Substitution of Properties. Provided that no Event of Default has occurred -------------------------- and is continuing, Borrower shall have the right to obtain a release of one or more of the Properties from the lien of the related Security Instrument and Loan Documents (a "Substitution Release") upon substitution of another fully licensed and operating hospitality property of comparable type and quality as the Property being released in the place of the Release Premises (a "Substitute Property") owned in fee simple (or leasehold) by a Borrower and leased to the Operating Tenant pursuant to an operating lease, substantially in the same form and content as the Operating Lease, and such Substitute Property is subjected to the lien of a new mortgage, deed of trust, deed to secure debt or similar security instruments, in the same form and substance as the Security Instruments ("Substitute Security Instrument") and to the lien of the Loan Documents, as a first lien thereon and managed by Manager (or an affiliate of Manager as provided for in the Management Agreement) pursuant to the terms of the Management Agreement or a Replacement Management Agreement (as defined in the Security Instruments) and, subject to a Franchise Agreement in compliance with the terms and conditions of Section 3.13 of the Security Instruments and upon compliance with and subject to the conditions set forth in this Section 4; provided, however, that Borrower's rights to such release and substitution shall be conditioned on receipt by Lender of the following: (a) evidence which would be satisfactory to a prudent institutional mortgage lender that title to the Release Property has been transferred to a Release Premises Transferee. (b) evidence which would be satisfactory to a prudent institutional mortgage lender that the Substitute Property is fully operational and is of similar or higher quality or value to the Release Premises. (c) a current Appraisal of the Substitute Property prepared within one hundred eighty (180) days prior to the release and substitution showing (1) an appraised value equal to or greater than the appraised value of the Release Premises as of the date hereof; and (2) an aggregate loan-to-value ratio with respect to the Properties remaining subject to the lien of the Security Instruments after the Substitution Release not greater than the ratio equal to the lesser of (A) the aggregate loan-to-value ratio as of the date hereof with respect to the Properties as set forth on Schedule B attached and (B) the aggregate loan-to-value ratio with respect to the Properties remaining subject to the lien of the Security Instruments immediately prior to the proposed Substitution Release. (d) an opinion of the related Borrower's counsel which would be satisfactory to a prudent institutional mortgage lender stating that (i) the Substitute Security Instrument and the Loan Documents by which the Substitute Property will be encumbered have been duly authorized, executed and delivered by such Borrower and are valid and enforceable in accordance with their terms, subject to bankruptcy and equitable principles, (ii) the related Borrower and Operating Tenant are qualified to do business and in good standing under the laws of the jurisdiction where the Substitute Property is located, or that such Borrower, are not required by Applicable Law (defined in the Security Instruments) to qualify to do business in such jurisdiction, and (iii) based solely on a certificate of the related Borrower the encumbrance of the Substitute Property with the lien of the Substitute Security Instrument and the Loan Documents shall not cause a breach of, or a default under any agreement, document or instrument to which such Borrower is a party or to which it or its properties are bound or affected. (e) a certification by the related Borrower that (x) the certificates, opinions and other instruments which have been or are therewith delivered to or deposited with Lender in connection with such release and substitution conform to the requirements of this Agreement and the Security Instruments, (y) all conditions precedent herein have been complied with and (z) all conditions precedent to the delivery of the Substitute Security Instrument and Loan Documents contained in this Agreement have been fulfilled. (f) original executed counterparts of the Substitute Security Instrument and the Loan Documents encumbering the Substitute Property and the related operating lease and related collateral, including without limitation, any financing statements or other documents necessary to grant or perfect Lender's first priority security interest in the Personal Property (defined in the Security Instruments) located thereon and the Rents and Accounts Receivable derived therefrom; the principal amount of such Substitute Security Instrument shall equal the face amount of the Note, provided that in the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording intangibles or similar tax, and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, the principal amount of such Substitute Security Instrument shall equal 125% of the Substitute Allocated Loan Amount (defined below). (g) a title insurance policy issued by a title insurance company satisfactory to the Rating Agencies (or, if a Securitization has not occurred, to Lender) insuring the lien of the Substitute Security Instrument on the Substitute Property(ies), in form and substance which would be satisfactory to a prudent institutional mortgage lender insuring that the Substitute Security Instrument is a valid and enforceable first lien on the good and marketable fee simple or leasehold estate, title of the related Borrower to the Substitute Property in an amount equal to the amount of the Loan allocated to the Substitute Property (the "Substitute Allocated Loan Amount"), subject only to standard and customary exceptions and such other exceptions that would be approved by a prudent institutional mortgage lender, together with such affirmative insurance and other endorsements customarily required by a prudent institutional mortgage lender, including a "tie-in" and first loss endorsement satisfactory to Lender, or, if such endorsement is not available in the state in which the Substitute Property is located, insurance in an amount equal to the greater of one hundred twenty five percent (125%) of the Substitute Allocated Loan Amount or the amount on which mortgage or intangibles tax was paid with respect to the Security Instrument for the Substitute Property, together with a "last dollar endorsement". Such title insurance policy shall not contain any exception for any state of facts that an accurate survey might show or that a survey made after the date of the survey referred to in Section 4(l) might show. (h) If the Operating Lease for the Release Premises has been terminated pursuant to Section 36.1 of the Operating Lease, and, after giving effect to such Release, the Release Premises Transferor is the owner of a Property that remains encumbered by the lien of the Security Instruments, an estoppel certificate from the Operating Tenant in form satisfactory to Lender stating that the Operating Lease has been terminated and that the Operating Tenant has released the Release Premises Transferor from all liability for the payment of any and all termination payments or any other payments due to the Operating Tenant pursuant to the terms of the Operating Lease and that the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease or, if the Operating Lease on the Release Premises has not been terminated, an estoppel certificate from the Operating Tenant in form satisfactory to Lender that such Operating Lease, as it relates to the Release Premises, is and will remain in full force and effect following the Substitution Release and that the Release Premises Transferor has no liability for the payment of any termination payments or any other payments due to the Operating Tenant pursuant to the terms of the Operating Lease and that the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease. (i) evidence which would be satisfactory to a prudent institutional mortgage lender to the effect that the Substitute Property and the use thereof are in substantial compliance with the applicable zoning, subdivision, and all other applicable federal, state or local laws and ordinances affecting the Substitute Property, and that all material building and operating licenses and permits necessary for the use and occupancy of the Substitute Property as a hospitality property or hotel including, but not limited to, current certificates of occupancy, have been obtained and are in full force and effect. (j) an environmental report dated within six (6) months prior to delivery which states that the Substitute Property does not contain any Hazardous Substances in violation of Applicable Law (as defined in the Security Instruments) or material risk of contamination from off-site Hazardous Substances. (k) payment of all costs and expenses incurred by Lender including reasonable counsel fees and disbursements in connection with the release of any Release Premises and the inclusion of the Substitute Property as collateral, all recording charges, filing fees, taxes, or other expenses, including but not limited to intangibles taxes and documentary stamp taxes in connection with the recording of the Substitute Security Instruments and the lien necessary to grant and perfect Lender a first priority lien on and security interest in the Substitute Property, the Personal Property located therein and the Rents derived therefrom. In the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording or intangibles tax, or similar tax, and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, if permitted by applicable law in such jurisdiction, such tax shall be paid on an amount equal to 125% of the Substitute Allocated Loan Amount. (l) a recent survey of the Substitute Property(ies) prepared by a land surveyor licensed in the state where the Substitute Property is located pursuant to the then current American Land Title Association/American Congress of Surveying and Mapping standards for title surveys and which would be otherwise satisfactory to a prudent institutional mortgage lender, provided that no structural additions to the improvements shown on such survey or new structures have been made or built since the date of such survey and that there has been no change in the legal description of the Substitute Property since the date of such survey, whether due to sales, transfers, condemnation or otherwise. (m) evidence indicating whether the Substitute Property is located within a flood plain. (n) a property inspection report dated within six (6) months of delivery prepared by an independent licensed engineer approved by Lender, prepared in accordance with standards employed by prudent institutional mortgage lenders stating, among other things, that the Substitute Property is in good condition and repair and free of material damage or waste and complies in all material respects with the Americans with Disabilities Act, or which otherwise reveals a state of fact that would be satisfactory to a prudent institutional mortgage lender and provided that adequate reserves satisfactory to Lender and the Rating Agencies are established. (o) annual operating statements and occupancy statements for the Substitute Property for the recent fiscal year of the owner thereof, together with a year to date operating statement, current occupancy statements, and a budget for the current fiscal year, each certified by the related Borrower, and a certificate of no adverse change since the date thereof executed by the related Borrower, in each case in a form and substance which would be satisfactory to a prudent institutional mortgage lender. (p) original certificates and copies of policies of insurance required by Lender under the terms of the Substitute Security Instrument for the Substitute Property. (q) evidence of the qualification and good standing of the related Borrower and Operating Tenant (and the principals, if necessary) in the state where the Substitute Property is located unless such qualification is not required in such state by Applicable Law. (r) certified copies of all Leases (as defined in the Substitute Security Instrument) with respect to the Substitute Property and tenant estoppel certificates from tenants under Material Leases, as required by Lender, all in a form and substance which would be satisfactory to a prudent institutional mortgage lender. (s) certified copies of all material contracts and agreements relating to the management, leasing and operation of the Substitute Property, including, without limitation, the Franchise
Appears in 1 contract
Substitution of Properties. Provided that no Event 56 39. The Individual Trustee.................................... 59 SCHEDULE A Land Parcel SCHEDULE B Basic Rent SCHEDULE C Termination Values SCHEDULE D Environmental Matters SCHEDULE E Purchase Prices SCHEDULE F Maximum Lessor and Lessee Risk Amounts SCHEDULE G Permitted Encumbrances SCHEDULE H Form of Default has occurred -------------------------- Supplement to Lease SCHEDULE I Form of Certificate As to Insurance SCHEDULE J Allocable Percentages SCHEDULE K Form of Lessee Estoppel Certificate THIS AMENDED AND RESTATED LEASE AGREEMENT, dated as of October 14, 1998 as amended and is continuingsupplemented from time to time (this Lease), Borrower shall have the right to obtain by and between FIRST ----- SECURITY BANK, N.A., a release of one or more of the Properties from the lien of the related Security Instrument and Loan Documents (a "Substitution Release") upon substitution of another fully licensed and operating hospitality property of comparable type and quality as the Property being released in the place of the Release Premises (a "Substitute Property") owned in fee simple (or leasehold) by a Borrower and leased to the Operating Tenant pursuant to an operating lease, substantially in the same form and content as the Operating Leasenational banking association, and such Substitute Property is subjected to the lien of a new mortgage▇▇▇ ▇. ▇▇▇▇▇, deed of trust, deed to secure debt or similar security instruments, not individually but solely in the same form their capacities as owner trustee under that certain Amended and substance as the Security Instruments ("Substitute Security Instrument") and to the lien of the Loan Documents, as a first lien thereon and managed by Manager (or an affiliate of Manager as provided for in the Management Agreement) pursuant to the terms of the Management Restated Trust Agreement or a Replacement Management Agreement (as defined in the Security Instruments) and, subject to a Franchise Agreement in compliance with the terms and conditions of Section 3.13 of the Security Instruments and upon compliance with and subject to the conditions set forth in this Section 4; provided, however, that Borrower's rights to such release and substitution shall be conditioned on receipt by Lender of the following:
(a) evidence which would be satisfactory to a prudent institutional mortgage lender that title to the Release Property has been transferred to a Release Premises Transferee.
(b) evidence which would be satisfactory to a prudent institutional mortgage lender that the Substitute Property is fully operational and is of similar or higher quality or value to the Release Premises.
(c) a current Appraisal of the Substitute Property prepared within one hundred eighty (180) days prior to the release and substitution showing (1) an appraised value equal to or greater than the appraised value of the Release Premises dated as of the date hereof; , the trust thereunder being referred to as the COB Real Estate Trust 1995-1, as lessor (together with their respective successors and assigns, collectively, Lessor), ------ having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and CAPITAL ONE REALTY, INC., a Delaware corporation, as lessee (2) together with their respective successors and permitted assigns, Lessee), having an aggregate loan-to-value ratio with respect to the Properties remaining subject to the lien address at ------ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Lessor and Lessee, as assignee of the Security Instruments after the Substitution Release not greater than the ratio equal to the lesser of (A) the aggregate loan-to-value ratio Guarantor's interest thereunder, have entered into a Lease Agreement dated as of the date hereof with respect to the Properties January 5, 1996, as set forth on Schedule B attached amended and (B) the aggregate loan-to-value ratio with respect to the Properties remaining subject to the lien of the Security Instruments immediately prior to the proposed Substitution Release.
(d) an opinion of the related Borrower's counsel which would be satisfactory to a prudent institutional mortgage lender stating that (i) the Substitute Security Instrument and the Loan Documents by which the Substitute Property will be encumbered have been duly authorized, executed and delivered by such Borrower and are valid and enforceable in accordance with their terms, subject to bankruptcy and equitable principles, (ii) the related Borrower and Operating Tenant are qualified to do business and in good standing under the laws of the jurisdiction where the Substitute Property is located, or that such Borrower, are not required by Applicable Law (defined in the Security Instruments) to qualify to do business in such jurisdiction, and (iii) based solely on a certificate of the related Borrower the encumbrance of the Substitute Property with the lien of the Substitute Security Instrument and the Loan Documents shall not cause a breach of, or a default under any agreement, document or instrument to which such Borrower is a party or to which it or its properties are bound or affected.
(e) a certification by the related Borrower that (x) the certificates, opinions and other instruments which have been or are therewith delivered to or deposited with Lender in connection with such release and substitution conform to the requirements of this Agreement and the Security Instruments, (y) all conditions precedent herein have been complied with and (z) all conditions precedent to the delivery of the Substitute Security Instrument and Loan Documents contained in this Agreement have been fulfilled.
(f) original executed counterparts of the Substitute Security Instrument and the Loan Documents encumbering the Substitute Property and the related operating lease and related collateral, including without limitation, any financing statements or other documents necessary to grant or perfect Lender's first priority security interest in the Personal Property (defined in the Security Instruments) located thereon and the Rents and Accounts Receivable derived therefrom; the principal amount of such Substitute Security Instrument shall equal the face amount of the Note, provided that in the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording intangibles or similar tax, and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, the principal amount of such Substitute Security Instrument shall equal 125% of the Substitute Allocated Loan Amount (defined below).
(g) a title insurance policy issued by a title insurance company satisfactory to the Rating Agencies (or, if a Securitization has not occurred, to Lender) insuring the lien of the Substitute Security Instrument on the Substitute Property(ies), in form and substance which would be satisfactory to a prudent institutional mortgage lender insuring that the Substitute Security Instrument is a valid and enforceable first lien on the good and marketable fee simple or leasehold estate, title of the related Borrower to the Substitute Property in an amount equal to the amount of the Loan allocated to the Substitute Property supplemented (the "Substitute Allocated Loan Amount"), subject only to standard and customary exceptions and such other exceptions that would be approved by a prudent institutional mortgage lender, together with such affirmative insurance and other endorsements customarily required by a prudent institutional mortgage lender, including a "tie-in" and first loss endorsement satisfactory to Lender, or, if such endorsement is not available in the state in which the Substitute Property is located, insurance in an amount equal to the greater of one hundred twenty five percent (125%) of the Substitute Allocated Loan Amount or the amount on which mortgage or intangibles tax was paid with respect to the Security Instrument for the Substitute Property, together with a "last dollar endorsement". Such title insurance policy shall not contain any exception for any state of facts that an accurate survey might show or that a survey made after the date of the survey referred to in Section 4(l) might show.
(h) If the Operating Lease for the Release Premises has been terminated pursuant to Section 36.1 of the Operating Original Lease, and, after giving effect to such Release, the Release Premises Transferor is the owner of a Property that remains encumbered by the lien of the Security Instruments, an estoppel certificate from the Operating Tenant in form satisfactory to Lender stating that the Operating Lease has been terminated and that the Operating Tenant has released the Release Premises Transferor from all liability for the payment of any and all termination payments or any other payments due to the Operating Tenant pursuant to the terms of the Operating Lease and that the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease or, if the Operating Lease on the Release Premises has not been terminated, an estoppel certificate from the Operating Tenant in form satisfactory to Lender that such Operating Lease, as it relates to the Release Premises, is and will remain in full force and effect following the Substitution Release and that the Release Premises Transferor has no liability for the payment of any termination payments or any other payments due to the Operating Tenant pursuant to the terms of the Operating Lease and that the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease.
(i) evidence which would be satisfactory to a prudent institutional mortgage lender to the effect that the Substitute Property and the use thereof are in substantial compliance with the applicable zoning, subdivision, and all other applicable federal, state or local laws and ordinances affecting the Substitute Property, and that all material building and operating licenses and permits necessary for the use and occupancy of the Substitute Property as a hospitality property or hotel including, but not limited to, current certificates of occupancy, have been obtained and are in full force and effect.
(j) an environmental report dated within six (6) months prior to delivery which states that the Substitute Property does not contain any Hazardous Substances in violation of Applicable Law (as defined in the Security Instruments) or material risk of contamination from off-site Hazardous Substances.
(k) payment of all costs and expenses incurred by Lender including reasonable counsel fees and disbursements in connection with the release of any Release Premises and the inclusion of the Substitute Property as collateral, all recording charges, filing fees, taxes, or other expenses, including but not limited to intangibles taxes and documentary stamp taxes in connection with the recording of the Substitute Security Instruments and the lien necessary to grant and perfect Lender a first priority lien on and security interest in the Substitute Property, the Personal Property located therein and the Rents derived therefrom. In the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording or intangibles tax, or similar tax, and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, if permitted by applicable law in such jurisdiction, such tax shall be paid on an amount equal to 125% of the Substitute Allocated Loan Amount.
(l) a recent survey of the Substitute Property(ies) prepared by a land surveyor licensed in the state where the Substitute Property is located pursuant to the then current American Land Title Association/American Congress of Surveying and Mapping standards for title surveys and which would be otherwise satisfactory to a prudent institutional mortgage lender, provided that no structural additions to the improvements shown on such survey or new structures have been made or built since the date of such survey and that there has been no change in the legal description of the Substitute Property since the date of such survey, whether due to sales, transfers, condemnation or otherwise.
(m) evidence indicating whether the Substitute Property is located within a flood plain.
(n) a property inspection report dated within six (6) months of delivery prepared by an independent licensed engineer approved by Lender, prepared in accordance with standards employed by prudent institutional mortgage lenders stating, among other things, that the Substitute Property is in good condition and repair and free of material damage or waste and complies in all material respects with the Americans with Disabilities Act, or which otherwise reveals a state of fact that would be satisfactory to a prudent institutional mortgage lender and provided that adequate reserves satisfactory to Lender and the Rating Agencies are established.
(o) annual operating statements and occupancy statements for the Substitute Property for the recent fiscal year of the owner thereof, together with a year to date operating statement, current occupancy statements, and a budget for the current fiscal year, each certified by the related Borrower, and a certificate of no adverse change since the date thereof executed by the related Borrower, in each case in a form and substance which would be satisfactory to a prudent institutional mortgage lender.
(p) original certificates and copies of policies of insurance required by Lender under the terms of the Substitute Security Instrument for the Substitute Property.
(q) evidence of the qualification and good standing of the related Borrower and Operating Tenant (and the principals, if necessary) in the state where the Substitute Property is located unless such qualification is not required in such state by Applicable Law.
(r) certified copies of all Leases (as defined in the Substitute Security Instrument) with respect to those certain parcels of land -------------- described in Schedule A annexed hereto (individually, a Land Parcel and collectively, the Substitute Property Land Parcels). Lessor and tenant estoppel certificates from tenants under Material LeasesLessee each desire to amend, ------------ restate and supercede the Original Lease in order to modify the terms and conditions thereof. Lessor and Lessee hereby agree, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, one to the other, as required by Lender, all follows (capitalized terms not otherwise defined are defined in a form and substance which would be satisfactory to a prudent institutional mortgage lender.
(s) certified copies of all material contracts and agreements relating to the management, leasing and operation of the Substitute Property, including, without limitation, the FranchiseAppendix I hereto):
Appears in 1 contract
Substitution of Properties. Provided Prior to the ninth anniversary of the date -------------------------- hereof, provided that no Event of Default has occurred -------------------------- and is continuing, Borrower shall have the right to obtain a release of one or more of the Properties from the lien of the related Security Instrument and Loan Documents (a "Substitution Release") upon (i) substitution (a -------------------- "Substitution") of another fully licensed and operating hospitality ------------ property of comparable type and quality as the Property being released in the place of the Release Premises (a "Substitute Property") owned in fee ------------------- simple (or leasehold) by a Borrower and leased to the Operating Tenant pursuant to an operating lease, substantially in the same form and content as the Operating Lease, and such which Substitute Property is subjected to the lien of a new mortgage, deed of trust, deed to secure debt or similar security instruments, in the same form and substance as the Security Instruments ("Substitute Security Instrument") and to the lien of the Loan Documents, ------------------------------ as a first lien thereon and managed by Manager (or an affiliate of Manager as provided for in the Management Agreement) pursuant to the terms of the Management Agreement or a Replacement Management Agreement (as defined in the Security Instruments) and, subject to a Franchise Agreement in compliance with the terms and conditions of Section 3.13 of the Security Instruments and upon (ii) compliance with and subject to the conditions set forth in this Section 45; provided, however, that Borrower's rights to such release and substitution shall be conditioned on receipt by Lender of the following:
(a1) receipt of a copy of a deed conveying all of the applicable Borrower's right, title and interest in and to the Substitute Property to a Release Premises Transferee and a letter from such Borrower countersigned by a title insurance company acknowledging receipt by such title insurance company of such deed of assignment and assumption, as applicable, and agreeing to record such deed or assignment and assumption, as applicable, in the real estate records for the county in which the Substitute Property is located.
(2) evidence which would be satisfactory to a prudent institutional mortgage lender that title to the Release Property has been transferred to a Release Premises Transferee.
(bi) evidence which would be satisfactory to a prudent institutional mortgage lender that the Substitute Property is fully operational and is of similar or higher quality or and value (including, without limitation, with respect to physical condition and amenities) to the Release PremisesPremises and (ii) the Properties, including the Substitute Property, will comply with both the Geographic Diversity Threshold and the Franchise Diversity Threshold (each as defined on Schedule 4 attached hereto).
(c3) a current Appraisal of the Substitute Property prepared by an MAI appraiser acceptable to Lender and to the Rating Agency within one hundred eighty sixty (18060) days prior to the release and substitution showing (1) showing an appraised value equal to or greater than the appraised value of the Release Premises as of the date hereof; and (2) which supports an aggregate loan-to-value ratio with respect to the Substitute Property and the Properties remaining subject to the lien of the Security Instruments after the Substitution Release not greater than the ratio equal to the lesser of (A) the aggregate loan-to-value ratio as of the date hereof with respect to the Properties as set forth on Schedule B A attached hereto and (B) the aggregate loan-to-value ratio with respect to the Properties remaining subject to the lien of the Security Instruments immediately prior to the proposed Substitution Release.
(d4) an opinion or opinions, as necessary, of the related Borrower's counsel which would be satisfactory to a prudent institutional mortgage lender stating that (i) the Substitute Security Instrument and the Loan Documents by which the Substitute Property will be encumbered have been duly authorized, executed and delivered by such Borrower and are valid and enforceable in accordance with their terms, including, without limitation, with respect to the remedies available to Lender by virtue of the cross-collateralization of the Loans, subject to bankruptcy and equitable principles, (ii) the related Borrower and Operating Tenant are qualified to do business and in good standing under the laws of the jurisdiction where the Substitute Property is located, or that such Borrower, are not required by Applicable Law (defined in the Security Instruments) any Legal Requirement to qualify to do business in such jurisdiction, and (iii) based solely on a certificate of the related Borrower the encumbrance of the Substitute Property with the lien of the Substitute Security Instrument and the Loan Documents shall not cause a breach of, or a default under any agreement, document or instrument to which such Borrower is a party or to which it or its properties are bound or affected, (iv) the Substitution (including such Substitute Borrower and Substitute Property) does not affect the opinions or assumptions set forth in the non-consolidation opinion delivered in connection with the closing of the Loan; (v) if a Securitization has occurred, the Substitution does not constitute a "significant modification" of the Loan under Section 1001 of the Code or cause the REMIC Trust to fail to qualify as a REMIC or otherwise cause a tax to be imposed on the REMIC Trust; and (vi) if a Securitization has occurred, the Substitution will not adversely affect the continued availability of any exemption relied upon in connection with the Securitization from the prohibited transaction rules of ERISA and section 4975 of the Code.
(e5) a certification by the related Borrower that (x) the certificates, opinions and other instruments which have been or are therewith delivered to or deposited with Lender in connection with such release and substitution conform to the requirements of this Agreement and the Security Instruments, (y) all conditions precedent herein have been complied with and (z) all conditions precedent to the delivery of the Substitute Security Instrument and Loan Documents contained in this Agreement have been fulfilled.
(f6) original executed counterparts of the Substitute Security Instrument and the Loan Documents encumbering the Substitute Property and the related operating lease and related collateral, including without limitation, any financing statements or other documents necessary to grant or perfect Lender's first priority security interest in the Personal Property (defined in the Security Instruments) located thereon and the Rents and Accounts Receivable derived therefrom; the principal amount of such Substitute Security Instrument shall equal the face amount of the Note, provided that in the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording intangibles or similar tax, and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, the principal amount of such Substitute Security Instrument shall equal 125% of the Substitute Allocated Loan Amount (defined below).
(g7) a title insurance policy issued by a title insurance company satisfactory to the Rating Agencies Agency (or, if a Securitization has not occurred, to Lender) insuring the lien of the Substitute Security Instrument on the Substitute Property(ies), in form and substance which would be satisfactory to a prudent institutional mortgage lender insuring that the Substitute Security Instrument is a valid and enforceable first lien on the good and marketable fee simple or leasehold estate, title of the related Borrower to the Substitute Property in an amount equal to the amount of the Loan allocated to the Substitute Property (the "Substitute Allocated Loan Amount"), subject only to -------------------------------- standard and customary exceptions and such other exceptions that would be approved by a prudent institutional mortgage lender, together with such affirmative insurance and other endorsements customarily required by a prudent institutional mortgage lender, including including, without limitation, a "tie-in" and first loss endorsement satisfactory to Lender, or, if such endorsement is not available in the state in which the Substitute Property is located, insurance in an amount equal to the greater of one hundred twenty five percent (125%) of the Substitute Allocated Loan Amount or the amount on which mortgage or intangibles tax was paid with respect to the Security Instrument for the Substitute Property, together with a "last dollar endorsement". Such title insurance policy shall not contain any exception for any state of facts that an accurate survey might show or that a survey made after the date of the survey referred to in Section 4(l5(l) might show.
(h) 8) If the Operating Lease for the Release Premises has been terminated pursuant to Section 36.1 of the Operating Lease, and, after giving effect to such Release, the Release Premises Transferor is the owner of a Property that remains encumbered by the lien of the Security Instruments, an estoppel certificate from the Operating Tenant in form satisfactory to Lender stating that the Operating Lease has been terminated and that the Operating Tenant has released the Release Premises Transferor from all liability for the payment of any and all termination payments or any other payments due to the Operating Tenant pursuant to the terms of the Operating Lease and that the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease or, if the Operating Lease on the Release Premises has not been terminated, an estoppel certificate from the Operating Tenant in form satisfactory to Lender that such Operating Lease, as it relates to the Release Premises, is and will remain in full force and effect following the Substitution Release and that the Release Premises Transferor has no liability for the payment of any termination payments or any other payments due to the Operating Tenant pursuant to the terms of the Operating Lease and that the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease.
(i9) evidence which would be satisfactory to a prudent institutional mortgage lender to the effect that the Substitute Property and the use thereof are in substantial compliance with the applicable zoning, subdivision, and all other applicable federal, state or local laws and ordinances affecting the Substitute Property, and that all material building and operating licenses and permits necessary for the use and occupancy of the Substitute Property as a hospitality property or hotel including, but not limited to, current valid certificates of occupancy, have been obtained and are in full force and effect.
(j10) an environmental report dated within six (6) months prior to delivery which states that the applicable Substitute Property (A) does not contain any Hazardous Substances Materials (1) in material violation of Applicable Law Environmental Laws, (2) reasonably anticipated to give rise to Remedial Work (as defined in the Security InstrumentsEnvironmental Indemnity Agreement) or material (3) reasonably anticipated to cause diminution in value of the Substitute Property, and (B) is not subject to any risk of material contamination from any off-site Hazardous SubstancesMaterial.
(k11) evidence of payment of all costs and expenses incurred by Lender including reasonable counsel fees and disbursements in connection with the release of any Release Premises and the inclusion of the Substitute Property as collateral, all recording charges, filing fees, taxes, or other expenses, including but not limited to intangibles taxes and documentary stamp taxes in connection with the recording of the Substitute Security Instruments and the lien necessary to grant and perfect Lender a first priority lien on and security interest in the Substitute Property, the Personal Property located therein and the Rents derived therefrom. In the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording or intangibles tax, or similar tax, and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, if permitted by applicable law in such jurisdiction, such tax shall be paid on an amount equal to 125% of the Substitute Allocated Loan Amount.
(l12) a recent survey of the Substitute Property(ies) prepared by a land surveyor licensed in the state where the Substitute Property is located pursuant to the then current American Land Title Association/American Congress of Surveying and Mapping standards for title surveys and which would be otherwise satisfactory to a prudent institutional mortgage lender, provided that no structural additions to the improvements shown on such survey or new structures have been made or built since the date of such survey and that there has been no change in the legal description of the Substitute Property since the date of such survey, whether due to sales, transfers, condemnation or otherwise.
(m13) evidence indicating whether the Substitute Property is located within a flood plain.
(n14) a property inspection report dated within six (6) months of delivery prepared by an independent licensed engineer approved by Lender, prepared in accordance with standards employed by prudent institutional mortgage lenders stating, among other things, that the Substitute Property is in good condition and repair and free of material damage or waste and complies in all material respects with the Americans with Disabilities Act, or which otherwise reveals a state of fact that would be satisfactory to a prudent institutional mortgage lender and provided that adequate reserves satisfactory to Lender and the Rating Agencies Agency are established.
(o15) annual operating statements and occupancy statements for the Substitute Property for the most recent fiscal year of the owner thereof, together with a year to date operating statement, current occupancy statements, and a budget for the current fiscal year, each certified by the related Borrower, and a certificate of no adverse change since the date thereof executed by the related Borrower, in each case in a form and substance which would be satisfactory to a prudent institutional mortgage lender.
(p16) original certificates and copies of policies of insurance required by Lender under the terms of the Substitute Security Instrument for the Substitute Property.
(q17) evidence of the qualification and good standing of the related Borrower and Operating Tenant (and the principals, if necessary) in the state where the Substitute Property is located unless such qualification is not required in such state by Applicable Lawany Legal Requirement.
(r18) certified copies of all Leases (as defined in the Substitute Security Instrument) with respect to the Substitute Property and tenant estoppel certificates from tenants under Material Leases, as required by Lender, all in a form and substance which would be satisfactory to a prudent institutional mortgage lender.
(s19) certified copies of all material contracts and agreements relating to the management, leasing and operation of the Substitute Property, including, without limitation, the FranchiseFranchise Agreement, each of which shall be in a form and substance which would be satisfactory to a prudent institutional mortgage lender in a transaction of similar type.
(20) certified copies of all material consents, licenses and approvals, if any, required in connection with the substitution of a Substitute Property, including liquor licenses and evidence that such consents, licenses and approvals are in full force and effect or, in the event that a liquor license cannot be issued to Borrower until Borrower has acquired title to the Substitute Property or to the Operating Tenant until the Operating Tenant has taken possession of the Substitute Property under the related Operating Lease, certified copies of a temporary liquor license or concession arrangement that is in full force and effect that permits the sale and consumption of liquor and alcoholic beverages at the Substitute Property.
(21) a certificate by the related Borrower and the other Borrowers certifying that all of the representations and warranties contained in the Security Instruments and in the other Loan Documents, after giving effect to the substitution of the Substitute Property, are true, accurate and correct in all respects with respect to the Substitute Property and that there is no Event of Default hereunder.
(22) a certificate of the related Borrower and the other Borrowers certifying, together with other evidence that would be satisfactory to a prudent institutional mortgage lender that, after the substitution of a Substitute Property and the release of the Release Premises, (i) the Debt Service Coverage Ratio for the Properties for the twelve (12) month period immediately preced
Appears in 1 contract
Substitution of Properties. Provided that no Event of Default has occurred -------------------------- and is continuing, Borrower shall have the right to obtain a release of one or more of the Properties from the lien of the related Security Instrument and Loan Documents (a "Substitution Release") upon substitution of another fully licensed and operating hospitality property of comparable type and quality as the Property being released in the place of the Release Premises (a "Substitute Property") owned in fee simple (or leasehold) by a Borrower and leased to the Operating Tenant pursuant to an operating lease, substantially in the same form and content as the Operating Lease, and such Substitute Property is subjected to the lien of a new mortgage, deed of trust, deed to secure debt or similar security instruments, in the same form and substance as the Security Instruments ("Substitute Security Instrument") and to the lien of the Loan Documents, as a first lien thereon and managed by Manager (or an affiliate of Manager as provided for in the Management Agreement) pursuant Subject to the terms of the Management Agreement or a Replacement Management Agreement (as defined in the Security Instruments) and, subject to a Franchise Agreement in compliance with the terms and conditions of Section 3.13 of the Security Instruments and upon compliance with and subject to the -------------------------- conditions set forth in this Section 4; provided2.7, howeverBorrower may obtain a release of the ----------- Lien of a Mortgage (and the related Loan Documents) encumbering an Individual Property (a "SUBSTITUTED PROPERTY") by substituting therefor another office or -------------------- industrial property acquired by Borrower (individually, a "SUBSTITUTE PROPERTY" and collectively, the "SUBSTITUTE PROPERTIES"), provided ------------------- --------------------- that Borrower's rights (a) the Substitution Conditions are satisfied with respect to Substitute Properties other than a Substituted Property damaged by a casualty or affected by a condemnation or eminent domain proceeding and for which Net Proceeds have not been made available by Lender to Borrower for Restoration pursuant to the terms and provisions of Section 7.1.3, (b) no such release substitution may occur after ------------- the Anticipated Repayment Date and (c) such substitution shall not be allowed more than three (3) times during the term of the Loan. In addition, any such substitution shall be conditioned on receipt by Lender subject, in each case, to the satisfaction of the followingfollowing conditions precedent:
(ai) evidence which would be satisfactory to Lender shall have received a prudent institutional mortgage lender that copy of a deed or an assignment and assumption of lessee's interest in the Ground Lease (together with the ground lessor's consent thereto), as applicable, conveying all of Borrower's right, title and interest in and to the Release Substituted Property has been transferred to an entity other than Borrower and a Release Premises Transfereeletter from Borrower countersigned by a title insurance company acknowledging receipt of such deed or assignment and assumption, as applicable, and agreeing to record such deed or assignment and assumption, as applicable, in the real estate records for the county in which the Substituted Property is located.
(bii) evidence which would be satisfactory to a prudent institutional mortgage lender that the Substitute Property is fully operational and is of similar or higher quality or value to the Release Premises.
(c) a current Appraisal Lender shall have received an appraisal of the Substitute Property prepared within one hundred eighty dated no more than sixty (18060) days prior to the release and substitution showing (1) by an appraiser acceptable to the Rating Agencies, indicating an appraised value of the Substitute Property that is equal to or greater than the appraised value of the Release Premises Substituted Property determined by Lender at the time of the encumbrance of the Substituted Property by the related Mortgage in connection with the Initial Advance or a Subsequent Advance, as applicable.
(iii) After giving effect to the substitution, the Debt Service Coverage Ratio for the Loan for all of the Properties is not less than the Debt Service Coverage Ratio for the Loan for all of the Properties as of the Outside Closing Date and as of the date hereof; immediately preceding the substitution.
(iv) The Net Operating Income for the Substitute Property does not show a downward trend over the three (3) years immediately prior to the date of substitution or, with respect to a Substitute Property for which information regarding the Net Operating Income of such Substitute Property for the three (3) years immediately prior to the date of substitution cannot be obtained by Borrower after Borrower's exercise of diligent efforts, the Net Operating Income shall not show a downward trend for such period of time immediately prior to the date of substitution as may be determined from the information regarding such Net Operating Income available.
(v) The Net Operating Income and Debt Service Coverage Ratio (2for the twelve (12) an aggregate loanmonth period immediately preceding the substitution) for the Substitute Property is greater than one hundred twenty-to-value ratio five percent (125%) of the Net Operating Income and Debt Service Coverage Ratio (for the twelve (12) month period immediately preceding the substitution) for the related Substituted Property. For purposes of this clause (v), the Debt Service Coverage Ratio with respect to a Substitute Property or a Substituted Property shall be calculated using the Net Operating Income with respect to such Substitute Property or the Substituted Property, as applicable, and the principal and interest due and payable on the Note with respect to the Properties remaining subject related Pro rata Substitute Release Amount or Pro rata Release Amount, as applicable.
(vi) Lender shall have received evidence in writing from the Rating Agencies to the lien effect that such substitution will not result in a withdrawal, qualification or downgrade of the Security Instruments after respective ratings in effect immediately prior to such substitution for the Substitution Release not greater than Securities issued in connection with the ratio equal Securitization that are then outstanding.
(vii) No Default or Event of Default shall have occurred and be continuing and Borrower shall be in compliance in all material respects with all terms and conditions set forth in this Agreement and in each Loan Document on Borrower's part to be observed or performed. Lender shall have received a certificate from Borrower confirming the lesser foregoing, stating that the representations and warranties of (A) Borrower contained in this Agreement and the aggregate loan-to-value ratio other Loan Documents are true and correct in all material respects on and as of the date hereof of the substitution with respect to Borrower, the Properties and the Substitute Property and containing any other representations and warranties with respect to Borrower, the Properties, the Substitute Property or the Loan as the Rating Agencies may require, unless such certificate would be inaccurate, such certificate to be in form and substance satisfactory to the Rating Agencies.
(viii) Borrower shall have executed, acknowledged and delivered to Lender (A) a Mortgage, an Assignment of Leases and two UCC Financing Statements with respect to the Properties Substitute Property, together with a letter from Borrower countersigned by a title insurance company acknowledging receipt of such Mortgage, Assignment of Leases and UCC-1 Financing Statements and agreeing to record or file, as set forth on Schedule B attached applicable, such Mortgage, Assignment of Leases and (B) the aggregate loan-to-value ratio with respect to the Properties remaining subject to the lien Rents and one of the Security Instruments immediately prior to UCC-1 Financing Statements in the proposed Substitution Release.
(d) an opinion of real estate records for the related Borrower's counsel which would be satisfactory to a prudent institutional mortgage lender stating that (i) the Substitute Security Instrument and the Loan Documents by county in which the Substitute Property will be encumbered have been duly authorized, executed is located and delivered by such Borrower and are valid and enforceable in accordance with their terms, subject to bankruptcy and equitable principles, (ii) the related Borrower and Operating Tenant are qualified to do business and in good standing under the laws file one of the jurisdiction where UCC-1 Financing Statement in the office of the Secretary of State of the state in which the Substitute Property is located, so as to effectively create upon such recording and filing valid and enforceable Liens upon the Substitute Property, of the requisite priority, in favor of Lender (or that such Borrowerother trustee as may be desired under local law), subject only to the Permitted Encumbrances and such other Liens as are not required by Applicable Law (defined in permitted pursuant to the Security Instruments) to qualify to do business in such jurisdiction, Loan Documents and (iiiB) based solely on a certificate an Assignment of Agreements and an Environmental Indemnity with respect to the Substitute Property. The Mortgage, Assignment of Leases, UCC-1 Financing Statements and Environmental Indemnity shall be the same in form and substance as the counterparts of such documents executed and delivered with respect to the related Borrower the encumbrance of Substituted Property subject to modifications reflecting the Substitute Property with as the lien Individual Property that is the subject of such documents and such modifications reflecting the laws of the state in which the Substitute Security Instrument and the Loan Documents Property is located as shall not cause a breach of, or a default under any agreement, document or instrument to which such Borrower is a party or to which it or its properties are bound or affected.
(e) a certification be recommended by the related Borrower that (x) counsel admitted to practice in such state and delivering 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 opinion as to the requirements enforceability of this Agreement and the Security Instruments, such documents required pursuant to clause (yxv) all conditions precedent herein have been complied with and (z) all conditions precedent to the delivery of the Substitute Security Instrument and Loan Documents contained in this Agreement have been fulfilled.
(f) original executed counterparts of the Substitute Security Instrument and the Loan Documents below. The Mortgage encumbering the Substitute Property and the related operating lease and related collateral, including without limitation, any financing statements or other documents necessary to grant or perfect Lender's first priority security interest in the Personal Property (defined in the Security Instruments) located thereon and the Rents and Accounts Receivable derived therefrom; the principal amount of such Substitute Security Instrument shall equal the face amount of secure all amounts evidenced by the Note, provided that in the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording recording, intangibles or similar tax, tax and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, the principal amount of secured by such Substitute Security Instrument Mortgage shall be equal 125% to one hundred fifty percent (150%) of the Substitute Allocated Loan Amount (defined below).
(g) a title insurance policy issued by a title insurance company satisfactory to the Rating Agencies (or, if a Securitization has not occurred, to Lender) insuring the lien amount of the Substitute Security Instrument on the Substitute Property(ies), in form and substance which would be satisfactory to a prudent institutional mortgage lender insuring that the Substitute Security Instrument is a valid and enforceable first lien on the good and marketable fee simple or leasehold estate, title of the related Borrower Loan allocated to the Substitute Property in an amount equal to the Property. The amount of the Loan allocated to the Substitute Property (such amount being hereinafter referred to as the "Substitute Allocated Loan AmountSUBSTITUTE RELEASE AMOUNT"), subject only to standard and customary exceptions and such other exceptions that would be approved by a prudent institutional mortgage lender, together with such affirmative insurance and other endorsements customarily required by a prudent institutional mortgage lender, including a ) shall the Release Amount of ------------------------- the related Substituted Property.
(ix) Lender shall have received (A) any "tie-in" or similar endorsement to each Title Insurance Policy insuring the Lien of an existing Mortgage as of the date of the substitution available with respect to the Title Insurance Policy insuring the Lien of the Mortgage with respect to the Substitute Property and first loss (B) a Title Insurance Policy (or a marked, signed and redated commitment to issue such Title Insurance Policy) insuring the Lien of the Mortgage encumbering the Substitute Property, issued by the title company that issued the Title Insurance Policies insuring the Lien of the existing Mortgages and dated as of the date of the substitution, with reinsurance and direct access agreements that replace such agreements issued in connection with the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Substituted Property. The Title Insurance Policy issued with respect to the Substitute Property shall (1) provide coverage in the amount of the Substitute Release Amount if the "tie-in" or similar endorsement satisfactory to Lender, described above is available or, if such endorsement is not available in the state in which the Substitute Property is locatedavailable, insurance in an amount equal to the greater of one hundred twenty five fifty percent (125150%) of the Substitute Allocated Loan Amount or Release Amount, (2) insure Lender that the amount relevant Mortgage creates a valid first lien on which mortgage or intangibles tax was paid with respect to the Security Instrument for the Substitute PropertyProperty encumbered thereby, together with a "last dollar endorsement". Such title insurance policy shall not contain any exception for any state free and clear of facts that an accurate survey might show or that a survey made after the date of the survey referred to in Section 4(l) might show.
all exceptions from coverage other than Permitted Encumbrances and standard exceptions and exclusions from coverage (h) If the Operating Lease for the Release Premises has been terminated pursuant to Section 36.1 of the Operating Lease, and, after giving effect to such Release, the Release Premises Transferor is the owner of a Property that remains encumbered as modified by the lien of the Security Instruments, an estoppel certificate from the Operating Tenant in form satisfactory to Lender stating that the Operating Lease has been terminated and that the Operating Tenant has released the Release Premises Transferor from all liability for the payment of any and all termination payments or any other payments due to the Operating Tenant pursuant to the terms of any endorsements), (3) contain such endorsements and affirmative coverages as are contained in the Operating Lease and that Title Insurance Policies insuring the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease or, if the Operating Lease on the Release Premises has not been terminated, an estoppel certificate from the Operating Tenant in form satisfactory to Lender that such Operating Lease, as it relates to the Release Premises, is and will remain in full force and effect following the Substitution Release and that the Release Premises Transferor has no liability for the payment of any termination payments or any other payments due to the Operating Tenant pursuant to the terms Liens of the Operating Lease and that the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease.
(i) evidence which would be satisfactory to a prudent institutional mortgage lender to the effect that the Substitute Property and the use thereof are in substantial compliance with the applicable zoning, subdivisionexisting Mortgages, and all other applicable federal, state or local laws and ordinances affecting (4) name Lender as the Substitute Property, and insured. Lender also shall have received copies of paid receipts showing that all material building premiums in respect of such endorsements and operating licenses and permits necessary for the use and occupancy of the Substitute Property as a hospitality property or hotel including, but not limited to, current certificates of occupancy, Title Insurance Policies have been obtained and are in full force and effectpaid.
(j) an environmental report dated within six (6) months prior to delivery which states that the Substitute Property does not contain any Hazardous Substances in violation of Applicable Law (as defined in the Security Instruments) or material risk of contamination from off-site Hazardous Substances.
(k) payment of all costs and expenses incurred by Lender including reasonable counsel fees and disbursements in connection with the release of any Release Premises and the inclusion of the Substitute Property as collateral, all recording charges, filing fees, taxes, or other expenses, including but not limited to intangibles taxes and documentary stamp taxes in connection with the recording of the Substitute Security Instruments and the lien necessary to grant and perfect Lender a first priority lien on and security interest in the Substitute Property, the Personal Property located therein and the Rents derived therefrom. In the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording or intangibles tax, or similar tax, and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, if permitted by applicable law in such jurisdiction, such tax shall be paid on an amount equal to 125% of the Substitute Allocated Loan Amount.
(l) a recent survey of the Substitute Property(ies) prepared by a land surveyor licensed in the state where the Substitute Property is located pursuant to the then current American Land Title Association/American Congress of Surveying and Mapping standards for title surveys and which would be otherwise satisfactory to a prudent institutional mortgage lender, provided that no structural additions to the improvements shown on such survey or new structures have been made or built since the date of such survey and that there has been no change in the legal description of the Substitute Property since the date of such survey, whether due to sales, transfers, condemnation or otherwise.
(m) evidence indicating whether the Substitute Property is located within a flood plain.
(n) a property inspection report dated within six (6) months of delivery prepared by an independent licensed engineer approved by Lender, prepared in accordance with standards employed by prudent institutional mortgage lenders stating, among other things, that the Substitute Property is in good condition and repair and free of material damage or waste and complies in all material respects with the Americans with Disabilities Act, or which otherwise reveals a state of fact that would be satisfactory to a prudent institutional mortgage lender and provided that adequate reserves satisfactory to Lender and the Rating Agencies are established.
(o) annual operating statements and occupancy statements for the Substitute Property for the recent fiscal year of the owner thereof, together with a year to date operating statement, current occupancy statements, and a budget for the current fiscal year, each certified by the related Borrower, and a certificate of no adverse change since the date thereof executed by the related Borrower, in each case in a form and substance which would be satisfactory to a prudent institutional mortgage lender.
(p) original certificates and copies of policies of insurance required by Lender under the terms of the Substitute Security Instrument for the Substitute Property.
(q) evidence of the qualification and good standing of the related Borrower and Operating Tenant (and the principals, if necessary) in the state where the Substitute Property is located unless such qualification is not required in such state by Applicable Law.
(r) certified copies of all Leases (as defined in the Substitute Security Instrument) with respect to the Substitute Property and tenant estoppel certificates from tenants under Material Leases, as required by Lender, all in a form and substance which would be satisfactory to a prudent institutional mortgage lender.
(s) certified copies of all material contracts and agreements relating to the management, leasing and operation of the Substitute Property, including, without limitation, the Franchise
Appears in 1 contract
Substitution of Properties. Provided that no Event of Default has occurred -------------------------- and is continuing, Borrower shall have the right to obtain a release of one or more of the Properties from the lien of the related Security Instrument and Loan Documents (a "Substitution Release") upon substitution of another fully licensed and operating hospitality property of comparable type and quality as the Property being released in the place of the Release Premises (a "Substitute Property") owned in fee simple (or leasehold) by a Borrower and leased to the Operating Tenant pursuant to an operating lease, substantially in the same form and content as the Operating Lease, and such Substitute Property is subjected to the lien of a new mortgage, deed of trust, deed to secure debt or similar security instruments, in the same form and substance as the Security Instruments ("Substitute Security Instrument") and to the lien of the Loan Documents, as a first lien thereon and managed by Manager (or an affiliate of Manager as provided for in the Management Agreement) pursuant Subject to the terms of the Management Agreement or a Replacement Management Agreement (as defined in the Security Instruments) and, subject to a Franchise Agreement in compliance with the terms and conditions of Section 3.13 of the Security Instruments and upon compliance with and subject to the -------------------------- conditions set forth in this Section 4; provided2.7, howeverBorrower may obtain a release of the ----------- Lien of a Mortgage (and the related Loan Documents) encumbering an Individual Property (a "SUBSTITUTED PROPERTY") by substituting therefor another office or -------------------- industrial property acquired by Borrower (individually, a "SUBSTITUTE PROPERTY" ------------------- and collectively, the "SUBSTITUTE PROPERTIES"), provided that Borrower's rights to such release and substitution --------------------- shall not be allowed more than three (3) times during the term of the Loan. In addition, any such substitution shall be conditioned on receipt by Lender subject, in each case, to the satisfaction of the followingfollowing conditions precedent:
(ai) evidence which would be satisfactory to Lender shall have received a prudent institutional mortgage lender that copy of a deed or an assignment and assumption of lessee's interest in the Ground Lease (together with the ground lessor's consent thereto), as applicable, conveying all of Borrower's right, title and interest in and to the Release Substituted Property has been transferred to an entity other than Borrower and a Release Premises Transfereeletter from Borrower countersigned by a title insurance company acknowledging receipt of such deed or assignment and assumption, as applicable, and agreeing to record such deed or assignment and assumption, as applicable, in the real estate records for the county in which the Substituted Property is located.
(bii) evidence which would be satisfactory to a prudent institutional mortgage lender that the Substitute Property is fully operational and is of similar or higher quality or value to the Release Premises.
(c) a current Appraisal Lender shall have received an appraisal of the Substitute Property prepared within one hundred eighty dated no more than sixty (18060) days prior to the release and substitution showing (1) by an appraised appraiser acceptable to the Rating Agencies or such other evidence of the value of the Substitute Property as shall be satisfactory to Lender in its sole discretion which appraisal or other evidence shall indicate that the value of the Substitute Property is equal to or greater than the appraised value of the Substituted Property determined by Lender at the time of the encumbrance of the Substituted Property by the related Mortgage in connection with the Initial Advance or a Subsequent Advance, as applicable.
(iii) After giving effect to the substitution, the Debt Service Coverage Ratio for the Loan for all of the Properties is not less than the Debt Service Coverage Ratio for the Loan for all of the Properties as of the Outside Closing Date.
(iv) The Net Operating Income for the Substitute Property does not show a downward trend over the three (3) years immediately prior to the date of substitution or, with respect to a Substitute Property for which information regarding the Net Operating Income of such Substitute Property for the three (3) years immediately prior to the date of substitution cannot be obtained by Borrower after Borrower's exercise of diligent efforts, the Net Operating Income shall not show a downward trend for such period of time immediately prior to the date of substitution as may be determined from the information regarding such Net Operating Income available.
(v) The Net Operating Income and Debt Service Coverage Ratio (for the twelve (12) month period immediately preceding the substitution) for the Substitute Property is equal to or greater than the Net Operating Income and Debt Service Coverage Ratio (for the twelve (12) month period immediately preceding the substitution) for the related Substituted Property. For purposes of this clause (v), the Debt Service Coverage Ratio with respect to a Substitute Property or a Substituted Property shall be calculated using the Net Operating Income with respect to such Substitute Property or the Substituted Property, as applicable, and the principal and interest due and payable on the Note with respect to the related Pro rata Substitute Release Premises Amount or Pro rata Release Amount, as applicable.
(vi) Lender shall have received evidence in writing from the Rating Agencies to the effect that such substitution will not result in a withdrawal, qualification or downgrade of the respective ratings in effect immediately prior to such substitution for the Securities issued in connection with the Securitization that are then outstanding.
(vii) No Default or Event of Default shall have occurred and be continuing and Borrower shall be in compliance in all material respects with all terms and conditions set forth in this Agreement and in each Loan Document on Borrower's part to be observed or performed. Lender shall have received a certificate from Borrower confirming the foregoing, stating that the representations and warranties of Borrower contained in this Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof; and (2) an aggregate loan-to-value ratio of the substitution with respect to Borrower, the Properties remaining subject and the Substitute Property and containing any other representations and warranties with respect to Borrower, the Properties, the Substitute Property or the Loan as the Rating Agencies may require, unless such certificate would be inaccurate, such certificate to be in form and substance satisfactory to the lien Rating Agencies. Notwithstanding the foregoing, Borrower may obtain the release of the Security Instruments after the Substitution Release not greater than the ratio equal Lien of a Mortgage encumbering an Individual Property affected by a Non-Curable Property Default and substitute therefor a Substitute Property pursuant to the lesser terms and provisions of this Section 2.7 if (A) such Non- ----------- Curable Property Default is the aggregate loan-to-value ratio as only Event of Default then existing under the date hereof with respect to the Properties as set forth on Schedule B attached and Loan Documents, (B) the aggregate loan-to-value ratio with respect to the Properties remaining subject to the lien of the Security Instruments immediately prior to the proposed Substitution Release.
(d) an opinion of the related Borrower's counsel which would be satisfactory to a prudent institutional mortgage lender stating that (i) the Substitute Security Instrument and the Loan Documents by which the Substitute Property will be encumbered have been duly authorized, executed and delivered by such Borrower and all other conditions contained in this Section 2.7 are valid and enforceable in accordance with their terms, subject to bankruptcy and equitable principles, (ii) the related Borrower and Operating Tenant are qualified to do business and in good standing under the laws of the jurisdiction where the Substitute Property is located, or that such Borrower, are not required by Applicable Law (defined in the Security Instruments) to qualify to do business in such jurisdiction, and (iii) based solely on a certificate of the related Borrower the encumbrance of the Substitute Property with the lien of the Substitute Security Instrument and the Loan Documents shall not cause a breach of, or a default under any agreement, document or instrument to which such Borrower is a party or to which it or its properties are bound or affected.
(e) a certification by the related Borrower that (x) the certificates, opinions and other instruments which have been or are therewith delivered to or deposited with Lender satisfied in connection with ----------- such release and substitution conform to the requirements of this Agreement and the Security Instruments, (y) all conditions precedent herein have been complied with and (zC) all conditions precedent after giving effect to the delivery such release and substitution, no Event of the Substitute Security Instrument and Loan Documents contained in this Agreement have been fulfilledDefault shall exist.
(fviii) original executed counterparts Borrower shall have executed, acknowledged and delivered to Lender (A) a Mortgage, an Assignment of the Substitute Security Instrument Leases and the Loan Documents encumbering the Substitute Property and the related operating lease and related collateral, including without limitation, any financing statements or other documents necessary to grant or perfect Lender's first priority security interest in the Personal Property (defined in the Security Instruments) located thereon and the Rents and Accounts Receivable derived therefrom; the principal amount of such Substitute Security Instrument shall equal the face amount of the Note, provided that in the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording intangibles or similar tax, and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, the principal amount of such Substitute Security Instrument shall equal 125% of the Substitute Allocated Loan Amount (defined below).two ▇▇▇-
(gix) a title insurance policy issued by a title insurance company satisfactory to the Rating Agencies Lender shall have received (or, if a Securitization has not occurred, to LenderA) insuring the lien of the Substitute Security Instrument on the Substitute Property(ies), in form and substance which would be satisfactory to a prudent institutional mortgage lender insuring that the Substitute Security Instrument is a valid and enforceable first lien on the good and marketable fee simple or leasehold estate, title of the related Borrower to the Substitute Property in an amount equal to the amount of the Loan allocated to the Substitute Property (the "Substitute Allocated Loan Amount"), subject only to standard and customary exceptions and such other exceptions that would be approved by a prudent institutional mortgage lender, together with such affirmative insurance and other endorsements customarily required by a prudent institutional mortgage lender, including a any "tie-in" or similar endorsement to each Title Insurance Policy insuring the Lien of an existing Mortgage as of the date of the substitution available with respect to the Title Insurance Policy insuring the Lien of the Mortgage with respect to the Substitute Property and first loss (B) a Title Insurance Policy (or a marked, signed and redated commitment to issue such Title Insurance Policy) insuring the Lien of the Mortgage encumbering the Substitute Property, issued by the title company that issued the Title Insurance Policies insuring the Lien of the existing Mortgages and dated as of the date of the substitution, with reinsurance and direct access agreements that replace such agreements issued in connection with the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Substituted Property. The Title Insurance Policy issued with respect to the Substitute Property shall (1) provide coverage in the amount of the Substitute Release Amount if the "tie-in" or similar endorsement satisfactory to Lender, described above is available or, if such endorsement is not available in the state in which the Substitute Property is locatedavailable, insurance in an amount equal to the greater of one hundred twenty twenty-five percent (125%) of the Substitute Allocated Loan Amount or Release Amount, (2) insure Lender that the amount relevant Mortgage creates a valid first lien on which mortgage or intangibles tax was paid with respect to the Security Instrument for the Substitute PropertyProperty encumbered thereby, together with a "last dollar endorsement". Such title insurance policy shall not contain any exception for any state free and clear of facts that an accurate survey might show or that a survey made after the date of the survey referred to in Section 4(l) might show.
all exceptions from coverage other than Permitted Encumbrances and standard exceptions and exclusions from coverage (h) If the Operating Lease for the Release Premises has been terminated pursuant to Section 36.1 of the Operating Lease, and, after giving effect to such Release, the Release Premises Transferor is the owner of a Property that remains encumbered as modified by the lien of the Security Instruments, an estoppel certificate from the Operating Tenant in form satisfactory to Lender stating that the Operating Lease has been terminated and that the Operating Tenant has released the Release Premises Transferor from all liability for the payment of any and all termination payments or any other payments due to the Operating Tenant pursuant to the terms of any endorsements), (3) contain such endorsements and affirmative coverages as are contained in the Operating Lease and that Title Insurance Policies insuring the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease or, if the Operating Lease on the Release Premises has not been terminated, an estoppel certificate from the Operating Tenant in form satisfactory to Lender that such Operating Lease, as it relates to the Release Premises, is and will remain in full force and effect following the Substitution Release and that the Release Premises Transferor has no liability for the payment of any termination payments or any other payments due to the Operating Tenant pursuant to the terms Liens of the Operating Lease and that the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease.
(i) evidence which would be satisfactory to a prudent institutional mortgage lender to the effect that the Substitute Property and the use thereof are in substantial compliance with the applicable zoning, subdivisionexisting Mortgages, and all other applicable federal, state or local laws and ordinances affecting (4) name Lender as the Substitute Property, and insured. Lender also shall have received copies of paid receipts showing that all material building premiums in respect of such endorsements and operating licenses and permits necessary for the use and occupancy of the Substitute Property as a hospitality property or hotel including, but not limited to, current certificates of occupancy, Title Insurance Policies have been obtained and are in full force and effectpaid.
(j) an environmental report dated within six (6) months prior to delivery which states that the Substitute Property does not contain any Hazardous Substances in violation of Applicable Law (as defined in the Security Instruments) or material risk of contamination from off-site Hazardous Substances.
(k) payment of all costs and expenses incurred by Lender including reasonable counsel fees and disbursements in connection with the release of any Release Premises and the inclusion of the Substitute Property as collateral, all recording charges, filing fees, taxes, or other expenses, including but not limited to intangibles taxes and documentary stamp taxes in connection with the recording of the Substitute Security Instruments and the lien necessary to grant and perfect Lender a first priority lien on and security interest in the Substitute Property, the Personal Property located therein and the Rents derived therefrom. In the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording or intangibles tax, or similar tax, and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, if permitted by applicable law in such jurisdiction, such tax shall be paid on an amount equal to 125% of the Substitute Allocated Loan Amount.
(l) a recent survey of the Substitute Property(ies) prepared by a land surveyor licensed in the state where the Substitute Property is located pursuant to the then current American Land Title Association/American Congress of Surveying and Mapping standards for title surveys and which would be otherwise satisfactory to a prudent institutional mortgage lender, provided that no structural additions to the improvements shown on such survey or new structures have been made or built since the date of such survey and that there has been no change in the legal description of the Substitute Property since the date of such survey, whether due to sales, transfers, condemnation or otherwise.
(m) evidence indicating whether the Substitute Property is located within a flood plain.
(n) a property inspection report dated within six (6) months of delivery prepared by an independent licensed engineer approved by Lender, prepared in accordance with standards employed by prudent institutional mortgage lenders stating, among other things, that the Substitute Property is in good condition and repair and free of material damage or waste and complies in all material respects with the Americans with Disabilities Act, or which otherwise reveals a state of fact that would be satisfactory to a prudent institutional mortgage lender and provided that adequate reserves satisfactory to Lender and the Rating Agencies are established.
(o) annual operating statements and occupancy statements for the Substitute Property for the recent fiscal year of the owner thereof, together with a year to date operating statement, current occupancy statements, and a budget for the current fiscal year, each certified by the related Borrower, and a certificate of no adverse change since the date thereof executed by the related Borrower, in each case in a form and substance which would be satisfactory to a prudent institutional mortgage lender.
(p) original certificates and copies of policies of insurance required by Lender under the terms of the Substitute Security Instrument for the Substitute Property.
(q) evidence of the qualification and good standing of the related Borrower and Operating Tenant (and the principals, if necessary) in the state where the Substitute Property is located unless such qualification is not required in such state by Applicable Law.
(r) certified copies of all Leases (as defined in the Substitute Security Instrument) with respect to the Substitute Property and tenant estoppel certificates from tenants under Material Leases, as required by Lender, all in a form and substance which would be satisfactory to a prudent institutional mortgage lender.
(s) certified copies of all material contracts and agreements relating to the management, leasing and operation of the Substitute Property, including, without limitation, the Franchise
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