Substitution of Collateral. Borrower shall have the right, but not the obligation, to request that Lender release its lien on the Property in exchange for a lien on the Substitute Collateral (the “Proposed Substitution”). In the event that Borrower requests the Proposed Substitution, Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender agrees to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (and not the Property) is part of the Collateral or, at Lender’s option, to make a new Loan secured by the Substitute 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 to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateral, including, without limitation, Lender’s requirements regarding current and projected loan-to-value-ratios and the financial condition of Borrower and the Borrower Affiliates. Borrower shall pay all reasonable costs and expenses incurred by Lender in connection with the foregoing analysis and Lender’s approval/disapproval thereof, including, without limitation, reasonable consultants’ fees, appraisal costs, title fees and 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; (ii) no modification of the Loan or new financing shall be deemed extended without issuance by Lender of a commitment letter executed by Lender (the “New Financing Commitment Letter”), and the modification of the Loan or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Letter, including, without limitation, with respect to the execution of new modification documents or loan 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. Borrower shall have the right, but not the obligation, to may from time-to-time request that Lender release its lien accept substitute real property collateral in place of all or a portion of the Property then encumbered by the Mortgage. Any proposed substitute property collateral must, in the aggregate, result in the new real property collateral and that portion of the Property which will remain encumbered by the Mortgage following the collateral substitution having:
(a) a combined Debt Service Coverage Ratio equal to or greater than the higher of (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 Borrower’s request; and
(b) a combined Loan-to-Value Ratio equal to or lesser than the lower of (i) sixty-five percent (65%), or (ii) the Loan-to-Value Ratio of that portion of the Property which is encumbered by the Mortgage at the time of Borrower’s request. The applicable Debt Service Coverage Ratios and Loan-to-Value Ratios specified above in this Section 2.7 shall be determined by an appraisal or appraisals prepared by a third-party appraiser acceptable to, and engaged directly by, Lender, which appraisal(s) shall be satisfactory to Lender in all respects, as reviewed, adjusted and approved by Lender. If any of the Debt Service Coverage Ratio or Loan-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 Loan, 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 Property in exchange for a lien on factors and criteria upon which Lender, at the Substitute Collateral (the “Proposed Substitution”). In the event that Borrower requests the Proposed Substitution, Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender agrees to reasonably consider time of Borrower’s request and request, bases its determination of whether or not to make reasonable efforts loans similar to modify the Loan to reflect that the Substitute Collateral (and not the Property) is part of the Collateral or, at Lender’s option, to make a new Loan secured by industrial property in Southern California (except that in the Substitute Collateral on the same material economic terms (other than amount case of Loan) as the Loan; provided, however, that it shall be considered reasonable for Lender to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans debt service coverage ratio and collateral, including, without limitation, Lender’s requirements regarding current and projected loan-to-valuevalue ratio underwriting criteria, the Debt Service Coverage Ratio and Loan-ratios and the financial condition of Borrower and the Borrower Affiliates. Borrower to-Value Ratio tests specified above shall pay all reasonable costs and expenses incurred by Lender control over any current underwriting standards then in connection with the foregoing analysis and Lender’s approval/disapproval thereof, including, without limitation, reasonable consultants’ fees, appraisal costs, title fees and 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; (ii) no modification of the Loan or new financing shall be deemed extended without issuance by Lender of a commitment letter executed by Lender (the “New Financing Commitment Letter”place), and if Lender agrees to accept such substitute collateral based on such factors and criteria, then the modification of the Loan or extension acceptance of such financing by Lender substitute collateral such shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Letter, including, without limitation, with respect underwriting and due diligence requirements and loan documentation as were applicable to the execution making of new modification documents or loan documentsthe Loan, including the requirements set forth in the closing checklist and in Schedule C to the term sheet for the Loan, and the 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. Borrower Notwithstanding the provisions of this Agreement or any of the Loan Documents to the contrary, Borrowers may submit a written request (“Substitution Request”), upon at least ninety (90) days prior notice, that Lender permit a substitution (each a “Substitution”) of a substitute property (each a “Substitute Property”) (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 such capacity a “Replaced Property”) upon and subject to the following terms and conditions:
(a) Borrowers must submit a Substitution Request, identifying the proposed Substitute Property and the proposed Replaced Property at least ninety (90) days prior to the proposed closing date for the Substitution. Lender shall have evaluate the rightrequest for the proposed Substitution and the proposed Substitute Property pursuant to its then customary underwriting and pricing criteria. In its underwriting and pricing analysis, Lender may review items such as, but not the obligationlimited to, to request that Lender release its lien on the Property in exchange for a lien on location, occupancy, lease term, rollover, tenant exposure, average Rental Unit rates and operating statements.
(b) The owner of the Substitute Collateral Property must be 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 join this Agreement as a Borrower. No properties will be permitted other than multi-family student oriented rental housing properties. The Substitute Property must be located in the continental United States.
(the “Proposed Substitution”). In the event that Borrower requests the Proposed Substitution, Borrower shall promptly provide Lender with all information that c) Lender in its good faith sole discretion deems relevant shall acknowledge within ten (10) business days of the Lender’s receipt of the Substitution Request whether the proposed Substitute Property appears to analyzing be acceptable to permit the Proposed Substitution. If Lender agrees approves the Substitution Request, the Substitution will be subject to reasonably consider Borrower’s request and the other conditions outlined in this Section 3.06.
(d) Borrowers shall pay a loan fee to make reasonable efforts Lender equal to modify one-half of one percent (0.5%) of an amount equal to eighty percent (80%) of the Loan to reflect that appraised fair market “As Is” value of the Substitute Collateral (and not the Property) is part Property at closing of the Collateral or, at Lender’s option, to make a new Loan secured by the Substitute Collateral on the same material economic terms (other than amount of Loan) as the Loaneach approved Substitution; provided, however, that it such fee shall be considered reasonable $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 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, 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 review the foregoing requirement.
(g) Borrowers must demonstrate to Lender’s satisfaction that, after giving effect to such Substitution (and any modification proposed prepayment of the Loan or new Loan based upon 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 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 Loan with such changes thereto as Lender reasonably deems appropriate to reflect 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.
(i) Borrowers shall be required to supply for Lender’s review and approval due diligence materials relating to the Substitute Property prior to closing of the Substitution similar to those items required for closing of this Loan, and such other materials as may then be customarily required as part of its then current underwriting criteria commercial loan closing policies, procedures, standards and practices for properties of similar loans type and collateralin similar locations as the Substitute Property, including, without limitation, Lender’s a current as-built ALTA survey, proof of adequate insurance, title insurance in conformance with the requirements regarding current for the closing of this Loan, proof of compliance with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and projected loan-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 Substitute Property, including but not limited to-value-ratios , 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 financial 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 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 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 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 Borrower 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.
(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, operations or prospects of any Borrower Affiliates. Borrower Party has occurred since the closing of the Loan.
(o) Borrowers shall pay all reasonable out-of-pocket costs and expenses incurred by Lender in connection with any such Substitution .and the foregoing analysis 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, Borrowers shall, in connection with, and as a condition to, each Substitution, pay the reasonable fees and expenses of Lender’s approval/disapproval thereofcounsel, includingthe reasonable fees and expenses of Lender’s engineers, without limitationappraisers, reasonable construction consultants’ fees, appraisal costsinsurance consultants and other due diligence consultants and contractors, recording charges, title fees insurance charges, and reasonable attorneys’ fees and costsdocumentary stamp and/or mortgage or similar taxes, transfer taxes. 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; (ii) no modification of the Loan or new financing Nothing contained herein shall be deemed extended without issuance by Lender to require from the Borrowers in conjunction with a Substitution Request hereunder a principal prepayment in excess of a commitment letter executed by Lender (that amount necessary to cause the “New Financing Commitment Letter”), and Borrowers to be in compliance with the modification of the Loan or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Letter, including, without limitation, with respect financial covenants set forth in Article VII hereof after giving effect to the execution of new modification documents or loan documentsSubstitution.
Appears in 2 contracts
Sources: Loan Agreement (Campus Crest Communities, Inc.), Loan Agreement (Campus Crest Communities, Inc.)
Substitution of Collateral. At any time during the term of the Loan, with ninety (90) days prior written notice to Lender, Borrower shall have the rightbe entitled (during any one loan year, but not subject to the obligationcumulative limits set out below) to substitute up to two (2) properties comprising the original Portfolio with properties ("Substitute Collateral") 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 (a) through (k) below. In evaluating the acceptability of the substitution, each of the following conditions must be satisfied:
(a) No Event of Default or event which with the passage of time or giving of notice, or both, would constitute an Event of Default shall exist under the Documents at the time of the request or at the time of the substitution of collateral;
(b) The Substitute Collateral shall only be an apartment complex satisfactory to request that Lender release its lien on the Property in exchange for a lien on Lender's sole discretion. The ownership entity of the Substitute Collateral (the “Proposed Substitution”). In the event that Borrower requests the Proposed Substitution, Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender agrees to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (and not the Property) is part of the Collateral or, at Lender’s option, to make a new Loan secured by the Substitute 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 identical to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateral, entity owning the Individual Property being transferred;
(c) The location (including, without limitation, the character and demographics of the market area) of the Substitute Collateral shall be satisfactory to Lender in Lender’s 's sole discretion;
(d) The Substitute Collateral shall not be less than ninety-two percent (92%) occupied by third-party tenants in occupancy and paying rent at the time of substitution;
(e) Lender shall have received a report 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 Report conforming with the guidelines then applicable to Lender's mortgage loans, which Environmental 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;
(f) The overall appearance, configuration, quality and age of the Substitute Collateral shall be satisfactory to Lender in Lender's sole discretion and 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 regarding current and projected loanin the Assignment.
(g) The value of the Substitute Collateral, as determined by Lender, shall equal or exceed then-to-value-ratios market value of the property being transferred, and the financial condition Net Operating Income of the Substitute Collateral, as determined by Lender, shall equal or exceed Net Operating Income of the property being transferred;
(h) To the extent applicable to the Substitute Collateral, all conditions that Borrower was obligated to meet and satisfy under the Borrower Affiliates. Borrower shall pay all reasonable costs and expenses incurred by Lender terms of the Application/Commitment in connection with the foregoing analysis and closing of the Loan, or, if required by Lender’s approval/disapproval thereof, Lender's then current closing requirements, shall be satisfied regarding the Substitute Collateral, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from Borrower's counsel, (iii) title to the Substitute Collateral shall be satisfactory in all respects to Lender (including, without limitation, reasonable consultants’ evidence that Lender shall have a first and exclusive lien on the fee simple interest in the Substitute Collateral) and Lender shall have received a satisfactory survey and title insurance policy, (iv) Lender receives evidence that the Substitute Collateral complies with all applicable government requirements, (v) construction of the Substitute Collateral is complete and in accordance with the plans and specifications, (vi) 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;
(i) Borrower shall pay all costs and expenses associated with the substitution of the Substitute Collateral, including but not limited to, title insurance and survey fees and expenses, recording costs, documentary stamp taxes, intangible taxes, similar fees, appraisal costs, title and attorneys' fees (including attorneys' fees and reasonable attorneys’ expenses for Lender's staff attorneys and outside counsel), fees of Lender's architect and/or engineer, and costsfees related to the Environmental Report. In addition, Borrower acknowledges and agrees that its right 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 the Proposed Substitution does for substitution;
(j) The Substitute Collateral shall not constitute consist of any partial interests in a commitment on the part property, including but not limited to partnership or joint venture interests;
(k) The consent of Lender to agree the substitution of collateral is expressly made subject to the Proposed Substitution; (ii) no modification Lender's analysis and approval of the Loan or new financing shall be deemed extended without issuance by Lender of a commitment letter executed by Lender economic trends affecting the Substitute Collateral; and
(l) At the “New Financing Commitment Letter”), and the modification time of the Loan or extension request for substitution of such financing by Lender shall be subject to satisfaction of all terms and conditions of collateral, the New Financing Commitment LetterDebt Service Coverage Ratio, including, without limitation, calculated with respect to the execution Portfolio as constituted prior to any substitution, is equal to or greater than 1.30 to 1.00. Lender shall have at least eighty (80) days in which to process any request to substitute collateral after receipt of new modification documents (1) all materials necessary to evaluate such request and (2) the fees required by subparagraph (i) above. Notwithstanding anything to the contrary in this Section 10.02 and Section 10.01 above, (x) Borrower and Guarantor shall only have the right, during any one loan year, to a cumulative total of (1) two partial releases, (2) two substitutions of collateral, or loan documents(3) one partial release and one substitution of collateral and (y) after any partial release or substitution of collateral, the remaining Individual Properties (including any substituted property which becomes part of the Individual Properties) shall always be in at least three markets with no more than thirty-five percent (35%) of the total value (as determined by Lender) of all of the Individual Properties in any one market.
Section 10.02 shall be personal to Borrower, and neither the Third Party Single Entity nor any other transferee shall have any rights under this paragraph.
Appears in 1 contract
Sources: Mortgage and Security Agreement (Cornerstone Realty Income Trust Inc)
Substitution of Collateral. Notwithstanding the provisions of this Agreement or any of the Loan Documents to the contrary, Borrower shall have the rightmay submit a written request (“Substitution Request”), but not the obligationupon at least ninety (90) days prior notice, to request that Lender release its lien permit a substitution (each a “Substitution”) of a substitute property (each a “Substitute 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 “Replaced Property”) upon and subject to the following terms and conditions:
(a) Borrower must submit a Substitution Request, identifying the proposed Substitute Property in exchange and the proposed Replaced Property at least ninety (90) days prior to the proposed closing date for a lien on the Substitute Collateral (the “Proposed Substitution”). In the event that Borrower requests the Proposed Substitution, Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender agrees shall evaluate the request for the proposed Substitution and the proposed Substitute Property pursuant to reasonably consider Borrower’s request its then customary underwriting and pricing criteria. The amount of the “Principal Allocation” Lender would determine to make reasonable efforts allocate to modify the Loan to reflect that the Substitute Collateral (and not Property must be at least equal to the Property) is part amount of the Collateral orthen remaining Principal Allocation for the proposed Replaced Property, at Lender’s option, to make a new Loan secured by and the Substitute 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 to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateral, including, without limitation, Lender’s requirements regarding current and projected loan-to-value-ratios and value ratio for the financial condition of Borrower and the Borrower Affiliates. Borrower shall pay all reasonable costs and expenses incurred by Lender in connection with the foregoing analysis and Lender’s approval/disapproval thereofproposed Principal Allocation for the Substitute Property, includingbased upon a current MAI appraisal in accordance with subparagraph (h) below, without limitation, reasonable consultants’ fees, appraisal costs, title fees and 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 must be at least equal to the Proposed Substitution; (ii) no modification of then current loan-to-value ratio for the Loan or new financing shall be deemed extended without issuance by proposed Replaced Property. In its underwriting and pricing analysis, Lender of a commitment letter executed by Lender (the “New Financing Commitment Letter”)may review items such as, but not limited to, location, occupancy, lease term, rollover, tenant exposure, tenant’s credit, average daily room rates and the modification of the Loan or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Letter, including, without limitation, with respect to the execution of new modification documents or loan documentsoperating statements.
Appears in 1 contract
Substitution of Collateral. 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 notice, that Lender permit a substitution (each a “SUBSTITUTION”) of a substitute property (each a “SUBSTITUTE 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 “REPLACED PROPERTY”) upon and subject to the following terms and conditions:
(a) Borrower must submit a Substitution Request, identifying the proposed Substitute Property and the proposed Replaced Property at least ninety (90) days prior to the 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 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 owns 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 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) Borrower shall pay a processing fee to Lender 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 processing 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.
(g) 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 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 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. 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, based on an MAI appraisal satisfactory to Lender, dated not more than ninety (90) days prior to the closing of the Substitution. All costs of such appraisals shall be paid by the Borrower on or prior to the closing of the Substitution. Lender shall have the rightright 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 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 Substitute Property opened for less than one year) to the Replaced Property.
(j) Lender’s outside counsel shall prepare and Borrower shall execute (1) amendments to the Note, the Mortgage, the Assignments of Rents and Leases, the Environmental Indemnification Agreement, this Agreement and tax and insurance escrows, and (2) all Loan Documents Lender shall deem appropriate, including, but not the obligationlimited to, any new security instrument, assignment of rents and leases, environmental indemnities, etc. relating to request that Lender release its lien on the Property in exchange for a lien on the Substitute Collateral 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 and Substitute Property) (collectively, the “Proposed SubstitutionSUBSTITUTE LOAN DOCUMENTS”). In The Substitution Loan Documents shall be cross-defaulted and cross-collateralized with the event that Borrower requests existing Loan Documents for the Proposed Substitution, Loan.
(k) Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant be required to analyzing the Proposed Substitution. Lender agrees supply for Lender’s review and approval due diligence materials relating to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (Property prior to closing of the Substitution including those items required for closing of this Loan, and not the Property) is such other materials as may then be customarily required as part of the Collateral orits then current commercial loan closing policies, at Lender’s optionprocedures, to make a new Loan secured by standards and practices for properties of similar type and in similar locations as the Substitute 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 to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateralProperty, including, without limitation, Lender’s a current as-built ALTA survey, proof of adequate insurance, title insurance in conformance with the requirements regarding current for the closing of this Loan, proof of compliance with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and projected loan-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 Substitute Property, including but not limited to-value-ratios , appraisal, hazardous substance report, seismic report and engineer report as required by Lender in its sole discretion. 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 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 financial 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 Loan closing unless approved by Lender in writing and continuing all coverage provided in the original 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 (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 Borrower 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 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 Affiliates. (or controlling member of Borrower or general partner or limited partner of Borrower, as applicable) has occurred after closing of this Loan.
(q) The Borrower shall pay all reasonable out-of-pocket costs and expenses incurred by Lender in connection with any such Substitution and the foregoing analysis 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 approval/disapproval thereofcounsel, includingthe reasonable fees and expenses of Lender’s engineers, without limitationappraisers, reasonable construction consultants’ fees, appraisal costsinsurance consultants and other due diligence consultants and contractors, recording charges, title fees and 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; (ii) no modification of the Loan or new financing shall be deemed extended without issuance by Lender of a commitment letter executed by Lender (the “New Financing Commitment Letter”)insurance charges, and the modification of the Loan documentary stamp and/or mortgage or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Lettersimilar taxes, including, without limitation, with respect to the execution of new modification documents or loan documentstransfer taxes.
Appears in 1 contract
Sources: Loan Agreement (Summit Hotel OP, LP)
Substitution of Collateral. Borrower Notwithstanding the provisions of Section 6.2 of this Agreement, provided no Event of Default shall have occurred and be continuing, the right, but not Borrower may elect to substitute for certain of the obligation, to request that Lender release its lien on the Property in exchange for a lien on the Substitute Collateral (the “Proposed "Released Collateral") substitute Collateral of the same type as the Released Collateral (the "Substitute Collateral") as Collateral for the Loan (a "Substitution”"). In , provided further that each of the event that Borrower requests the Proposed Substitution, following conditions precedent shall be satisfied: The Borrower shall promptly provide deliver to Lender with all information that Lender in its good faith discretion deems relevant respect to analyzing the Proposed Substitution. Lender agrees to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral Collateral, if required by Lender, (and not the Propertyi) is part of the Collateral or, at Lender’s option, to make a new Loan secured by the Substitute Collateral on the same material economic terms (promissory note, loan agreement, environmental indemnity agreement, mortgage/deed of trust, security agreement, UCC-1 financing statements, and such other than amount of Loan) as the Loan; provided, however, that it shall be considered reasonable for Lender to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateralloan documents, including, without limitation, Lender’s requirements regarding current guaranties and projected loan-to-value-ratios opinions of counsel, as Lender may require with respect to the Substitute Collateral, and (ii) if the financial condition Substitute Collateral consists of Borrower real property, a mortgagee title insurance policy and the Borrower Affiliates. an ALTA survey acceptable to Lender in all respects; The Borrower shall pay all reasonable costs and expenses incurred of Lender in connection with the Substitution and cooperate fully with Lender in connection with all due diligence conducted by Lender in connection with the foregoing analysis Substitute Collateral, and the Substitute Collateral shall be subject to, among other things, the underwriting guidelines and requirements of Lender as well as the review and approval by Lender’s approval/disapproval thereof, in its discretion, of the Substitute Collateral; The then current value of the Substitute 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 the value of the Released Collateral as determined by Lender at the time of the closing of the Loan; Lender must be satisfied, in its absolute and sole discretion, that the Borrower is able to satisfy and comply with the provisions of all covenants set forth in the Loan Documents, including, without limitation, reasonable consultants’ feesthe covenants set forth in Section V of this Agreement, appraisal costs, title fees and reasonable attorneys’ fees and costs. Borrower acknowledges and agrees that its right to request on an ongoing basis when the Proposed Substitution does not constitute a commitment on the part of Lender to agree to the Proposed Substitution; (ii) no modification Substitute Collateral is pledged in lieu of the Loan or new financing shall be deemed extended without issuance by Lender of a commitment letter executed by Lender (the “New Financing Commitment Letter”)Released Collateral, and that the modification of the Loan or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Letter, including, without limitation, Cash Flow Coverage Ratio computed solely with respect to the execution Substitute Collateral (and any existing Collateral that will not constitute Released Collateral) for the period of new modification documents two consecutive fiscal years most recently ended equals or loan documentsexceeds 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 the Loan has determined that such Substitution will not result in the qualification, downgrade or withdrawal of the ratings of such bonds or other securities.
Appears in 1 contract
Substitution of Collateral. 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 notice, that Lender permit a substitution (each a “SUBSTITUTION”) of a substitute property (each a “SUBSTITUTE 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 “REPLACED PROPERTY”) upon and subject to the following terms and conditions:
(a) Borrower must submit a Substitution Request, identifying the proposed Substitute Property and the proposed Replaced Property at least ninety (90) days prior to the 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 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 owns 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 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) Borrower shall pay a processing fee to Lender 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 processing 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.
(g) 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 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 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. 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, based on an MAI appraisal satisfactory to Lender, dated not more than ninety (90) days prior to the closing of the Substitution. All costs of such appraisals shall be paid by the Borrower on or prior to the closing of the Substitution. Lender shall have the rightright 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). The Release Factor set forth in SECTION 3.07 SUBPARAGRAPH (I) 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 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 Substitute Property opened for less than one year) to the Replaced Property.
(j) Lender’s outside counsel shall prepare and Borrower shall execute (1) amendments to the Note, the Mortgage, the Assignments of Rents and Leases, the Environmental Indemnification Agreement, this Agreement and tax and insurance escrows, and (2) all Loan Documents Lender shall deem appropriate, including, but not the obligationlimited to, any new security instrument, assignment of rents and leases, environmental indemnities, etc. relating to request that Lender release its lien on the Property in exchange for a lien on the Substitute Collateral 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 and Substitute Property) (collectively, the “Proposed SubstitutionSUBSTITUTE LOAN DOCUMENTS”). In The Substitution Loan Documents shall be cross-defaulted and cross-collateralized with the event that Borrower requests existing Loan Documents for the Proposed Substitution, Loan.
(k) Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant be required to analyzing the Proposed Substitution. Lender agrees supply for Lender’s review and approval due diligence materials relating to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (Property prior to closing of the Substitution including those items required for closing of this Loan, and not the Property) is such other materials as may then be customarily required as part of the Collateral orits then current commercial loan closing policies, at Lender’s optionprocedures, to make a new Loan secured by standards and practices for properties of similar type and in similar locations as the Substitute 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 to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateralProperty, including, without limitation, Lender’s a current as-built ALTA survey, proof of adequate insurance, title insurance in conformance with the requirements regarding current for the closing of this Loan, proof of compliance with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and projected loan-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 Substitute Property, including but not limited to-value-ratios , appraisal, hazardous substance report, seismic report and engineer report as required by Lender in its sole discretion. 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 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 financial 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 Loan closing unless approved by Lender in writing and continuing all coverage provided in the original 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 (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 Borrower 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 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 Affiliates. (or controlling member of Borrower or general partner or limited partner of Borrower, as applicable) has occurred after closing of this Loan.
(q) The Borrower shall pay all reasonable out-of-pocket costs and expenses incurred by Lender in connection with any such Substitution and the foregoing analysis 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 approval/disapproval thereofcounsel, includingthe reasonable fees and expenses of Lender’s engineers, without limitationappraisers, reasonable construction consultants’ fees, appraisal costsinsurance consultants and other due diligence consultants and contractors, recording charges, title fees and 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; (ii) no modification of the Loan or new financing shall be deemed extended without issuance by Lender of a commitment letter executed by Lender (the “New Financing Commitment Letter”)insurance charges, and the modification of the Loan documentary stamp and/or mortgage or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Lettersimilar taxes, including, without limitation, with respect to the execution of new modification documents or loan documentstransfer taxes.
Appears in 1 contract
Substitution of Collateral. Borrower shall have At any time during the rightterm of the Loan, but not Lender will, at Borrower’s request and subject to all of the obligationterms and conditions herein contained, to request that Lender permit a substitution and release its lien on the Property in exchange for (a lien on the Substitute Collateral (the “Proposed Substitution”) of the either of the Richmond property (Exhibit A-1 of the Mortgage) or the Fremont property (Exhibit A-2 of the Mortgage). In the event that Borrower requests the Proposed , provided that, in connection with any such Substitution, Borrower shall promptly provide satisfy each of the following requirements. In connection with the Substitution, Borrower shall be entitled to obtain a release of the lien of the Mortgage from the applicable Richmond or Fremont property (for the purposes of this Section, the “Existing Premises”) upon the Substitution of another property or properties (the “Substitute Premises”) satisfactory to Lender (in its reasonable discretion) upon satisfaction of each of the following terms and conditions:
(a) At the time of 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 all information that the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;
(b) The proposed Substitute 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;
(c) The credit of the 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 Premises and the lease rollover schedule for such tenant(s) shall be satisfactory to Lender in its good faith discretion deems relevant to analyzing reasonable discretion;
(d) Lender shall have received the Proposed Substitution. Lender agrees to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that following reports of the Substitute Collateral (and not the Property) is part of the Collateral or, at Lender’s option, Premises each conforming to make a new Loan secured by the Substitute 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 to review any modification of the Loan or new Loan based upon 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 from an engineer or architect acceptable to Lender; (ii) a Phase I environmental report from an environmental consulting firm 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, 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;
(e) The Substitute Premises (including, without limitation, property type, the location, the demographics of the market area, appearance, configuration, quality and age of the Substitute Premises) 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;
(f) Lender’s then current closing and underwriting criteria for similar loans requirements, shall be satisfied regarding the Substitute Premises, including without limitation, that: (i) all amendments to the Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from Borrower’s counsel regarding such amended Loan Documents, (iii) title to the Substitute Premises shall be satisfactory in all respects to Lender (including, without limitation, evidence that Lender shall have a first and collateralexclusive mortgage lien on the fee simple interest in the Substitute Premises), (iv) Lender shall receive a satisfactory survey and title insurance policy, (v) Lender receives satisfactory evidence that the Substitute Premises complies with all applicable governmental requirements, and (vi) Borrower’s, and if applicable, tenant’s then current financial condition shall be satisfactory to Lender;
(g) At the same time Borrower delivers its written notice to Lender requesting a Substitution, Borrower shall pay to Lender a non-refundable administrative fee of $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 equal to $30,000, but Lender shall credit against such fee the Substitution Administrative Fee Borrower previously paid to Lender. The Substitution Administrative Fee and the fee due upon the closing of the Substitution shall be applied to cover all of Lender’s expenses, including, without limitation, Lender’s requirements regarding current travel and projected loanin-to-value-ratios 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;
(h) Whether or not the financial condition of Borrower and the Borrower Affiliates. Substitution actually closes, Borrower shall pay all reasonable third party costs and expenses incurred 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, fees for Lender’s outside counsel (if any), and fees for the reports described in (d) above;
(i) The Loan to value ratio of the Substitute Premises, DSC Ratio, value and income of the Substitute Premises shall all be subject to Lender’s approval in its reasonable discretion;
(j) Lender determines in its reasonable discretion that the Substitution would not result in a violation of the ERISA provisions contained herein, and Borrower delivers such certifications and other documents as Lender may request in connection therewith;
(k) Lender is satisfied, and Borrower shall deliver such assurances as may be reasonably requested by Lender (including a reaffirmation certification or other agreement) that any guaranty or indemnity or similar instrument delivered to Lender in connection with the foregoing analysis Loan remains in full force and Lender’s approval/disapproval thereofeffect, including, without limitation, reasonable consultants’ fees, appraisal costs, title fees notwithstanding and reasonable attorneys’ fees and costs. taking into consideration the Substitution;
(l) Any written request by Borrower acknowledges and agrees that its right to request the Proposed Lender for a Substitution does not constitute a commitment on the part of Lender to agree may be made no later than twelve (12) months prior to the Proposed Substitution; (ii) no modification Maturity Date of the Loan or new financing Loan. Lender shall use reasonable efforts to process a request from Borrower to effect a Substitution within sixty (60) days from the request therefore, provided Lender has received: (1) all materials and information necessary to evaluate such request; and (2) the Substitution Administrative Fee. This Section 11.21 shall be deemed extended without issuance by Lender of a commitment letter executed by Lender personal to the original Borrower under the Loan (the “New Financing Commitment Letter”)other than as outlined in (l) above, and no Transferee shall have any rights under this Section to substitute the modification of the Loan or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Letter, including, without limitation, with respect to the execution of new modification documents or loan documentsPremises.
Appears in 1 contract
Substitution of Collateral. At any time during the term of the Loan, with ninety (90) days prior written notice to Lender, Borrower shall have the rightbe entitled (during any one loan year, but not subject to the obligationcumulative limits set out below) to substitute up to two (2) properties comprising the original Portfolio with properties ("Substitute Collateral") 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 (a) through (k) below. In evaluating the acceptability of the substitution, each of the following conditions must be satisfied:
(a) No Event of Default or event which with the passage of time or giving of notice, or both, would constitute an Event of Default shall exist under the Documents at the time of the request or at the time of the substitution of collateral;
(b) The Substitute Collateral shall only be an apartment complex satisfactory to request that Lender release its lien on the Property in exchange for a lien on Lender's sole discretion. The ownership entity of the Substitute Collateral (the “Proposed Substitution”). In the event that Borrower requests the Proposed Substitution, Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender agrees to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (and not the Property) is part of the Collateral or, at Lender’s option, to make a new Loan secured by the Substitute 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 identical to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateral, entity owning the Individual Property being transferred;
(c) The location (including, without limitation, the character and demographics of the market area) of the Substitute Collateral shall be satisfactory to Lender in Lender’s 's sole discretion;
(d) The Substitute Collateral shall not be less than ninety-two percent (92%) occupied by third-party tenants in occupancy and paying rent at the time of substitution;
(e) Lender shall have received a report 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 Report conforming with the guidelines then applicable to Lender's mortgage loans, which Environmental 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;
(f) The overall appearance, configuration, quality and age of the Substitute Collateral shall be satisfactory to Lender in Lender's sole discretion and 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 regarding current and projected loanin the Assignment.
(g) The value of the Substitute Collateral, as determined by Lender, shall equal or exceed then-to-value-ratios market value of the property being transferred, and the financial condition Net Operating Income of the Substitute Collateral, as determined by Lender, shall equal or exceed Net Operating Income of the property being transferred;
(h) To the extent applicable to the Substitute Collateral, all conditions that Borrower was obligated to meet and satisfy under the Borrower Affiliates. Borrower shall pay all reasonable costs and expenses incurred by Lender terms of the Application/Commitment in connection with the foregoing analysis and closing of the Loan, or, if required by Lender’s approval/disapproval thereof, Lender's then current closing requirements, shall be satisfied regarding the Substitute Collateral, including without limitation, that (i) all Loan Documents shall be satisfactory to Lender, (ii) Lender receives a satisfactory legal opinion from Borrower's counsel, (iii) title to the Substitute Collateral shall be satisfactory in all respects to Lender (including, without limitation, reasonable consultants’ evidence that Lender shall have a first and exclusive lien on the fee simple interest in the Substitute Collateral) and Lender shall have received a satisfactory survey and title insurance policy, (iv) Lender receives evidence that the Substitute Collateral complies with all applicable government requirements, (v) construction of the Substitute Collateral is complete and in accordance with the plans and specifications, (vi) 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;
(i) Borrower shall pay all costs and expenses associated with the substitution of the Substitute Collateral, including but not limited to, title insurance and survey fees and expenses, recording costs, documentary stamp taxes, intangible taxes, similar fees, appraisal costs, title and attorneys' fees (including attorneys' fees and reasonable attorneys’ expenses for Lender's staff attorneys and outside counsel), fees of Lender's architect and/or engineer, and costsfees related to the Environmental Report. In addition, Borrower acknowledges and agrees that its right 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 the Proposed Substitution does for substitution;
(j) The Substitute Collateral shall not constitute consist of any partial interests in a commitment on the part property, including but not limited to partnership or joint venture interests;
(k) The consent of Lender to agree the substitution of collateral is expressly made subject to the Proposed Substitution; (ii) no modification Lender's analysis and approval of the Loan or new financing shall be deemed extended without issuance by Lender of a commitment letter executed by Lender economic trends affecting the Substitute Collateral; and
(l) At the “New Financing Commitment Letter”), and the modification time of the Loan or extension request for substitution of such financing by Lender shall be subject to satisfaction of all terms and conditions of collateral, the New Financing Commitment LetterDebt Service Coverage Ratio, including, without limitation, calculated with respect to the execution Portfolio as constituted prior to any substitution, is equal to or greater than 1.30 to 1.00. Lender shall have at least eighty (80) days in which to process any request to substitute collateral after receipt of new modification documents (1) all materials necessary to evaluate such request and (2) the fees required by subparagraph (i) above. Notwithstanding anything to the contrary in this Section 10.02 and Section 10.01 above, (x) Borrower and Guarantor shall only have the right, during any one loan year, to a cumulative total of (1) two partial releases, (2) two substitutions of collateral, or loan documents(3) one partial release and one substitution of collateral and (y) after any partial release or substitution of collateral, the remaining Individual Properties (including any substituted property which becomes part of the Individual Properties) shall always be in at least three markets with no more than thirty-five percent (35%) of the total value (as determined by Lender) of all of the Individual Properties in any one market.
Appears in 1 contract
Sources: Mortgage and Security Agreement (Cornerstone Realty Income Trust Inc)
Substitution of Collateral. 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 notice, that Lender permit a substitution (each a "Substitution") of a substitute property (each a "Substitute 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 "Replaced Property") upon and subject to the following terms and conditions:
(a) Borrower must submit a Substitution Request, identifying the proposed Substitute Property and the proposed Replaced Property at least ninety (90) days prior to the 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 proposed Principal Allocation for the Substitute Property, based upon a current MAI appraisal in accordance with subparagraph (b) 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 and tenant's credit.
(b) The owner of the Substitute Property must be the Borrower (such that the Substitute Property is owned 100% by the same entity as owns all the collateral constituting the Property). No special purpose properties will be permitted (for example, hotels, health or senior care facilities, or mobile home parks). The Substitute Property must be located in the continental United States and may not be located in Texas, Florida or New York.
(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, Northmarq Capital Inc. will process the Borrower's formal request for 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 herein.
(d) No more than two (2) Substitution Requests 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 nine (9) Substitutions during the Loan term.
(f) Borrower shall pay a processing fee to Lender 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 processing fee contemplated by this subparagraph are in addition to 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 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 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 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 Northmarq Capital Inc. and approved by the Lender, based on an MAI appraisal satisfactory to Lender, dated not more than ninety (90) days prior to the closing of the Substitution. All costs of such appraisals shall be paid by the Borrower on or prior to the closing of the Substitution. Lender shall have the rightright to readjust the Principal Allocations and Allocation Percentages for all eighteen (18) properties (or such number remaining if the Release Privilege previously has been exercised). The Release Factor set forth in Section 3.07 subparagraph (i) 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 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 Substitute Property opened for less than one year) to the Replaced Property.
(j) Lender's outside counsel shall prepare and Borrower shall execute (1) amendments to the Loan Documents and this Agreement, and (2) all Loan Documents Lender shall deem appropriate, including, but not the obligationlimited to, any new Mortgage, assignment of rents and leases, environmental indemnities, etc. relating to request that Lender release its lien on the Property in exchange for a lien on the Substitute Collateral Property (all of which documentation shall be substantially in the “Proposed Substitution”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 and Substitute Property) (collectively, the "Substitute Loan Documents"). In The Substitution Loan Documents shall be cross-defaulted and cross-collateralized with the event that Borrower requests existing Loan Documents for the Proposed Substitution, Loan.
(k) Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant be required to analyzing the Proposed Substitution. Lender agrees supply for Lender's review and approval due diligence materials relating to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (Property prior to closing of the Substitution including those items required for closing of this Loan, and not the Property) is such other materials as may then be customarily required as part of the Collateral orits then current commercial loan closing policies, at Lender’s optionprocedures, to make a new Loan secured by standards and practices for properties of similar type and in similar locations as the Substitute 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 to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateralProperty, including, without limitation, Lender’s a current as-built ALTA survey, proof of adequate insurance, title insurance in conformance with the requirements regarding current for the closing of this Loan, proof of compliance with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and projected loan-attornment agreements. 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 Substitute Property, including but not limited to-value-ratios , appraisal, hazardous substance report and engineer report, and seismic report if located in an area where Lender customarily requires such reports as part of its due diligence prior to making a mortgage loan as required by Lender in its sole discretion. The items listed in this subparagraph 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 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 Loan closing unless approved by Lender in writing and continuing all coverage provided in the original 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 (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 on the original eighteen (18) parcels securing the Loan.
(o) 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.
(p) Lender shall be satisfied that no material adverse change in the financial condition, operations or prospects of Borrower (or general partner or limited partner as applicable) has occurred after closing of this Loan. No Substitution shall be permitted if Borrower, at the time of the Substitution is insolvent, as such term is defined in the U.S. Bankruptcy Code, or if the Substitution shall render the Borrower insolvent. Borrower shall provide sufficient audited, if available, or unaudited statements of its financial affairs including, but not limited to, balance sheets and income and expense statements all accurately describing its financial condition of Borrower and a date no later than three (3) months prior to the Borrower Affiliates. Substitution.
(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.
(r) In the event the Substitute Property has not been identified prior to the sale of the Replaced Property, Lender will allow Borrower to post an unconditional, irrevocable Letter of Credit ("LC") in accordance with all requirements of Section 3.05 until a Substitute Property is added to the security, provided that the Loan to value (including any available funds under the revolving line of credit) of the remaining Properties securing the Loan, as determined by Lender in connection with its sole discretion, does not exceed seventy percent (70%). The amount of the foregoing analysis LC will be equal to the Release Price for the Replaced Property, as calculated in Section 3.07 above. If a Substitute Property meeting all the requirements of this Section 3.08 is not added to the security within twelve (12) months of the release of the Replaced Property, Lender will have a right to draw on the LC and Lender’s approval/disapproval thereof, including, without limitation, reasonable consultants’ fees, appraisal costs, title fees and reasonable attorneys’ fees and costsapply the proceeds to the Loan pursuant to Section 3.07 herein. Borrower acknowledges shall have the ability to use an LC for up to two (2) of the permitted Substitutions during the entire term of the Loan. The combined total of any outstanding LCs permitted under this Section shall not exceed $20,000,000.
(s) Any LC used pursuant to Subparagraph (r) would be additional collateral for the Loan for the entire term. In the event of default, Lender will be entitled to draw the LC in whole or in part and agrees that its right to request apply the Proposed Substitution does not constitute a commitment on the part of Lender to agree amount so drawn to the Proposed Substitution; (ii) no modification of indebtedness under the Loan or new financing and/or to the cure of any such default in such order and portions as Lender may elect in its sole and absolute discretion. No such election to draw and/or application of funds shall be deemed extended without issuance by Lender an election of remedies or a commitment letter executed by Lender cure of Borrower's default (the “New Financing Commitment Letter”or general partner or limited partner's default, as applicable), . All rights and the modification remedies of the Loan or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Letter, including, without limitation, with respect to the execution of new modification documents or loan documentscumulative.
Appears in 1 contract
Sources: Loan Agreement (Great Lakes Reit)
Substitution of Collateral. Borrower Mortgagor may submit a written request ("SUBSTITUTION REQUEST"), upon at least ninety (90) days prior notice, that Mortgagee permit a substitution (each a "SUBSTITUTION") of a substitute property (which previously has not been the subject of inclusion in the collateral for the Loan) (each a "SUBSTITUTE PROPERTY") for any individual Parcel (in such capacity a "Replaced Property") upon and subject to the following terms and conditions:
(a) The Mortgagor shall submit a written request for Substitution, identifying the proposed Substitute Property and the proposed Replaced Property at least ninety (90) days prior to the 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 the "Principal Allocation" Mortgagee 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 ("LTV") ratio for the Mortgagee's proposed Principal Allocation for the Substitute Property, 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 owner of the Substitute Property must be the Mortgagor (such that the Substitute Property is owned one hundred percent (100%) by the 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-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 any calendar year for the entire Loan.
(e) Mortgagor shall not be permitted to request and close 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 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 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 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 rightright 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 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) Mortgagee's outside counsel shall prepare and Mortgagor shall execute (1) amendments to the Note, Mortgage, assignment of rents and leases, loan agreement, environmental indemnities, tax and insurance escrows and (2) all other Loan Documents Mortgagee shall deems appropriate, including, but not the obligationlimited to, any new Mortgage, assignment of rents and leases, environmental indemnities, etc. relating to request that Lender release its lien on the Property in exchange for a lien on the Substitute Collateral Property (all of which documentation shall be substantially in the “Proposed Substitution”form of the applicable documents executed in connection with the Loan with such changes thereto as Mortgagee reasonably deems appropriate to reflect the terms and circumstances of the Substitution and Substitute Property) (collectively, the "SUBSTITUTE LOAN DOCUMENTS"). In The Substitution Loan Documents shall be cross-defaulted and cross-collateralized with the event that Borrower requests existing Loan Documents for the Proposed Substitution, Borrower Loan.
(k) Mortgagor shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant be required to analyzing the Proposed Substitution. Lender agrees supply for Mortgagee's review and approval due diligence materials relating to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (Property prior to closing of the Substitution including those items contained in that certain Application Letter dated August 25, 2004 between Mortgagor and not the Property) is Mortgagee as a requirement for closing of this Loan, and such other materials as may then be customarily required as part of the Collateral orits then current commercial loan closing policies, at Lender’s optionprocedures, to make a new Loan secured by standards and practices for properties of similar type and in similar locations as the Substitute 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 to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateralProperty, including, without limitation, Lender’s requirements regarding 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 projected loan-attornment agreements. The Mortgagee shall, at the Mortgagors' sole cost and expense, receive for its review and approval all additional due diligence materials in any way relating to the Substitute Property, including but not limited to-value-ratios , appraisal, Hazardous Substance report and engineer report as required by 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 financial 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 Borrower closing the Substitution and the Borrower Affiliates. Borrower 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 by Lender in connection with any such Substitution and the foregoing analysis out-of-pocket fees and Lender’s approval/disapproval thereof, expenses incurred by Mortgagee (including, without limitation, the reasonable fees and expenses of its outside counsel) and its loan correspondent and servicer in connection therewith. Without limiting the generality of the foregoing, the Mortgagor shall, in connection with, and as a condition to, each Substitution, pay the reasonable fees and expenses of Mortgagee's counsel, the fees and expenses of Mortgagee's engineers, appraisers, construction consultants’ fees, appraisal costsinsurance consultants and other due diligence consultants and contractors, recording charges, title fees and 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; (ii) no modification of the Loan or new financing shall be deemed extended without issuance by Lender of a commitment letter executed by Lender (the “New Financing Commitment Letter”)insurance charges, and the modification of the Loan stamp and/or mortgage or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Lettersimilar taxes, including, without limitation, with respect to the execution of new modification documents or loan documentstransfer taxes.
Appears in 1 contract
Sources: Mortgage, Security Agreement, Financing Statement and Fixture Filing (Equity Inns Inc)
Substitution of Collateral. 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 to the Termination Date, Borrower shall have the right, but not subject to the obligationconsent of all of the Lenders, which consent may be withheld in the sole discretion of the Lenders, to request that Lender obtain a release its lien on of a Property from the Lien of the related Mortgage and Loan Documents (a "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 (a "Substitute Property"), and subjects such Substitute Property to the Lien of a new mortgage, deed of trust, deed to secure debt or similar security instruments, in exchange for a lien on the same form and substance as the Mortgage ("Substitute Collateral (the “Proposed Substitution”). In the event that Borrower requests the Proposed Substitution, Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender agrees to reasonably consider Borrower’s request Mortgage") and to make reasonable efforts to modify the Lien of the Loan Documents, 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 reflect the provisions of 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 following, all of which shall be satisfactory in form and substance to all of the Lenders:
i. Evidence that the Substitute Collateral (and not Property is of similar or higher quality to the Release Property) is part .
ii. An Appraisal of the Collateral or, at Lender’s option, Substitute Property prepared within six (6) months prior to make a new Loan secured by the Substitute 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 to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateral, including, without limitation, Lender’s requirements regarding current and projected loan-to-value-ratios and the financial condition 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 Substitute Mortgage and the Loan Documents without affecting the Lien of any other Mortgages or of the Loan Documents on any of the other Real Properties, (v) that subjecting the Substitute Property to the Lien of the 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, (w) that the Substitute Mortgage and the Loan Documents by which the Substitute Property will be encumbered have been duly authorized, executed and delivered by Borrower Affiliatesand the Company, as applicable; and are valid and enforceable in accordance with their terms, subject to bankruptcy and equitable principles, (x) that Borrower and the Company (if necessary) 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 with the Liens of the Substitute Mortgage and the Loan Documents shall not cause a breach of, or 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 Borrower shall pay all reasonable costs and expenses incurred by the Company (x) that the certificates, opinions and other instruments which have been or are therewith delivered to or deposited with Lender in connection with such release and substitution conform to the foregoing analysis requirements of this Agreement and Lender’s approval/disapproval thereofthe Mortgages, including(y) that all conditions precedent herein have been complied with and (z) that all conditions precedent to the delivery of the Substitute Mortgage and Loan Documents contained in this Agreement have been fulfilled.
v. Evidence that Borrower and the Company are, and will remain after the consummation of the transaction, Solvent.
vi. Original executed counterparts of the Substitute Mortgage and the Loan Documents encumbering the Substitute Property, including without limitation, reasonable consultants’ feesfinancing 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, appraisal costs, and an Environmental Indemnity Agreement.
vii. A title fees and reasonable attorneys’ fees and costs. Borrower acknowledges and agrees that its right to request insurance policy insuring the Proposed Substitution does not constitute a commitment lien of the Substitute Mortgage on the part 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 Lender to agree Borrower to the Proposed Substitution; (ii) no modification Substitute Property, in an amount equal to the amount of the Loan allocated to the Substitute Property and showing no other liens and encumbrances (except 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 other applicable federal, state or new financing 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 deemed extended without issuance satisfactory to all of the Lenders.
x. Payment of all Transaction Costs and other expenses incurred by Lender Agent and the Lenders including reasonable counsel fees and disbursements in connection with the release of any Release Property and the Substitute Property 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 commitment letter executed 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 Lender (courses and distances, the “New Financing Commitment Letter”)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 modification established building lines and the street lines, all encroachments and the extent thereof upon the Substitute Property and indicating that the on-site improvements to the extent constructed are within the lot and building lines of the Loan or extension of Substitute Property, indicating whether the Substitute Property is in a flood plain and otherwise containing such financing items as are reasonably requested by Lender shall be subject to satisfaction the Lenders.
xii. Payment of all terms recording charges, filing fees, taxes, or other expenses, including but not limited to intangibles taxes and conditions documentary stamp taxes in connection with the recording of the New Financing Commitment LetterSubstitute Mortgage and the Lien necessary to grant and perfect Agent, includingfor the benefit of Lenders, without limitationa first priority lien on and security interest in the Substitute Property.
xiii. Operating statements for the Substitute Property, 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 to Agent.
xiv. Original certificates and copies of policies of insurance 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 is located and in their respective states of organization of Borrower and the Company.
xvi. Certified copies of all leases with respect to the execution Substitute Property and tenant Estoppel Certificates and Subordination, Non-Disturbance, and Attornment Agreements for such leases.
xvii. Evidence to indicate compliance with all requirements of new modification documents Applicable Laws and such evidence as Agent may deem necessary or loan documentsappropriate to evidence the availability of all utilities, including water, sewers, gas and electricity, as may be necessary for the use of the Substitute Property as intended.
xviii. Certified copies of all contracts and agreements relating to the management, leasing and operation of the Substitute Property.
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Substitution of Collateral. Notwithstanding the provisions of this Agreement or any of the Loan Documents to the contrary, Borrower shall have the rightmay submit a written request ("SUBSTITUTION REQUEST"), but not the obligationupon at least ninety (90) days prior notice, to request that Lender release its lien permit a substitution (each a "SUBSTITUTION") of a substitute property (each a "SUBSTITUTE 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 "REPLACED PROPERTY") upon and subject to the following terms and conditions:
(a) Borrower must submit a Substitution Request, identifying the proposed Substitute Property in exchange and the proposed Replaced Property at least ninety (90) days prior to the proposed closing date for a lien on the Substitute Collateral (the “Proposed Substitution”). In the event that Borrower requests the Proposed Substitution, Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender agrees shall evaluate the request for the proposed Substitution and the proposed Substitute Property pursuant to reasonably consider Borrower’s request its then customary underwriting and pricing criteria. The amount of the "PRINCIPAL ALLOCATION" Lender would determine to make reasonable efforts allocate to modify the Loan to reflect that the Substitute Collateral (and not Property must be at least equal to the Property) is part amount of the Collateral orthen remaining Principal Allocation for the proposed Replaced Property, at Lender’s option, to make a new Loan secured by and the Substitute 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 to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateral, including, without limitation, Lender’s requirements regarding current and projected loan-to-valuevalue ratio for the Lender'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-ratios 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 financial condition of Borrower and Substitute Property must be the Borrower Affiliates(such that the Substitute Property is owned 100% by the same entity as owns 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 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) Borrower shall pay all reasonable costs a processing fee to Lender 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 processing fee contemplated by this subsection are in addition to attorneys' fees and expenses incurred by in the documentation of such Substitution and in the review of due diligence.
(g) 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 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 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 foregoing analysis closing of the 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’s approval/disapproval thereof, includingbased on an MAI appraisal satisfactory to Lender, without limitation, reasonable consultants’ fees, appraisal costs, title fees and reasonable attorneys’ fees and costs[LOAN AGREEMENT] ING No. 27924 dated not more than ninety (90) days prior to the closing of the Substitution. All costs of such appraisals shall be paid by the Borrower acknowledges and agrees that its on or prior to the closing of the Substitution. Lender shall have the right to request readjust the Proposed Substitution does not constitute a commitment on Principal Allocations and Allocation Percentages for all properties constituting the part of Lender to agree Property (or such number remaining if the Release Privilege previously has been exercised).
(i) The actual net operating income relating to the Proposed Substitution; Substitute Property (iibased upon the trailing twelve (12) no modification of 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 Loan actual net operating income relating (based upon the trailing twelve (12) month financial results or new financing shall be deemed extended without issuance by such shorter period, as Lender of a commitment letter executed by Lender (the “New Financing Commitment Letter”)reasonably deems appropriate, and the modification of the Loan or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Letter, including, without limitation, with respect for any Substitute Property opened for less than one year) to the execution of new modification documents or loan documentsReplaced Property.
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Substitution of Collateral. Notwithstanding the provisions of this Agreement or any of the Loan Documents to the contrary, Borrower shall have the rightmay submit a written request ("SUBSTITUTION REQUEST"), but not the obligationupon at least ninety (90) days prior notice, to request that Lender release its lien permit a substitution (each a "SUBSTITUTION") of a substitute property (each a "SUBSTITUTE 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 "REPLACED PROPERTY") upon and subject to the following terms and conditions:
(a) Borrower must submit a Substitution Request, identifying the proposed Substitute Property in exchange and the proposed Replaced Property at least ninety (90) days prior to the proposed closing date for a lien on the Substitute Collateral (the “Proposed Substitution”). In the event that Borrower requests the Proposed Substitution, Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender agrees shall evaluate the request for the proposed Substitution and the proposed Substitute Property pursuant to reasonably consider Borrower’s request its then customary underwriting and pricing criteria. The amount of the "PRINCIPAL ALLOCATION" Lender would determine to make reasonable efforts allocate to modify the Loan to reflect that the Substitute Collateral (and not Property must be at least equal to the Property) is part amount of the Collateral orthen remaining Principal Allocation for the proposed Replaced Property, at Lender’s option, to make a new Loan secured by and the Substitute 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 to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateral, including, without limitation, Lender’s requirements regarding current and projected loan-to-valuevalue ratio for the Lender'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-ratios 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 financial condition of Borrower and Substitute Property must be the Borrower Affiliates(such that the Substitute Property is owned 100% by the same entity as owns 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 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) Borrower shall pay all reasonable costs a processing fee to Lender 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 processing fee contemplated by this subsection are in addition to attorneys' fees and expenses incurred by in the documentation of such Substitution and in the review of due diligence.
(g) 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 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 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 foregoing analysis closing of the 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’s approval/disapproval thereof, includingbased on an MAI appraisal satisfactory to Lender, without limitation, reasonable consultants’ fees, appraisal costs, title fees and reasonable attorneys’ fees and costsdated not more than ninety (90) days prior to the closing of the Substitution. All costs of such appraisals shall be paid by the Borrower acknowledges and agrees that its on or prior to the closing of the Substitution. Lender shall have the right to request readjust the Proposed Substitution does not constitute a commitment on Principal Allocations and Allocation Percentages for all properties constituting the part of Lender to agree to Property (or such number remaining if the Proposed Substitution; (ii) no modification of the Loan or new financing shall be deemed extended without issuance by Lender of a commitment letter executed by Lender (the “New Financing Commitment Letter”Release Privilege previously has been exercised), and the modification of the Loan or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Letter, including, without limitation, with respect to the execution of new modification documents or loan documents.. The Release Factor set forth in SECTION 3.07
Appears in 1 contract
Substitution of Collateral. 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 notice, that Lender permit a substitution (each a “SUBSTITUTION”) of a substitute property (each a “SUBSTITUTE 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 “REPLACED PROPERTY”) upon and subject to the following terms and conditions:
(a) Borrower must submit a Substitution Request, identifying the proposed Substitute Property and the proposed Replaced Property at least ninety (90) days prior to the 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 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 owns 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 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) Borrower shall pay a processing fee to Lender 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 processing 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.
(g) 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 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 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. 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, based on an MAI appraisal satisfactory to Lender, [LOAN AGREEMENT] ING No. 27924 dated not more than ninety (90) days prior to the closing of the Substitution. All costs of such appraisals shall be paid by the Borrower on or prior to the closing of the Substitution. Lender shall have the rightright 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 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 Substitute Property opened for less than one year) to the Replaced Property.
(j) Lender’s outside counsel shall prepare and Borrower shall execute (1) amendments to the Note, the Mortgage, the Assignments of Rents and Leases, the Environmental Indemnification Agreement, this Agreement and tax and insurance escrows, and (2) all Loan Documents Lender shall deem appropriate, including, but not the obligationlimited to, any new security instrument, assignment of rents and leases, environmental indemnities, etc. relating to request that Lender release its lien on the Property in exchange for a lien on the Substitute Collateral 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 and Substitute Property) (collectively, the “Proposed SubstitutionSUBSTITUTE LOAN DOCUMENTS”). In The Substitution Loan Documents shall be cross-defaulted and cross-collateralized with the event that Borrower requests existing Loan Documents for the Proposed Substitution, Loan.
(k) Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant be required to analyzing the Proposed Substitution. Lender agrees supply for Lender’s review and approval due diligence materials relating to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (Property prior to closing of the Substitution including those items required for closing of this Loan, and not the Property) is such other materials as may then be customarily required as part of the Collateral orits then current commercial loan closing policies, at Lender’s optionprocedures, to make a new Loan secured by standards and practices for properties of similar type and in similar locations as the Substitute 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 to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateralProperty, including, without limitation, Lender’s a current as-built ALTA survey, proof of adequate insurance, title insurance in conformance with the requirements regarding current for the closing of this Loan, proof of compliance with governmental regulations, tenant estoppel certificates, subordination, non-disturbance and projected loan-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 Substitute Property, including but not limited to-value-ratios , appraisal, hazardous substance report, seismic report and engineer report as required by Lender in its sole discretion. 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 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 financial 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 Loan closing unless approved by Lender in writing and continuing all coverage provided in the original 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 (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 Borrower 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 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 Affiliates. (or controlling member of Borrower or general partner or limited partner of Borrower, as applicable) has occurred after closing of this Loan.
(q) The Borrower shall pay all reasonable out-of-pocket costs and expenses incurred by Lender in connection with any such Substitution and the foregoing analysis 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 approval/disapproval thereofcounsel, includingthe reasonable fees and expenses of Lender’s engineers, without limitationappraisers, reasonable construction consultants’ fees, appraisal costsinsurance consultants and other due diligence consultants and contractors, recording charges, title fees and 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; (ii) no modification of the Loan or new financing shall be deemed extended without issuance by Lender of a commitment letter executed by Lender (the “New Financing Commitment Letter”)insurance charges, and the modification of the Loan documentary stamp and/or mortgage or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Lettersimilar taxes, including, without limitation, with respect to the execution of new modification documents or loan documentstransfer taxes.
Appears in 1 contract
Sources: Loan Agreement
Substitution of Collateral. Notwithstanding anything to the contrary contained in the Loan Documents, Borrower shall have the right to request in writing that Lender accept additional real estate and related personal property collateral (“Substitute Collateral”) in substitution for one Property and the related Personal Property Security (the “Old Security”) to be released from the 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 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 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, absent manifest error. In the event the NOI of the Substitute Collateral (as determined by Lender in its sole discretion) falls below the required level, Borrower shall have the right, but not subject to payment of the obligationprepayment premium calculated in accordance with the provisions set forth in the Notes, to request that pay Lender release its lien on the Property in exchange for a lien on amount necessary to decrease the Substitute Collateral (the “Proposed Substitution”). In the event that Borrower requests the Proposed Substitution, Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender agrees to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (and not the Property) is part Debt Service of the Collateral or, at Lender’s option, remaining Property to make a new Loan secured by meet the Substitute Collateral on the same material economic terms other conditions of this Section 6.
(other than amount of Loane) as the Loan; provided, however, that it shall be considered reasonable for Lender to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateral, The location (including, without limitation, the character and demographics of the market area) of the Substitute Collateral shall be satisfactory to Lender in Lender’s requirements sole discretion. The consent of Lender to the Substitution of Collateral is expressly made subject to Lender’s analyses and approval of the economic trends affecting the Substitute Collateral.
(f) The credit of the tenants shall be acceptable in Lender’s sole discretion.
(g) Lender shall have received a report in accordance with Lender’s then-current standards from an engineer or architect chosen by Lender 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 Report in accordance with Lender’s then-current environmental guidelines, which Environmental Report shall be satisfactory in all respects to Lender in Lender’s sole discretion. The cost of preparation of all such reports and projected loan-to-value-ratios and all necessary inspections shall be paid by Borrower.
(h) At the financial condition 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 and 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 Affiliates. 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 foregoing analysis and Lender’s approval/disapproval thereofSubstitution, including, without limitationbut not limited to, reasonable consultants’ all legal, accounting, title insurance and appraisal fees, appraisal recording costs, title fees intangible taxes and reasonable attorneys’ fees documentary stamps, and costs. Borrower acknowledges 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) At the time of the request and agrees that its right to request the Proposed Substitution does not time of the Substitution, there shall be 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 commitment on default under the part of Lender to agree Loan Documents (except for any such default relating solely to the Proposed Old Security which, by its very nature, will be cured by the requested Substitution; ).
(iim) no modification Borrower shall pay Lender a $25,000.00 servicing fee (the “Substitution Servicing Fee”) for consideration by Lender of the Loan or new financing request at the time Borrower makes such request, which shall be deemed extended without issuance fully earned by Lender even if such request is denied, and an additional fee (against which the Substitution Servicing Fee shall be credited) equal to one half percent (0.5%) of the allocated loan balance for the Old Security, which additional fee shall be paid at the time of closing.
(n) The Substitute Collateral shall not consist of any partial interest in a commitment letter executed property, including but not limited to partnership or joint venture interests.
(o) Unless otherwise agreed to by Lender in its sole discretion, ▇▇▇▇ Centre VII, ▇▇▇▇ Centre III and ▇▇▇▇ Centre II will not be eligible for Substitution (if at such time any of the “New Financing Commitment Letter”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 eliminate such rights as a portion of the contractual rights of such Lease, and to provide that the Tenant’s recourse shall only be as a contractual right, of public record, with the owner of such Property to be released in such Substitution), unless all of such Properties are substituted at the same time (or substituted as to some Properties and released as to some Properties at such time), and provided that the modification aggregate balance of all of the Loan or extension of Loans is not less than $85,000,000.00 following any such financing by Release [under this provision Lender shall be subject consent to satisfaction the Release of all terms three Properties (▇▇▇▇ Centre VII, ▇▇▇▇ Centre III and conditions ▇▇▇▇ Centre II), but will not consent to any additional Releases or Substitutions during the Loan term) except in connection with the additional letter of credit which may be posted in the last 12 months of the New Financing Commitment Letter, including, without limitation, with respect to the execution of new modification documents or loan documentsLoan].
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Substitution of Collateral. Provided that the Initial Funding and Second Funding have occurred and the Loan is secured by the TX Investment, Borrower shall have may, up to one (1) time during the rightterm of the Loan, but not subject to the obligationconditions set forth herein, to request that Lender release its lien on either the TN Investment or the WA Investment from the balance of the Secured Property in exchange for a lien on the Substitute Collateral (the “Proposed Released Secured Property”) from the lien of Lender’s Mortgage and substitute another property or properties owned in fee simple by Borrower (collectively, the “Substitute Secured Property”) in its place (hereinafter a “Substitution”). Borrower shall provide written notice to Lender at least forty-five (45) days prior to the desired closing date of the proposed Substitution (the “Substitution Date”). L▇▇▇▇▇’s approval of the proposed Substitution is subject to the following terms and conditions (the “Substitution Conditions”):
(a) In addition to the event that Borrower requests other requirements set forth herein, L▇▇▇▇▇’s consideration of B▇▇▇▇▇▇▇’s request for a Substitution is subject to Borrower’s fulfillment of at least the Proposed Substitutionsame documentation submission and other requirements set forth in the Application as were applicable to the Released Secured Property as a condition to the initial funding of the Loan. As a result, at least thirty (30) days prior to the Substitution Date, Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender agrees to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (and not the Property) is part submit each of the Collateral orfollowing documents to State Lender and its outside counsel, at Lender’s option, to make a new Loan secured by the Substitute Collateral on the same material economic terms as applicable:
(other than amount of Loani) as the Loan; provided, however, that it shall be considered reasonable for Lender to review any modification The Documentation set forth in Sections 2 and 3 of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans General Terms and collateralConditions 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 requirements regarding current and projected loan-to-value-ratios and form of Property Information Questionnaire in the financial condition form of Exhibit D to the Application. The responses made by Borrower in such Questionnaire shall be satisfactory to Lender in its sole discretion;
(vi) 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 Affiliates. having the right to pay down the Loan to satisfy this requirement);
(f) After the proposed Substitution, (i) the Loan to Value Ratio for the Substitute Secured Property must be not more than 0.55 to 1.0, as determined by Lender based on the M.A.I. appraisal submitted by Borrower shall pay all reasonable costs and expenses incurred by to Lender in connection with the foregoing analysis Substitution, provided, that if the applicable Substitute Secured Property is being acquired by Borrower, then such ratio shall be calculated based upon the portion of the Loan allocated to such Substitute Secured Property divided by the purchase price for such Substitute Secured Property as shown on the closing statement executed by Borrower in connection with the acquisition thereof, and (ii) the Loan to acquisition cost with respect to such Substitute Secured Property shall not exceed 55% (Borrower shall have the right to pay down the Loan to satisfy this requirement);
(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 Substitute Secured Property, which fee shall be paid together with and in addition to all of Lender’s approval/disapproval thereofexpenses in connection with the review and/or preparation of any Documentation related to the Substitution, including, without limitationbut not limited to, reasonable consultants’ fees, appraisal costs, title the fees and reasonable attorneys’ fees and costs. Borrower acknowledges and agrees that its right to request expenses of Lender’s outside counsel regardless of whether the Proposed Substitution does not constitute a commitment on the part of Lender to agree to the Proposed Substitution; (ii) no modification of the Loan or new financing shall be deemed extended without issuance 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 commitment letter executed by Lender common development or project and (Z) located within the “New Financing Commitment Letter”same jurisdiction), and the modification of the Loan or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Letter, including, without limitation, with respect to the execution of new modification documents or loan documents.;
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