Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions: (a) At the time of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents; (b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution; (c) A Substitution shall involve only one (1) Individual Property; (d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated; (e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution; (f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans; (g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted; (h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property; (i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender; (j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender. (k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower; (l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender; (m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender; (n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender; (o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans; (p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment; (q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75; (r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and (s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property; (t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith; (u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and (v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4.
Appears in 2 contracts
Sources: Collateral Loan Agreement, Collateral Loan Agreement (CNL Income Properties Inc)
Substitution of Collateral. Upon prior written notice to Lender, Borrower may from time-to-time request that Lender accept substitute real property collateral in place of all or a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien portion of the Collateral Documents Property then encumbered by the Mortgage. Any proposed substitute property collateral must, in the aggregate, result in the new real property collateral and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each that portion of the Property which will remain encumbered by the Mortgage following terms and conditionsthe collateral substitution having:
(a) At a combined Debt Service Coverage Ratio equal to or greater than the time higher of such Borrower’s request for a Substitution and (i) 1.35 to 1.00 or (ii) the Debt Service Coverage Ratio of that portion of the Property which is encumbered by the Mortgage at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;Borrower’s request; and
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date a combined Loan-to-Value Ratio equal to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner lesser than the later lower of (i) nine sixty-five percent (9) months after the Closing 65%), or (ii) six (6) months after completion the Loan-to-Value Ratio of that portion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to Property which is encumbered by the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At Mortgage at the time of any Substitution, the Substitute Property Borrower’s request. The applicable Debt Service Coverage Ratios and Loan-to-Value Ratios specified above in this Section 2.7 shall not be less than one hundred percent (100%) occupied determined by an appraisal or appraisals prepared by a third-party tenants in occupancy and paying rentappraiser acceptable to, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteedengaged directly by, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Propertyappraisal(s) shall be satisfactory to Lender in all respects, as reviewed, adjusted and approved by Lender;
(m) The value and NOI (as defined above) . If any of the Substitute Property shall equal Debt Service Coverage Ratio or exceed the thenLoan-market value and NOI to-Value Ratio requirements specified above in this Section 2.7 are not met, Borrower may satisfy such requirements by making a voluntary paydown of the Exiting PropertyLoan, all as subject to the satisfaction of any conditions to prepayment, including the payment of any prepayment fee or premium, together with a mutually agreed-upon reduction in the committed amount of the Loan. The acceptance of such substitute collateral shall be in Lender’s sole discretion but shall be determined by Lender in good faith based on the factors and criteria upon which Lender;
(n) All conditions that Borrowers were obligated , at the time of Borrower’s request, bases its determination of whether or not to meet and satisfy under the terms of make loans similar to the Loan Application and secured by industrial property in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, Southern California (except that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey case of debt service coverage ratio and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a nonloan-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a nonto-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property)value ratio underwriting criteria, the Debt Service Coverage Ratio for the Security Pool and Loan-to-Value Ratio tests specified above shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject control over any proposed Substitute Property shall be current underwriting standards then in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lenderplace), and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that if Lender agrees to consider accept such substitute collateral based on such factors and criteria, then the acceptance of such substitute collateral such shall be subject to all of the underwriting and due diligence requirements and loan documentation as were applicable to the making of the Loan, including the requirements set forth in good faith any request for its consent the closing checklist and in Schedule C to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of sheet for the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the LoansLoan, and no transferee shall have any rights under this Section 4the requirements set forth herein.
Appears in 2 contracts
Sources: Term Loan Agreement (Rexford Industrial Realty, Inc.), Term Loan Agreement (Rexford Industrial Realty, Inc.)
Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled to obtain a release Notwithstanding the provisions of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien this Agreement or any of the Collateral Loan Documents and to the Cross Collateral Documents contrary, Borrowers may submit a written request (“Substitution Request”), upon substituting therefor at least ninety (90) days prior notice, that Lender permit a substitution (each a “Substitution”) another of a substitute property (the each a “Substitute Property”) satisfactory to Lender (which previously has not been the subject of inclusion in the Collateral for the Loan) for any individual Property then serving as Collateral for the Loan (in its sole discretionsuch capacity a “Replaced Property”) upon and upon satisfaction (as determined by Lender in its sole discretion) of each of subject to the following terms and conditions:
(a) At the time of such Borrower’s request for Borrowers must submit a Substitution and at the time of Request, identifying the proposed Substitution, there shall exist no Event of Default, Substitute Property and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Replaced Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty ninety (3090) days prior to the end of Lender’s period (as specified below) proposed closing date for processing such the Substitution;
(f) Any written . Lender shall evaluate the request by a Borrower to Lender for a the proposed Substitution must be received no sooner than and the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate pursuant to its then customary underwriting and pricing criteria. In its underwriting and pricing analysis, Lender may review items such propertyas, but not limited to, location, occupancy, lease term, rollover, tenant exposure, average Rental Unit rates and no joint venture or partnership interests or interests shall be permitted;operating statements.
(hb) The ownership entity owner of the Substitute Property shall must be identical a single purpose entity owned and controlled in such manner that inclusion of such owner as a Borrower would not result in a Change of Control and such owner must execute a joinder agreement in the form of Exhibit A to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the join this Agreement as a Borrower. No properties will be permitted other than multi-family student oriented rental housing properties. The Substitute Property shall not must be less than one hundred percent (100%) occupied by third-party tenants located in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lendercontinental United States.
(kc) Lender in its sole discretion shall have received a physical condition report acknowledge within ten (conforming with Lender’s then current guidelines and report requirements10) business days of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of Substitution Request whether the proposed Substitute Property appears to be acceptable to permit the Substitution. If Lender approves the Substitution Request, Borrower the Substitution will be subject to the other conditions outlined in this Section 3.06.
(d) Borrowers shall pay a loan fee to Lender a nonequal to one-refundable fee of one half of one percent (0.5%) of an amount equal to eighty percent (80%) of the Allocated Loan Amount appraised fair market “As Is” value of the Substitute Property at closing of each approved Substitution; provided, however, that such fee shall be $50,000 with respect to each of the first three (3) Substitutions. A “Substitution Deposit” of $25,000.00 shall be required with submission of a Substitution Request, which deposit shall be applied to the loan fee at closing of the Substitution. The deposit and loan fee contemplated by this subsection are in addition to attorneys’ fees and expenses incurred in the documentation of such Substitution and in the review of due diligence.
(e) All improvements on the Substitute Property shall have been completed in a good and workmanlike manner and in compliance, in all material respects, with all applicable governmental requirements. The Substitute Property must be lien free (except for easements and other matters of record acceptable to Lender) and all land, improvements and personal property must be paid for in full.
(f) The appraised fair market “As Is” value of the Exiting Substitute Property shall be equal to or greater than the greater of (x) the then appraised fair market value, or gross sales proceeds, as the case may be, of the Replaced Property, and (y) the original appraised value of the Replaced Property as set forth in the appraisal delivered to Lender in connection with the closing of the loan on the Replaced Property; provided, however, that that, Borrowers may prepay the Loan by the amount of any shortfall in the appraised fair market “As Is” value of the Substitute Property with respect to the foregoing requirement.
(g) Borrowers must demonstrate to Lender’s satisfaction that, after giving effect to such Substitution (and any proposed prepayment of the Loan to be made in conjunction therewith, if applicable), the Borrowers will be in compliance with the financial covenants set forth in Article VII.
(h) Lender’s outside counsel shall prepare and Borrowers shall execute (1) amendments to the Note, the Mortgage, the Assignments of Rents and Leases, the Environmental Indemnification Agreement, and this Agreement to the extent deemed necessary or appropriate by Lender, and (2) all Loan Documents Lender shall credit against such non-refundable fee paid at deem necessary or appropriate, including, but not limited to, any new security instrument, assignment of rents and leases, environmental indemnities, etc. relating to the Substitute Property (all of which documentation shall be substantially in the form of the applicable documents executed in connection with the closing of the Substitution Loan with such changes thereto as Lender reasonably deems appropriate to reflect the terms and circumstances of the Substitution Administrative Fee that such Borrower previously paid and Substitute Property) (collectively, the “Substitute Loan Documents”). The Substitution Loan Documents shall be cross-defaulted and cross-collateralized with the existing Loan Documents for the Loan.
(i) Borrowers shall be required to supply for Lender. Neither ’s review and approval due diligence materials relating to the Substitution Administrative Fee nor the non-refundable fee paid at the Substitute Property prior to closing of the Substitution shall similar to those items required for closing of this Loan, and such other materials as may then be applied customarily required as part of its then current commercial loan closing policies, procedures, standards and practices for properties of similar type and in similar locations as the Substitute Property, including, without limitation, a current as-built ALTA survey, proof of adequate insurance, title insurance in conformance with the requirements for the closing of this Loan, proof of compliance with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and attornment agreements, franchise agreements and comfort letters. The Lender shall, at the Borrowers’ sole cost and expense, receive for its review and approval all additional due diligence materials in any way relating to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the SubstitutionSubstitute Property, including but not limited to, appraisal, hazardous substance report, seismic report and engineer report as required by Lender in its reasonable discretion. The items listed in this subsection are not exhaustive.
(j) The Substitute Loan Documents, financing statements, and other instruments required to perfect the liens in the Substitute Property and all collateral under such documents shall be recorded, registered and filed (as applicable) in such manner as may be required by law to create a valid, perfected lien and security interest with respect to the Substitute Property and the personal property related thereto. The liens created by the Substitute Loan Documents shall be first liens and security interests on the Substitute Property and the personal property related thereto, subject only to such exceptions as Lender shall approve in its reasonable discretion. At closing of the Substitution, Borrowers shall have good and marketable title insurance to the Substitute Property and survey fees good and expensesvalid title to any personal property located thereon or used in connection therewith, in each case satisfactory to the Lender. The title policies to the remaining parcels of Property in the Loan must also be endorsed to bring forward the effective dates thereof through the dates and times of recording charges of the modification instruments and taxesshowing no new exceptions since the original Loan closing unless approved by Lender in writing and continuing all coverage provided in the original Loan title policy.
(k) Lender shall receive (1) a confirmation and reaffirmation of all Loan Documents by the Borrowers for the remaining Property, (2) a consent to such Substitution by the Guarantors, and (3) such other instruments and agreements and such certificates and opinions of counsel, in form and substance satisfactory to the Lender in connection with such Substitution as it may reasonably request.
(1) Borrowers shall be responsible for all documentary stamp taxesand intangible taxes on the Substitution and the Mortgage encumbering the Substitute Property and all other parcels of Property in the Loan that shall arise in connection with such Substitution. Lender shall require payment of all such documentary stamp and intangibles taxes required by law and authorities having jurisdiction as a condition of closing the Substitution and the corresponding loan modifications to the Loan, intangible taxesregardless of whether the taxing authority imposes taxes duplicative of those incurred at the original closing of the Loan.
(m) No Event of Default shall have occurred and be continuing hereunder or under any other Loan Documents for the Loan on the date of Substitution Request or at closing of the Substitution.
(n) Lender shall be satisfied that no material adverse change in the financial condition, attorneys’ fees operations or prospects of any Borrower Party has occurred since the closing of the Loan.
(including attorneys’ o) Borrowers shall pay all reasonable out-of-pocket costs and expenses incurred in connection with any such Substitution .and the reasonable out-of-pocket fees and expenses for incurred by Lender’s staff attorneys , its outside counsel and outside counsel)its loan correspondent and servicer in connection therewith. Without limiting the generality of the foregoing, Borrowers shall, in connection with, and as a condition to, each Substitution, pay the reasonable fees and expenses of Lender’s architect and/or engineercounsel, the reasonable fees and expenses of Lender’s engineers, appraisers, construction consultants, insurance consultants and other due diligence consultants and contractors, recording charges, title insurance charges, and fees related documentary stamp and/or mortgage or similar taxes, transfer taxes. Nothing contained herein shall be deemed to require from the Environmental Site Assessment;
(q) Lender shall have determined that, Borrowers in conjunction with a Substitution Request hereunder a principal prepayment in excess of that amount necessary to cause the Borrowers to be in compliance with the financial covenants set forth in Article VII hereof after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4.
Appears in 2 contracts
Sources: Loan Agreement (Campus Crest Communities, Inc.), Loan Agreement (Campus Crest Communities, Inc.)
Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled have the right, but not the obligation, to obtain request that Lender release its lien on the Property in exchange for a release of an Individual Property owned by such Borrower lien on the Substitute Collateral (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Proposed Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At the time of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in ). In the event that Borrower requests the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Proposed Substitution, Borrower shall pay promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender a non-refundable fee of one half of one percent agrees to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (0.5%and not the Property) is part of the Allocated Collateral or, at Lender’s option, to make a new Loan Amount for secured by the Exiting PropertySubstitute Collateral on the same material economic terms (other than amount of Loan) as the Loan; provided, however, that it shall be considered reasonable for Lender shall credit against such non-refundable fee paid at the closing to review any modification of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the new Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in based upon Lender’s then current guidelines underwriting criteria for similar loans and requirementscollateral, including, without limitation, Lender’s requirements regarding current and Borrowers deliver such certifications projected loan-to-value-ratios and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, the financial condition of Borrower and Borrowers the Borrower Affiliates. Borrower shall deliver such assurances as may be reasonably requested pay all reasonable costs and expenses incurred by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force foregoing analysis and effectLender’s approval/disapproval thereof, notwithstanding including, without limitation, reasonable consultants’ fees, appraisal costs, title fees and taking into consideration reasonable attorneys’ fees and costs. Borrower acknowledges and agrees that its right to request the Proposed Substitution does not constitute a commitment on the part of Lender to agree to the Proposed Substitution; and
(vii) The Substitute Property no modification of the Loan or new financing shall have be deemed extended without issuance by Lender of a commitment letter executed by Lender (the same unpaid principal balance allocated “New Financing Commitment Letter”), and the modification of the Loan or extension of such financing by Lender shall be subject to such Substitute Property as satisfaction of all terms and conditions of the then existing unpaid principal balance allocated New Financing Commitment Letter, including, without limitation, with respect to the Exiting Property at the time execution of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release new modification documents or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4loan documents.
Appears in 2 contracts
Sources: Loan and Security Agreement (William Lyon Homes), Loan and Security Agreement (William Harwell Lyon Separate Property Trust)
Substitution of Collateral. Upon prior written notice Provided that the Initial Funding and Second Funding have occurred and the Loan is secured by the TX Investment, Borrower may, up to Lenderone (1) time during the term of the Loan, a Borrower shall be entitled subject to obtain a the conditions set forth herein, request that Lender release either the TN Investment or the WA Investment from the balance of an Individual the Secured Property owned by such Borrower (the “Exiting Released Secured Property”) from the Lien lien of Lender’s Mortgage and substitute another property or properties owned in fee simple by Borrower (collectively, the Collateral Documents and the Cross Collateral Documents upon substituting therefor “Substitute Secured Property”) in its place (hereinafter a “Substitution”). Borrower shall provide written notice to Lender at least forty-five (45) another property days prior to the desired closing date of the proposed Substitution (the “Substitute PropertySubstitution Date”) satisfactory ). L▇▇▇▇▇’s approval of the proposed Substitution is subject to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:conditions (the “Substitution Conditions”):
(a) At In addition to the time other requirements set forth herein, L▇▇▇▇▇’s consideration of such BorrowerB▇▇▇▇▇▇▇’s request for a Substitution is subject to Borrower’s fulfillment of at least the same documentation submission and at other requirements set forth in the time Application as were applicable to the Released Secured Property as a condition to the initial funding of the proposed SubstitutionLoan. As a result, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end Substitution Date, Borrower shall submit each of the following documents to State Lender and its outside counsel, as applicable:
(i) The Documentation set forth in Sections 2 and 3 of the General Terms and Conditions of the Application, including, without limitation, “as built” plans and specifications for the Improvements in the Substitute Secured Property (if available), a current Property Conditions Report of the Improvements certified to Lender in the form of Exhibit E-1 to the Application, a Phase I Environmental Report certified to Lender in the form of Exhibit F to the Application, an M.A.I. Appraisal certified to Lender, photographs of the Improvements, evidence of insurance coverage, a title insurance commitment in the form of Exhibit G, an ALTA/NSPS land title survey in the form of Exhibit H to the Application, evidence of zoning, building code and parking code compliance in the form of a report from Planning and Zoning Resource Corporation or similar service acceptable to Lender, certificates of occupancy and evidence that the Substitute Secured Property is a separate tax parcel or tax parcels. All such Documentation shall be subject to the general requirements set forth in Section 1 of the General Terms and Conditions of the Application and must be in form and substance acceptable to Lender and its outside counsel;
(ii) Operating statements for the Substitute Secured Property showing all elements of income and expense;
(iii) Financial statements (consisting of a balance sheet and an income and expense statement) for Borrower (and the entity affiliated with Borrower which owns a leasehold interest in the WA Investment);
(iv) A current rent roll and complete copies of all leases in the Substitute Secured Property;
(v) Lender’s period form of Property Information Questionnaire in the form of Exhibit D to the Application. The responses made by Borrower in such Questionnaire shall be satisfactory to Lender in its sole discretion;
(as specified belowvi) for processing such Evidence that the Substitute Secured Property is managed by either: (i) Borrower or an entity affiliated with Borrower and approved by Lender, provided that Borrower or the affiliated entity is managing the Secured Property in a first-class manner; or (ii) a professional property management company approved by Lender. The management of the Substitute Secured Property is subject to the terms of Section 12 of the General Terms and Conditions of the Application. The requested Substitution and accompanying Documentation shall be reviewed by L▇▇▇▇▇ and its outside counsel. Lender reserves the right to impose additional requirements to its approval of the Substitution following the consideration of the Substitution by L▇▇▇▇▇’s Investment Review Committee.
(b) The Substitute Secured Property must (i) be of similar type, quality and size to the Released Secured Property and must be located in a top 50 Metropolitan Statistical Area; and (ii) not be located in the State of New York;
(c) Lender may in its sole discretion reject any Substitution that in L▇▇▇▇▇’s determination is not in compliance with the terms and conditions set forth herein;
(d) All leases in the Substitute Secured Property must have terms and conditions acceptable to Lender in its sole discretion. The tenants occupying the Substitute Secured Property must have an identity, composition, financial condition, creditworthiness and business reputation acceptable to Lender in its sole discretion;
(e) After giving effect to the proposed Substitution, B▇▇▇▇▇▇▇’s Debt Service Coverage Ratio must be at least 1.5 to 1.0 (with Borrower having the right to pay down the Loan to satisfy this requirement);
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than After the later of proposed Substitution, (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall Substitute Secured Property must be not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect more than 0.55 to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property1.0, as determined by Lender, and is at least equal to Lender based on the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required M.A.I. appraisal submitted by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered Borrower to Lender in connection with the Loans remains in full force and effectSubstitution, notwithstanding and taking into consideration provided, that if the Substitution; and
(v) The applicable Substitute Secured Property is being acquired by Borrower, then such ratio shall have be calculated based upon the same unpaid principal balance portion of the Loan allocated to such Substitute Secured Property divided by the purchase price for such Substitute Secured Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of shown on the closing of statement executed by Borrower in connection with the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request acquisition thereof, and (2ii) the Substitution Administrative Fee. Notwithstanding anything Loan to the contrary in Section 3 above and/or this Section 4, Borrowers acquisition cost with respect to such Substitute Secured Property shall only not exceed 55% (Borrower shall have the right to a combined cumulative total pay down the Loan to satisfy this requirement);
(during g) For each Substitution, Borrower shall pay an administrative processing fee to Lender equal to $20,000.00 for each Independent Parcel (defined below) comprising or contained within the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and SubstitutionsSubstitute Secured Property, which consent may fee shall be given or withheld for any reason or given conditionally, paid together with and in addition to all of Lender’s sole discretion. This Section 4 shall be personal expenses in connection with the review and/or preparation of any Documentation related to the original Borrowers under Substitution, including, but not limited to, the Loansfees and expenses of Lender’s outside counsel regardless of whether the Substitution is approved by Lender or is ultimately completed (for purposes hereof, the phrase “Independent Parcel” shall mean any parcel or group of parcels of improved real property that are (X) contiguous or adjacent parcels (Y) existing within a common development or project and no transferee shall have any rights under this Section 4.(Z) located within the same jurisdiction);
Appears in 1 contract
Substitution of Collateral. Upon Mortgagor may submit a written request ("SUBSTITUTION REQUEST"), upon at least ninety (90) days prior written notice to Lendernotice, that Mortgagee permit a Borrower shall be entitled to obtain substitution (each a release "SUBSTITUTION") of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another substitute property (which previously has not been the “Substitute Property”subject of inclusion in the collateral for the Loan) satisfactory to Lender (each a "SUBSTITUTE PROPERTY") for any individual Parcel (in its sole discretionsuch capacity a "Replaced Property") upon and upon satisfaction (as determined by Lender in its sole discretion) of each of subject to the following terms and conditions:
(a) At the time of such Borrower’s request for The Mortgagor shall submit a Substitution and at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of identifying the current draft of proposed Substitute Property and the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made proposed Replaced Property at least thirty ninety (3090) days prior to the end proposed closing date for the Substitution. Mortgagee shall evaluate the request for the proposed Substitution and Substitute Property pursuant to its then customary underwriting and pricing criteria. The amount of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower the "Principal Allocation" Mortgagee would determine to Lender for a Substitution allocate to the Substitute Property must be received no sooner than at least equal to the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion amount of the most recent Release or Substitutionthen remaining Principal Allocation for the proposed Replaced Property, and any such written request must be received no later than twelve the loan-to-value (12"LTV") months prior to ratio for the maturity date of Mortgagee's proposed Principal Allocation for the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such propertyProperty, and no joint venture or partnership interests or interests shall be permitted;
based upon a current MAI appraisal in accordance with subsection (h) below, must be at least equal to the then current LTV [MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING] ING No. 27449 ratio for the proposed Replaced Property. In its underwriting and pricing analysis, Mortgagee may review items such as, but not limited to, location, occupancy, lease term, rollover, tenant exposure, tenant's credit.
(b) The ownership entity owner of the Substitute Property shall must be identical to the entity Mortgagor (such that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than is owned one hundred percent (100%) occupied by thirdthe same entity as owns all the collateral constituting the Premises. The Substitute Property must be located in the continental United States.
(c) Mortgagee in its sole discretion shall acknowledge within ten (10) business days of the Mortgagee's receipt of the Substitution Request whether the proposed Substitution Property appears to be acceptable to permit the Substitution. If in the Mortgagee's sole discretion it is determined that the proposed Substitution Property is equal to or greater in value and quality than the Replaced Property, then Mortgagee, through its loan correspondent, Mid-party tenants North Financial Services, will process Mortgagor's formal request for Substitution. The proposal will be reviewed by and presented to Mortgagee's investment review committee pursuant to its then current commercial mortgage loan policies, practices, standards and procedures. If the investment review committee approves the formal request for Substitution, the Substitution will be subject to the other conditions outlined herein.
(d) No more than two (2) Substitution Requests shall be considered in occupancy any calendar year for the entire Loan.
(e) Mortgagor shall not be permitted to request and paying rentclose more than a total of three (3) Substitutions during the Loan term.
(f) Mortgagor shall pay a processing fee to Mortgagee equal to $25,000 at closing of each approved Substitution. A "Substitution Deposit" of $5,000 shall be required with submission of a Substitution Request, which deposit shall be applied to the processing fee at closing of the Substitution. The deposit and free rent or other rental concessions processing fee contemplated by this subsection are in addition to reasonable attorneys' fees and expenses incurred in the documentation of such Substitution and in the review of due diligence.
(g) All improvements on the Substitute Property shall have been extinguished except completed in a good and workmanlike manner and in compliance, in all material respects, with all applicable governmental requirements. The Substitute Property must be lien free and all land, improvements and personal property must be paid for in full.
(h) The appraised fair market "As Is" value of the Substitute Property shall be equal to or greater than the greater of (x) the then appraised fair market value, or gross sales proceeds, as the case may otherwise be, of the Replaced Property and (y) the original appraised value of the Replaced Property as set forth in the appraisal delivered to Mortgagee in connection with the closing of this Loan. The fair market "As Is" value of the Replaced Property and Substitute Property shall be determined by a firm of appraisers selected by Mortgagor and approved by the Mortgagee, based on an MAI appraisal satisfactory to Mortgagee, dated not more than ninety (90) days prior [MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING] ING No. 27449 to the closing of the Substitution. All costs of such appraisals shall be paid by the Mortgagors on or prior to the closing of the Substitution. Mortgagee shall have the right to readjust the Principal Allocations and Allocation Percentages for all five (5) Parcels (or such number remaining if the Release Privilege previously has been exercised). The Release Factor (i.e., 115%) set forth in writing by Lender;Section 43 subsection (ii) above shall remain the same upon closing of the Substitution.
(i) The actual net operating income relating to the Substitute Property (based upon the trailing twelve (12) month financial results or such shorter period, as Mortgagee deems appropriate, for a Substitute Property opened for less than one year) shall equal or exceed the actual net operating income relating (based upon the trailing twelve (12) month financial results or such shorter period, as Mortgagee reasonably deems appropriate, for any Substitute Property opened for less than one (1) year) to the Replaced Property.
(j) The credit Mortgagee's outside counsel shall prepare and Mortgagor shall execute (1) amendments to the Note, Mortgage, assignment of the tenants rents and leases, loan agreement, environmental indemnities, tax and insurance escrows and (or if a lease is guaranteed2) all other Loan Documents Mortgagee shall deems appropriate, the credit including, but not limited to, any new Mortgage, assignment of the guarantor so long as such lease is guaranteed pursuant rents and leases, environmental indemnities, etc. relating to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants (all of which documentation shall be satisfactory substantially in the form of the applicable documents executed in connection with the Loan with such changes thereto as Mortgagee reasonably deems appropriate to Lenderreflect the terms and circumstances of the Substitution and Substitute Property) (collectively, the "SUBSTITUTE LOAN DOCUMENTS"). The Substitution Loan Documents shall be cross-defaulted and cross-collateralized with the existing Loan Documents for the Loan.
(k) Lender Mortgagor shall have received a physical condition report (conforming with Lender’s then current guidelines be required to supply for Mortgagee's review and report requirements) of approval due diligence materials relating to the Substitute Property from an engineer or architect chosen by Lenderprior to closing of the Substitution including those items contained in that certain Application Letter dated August 25, which report shall 2004 between Mortgagor and Mortgagee as a requirement for closing of this Loan, and such other materials as may then be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s customarily required as part of its then current guidelines commercial loan closing policies, procedures, standards and report requirements) practices for properties of similar type and in similar locations as the Substitute Property from an environmental consulting firm chosen by LenderProperty, which Environmental Site Assessment shall be satisfactory in all respects to Lenderincluding, without limitation, a current as-built ALTA survey, proof of adequate insurance, title insurance, proof of compliance with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and attornment agreements. The Mortgagee shall, at the Mortgagors' sole cost of preparation of and expense, receive for its review and approval all such reports additional due diligence materials in any way relating to the Substitute Property, including but not limited to, appraisal, Hazardous Substance report and all necessary inspections shall be paid engineer report as required by Borrower;Mortgagee in its sole discretion. The items listed in this section are not exhaustive.
(l) The Substitute Loan Documents, financing statements, and other instruments required to perfect the liens in the Substitute Property and all collateral under such documents shall be recorded, registered and filed (as applicable) in such manner as may be required by law to create a valid, perfected lien and security interest with respect to the Substitute Property and the personal property related thereto. The liens created by the Substitute Loan Documents shall be first liens and security interests on the Substitute Property and the personal property related [MORTGAGE, SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING] ING No. 27449 thereto, subject only to such exceptions as Mortgagee shall approve in its sole discretion. At closing of the Substitution, the Mortgagor shall have good and marketable title to the Substitute Property and good and valid title to any personal property located thereon or used in connection therewith, in each case satisfactory to the Mortgagee. The title policies to the remaining parcels of Land in the Loan must also be endorsed to bring forward the effective dates thereof through the dates and times of recording of the modification instruments and showing no new exceptions since the original Loan closing unless approved by Mortgagee in writing and continuing all coverage provided in the original loan title policies.
(m) Mortgagee shall receive (1) a confirmation and reaffirmation of all Loan Documents by the Mortgagor for the other properties in the Loan, (2) a consent to such Substitution by any "Carve-Out" or other guarantors or indemnitors, if any, and (3) such other instruments and agreements and such certificates and opinions of counsel, in form and substance satisfactory to the Mortgagee in connection with such Substitution as it may reasonably request.
(n) The Substitute Property shall be located within the continental United States. Mortgagor shall consider all implications for documentary stamp and intangible taxes on the Substitution and the Mortgage encumbering the other Parcels of Land in the Loan that shall arise in connection with such Substitution. Mortgagee shall require payment of all such documentary stamp and intangibles taxes required by law and authorities having jurisdiction as a condition of closing the Substitution and the corresponding loan modifications to the Loan, regardless of whether the taxing authority imposes taxes duplicative of those incurred at the original closing of the Loan.
(o) No default or Event of Default shall have occurred and be continuing hereunder or under any other Loan Documents for the Loan on the date of Substitution Request or at closing of the Substitution.
(p) Mortgagee shall be satisfied that no material adverse change in the financial condition, operations or prospects of any guarantor, Mortgagor (or General Partner or Limited Partner as applicable) has occurred after closing of this Loan.
(q) The Mortgagor shall pay all reasonable out-of-pocket costs and expenses incurred in connection with any such Substitution and the out-of-pocket fees and expenses incurred by Mortgagee (including, without limitation, the locationreasonable fees and expenses of its outside counsel) and its loan correspondent and servicer in connection therewith. Without limiting the generality of the foregoing, the demographics of the market areaMortgagor shall, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with with, and as a condition to, each Substitution, pay the closing reasonable fees and expenses of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s Mortgagee's counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs fees and expenses associated with the Substitutionof Mortgagee's engineers, including but not limited toappraisers, construction consultants, insurance consultants and other due diligence consultants and contractors, recording charges, title insurance charges, and survey fees and expenses, recording charges and stamp and/or mortgage or similar taxes, documentary stamp transfer taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4.
Appears in 1 contract
Sources: Mortgage, Security Agreement, Financing Statement and Fixture Filing (Equity Inns Inc)
Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled to obtain substitute a release of an Individual Property property (being defined as releasing a property that then constitutes security for the Loan (the "Released Property")) and substituting another property owned in fee by such Borrower (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “"Substitute Property”") satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of place on the following terms and conditions:
(a) At A substitution may not take place more than three (3) times during the time of such Borrower’s request for a Substitution and at the time term of the proposed Substitution, there shall exist no Event of Default, Loan and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan DocumentsRelated Loans;
(b) No Event more than three (3) properties (in the aggregate) may be released under this Section 6.16 and Section 5.16 of Default shall have occurred under any each Related Mortgage, and no more than a total of three (3) of the Loan Documents at any time from the Closing Date to the date Mortgaged Properties may be released under (i) Section 6.15 above and Section 5.15 of the consummation each Related Mortgage, and (ii) this Section 6.16 and Section 5.16 of the proposed Substitutioneach Related Mortgage;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event After the proposed sale of substitution, the Individual Property shall not actually be consummated;
(e) Upon Debt Service Coverage Ratio - Remaining Properties for the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date substitution and projected twelve (12) months following the substitution must be at least equal to or greater than the greater of (i) 1.65, or (ii) the current Debt Service Coverage Ratio - Mortgaged Properties calculated for the twelve (12) month period prior to the substitution;
(d) After the proposed substitution, the loan to value ratio of the Loansremaining Related Loans must be less than or equal to the lesser of (i) 60%, or (ii) the current loan to value ratio of the existing Loan and Related Loans calculated immediately prior to the substitution based upon appraisals furnished to Lender in form and substance reasonably satisfactory to Lender and prepared by an MAI appraiser approved by Lender at Borrower's cost;
(e) The net operating income and/or RevPar (as reported by Smit▇ ▇▇▇vel) of the Substitute Property must not show a downward trend for any of the three (3) years prior to the substitution;
(f) The appraised value (based upon appraisals furnished to Lender in form and substance reasonably satisfactory to Lender and prepared by an MAI appraiser approved by Lender at Borrower's cost), the net operating income and current debt service coverage ratio of the Substitute Property must be 120% greater than the appraised value, net operating income and the debt service coverage ratio of the Released Property;
(g) The proposed Substitute Property shall constitute Lender may at its sole discretion reject any property substitution that in Lender's sole determination would not be in compliance with the fee simple estate terms and provisions of the Loan Application, would be detrimental to such propertythe overall quality and/or value of the Mortgaged Properties, or would not be in compliance with Lender's then existing underwriting standards and no joint venture or partnership interests or interests shall be permittedcriteria;
(h) The ownership entity of the Substitute Property shall must be identical franchised as a "Sheraton or Sheraton Suites", or other franchise reasonably acceptable to Lender, and managed by the manager under the Management Agreement or another a nationally recognized hotel management company with a franchise and hotel agreement similar to the entity that owned the Exiting PropertyManagement Agreement or otherwise reasonably acceptable to Lender;
(i) At Borrower must pay (i) all of Lender's costs (all of which must be paid, whether or not such substitution is actually approved or completed) associated with the time of any Substitutionsubstitution including but not limited to legal fees, appraised fees, market studies and expenses, title insurance premiums on the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy new property, engineering fees and paying rentexpenses, recording fees and transfer taxes, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender(ii) a fee of 1% of the original Allocated Loan Amount for the Released Property;
(j) The credit Loan and any Related Loan shall not be in Default at the time such request for substitution is made through the completion of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.substitution;
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines The original Borrower named in the Loan Documents and report requirements) Related Loan Documents continues to be the owner of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;Remaining Mortgaged Properties; and
(l) The Substitute Property (In order to substitute one property for another as security for the Loan or any Related Loan, Borrower acknowledges that such substitute property shall be subject to all of Lender's underwriting and due diligence requirements and criteria, including, without limitation, the locationenvironmental assessment, the demographics review of the market arealeases, appearancereceipt of tenant subordination letters, configurationtitle policy endorsements, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions etc. Borrower agrees that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in subject to all respects to Lender (including, without limitation, evidence that Lender shall have a first the terms and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing conditions of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to LenderApplication. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4.61 66
Appears in 1 contract
Sources: Deed of Trust and Security Agreement (Felcor Lodging Trust Inc)
Substitution of Collateral. Upon prior written notice At any time during the term of the Loan, Lender will, at Borrower’s request and subject to Lenderall of the terms and conditions herein contained, permit a substitution and release (a “Substitution”) of the either of the Richmond property (Exhibit A-1 of the Mortgage) or the Fremont property (Exhibit A-2 of the Mortgage), provided that, in connection with any such Substitution, Borrower shall satisfy each of the following requirements. In connection with the Substitution, Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower the lien of the Mortgage from the applicable Richmond or Fremont property (for the purposes of this Section, the “Exiting PropertyExisting Premises”) from upon the Lien Substitution of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property or properties (the “Substitute PropertyPremises”) satisfactory to Lender (in its sole reasonable discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At the time of such Borrower’s request for a Substitution and at the time of the consummation of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property Premises shall constitute the fee simple estate to such property, and no joint venture (except as outlined in Section 4.2.3(b)(i) herein), tenant-in-common or partnership interests or interests in ground leases shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(jc) The credit of the tenants tenant(s) (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property Premises and the lease rollover schedule for such tenants tenant(s) shall be satisfactory to Lender.Lender in its reasonable discretion;
(kd) Lender shall have received the following reports of the Substitute Premises each conforming to Lender’s then current report guidelines, which any such report shall be satisfactory to Lender in its reasonable discretion in all respects: (i) a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects acceptable to Lender. In addition, Lender shall have received an Environmental Site Assessment ; (conforming with Lender’s then current guidelines and ii) a Phase I environmental report requirements) of the Substitute Property from an environmental consulting firm chosen by acceptable to Lender (Lender reserves the right to require a Phase II environmental report at Lender’s option in the event the Phase I discloses contamination or the need for further investigation, which Environmental Site Assessment shall be satisfactory in all respects but only with Borrower’s prior written consent to such Phase II); (iii) a zoning report from a zoning company acceptable to Lender; (iv) a MAI appraisal from an appraiser acceptable to Lender; and (v) if applicable, seismic/soils/curtain wall report(s) from an engineer or architect acceptable to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(le) The Substitute Property Premises (including, without limitation, property type, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute PropertyPremises) shall be satisfactory to Lender in Lender’s reasonable discretion. From a property type standpoint, Lender will only consider industrial, retail, office and multi-family;
(mf) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute PropertyPremises, including without limitation, that that: (i) all amendments to the Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counselcounsel regarding such amended Loan Documents, (iii) title to the Substitute Property Premises shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien mortgage lien on the fee simple interest in the Substitute PropertyPremises), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property Premises complies with all applicable government governmental requirements, and (vi) Borrowers’ Borrower’s, and if applicable, tenant’s then current financial condition shall be satisfactory to Lender;
(og) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 5,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; providedequal to $30,000, however, that but Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the The Substitution Administrative Fee nor and the non-refundable fee paid at due upon the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loanscover all of Lender’s expenses, including, without limitation, travel and in-house legal, except for third party costs and expenses outlined in (d) above and (h) below, which shall be paid by Borrower in addition to such fees;
(ph) Whether or not the Substitution actually closes, Borrowers Borrower shall pay all third party costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counselcounsel (if any), fees of Lender’s architect and/or engineer, and fees related to for the Environmental Site Assessmentreports described in (d) above;
(qi) Lender shall have determined that, after giving effect The Loan to the proposed Substitution (excluding the Exiting Property, but including value ratio of the Substitute Property)Premises, the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%)DSC Ratio, value and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including income of the Substitute Property), the Debt Service Coverage Ratio for the Security Pool Premises shall all be at least 1.75subject to Lender’s approval in its reasonable discretion;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(tj) Lender determines in its sole reasonable discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirementsherein, and Borrowers deliver Borrower delivers such certifications and other documents as Lender may request in connection therewith;
(uk) Lender is satisfied, and Borrowers Borrower shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, guaranty or indemnity or similar instrument delivered to Lender in connection with the Loans Loan remains in full force and effect, notwithstanding and taking into consideration the Substitution; and;
(vl) The Substitute Property shall have the same unpaid principal balance allocated Any written request by Borrower to such Substitute Property as the then existing unpaid principal balance allocated Lender for a Substitution may be made no later than twelve (12) months prior to the Exiting Property at the time Maturity Date of the closing of the SubstitutionLoan. Lender shall have at least use reasonable efforts to process a request from Borrower to effect a Substitution within sixty (60) days in which to process any from the request to effect a Substitution after receipt of therefore, provided Lender has received: (1) all materials and information necessary to evaluate such request request; and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 11.21 shall be personal to the original Borrowers Borrower under the LoansLoan (other than as outlined in (l) above, and no transferee Transferee shall have any rights under this Section 4to substitute the Premises.
Appears in 1 contract
Substitution of Collateral. Upon prior written notice to Lender, a an Individual Borrower or Gatlinburg Obligor, as the case may be, shall be entitled to obtain a release of an Individual Property owned by such Individual Borrower or Gatlinburg Obligor (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At the time of such Borrower’s request for a Substitution Substitution, and at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Golf Course Master Tenant, the Gatlinburg Master Tenant or another third party unrelated to any of BorrowersBorrowers or Gatlinburg Obligor, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a SubstitutionSubstitution by the applicable Individual Borrower or Gatlinburg Obligor, as the case may be, such Borrower party shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Individual Borrower or Gatlinburg Obligor, as applicable, shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s the execution of such sale agreementagreement by such Individual Borrower or Gatlinburg Obligor, as applicable, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a an Individual Borrower or Gatlinburg Obligor to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then then-current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrowerthe applicable Individual Borrower or Gatlinburg Obligor;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Individual Borrower’s or Gatlinburg Obligor’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ and Gatlinburg Obligor’s current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Individual Borrower or Gatlinburg Obligor delivers its written notice to Lender requesting a Substitution, such Borrower party shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, the applicable Individual Borrower or Gatlinburg Obligor shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property (or, if the Exiting Property is the Gatlinburg Individual Property, one half of one percent (0.5%) of the Gatlinburg Release Price); provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Individual Borrower or Gatlinburg Obligor previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers and Gatlinburg Obligor shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on Security Pool as of the Closing Date date of this Agreement and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Each of Borrowers and Gatlinburg Obligor acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers and Gatlinburg Obligor assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then then-current guidelines and requirements, and Borrowers and Gatlinburg Obligor deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers and Gatlinburg Obligor shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) ), that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers and Gatlinburg Obligor shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight nine (8) 9) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight nine (8) 9) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loansand Gatlinburg Obligor, and no transferee shall have any rights under this Section 4.
Appears in 1 contract
Sources: Collateral Loan Agreement (CNL Lifestyle Properties Inc)
Substitution of Collateral. Upon At any time during the term of the Loan, with ninety (90) days prior written notice to Lender, a Borrower shall be entitled (during any one loan year, but subject to obtain a release of an Individual Property owned by such Borrower the cumulative limits set out below) to substitute up to two (2) properties comprising the “Exiting Property”original Portfolio with properties ("Substitute Collateral") from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) which shall be satisfactory to Lender in Lender's sole discretion and shall meet all criteria of Lender, including without limitation, the criteria set forth in subparagraphs (in its sole discretiona) and upon satisfaction through (as determined by Lender in its sole discretionk) below. In evaluating the acceptability of the substitution, each of the following terms and conditionsconditions must be satisfied:
(a) At the time of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist no No Event of Default, and there shall exist no condition Default or state of facts, event which with the passage of time or the giving of notice, or both, would constitute an Event of Default shall exist under the Loan DocumentsDocuments at the time of the request or at the time of the substitution of collateral;
(b) No Event of Default The Substitute Collateral shall have occurred under any only be an apartment complex satisfactory to Lender in Lender's sole discretion. The ownership entity of the Loan Documents at any time from the Closing Date Substitute Collateral shall be identical to the date of entity owning the consummation of the proposed SubstitutionIndividual Property being transferred;
(c) A Substitution The location (including, without limitation, the character and demographics of the market area) of the Substitute Collateral shall involve only one (1) Individual Propertybe satisfactory to Lender in Lender's sole discretion;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property Collateral shall not be less than one hundred ninety-two percent (10092%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lenderat the time of substitution;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(ke) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender conforming with the guidelines then applicable to Lender's mortgage loans, which report shall be satisfactory in all respects to Lender in Lender's sole discretion. In addition, Lender shall have received an Environmental Site Assessment (Report conforming with the guidelines then applicable to Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender's mortgage loans, which Environmental Site Assessment Report shall be satisfactory in all respects to Lender in Lender's sole discretion. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(lf) The Substitute Property (including, without limitation, the location, the demographics of the market area, overall appearance, configuration, quality and age of the Substitute Property) Collateral shall be satisfactory to Lender in Lender;
(m) The value 's sole discretion and NOI (as defined above) of the Substitute Property shall equal or exceed the appearance, configuration, quality and age of the property being transferred. Lender shall have determined in its sole discretion, that following the proposed substitution, the entire Portfolio shall meet the leasing percentage requirements in the Assignment.
(g) The value of the Substitute Collateral, as determined by Lender, shall equal or exceed then-market value and NOI of the Exiting Propertyproperty being transferred, all and the Net Operating Income of the Substitute Collateral, as determined by Lender, shall equal or exceed Net Operating Income of the property being transferred;
(nh) All To the extent applicable to the Substitute Collateral, all conditions that Borrowers were Borrower was obligated to meet and satisfy under the terms of the Loan Application Application/Commitment in connection with the closing of the LoansLoan, or, if required by Lender, Lender’s 's then current closing and underwriting requirements, shall be satisfied regarding the Substitute PropertyCollateral, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s 's counsel, (iii) title to the Substitute Property Collateral shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien lien on the fee simple interest in the Substitute Property), (ivCollateral) and Lender shall receive have received a satisfactory survey and title insurance policy, (viv) Lender receives satisfactory evidence that the Substitute Property Collateral complies with all applicable government requirements, (v) construction of the Substitute Collateral is complete and in accordance with the plans and specifications, (vi) Borrowers’ all bills in connection with such construction have been paid in full, and (vii) Borrower's current financial condition shall be reasonably satisfactory to Lender. In addition, Lender shall have the right to modify the minimum leasing requirements for the Substitute Collateral to an appropriate level;
(oi) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitutionsubstitution of the Substitute Collateral, including but not limited to, title insurance and survey fees and expenses, recording charges and taxescosts, documentary stamp taxes, intangible taxes, similar fees, and attorneys’ ' fees (including attorneys’ ' fees and expenses for Lender’s 's staff attorneys and outside counsel), fees of Lender’s 's architect and/or engineer, and fees related to the Environmental Site AssessmentReport. In addition, Borrower shall pay to Lender a non-refundable servicing fee of 1.0% of the Substituted Collateral's allocated loan balance at the time of the request for substitution;
(qj) The Substitute Collateral shall not consist of any partial interests in a property, including but not limited to partnership or joint venture interests;
(k) The consent of Lender shall have determined that, after giving effect to the proposed Substitution (excluding substitution of collateral is expressly made subject to Lender's analysis and approval of the Exiting Property, but including economic trends affecting the Substitute Property), Collateral; and
(l) At the Loan to Value Ratio time of the request for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property)substitution of collateral, the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined thatRatio, following the Substitution, the aggregate amount of the Individual Loans calculated with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain Portfolio as part of the Security Poolconstituted prior to any substitution, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, is equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal 1.30 to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution1.00. Lender shall have at least sixty eighty (6080) days in which to process any request to effect a Substitution substitute collateral after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Feefees required by subparagraph (i) above. Notwithstanding anything to the contrary in Section 3 above and/or this Section 410.02 and Section 10.01 above, Borrowers (x) Borrower and Guarantor shall only have the right right, during any one loan year, to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases (1) two partial releases, (2) two substitutions of collateral, or (3) one partial release and Substitutions during one substitution of collateral and (y) after any partial release or substitution of collateral, the term remaining Individual Properties (including any substituted property which becomes part of the Loans to exceed eight Individual Properties) shall always be in at least three markets with no more than thirty-five percent (8) Releases and Substitutions, which consent may be given or withheld for 35%) of the total value (as determined by Lender) of all of the Individual Properties in any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4one market.
Appears in 1 contract
Sources: Mortgage and Security Agreement (Cornerstone Realty Income Trust Inc)
Substitution of Collateral. Upon prior Unless an Event of Default has occurred and is continuing, the Company shall have the option (exercisable by giving the Trustee written notice notice, herein referred to Lender, as a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien Substitution Notice,” of the Collateral Documents and Company’s election to exercise such option not less than ten (10) calendar days prior to the Cross Collateral Documents upon substituting therefor date of substitution pursuant to such option) to substitute (herein referred to as a “Substitution”) another property one or more containers, vehicle transport modules® and/or chassis (collectively, the “Substitution Collateral”) for Containers, VTMs and/or Chassis (collectively, the “Existing Collateral”) that constitute Collateral hereunder, with such substitution to become effective on the date specified in such Substitution Notice (the “Substitute PropertySubstitution Date”). The Substitution Notice shall (i) satisfactory to Lender describe the proposed Substitution; (in its sole discretionii) specify the fair market value of both the Existing Collateral and upon satisfaction the Substitution Collateral within sixty (as determined by Lender in its sole discretion60) days of each such Substitution Notice (the “Valuation Date”); (iii) state that the fair market value of the following terms Substitution Collateral is equal to or greater than the Existing Collateral; and conditions:
(iv) state that the Substitution will not interfere with the Trustee’s ability to realize the value of the remaining Collateral and will not impair the maintenance and operation of the remaining Collateral. Contemporaneously with the delivery of the Substitution Notice, the Company shall deliver to the Trustee (a) At an Officer’s Certificate stating that (i) the time of such Borrower’s request for a Substitution (A) does not include any assets other than the Substitution Collateral, and at (B) complies with the time terms and conditions of the proposed SubstitutionIndenture and this Agreement, including, without limitation, the provisions of this Section 4.04; (ii) there shall exist is no Default in existence or continuing on the date thereof, the Valuation Date, or the Substitution Date; (iii) the Substitution will not result in a Default or an Event of Default, ; (iv) all conditions precedent in the Indenture and there shall exist no condition or state of facts, which with this Agreement relating to the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
Substitution have been complied with; (b) No Event of Default shall have occurred under any of all documentation required by the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property TIA (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined aboveSection 314(d) of the Substitute Property shall equal or exceed TIA) prior to the then-market value proposed Substitution; and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (ic) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender documentation (including, without limitation, evidence that Lender any necessary or appropriate Uniform Commercial Code financing statements or amendments thereto, together with a supplement to this Agreement in form and substance satisfactory to the Trustee providing that, as of the Substitution Date, the Substitution Collateral shall have become Collateral under this Agreement) necessary or reasonably requested by the Trustee to grant to the Trustee a perfected first priority security interest in and exclusive Lien (subject only to Permitted Collateral Liens) on the fee simple interest in Substitution Collateral. Upon the Substitute Property)Company’s compliance with the foregoing provisions, (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee effective as of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt Date, at the expense (including payment of such fee. At attorneys’ fees for the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%Trustee) of the Allocated Loan Amount for Company (x) the Exiting Property; provided, however, that Lender Company shall credit against execute such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications releases and other documents as Lender the Company may reasonably request in connection therewith;
(u) Lender is satisfiedto release the Trustee’s Liens on the Existing Collateral, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2y) the Trustee shall take the steps necessary or appropriate to perfect the Trustee’s security interest in the Substitution Administrative FeeCollateral. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4foregoing, Borrowers shall only have the right to a combined cumulative total (during the entire term no substitution of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 Collateral shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights permitted under this Section 4if the fair market value of all Substitution Collateral for all such substitutions occurring since the Issue Date exceeds $8,500,000.
Appears in 1 contract
Substitution of Collateral. Upon prior written notice Notwithstanding the foregoing, Borrower, but not any subsequent transferee, shall have a one-time right to Lender, substitute a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory for one of the three Individual Properties (the “Replaced Property”), subject to Lender the following conditions:
(in its sole discretiona) and upon satisfaction (the Substitute Property is of equal or greater value to the Replaced Property, as determined by Lender in its sole discretion) of each of the following , based upon ▇▇▇▇▇▇’s then current underwriting methodology for similar properties, including, but not limited to both historical operating reviews and performance and forward-looking proforma underwriting, property condition, operating history, current occupancy, net operating income, debt service coverage, tenant exposures and financial conditions, tenant lease terms and conditions:
(a) At lease rollover, market rents, any anticipated change in real estate taxes and/or assessments due with respect to the time of such Borrower’s request for a Substitution property sale/transfer, property location, Borrower financial condition and at the time of the proposed Substitutioncreditworthiness, there shall exist no Event of DefaultBorrower operating and management experience, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documentsthen current market conditions;
(b) No Event of Default shall have occurred under any the combined loan-to-value ratio of the Loan Documents at any time from Substitute Property and the Closing Date to remaining two Individual Properties constituting the date Property after such contemplated substitution of collateral shall not exceed the lesser of (i) the then-current loan-to-value of the consummation of Property prior to such substitution and (ii) 55.0% and the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution debt service coverage ratio shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least 1.60x (based upon a 30-year amortization schedule) (any leases with tenants not in occupancy or more than thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing delinquent or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later less than twelve (12) months prior to the maturity date of the Loansterm left shall not be included in these calculations);
(gc) The proposed Substitute Property shall constitute the fee simple estate to such propertyBorrower shall, at its own expense, submit whatever information Lender reasonably requests (including without limitation title, survey, zoning, leases, operating statements, rent rolls, environmental reports, property inspection reports, appraisals, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application documentation required in connection with the closing original making of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (iloan) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that evaluate whether or not the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ ▇▇▇▇▇▇’s then current financial condition shall be satisfactory to Lenderrequirements for new loans;
(od) At the same time execution of all documents required, as determined by ▇▇▇▇▇▇, to evidence the collateral substitution;
(e) an updated and/or new title policy providing coverage for the Substitute Property; and
(f) ▇▇▇▇▇▇▇▇’s payment of a collateral substitution fee equal to the greater of (i) 0.50% of the outstanding balance that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of is allocated for each Substitute Property and (ii) $25,000 (the “Substitution Administrative Fee”)25,000, and the Substitution Administrative Fee shall be deemed earned by Lender upon payment of all of Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with such collateral substitution, including, ▇▇▇▇▇▇’s legal costs (internal and external). Notwithstanding the Substitutionforegoing, including but not limited toLender may reject, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s its sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the any Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in proposed by Borrower based upon to Lender’s sole judgmentthen-current portfolio mix, equal to MSA market outlook, market exposure or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4portfolio concentration.
Appears in 1 contract
Sources: Loan Agreement (Whitestone REIT)
Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At If Ampex intends to sell or refinance the time of such Borrower’s request for a Substitution Mortgaged Property (or any other substitute Collateral) free and at the time clear of the proposed Substitutionmortgage and security interest therein, there shall exist no Event of Default, and there shall exist no condition then prior to or state of facts, which simultaneous with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any Hillside's release of the Loan Documents at any time from the Closing Date to the date deed of the consummation of the proposed Substitution;
(c) A Substitution trust, Ampex shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along provide Hillside with a marked copy security interest in substitute Collateral having a fair market value of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed $7.5 million pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Propertythis Section 4.2; provided, however, that Lender if Ampex refinances the Mortgaged Property for an amount in excess of $7.5 million, Ampex shall credit against such non-refundable fee paid provide Hillside with a security interest in substitute Collateral having a fair market value equal to at least the closing amount of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing proceeds of the Substitution shall be applied to the refinancing net of applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closesrefinancing expenses, Borrowers shall pay all costs and expenses associated with the Substitutionincluding, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxescommissions and transfer fees. If such substitute Collateral shall comprise inventory and/or accounts receivable, intangible taxes(i) thirty (30) days' prior written notice shall be provided in the manner described in paragraph (b)(i) and (ii) below, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees ii) the value of Lender’s architect and/or engineersuch Collateral shall be deemed to be equal to the value thereof less applicable reserves as set forth in the financial statements of Ampex (or the owner of the Collateral) as prepared in accordance with GAAP, and fees related (iii) such security interest shall extend to all Ampex's domestic inventories and/or accounts receivable, as the case may be, but Ampex shall have the right to grant other security interests in its inventory and/or accounts receivable, as the case may be, provided that such other security interests shall be subordinated to the Environmental Site Assessmentprior lien in favor of Hillside for obligations up to an aggregate of $7.5 million (or, if applicable, the amount of any refinancing of the Mortgaged Property, if greater). Any security interest in substitute Collateral shall be granted pursuant to a Security Document, in a form satisfactory to Hillside.
(b) If Ampex intends to sell or refinance the Mortgaged Property (or any other substitute Collateral) free and clear of the mortgage and security interest and to provide Hillside with substitute Collateral (other than inventories and/or accounts receivable) pursuant to the provisions hereof, the following procedures shall apply:
(i) Ampex shall provide written notice to Hillside, signed by the President or Chief Financial Officer of Ampex, of its intention to offer Hillside substitute Collateral for the existing Collateral, which notice shall include a precise description of the property or type of property and its location; the estimated fair market value of the substitute Collateral and the basis for the estimate; a description of any prior mortgage, lien, encumbrance, or security interest on such substitute Collateral; a description of any known or potential claim to such property by any other person; a description of any known purchases, sales or offers to purchase or sell the property or type of property involved;
(qii) Lender Hillside shall have determined thatthirty (30) days in which to respond, after giving effect in writing, to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan Ampex's notice of its intention to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75substitute Collateral;
(riii) Lender If Hillside agrees to accept the substitute Collateral, or fails to respond, in writing, within such thirty (30) day period, Ampex shall have determined that, following provide Hillside with a security interest (or mortgage) in the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of substitute Collateral by executing the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; andDocument;
(siv) Lender’s decision If Hillside objects to accept or reject any proposed Substitute Property shall be Ampex, in Lender’s sole and absolute discretion; it being understood thatwriting, without limiting as to the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the fair market value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent proposed substitute Collateral (100%) net of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as portion which may be reasonably requested by Lender (including a reaffirmation certification subject to any prior lien, encumbrance or other agreement) that security interest of any guarantykind), indemnity or similar instrument delivered to Lender in connection Ampex and Hillside shall jointly appoint an independent valuator, who is familiar with the Loans remains type of property being offered as substitute Collateral and the market in full force and effect, notwithstanding and taking into consideration the Substitution; andwhich it could be sold;
(v) The Substitute Property valuator shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated render a written report to the Exiting Property at parties, within thirty (30) days of his appointment, in which he shall state his opinion as to the time fair value of the closing offered substitute Collateral, and such opinion shall be binding on both parties;
(vi) Ampex shall bear the costs of the Substitution. Lender shall have valuator, and, if applicable, the costs incurred by Hillside in releasing its mortgage and security interest in the existing Mortgaged Property or previous substitute Collateral and obtaining, filing, and perfecting its security interest in the substitute Collateral;
(vii) If the offered substitute Collateral is not of sufficient value for substitution, Ampex may at least sixty (60) days any time offer additional or different substitute Collateral in which to process any request to effect a Substitution after receipt event the foregoing procedures of this subsection (1b) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4applicable.
Appears in 1 contract
Sources: Hillside Ampex/Sherborne Agreement (Ampex Corp /De/)
Substitution of Collateral. Upon prior written notice to LenderAfter the first day of the twenty-fifth (25th) month following the First Disbursement Closing Date, not more than twice in a calendar year, and not more than an aggregate of five (5) times during the term of the Loan (total for both this Loan and for substitutions under the Pool B Loan). Borrower shall be entitled have the right to ▇▇▇▇▇ ▇ ▇▇▇▇ in favor of Lender (and add an "Individual Property" under the Loan Documents) encumbering certain of Borrower's properties (other than a then existing Individual Property) (the "Substitution Property") and obtain a release of an Individual Property owned by such Borrower (the “Exiting "Substituted Property”," and collectively, along with the Substitution Property, the "Substitution Properties") from the Lien of the Collateral Mortgage thereon and from Borrower's obligations under the Loan Documents and the Cross Collateral Documents upon substituting therefor (other than those expressly stated to survive) with respect to such Substituted Property (collectively, a “"Substitution”) another property (the “Substitute Property”) satisfactory "), subject to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditionsto the sole satisfaction of Lender:
(a) At each Substitution shall consist of not more than five (5) then existing Individual Properties, and all Substitutions, in the time aggregate, shall consist of not more than fifteen (15) Individual Properties (including substituted properties under the Pool B Loan);
(b) Lender shall receive at least ninety (90) days prior written notice of the proposed Substitution, which notice will contain sufficient documentation to enable Lender to determine whether the conditions set forth herein have been satisfied;
(c) there shall be no Event of Default as of either the date of notice of the proposed Substitution or the date of the Substitution;
(d) the then current appraised value of the Substitution Property must equal or exceed the then current appraised value of the Substituted Property, the Substitution Property shall be at least 93% fully leased and occupied with tenants in possession and paying rent under Leases reasonably acceptable to Lender, and the Substitution Property shall be similar or better, with respect to product type, age, building construction design and quality, and tenant quality, as compared to the Substituted Property;
(e) the resulting annualized Debt Service Coverage Ratio calculated only with respect to the Substitution Property (for the 12-month period commencing on the date of the proposed Substitution) shall be equal to or greater than the annualized Debt Service Coverage Ratio calculated only with respect to the Substituted Property (for the 12-month period commencing on the date of the proposed Substitution);
(f) Borrower will comply with each and every provision set forth in Schedule III attached hereto to the sole satisfaction of Lender, and each Substitution Property shall satisfy Lender's then existing underwriting criteria pertaining to, without limitation, leasing, tenant-credit, tenant-quality, tenant-identification, insurance coverage, and lease-expiration;
(g) Borrower shall have delivered to Lender Title Insurance Policies satisfactory to Lender for the Substitution Property and endorsements to the Title Insurance Policies for all Properties satisfactory to Lender that (i) add the Substitution Property thereunder; (ii) extend the effective date of such Borrower’s policies to the effective date of the Substitution; (iii) confirm that there shall be no change in the priority of the Lien of the Mortgages (including a first Lien of the Mortgage for the Substitution Property); (iv) confirm that the title insurers issuing the Title Insurance Policies consent to the Substitution; (v) waive any defense that such title insurers may have as a result of the Substitution; and (vi) to the extent of the then current appraised value of the Substituted Property, waive any right of subrogation;
(h) Borrower shall pay for all of Lender's costs, including, but not limited to, third party reports, reasonable attorneys' fees, title, survey, engineering and environmental costs and charges, fees related to appraisers, engineers, architects and consultants, recording costs and costs of endorsements and/or premiums for Title Insurance Policies required by Lender, in connection with any such Substitution;
(i) Neither the Laws of the State where the Substitution Property is located nor the ownership structure of the Substitution Property shall, in Lender's sole opinion, increase the risks associated with Lender's ability to enforce its rights and remedies under the Mortgages related to any or all anti-deficiency statutes or single-action legislation;
(j) Borrower shall pay Lender a fee of $20,000.00 per each separate property as may be part of a Substitution Property (which shall be payable per, and along with, each request for a Substitution), but which shall not exceed $50,000.00 per Substitution;
(k) Borrower shall execute, acknowledge and deliver all documents and agreements reasonably required by Lender to evidence any Substitution and to otherwise acknowledge and confirm Borrower's obligations under the Loan Documents and all documents and agreements executed and delivered in connection with Loan, including CDC's obligations under the Environmental Indemnity Agreement for the Substitution Properties, the limitation of liability provisions of Article XV of the Mortgage for the Substituted Property, and any contribution agreement executed and delivered in connection with the Loan; and
(l) If the owner of the Substitution Property is a permitted wholly-owned subsidiary of CDC, CDC shall deliver to Lender (A) an instrument, satisfactory to Lender, from CDC guaranteeing the Environmental Indemnity Agreement for the Substitution Property, (B) an instrument, satisfactory to Lender, from CDC guaranteeing the limitation of liability provisions of Article XV of the Mortgage for the Substitution Property, and (C) all documents and agreements reasonably required by Lender to, among other things, evidence CDC's guarantee of all obligations with respect to the Substitution and to include the proposed transferee within any contribution agreement executed and delivered in connection with the Loan.
(m) Borrower shall have delivered to Lender evidence satisfactory to Lender that, at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with that (A) the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any lien of the Subordinate Loan Documents at any time is released from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Substituted Property, and as soon as available after such Borrower’s written request for a Substitution, such (B) Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior has granted to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Subordinate Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (ivMortgages) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and lien encumbering the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4.
Appears in 1 contract
Substitution of Collateral. Upon Notwithstanding the provisions of this Agreement or any of the Loan Documents to the contrary, Borrower may submit a written request (“SUBSTITUTION REQUEST”), upon at least ninety (90) days prior written notice to Lendernotice, that Lender permit a Borrower shall be entitled to obtain substitution (each a release of an Individual Property owned by such Borrower (the “Exiting PropertySUBSTITUTION”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor a substitute property (each a “SubstitutionSUBSTITUTE PROPERTY”) another property (which previously has not been the subject of inclusion in the collateral for the Loan) for any individual Property on Schedule I (in such capacity a “Substitute PropertyREPLACED PROPERTY”) satisfactory upon and subject to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At the time of such Borrower’s request for Borrower must submit a Substitution and at the time of Request, identifying the proposed Substitution, there shall exist no Event of Default, Substitute Property and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Replaced Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty ninety (3090) days prior to the end proposed closing date for the Substitution. Lender shall evaluate the request for the proposed Substitution and the proposed Substitute Property pursuant to its then customary underwriting and pricing criteria. The amount of the “PRINCIPAL ALLOCATION” Lender would determine to allocate to the Substitute Property must be at least equal to the amount of the then remaining Principal Allocation for the proposed Replaced Property, and the loan-to-value ratio for the Lender’s period proposed Principal Allocation for the Substitute Property, based upon a current MAI appraisal in accordance with SUBPARAGRAPH (H) below, must be at least equal to the then current loan-to-value ratio for the proposed Replaced Property. In its underwriting and pricing analysis, Lender may review items such as, but not limited to, location, occupancy, lease term, rollover, tenant exposure, tenant’s credit, average daily room rates and operating statements.
(b) The owner of the Substitute Property must be the Borrower (such that the Substitute Property is owned 100% by the same entity as specified belowowns all the collateral constituting the Property). No properties will be permitted other than limited service or full service hotels or motels operating under a hotel or motel franchise acceptable to Lender. The Substitute Property must be located in the continental United States.
(c) Lender in its sole discretion shall acknowledge within ten (10) business days of the Lender’s receipt of the Substitution Request whether the proposed Substitute Property appears to be acceptable to permit the Substitution. If in the Lender’s sole discretion it is determined that the proposed Substitute Property is equal to or greater in value and quality than the Property, then Lender, through its loan correspondent, GMAC Commercial Mortgage, will process the Borrower’s formal request for processing such Substitution;. The proposal will be reviewed by and presented to Lender’s and TNG Investment Management LLC’s investment review committees pursuant to each of their then current commercial mortgage loan policies, practices, standards and procedures. If the investment review committee approves the formal request for Substitution, the Substitution will be subject to the other conditions outlined in this SECTION 3.08.
(d) No more than one (1) Substitution Request shall be considered in any calendar year for the entire Loan.
(e) Borrower shall not be permitted to request and close more than a total of two (2) Substitutions during the Loan term.
(f) Any written request by Borrower shall pay a Borrower processing fee to Lender for equal to $25,000 at closing of each approved Substitution. A “SUBSTITUTION DEPOSIT’ of $5,000 shall be required with submission of a Substitution must Request, which deposit shall be received no sooner than applied to the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion processing fee at closing of the most recent Release or Substitution, . The deposit and any processing fee contemplated by this subsection are in addition to attorneys’ fees and expenses incurred in the documentation of such written request must be received no later than twelve (12) months prior to Substitution and in the maturity date review of the Loans;due diligence.
(g) The proposed All improvements on the Substitute Property shall constitute the fee simple estate to such propertyhave been completed in a good and workmanlike manner and in compliance, in all material respects, with all applicable governmental requirements. The Substitute Property must be lien free and no joint venture or partnership interests or interests shall all land, improvements and personal property must be permitted;paid for in full.
(h) The ownership entity appraised fair market “As Is” value of the Substitute Property shall be identical equal to or greater than the entity that owned greater of (x) the Exiting then appraised fair market value, or gross sales proceeds, as the case may be, of the Replaced Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(jy) The credit the original appraised value of the tenants (or if a lease is guaranteed, Replaced Property as set forth in the credit of the guarantor so long as such lease is guaranteed pursuant appraisal delivered to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required loan on the Replaced Property. The fair market “As Is” value of the Replaced Property and Substitute Property shall be determined by a firm of appraisers selected by GMAC Commercial Mortgage and approved by the Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be based on an MAI appraisal satisfactory to Lender, dated not more than ninety (ii90) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title days prior to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee . All costs of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution appraisals shall be applied paid by the Borrower on or prior to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty the right to readjust the Principal Allocations and Allocation Percentages for all properties constituting the Property (60or such number remaining if the Release Privilege previously has been exercised). The Release Factor set forth in SECTION 3.07 SUBPARAGRAPH (I) days in which above shall remain the same upon closing of the Substitution.
(i) The actual net operating income relating to process the Substitute Property (based upon the trailing twelve (12) month financial results or such shorter period, as Lender deems appropriate, for a Substitute Property opened for less than one year) shall equal or exceed the actual net operating income relating (based upon the trailing twelve (12) month financial results or such shorter period, as Lender reasonably deems appropriate, for any request Substitute Property opened for less than one year) to effect a Substitution after receipt of the Replaced Property.
(j) Lender’s outside counsel shall prepare and Borrower shall execute (1) all materials amendments to the Note, the Mortgage, the Assignments of Rents and information necessary to evaluate such request Leases, the Environmental Indemnification Agreement, this Agreement and tax and insurance escrows, and (2) all Loan Documents Lender shall deem appropriate, including, but not limited to, any new security instrument, assignment of rents and leases, environmental indemnities, etc. relating to the Substitute Property (all of which documentation shall be substantially in the form of the applicable documents executed in connection with the Loan with such changes thereto as Lender reasonably deems appropriate to reflect the terms and circumstances of the Substitution Administrative Feeand Substitute Property) (collectively, the “SUBSTITUTE LOAN DOCUMENTS”). Notwithstanding anything The Substitution Loan Documents shall be cross-defaulted and cross-collateralized with the existing Loan Documents for the Loan.
(k) Borrower shall be required to supply for Lender’s review and approval due diligence materials relating to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right Substitute Property prior to a combined cumulative total (during the entire term closing of the Loans) Substitution including those items required for closing of eight (8) Releases this Loan, and Substitutions; providedsuch other materials as may then be customarily required as part of its then current commercial loan closing policies, howeverprocedures, that standards and practices for properties of similar type and in similar locations as the Substitute Property, including, without limitation, a current as-built ALTA survey, proof of adequate insurance, title insurance in conformance with the requirements for the closing of this Loan, proof of compliance with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and attornment agreements, franchise agreements and comfort letters. The Lender agrees to consider in good faith any request shall, at the Borrowers’ sole cost and expense, receive for its consent review and approval all additional due diligence materials in any way relating to a Release or Substitution that would cause the combined cumulative total of Releases Substitute Property, including but not limited to, appraisal, hazardous substance report, seismic report and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, engineer report as required by Lender in Lender’s its sole discretion. This Section 4 The items listed in this subsection are not exhaustive.
(l) The Substitute Loan Documents, financing statements, and other instruments required to perfect the liens in the Substitute Property and all collateral under such documents shall be personal recorded, registered and filed (as applicable) in such manner as may be required by law to create a valid, perfected lien and security interest with respect to the Substitute Property and the personal property related thereto. The liens created by the Substitute Loan Documents shall be first liens and security interests on the Substitute Property and the personal property related thereto, subject only to such exceptions as Lender shall approve in its sole discretion. At closing of the Substitution, the Borrower shall have good and marketable title to the Substitute Property and good and valid title to any personal property located thereon or used in connection therewith, in each case satisfactory to the Lender. The title policies to the remaining parcels of Property in the Loan must also be endorsed to bring forward the effective dates thereof through the dates and times of recording of the modification instruments and showing no new exceptions since the original Borrowers under Loan closing unless approved by Lender in writing and continuing all coverage provided in the Loansoriginal Loan title policy.
(m) Lender shall receive (1) a confirmation and reaffirmation of all Loan Documents by the Borrower for the other properties in the Loan, (2) a consent to such Substitution by any guarantors or indemnitors, if any, and no transferee (3) such other instruments and agreements and such certificates and opinions of counsel, in form and substance satisfactory to the Lender in connection with such Substitution as it may reasonably request.
(n) Borrower shall be responsible for all documentary stamp and intangible taxes on the Substitution and the Mortgage encumbering the Substitute Property and all other parcels of Property in the Loan that shall arise in connection with such Substitution. Lender shall require payment of all such documentary stamp and intangibles taxes required by law and authorities having jurisdiction as a condition of closing the Substitution and the corresponding loan modifications to the Loan, regardless of whether the taxing authority imposes taxes duplicative of those incurred at the original closing of the Loan.
(o) No Event of Default shall have occurred and be continuing hereunder or under any rights under other Loan Documents for the Loan on the date of Substitution Request or at closing of the Substitution.
(p) Lender shall be satisfied that no material adverse change in the financial condition, operations or prospects of any guarantor, Borrower (or controlling member of Borrower or general partner or limited partner of Borrower, as applicable) has occurred after closing of this Section 4Loan.
(q) The Borrower shall pay all reasonable out-of-pocket costs and expenses incurred in connection with any such Substitution and the reasonable out-of-pocket fees and expenses incurred by Lender, its outside counsel and its loan correspondent and servicer in connection therewith. Without limiting the generality of the foregoing, the Borrower shall, in connection with, and as a condition to, each Substitution, pay the reasonable fees and expenses of Lender’s counsel, the reasonable fees and expenses of Lender’s engineers, appraisers, construction consultants, insurance consultants and other due diligence consultants and contractors, recording charges, title insurance charges, and documentary stamp and/or mortgage or similar taxes, transfer taxes.
Appears in 1 contract
Substitution of Collateral. Upon prior written notice to LenderNotwithstanding the provisions of Section 6.2 of this Agreement, a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At the time of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist provided no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any and be continuing, the Borrower may elect to substitute for certain of the Loan Documents at any time from Collateral (the Closing Date to the date "Released Collateral") substitute Collateral of the consummation same type as the Released Collateral (the "Substitute Collateral") as Collateral for the Loan (a "Substitution"), provided further that each of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution following conditions precedent shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such satisfied: The Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining with respect to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, orCollateral, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lendera new promissory note, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counselloan agreement, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (environmental indemnity agreement, mortgage/deed of trust, security agreement, UCC-1 financing statements, and such other loan documents, including, without limitation, evidence that guaranties and opinions of counsel, as Lender shall have a first and exclusive Lien on the fee simple interest in may require with respect to the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirementsCollateral, and (viii) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At if the same time that the applicable Borrower delivers its written notice Substitute Collateral consists of real property, a mortgagee title insurance policy and an ALTA survey acceptable to Lender requesting a Substitution, such in all respects; The Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated of Lender in connection with the SubstitutionSubstitution and cooperate fully with Lender in connection with all due diligence conducted by Lender in connection with the Substitute Collateral, including but not limited and the Substitute Collateral shall be subject to, title insurance among other things, the underwriting guidelines and survey fees requirements of Lender as well as the review and expensesapproval by Lender, recording charges and taxesin its discretion, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the LoansCollateral; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the The then current value of the Substitute Property is, in Lender’s sole judgment, Collateral as determined by Lender pursuant to an appraisal or valuation obtained by Lender at Borrower's cost and expense shall be equal to or greater than one hundred percent (100%) of the value of the Exiting Property, Released Collateral as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Loan; Lender shall have at least sixty (60) days must be satisfied, in which its absolute and sole discretion, that the Borrower is able to process any request to effect a Substitution after receipt satisfy and comply with the provisions of (1) all materials covenants set forth in the Loan Documents, including, without limitation, the covenants set forth in Section V of this Agreement, on an ongoing basis when the Substitute Collateral is pledged in lieu of the Released Collateral, and information necessary to evaluate such request and (2) that the Substitution Administrative Fee. Notwithstanding anything Cash Flow Coverage Ratio computed solely with respect to the contrary Substitute Collateral (and any existing Collateral that will not constitute Released Collateral) for the period of two consecutive fiscal years most recently ended equals or exceeds the computed Cash Flow Coverage Ratio solely with respect to the Released Collateral (and any existing Collateral that will not constitute Released Collateral) for such period; The Borrower shall provide evidence to Lender, which evidence must be satisfactory to Lender, that each rating agency which has rated bonds or other securities issued by an entity which holds the Loan or an interest in Section 3 above and/or this Section 4the Loan has determined that such Substitution will not result in the qualification, Borrowers shall only have the right to a combined cumulative total (during the entire term downgrade or withdrawal of the Loans) ratings of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release such bonds or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4other securities.
Appears in 1 contract
Substitution of Collateral. Upon prior written notice a. The Mortgagee acknowledges and agrees that the Mortgagor shall have the right to Lendersubstitute collateral (the "Substituted Collateral") that is secured by the lien and operation of this Mortgage or the other documentation executed in connection with the Note. The "Appraised Value" of the Substituted Collateral, a Borrower together with any other collateral then mortgaged to Mortgagee as security for the Note, shall be entitled equal to obtain a release of an Individual Property owned by such Borrower or greater than Six Million Dollars ($6,000,000.00), or Seven Million, Three Hundred Thousand Dollars ($7,300,000.00), as the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (case may be, in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At the time of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which accordance with the passage provisions of time or section 3.18.4 hereof. It is understood and agreed that the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution Substituted Collateral shall be in conjunction with property that falls within the sale ambit of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement ▇▇▇▇▇▇▇▇▇'s business plan previously delivered to Lender)Mortgagee, but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement or is otherwise reasonably satisfactory to Mortgagee. The term "Appraised Value" will be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion appraised value of the most recent Release or SubstitutionSubstituted Collateral as set forth in an appraisal (the "Substituted Collateral Appraisal") prepared by an MAI certified appraiser, and approved by Mortgagee in its reasonable discretion, provided that Integra is hereby approved to perform any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such propertyappraisal required hereunder, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant Integra shall continue to a guaranty satisfactory adhere to Lender) occupying the Substitute Property Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Foundation and the lease rollover schedule for such tenants shall be satisfactory to LenderStandards of Professional Practice and the Code of Ethics of the Appraisal Institute.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) b. Upon the satisfaction of the Substitute Property from an engineer items set forth in subsection 3.19(c) hereof, Mortgagor and Mortgagee will sign documentation reasonably necessary to release the monies held in escrow to Mortgagor and execute whatever further documentation is necessary or architect chosen by Lenderdesirable to implement the terms hereof, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, documentation sufficient to release collateral from the locationlien of this Mortgage.
c. Notwithstanding anything to the contrary contained herein, ▇▇▇▇▇▇▇▇▇ acknowledges and agrees that Mortgagee shall be under no obligation whatsoever to accept the demographics Substituted Collateral or to carry out any of the market areaprovisions of subsection 3.19(b) hereof unless and until there shall have been delivered to Mortgagee the following documents, appearanceeach to be wholly satisfactory to Mortgagee, configuration, quality and age in its reasonable discretion:
(i) A marked up commitment by the title insurance company to issue the title insurance policy.
(ii) Policy or policies of insurance relating to the Substituted Collateral conforming to the requirements which are fully set forth in the Mortgage.
(iii) Three (3) copies of the Substitute Propertycurrent (i.e. not older than ninety (90) days) Survey of the Land.
(iv) The Substituted Collateral Appraisal.
(v) A report as to soil borings made on the Substituted Collateral by a soil testing firm satisfactory to Mortgagee. The number and location of such borings shall be in accordance with the recommendations of the soil testing firm and must also be satisfactory to Lender;Mortgagee.
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be Evidence satisfactory to Lender;Mortgagee and its counsel that the Substituted Collateral conform to all federal, state and local laws, ordinances, rules and regulations, including, but not limited to, laws of the State of Florida regulating air and water pollution and land use.
(ovii) At the same time Evidence that the applicable Borrower delivers its written notice Substituted Collateral is or will be separately assessed for tax purposes and information as to Lender requesting a Substitutiontax identification numbers, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”)tax rates, estimated tax values and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing identifies of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent taxing authorities.
(0.5%viii) An environmental assessment of the Allocated Loan Amount for Substituted Collateral performed at ▇▇▇▇▇▇▇▇▇'s expense by a licensed engineer or other environmental consultant satisfactory to Mortgagee stating that:
1. the Exiting PropertySubstituted Collateral is not located within any area designated as a hazardous substance site by any governmental authority; providedand
2. no hazardous or toxic wastes or other materials or substances regulated, howevercontrolled, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether prohibited by any federal, state, or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitutionlocal environmental laws, including but not limited toto asbestos, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property are located on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the LoansSubstituted Collateral; and
(s) Lender’s decision to accept 3. the Substituted Collateral has not been cited in the past for any violation of any such laws, regulations, or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood thatordinances . If the environmental assessment recommends, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property isor if Mortgagee so requests, in Lender’s its reasonable discretion, a Phase II audit, additional testing or remedial action, Mortgagor, at its sole judgment, equal cost and expense shall promptly conduct such additional audits and testing and/or complete such remedial action. Mortgagee may require Mortgagor to or greater than one hundred percent (100%) of provide evidence that all necessary actions have been taken to remove any hazardous substance contamination and/or to restore the value of the Exiting Property, as determined by Lender, site to a condition acceptable to Mortgagee and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;all governmental authority.
(tix) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such Such other certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances to be executed by ▇▇▇▇▇▇▇▇▇ or others as may be reasonably requested required by Lender (including a reaffirmation certification Mortgagee or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated Mortgagee's counsel pertaining to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) Substituted Collateral, it being understood that all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 items shall be personal promptly delivered prior to Mortgagee's obligation to accept the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4Substituted Collateral hereunder.
Appears in 1 contract
Sources: Mortgage and Security Agreement (American Leisure Holdings Inc)
Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled to obtain a release Notwithstanding the provisions of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien this Agreement or any of the Collateral Loan Documents and to the Cross Collateral Documents contrary, Borrower may submit a written request (“Substitution Request”), upon substituting therefor at least ninety (90) days prior notice, that Lender permit a substitution (each a “Substitution”) another of a substitute property (the each a “Substitute Property”) satisfactory to Lender (which previously has not been the subject of inclusion in the collateral for the Loan) for any individual Property on the list in the chart in subparagraph 3.07
(i) herein (in its sole discretionsuch capacity a “Replaced Property”) upon and upon satisfaction (as determined by Lender in its sole discretion) of each of subject to the following terms and conditions:
(a) At the time of such Borrower’s request for Borrower must submit a Substitution and at the time of Request, identifying the proposed Substitution, there shall exist no Event of Default, Substitute Property and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Replaced Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty ninety (3090) days prior to the end of Lender’s period (as specified below) proposed closing date for processing such the Substitution;
(f) Any written . Lender shall evaluate the request by a Borrower to Lender for a the proposed Substitution must be received no sooner than and the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute pursuant to its then customary underwriting and pricing criteria. The amount of the fee simple estate “Principal Allocation” Lender would determine to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of allocate to the Substitute Property shall must be identical at least equal to the entity that owned amount of the Exiting then remaining Principal Allocation for the proposed Replaced Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, loan-to-value ratio for the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding proposed Principal Allocation for the Substitute Property, including without limitationbased upon a current MAI appraisal in accordance with subparagraph (h) below, that (i) all Loan Documents shall must be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title at least equal to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ then current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a nonloan-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a nonto-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount value ratio for the Exiting proposed Replaced Property; provided. In its underwriting and pricing analysis, howeverLender may review items such as, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance location, occupancy, lease term, rollover, tenant exposure, tenant’s credit, average daily room rates and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4operating statements.
Appears in 1 contract
Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (for the purposes of this Section 4, the “Exiting Property”) from the Lien lien of the Collateral Loan Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each all of the following terms and conditions:
(a) At the time of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of the one (1) Individual Property to the Master Tenant or another a third party unrelated to any of the Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the then-current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such the delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six nine (69) months after the completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests in ground leases shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred eighty-two percent (10082%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.. In addition, Lender shall have the right to set the minimum leasing requirements for the Substitute Property;
(k) Lender shall have received a physical condition report (conforming with Lender’s then then-current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then then-current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of and access to the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government governmental requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 10,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one one-half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the LoansLoan;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, reasonable attorneys’ fees (including reasonable attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), reasonable fees of Lender’s architect and/or engineer, and reasonable fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fiftysixty-five two percent (5562%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.751.90 to 1.00;
(r) [intentionally omitted];
(s) If the Exiting Property is a self-storage facility, the Substitute Property must be a self-storage facility;
(t) Lender shall have determined that, following the Substitution, the aggregate value of all Individual Properties in any one metropolitan area remaining in the Security Pool shall not exceed ten percent (10%) of the total value of all Individual Properties remaining in the Security Pool (with the exception of Fort ▇▇▇, New Jersey, and South Florida, in which case the total value cannot exceed thirty percent (30%);
(u) Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of three (3) Substitutions;
(v) Lender shall have determined, that following the Substitution, the amount of the Individual Loans with respect to of all Individual Properties that comprised part of the Property Security Pool on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent sixty (5560%) of the total original principal amount of the Loans; and;
(sw) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; , it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(tx) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then then-current guidelines and requirements, and Borrowers deliver delivers such certifications and other documents as Lender may request in connection therewith;
(uy) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(vz) The Individual Loan associated with the Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property Individual Loan as the then then-existing unpaid principal balance allocated to the Individual Loan associated with the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total Within ten (during the entire term of the Loans10) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in business days following Lender’s sole discretionreceipt of Borrower’s notice to effect a Substitution and the Substitution Administrative Fee, Lender shall preliminarily notify Borrower of any materials or information missing from documentation submitted to Lender with such written notice and which are needed by Lender to evaluate such request. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4.
Appears in 1 contract
Sources: Collateral Loan Agreement (Strategic Storage Trust, Inc.)
Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled to obtain a release Notwithstanding the provisions of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien this Agreement or any of the Collateral Loan Documents and to the Cross Collateral Documents contrary, Borrower may submit a written request ("SUBSTITUTION REQUEST"), upon substituting therefor at least ninety (90) days prior notice, that Lender permit a “Substitution”substitution (each a "SUBSTITUTION") another of a substitute property (each a "SUBSTITUTE PROPERTY") (which previously has not been the “Substitute Property”subject of inclusion in the collateral for the Loan) satisfactory to Lender for any individual Property on the list in the chart in SUBPARAGRAPH 3.07(i) herein (in its sole discretionsuch capacity a "REPLACED PROPERTY") upon and upon satisfaction (as determined by Lender in its sole discretion) of each of subject to the following terms and conditions:
(a) At the time of such Borrower’s request for Borrower must submit a Substitution and at the time of Request, identifying the proposed Substitution, there shall exist no Event of Default, Substitute Property and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Replaced Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty ninety (3090) days prior to the end proposed closing date for the Substitution. Lender shall evaluate the request for the proposed Substitution and the proposed Substitute Property pursuant to its then customary underwriting and pricing criteria. The amount of the "PRINCIPAL ALLOCATION" Lender would determine to allocate to the Substitute Property must be at least equal to the amount of the then remaining Principal Allocation for the proposed Replaced Property, and the loan-to-value ratio for the Lender’s period 's proposed Principal Allocation for the Substitute Property, based upon a current MAI appraisal in accordance with SUBPARAGRAPH (h) below, must be at least equal to the then current loan-to-value ratio for the proposed Replaced Property. In its underwriting and pricing analysis, Lender may review items such as, but not limited to, location, occupancy, lease term, rollover, tenant exposure, tenant's credit, average daily room rates and operating statements.
(b) The owner of the Substitute Property must be the Borrower (such that the Substitute Property is owned 100% by the same entity as specified belowowns all the collateral [LOAN AGREEMENT] ING No. 27924 constituting the Property). No properties will be permitted other than limited service or full service hotels or motels operating under a hotel or motel franchise acceptable to Lender. The Substitute Property must be located in the continental United States.
(c) Lender in its sole discretion shall acknowledge within ten (10) business days of the Lender's receipt of the Substitution Request whether the proposed Substitute Property appears to be acceptable to permit the Substitution. If in the Lender's sole discretion it is determined that the proposed Substitute Property is equal to or greater in value and quality than the Property, then Lender, through its loan correspondent, GMAC Commercial Mortgage, will process the Borrower's formal request for processing such Substitution;. The proposal will be reviewed by and presented to Lender's and ING Investment Management LLC's investment review committees pursuant to each of their then current commercial mortgage loan policies, practices, standards and procedures. If the investment review committee approves the formal request for Substitution, the Substitution will be subject to the other conditions outlined in this SECTION 3.08.
(d) No more than one (1) Substitution Request shall be considered in any calendar year for the entire Loan.
(e) Borrower shall not be permitted to request and close more than a total of three (3) Substitutions during the Loan term.
(f) Any written request by Borrower shall pay a Borrower processing fee to Lender for equal to $25,000 at closing of each approved Substitution. A "SUBSTITUTION DEPOSIT" of $5,000 shall be required with submission of a Substitution must Request, which deposit shall be received no sooner than applied to the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion processing fee at closing of the most recent Release or Substitution, . The deposit and any processing fee contemplated by this subsection are in addition to attorneys' fees and expenses incurred in the documentation of such written request must be received no later than twelve (12) months prior to Substitution and in the maturity date review of the Loans;due diligence.
(g) The proposed All improvements on the Substitute Property shall constitute the fee simple estate to such propertyhave been completed in a good and workmanlike manner and in compliance, in all material respects, with all applicable governmental requirements. The Substitute Property must be lien free and no joint venture or partnership interests or interests shall all land, improvements and personal property must be permitted;paid for in full.
(h) The ownership entity appraised fair market "As Is" value of the Substitute Property shall be identical equal to or greater than the entity that owned greater of (x) the Exiting then appraised fair market value, or gross sales proceeds, as the case may be, of the Replaced Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(jy) The credit the original appraised value of the tenants (or if a lease is guaranteed, Replaced Property as set forth in the credit of the guarantor so long as such lease is guaranteed pursuant appraisal delivered to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required loan on the Replaced Property. The fair market "As Is" value of the Replaced Property and Substitute Property shall be determined by a firm of appraisers selected by GMAC Commercial Mortgage and approved by the Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be based on an MAI appraisal satisfactory to Lender, [LOAN AGREEMENT] ING No. 27924 dated not more than ninety (ii90) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title days prior to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee . All costs of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution appraisals shall be applied paid by the Borrower on or prior to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to readjust the Principal Allocations and Allocation Percentages for all properties constituting the Property (or such number remaining if the Release Privilege previously has been exercised).
(i) The actual net operating income relating to the Substitute Property (based upon the trailing twelve (12) month financial results or such shorter period, as Lender deems appropriate, for a combined cumulative total Substitute Property opened for less than one year) shall equal or exceed the actual net operating income relating (during based upon the entire term of the Loanstrailing twelve (12) of eight (8) Releases and Substitutions; providedmonth financial results or such shorter period, howeveras Lender reasonably deems appropriate, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal Substitute Property opened for less than one year) to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4Replaced Property.
Appears in 1 contract
Substitution of Collateral. Upon prior written notice to LenderAfter the first day of the twenty-fifth (25th) month following the First Disbursement Closing Date, not more than twice in a calendar year, and not more than an aggregate of five (5) times during the term of the Loan (total for both this Loan and for substitutions under the Pool A Loan). Borrower shall be entitled have the right to ▇▇▇▇▇ ▇ ▇▇▇▇ in favor of Lender (and add an "Individual Property" under the Loan Documents) encumbering certain of Borrower's properties (other than a then existing Individual Property) (the "Substitution Property") and obtain a release of an Individual Property owned by such Borrower (the “Exiting "Substituted Property”," and collectively, along with the Substitution Property, the "Substitution Properties") from the Lien of the Collateral Mortgage thereon and from Borrower's obligations under the Loan Documents and the Cross Collateral Documents upon substituting therefor (other than those expressly stated to survive) with respect to such Substituted Property (collectively, a “"Substitution”) another property (the “Substitute Property”) satisfactory "), subject to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditionsto the sole satisfaction of Lender:
(a) At each Substitution shall consist of not more than five (5) then existing Individual Properties, and all Substitutions, in the time aggregate, shall consist of not more than fifteen (15) Individual Properties (including substituted properties under the Pool A Loan);
(b) Lender shall receive at least ninety (90) days prior written notice of the proposed Substitution, which notice will contain sufficient documentation to enable Lender to determine whether the conditions set forth herein have been satisfied;
(c) there shall be no Event of Default as of either the date of notice of the proposed Substitution or the date of the Substitution;
(d) the then current appraised value of the Substitution Property must equal or exceed the then current appraised value of the Substituted Property, the Substitution Property shall be at least 93% fully leased and occupied with tenants in possession and paying rent under Leases reasonably acceptable to Lender, and the Substitution Property shall be similar or better, with respect to product type, age, building construction design and quality, and tenant quality, as compared to the Substituted Property;
(e) the resulting annualized Debt Service Coverage Ratio calculated only with respect to the Substitution Property (for the 12-month period commencing on the date of the proposed Substitution) shall be equal to or greater than the annualized Debt Service Coverage Ratio calculated only with respect to the Substituted Property (for the 12-month period commencing on the date of the proposed Substitution);
(f) Borrower will comply with each and every provision set forth in Schedule III attached hereto to the sole satisfaction of Lender, and each Substitution Property shall satisfy Lender's then existing underwriting criteria pertaining to, without limitation, leasing, tenant-credit, tenant-quality, tenant-identification, insurance coverage, and lease-expiration;
(g) Borrower shall have delivered to Lender Title Insurance Policies satisfactory to Lender for the Substitution Property and endorsements to the Title Insurance Policies for all Properties satisfactory to Lender that (i) add the Substitution Property thereunder; (ii) extend the effective date of such Borrower’s policies to the effective date of the Substitution; (iii) confirm that there shall be no change in the priority of the Lien of the Mortgages (including a first Lien of the Mortgage for the Substitution Property); (iv) confirm that the title insurers issuing the Title Insurance Policies consent to the Substitution; (v) waive any defense that such title insurers may have as a result of the Substitution; and (vi) to the extent of the then current appraised value of the Substituted Property, waive any right of subrogation;
(h) Borrower shall pay for all of Lender's costs, including, but not limited to, third party reports, reasonable attorneys' fees, title, survey, engineering and environmental costs and charges, fees related to appraisers, engineers, architects and consultants, recording costs and costs of endorsements and/or premiums for Title Insurance Policies required by Lender, in connection with any such Substitution;
(i) Neither the Laws of the State where the Substitution Property is located nor the ownership structure of the Substitution Property shall, in Lender's sole opinion, increase the risks associated with Lender's ability to enforce its rights and remedies under the Mortgages related to any or all anti-deficiency statutes or single-action legislation;
(j) Borrower shall pay Lender a fee of $20,000.00 per each separate property as may be part of a Substitution Property (which shall be payable per, and along with, each request for a Substitution), but which shall not exceed $50,000.00 per Substitution;
(k) Borrower shall execute, acknowledge and deliver all documents and agreements reasonably required by Lender to evidence any Substitution and to otherwise acknowledge and confirm Borrower's obligations under the Loan Documents and all documents and agreements executed and delivered in connection with Loan, including CDC's obligations under the Environmental Indemnity Agreement for the Substitution Properties, the limitation of liability provisions of Article XV of the Mortgage for the Substituted Property, and any contribution agreement executed and delivered in connection with the Loan; and
(l) If the owner of the Substitution Property is a permitted wholly-owned subsidiary of CDC, CDC shall deliver to Lender (A) an instrument, satisfactory to Lender, from CDC guaranteeing the Environmental Indemnity Agreement for the Substitution Property, (B) an instrument, satisfactory to Lender, from CDC guaranteeing the limitation of liability provisions of Article XV of the Mortgage for the Substitution Property, and (C) all documents and agreements reasonably required by Lender to, among other things, evidence CDC's guarantee of all obligations with respect to the Substitution and to include the proposed transferee within any contribution agreement executed and delivered in connection with the Loan.
(m) Borrower shall have delivered to Lender evidence satisfactory to Lender that, at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with that (A) the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any lien of the Subordinate Loan Documents at any time is released from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Substituted Property, and as soon as available after such Borrower’s written request for a Substitution, such (B) Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior has granted to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Subordinate Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (ivMortgages) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and lien encumbering the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4.
Appears in 1 contract
Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At the time of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests Trust shall be permitted;
(h) The ownership entity of , from time to time, to withdraw Subject Shares from the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property Custody Account and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy security interest under the terms of the Loan Application in connection with the closing of the LoansPledge Agreement, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender the Trust shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid substitute therefor, in a manner and pursuant to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied agreements and arrangements reasonably satisfactory to the Company under which the Company shall have a perfected security interest therein subject to no prior liens or security interests other than liens and security interests theretofore applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal Subject Shares withdrawn prior to or greater than one hundred percent concurrently with any such withdrawal, either (100%i) of an amount in cash (the value of the Exiting Property, as determined by Lender, and is "CASH COLLATERAL") at least equal to the Exiting Property in each Minimum Required Amount or (ii) an equal number of Subject Shares (the number of Subject Shares from time to time so withdrawn, "WITHDRAWN SHARES"). The "MINIMUM REQUIRED AMOUNT" means 120% of the following respects: product of the fair market value of the assets comprising a Subject Share and the number of Withdrawn Shares. For purposes of the preceding sentence, the fair market value (ai) stability of cash flowa share of Common Stock shall be the Current Market Price Per Common Share as of the Determination Date or (ii) of any other publicly traded securities shall be deemed to be the average (weighted by trading volume) of the daily closing prices (as reported in The Wall Street Journal or other recognized source of financial information) of such securities on the principal securities exchange on which, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; or the principal securities market in which, such securities are traded during the 20 consecutive trading days immediately prior to such date and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loansiii) of eight (8) Releases and Substitutions; providedany other assets, however, that Lender agrees to consider as determined in good faith any request for its consent to a Release or Substitution that would cause by the combined cumulative total Board of Releases and Substitutions during the term Directors of the Loans to exceed eight (8) Releases and SubstitutionsCompany. The required amount of Cash Collateral shall be recalculated weekly by the Custodian, which consent shall deliver promptly (by telecopier in accordance with Section 4.05) a written notice of such recalculation to the Trust (a "CUSTODIAN'S NOTICE"). Cash Collateral shall be remitted by the Custodian to, or additional Cash Collateral (or Subject Shares) which may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 required shall be personal deposited in the Custody Account by, the Trust based upon the most recent Custodian's Notice, to the original Borrowers under extent, but only to the Loansextent, and no transferee the value of the Cash Collateral is greater or less than, as the case may be, the then current Minimum Required Amount. Any payment by or to the Trust shall have be made on the second Business Day after the date of the Custodian's Notice. Any income in respect of the Cash Collateral shall be paid to the Trust; provided that any rights under such income shall be retained by the Custodian to the extent necessary to bring the Trust into compliance with the provisions of this Section 43.05. Cash Collateral may be invested only in U.S. Government debt securities having a maturity of less than 90 days.
Appears in 1 contract
Sources: Contingent Stock Redemption Agreement (Limited Inc)
Substitution of Collateral. Upon prior written notice The Borrower may, from time to Lendertime, replace any Eligible Container included in the Collateral (each, a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (the “Exiting PropertyReleased Container”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor with a replacement Container (each, a “SubstitutionSubstitute Container”), provided that (A) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each all of the following terms conditions are met in connection with such substitution and conditions:
(aB) At the time of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to extent any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made condition is measured at least thirty (30) days prior to the end of Lender’s period (a calendar quarter, all Containers released or added, as specified below) for processing applicable, within such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests calendar quarter shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;considered on an aggregate basis in determining whether such condition has been satisfied:
(i) At the time of any Substitution, the each Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by LenderContainer is an Eligible Container;
(jii) The credit no Event of Default exists on the tenants (date of release of any Released Container or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrowerwill exist giving effect thereto;
(liii) The on the date of such substitution, such Substitute Property Container(s) delivered on such date are comparable to the Released Containers released on such date; that is the Substitute Container(s) are of the same or functionally similar type (includinge.g., without limitationdry cargo containers substituted for dry cargo containers and refrigerated containers substituted for refrigerated containers) as, and having Net Book Values not less than the Net Book Values of, the locationReleased Containers, and which are not otherwise selected by the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;Borrower using any materially adverse selection criteria; and
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policythe sum of the Net Book Values of all Substitute Containers that have been substituted for Released Containers since the Closing Date does not, without the prior written consent of the Required Lenders (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall such consent to not be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”unreasonably withheld), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitutionexceed an amount equal to either (1) during any 12-month period, Borrower shall pay to Lender a non-refundable fee of one half of one five percent (0.55%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property Aggregate Note Principal Balance on the Closing Date and that would remain as part or (2) during the term of the Security Poolthis Term Loan Agreement, shall be greater than fifty-five twenty percent (5520%) of the total original principal amount of Aggregate Note Principal Balance on the Loans; and
(sClosing Date. The Substitute Container(s) Lenderand all the Related Assets shall become Collateral subject to this Term Loan Agreement and the Security Agreement and the security interest granted to the Collateral Agent pursuant to the Security Documents. The Borrower shall take all necessary action, and any action that the Collateral Agent reasonably determines is advisable, to protect and perfect the Collateral Agent’s decision to accept or reject any proposed Substitute Property shall be Lien in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for Container(s). Upon the Collateral Agent’s obtaining a Substitution unless the value of first priority perfected Lien in the Substitute Property isContainer(s), in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property Collateral Agent shall release its Lien in each of Released Container and all the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4Related Assets.
Appears in 1 contract
Sources: Term Loan Agreement (TAL International Group, Inc.)
Substitution of Collateral. Upon Notwithstanding the provisions of this Agreement or any of the Loan Documents to the contrary, Borrower may submit a written request (“SUBSTITUTION REQUEST”), upon at least ninety (90) days prior written notice to Lendernotice, that Lender permit a Borrower shall be entitled to obtain substitution (each a release of an Individual Property owned by such Borrower (the “Exiting PropertySUBSTITUTION”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor a substitute property (each a “SubstitutionSUBSTITUTE PROPERTY”) another property (which previously has not been the subject of inclusion in the collateral for the Loan) for any individual Property on the list in the chart in SUBPARAGRAPH 3.07(i) herein (in such capacity a “Substitute PropertyREPLACED PROPERTY”) satisfactory upon and subject to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At the time of such Borrower’s request for Borrower must submit a Substitution and at the time of Request, identifying the proposed Substitution, there shall exist no Event of Default, Substitute Property and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Replaced Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty ninety (3090) days prior to the end proposed closing date for the Substitution. Lender shall evaluate the request for the proposed Substitution and the proposed Substitute Property pursuant to its then customary underwriting and pricing criteria. The amount of the “PRINCIPAL ALLOCATION” Lender would determine to allocate to the Substitute Property must be at least equal to the amount of the then remaining Principal Allocation for the proposed Replaced Property, and the loan-to-value ratio for the Lender’s period proposed Principal Allocation for the Substitute Property, based upon a current MAI appraisal in accordance with SUBPARAGRAPH (h) below, must be at least equal to the then current loan-to-value ratio for the proposed Replaced Property. In its underwriting and pricing analysis, Lender may review items such as, but not limited to, location, occupancy, lease term, rollover, tenant exposure, tenant’s credit, average daily room rates and operating statements.
(b) The owner of the Substitute Property must be the Borrower (such that the Substitute Property is owned 100% by the same entity as specified belowowns all the collateral constituting the Property). No properties will be permitted other than limited service or full service hotels or motels operating under a hotel or motel franchise acceptable to Lender. The Substitute Property must be located in the continental United States.
(c) Lender in its sole discretion shall acknowledge within ten (10) business days of the Lender’s receipt of the Substitution Request whether the proposed Substitute Property appears to be acceptable to permit the Substitution. If in the Lender’s sole discretion it is determined that the proposed Substitute Property is equal to or greater in value and quality than the Property, then Lender, through its loan correspondent, GMAC Commercial Mortgage, will process the Borrower’s formal request for processing such Substitution;. The proposal will be reviewed by and presented to Lender’s and ING Investment Management LLC’s investment review committees pursuant to each of their then current commercial mortgage loan policies, practices, standards and procedures. If the investment review committee approves the formal request for Substitution, the Substitution will be subject to the other conditions outlined in this SECTION 3.08.
(d) No more than one (1) Substitution Request shall be considered in any calendar year for the entire Loan.
(e) Borrower shall not be permitted to request and close more than a total of three (3) Substitutions during the Loan term.
(f) Any written request by Borrower shall pay a Borrower processing fee to Lender for equal to $25,000 at closing of each approved Substitution. A “SUBSTITUTION DEPOSIT” of $5,000 shall be required with submission of a Substitution must Request, which deposit shall be received no sooner than applied to the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion processing fee at closing of the most recent Release or Substitution, . The deposit and any processing fee contemplated by this subsection are in addition to attorneys’ fees and expenses incurred in the documentation of such written request must be received no later than twelve (12) months prior to Substitution and in the maturity date review of the Loans;due diligence.
(g) The proposed All improvements on the Substitute Property shall constitute the fee simple estate to such propertyhave been completed in a good and workmanlike manner and in compliance, in all material respects, with all applicable governmental requirements. The Substitute Property must be lien free and no joint venture or partnership interests or interests shall all land, improvements and personal property must be permitted;paid for in full.
(h) The ownership entity appraised fair market “As Is” value of the Substitute Property shall be identical equal to or greater than the entity that owned greater of (x) the Exiting then appraised fair market value, or gross sales proceeds, as the case may be, of the Replaced Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(jy) The credit the original appraised value of the tenants (or if a lease is guaranteed, Replaced Property as set forth in the credit of the guarantor so long as such lease is guaranteed pursuant appraisal delivered to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required loan on the Replaced Property. The fair market “As Is” value of the Replaced Property and Substitute Property shall be determined by a firm of appraisers selected by GMAC Commercial Mortgage and approved by the Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be based on an MAI appraisal satisfactory to Lender, dated not more than ninety (ii90) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title days prior to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee . All costs of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution appraisals shall be applied paid by the Borrower on or prior to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty the right to readjust the Principal Allocations and Allocation Percentages for all properties constituting the Property (60or such number remaining if the Release Privilege previously has been exercised).
(i) days in which The actual net operating income relating to process the Substitute Property (based upon the trailing twelve (12) month financial results or such shorter period, as Lender deems appropriate, for a Substitute Property opened for less than one year) shall equal or exceed the actual net operating income relating (based upon the trailing twelve (12) month financial results or such shorter period, as Lender reasonably deems appropriate, for any request Substitute Property opened for less than one year) to effect a Substitution after receipt of the Replaced Property.
(j) Lender’s outside counsel shall prepare and Borrower shall execute (1) all materials amendments to the Note, the Mortgage, the Assignments of Rents and information necessary to evaluate such request Leases, the Environmental Indemnification Agreement, this Agreement and tax and insurance escrows, and (2) all Loan Documents Lender shall deem appropriate, including, but not limited to, any new security instrument, assignment of rents and leases, environmental indemnities, etc. relating to the Substitute Property (all of which documentation shall be substantially in the form of the applicable documents executed in connection with the Loan with such changes thereto as Lender reasonably deems appropriate to reflect the terms and circumstances of the Substitution Administrative Feeand Substitute Property) (collectively, the “SUBSTITUTE LOAN DOCUMENTS”). Notwithstanding anything The Substitution Loan Documents shall be cross-defaulted and cross-collateralized with the existing Loan Documents for the Loan.
(k) Borrower shall be required to supply for Lender’s review and approval due diligence materials relating to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right Substitute Property prior to a combined cumulative total (during the entire term closing of the Loans) Substitution including those items required for closing of eight (8) Releases this Loan, and Substitutions; providedsuch other materials as may then be customarily required as part of its then current commercial loan closing policies, howeverprocedures, that standards and practices for properties of similar type and in similar locations as the Substitute Property, including, without limitation, a current as-built ALTA survey, proof of adequate insurance, title insurance in conformance with the requirements for the closing of this Loan, proof of compliance with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and attornment agreements, franchise agreements and comfort letters. The Lender agrees to consider in good faith any request shall, at the Borrowers’ sole cost and expense, receive for its consent review and approval all additional due diligence materials in any way relating to a Release or Substitution that would cause the combined cumulative total of Releases Substitute Property, including but not limited to, appraisal, hazardous substance report, seismic report and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, engineer report as required by Lender in Lender’s its sole discretion. This Section 4 The items listed in this subsection are not exhaustive.
(l) The Substitute Loan Documents, financing statements, and other instruments required to perfect the liens in the Substitute Property and all collateral under such documents shall be personal recorded, registered and filed (as applicable) in such manner as may be required by law to create a valid, perfected lien and security interest with respect to the Substitute Property and the personal property related thereto. The liens created by the Substitute Loan Documents shall be first liens and security interests on the Substitute Property and the personal property related thereto, subject only to such exceptions as Lender shall approve in its sole discretion. At closing of the Substitution, the Borrower shall have good and marketable title to the Substitute Property and good and valid title to any personal property located thereon or used in connection therewith, in each case satisfactory to the Lender. The title policies to the remaining parcels of Property in the Loan must also be endorsed to bring forward the effective dates thereof through the dates and times of recording of the modification instruments and showing no new exceptions since the original Borrowers under Loan closing unless approved by Lender in writing and continuing all coverage provided in the Loansoriginal Loan title policies.
(m) Lender shall receive (1) a confirmation and reaffirmation of all Loan Documents by the Borrower for the other properties in the Loan, (2) a consent to such Substitution by any guarantors or indemnitors, if any, and no transferee (3) such other instruments and agreements and such certificates and opinions of counsel, in form and substance satisfactory to the Lender in connection with such Substitution as it may reasonably request.
(n) Borrower shall be responsible for all documentary stamp and intangible taxes on the Substitution and the Mortgage encumbering the Substitute Property and all other parcels of Property in the Loan that shall arise in connection with such Substitution. Lender shall require payment of all such documentary stamp and intangibles taxes required by law and authorities having jurisdiction as a condition of closing the Substitution and the corresponding loan modifications to the Loan, regardless of whether the taxing authority imposes taxes duplicative of those incurred at the original closing of the Loan.
(o) No Event of Default shall have occurred and be continuing hereunder or under any rights under other Loan Documents for the Loan on the date of Substitution Request or at closing of the Substitution.
(p) Lender shall be satisfied that no material adverse change in the financial condition, operations or prospects of any guarantor, Borrower (or controlling member of Borrower or general partner or limited partner of Borrower, as applicable) has occurred after closing of this Section 4Loan.
(q) The Borrower shall pay all reasonable out-of-pocket costs and expenses incurred in connection with any such Substitution and the reasonable out-of-pocket fees and expenses incurred by Lender, its outside counsel and its loan correspondent and servicer in connection therewith. Without limiting the generality of the foregoing, the Borrower shall, in connection with, and as a condition to, each Substitution, pay the reasonable fees and expenses of Lender’s counsel, the reasonable fees and expenses of Lender’s engineers, appraisers, construction consultants, insurance consultants and other due diligence consultants and contractors, recording charges, title insurance charges, and documentary stamp and/or mortgage or similar taxes, transfer taxes.
Appears in 1 contract
Sources: Loan Agreement (Summit Hotel OP, LP)
Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled to obtain substitute a release of an Individual Property property (being defined as releasing a property that then constitutes security for the Loan (the "Released Property")) and substituting another property owned in fee by such Borrower (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “"Substitute Property”") satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of place on the following terms and conditions:
(a) At A substitution may not take place more than three (3) times during the time of such Borrower’s request for a Substitution and at the time term of the proposed Substitution, there shall exist no Event of Default, Loan and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan DocumentsRelated Loans;
(b) No Event more than three (3) properties (in the aggregate) may be released under this Section 6.16 and Section 5.16 of Default shall have occurred under any each Related Mortgage, and no more than a total of three (3) of the Loan Documents at any time from the Closing Date to the date Mortgaged Properties may be released under (i) Section 6.15 above and Section 5.15 of the consummation each Related Mortgage, and (ii) this Section 6.16 and Section 5.16 of the proposed Substitutioneach Related Mortgage;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event After the proposed sale of substitution, the Individual Property shall not actually be consummated;
(e) Upon Debt Service Coverage Ratio - Remaining Properties for the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date substitution and projected twelve (12) months following the substitution must be at least equal to or greater than the greater of (i) 1.65, or (ii) the current Debt Service Coverage Ratio - Mortgaged Properties calculated for the twelve (12) month period prior to the substitution;
(d) After the proposed substitution, the loan to value ratio of the Loansremaining Related Loans must be less than or equal to the lesser of (i) 60%, or (ii) the current loan to value ratio of the existing Loan and Related Loans calculated immediately prior to the substitution based upon appraisals furnished to Lender in form and substance reasonably satisfactory to Lender and prepared by an MAI appraiser approved by Lender at Borrower's cost;
(e) The net operating income and/or RevPar (as reported by Smit▇ ▇▇▇vel) of the Substitute Property must not show a downward trend for any of the three (3) years prior to the substitution;
(f) The appraised value (based upon appraisals furnished to Lender in form and substance reasonably satisfactory to Lender and prepared by an MAI appraiser approved by Lender at Borrower's cost), the net operating income and current debt service coverage ratio of the Substitute Property must be 120% greater than the appraised value, net operating income and the debt service coverage ratio of the Released Property;
(g) The proposed Substitute Property shall constitute Lender may at its sole discretion reject any property substitution that in Lender's sole determination would not be in compliance with the fee simple estate terms and provisions of the Loan Application, would be detrimental to such propertythe overall quality and/or value of the Mortgaged Properties, or would not be in compliance with Lender's then existing underwriting standards and no joint venture or partnership interests or interests shall be permittedcriteria;
(h) The ownership entity of the Substitute Property shall must be identical franchised as a "Sheraton or Sheraton Suites", or other franchise reasonably acceptable to Lender, and managed by the manager under the Management Agreement or another a nationally recognized hotel management company with a franchise and hotel agreement similar to the entity that owned the Exiting PropertyManagement Agreement or otherwise reasonably acceptable to Lender;
(i) At Borrower must pay (i) all of Lender's costs (all of which must be paid, whether or not such substitution is actually approved or completed) associated with the time of any Substitutionsubstitution including but not limited to legal fees, appraised fees, market studies and expenses, title insurance premiums on the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy new property, engineering fees and paying rentexpenses, recording fees and transfer taxes, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender(ii) a fee of 1% of the original Allocated Loan Amount for the Released Property;
(j) The credit Loan and any Related Loan shall not be in Default at the time such request for substitution is made through the completion of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.substitution;
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines The original Borrower named in the Loan Documents and report requirements) Related Loan Documents continues to be the owner of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;Remaining Mortgaged Properties; and
(l) The Substitute Property (In order to substitute one property for another as security for the Loan or any Related Loan, Borrower acknowledges that such substitute property shall be subject to all of Lender's underwriting and due diligence requirements and criteria, including, without limitation, the locationenvironmental assessment, the demographics review of the market arealeases, appearancereceipt of tenant subordination letters, configurationtitle policy endorsements, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions etc. Borrower agrees that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in subject to all respects to Lender (including, without limitation, evidence that Lender shall have a first the terms and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing conditions of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4Application.
Appears in 1 contract
Substitution of Collateral. Upon At any time after the Release Date but prior written notice to Lenderthe Optional Prepayment Date, a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At , Lender shall, in the time case of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Parcels permit Borrower to substitute a different property (a "Replacement Parcel") for an original Parcel (the "Replaced Parcel"), and following such substitution, Lender shall release the Mortgage and any other Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of Replaced Parcel: (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) sum of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at proposed Replaced Parcel and the closing of the Substitution the Substitution Administrative Fee that such Borrower Allocated Loan Amounts for all other Replaced Parcels which have previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses been substituted for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent One Hundred Percent (100%) of the value amount of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturitiesLoan; (bii) tenant credit no Event of Default shall have occurred and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender be continuing with respect to the Substitute Property;
Loan; (tiii) the Borrower amends this Agreement, the Note and the other Loan Documents and executes such other documentation as Lender, the Servicer, or a Rating Agency may require to evidence the addition of the Replacement Parcel as collateral for the Loan and to confirm the enforceability of the Loan Documents; (iv) Lender determines in its sole discretion that receives a Qualified Survey for the Substitution would not result in Replacement Parcel; (v) Lender approves the status of title to the Replacement Parcel and obtains a violation of Qualified Title Insurance Policy for the ERISA provisions contained in Lender’s then current guidelines and requirementsReplacement Parcel; (vi) Lender receives such environmental, engineering, soil, and Borrowers deliver such certifications and other documents property condition reports regarding the Replacement Parcel as Lender may request in connection therewith;
require, all of which reports must be satisfactory to Lender; (uvii) Lender shall have received appraisals prepared in accordance with FIRREA which are satisfactory to Lender and which demonstrate that the fair market value of the Replacement Parcel equals or exceeds the fair market value of the Replaced Parcel; (viii) if the Replacement Parcel is satisfieda previously developed property, for the twelve month period prior to the transfer, the Net Operating Income for the Replacement Parcel shall have equaled or exceeded the Net Operating Income for the Replaced Parcel; (ix) if the Replacement Parcel is a newly developed property, the projected annualized Net Operating Income for the Replacement Parcel shall have equaled or exceeded the Net Operating Income for the Replaced Parcel for the twelve month period prior to the transfer; (x) on a pro forma basis, for the twelve month period after the transfer, the Net Operating Income for the Replacement Parcel is projected to equal or exceed the Net Operating Income for the Replaced Parcel; (xi) the Borrower confirms all warranties and representations contained in the Loan Documents with respect to the Property assuming the inclusion of the Replacement Property; (xii) the Borrower delivers to Lender such due diligence items regarding the Replacement Property as Lender or any Rating Agency may require, and Borrowers shall deliver such assurances as may be reasonably requested by due diligence items are satisfactory to Lender and the Rating Agencies; and (including a reaffirmation certification or other agreementxiii) each Rating Agency confirms in writing that any guaranty, indemnity or similar instrument delivered to Lender rating issued by such Rating Agency in connection with the Loans remains in full force and effecta Securitization will not be downgraded, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property qualified, or withdrawn as the then existing unpaid principal balance allocated to the Exiting Property at the time a result of the closing substitution of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4Replacement Parcel.
Appears in 1 contract
Substitution of Collateral. Upon At any time during the term of the Loan, with ninety (90) days prior written notice to Lender, a Borrower shall be entitled (during any one loan year, but subject to obtain a release of an Individual Property owned by such Borrower the cumulative limits set out below) to substitute up to two (2) properties comprising the “Exiting Property”original Portfolio with properties ("Substitute Collateral") from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) which shall be satisfactory to Lender in Lender's sole discretion and shall meet all criteria of Lender, including without limitation, the criteria set forth in subparagraphs (in its sole discretiona) and upon satisfaction through (as determined by Lender in its sole discretionk) below. In evaluating the acceptability of the substitution, each of the following terms and conditionsconditions must be satisfied:
(a) At the time of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist no No Event of Default, and there shall exist no condition Default or state of facts, event which with the passage of time or the giving of notice, or both, would constitute an Event of Default shall exist under the Loan DocumentsDocuments at the time of the request or at the time of the substitution of collateral;
(b) No Event of Default The Substitute Collateral shall have occurred under any only be an apartment complex satisfactory to Lender in Lender's sole discretion. The ownership entity of the Loan Documents at any time from the Closing Date Substitute Collateral shall be identical to the date of entity owning the consummation of the proposed SubstitutionIndividual Property being transferred;
(c) A Substitution The location (including, without limitation, the character and demographics of the market area) of the Substitute Collateral shall involve only one (1) Individual Propertybe satisfactory to Lender in Lender's sole discretion;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property Collateral shall not be less than one hundred ninety-two percent (10092%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lenderat the time of substitution;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(ke) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender conforming with the guidelines then applicable to Lender's mortgage loans, which report shall be satisfactory in all respects to Lender in Lender's sole discretion. In addition, Lender shall have received an Environmental Site Assessment (Report conforming with the guidelines then applicable to Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender's mortgage loans, which Environmental Site Assessment Report shall be satisfactory in all respects to Lender in Lender's sole discretion. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(lf) The Substitute Property (including, without limitation, the location, the demographics of the market area, overall appearance, configuration, quality and age of the Substitute Property) Collateral shall be satisfactory to Lender in Lender;
(m) The value 's sole discretion and NOI (as defined above) of the Substitute Property shall equal or exceed the appearance, configuration, quality and age of the property being transferred. Lender shall have determined in its sole discretion, that following the proposed substitution, the entire Portfolio shall meet the leasing percentage requirements in the Assignment.
(g) The value of the Substitute Collateral, as determined by Lender, shall equal or exceed then-market value and NOI of the Exiting Propertyproperty being transferred, all and the Net Operating Income of the Substitute Collateral, as determined by Lender, shall equal or exceed Net Operating Income of the property being transferred;
(nh) All To the extent applicable to the Substitute Collateral, all conditions that Borrowers were Borrower was obligated to meet and satisfy under the terms of the Loan Application Application/Commitment in connection with the closing of the LoansLoan, or, if required by Lender, Lender’s 's then current closing and underwriting requirements, shall be satisfied regarding the Substitute PropertyCollateral, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s 's counsel, (iii) title to the Substitute Property Collateral shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien lien on the fee simple interest in the Substitute Property), (ivCollateral) and Lender shall receive have received a satisfactory survey and title insurance policy, (viv) Lender receives satisfactory evidence that the Substitute Property Collateral complies with all applicable government requirements, (v) construction of the Substitute Collateral is complete and in accordance with the plans and specifications, (vi) Borrowers’ all bills in connection with such construction have been paid in full, and (vii) Borrower's current financial condition shall be reasonably satisfactory to Lender. In addition, Lender shall have the right to modify the minimum leasing requirements for the Substitute Collateral to an appropriate level;
(oi) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitutionsubstitution of the Substitute Collateral, including but not limited to, title insurance and survey fees and expenses, recording charges and taxescosts, documentary stamp taxes, intangible taxes, similar fees, and attorneys’ ' fees (including attorneys’ ' fees and expenses for Lender’s 's staff attorneys and outside counsel), fees of Lender’s 's architect and/or engineer, and fees related to the Environmental Site AssessmentReport. In addition, Borrower shall pay to Lender a non-refundable servicing fee of 1.0% of the Substituted Collateral's allocated loan balance at the time of the request for substitution;
(qj) The Substitute Collateral shall not consist of any partial interests in a property, including but not limited to partnership or joint venture interests;
(k) The consent of Lender shall have determined that, after giving effect to the proposed Substitution (excluding substitution of collateral is expressly made subject to Lender's analysis and approval of the Exiting Property, but including economic trends affecting the Substitute Property), Collateral; and
(l) At the Loan to Value Ratio time of the request for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property)substitution of collateral, the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined thatRatio, following the Substitution, the aggregate amount of the Individual Loans calculated with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain Portfolio as part of the Security Poolconstituted prior to any substitution, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, is equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal 1.30 to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution1.00. Lender shall have at least sixty eighty (6080) days in which to process any request to effect a Substitution substitute collateral after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Feefees required by subparagraph (i) above. Notwithstanding anything to the contrary in Section 3 above and/or this Section 410.02 and Section 10.01 above, Borrowers (x) Borrower and Guarantor shall only have the right right, during any one loan year, to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases (1) two partial releases, (2) two substitutions of collateral, or (3) one partial release and Substitutions during one substitution of collateral and (y) after any partial release or substitution of collateral, the term remaining Individual Properties (including any substituted property which becomes part of the Loans to exceed eight Individual Properties) shall always be in at least three markets with no more than thirty-five percent (8) Releases and Substitutions, which consent may be given or withheld for 35%) of the total value (as determined by Lender) of all of the Individual Properties in any reason or given conditionally, in Lender’s sole discretion. This one market.
Section 4 10.02 shall be personal to the original Borrowers under the LoansBorrower, and no neither the Third Party Single Entity nor any other transferee shall have any rights under this Section 4paragraph.
Appears in 1 contract
Sources: Mortgage and Security Agreement (Cornerstone Realty Income Trust Inc)
Substitution of Collateral. Upon prior written notice to Lender, a Borrower Trustor shall be entitled to obtain substitute a release of an Individual Property owned by such Borrower property (being defined as releasing a property that then constitutes security for the Loan (the “Exiting "Released Property”")) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property owned in fee by Trustor (the “"Substitute Property”") satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of place on the following terms and conditions:
(a) At A substitution may not take place more than two (2) times during the time of such Borrower’s request for a Substitution and at the time term of the proposed Substitution, there shall exist no Event of Default, Loan and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan DocumentsRelated Loans;
(b) No Event more than two (2) properties (in the aggregate) may be released under this Section 6.16 and Section 6.16 of Default shall have occurred under any each Related Mortgage, and no more than a total of two (2) of the Loan Documents at any time from the Closing Date to the date Mortgaged Properties may be released under (i) Section 6.15 above and Section 6.15 of the consummation each Related Mortgage, and (ii) this Section 6.16 and Section 6.16 of the proposed Substitutioneach Related Mortgage;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event After the proposed sale of substitution, the Individual Property shall not actually be consummated;
(e) Upon Debt Service Coverage Ratio - Remaining Properties for the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date substitution and projected twelve (12) months following the substitution must be at least equal to or greater than the greater of (i) 1.75, or (ii) the current Debt Service Coverage Ratio - Mortgaged Properties calculated for the twelve (12) month period prior to the substitution;
(d) After the proposed substitution, the loan to value ratio of the Loansremaining Related Loans must be less than or equal to the lesser of (i) 50%, or (ii) the current loan to value ratio of the existing Loan and Related Loans calculated immediately prior to the substitution based upon appraisals furnished to Lender in form and substance reasonably satisfactory to Lender and prepared by an MAI appraiser approved by Lender at Borrower's cost;
(e) The net operating income and/or RevPas (as reported by Smit▇ ▇▇▇vel) of the Substitute Property must not show a downward trend for any of the three (3) years prior to the substitution;
(f) The appraised value (based upon appraisals furnished to Lender in form and substance reasonably satisfactory to Lender and prepared by an MAI appraiser approved by Lender at Borrower's cost), the net operating income and current debt service coverage ratio of the Substitute Property must be 120% greater than the appraised value, net operating income and the debt service coverage ratio of the Released Property;
(g) The proposed Substitute Property shall constitute Lender may at its sole discretion reject any property substitution that in Lender's sole determination would not be in compliance with the fee simple estate terms and provisions of the Loan Application, would be detrimental to such propertythe overall quality and/or value of the Mortgaged Properties, or would not be in compliance with Lender's then existing underwriting standards and no joint venture or partnership interests or interests shall be permittedcriteria;
(h) The ownership entity of the Substitute Property shall must be identical franchised as an "Embassy Suites", or other franchise reasonably acceptable to Lender, and managed by the manager under the Management Agreement or another a nationally recognized hotel management company with a franchise and hotel agreement similar to the entity that owned the Exiting PropertyManagement Agreement and License Agreement or otherwise reasonably acceptable to Lender;
(i) At Borrower must pay (i) all of Lender's costs (all of which must be paid, whether or not such substitution is actually approved or completed) associated with the time of any Substitutionsubstitution including but not limited to legal fees, appraised fees, market studies and expenses, title insurance premiums on the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy new property, engineering fees and paying rentexpenses, recording fees and transfer taxes, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender(ii) a fee of 1% of the original Allocated Loan Amount for the Released Property;
(j) The credit Loan and any Related Loan shall not be in Default at the time such request for substitution is made through the completion of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.substitution;
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines The original Borrower named in the Loan Documents and report requirements) Related Loan Documents continues to be the owner of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;Remaining Mortgaged Properties; and
(l) The Substitute Property (In order to substitute one property for another as security for the Loan or any Related Loan, Borrower acknowledges that such substitute property shall be subject to all of Lender's underwriting and due diligence requirements and criteria, including, without limitation, the locationenvironmental assessment, the demographics review of the market arealeases, appearancereceipt of tenant subordination letters, configurationtitle policy endorsements, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions etc. Borrower agrees that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in subject to all respects to Lender (including, without limitation, evidence that Lender shall have a first the terms and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing conditions of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4Application.
Appears in 1 contract
Sources: Deed of Trust and Security Agreement (Felcor Lodging Trust Inc)
Substitution of Collateral. Upon Provided that no Default or Event of Default has occurred and is continuing and that no Property shall constitute more than 20% of the Borrowing Base Value, prior written notice to Lenderthe Termination Date, a Borrower shall have the right, subject to the consent of all of the Lenders, which consent may be entitled withheld in the sole discretion of the Lenders, to obtain a release of an Individual a Property owned by such Borrower (the “Exiting Property”) from the Lien of the Collateral related Mortgage and Loan Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) "Release Property"), if Borrower simultaneously substitutes another comparable commercial real estate property owned in fee simple by Borrower or leased by Borrower pursuant to a ground lease acceptable in all respects to all of the Lenders in their sole discretion (the “a "Substitute Property”) satisfactory "), and subjects such Substitute Property to Lender the Lien of a new mortgage, deed of trust, deed to secure debt or similar security instruments, in the same form and substance as the Mortgage (in its sole discretion"Substitute Mortgage") and upon satisfaction (as determined by Lender in its sole discretion) to the Lien of each of the following terms and conditions:
(a) At the time of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event , as a first lien thereon. The Substitute Property shall be designated by Agent as an Acquisition Property or a Development Property and shall be subject to the provisions of Default shall have occurred under any this Agreement in respect of Acquisition Properties and Development Properties, as applicable, upon substitution hereunder. The Lenders' consent to such release and substitution may be conditioned on, among other things, receipt by the Lenders of the Loan Documents at any time from following, all of which shall be satisfactory in form and substance to all of the Closing Date Lenders:
i. Evidence that the Substitute Property is of similar or higher quality to the date Release Property.
ii. An Appraisal of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Substitute Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) prepared within six (6) months after completion prior to delivery.
iii. An opinion of Borrower and the Company's counsel stating (u) that the Substitute Property may be, and has been, lawfully subjected to the lien of the most recent Release Substitute Mortgage and the Loan Documents without affecting the Lien of any other Mortgages or Substitutionof the Loan Documents on any of the other Real Properties, and any such written request must be received no later than twelve (12v) months prior that subjecting the Substitute Property to the maturity date Lien of the Loans;
Substitute Mortgage and the Loan Documents does not and will not affect or impair the ability of Lenders to enforce their remedies under all of the Mortgages and Loan Documents or to realize the benefits of the cross-collateralization, (gw) The proposed that the Substitute Mortgage and the Loan Documents by which the Substitute Property shall constitute will be encumbered have been duly authorized, executed and delivered by Borrower and the fee simple estate Company, as applicable; and are valid and enforceable in accordance with their terms, subject to such propertybankruptcy and equitable principles, (x) that Borrower and no joint venture or partnership interests or interests shall be permitted;
the Company (hif necessary) The ownership entity are qualified to do business and in good standing under the laws of the jurisdiction where the Substitute Property is located, (y) the encumbrance of the Substitute Property shall be identical to with the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) Liens of the Substitute Property from an engineer Mortgage and the Loan Documents shall not cause a breach of, or architect chosen a default under any agreement, document or instrument to which Borrower and the Company is a party or to which it or its properties are bound or affected and (z) the anticipated release and substitution will not affect the status of the Company as a qualified real estate investment trust and Borrower as a qualified Company subsidiary under Section 856 of the Code.
iv. A certification by LenderBorrower and the Company (x) that the certificates, opinions and other instruments which report shall be satisfactory have been or are therewith delivered to or deposited with Lender in connection with such release and substitution conform to the requirements of this Agreement and the Mortgages, (y) that all respects conditions precedent herein have been complied with and (z) that all conditions precedent to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) the delivery of the Substitute Property from an environmental consulting firm chosen by LenderMortgage and Loan Documents contained in this Agreement have been fulfilled.
v. Evidence that Borrower and the Company are, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, will remain after the location, the demographics consummation of the market areatransaction, appearance, configuration, quality and age Solvent.
vi. Original executed counterparts of the Substitute Property) shall be satisfactory to Lender;
(m) The value Mortgage and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding Documents encumbering the Substitute Property, including without limitation, financing statements or other documents necessary to grant or perfect Lenders' first priority security interest in the fixtures and personalty located thereon and the Rents derived therefrom, and an Environmental Indemnity Agreement.
vii. A title insurance policy insuring the lien of the Substitute Mortgage on the Substitute Property, insuring that the Substitute Mortgage is a valid and enforceable first lien on the good and marketable fee simple title or leasehold title, as applicable, of Borrower to the Substitute Property, in an amount equal to the amount of the Loan allocated to the Substitute Property and showing no other liens and encumbrances (iexcept those approved by Lenders), together with a "tie-in" and first loss endorsement satisfactory to Lenders, or, if such endorsement is not available in the state in which the Substitute Property is located, in an amount equal to one hundred twenty-five percent (125%) of the amount of the Loan allocated by Lenders to the Substitute Property together with a "last dollar endorsement".
viii. Evidence to the effect that the Substitute Property and the use thereof are in compliance with the applicable zoning, subdivision, and all Loan Documents other applicable federal, state or local laws and ordinances affecting the Substitute Property, and that all building and operating licenses and permits as well as all other licenses, permits, registrations, certifications or similar filings necessary for the use and occupancy of the Substitute Property have been obtained and are in full force and effect and in good standing.
ix. An Environmental Report dated within six (6) months prior to delivery which states that the Substitute Property does not contain any Hazardous Substances (as defined in the Mortgage) or risk of contamination from off-site Hazardous Substance, and which otherwise shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from all of the applicable Borrower’s counsel, (iii) title to Lenders.
x. Payment of all Transaction Costs and other expenses incurred by Agent and the Lenders including reasonable counsel fees and disbursements in connection with the release of any Release Property and the Substitute Property shall be satisfactory and its inclusion as Collateral.
xi. A survey of the Substitute Property certified to Agent, its successors and assigns, dated within 60 days prior to the closing to include as Collateral the Substitute Property, prepared by a land surveyor licensed in the state where the Substitute Property is located pursuant to the then current ALTA/ACSM standards for title surveys and showing thereon the location of the perimeter of the Substitute Property by courses and distances, the lines of the streets abutting the Substitute Property and the width thereof, the on site improvements to the extent constructed and the relation of the on site improvements by distance to the perimeter of the Substitute Property, and the established building lines and the street lines, all respects encroachments and the extent thereof upon the Substitute Property and indicating that the on-site improvements to Lender (includingthe extent constructed are within the lot and building lines of the Substitute Property, without limitationindicating whether the Substitute Property is in a flood plain and otherwise containing such items as are reasonably requested by the Lenders.
xii. Payment of all recording charges, evidence that Lender shall have filing fees, taxes, or other expenses, including but not limited to intangibles taxes and documentary stamp taxes in connection with the recording of the Substitute Mortgage and the Lien necessary to grant and perfect Agent, for the benefit of Lenders, a first priority lien on and exclusive Lien on the fee simple security interest in the Substitute Property).
xiii. Operating statements for the Substitute Property, (iv) Lender shall receive together with a year to date operating statement, current occupancy statements, and a budget for the current fiscal year, each certified by Borrower, and a certificate of no adverse change since the date thereof executed by the general partner of Borrower, in each case in form and substance satisfactory survey to Agent.
xiv. Original certificates and title copies of policies of insurance policy, (v) Lender receives satisfactory evidence that required by Agent under the terms of the Substitute Mortgage for the Substitute Property.
xv. Evidence of the good standing in the state where the Substitute Property complies with all applicable government requirements, is located and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable in their respective states of organization of Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt Company.
xvi. Certified copies of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender leases with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines Property and requirementstenant Estoppel Certificates and Subordination, Non-Disturbance, and Borrowers deliver Attornment Agreements for such certifications leases.
xvii. Evidence to indicate compliance with all requirements of Applicable Laws and other documents such evidence as Lender Agent may request in connection therewith;
(u) Lender is satisfieddeem necessary or appropriate to evidence the availability of all utilities, including water, sewers, gas and Borrowers shall deliver such assurances electricity, as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with necessary for the Loans remains in full force and effect, notwithstanding and taking into consideration use of the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated intended.
xviii. Certified copies of all contracts and agreements relating to the Exiting Property at the time management, leasing and operation of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4Substitute Property.
Appears in 1 contract
Substitution of Collateral. Upon prior written notice Notwithstanding anything to Lenderthe contrary contained in the Loan Documents, a Borrower shall be entitled have the right to obtain a release of an Individual request in writing that Lender accept additional real estate and related personal property collateral (“Substitute Collateral”) in substitution for one Property owned by such Borrower and the related Personal Property Security (the “Exiting PropertyOld Security”) to be released from the Lien lien of the Loan Documents. Such request may be made on not more than two (2) Properties during the Term of the Loan (except if the Release is in accordance with the conditions set forth in subsection (o) below), and further, any such Substitution must occur after six (6) months from the date hereof and prior to the last six (6) months prior to the Maturity Date. Lender shall have the right to approve any such Substitution in Lender’s sole discretion. Lender shall advise Borrower as soon as practicable of Lender’s approval or disapproval of any such Substitution of collateral; if such Substitution is approved, Lender shall also advise Borrower of the conditions for such approval, which shall include, without limitation, the following:
(a) The Substitute Collateral Documents must consist of one or more legally separate parcels of land in the United States owned in fee simple. The Substitute Collateral shall be an office property and must be of similar or better quality than the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) Old Security and must be satisfactory to Lender in Lender’s sole discretion.
(b) Lender must receive perfected first and exclusive liens, security interest and/or security title on the Substitute Collateral, and the Loan for the Substitute Collateral shall be cross collateralized and cross defaulted with all the other Loans pursuant to the Loan Documents. The beneficial ownership entity of the Substitute Collateral shall be identical to the beneficial ownership of the Old Security or acceptable to Lender in Lender’s sole discretion.
(c) The Substitute Collateral must comply with Lender’s then current underwriting and other requirements in all respects, including, without limitation, loan documents, title, survey, compliance with zoning, building, environmental and land use laws, construction and engineering, insurance, leases, real estate taxes, legal opinions, estoppel certificates and all other terms and conditions.
(d) The NOI from the Substitute Collateral shall equal or exceed the NOI from the Old Security, calculated as of the date of the Substitution, and Lender shall have no reason to reasonably believe that such NOI from the Substitute Collateral will not be continued for the next succeeding twenty-four (24) months, and the fair market value of the Substitute Collateral shall equal or exceed the fair market value of the Old Security (as of the Substitution date), as determined by Lender in its sole discretion) and upon satisfaction , absent manifest error. In the event the NOI of the Substitute Collateral (as determined by Lender in its sole discretion) of each falls below the required level, Borrower shall have the right, subject to payment of the following terms and conditions:
(a) At prepayment premium calculated in accordance with the time of such Borrower’s request for a Substitution and at provisions set forth in the time Notes, to pay Lender the amount necessary to decrease the Debt Service of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual remaining Property to meet the Master Tenant or another third party unrelated to any other conditions of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;this Section 6.
(e) Upon The location (including, without limitation, the applicable Borrower’s written request for a Substitution, such Borrower character and demographics of the market area) of the Substitute Collateral shall deliver be satisfactory to Lender a copy in Lender’s sole discretion. The consent of Lender to the Substitution of Collateral is expressly made subject to Lender’s analyses and approval of the current draft of economic trends affecting the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;Substitute Collateral.
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to acceptable in Lender’s sole discretion.
(kg) Lender shall have received a physical condition report (conforming in accordance with Lender’s then then-current guidelines and report requirements) of the Substitute Property standards from an engineer or architect chosen by LenderLender regarding the physical structure of the Substitute Collateral, which report shall be satisfactory in all respects to Lender in Lender’s sole discretion. In addition, Lender shall have received an Environmental Site Assessment (conforming Report in accordance with Lender’s then then-current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lenderguidelines, which Environmental Site Assessment Report shall be satisfactory in all respects to Lender in Lender’s sole discretion. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;.
(h) At the time of the Substitution, Debt Service Coverage, calculated with respect to the Real Estate Security including the Substitute Collateral but excluding the Old Security is equal to or greater than (i) the Debt Service Coverage with respect to all of the Property (including the substituted Property) immediately prior to such Substitution, and, in any event, (ii) 4.00 to 1.00. In the event the Debt Service Coverage of the remaining Property (as determined by Lender in its sole discretion) falls below the required level, Borrower shall have the right, subject to payment of the prepayment premium calculated in accordance with the provisions set forth in the Notes, to pay Lender the amount necessary to increase the Debt Service Coverage of the remaining Property to the required level.
(i) At the time of the Substitution, the Loan to Value Ratio, calculated with respect to the Real Estate Security including the Substitute Collateral but excluding the Old Security, does not exceed the lesser of (1) forty seven percent (47%), or (2) the Loan to Value Ratio of the entire Property (including the Old Security) immediately prior to such Release. In the event the Loan to Value Ratio of the remaining Property (as determined by Lender in its sole discretion) exceeds the required level, Borrower shall have the right, subject to payment of the prepayment premium calculated in accordance with the provisions set forth in the Notes, to pay Lender the amount necessary to reduce the loan to value ratio of the remaining Property to the required level.
(j) Borrower shall pay all reasonable costs and expenses incurred by Lender in connection with the Substitution, including, but not limited to, all legal, accounting, title insurance and appraisal fees, recording costs, intangible taxes and documentary stamps, and a MAI appraisal (prepared by an appraiser selected by Lender) of the Substitute Property, whether or not such Substitution is actually consummated.
(k) [Intentionally deleted]
(l) The Substitute Property (including, without limitation, At the location, the demographics time of the market area, appearance, configuration, quality request and age the time of the Substitute Property) Substitution, there shall be satisfactory no default under the Loan Documents, and there shall exist no condition or state of facts which with the passage of time or the giving of notice or both, would constitute a default under the Loan Documents (except for any such default relating solely to Lender;the Old Security which, by its very nature, will be cured by the requested Substitution).
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative $25,000.00 servicing fee of $25,000 (the “Substitution Administrative Servicing Fee”)) for consideration by Lender of the request at the time Borrower makes such request, which shall be deemed fully earned by Lender even if such request is denied, and an additional fee (against which the Substitution Administrative Servicing Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay credited) equal to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount allocated loan balance for the Exiting Property; providedOld Security, however, that Lender which additional fee shall credit against such non-refundable fee be paid at the closing time of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;closing.
(pn) Whether or The Substitute Collateral shall not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitutionconsist of any partial interest in a property, including but not limited toto partnership or joint venture interests.
(o) Unless otherwise agreed to by Lender in its sole discretion, title insurance ▇▇▇▇ Centre VII, ▇▇▇▇ Centre III and survey fees ▇▇▇▇ Centre II will not be eligible for Substitution (if at such time any of the leases in such Properties have any right to expand into, or rights of refusal or offer in, such other building, unless such rights have been amended to terminate and expenseseliminate such rights as a portion of the contractual rights of such Lease, recording charges and taxesto provide that the Tenant’s recourse shall only be as a contractual right, documentary stamp taxesof public record, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counselwith the owner of such Property to be released in such Substitution), fees unless all of Lender’s architect and/or engineer, such Properties are substituted at the same time (or substituted as to some Properties and fees related released as to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%some Properties at such time), and provided that the aggregate balance of all of the Loans is not less than $85,000,000.00 following any such Release [under this provision Lender shall have determined that, after giving effect consent to the proposed Substitution Release of all three Properties (excluding the Exiting Property▇▇▇▇ Centre VII, ▇▇▇▇ Centre III and ▇▇▇▇ Centre II), but including will not consent to any additional Releases or Substitutions during the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(rLoan term) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender except in connection with the Loans remains additional letter of credit which may be posted in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time last 12 months of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4Loan].
Appears in 1 contract
Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled to obtain a release Notwithstanding the provisions of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien this Agreement or any of the Collateral Loan Documents and to the Cross Collateral Documents contrary, Borrower may submit a written request ("SUBSTITUTION REQUEST"), upon substituting therefor at least ninety (90) days prior notice, that Lender permit a “Substitution”substitution (each a "SUBSTITUTION") another of a substitute property (each a "SUBSTITUTE PROPERTY") (which previously has not been the “Substitute Property”subject of inclusion in the collateral for the Loan) satisfactory to Lender for any individual Property on Schedule I (in its sole discretionsuch capacity a "REPLACED PROPERTY") upon and upon satisfaction (as determined by Lender in its sole discretion) of each of subject to the following terms and conditions:
(a) At the time of such Borrower’s request for Borrower must submit a Substitution and at the time of Request, identifying the proposed Substitution, there shall exist no Event of Default, Substitute Property and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Replaced Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty ninety (3090) days prior to the end proposed closing date for the Substitution. Lender shall evaluate the request for the proposed Substitution and the proposed Substitute Property pursuant to its then customary underwriting and pricing criteria. The amount of the "PRINCIPAL ALLOCATION" Lender would determine to allocate to the Substitute Property must be at least equal to the amount of the then remaining Principal Allocation for the proposed Replaced Property, and the loan-to-value ratio for the Lender’s period 's proposed Principal Allocation for the Substitute Property, based upon a current MAI appraisal in accordance with SUBPARAGRAPH (H) below, must be at least equal to the then current loan-to-value ratio for the proposed Replaced Property. In its underwriting and pricing analysis, Lender may review items such as, but not limited to, location, occupancy, lease term, rollover, tenant exposure, tenant's credit, average daily room rates and operating statements.
(b) The owner of the Substitute Property must be the Borrower (such that the Substitute Property is owned 100% by the same entity as specified belowowns all the collateral constituting the Property). No properties will be permitted other than limited service or full service hotels or motels operating under a hotel or motel franchise acceptable to Lender. The Substitute Property must be located in the continental United States.
(c) Lender in its sole discretion shall acknowledge within ten (10) business days of the Lender's receipt of the Substitution Request whether the proposed Substitute Property appears to be acceptable to permit the Substitution. If in the Lender's sole discretion it is determined that the proposed Substitute Property is equal to or greater in value and quality than the Property, then Lender, through its loan correspondent, GMAC Commercial Mortgage, will process the Borrower's formal request for processing such Substitution;. The proposal will be reviewed by and presented to Lender's and TNG Investment Management LLC's investment review committees pursuant to each of their then current commercial mortgage loan policies, practices, standards and procedures. If the investment review committee approves the formal request for Substitution, the Substitution will be subject to the other conditions outlined in this SECTION 3.08.
(d) No more than one (1) Substitution Request shall be considered in any calendar year for the entire Loan.
(e) Borrower shall not be permitted to request and close more than a total of two (2) Substitutions during the Loan term.
(f) Any written request by Borrower shall pay a Borrower processing fee to Lender for equal to $25,000 at closing of each approved Substitution. A "SUBSTITUTION DEPOSIT' of $5,000 shall be required with submission of a Substitution must Request, which deposit shall be received no sooner than applied to the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion processing fee at closing of the most recent Release or Substitution, . The deposit and any processing fee contemplated by this subsection are in addition to attorneys' fees and expenses incurred in the documentation of such written request must be received no later than twelve (12) months prior to Substitution and in the maturity date review of the Loans;due diligence.
(g) The proposed All improvements on the Substitute Property shall constitute the fee simple estate to such propertyhave been completed in a good and workmanlike manner and in compliance, in all material respects, with all applicable governmental requirements. The Substitute Property must be lien free and no joint venture or partnership interests or interests shall all land, improvements and personal property must be permitted;paid for in full.
(h) The ownership entity appraised fair market "As Is" value of the Substitute Property shall be identical equal to or greater than the entity that owned greater of (x) the Exiting then appraised fair market value, or gross sales proceeds, as the case may be, of the Replaced Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(jy) The credit the original appraised value of the tenants (or if a lease is guaranteed, Replaced Property as set forth in the credit of the guarantor so long as such lease is guaranteed pursuant appraisal delivered to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required loan on the Replaced Property. The fair market "As Is" value of the Replaced Property and Substitute Property shall be determined by a firm of appraisers selected by GMAC Commercial Mortgage and approved by the Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be based on an MAI appraisal satisfactory to Lender, dated not more than ninety (ii90) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title days prior to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee . All costs of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution appraisals shall be applied paid by the Borrower on or prior to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total readjust the Principal Allocations and Allocation Percentages for all properties constituting the Property (during or such number remaining if the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider Release Privilege previously has been exercised). The Release Factor set forth in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4.SECTION 3.07
Appears in 1 contract
Substitution of Collateral. Upon Notwithstanding the provisions of this Agreement or any of the Loan Documents to the contrary, Borrower may submit a written request (“SUBSTITUTION REQUEST”), upon at least ninety (90) days prior written notice to Lendernotice, that Lender permit a Borrower shall be entitled to obtain substitution (each a release of an Individual Property owned by such Borrower (the “Exiting PropertySUBSTITUTION”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor a substitute property (each a “SubstitutionSUBSTITUTE PROPERTY”) another property (which previously has not been the subject of inclusion in the collateral for the Loan) for any individual Property on the list in the chart in SUBPARAGRAPH 3.07(i) herein (in such capacity a “Substitute PropertyREPLACED PROPERTY”) satisfactory upon and subject to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At the time of such Borrower’s request for Borrower must submit a Substitution and at the time of Request, identifying the proposed Substitution, there shall exist no Event of Default, Substitute Property and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Replaced Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty ninety (3090) days prior to the end proposed closing date for the Substitution. Lender shall evaluate the request for the proposed Substitution and the proposed Substitute Property pursuant to its then customary underwriting and pricing criteria. The amount of the “PRINCIPAL ALLOCATION” Lender would determine to allocate to the Substitute Property must be at least equal to the amount of the then remaining Principal Allocation for the proposed Replaced Property, and the loan-to-value ratio for the Lender’s period proposed Principal Allocation for the Substitute Property, based upon a current MAI appraisal in accordance with SUBPARAGRAPH (h) below, must be at least equal to the then current loan-to-value ratio for the proposed Replaced Property. In its underwriting and pricing analysis, Lender may review items such as, but not limited to, location, occupancy, lease term, rollover, tenant exposure, tenant’s credit, average daily room rates and operating statements.
(b) The owner of the Substitute Property must be the Borrower (such that the Substitute Property is owned 100% by the same entity as specified belowowns all the collateral [LOAN AGREEMENT] ING No. 27924 8 constituting the Property). No properties will be permitted other than limited service or full service hotels or motels operating under a hotel or motel franchise acceptable to Lender. The Substitute Property must be located in the continental United States.
(c) Lender in its sole discretion shall acknowledge within ten (10) business days of the Lender’s receipt of the Substitution Request whether the proposed Substitute Property appears to be acceptable to permit the Substitution. If in the Lender’s sole discretion it is determined that the proposed Substitute Property is equal to or greater in value and quality than the Property, then Lender, through its loan correspondent, GMAC Commercial Mortgage, will process the Borrower’s formal request for processing such Substitution;. The proposal will be reviewed by and presented to Lender’s and ING Investment Management LLC’s investment review committees pursuant to each of their then current commercial mortgage loan policies, practices, standards and procedures. If the investment review committee approves the formal request for Substitution, the Substitution will be subject to the other conditions outlined in this SECTION 3.08.
(d) No more than one (1) Substitution Request shall be considered in any calendar year for the entire Loan.
(e) Borrower shall not be permitted to request and close more than a total of three (3) Substitutions during the Loan term.
(f) Any written request by Borrower shall pay a Borrower processing fee to Lender for equal to $25,000 at closing of each approved Substitution. A “SUBSTITUTION DEPOSIT” of $5,000 shall be required with submission of a Substitution must Request, which deposit shall be received no sooner than applied to the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion processing fee at closing of the most recent Release or Substitution, . The deposit and any processing fee contemplated by this subsection are in addition to attorneys’ fees and expenses incurred in the documentation of such written request must be received no later than twelve (12) months prior to Substitution and in the maturity date review of the Loans;due diligence.
(g) The proposed All improvements on the Substitute Property shall constitute the fee simple estate to such propertyhave been completed in a good and workmanlike manner and in compliance, in all material respects, with all applicable governmental requirements. The Substitute Property must be lien free and no joint venture or partnership interests or interests shall all land, improvements and personal property must be permitted;paid for in full.
(h) The ownership entity appraised fair market “As Is” value of the Substitute Property shall be identical equal to or greater than the entity that owned greater of (x) the Exiting then appraised fair market value, or gross sales proceeds, as the case may be, of the Replaced Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(jy) The credit the original appraised value of the tenants (or if a lease is guaranteed, Replaced Property as set forth in the credit of the guarantor so long as such lease is guaranteed pursuant appraisal delivered to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required loan on the Replaced Property. The fair market “As Is” value of the Replaced Property and Substitute Property shall be determined by a firm of appraisers selected by GMAC Commercial Mortgage and approved by the Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be based on an MAI appraisal satisfactory to Lender, [LOAN AGREEMENT] ING No. 27924 dated not more than ninety (ii90) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title days prior to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee . All costs of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution appraisals shall be applied paid by the Borrower on or prior to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty the right to readjust the Principal Allocations and Allocation Percentages for all properties constituting the Property (60or such number remaining if the Release Privilege previously has been exercised).
(i) days in which The actual net operating income relating to process the Substitute Property (based upon the trailing twelve (12) month financial results or such shorter period, as Lender deems appropriate, for a Substitute Property opened for less than one year) shall equal or exceed the actual net operating income relating (based upon the trailing twelve (12) month financial results or such shorter period, as Lender reasonably deems appropriate, for any request Substitute Property opened for less than one year) to effect a Substitution after receipt of the Replaced Property.
(j) Lender’s outside counsel shall prepare and Borrower shall execute (1) all materials amendments to the Note, the Mortgage, the Assignments of Rents and information necessary to evaluate such request Leases, the Environmental Indemnification Agreement, this Agreement and tax and insurance escrows, and (2) all Loan Documents Lender shall deem appropriate, including, but not limited to, any new security instrument, assignment of rents and leases, environmental indemnities, etc. relating to the Substitute Property (all of which documentation shall be substantially in the form of the applicable documents executed in connection with the Loan with such changes thereto as Lender reasonably deems appropriate to reflect the terms and circumstances of the Substitution Administrative Feeand Substitute Property) (collectively, the “SUBSTITUTE LOAN DOCUMENTS”). Notwithstanding anything The Substitution Loan Documents shall be cross-defaulted and cross-collateralized with the existing Loan Documents for the Loan.
(k) Borrower shall be required to supply for Lender’s review and approval due diligence materials relating to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right Substitute Property prior to a combined cumulative total (during the entire term closing of the Loans) Substitution including those items required for closing of eight (8) Releases this Loan, and Substitutions; providedsuch other materials as may then be customarily required as part of its then current commercial loan closing policies, howeverprocedures, that standards and practices for properties of similar type and in similar locations as the Substitute Property, including, without limitation, a current as-built ALTA survey, proof of adequate insurance, title insurance in conformance with the requirements for the closing of this Loan, proof of compliance with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and attornment agreements, franchise agreements and comfort letters. The Lender agrees to consider in good faith any request shall, at the Borrowers’ sole cost and expense, receive for its consent review and approval all additional due diligence materials in any way relating to a Release or Substitution that would cause the combined cumulative total of Releases Substitute Property, including but not limited to, appraisal, hazardous substance report, seismic report and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, engineer report as required by Lender in Lender’s its sole discretion. This Section 4 The items listed in this subsection are not exhaustive. [LOAN AGREEMENT] ING No. 27924 10
(l) The Substitute Loan Documents, financing statements, and other instruments required to perfect the liens in the Substitute Property and all collateral under such documents shall be personal recorded, registered and filed (as applicable) in such manner as may be required by law to create a valid, perfected lien and security interest with respect to the Substitute Property and the personal property related thereto. The liens created by the Substitute Loan Documents shall be first liens and security interests on the Substitute Property and the personal property related thereto, subject only to such exceptions as Lender shall approve in its sole discretion. At closing of the Substitution, the Borrower shall have good and marketable title to the Substitute Property and good and valid title to any personal property located thereon or used in connection therewith, in each case satisfactory to the Lender. The title policies to the remaining parcels of Property in the Loan must also be endorsed to bring forward the effective dates thereof through the dates and times of recording of the modification instruments and showing no new exceptions since the original Borrowers under Loan closing unless approved by Lender in writing and continuing all coverage provided in the Loansoriginal Loan title policies.
(m) Lender shall receive (1) a confirmation and reaffirmation of all Loan Documents by the Borrower for the other properties in the Loan, (2) a consent to such Substitution by any guarantors or indemnitors, if any, and no transferee (3) such other instruments and agreements and such certificates and opinions of counsel, in form and substance satisfactory to the Lender in connection with such Substitution as it may reasonably request.
(n) Borrower shall be responsible for all documentary stamp and intangible taxes on the Substitution and the Mortgage encumbering the Substitute Property and all other parcels of Property in the Loan that shall arise in connection with such Substitution. Lender shall require payment of all such documentary stamp and intangibles taxes required by law and authorities having jurisdiction as a condition of closing the Substitution and the corresponding loan modifications to the Loan, regardless of whether the taxing authority imposes taxes duplicative of those incurred at the original closing of the Loan.
(o) No Event of Default shall have occurred and be continuing hereunder or under any rights under other Loan Documents for the Loan on the date of Substitution Request or at closing of the Substitution.
(p) Lender shall be satisfied that no material adverse change in the financial condition, operations or prospects of any guarantor, Borrower (or controlling member of Borrower or general partner or limited partner of Borrower, as applicable) has occurred after closing of this Section 4Loan.
(q) The Borrower shall pay all reasonable out-of-pocket costs and expenses incurred in connection with any such Substitution and the reasonable out-of-pocket fees and expenses incurred by Lender, its outside counsel and its loan correspondent [LOAN AGREEMENT] ING No. 27924 11 and servicer in connection therewith. Without limiting the generality of the foregoing, the Borrower shall, in connection with, and as a condition to, each Substitution, pay the reasonable fees and expenses of Lender’s counsel, the reasonable fees and expenses of Lender’s engineers, appraisers, construction consultants, insurance consultants and other due diligence consultants and contractors, recording charges, title insurance charges, and documentary stamp and/or mortgage or similar taxes, transfer taxes.
Appears in 1 contract
Sources: Loan Agreement
Substitution of Collateral. Upon prior written notice (a) Subject to Lenderthe terms and conditions of this Section 7.16, Lender agrees to accept the substitution of collateral for a Property (each, a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (the “Exiting PropertyCollateral Substitution”) from the Lien ), provided that in connection with each Collateral Substitution, each and every one of the Collateral Documents and the Cross Collateral Documents upon substituting therefor following conditions are satisfied (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as be determined by Lender in the exercise of its sole discretionreasonable judgment):
(i) of each As of the following terms and conditions:
(a) At date Lender consents to the time of such Borrower’s request for a Collateral Substitution and at the time as of the proposed Substitutiondate the Collateral Substitution is deemed effective, there shall exist no Event monetary Potential Default (which solely for the purposes of Defaultthis provisions means a failure to make a payment of a liquidated sum of money on the due date thereof but for which the applicable grace period has yet to expire) then exists, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitutionexist;
(cii) A Substitution Borrower shall involve only one (1) Individual Property;
(d) The Substitution shall not be in conjunction with the sale of one (1) Individual Property entitled to the Master Tenant or another third party unrelated to any of Borrowersrequest, and Lender shall not be obligated have no obligation to consummate the approve: (A) a Collateral Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitutionprior to October 1, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property2009 or after October 1, 2017, and as soon as available after such Borrower’s written request (B) Collateral Substitutions for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later more than two (2) business days after such Properties in any 12-month period;
(iii) Only Borrower’s execution of such sale agreement, and in all events such delivery not a permitted successor under Section 7.1(c), shall be made at least thirty (30) days prior have the right to the end of Lender’s period (as specified below) for processing such request a Collateral Substitution;
(fiv) Any written request by Borrower shall not be entitled to request, and Lender shall have no obligation to approve a Borrower Collateral Substitution for any Property, if such Property, together with all Properties previously substituted pursuant to Lender for a Substitution must be received no sooner than this Section 7.16, contains, in the later of aggregate, more than: (iA) nine (9) months after 807,000 square feet, if the Closing San I▇▇▇▇▇▇ Properties shall have been previously released pursuant to Section 7.15 or substituted pursuant to this Section 7.16; or (iiB) six (6) months after completion 600,000, if the San I▇▇▇▇▇▇ Properties shall remain a portion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the LoansPortfolio;
(gv) The proposed Substitute Lender shall have confirmed, in the exercise of its reasonable judgment, that the Portfolio will, following the closing of such Collateral Substitution, generate a Debt Service Coverage Ratio, calculated for the 12-month period immediately following the closing of the requested Collateral Substitution (based on a fully amortizing 20-year schedule), equal to or in excess of the greater of: (A) 125%, or (B) the Debt Service Coverage Ratio (inclusive of the Property shall constitute to be released from the fee simple estate to such property, Portfolio and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity exclusive of the Substitute Property shall to be identical added to the entity that owned Portfolio in connection with the Exiting Propertyrequested Collateral Substitution) calculated for the 12-month period immediately preceding the closing of the requested Collateral Substitution;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(kvi) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) confirmed in the exercise of the Substitute Property from an engineer or architect chosen by Lenderits reasonable judgment, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loansto Value Ratio, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, calculated after giving effect to the proposed Substitution closing of the Collateral Substitution, will not exceed the lesser of (excluding the Exiting Property1) 65%, but including the Substitute Property), or (2) the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after calculated immediately prior to giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute Property;
(t) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines and requirements, and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4.the
Appears in 1 contract
Sources: Fixed Rate Term Loan Agreement (Mission West Properties Inc)
Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (have the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At the time of such Borrower’s request for a Substitution and at the time of the proposed Substitutionright, there shall exist provided that no Event of DefaultDefault has occurred that has not been waived by Lenders in writing or cured, and there shall exist no condition or state to obtain the release of factsa Mortgaged Property from the lien of the encumbering Mortgage, which with the passage of time or the giving of noticeprovided that Borrower has delivered to Agent, or bothAgent has otherwise received, would constitute an Event in form and substance satisfactory to Agent and its counsel, the following documents and instruments:
2.2.4.1 A notice from Borrower designating to Agent and Lenders Substitute Collateral that is of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Loan Documents at any time from the Closing Date like quality to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall Mortgaged Property requested to be in conjunction with the sale of one (1) Individual Property released and that will generate NOI that, when added to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Propertyremaining Mortgaged Properties, will total not less than $4,670,000, all as determined by LenderLenders in good faith;
(n) All conditions that Borrowers were obligated 2.2.4.2 An Appraisal acceptable to meet Agent and satisfy under Lenders with respect to the terms of the Loan Application in connection with the closing of the Loansproposed Substitute Collateral, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives which indicates a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or value not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater less than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Mortgaged Property isrequested to be released, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, Mortgaged Property requested to be released to be as determined by Lender, and is at least equal to the Exiting Appraisal of such Mortgaged Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversificationmost recently obtained by Agent; and (dii) location quality which evidences, based upon the most recently obtained Appraisals, that following the release of such Mortgaged Property and diversification. Borrowers acknowledge delivery of a Mortgage encumbering the Substitute Collateral, the then-current LTV shall not exceed 75%;
2.2.4.3 A Mortgage encumbering the Substitute Collateral, in the form of that Lender may reject a property proposed which was delivered to Agent with respect to the Kenwood Gardens Apartments, Toledo, Ohio, pursuant to the 1994 Loan Agreement, as a modified to reflect this First Amendment and the requirements of the jurisdiction in which the Substitute Property for any reason or without giving a reasonCollateral is located;
2.2.4.4 An Assignment to Rents, Leases and Borrowers assume such risk notwithstanding Profits encumbering the Substitute Collateral, in the form of that it may spend substantial resources preparing which was delivered to Agent with respect to the reports Kenwood Gardens Apartments, Toledo, Ohio, pursuant to the 1994 Loan Agreement, as modified to reflect this First Amendment and other information required by Lender the requirements of the jurisdiction in which the Substitute Collateral is located;
2.2.4.5 A Collateral Assignment of Agreements Affecting Real Estate encumbering the Substitute Collateral, in the form of that which was delivered to Agent with respect to the Kenwood Gardens Apartments, Toledo, Ohio, pursuant to the 1994 Loan Agreement, as modified to reflect this First Amendment and the requirements of the jurisdiction in which the Substitute Collateral is located;
2.2.4.6 UCC-1 Financing Statements with respect to the Substitute PropertyCollateral;
(t) Lender determines in its sole discretion that 2.2.4.7 A certified copy of resolutions adopted by the Substitution would not result in a violation Board of Trustees of Borrower authorizing the execution, delivery and performance of the ERISA provisions contained documents referred to in Lender’s then current guidelines this Section 2.2.4 that are executed by Borrower, all certified by a trustee or officer of Borrower to be true and requirements, correct copies of the originals and Borrowers deliver such certifications and other documents as Lender may request in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may to be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with the Loans remains in full force and effecteffect as of the date hereof;
2.2.4.8 An incumbency and signature certificate with respect to each of the trustees of Borrower authorized to execute and deliver the documents referred to in this Section 2.2.4 that are executed by Borrower;
2.2.4.9 The opinion of Borrower's counsel, notwithstanding in form and taking into consideration substance acceptable to Lenders in their reasonable judgment;
2.2.4.10 A Policy of Title Insurance, or a marked-up commitment to issue such a policy, by First American Title Insurance Company, insuring the SubstitutionMortgage encumbering the Substitute Collateral as a first lien thereon, subject to only such exceptions as Lenders may accept;
2.2.4.11 Evidence of Borrower's policies of insurance, with respect to the Substitute Collateral, as required by the terms of Section 5.1.21 of the 1994 Loan Agreement;
2.2.4.12 Evidence that Borrower has received, with respect to the Substitute Collateral, all required Governmental Approvals relating to the ownership, use, operation and occupancy thereof and that the Substitute Collateral complies in all material respects with all applicable laws;
2.2.4.13 A "Phase I" Environmental Audit performed with respect to the Substitute Collateral by a qualified environmental engineer acceptable to Lenders; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property 2.2.4.14 Such additional documents or instruments as the then existing unpaid principal balance allocated to the Exiting Property at the time of the closing of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given required by this Agreement or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4as Agent may reasonably require.
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Sources: Secured Loan Agreement (Pennsylvania Real Estate Investment Trust)
Substitution of Collateral. Upon At any time after the Release Date but prior written notice to Lenderthe Optional Prepayment Date, a Borrower shall be entitled to obtain a release of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory to Lender (in its sole discretion) and upon satisfaction (as determined by Lender in its sole discretion) of each of the following terms and conditions:
(a) At , Lender shall, in the time case of such Borrower’s request for a Substitution and at the time of the proposed Substitution, there shall exist no Event of Default, and there shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) No Event of Default shall have occurred under any of the Parcels permit Borrower to substitute a different property (a "Replacement Parcel") for an original Parcel (the "Replaced Parcel"), and following such substitution, Lender shall release the Mortgages and any other Loan Documents at any time from the Closing Date to the date of the consummation of the proposed Substitution;
(c) A Substitution shall involve only one (1) Individual Property;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property to the Master Tenant or another third party unrelated to any of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummated;
(e) Upon the applicable Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;
(f) Any written request by a Borrower to Lender for a Substitution must be received no sooner than the later of Replaced Parcel: (i) nine (9) months after the Closing or (ii) six (6) months after completion of the most recent Release or Substitution, and any such written request must be received no later than twelve (12) months prior to the maturity date of the Loans;
(g) The proposed Substitute Property shall constitute the fee simple estate to such property, and no joint venture or partnership interests or interests shall be permitted;
(h) The ownership entity of the Substitute Property shall be identical to the entity that owned the Exiting Property;
(i) At the time of any Substitution, the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rent, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title to the Substitute Property shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) sum of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender proposed Replaced Parcel and the Allocated Loan Amounts for all other Replaced Parcels which have previously been substituted for shall credit against such non-refundable fee paid at the closing not exceed Fifty Percent (50%) of the Substitution amount of the Substitution Administrative Fee that Loan; (ii) no Event of Default shall have occurred and be continuing with respect to the Loan; (iii) the Borrower amends the Note and the other Loan Documents and executes such Borrower previously paid other documentation as Lender, the Servicer, or a Rating Agency may require to evidence the addition of the Replacement Parcel as collateral for the Loan and to confirm the enforceability of the Loan Documents; (iv) Lender receives a Qualified Survey for the Replacement Parcel; (v) Lender approves the status of title to the Replacement Parcel and obtains a Qualified Title Insurance Policy for the Replacement Parcel; (vi) Lender receives such environmental, engineering, soil, and other property condition reports regarding the Replacement Parcel as Lender may require, all of which reports must be satisfactory to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
; (p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related to the Environmental Site Assessment;
(qvii) Lender shall have determined that, after giving effect received appraisals prepared in accordance with FIRREA which are satisfactory to Lender and which demonstrate that the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the fair market value of the Substitute Property is, in Lender’s sole judgment, equal to Replacement Parcel equals or greater than one hundred percent (100%) of exceeds the fair market value of the Exiting PropertyReplaced Parcel; (viii) if the Replacement Parcel is a previously developed property, as determined by Lender, and is at least equal for the twelve month period prior to the Exiting Property in each of transfer, the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturitiesNet Operating Income for the Replacement Parcel shall have equaled or exceeded the Net Operating Income for the Replaced Parcel; (bvi) tenant credit and quality and diversificationif the Replacement Parcel is a newly developed property, the projected annualized Net Operating Income for the Replacement Parcel shall have equaled or exceeded the Net Operating Income for the Replaced Parcel for the twelve month period prior to the transfer; (cix) building quality on a pro forma basis, for the twelve month period after the transfer, the Net Operating Income for the Replacement Parcel is projected to equal or exceed the Net Operating Income for the Replaced Parcel; (x) the Borrower confirms all warranties and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing representations contained in the reports and other information required by Lender Loan Documents with respect to the Substitute Property;
(t) Lender determines in its sole discretion that Property assuming the Substitution would not result in a violation inclusion of the ERISA provisions contained in Lender’s then current guidelines and requirementsReplacement Property; (xi) the Borrower delivers to Lender such due diligence items regarding the Replacement Property as Lender or any Rating Agency may require, and Borrowers deliver such certifications due diligence items are satisfactory to Lender and other documents as Lender may request the Rating Agencies; and (xii) each Rating Agency confirms in connection therewith;
(u) Lender is satisfied, and Borrowers shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) writing that any guaranty, indemnity or similar instrument delivered to Lender rating issued by such Rating Agency in connection with the Loans remains in full force and effecta Securitization will not be downgraded, notwithstanding and taking into consideration the Substitution; and
(v) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property qualified, or withdrawn as the then existing unpaid principal balance allocated to the Exiting Property at the time a result of the closing substitution of the Substitution. Lender shall have at least sixty (60) days in which to process any request to effect a Substitution after receipt of (1) all materials and information necessary to evaluate such request and (2) the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and Substitutions; provided, however, that Lender agrees to consider in good faith any request for its consent to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4Replacement Parcel.
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Substitution of Collateral. Upon prior written notice to Lender, a Borrower shall be entitled have the right from time to obtain a release of an Individual Property owned by such Borrower (the “Exiting Property”) from the Lien of the Collateral Documents and the Cross Collateral Documents upon substituting therefor (a “Substitution”) another property (the “Substitute Property”) satisfactory time, to substitute other real estate reasonably acceptable to Lender (in its sole discretion“Substitute Collateral”) for any Site and upon satisfaction (as determined by Lender in its sole discretion) to obtain the release thereof from the lien of each of the Loan Documents, subject to the following terms and conditions:
(a) At On the time date of such Borrower’s request for a Substitution substitution and at on the time date of the proposed Substitutionscheduled substitution, there shall exist no Event of Default, and there Default shall exist no condition or state of facts, which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documentsbe in existence;
(b) No Event of Default shall have occurred under any The aggregate principal balance of the Loan Documents at any time from Note or Notes secured by the Closing Date First Mortgages encumbering the Site(s) to the date of the consummation of the proposed Substitutionbe substituted shall not exceed $33,434,500.00, on a cumulative basis;
(c) A Substitution shall involve only one (1) Individual PropertyBorrower gives Lender at least 30 days’ prior written notice of its request for a substitution along with a payment of $10,000.00 for each Site to be substituted as a substitution fee; which fee is non-refundable regardless of whether the requested substitution is consummated;
(d) The Substitution shall be in conjunction with the sale of one (1) Individual Property Fee simple title to the Master Tenant or another third party unrelated to any Substitute Collateral must be vested in a single purpose entity that is an Affiliate of Borrowers, and Lender shall not be obligated to consummate the Substitution in the event the proposed sale of the Individual Property shall not actually be consummatedIIT REIT;
(e) Upon The Substitute Collateral must be a bulk warehouse or light industrial facility in the applicable Borrower’s written request for a Substitutionsame general geographic area as the existing Site, such Borrower shall deliver to Lender a copy of the current draft of the sale agreement pertaining to the sale of the Exiting Property, and as soon as available after such Borrower’s written request for a Substitution, such Borrower shall deliver to Lender a copy of the fully executed sale agreement (along with a marked copy of such fully executed sale agreement indicating all changes made after the draft of the sale agreement previously delivered or another location reasonably acceptable to Lender), but in no event shall such delivery of such fully executed sale agreement and such marked sale agreement be later than two (2) business days after such Borrower’s execution of such sale agreement, and in all events such delivery shall be made at least thirty (30) days prior to the end of Lender’s period (as specified below) for processing such Substitution;.
(f) Any written request by a Lender shall have the right to review and underwrite any proposed Substitute Collateral (subject to subsections (g) and (h) below); without limiting the generality of the foregoing, Borrower shall provide and Lender shall have the right to Lender review and approve the following for a Substitution must the Substitute Collateral, all of which shall be received no sooner than the later of obtained at Borrower’s expense: (i) nine (9) months after the Closing or an ALTA survey; (ii) six as-built plans and specifications of all Improvements; (6iii) months after completion certificates of occupancy and evidence of compliance with local zoning code, which evidence may be in the form of a planning and zoning report; (iv) all leases; (v) estoppel certificates from all tenants and subordination agreements from all tenants whose lease is not automatically subordinated to future mortgages by its terms or which contains a right to purchase the Substitute Collateral; (vi) insurance coverage consistent with the requirements of this Agreement; (vii) a rent roll; (viii) operating statements, budgets and other financial information concerning the operation of the most recent Release proposed Substitute Collateral as Lender may reasonably require; (ix) an engineering report; (x) an environmental report; (xi) an Appraisal; (xii) a seismic report (if the Substitute Collateral is in California, the Pacific Northwest or Substitution, New Madrid seismic area) and any such written request must be received no later than twelve (12xiii) months prior new title insurance for the Substitute Collateral and acceptable title endorsements to Lender’s existing title insurance policies insuring the maturity date lien of the LoansMortgage, if required by Lender;
(g) The Loan to value ratio of the Project after the Substitution of Collateral, does not exceed the Loan to value ratio of the Project immediately prior to the proposed Substitute Property substitution, as determined by Lender in its reasonable discretion (and Borrower shall constitute have the fee simple estate right to such propertyprepay a portion of the Loan (together with any applicable prepayment premium) in order to satisfy this requirement), and no joint venture or partnership interests or interests which prepayment shall be permittedallocated to the outstanding principal balance of the remaining unpaid Notes on a pro rata basis);
(h) The ownership entity Debt Coverage Ratio of the Substitute Property Project after the Substitution of Collateral is not less than the Debt Coverage Ratio for the Project immediately prior to the proposed substitution, as determined by Lender in its reasonable discretion (and Borrower shall have the right to prepay a portion of the Loan (together with any applicable prepayment premium) in order to satisfy this requirement), which prepayment shall be identical allocated to the entity that owned outstanding principal balance of the Exiting Propertyremaining unpaid Notes on a pro rata basis);
(i) At the time Borrower shall have executed and delivered to Lender a deed of any Substitution, trust or mortgage and an assignment of leases encumbering the Substitute Property shall not be less than one hundred percent (100%) occupied by third-party tenants in occupancy and paying rentCollateral, and free rent or other rental concessions shall have been extinguished except as may otherwise be approved in writing by Lender;
(j) The credit of the tenants (or if a lease is guaranteed, the credit of the guarantor so long as such lease is guaranteed pursuant to a guaranty satisfactory to Lender) occupying the Substitute Property and the lease rollover schedule for such tenants shall be satisfactory to Lender.
(k) Lender shall have received a physical condition report (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an engineer or architect chosen by Lender, which report shall be satisfactory in all respects to Lender. In addition, Lender shall have received an Environmental Site Assessment (conforming with Lender’s then current guidelines and report requirements) of the Substitute Property from an environmental consulting firm chosen by Lender, which Environmental Site Assessment shall be satisfactory in all respects to Lender. The cost of preparation of all such reports and all necessary inspections shall be paid by Borrower;
(l) The Substitute Property (including, without limitation, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Property) shall be satisfactory to Lender;
(m) The value and NOI (as defined above) of the Substitute Property shall equal or exceed the then-market value and NOI of the Exiting Property, all as determined by Lender;
(n) All conditions that Borrowers were obligated to meet and satisfy under the terms of the Loan Application in connection indemnity with the closing of the Loans, or, if required by Lender, Lender’s then current closing and underwriting requirements, shall be satisfied regarding the Substitute Property, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from the applicable Borrower’s counsel, (iii) title respect to the Substitute Property shall be satisfactory Collateral in all respects to Lender (including, without limitation, evidence that Lender shall have a first form and exclusive Lien on the fee simple interest in the Substitute Property), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Property complies with all applicable government requirements, and (vi) Borrowers’ current financial condition shall be satisfactory to Lender;
(o) At the same time that the applicable Borrower delivers its written notice to Lender requesting a Substitution, such Borrower shall pay to Lender a non-refundable administrative fee of $25,000 (the “Substitution Administrative Fee”), and the Substitution Administrative Fee shall be deemed earned by Lender upon Lender’s receipt of such fee. At the closing of the Substitution, Borrower shall pay to Lender a non-refundable fee of one half of one percent (0.5%) of the Allocated Loan Amount for the Exiting Property; provided, however, that Lender shall credit against such non-refundable fee paid at the closing of the Substitution the Substitution Administrative Fee that such Borrower previously paid to Lender. Neither the Substitution Administrative Fee nor the non-refundable fee paid at the closing of the Substitution shall be applied to the applicable Individual Loan or the outstanding principal balance due under the Loans;
(p) Whether or not the Substitution actually closes, Borrowers shall pay all costs and expenses associated with the Substitution, including but not limited to, title insurance and survey fees and expenses, recording charges and taxes, documentary stamp taxes, intangible taxes, attorneys’ fees (including attorneys’ fees and expenses for Lender’s staff attorneys and outside counsel), fees of Lender’s architect and/or engineer, and fees related content similar to the Environmental Site Assessment;
(q) Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Loan to Value Ratio for the Security Pool shall not exceed fifty-five percent (55%), Indemnity and Lender shall have determined that, after giving effect to the proposed Substitution (excluding the Exiting Property, but including the Substitute Property), the Debt Service Coverage Ratio for the Security Pool shall such other documents as may be at least 1.75;
(r) Lender shall have determined that, following the Substitution, the aggregate amount of the Individual Loans with respect to all Individual Properties that comprised part of the Property on the Closing Date and that would remain as part of the Security Pool, shall be greater than fifty-five percent (55%) of the total original principal amount of the Loans; and
(s) Lender’s decision to accept or reject any proposed Substitute Property shall be in Lender’s sole and absolute discretion; it being understood that, without limiting the foregoing, under no circumstances shall the Substitute Property qualify for a Substitution unless the value of the Substitute Property is, in Lender’s sole judgment, equal to or greater than one hundred percent (100%) of the value of the Exiting Property, as determined by Lender, and is at least equal to the Exiting Property in each of the following respects: (a) stability of cash flow, taking into consideration weighted average lease maturities; (b) tenant credit and quality and diversification; (c) building quality and diversification; and (d) location quality and diversification. Borrowers acknowledge that Lender may reject a property proposed as a Substitute Property for any reason or without giving a reason, and Borrowers assume such risk notwithstanding that it may spend substantial resources preparing the reports and other information required by Lender with respect to the Substitute PropertyCollateral;
(tj) Lender determines in its sole discretion that the Substitution would not result in a violation of the ERISA provisions contained in Lender’s then current guidelines Borrower shall execute and requirements, and Borrowers deliver such certifications documents and/or amendments or modifications to the existing Loan Documents as may be necessary to fully encumber the Substitute Collateral as collateral for the Loan and other to cross-collateralize and cross-default the security documents as Lender may request in connection therewithencumbering the Substitute Collateral with the existing Loan Documents;
(uk) Lender is satisfiedIn addition to the substitution fee, and Borrowers Borrower shall deliver such assurances as may be reasonably requested pay all reasonable out-of-pocket costs incurred by Lender (including a reaffirmation certification or other agreement) that any guaranty, indemnity or similar instrument delivered to Lender in connection with any substitution, including without limitation, all reasonable legal fees, title charges and appraisal fees, whether or not the Loans remains in full force and effect, notwithstanding and taking into consideration the Substitution; andsubstitution is consummated;
(vl) The Substitute Property shall have the same unpaid principal balance allocated to such Substitute Property as the then existing unpaid principal balance allocated to the Exiting Property at the time Upon completion of the closing of substitution, Lender shall: (i) release the Substitution. Lender shall have at least sixty (60Debtor(s) days in which to process any request to effect a Substitution after receipt of (1owning the substituted Site(s) all materials and information necessary to evaluate such request and (2) from liability under the Substitution Administrative Fee. Notwithstanding anything to the contrary in Section 3 above and/or this Section 4, Borrowers shall only have the right to a combined cumulative total (during the entire term of the Loans) of eight (8) Releases and SubstitutionsLoan Documents; provided, however, that such release shall not extend to such Debtor(s)’ liability under the Environmental Indemnity for Costs (as such term is defined in the Environmental Indemnity) incurred by Lender agrees from Contamination (as such term is defined in the Environmental Indemnity) or any violation of any Environmental Law (as such term is defined in the Environmental Indemnity) solely with respect to consider the substituted Site(s), first occurring after such substitution (provided such Debtor(s) shall have the burden of proving when such Contamination or violation first occurred); and (ii); deliver to such Debtor(s) for recording, a release of the Mortgage encumbering such substituted Site(s) in good faith recordable form; and
(m) The right to Substitute Collateral pursuant to this Article 11 is personal to Borrower, its Affiliates, any request for its consent Permitted Transferee, and any Qualified Transferee and shall not be assignable or exercisable by any other transferee whatsoever and shall automatically become null and void after a Third Party Transfer except to a Release or Substitution that would cause the combined cumulative total of Releases and Substitutions during the term of the Loans to exceed eight (8) Releases and Substitutions, which consent may be given or withheld for any reason or given conditionally, in Lender’s sole discretion. This Section 4 shall be personal to the original Borrowers under the Loans, and no transferee shall have any rights under this Section 4Qualified Transferee.
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