Partial Release. (a) Provided no Event of Default shall have occurred and be continuing (other than with respect to a Default Release), Borrower shall have the right at any time prior to the Maturity Date to obtain the release (a “Partial Release”) of one or more Individual Properties (each such released Individual Property, the “Released Property”, and the Individual Properties remaining encumbered by the Security Instrument, the “Remaining Properties”) from the lien of the Security Instrument thereon (and related Loan Documents) and the release of the applicable Individual Borrower’s obligations under the Loan Documents with respect to such Released Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions precedent: (i) Lender shall have received at least ten (10) Business Days’ (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith) prior written notice requesting the release of the Released Property; (ii) Borrower shall, in accordance with the provisions of Section 2.7(a) above, partially prepay the Loan in an amount equal to the Release Price or such other amounts as may be required to be prepaid in connection with such release under clause (vi) below (together with, without limitation, any Interest Shortfall (if applicable) and, with respect to any such payment in excess of the Free Prepayment Amount, the Prepayment Premium applicable thereto), or such greater amount as may be required to satisfy the Partial Release Test as set forth in clause (vi) below; (iii) Intentionally Omitted; (iv) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith), a release or assignment of lien (and related Loan Documents) for the Released Property for execution by ▇▇▇▇▇▇. Such release or assignment shall be in a form appropriate in the State in which the Released Property is located and shall contain standard provisions, if any, protecting the rights of the releasing or assigning lenders. In addition, Borrower shall provide all other documentation in connection with such release or assignment as may be reasonably requested by ▇▇▇▇▇▇; (v) Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender that the release of the Released Property will not violate any term or provision of any Major Lease, Property Document, PILOT Lease and/or PILOT Document, or Management Agreement in effect at the Remaining Property at the time of the release of the Released Property, in each case in any material respect, which evidence may take the form of a certification from Borrower contained in the Officer’s Certificate referenced in Section 2.10(a)(xiii) below; (vi) As of the date of consummation of the Partial Release, after giving effect to the release of the Released Property from the lien of the related Security Instrument and the accordant partial prepayment of the Loan, the Debt Yield with respect to the Remaining Properties shall be equal to or greater than the Closing Date Debt Yield (such test, the “Partial Release Test”); provided that with respect to a release in connection with a sale to a third-party, unrelated to any Borrower, Guarantor, Sponsor, or any Affiliate thereof on a -51- bona fide arm’s-length basis, at market pricing based on a market process, if the Partial Release Test would not be satisfied after giving effect to the release of the Released Property and payment of the Release Price, then such Partial Release shall be permitted upon payment of a release price equal to the greater of (1) one hundred percent (100%) of the net sales proceeds from the disposition of such Released Property (net of reasonable and customary closing costs payable to third parties in connection with the disposition of such Released Property) and (2) the Release Price for such Released Property; provided, further, that, notwithstanding the foregoing, Borrower shall also have the right to satisfy the Partial Release Test by making an additional prepayment of the Debt, in accordance with the terms and conditions of Section 2.7(a) hereof (including, without limitation, payment of any applicable Interest Shortfall, Breakage Costs, and/or Prepayment Premium), in an amount which, when applied to the repayment of the Debt, together with the applicable Release Price is sufficient such that the Partial Release Test is satisfied. Upon request from ▇▇▇▇▇▇, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s calculation of the Debt Yield with respect to the Remaining Properties; (vii) Borrower shall pay all recording charges, filing fees, taxes or other out-of-pocket expenses (including, without limitation, any mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the release of the Released Property; (viii) Intentionally Omitted; (ix) Intentionally Omitted; (x) In the event that the Released Property is the last Individual Property owned by Borrower Interest Rate Cap Party, Borrower Interest Rate Cap Party shall have assigned all of its right, title and interest in and to the Interest Rate Cap Agreement to another Individual Borrower that owns one or more Properties that shall remain subject to the lien of the Security Instrument after such release (such Borrower, the “Assignee Borrower”). In connection with (and as a condition precedent to) such assignment, Assignor (as defined in the Collateral Assignment of Interest Rate Cap Agreement and which, for the avoidance of doubt, may refer to Borrower Interest Rate Cap Party or any Assignee Borrower that has assumed the interests of such Assignor pursuant to and in accordance with this Agreement) and the other Borrowers (as applicable) shall execute and deliver to Lender (i) an assumption of the existing Collateral Assignment of Interest Rate Cap Agreement reasonably acceptable to Lender (or a new collateral assignment of interest rate cap agreement in form and substance substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date and otherwise reasonably acceptable to Lender) and (ii) an acknowledgment and consent to such assumption or new assignment executed by Counterparty and reasonably acceptable to Lender. Any Assignee Borrower may further assign its right, title and interest in and to the Interest Rate Cap Agreement to another Assignee Borrower, provided all of the conditions set forth in this Section 2.10(a)(x) are satisfied; and (xi) Subsequent to such release, each remaining Individual Borrower and each SPE Component Entity shall continue to be a Single Purpose Entity pursuant to, and in accordance with, Article 5 hereof; (xii) Borrower shall have paid or reimbursed Lender and/or Servicer for all reasonable out-of-pocket costs and expenses actually incurred by ▇▇▇▇▇▇ and/or Servicer (including, without limitation, reasonable actually incurred attorneys’ fees and -52- disbursements), and shall have paid the customary fees of Servicer in connection with such release, which fee shall (A) not exceed (x) $10,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of between one (1) and four (4) Individual Properties and (y) $20,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of five (5) or more Individual Properties; and (xiii) Borrower shall deliver an Officer’s Certificate certifying that all requirements set forth in this Section 2.10 have been satisfied. (b) In connection with any release under this Section 2.10, in the event that such release would result in the release of all Individual Properties held by an Individual Borrower (each an “Unencumbered Borrower”), such Unencumbered Borrower shall be released by Lender from the obligations of the Loan Documents, except with respect to those obligations that are expressly provided herein to survive repayment of the Loan. In connection with a release or cancellation of each Unencumbered Borrower, ▇▇▇▇▇▇ agrees to deliver (i) a UCC-3 Financing Statement termination or amendment releasing ▇▇▇▇▇▇’s security interest in the collateral pledged to Lender relating to each Unencumbered Borrower, and (ii) instruments executed by Lender reasonably necessary to evidence the release or cancellation of each Unencumbered Borrower from its obligations under the Loan Documents. All reasonable out-of-pocket costs and expenses actually incurred by Lender in connection with such release shall be paid by Borrower.
Appears in 1 contract
Sources: Loan Agreement (Ares Real Estate Income Trust Inc.)
Partial Release. Provided (a1) Provided no Event of Default shall have occurred and be continuing and (other than with respect to a Default Release)2) the Partial Release Condition shall be satisfied, Borrower shall have the right at any time prior to the Maturity Date to obtain the release (a the “Partial Release”) of one or more any of the Individual Properties (each such released Individual Property, the “Released Property”, and the Individual Properties remaining encumbered by the Security Instrument, the “Remaining Properties”) from the lien of the applicable Security Instrument thereon (and related Loan Documents) and the release of the applicable Individual Borrower’s obligations under the Loan Documents with respect to such Released Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions precedent:
(ia) Borrower shall provide Lender shall have received at least ten with thirty (1030) Business Days’ (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith) days prior written notice requesting the release of the Released Propertyproposed Partial Release (the date of Lender’s receipt of such notice shall be referred to herein as a the “Partial Release Notice Date”);
(ii) Borrower shall, in accordance with the provisions of Section 2.7(a) above, partially prepay the Loan in an amount equal to the Release Price or such other amounts as may be required to be prepaid in connection with such release under clause (vi) below (together with, without limitation, any Interest Shortfall (if applicable) and, with respect to any such payment in excess of the Free Prepayment Amount, the Prepayment Premium applicable thereto), or such greater amount as may be required to satisfy the Partial Release Test as set forth in clause (vi) below;
(iii) Intentionally Omitted;
(ivb) Borrower shall submit to Lender, not less than ten (10) Business Days days prior to the date of such release (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith)Partial Release, a release or assignment of lien (and related Loan Documents) for the Released Property for execution by ▇▇▇▇▇▇Lender. Such release or assignment shall be in a form appropriate in the State each jurisdiction in which the Released Property is located and shall contain standard provisions, if any, protecting the rights of the releasing or assigning lendersLender. In addition, Borrower shall provide all other documentation as may be required to satisfy the prudent lender standard in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will effect such release in accordance with the terms of this Agreement, and (iii) will not impair or assignment otherwise adversely affect the liens, security interests and other rights of Lender under the Loan Documents not being released (or as may be reasonably requested by ▇▇▇▇▇▇to the parties to the Loan Documents and Properties subject to the Loan Documents not being released);
(vc) The Released Property shall be conveyed to a Person other than Borrower;
(d) Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender that (A) partially prepay the release Debt in accordance with Section 9 of the Released Property will not violate any term or provision of any Major Lease, Property Document, PILOT Lease and/or PILOT Document, or Management Agreement Note in effect at the Remaining Property at the time of the release of the Released Property, in each case in any material respect, which evidence may take the form of a certification from Borrower contained in the Officer’s Certificate referenced in Section 2.10(a)(xiii) below;
(vi) As of the date of consummation of the Partial Release, after giving effect to the release of the Released Property from the lien of the related Security Instrument and the accordant partial prepayment of the Loan, the Debt Yield with respect to the Remaining Properties shall be equal to or greater than the Closing Date Debt Yield (such test, the “Partial Release Test”); provided that with respect to a release in connection with a sale to a third-party, unrelated to any Borrower, Guarantor, Sponsor, or any Affiliate thereof on a -51- bona fide arm’s-length basis, at market pricing based on a market process, if the Partial Release Test would not be satisfied after giving effect to the release of the Released Property and payment of the Release Price, then such Partial Release shall be permitted upon payment of a release price an amount equal to the greater of (1i) one hundred percent (100%) 125% of the net sales Allocated Loan Amount for the Released Property; or (ii) 90% of the proceeds from the disposition sale of such the Released Property (net the “Release Amount”), (B) unless such prepayment is tendered on a Payment Date, pay to Lender an amount equal to the interest that would have accrued on the amount being prepaid for the full Accrual Period had the prepayment not been made and (C) pay to Lender the applicable Yield Maintenance Amount to the extent that such prepayment occurs at any time other than during the Open Prepayment Period. Any portion of reasonable the Release Amount applied to the principal amount of the Debt in accordance herewith shall be applied (i) first, to reduce the Allocated Loan Amount attributable to the Released Property to zero and customary closing costs payable (ii) second, pro rata to third parties reduce the Allocated Loan Amounts of each of the other remaining Individual Properties;
(e) The Partial Release shall be permitted under REMIC Requirements in effect as of each of (I) the Partial Release Notice Date and (II) the consummation of the Partial Release;
(f) If required by Lender, Lender shall have received confirmation in writing from each of the applicable Rating Agencies to the effect that such release will not result in a downgrade, withdrawal or qualification of the respective ratings in effect immediately prior to such Partial Release for the Securities issued in connection with the disposition Securitization which are then outstanding; and
(g) Borrower shall (A) deliver to Lender an opinion of counsel acceptable the Rating Agencies (issued by counsel acceptable to the Rating Agencies) with respect to satisfaction of the REMIC Requirements and with respect to such Released Property) other matters as may be required by Lender and (2B) pay all of Lender’s reasonable costs and expenses and the Release Price for such Released Property; provided, further, that, notwithstanding costs and expenses of the foregoing, Borrower shall also have the right to satisfy Rating Agencies in connection with the Partial Release Test by making an additional prepayment of the DebtRelease, in accordance with the terms and conditions of Section 2.7(a) hereof (including, without limitation, payment of any applicable Interest Shortfall, Breakage Costs, and/or Prepayment Premium), in an amount which, when applied to the repayment of the Debt, together with the applicable Release Price is sufficient such that the Partial Release Test is satisfied. Upon request from ▇▇▇▇▇▇, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s calculation of the Debt Yield with respect to the Remaining Properties;
(vii) Borrower shall pay all recording charges, filing counsel fees, taxes or other out-of-pocket expenses (including, without limitation, any mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the release of the Released Property;
(viii) Intentionally Omitted;
(ix) Intentionally Omitted;
(x) In the event that the Released Property is the last Individual Property owned by Borrower Interest Rate Cap Party, Borrower Interest Rate Cap Party shall have assigned all of its right, title and interest in and to the Interest Rate Cap Agreement to another Individual Borrower that owns one or more Properties that shall remain subject to the lien of the Security Instrument after such release (such Borrower, the “Assignee Borrower”). In connection with (and as a condition precedent to) such assignment, Assignor (as defined in the Collateral Assignment of Interest Rate Cap Agreement and which, for the avoidance of doubt, may refer to Borrower Interest Rate Cap Party or any Assignee Borrower that has assumed the interests of such Assignor pursuant to and in accordance with this Agreement) and the other Borrowers (as applicable) shall execute and deliver to Lender (i) an assumption of the existing Collateral Assignment of Interest Rate Cap Agreement reasonably acceptable to Lender (or a new collateral assignment of interest rate cap agreement in form and substance substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date and otherwise reasonably acceptable to Lender) and (ii) an acknowledgment and consent to such assumption or new assignment executed by Counterparty and reasonably acceptable to Lender. Any Assignee Borrower may further assign its right, title and interest in and to the Interest Rate Cap Agreement to another Assignee Borrower, provided all of the conditions set forth in this Section 2.10(a)(x) are satisfied; and
(xi) Subsequent to such release, each remaining Individual Borrower and each SPE Component Entity shall continue to be a Single Purpose Entity pursuant to, and in accordance with, Article 5 hereof;
(xii) Borrower shall have paid or reimbursed Lender and/or Servicer for all reasonable out-of-pocket costs and expenses actually incurred by ▇▇▇▇▇▇ and/or Servicer (including, without limitation, reasonable actually incurred attorneys’ fees and -52- disbursements), and shall have paid the customary fees of Servicer in connection with such release, which fee shall (A) not exceed (x) $10,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of between one (1) and four (4) Individual Properties and (y) $20,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of five (5) or more Individual Properties; and
(xiii) Borrower shall deliver an Officer’s Certificate certifying that all requirements set forth in this Section 2.10 have been satisfied.
(b) In connection with any release under this Section 2.10, in the event that such release would result in the release of all Individual Properties held by an Individual Borrower (each an “Unencumbered Borrower”), such Unencumbered Borrower shall be released by Lender from the obligations of the Loan Documents, except with respect to those obligations that are expressly provided herein to survive repayment of the Loan. In connection with a release or cancellation of each Unencumbered Borrower, ▇▇▇▇▇▇ agrees to deliver (i) a UCC-3 Financing Statement termination or amendment releasing ▇▇▇▇▇▇’s security interest in the collateral pledged to Lender relating to each Unencumbered Borrower, and (ii) instruments executed by Lender reasonably necessary to evidence the release or cancellation of each Unencumbered Borrower from its obligations under the Loan Documents. All reasonable out-of-pocket costs and expenses actually incurred by Lender in connection with such release shall be paid by Borrower.
Appears in 1 contract
Partial Release. (a) Provided no Event of Default shall have occurred and be continuing (other than with respect to a Default Release)continuing, Borrower shall have the right at any time after the Release Date and prior to the Maturity Date to obtain the partial release (a “the "Partial Release”") of one or more Individual Properties the Eligible Release Parcel (each such released Individual PropertyEligible Release Parcel, the “"Released Property”, and the Individual Properties remaining encumbered by the Security Instrument, the “Remaining Properties”Parcel") from the lien of the Security Instrument thereon (and related Loan Documents) and the release of the applicable Individual Borrower’s 's obligations under the Loan Documents with respect to such Released Property Parcel (other than those expressly stated to survive), upon the satisfaction of each of the following conditions precedent:
(i1) Borrower shall provide Lender shall have received at least ten with thirty (1030) Business Days’ days (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faithdiscretion) prior written notice requesting the release of the Released Propertyproposed Partial Release (the date of Lender's receipt of such notice shall be referred to herein as a the "Partial Release Notice Date");
(ii) Borrower shall, in accordance with the provisions of Section 2.7(a) above, partially prepay the Loan in an amount equal to the Release Price or such other amounts as may be required to be prepaid in connection with such release under clause (vi) below (together with, without limitation, any Interest Shortfall (if applicable) and, with respect to any such payment in excess of the Free Prepayment Amount, the Prepayment Premium applicable thereto), or such greater amount as may be required to satisfy the Partial Release Test as set forth in clause (vi) below;
(iii) Intentionally Omitted;
(iv2) Borrower shall submit to Lender, not less than ten (10) Business Days days prior to the date of such release (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith)Partial Release, a partial release or assignment of lien (and related Loan Documents) for the Released Property Parcel for execution by ▇▇▇▇▇▇Lender. Such partial release or assignment shall be in a form appropriate in the State each jurisdiction in which the Released Property Parcel is located and shall contain standard provisions, if any, protecting the rights of the releasing or assigning lendersLender and must be approved by Lender. In addition, Borrower shall provide all other documentation as may be required to satisfy the Prudent Lender Standard in connection with such release Partial Release, together with an Officer's Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will effect such Partial Release in accordance with the terms of this Agreement, and (iii) will not impair or assignment otherwise adversely affect the liens, security interests and other rights of Lender under the Loan Documents not being released (or as may be reasonably requested by ▇▇▇▇▇▇to the parties to the Loan Documents and the portion of the Property subject to the Loan Documents not being released);
(v3) Borrower The Released Parcel shall have delivered be conveyed to Lender evidence reasonably satisfactory to Lender that the release of the Released Property will not violate any term or provision of any Major Lease, Property Document, PILOT Lease and/or PILOT Document, or Management Agreement in effect at the Remaining Property at the time of the release of the Released Property, in each case in any material respect, which evidence may take the form of a certification from Borrower contained in the Officer’s Certificate referenced in Section 2.10(a)(xiii) belowPerson other than Borrower;
(vi4) As of each of the Partial Release Notice Date and the date of consummation of the Partial Release, after giving effect to the release of the Released Property from the lien of the related Security Instrument and encumbering the accordant partial prepayment of the LoanReleased Parcel, the Debt Yield with respect to the Remaining Properties remaining portion of the Property shall each be equal to or greater than the Closing Date greater of (1) the Debt Yield (such test, of the “Partial Release Test”); provided that with respect Property encumbered by the Security Instrument immediately prior to a release in connection with a sale to a third-party, unrelated to any Borrower, Guarantor, Sponsor, or any Affiliate thereof on a -51- bona fide arm’s-length basis, at market pricing based on a market process, if the Partial Release Test would not be satisfied Notice Date or the consummation of the Partial Release (as applicable) and (2) the Debt Yield of the Property on the Closing Date; 41458-110/JANAF Shopping Yard (VA)
(5) As of each of the Partial Release Notice Date and the date of consummation of the Partial Release, after giving effect to the release of the Released Property and payment lien of the Release PriceSecurity Instrument encumbering the Released Parcel, then such Partial Release the LTV with respect to the remaining portion of the Property shall be permitted upon payment of a release price equal to no greater than the greater lesser of (1) one hundred percent the LTV on the Closing Date or (100%2) the LTV with respect to the Property immediately prior to the Partial Release Notice Date or the consummation of the net sales proceeds from the disposition Partial Release, as applicable (with each of such Released Property (net of reasonable and customary closing costs payable to third parties in connection with the disposition of such Released Property1) and (2) being determined based upon an updated Appraisal for the Property);
(6) The exact dimensions and legal descriptions of the Eligible Release Price for such Released Property; providedParcel shall be subject to the prior written consent and approval of Lender, further, that, notwithstanding and at least thirty (30) days prior to the foregoingeffective date of the Partial Release, Borrower shall also have prepare and deliver to Lender (at Borrower's sole cost and expense) a proposed re-plat and/or subdivision of such Eligible Release Parcel and a Survey for each of such Release Parcel and, if necessary, the right to satisfy the Partial Release Test by making an additional prepayment applicable portion of the Debtremaining Property, all prepared by a licensed surveyor or engineer (which surveys shall be, in accordance form, consistent with the terms Survey delivered to Lender prior to the Closing Date and conditions Lender's then applicable requirements and the plat must be in compliance with all applicable Legal Requirements) and shall depict the exact location of Section 2.7(asuch Eligible Release Parcel relative to the Remaining Property and the location of all applicable title matters, which such Survey may be an update of the Survey delivered to Lender prior to the Closing Date;
(7) hereof Borrower must provide evidence, which would be deemed satisfactory pursuant to Prudent Lender Standards, to Lender of the following matters: (i) that following such Partial Release, the remaining Property shall comply with all federal, state and local environmental, land use and zoning laws (including, without limitation, payment minimum lot size, parking regulations, set back lines, density requirements, lot coverage ratios, frontage, subdivision, site plan approval and access to a public right of way); (ii) that the proposed Partial Release and any future development on such Eligible Release Parcel will not have a material adverse impact on the quiet enjoyment of any applicable Interest ShortfallTenant of their demised premises located on the remaining Property unless otherwise approved by such Tenant; (iii) that all required notices have been given and consents obtained in connection with the proposed Partial Release, Breakage Costs, and/or Prepayment Premiumincluding (without limitation) the consent of any Governmental Authority and any Tenants (such as exclusives and similar leasing restrictions), (iv) that such Eligible Release Parcel will be assessed as a separate tax parcel with respect to all property taxes and assessments; and (v) that the future uses of such Eligible Release Parcel will not violate any covenant, restriction, condition, Leases or other title matter then encumbering the remaining Property;
(8) If requested by Lender in its reasonable discretion and if one is not already in place, an amount whichinsurable easement arrangement (or modification to existing easement) covering such matters as mutual parking and access, when applied maintenance, shared utilities, drainage, any applicable temporary and permanent parking arrangements and other similar issues located on such Eligible Release Parcel, and to the repayment extent available, an endorsement to the existing Title Insurance Policy providing title coverage to Lender with respect to such easement estate, if any, without exception (unless such exceptions are Permitted Encumbrances) and without any exception for Liens;
(9) If required by Lender pursuant to Prudent Lender Standards at the time of such Partial Release, Borrower shall, prior to the effective date of the Debtproposed Partial Release, together LOAN AGREEMENT – Page 35 41458-110/JANAF Shopping Yard (VA) encumber such Eligible Release Parcel with a recorded development or similar agreement (which must be deemed satisfactory pursuant to Prudent Lender Standards), covering such matters as mutual parking and access, maintenance, shared utilities, drainage and other similar issues and containing appropriate restrictions on the applicable type, construction, location, height and use of any improvements then existing or thereafter to be constructed on such Eligible Release Price is sufficient such that Parcel;
(10) The Partial Release shall not (i) deny the remaining Property reasonable access to public streets, roads or utilities, (ii) unreasonably divide any portion or tract of the remaining Property into strips or parcels, or (iii) otherwise have a Material Adverse Effect on the remaining Property as determined pursuant to Prudent Lender Standards;
(11) The Partial Release shall be permitted under REMIC Requirements in effect as of each of (I) the Partial Release Test is satisfied. Upon request from ▇▇▇▇▇▇, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s calculation Notice Date and (II) the consummation of the Debt Yield Partial Release;
(12) If required by Lender, Lender shall have received a Rating Agency Confirmation with respect to the Remaining PropertiesPartial Release;
(vii13) Borrower shall (A) deliver to Lender (1) a REMIC Opinion with respect to the Partial Release and (2) an opinion of counsel satisfying the Prudent Lender Standard and acceptable the Rating Agencies (issued by counsel satisfying the Prudent Lender Standard and acceptable to the Rating Agencies) with respect to such other matters as may be required by Lender in order to satisfy the Prudent Lender Standard and (B) pay all recording chargesof Lender's reasonable costs and expenses and the costs and expenses of the Rating Agencies in connection with the Partial Release, filing fees, taxes or other out-of-pocket expenses (including, without limitation, any mortgage and intangibles taxes and documentary stamp taxescounsel fees; and
(14) payable Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such partial release, together with an Officer's Certificate certifying that such documentation (1) is in compliance with all Legal Requirements and (2) will effect such partial release in accordance with the terms of this Agreement. Borrower shall pay all costs, taxes and expenses associated with the partial release of the Released Property;
(viii) Intentionally Omitted;
(ix) Intentionally Omitted;
(x) In the event that the Released Property is the last Individual Property owned by Borrower Interest Rate Cap Party, Borrower Interest Rate Cap Party shall have assigned all of its right, title and interest in and to the Interest Rate Cap Agreement to another Individual Borrower that owns one or more Properties that shall remain subject to the lien of the Security Instrument after such release (such BorrowerInstrument, the “Assignee Borrower”). In connection with (and as a condition precedent to) such assignmentincluding Lender's reasonable attorneys' fees, Assignor (as defined in the Collateral Assignment of Interest Rate Cap Agreement and which, for the avoidance of doubt, may refer to Borrower Interest Rate Cap Party or any Assignee Borrower that has assumed the interests of such Assignor pursuant to and in accordance with this Agreement) and the other Borrowers (as applicable) shall execute and deliver to Lender (i) an assumption of the existing Collateral Assignment of Interest Rate Cap Agreement reasonably acceptable to Lender (or a new collateral assignment of interest rate cap agreement in form and substance substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date and otherwise reasonably acceptable to Lender) and (ii) an acknowledgment and consent to such assumption or new assignment executed by Counterparty and reasonably acceptable to Lender. Any Assignee Borrower may further assign its right, title and interest in and to the Interest Rate Cap Agreement to another Assignee Borrower, provided all of the conditions set forth in this Section 2.10(a)(x) are satisfied; and
(xi) Subsequent to such release, each remaining Individual Borrower and each SPE Component Entity shall continue to be a Single Purpose Entity pursuant to, and in accordance with, Article 5 hereof;
(xii) but Borrower shall have paid not be required to pay a release premium or reimbursed Lender and/or Servicer for all reasonable out-of-pocket costs and expenses actually incurred by ▇▇▇▇▇▇ and/or Servicer (including, without limitation, reasonable actually incurred attorneys’ fees and -52- disbursements), and shall have paid be required to pay down the customary fees of Servicer in connection with such release, which fee shall (A) not exceed (x) $10,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of between one (1) and four (4) Individual Properties and (y) $20,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of five (5) or more Individual Properties; and
(xiii) Borrower shall deliver an Officer’s Certificate certifying that all requirements set forth in this Section 2.10 have been satisfied.
(b) In connection with any release under this Section 2.10, in the event that such release would result in the release of all Individual Properties held by an Individual Borrower (each an “Unencumbered Borrower”), such Unencumbered Borrower shall be released by Lender from the obligations principal balance of the Loan Documents, except with respect unless due to those obligations that are expressly provided herein to survive repayment of the Loan. In connection with a release or cancellation of each Unencumbered Borrower, ▇▇▇▇▇▇ agrees to deliver (i) a UCC-3 Financing Statement termination or amendment releasing ▇▇▇▇▇▇’s security interest in the collateral pledged to Lender relating to each Unencumbered Borrower, and (ii) instruments executed by Lender reasonably necessary to evidence the release or cancellation of each Unencumbered Borrower from its obligations under the Loan Documents. All reasonable out-of-pocket costs and expenses actually incurred by Lender in connection with such release shall be paid by BorrowerREMIC Requirements.
Appears in 1 contract
Sources: Loan Agreement (Wheeler Real Estate Investment Trust, Inc.)
Partial Release. Borrower may, at any time and from time to time, obtain a Partial Release of a Release Parcel from the liens and all other interests of Lender existing by virtue of the Loan Documents upon satisfaction of all the following terms and conditions:
(a) Provided no Borrower shall have delivered written notice to Lender not less than thirty (30) days prior to the proposed date of the Partial Release.
(b) the Improvements shall have been completed in substantial accordance with the Plans and Specifications and all bills and invoices incurred in connection with construction of the Improvements have been paid in full, and final lien releases and waivers for all costs incurred in connection with construction of the Improvements have been provided to Lender or any disputed mechanics or materialmen's lien has been bonded over and released from the Mortgaged Property in accordance with the Texas Property Code.
(c) The recordation of the final plat of the Phase II Land, such final plat to be in form and substance approved by Lender in its reasonable discretion (the "Plat").
(d) No Event of Default shall have occurred exist and be continuing (other than with respect to a Default Release), Borrower shall have the right at any time prior to the Maturity Date to obtain the release (a “Partial Release”) of one or more Individual Properties (each such released Individual Property, the “Released Property”, and the Individual Properties remaining encumbered by the Security Instrument, the “Remaining Properties”) from the lien of the Security Instrument thereon (and related Loan Documents) and the release of the applicable Individual Borrower’s obligations under the Loan Documents with respect to such Released Property (other than those expressly stated to survive), upon the satisfaction of each as of the following conditions precedent:date of notice in clause (a) above or on the date the Partial Release is to become effective.
(ie) Lender shall have received at any and all sums then due and payable under the Loan Documents, and Borrower shall have paid to Lender for such Partial Release, on or before the date of the Partial Release, an amount equal to the sum of (i) the Release Price, and (ii) any interest rate breakage costs then due and payable (if any) as determined by Lender with respect to the portion of the principal so prepaid.
(f) Lender shall have received evidence satisfactory to Lender that, after giving effect to the applicable Partial Release, the Loan-to-Value Ratio of the Remaining Property is less than or equal to 25.12%.
(g) Lender shall have received evidence satisfactory to Lender that: (i) the portion of the Mortgaged Property not being released (the “Remaining Property”) and the Release Parcel are each comprised of one or more legal parcels lawfully created in compliance with all applicable legal requirements, including without limitation, those pertaining to subdivisions, plat, replats or other land divisions and (ii) the Remaining Property has the benefit of all utilities, easements, public and/or private streets, covenants, conditions and restrictions as may be necessary for the continued operation thereof in a manner satisfactory to Lender, including all ingress and egress to public rights-of-way which are necessary for the legal and efficient operation of the Mortgaged Property such that the Remaining Property is a separate, economically viable project and otherwise complies (and will comply after the Partial Release) with all applicable legal requirements and otherwise in a manner acceptable to Lender.
(h) Such Partial Release will not affect the priority of the lien or liens on the Remaining Property.
(i) Upon the recording of the Partial Release, Borrower shall use good faith and diligent efforts to cause the Release Parcel to constitute a separate tax lot with a separate tax assessment, independent of the Remaining Property, and shall in any event complete the foregoing no later than the end of the calendar year of the year of the Partial Release.
(j) At least ten (10) Business Days’ (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith) prior written notice requesting the release of the Released Property;
(ii) Borrower shall, in accordance with the provisions of Section 2.7(a) above, partially prepay the Loan in an amount equal to the Release Price or such other amounts as may be required to be prepaid in connection with such release under clause (vi) below (together with, without limitation, any Interest Shortfall (if applicable) and, with respect to any such payment in excess of the Free Prepayment Amount, the Prepayment Premium applicable thereto), or such greater amount as may be required to satisfy the Partial Release Test as set forth in clause (vi) below;
(iii) Intentionally Omitted;
(iv) Borrower shall submit to Lender, not less than ten (10) Business Days days prior to the date of such the Partial Release, Borrower shall deliver to Lender at Borrower’s expense the form of the partial release (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith), a release or assignment of lien (and related Loan Documents) for the Released Property for execution to be executed by ▇▇▇▇▇▇. Such ▇ (which form of release or assignment shall must be in a form appropriate in the State in which the Released Property is located and shall contain standard provisions, if any, protecting the rights of the releasing or assigning lenders. In addition, Borrower shall provide all other documentation in connection with such release or assignment as may be reasonably requested by ▇▇▇▇▇▇;
(v) Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender that the release of the Released Property will not violate any term or provision of any Major Lease, Property Document, PILOT Lease and/or PILOT Document, or Management Agreement in effect at the Remaining Property at form and substance).
(k) At the time of the release of the Released Property, in each case in any material respect, which evidence may take the form of a certification from Borrower contained in the Officer’s Certificate referenced in Section 2.10(a)(xiii) below;
(vi) As of the date of consummation of the Partial Release, after giving effect to the release of the Released Property from the lien of the related Security Instrument and the accordant partial prepayment of the Loan, the Debt Yield with respect to the Remaining Properties shall be equal to or greater than the Closing Date Debt Yield (such test, the “Partial Release Test”); provided that with respect to a release in connection with a sale to a third-party, unrelated to any Borrower, Guarantor, Sponsor, or any Affiliate thereof on a -51- bona fide arm’s-length basis, at market pricing based on a market process, if the Partial Release Test would not be satisfied after giving effect to the release of the Released Property and payment of the Release Price, then such Partial Release shall be permitted upon payment of a release price equal to the greater of (1) one hundred percent (100%) of the net sales proceeds from the disposition of such Released Property (net of reasonable and customary closing costs payable to third parties in connection with the disposition of such Released Property) and (2) the Release Price for such Released Property; provided, further, that, notwithstanding the foregoing, Borrower shall also have the right to satisfy the Partial Release Test by making an additional prepayment of the Debt, in accordance with the terms and conditions of Section 2.7(a) hereof (including, without limitation, payment of any applicable Interest Shortfall, Breakage Costs, and/or Prepayment Premium), in an amount which, when applied to the repayment of the Debt, together with the applicable Release Price is sufficient such that the Partial Release Test is satisfied. Upon request from ▇▇▇▇▇▇, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s calculation of the Debt Yield with respect to the Remaining Properties;
(vii) Borrower shall pay all recording charges, filing fees, taxes or other out-of-pocket expenses (including, without limitation, any mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the release of the Released Property;
(viii) Intentionally Omitted;
(ix) Intentionally Omitted;
(x) In the event that the Released Property is the last Individual Property owned by Borrower Interest Rate Cap Party, Borrower Interest Rate Cap Party shall have assigned all of its right, title and interest in and to the Interest Rate Cap Agreement to another Individual Borrower that owns one or more Properties that shall remain subject to the lien of the Security Instrument after such release (such Borrower, the “Assignee Borrower”). In connection with (and as a condition precedent to) such assignment, Assignor (as defined in the Collateral Assignment of Interest Rate Cap Agreement and which, for the avoidance of doubt, may refer to Borrower Interest Rate Cap Party or any Assignee Borrower that has assumed the interests of such Assignor pursuant to and in accordance with this Agreement) and the other Borrowers (as applicable) shall execute and deliver to Lender (i) an assumption of the existing Collateral Assignment of Interest Rate Cap Agreement reasonably acceptable to Lender (or a new collateral assignment of interest rate cap agreement in form and substance substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date and otherwise reasonably acceptable to Lender) and (ii) an acknowledgment and consent to such assumption or new assignment executed by Counterparty and reasonably acceptable to Lender. Any Assignee Borrower may further assign its right, title and interest in and to the Interest Rate Cap Agreement to another Assignee Borrower, provided all of the conditions set forth in this Section 2.10(a)(x) are satisfied; and
(xi) Subsequent to such release, each remaining Individual Borrower and each SPE Component Entity shall continue to be a Single Purpose Entity pursuant to, and in accordance with, Article 5 hereof;
(xii) Borrower shall have paid or reimbursed Lender and/or Servicer for all reasonable out-of-pocket costs and expenses actually incurred by ▇▇▇▇▇▇ and/or Servicer in connection therewith (including, without limitation, including reasonable actually incurred attorneys’ attorney’s fees and -52- disbursements)expenses) and Borrower shall, at its sole cost and shall have paid expense, obtain and deliver to Lender a T-38 endorsement of the customary fees of Servicer Title Insurance in connection with such release, which fee shall (A) not exceed (x) $10,000.00 in the aggregate with respect form and content acceptable to the coordinated release (simultaneously or on or about the same date) of between one (1) and four (4) Individual Properties and (y) $20,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of five (5) or more Individual Properties; andLender.
(xiiil) Borrower shall deliver an Officer’s Certificate certifying have furnished evidence to Lender that all requirements set forth in this Section 2.10 have been satisfied.
(b) In connection with any release under this Section 2.10, in the event that such release would result in the release of all Individual Properties held by an Individual Borrower (each an “Unencumbered Borrower”), such Unencumbered Borrower shall be released by Lender from the obligations of the Loan Documents, except with respect to those obligations that are expressly provided herein to survive repayment of the Loan. In connection with a release or cancellation of each Unencumbered Borrower, it has contributed ▇▇▇▇▇▇ agrees to deliver (i) a UCC-3 Financing Statement termination or amendment releasing ▇▇▇▇▇▇’s security interest in the collateral pledged to Lender relating to each Unencumbered Borrower, and Equity (ii) instruments executed by Lender reasonably necessary to evidence the release or cancellation of each Unencumbered Borrower from its obligations under the Loan Documents. All reasonable out-of-pocket costs and expenses actually incurred by Lender in connection with such release shall be paid by BorrowerSubsequent).
Appears in 1 contract
Sources: Construction Loan Agreement (Stratus Properties Inc)
Partial Release. Provided (a1) Provided no Event of Default shall have occurred and be continuing and (other than with respect to a Default Release)2) the Partial Release Condition shall be satisfied, Borrower shall have the right at any time prior to the Maturity Date to obtain the release (a the “Partial Release”) of one or more any of the Individual Properties (each such released Individual Property, the “Released Property”, and the Individual Properties remaining encumbered by the Security Instrument, the “Remaining Properties”) from the lien of the applicable Security Instrument thereon (and related Loan Documents) and the release of the applicable Individual Borrower’s obligations under the Loan Documents with respect to such Released Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions precedent:
(ia) Borrower shall provide Lender shall have received at least ten with thirty (1030) Business Days’ (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith) days prior written notice requesting the release of the Released Propertyproposed Partial Release (the date of Lender’s receipt of such notice shall be referred to herein as a the “Partial Release Notice Date”);
(ii) Borrower shall, in accordance with the provisions of Section 2.7(a) above, partially prepay the Loan in an amount equal to the Release Price or such other amounts as may be required to be prepaid in connection with such release under clause (vi) below (together with, without limitation, any Interest Shortfall (if applicable) and, with respect to any such payment in excess of the Free Prepayment Amount, the Prepayment Premium applicable thereto), or such greater amount as may be required to satisfy the Partial Release Test as set forth in clause (vi) below;
(iii) Intentionally Omitted;
(ivb) Borrower shall submit to Lender, not less than ten (10) Business Days days prior to the date of such release (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith)Partial Release, a release or assignment of lien (and related Loan Documents) for the Released Property for execution by ▇▇▇▇▇▇Lender. Such release or assignment shall be in a form appropriate in the State each jurisdiction in which the Released Property is located and shall contain standard provisions, if any, protecting the rights of the releasing or assigning lendersLender. In addition, Borrower shall provide all other documentation as may be required to satisfy the prudent lender standard in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will effect such release in accordance with the terms of this Agreement, and (iii) will not impair or assignment otherwise adversely affect the liens, security interests and other rights of Lender under the Loan Documents not being released (or as may be reasonably requested by ▇▇▇▇▇▇to the parties to the Loan Documents and Properties subject to the Loan Documents not being released);
(vc) The Released Property shall be conveyed to a Person other than Borrower or an Affiliate of Borrower;
(d) Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender that (A) partially prepay the release Debt in accordance with Section 9 of the Released Property will not violate any term or provision of any Major Lease, Property Document, PILOT Lease and/or PILOT Document, or Management Agreement Note in effect at the Remaining Property at the time of the release of the Released Property, in each case in any material respect, which evidence may take the form of a certification from Borrower contained in the Officer’s Certificate referenced in Section 2.10(a)(xiii) below;
(vi) As of the date of consummation of the Partial Release, after giving effect to the release of the Released Property from the lien of the related Security Instrument and the accordant partial prepayment of the Loan, the Debt Yield with respect to the Remaining Properties shall be equal to or greater than the Closing Date Debt Yield (such test, the “Partial Release Test”); provided that with respect to a release in connection with a sale to a third-party, unrelated to any Borrower, Guarantor, Sponsor, or any Affiliate thereof on a -51- bona fide arm’s-length basis, at market pricing based on a market process, if the Partial Release Test would not be satisfied after giving effect to the release of the Released Property and payment of the Release Price, then such Partial Release shall be permitted upon payment of a release price an amount equal to the greater of (1i) one hundred percent (100%) 125% of the net sales Allocated Loan Amount for the Released Property; or (ii) 90% of the proceeds from the disposition sale of such the Released Property (net the “Release Amount”), (B) unless such prepayment is tendered on a Payment Date, pay to Lender an amount equal to the interest that would have accrued on the amount being prepaid for the full Accrual Period had the prepayment not been made and (C) pay to Lender the applicable Yield Maintenance Amount to the extent that such prepayment occurs at any time other than during the Open Prepayment Period. Any portion of reasonable the Release Amount applied to the principal amount of the Debt in accordance herewith shall be applied (i) first, to reduce the Allocated Loan Amount attributable to the Released Property to zero and customary closing costs payable (ii) second, pro rata to third parties reduce the Allocated Loan Amounts of each of the other remaining Individual Properties;
(e) The Partial Release shall be permitted under REMIC Requirements in effect as of each of (I) the Partial Release Notice Date and (II) the consummation of the Partial Release;
(f) If required by Lender, Lender shall have received confirmation in writing from each of the applicable Rating Agencies to the effect that such release will not result in a downgrade, withdrawal or qualification of the respective ratings in effect immediately prior to such Partial Release for the Securities issued in connection with the disposition of such Released PropertySecuritization which are then outstanding;
(g) and (2) the Release Price for such Released Property; provided, further, that, notwithstanding the foregoing, Borrower shall also have the right delivered evidence satisfactory to satisfy the Partial Release Test by making an additional prepayment of the Debt, Lender that Mezzanine Borrower is in accordance compliance with the terms of the Mezzanine Loan Agreement, including its agreement to deliver funds into the Mezzanine Collection Account upon receipt of the Release Amount; and
(h) Borrower shall (A) deliver to Lender an opinion of counsel acceptable the Rating Agencies (issued by counsel acceptable to the Rating Agencies) with respect to satisfaction of the REMIC Requirements and conditions with respect to such other matters as may be required by Lender and (B) pay all of Section 2.7(a) hereof (Lender’s reasonable costs and expenses and the costs and expenses of the Rating Agencies in connection with the Partial Release, including, without limitation, payment of any applicable Interest Shortfall, Breakage Costs, and/or Prepayment Premium), in an amount which, when applied to the repayment of the Debt, together with the applicable Release Price is sufficient such that the Partial Release Test is satisfied. Upon request from ▇▇▇▇▇▇, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s calculation of the Debt Yield with respect to the Remaining Properties;
(vii) Borrower shall pay all recording charges, filing counsel fees, taxes or other out-of-pocket expenses (including, without limitation, any mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the release of the Released Property;
(viii) Intentionally Omitted;
(ix) Intentionally Omitted;
(x) In the event that the Released Property is the last Individual Property owned by Borrower Interest Rate Cap Party, Borrower Interest Rate Cap Party shall have assigned all of its right, title and interest in and to the Interest Rate Cap Agreement to another Individual Borrower that owns one or more Properties that shall remain subject to the lien of the Security Instrument after such release (such Borrower, the “Assignee Borrower”). In connection with (and as a condition precedent to) such assignment, Assignor (as defined in the Collateral Assignment of Interest Rate Cap Agreement and which, for the avoidance of doubt, may refer to Borrower Interest Rate Cap Party or any Assignee Borrower that has assumed the interests of such Assignor pursuant to and in accordance with this Agreement) and the other Borrowers (as applicable) shall execute and deliver to Lender (i) an assumption of the existing Collateral Assignment of Interest Rate Cap Agreement reasonably acceptable to Lender (or a new collateral assignment of interest rate cap agreement in form and substance substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date and otherwise reasonably acceptable to Lender) and (ii) an acknowledgment and consent to such assumption or new assignment executed by Counterparty and reasonably acceptable to Lender. Any Assignee Borrower may further assign its right, title and interest in and to the Interest Rate Cap Agreement to another Assignee Borrower, provided all of the conditions set forth in this Section 2.10(a)(x) are satisfied; and
(xi) Subsequent to such release, each remaining Individual Borrower and each SPE Component Entity shall continue to be a Single Purpose Entity pursuant to, and in accordance with, Article 5 hereof;
(xii) Borrower shall have paid or reimbursed Lender and/or Servicer for all reasonable out-of-pocket costs and expenses actually incurred by ▇▇▇▇▇▇ and/or Servicer (including, without limitation, reasonable actually incurred attorneys’ fees and -52- disbursements), and shall have paid the customary fees of Servicer in connection with such release, which fee shall (A) not exceed (x) $10,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of between one (1) and four (4) Individual Properties and (y) $20,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of five (5) or more Individual Properties; and
(xiii) Borrower shall deliver an Officer’s Certificate certifying that all requirements set forth in this Section 2.10 have been satisfied.
(b) In connection with any release under this Section 2.10, in the event that such release would result in the release of all Individual Properties held by an Individual Borrower (each an “Unencumbered Borrower”), such Unencumbered Borrower shall be released by Lender from the obligations of the Loan Documents, except with respect to those obligations that are expressly provided herein to survive repayment of the Loan. In connection with a release or cancellation of each Unencumbered Borrower, ▇▇▇▇▇▇ agrees to deliver (i) a UCC-3 Financing Statement termination or amendment releasing ▇▇▇▇▇▇’s security interest in the collateral pledged to Lender relating to each Unencumbered Borrower, and (ii) instruments executed by Lender reasonably necessary to evidence the release or cancellation of each Unencumbered Borrower from its obligations under the Loan Documents. All reasonable out-of-pocket costs and expenses actually incurred by Lender in connection with such release shall be paid by Borrower.
Appears in 1 contract
Partial Release. (a) Provided no Event of Default shall have has occurred and be continuing (other than with respect to a Default Release)is continuing, Borrower shall have the right at any time prior to the Maturity Date to obtain the a release (a an “Partial Out-Parcel Release”) of one or more Individual Properties (each such released Individual Property, the “Released Property”, and the Individual Properties remaining encumbered by the Security Instrument, the “Remaining Properties”) Out-Parcel from the lien of the Security Instrument thereon Mortgage upon compliance with (and related Loan Documentsor waiver by Lender of) and the release of the applicable Individual Borrower’s obligations under the Loan Documents with respect to such Released Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions precedentterms and conditions:
(ia) Borrower shall give Lender shall have received at least ten thirty (1030) Business Days’ days, but no more than ninety (or 90) days, prior written notice of its request to obtain an Out-Parcel Release;
(b) Borrower shall prepay the loan in accordance with Section 2.3.4 on a shorter period pro-rata basis with the Mezzanine Loan, such that the aggregate principal balance of time if permitted the Loan and the Mezzanine Loan following the Out-Parcel Release is less than seventy-five percent (75%) of the value of the remaining Property, as determined by Lender in its sole discretion exercised in good faith) prior written notice requesting reasonable discretion. In connection with any such determination, Lender shall have the release right to require Borrower to deliver at Borrower’s own cost, an updated appraisal of the Released Propertyremaining Property in form and substance reasonably acceptable to Lender;
(c) The Pro Forma Debt Service Coverage Ratio for the Property following the Out-Parcel Release shall be greater than 1.20:1.00 (after giving effect to any prepayments made pursuant to Section 2.4.1(b) hereof);
(d) Borrower shall provide evidence reasonably acceptable to a prudent mortgage loan lender that upon an Out-Parcel Release (i) the balance of the Property shall continue to be subject to the lien of the Mortgage, (ii) Borrower shallingress and egress to and from the portion of the Property remaining subject to the lien of the Mortgage will not be terminated or restricted as a result of the Out-Parcel Release, (iii) the Out-Parcel Release shall not cause or result in accordance with a violation of any of the provisions of any of the Leases, and (iv) the remaining Property shall be in compliance with all applicable Legal Requirements;
(e) Borrower shall provide Lender with an endorsement to Lender’s Title Insurance Policy insuring that the Out-Parcel Release shall not adversely affect or impair the title insurance provided in the Title Insurance Policy and insuring the easements referenced in Section 2.7(a2.4.1(k) abovehereof;
(f) Borrower shall provide Lender with such surveys, partially prepay descriptions, title insurance endorsements, computations of acreage and other information as Lender may in its reasonable discretion require in connection with the Loan in an amount equal Out-Parcel Release;
(g) If required by any Legal Requirement, Borrower shall obtain all subdivisions and zoning approvals with respect to the Release Price or such other amounts portion of the Property remaining subject to the lien of the Mortgage as may be reasonably required by Lender to be prepaid in connection with such release under clause (vi) below (together with, without limitation, any Interest Shortfall (if applicable) and, with respect to any such payment in excess ensure that the parcel being released and the portion of the Free Prepayment AmountProperty remaining subject to the lien of the Mortgage (the “Remaining Parcel”) shall be independent of each other for all building, the Prepayment Premium applicable thereto)zoning, or such greater amount as may be required to satisfy the Partial Release Test as set forth in clause (vi) belowsubdivision and taxing purposes;
(iii) Intentionally Omitted;
(ivh) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith), a release or assignment of lien (and related Loan Documents) for the Released Property applicable Out-Parcel for execution by ▇▇▇▇▇▇Lender. Such release or assignment shall be in a form appropriate in the State in which the Released Property is located and shall contain that contains standard provisions, if any, protecting the rights of the releasing or assigning lenders. In addition, Borrower shall provide all other documentation in connection with such release or assignment as may be reasonably requested by ▇▇▇▇▇▇lender;
(vi) Borrower Lender shall have delivered to Lender received evidence reasonably satisfactory to Lender that following the Out-Parcel Release, the provisions of Section 5.13 shall remain true and correct in all material respects;
(j) Borrower has complied with any requirements applicable to such release of the Released Out-Parcel contained in any of the Leases, reciprocal easement agreements, operating agreements, parking agreements or other similar agreements affecting the Property will and the release does not violate any term of the provisions of such documents in any respect that would result in a termination (or provision of give any Major Lease, Property Document, PILOT Lease and/or PILOT Documentother party thereto the right to terminate), or Management Agreement extinguishment or other loss of material rights of Borrower or in effect at the Remaining Property at the time of the release of the Released Property, a material increase in each case in any material respect, which evidence may take the form of a certification from Borrower contained in the OfficerBorrower’s Certificate referenced in Section 2.10(a)(xiii) belowobligations under such documents;
(vik) As of the date of consummation of the Partial Release, after giving effect to the release of the Released Property from the lien of the related Security Instrument and the accordant partial prepayment of the Loan, the Debt Yield with respect to the Remaining Properties shall be equal to or greater than the Closing Date Debt Yield (such test, the “Partial Release Test”); provided that with respect to a release in connection with a sale to a third-party, unrelated to any Borrower, Guarantor, Sponsor, or any Affiliate thereof on a -51- bona fide arm’s-length basis, at market pricing based on a market process, if the Partial Release Test would not be satisfied after giving effect to the release of the Released Property and payment of the Release Price, then such Partial Release shall be permitted upon payment of a release price equal to the greater of (1) one hundred percent (100%) of the net sales proceeds from the disposition of such Released Property (net of reasonable and customary closing costs payable to third parties in connection with the disposition of such Released Property) and (2) the Release Price for such Released Property; provided, further, that, notwithstanding the foregoing, Borrower shall also have the right to satisfy the Partial Release Test by making an additional prepayment of the Debt, in accordance with the terms and conditions of Section 2.7(a) hereof (including, without limitation, payment of any applicable Interest Shortfall, Breakage Costs, and/or Prepayment Premium), in an amount which, when applied to the repayment of the Debt, together with the applicable Release Price is sufficient such that the Partial Release Test is satisfied. Upon request from ▇▇▇▇▇▇, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s calculation copies of each proposed permanent easement, cross easement and mutual or non-exclusive easement for ingress, egress, access, pedestrian walkways, parking, traffic flow, utilities and services being shared by the portion of the Debt Yield with respect to property being released and the Remaining Properties;
(vii) Borrower shall pay all recording charges, filing fees, taxes or other out-of-pocket expenses (including, without limitation, any mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the release portion of the Released Property;
(viii) Intentionally Omitted;
(ix) Intentionally Omitted;
(x) In the event that the Released Property is the last Individual Property owned by Borrower Interest Rate Cap Party, Borrower Interest Rate Cap Party shall have assigned all of its right, title and interest in and to the Interest Rate Cap Agreement to another Individual Borrower that owns one or more Properties that shall remain remaining subject to the lien of the Security Instrument after such release (such Borrower, the “Assignee Borrower”). In connection with (and as a condition precedent to) such assignment, Assignor (as defined in the Collateral Assignment of Interest Rate Cap Agreement and which, Mortgage which may be required by any governmental authority or which are necessary for the avoidance of doubt, may refer to Borrower Interest Rate Cap Party or any Assignee Borrower that has assumed the interests operation of such Assignor pursuant to and in accordance with this Agreement) and the other Borrowers (as applicable) shall execute and deliver to Lender (i) an assumption parcels, all of the existing Collateral Assignment of Interest Rate Cap Agreement reasonably acceptable to Lender (or a new collateral assignment of interest rate cap agreement in form and substance substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date and otherwise reasonably acceptable which are subject to Lender) and (ii) an acknowledgment and consent to such assumption or new assignment executed by Counterparty and reasonably acceptable to Lender. Any Assignee Borrower may further assign its right, title and interest in and to the Interest Rate Cap Agreement to another Assignee Borrower, provided all of the conditions set forth in this Section 2.10(a)(x) are satisfied; and
(xi) Subsequent to such release, each remaining Individual Borrower and each SPE Component Entity shall continue to be a Single Purpose Entity pursuant to, and in accordance with, Article 5 hereof’s reasonable approval;
(xiil) Borrower shall have paid or reimbursed Lender and/or Servicer for pay all of Lender’s reasonable out-of-pocket costs and expenses actually incurred by ▇▇▇▇▇▇ and/or Servicer (includingexpenses, without limitation, including reasonable actually incurred attorneys’ counsel fees and -52- disbursements), and shall have paid the customary fees of Servicer disbursements incurred in connection with such releasethe Out-Parcel Release from the lien of the Mortgage, which fee shall (A) not exceed (x) $10,000.00 the review and approval of the documents and information required to be delivered in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of between one (1) connection therewith and four (4) Individual Properties all recording fees and (y) $20,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of five (5) or more Individual Properties; andtitle charges;
(xiiim) Borrower shall deliver an Officer’s Certificate provide Lender with a certificate certifying that all the requirements set forth in this Section 2.10 2.4.1 have been satisfied;
(n) If a Securitization has occurred, if required by a Rating Agency, Borrower shall be required to provide Lender with a legal opinion (standard in commercial lending transactions similar to the Loan and subject to customary qualifications, assumptions and exceptions) that the tax qualification and status of the REMIC will not be adversely affected or impaired as a result of the release if each of the requirements of this Section 2.4.1 have been satisfied. The term REMIC, as used herein, shall mean a real estate mortgage investment conduit within the meaning of Section 860D of the Internal Revenue Code of 1986, as amended, and the related Treasury Department regulations, including temporary regulations; and
(o) All of the provisions of Section 2.4.1 of the Mezzanine Loan Agreement have been satisfied.
(b) In connection with any release under this Section 2.10, in the event that such release would result in the release of all Individual Properties held by an Individual Borrower (each an “Unencumbered Borrower”), such Unencumbered Borrower shall be released by Lender from the obligations of the Loan Documents, except with respect to those obligations that are expressly provided herein to survive repayment of the Loan. In connection with a release or cancellation of each Unencumbered Borrower, ▇▇▇▇▇▇ agrees to deliver (i) a UCC-3 Financing Statement termination or amendment releasing ▇▇▇▇▇▇’s security interest in the collateral pledged to Lender relating to each Unencumbered Borrower, and (ii) instruments executed by Lender reasonably necessary to evidence the release or cancellation of each Unencumbered Borrower from its obligations under the Loan Documents. All reasonable out-of-pocket costs and expenses actually incurred by Lender in connection with such release shall be paid by Borrower.
Appears in 1 contract
Sources: Loan Agreement (Behringer Harvard Opportunity REIT I, Inc.)
Partial Release. (a) Provided no Event of Default shall have has occurred and be continuing (other than with respect to a Default Release)is continuing, Borrower shall have the right at any time prior to the Maturity Date cause Mortgage Borrower to obtain the a release (a an “Partial Out-Parcel Release”) of one or more Individual Properties (each such released Individual Property, the “Released Property”, and the Individual Properties remaining encumbered by the Security Instrument, the “Remaining Properties”) Out-Parcel from the lien of the Security Instrument thereon Mortgage upon compliance with (or waiver by Lender of) the following terms and related conditions:
(a) Borrower shall give Lender at least thirty (30) days, but no more than ninety (90) days, prior written notice of its request to obtain an Out-Parcel Release;
(b) Borrower shall prepay the loan in accordance with Section 2.3.4 on a pro-rata basis with the Mortgage Loan, such that the aggregate principal balance of the Loan Documents) and the release Mortgage Loan following the Out-Parcel Release is less than seventy-five percent (75%) of the applicable Individual value of the remaining Property, as determined by Lender in its reasonable discretion. In connection with any such determination, Lender shall have the right to require Borrower to deliver at Borrower’s obligations under own cost, an updated appraisal of the Loan Documents remaining Property in form and substance reasonably acceptable to Lender;
(c) The Pro Forma Debt Service Coverage Ratio for the Property following the Out-Parcel Release shall be greater than 1.20:1.00 (after giving effect to any prepayments made pursuant to Section 2.4.1(b) hereof);
(d) Borrower shall provide evidence reasonably acceptable to a prudent institutional lender that upon an Out-Parcel Release (i) the balance of the Property shall continue to be subject to the lien of the Mortgage, (ii) ingress and egress to and from the portion of the Property remaining subject to the lien of the Mortgage will not be terminated or restricted as a result of the Out-Parcel Release, (iii) the Out-Parcel Release shall not cause or result in a violation of any of the provisions of any of the Leases, and (iv) the remaining Property shall be in compliance with all applicable Legal Requirements;
(e) Borrower shall provide Lender with an endorsement to Owner’s Title Insurance Policy insuring that the Out-Parcel Release shall not adversely affect or impair the title insurance provided in the Owner’s Title Insurance Policy and insuring the easements referenced in Section 2.4.1(k) hereof;
(f) Borrower shall provide Lender with such surveys, descriptions, title insurance endorsements, computations of acreage and other information as Lender may in its reasonable discretion require in connection with the Out-Parcel Release;
(g) If required by any Legal Requirement, Borrower shall cause Mortgage Borrower to obtain all subdivisions and zoning approvals with respect to such Released the portion of the Property remaining subject to the lien of the Mortgage as may be reasonably required by Lender to ensure that the parcel being released and the portion of the Property remaining subject to the lien of the Mortgage (other than those expressly stated to survive), upon the satisfaction “Remaining Parcel”) shall be independent of each of the following conditions precedent:other for all building, zoning, subdivision and taxing purposes;
(h) [Intentionally Omitted];
(i) Lender shall have received at least ten (10) Business Days’ (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith) prior written notice requesting the release of the Released Property;
(ii) Borrower shall, in accordance with the provisions of Section 2.7(a) above, partially prepay the Loan in an amount equal to the Release Price or such other amounts as may be required to be prepaid in connection with such release under clause (vi) below (together with, without limitation, any Interest Shortfall (if applicable) and, with respect to any such payment in excess of the Free Prepayment Amount, the Prepayment Premium applicable thereto), or such greater amount as may be required to satisfy the Partial Release Test as set forth in clause (vi) below;
(iii) Intentionally Omitted;
(iv) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith), a release or assignment of lien (and related Loan Documents) for the Released Property for execution by ▇▇▇▇▇▇. Such release or assignment shall be in a form appropriate in the State in which the Released Property is located and shall contain standard provisions, if any, protecting the rights of the releasing or assigning lenders. In addition, Borrower shall provide all other documentation in connection with such release or assignment as may be reasonably requested by ▇▇▇▇▇▇;
(v) Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender that following the Out-Parcel Release, the provisions of Section 5.13 shall remain true and correct in all material respects;
(j) Borrower shall have caused Mortgage Borrower to comply with any requirements applicable to such release of the Released Out-Parcel contained in any of the Leases, reciprocal easement agreements, operating agreements, parking agreements or other similar agreements affecting the Property will and the release does not violate any term of the provisions of such documents in any respect that would result in a termination (or provision of give any Major Lease, Property Document, PILOT Lease and/or PILOT Documentother party thereto the right to terminate), or Management Agreement extinguishment or other loss of material rights of Mortgage Borrower or in effect at the Remaining Property at the time of the release of the Released Property, a material increase in each case in any material respect, which evidence may take the form of a certification from Borrower contained in the OfficerMortgage Borrower’s Certificate referenced in Section 2.10(a)(xiii) belowobligations under such documents;
(vik) As of the date of consummation of the Partial Release, after giving effect to the release of the Released Property from the lien of the related Security Instrument and the accordant partial prepayment of the Loan, the Debt Yield with respect to the Remaining Properties shall be equal to or greater than the Closing Date Debt Yield (such test, the “Partial Release Test”); provided that with respect to a release in connection with a sale to a third-party, unrelated to any Borrower, Guarantor, Sponsor, or any Affiliate thereof on a -51- bona fide arm’s-length basis, at market pricing based on a market process, if the Partial Release Test would not be satisfied after giving effect to the release of the Released Property and payment of the Release Price, then such Partial Release shall be permitted upon payment of a release price equal to the greater of (1) one hundred percent (100%) of the net sales proceeds from the disposition of such Released Property (net of reasonable and customary closing costs payable to third parties in connection with the disposition of such Released Property) and (2) the Release Price for such Released Property; provided, further, that, notwithstanding the foregoing, Borrower shall also have the right to satisfy the Partial Release Test by making an additional prepayment of the Debt, in accordance with the terms and conditions of Section 2.7(a) hereof (including, without limitation, payment of any applicable Interest Shortfall, Breakage Costs, and/or Prepayment Premium), in an amount which, when applied to the repayment of the Debt, together with the applicable Release Price is sufficient such that the Partial Release Test is satisfied. Upon request from ▇▇▇▇▇▇, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s calculation copies of each proposed permanent easement, cross easement and mutual or non-exclusive easement for ingress, egress, access, pedestrian walkways, parking, traffic flow, utilities and services being shared by the portion of the Debt Yield with respect to property being released and the Remaining Properties;
(vii) Borrower shall pay all recording charges, filing fees, taxes or other out-of-pocket expenses (including, without limitation, any mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the release portion of the Released Property;
(viii) Intentionally Omitted;
(ix) Intentionally Omitted;
(x) In the event that the Released Property is the last Individual Property owned by Borrower Interest Rate Cap Party, Borrower Interest Rate Cap Party shall have assigned all of its right, title and interest in and to the Interest Rate Cap Agreement to another Individual Borrower that owns one or more Properties that shall remain remaining subject to the lien of the Security Instrument after such release (such Borrower, the “Assignee Borrower”). In connection with (and as a condition precedent to) such assignment, Assignor (as defined in the Collateral Assignment of Interest Rate Cap Agreement and which, Mortgage which may be required by any governmental authority or which are necessary for the avoidance of doubt, may refer to Borrower Interest Rate Cap Party or any Assignee Borrower that has assumed the interests operation of such Assignor pursuant to and in accordance with this Agreement) and the other Borrowers (as applicable) shall execute and deliver to Lender (i) an assumption parcels, all of the existing Collateral Assignment of Interest Rate Cap Agreement reasonably acceptable to Lender (or a new collateral assignment of interest rate cap agreement in form and substance substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date and otherwise reasonably acceptable which are subject to Lender) and (ii) an acknowledgment and consent to such assumption or new assignment executed by Counterparty and reasonably acceptable to Lender. Any Assignee Borrower may further assign its right, title and interest in and to the Interest Rate Cap Agreement to another Assignee Borrower, provided all of the conditions set forth in this Section 2.10(a)(x) are satisfied; and
(xi) Subsequent to such release, each remaining Individual Borrower and each SPE Component Entity shall continue to be a Single Purpose Entity pursuant to, and in accordance with, Article 5 hereof’s reasonable approval;
(xiil) Borrower shall have paid or reimbursed Lender and/or Servicer for pay all of Lender’s reasonable out-of-pocket costs and expenses actually incurred by ▇▇▇▇▇▇ and/or Servicer (includingexpenses, without limitation, including reasonable actually incurred attorneys’ counsel fees and -52- disbursements), and shall have paid the customary fees of Servicer disbursements incurred in connection with such releasethe Out-Parcel Release from the lien of the Mortgage, which fee shall (A) not exceed (x) $10,000.00 the review and approval of the documents and information required to be delivered in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of between one (1) connection therewith and four (4) Individual Properties all recording fees and (y) $20,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of five (5) or more Individual Properties; andtitle charges;
(xiiim) Borrower shall deliver an Officer’s Certificate provide Lender with a certificate certifying that all the requirements set forth in this Section 2.10 2.4.1 have been satisfied; and
(n) All of the provisions of Section 2.4.1 of the Mortgage Loan Agreement have been satisfied.
(b) In connection with any release under this Section 2.10, in the event that such release would result in the release of all Individual Properties held by an Individual Borrower (each an “Unencumbered Borrower”), such Unencumbered Borrower shall be released by Lender from the obligations of the Loan Documents, except with respect to those obligations that are expressly provided herein to survive repayment of the Loan. In connection with a release or cancellation of each Unencumbered Borrower, ▇▇▇▇▇▇ agrees to deliver (i) a UCC-3 Financing Statement termination or amendment releasing ▇▇▇▇▇▇’s security interest in the collateral pledged to Lender relating to each Unencumbered Borrower, and (ii) instruments executed by Lender reasonably necessary to evidence the release or cancellation of each Unencumbered Borrower from its obligations under the Loan Documents. All reasonable out-of-pocket costs and expenses actually incurred by Lender in connection with such release shall be paid by Borrower.
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Behringer Harvard Opportunity REIT I, Inc.)
Partial Release. Upon not less than sixty (a60) Provided no Event of Default days prior written notice from Borrower, Lender shall have occurred and be continuing (other than with respect to a Default Release), Borrower shall have the right at any time prior to the Maturity Date to obtain the release (a “Partial Property Release”) of one or more Individual Properties (each such released Individual Property, the “Released Property”, and the Individual Properties remaining encumbered by the Security Instrument, the “Remaining Properties”Property(ies) from the lien of the Security Instrument thereon (and related Loan Documents) and the release of the applicable Individual Borrower’s obligations under the Loan Documents with respect to such (each, a “Released Property (other than those expressly stated to surviveProperty”), upon the satisfaction of each of the following conditions precedent:
(i) Lender shall have received at least ten (10) Business Days’ (or a shorter period of time if permitted as determined by Lender in its sole discretion exercised discretion) of all of the following terms and conditions:
(a) At the time of the request and the time of the proposed Property Release, there shall be no default under the Documents, and there shall exist no condition or state of facts which with the passage of time or the giving of notice or both, would constitute a default under the Documents;
(b) Any such request may be made no sooner than nine (9) months after the Closing, and such written request must be received no later than twelve (12) months prior to the maturity date of the Loan;
(c) For each Released Property, Borrower shall have paid to Lender the “Release Price”, which shall be equal to (i) 1.20% of the Allocated Loan Amount applicable to the Released Property (such amount shall herein be called the “Principal Payment Amount”) plus (ii) the applicable Prepayment Premium (based on the Principal Payment Amount) plus (iii) all accrued interest with respect to the allocated loan amount applicable to the Released CENTRAL\31200109.7 -28- Property (any such allocated loan amount being referred to as an “Individual Loan”) and all accrued and unpaid charges with respect to the Loan;
(d) The Principal Payment Amount shall be applied to pay in good faith) prior written notice requesting full the release of principal balance due with respect to the Individual Loan applicable to the Released Property;
(ii) Borrower shall, and Lender, in accordance with its discretion, shall apply the provisions portion of Section 2.7(a) above, partially prepay the Loan in an amount equal to the Release Price or such other amounts as may be required to be prepaid in connection with such release under clause (vi) below (together with, without limitation, any Interest Shortfall (if applicable) and, with respect to any such payment Principal Payment Amount which is in excess of the Free Prepayment Amount, then outstanding principal balance of the Prepayment Premium Individual Loan applicable thereto), or such greater amount as may be required to satisfy the Partial Release Test as set forth in clause (vi) belowReleased Property to one of more of the other Individual Loans applicable to the other Individual Properties;
(iiie) Intentionally Omitted;
(iv) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith), a release or assignment of lien (and related Loan Documents) for the Released Property for execution by ▇▇▇▇▇▇. Such release or assignment shall be in a form appropriate in the State in which the Released Property is located and shall contain standard provisions, if any, protecting the rights of the releasing or assigning lenders. In addition, Borrower shall provide all other documentation in connection with such release or assignment as may be reasonably requested by ▇▇▇▇▇▇;
(v) Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender determined that following the release of the Released Property will not violate any term or provision of any Major Lease, Property Document, PILOT Lease and/or PILOT Document, or Management Agreement in effect at the Remaining Property at the time of the release of the Released Property, in each case in any material respect, which evidence may take the form of a certification from Borrower contained in the Officer’s Certificate referenced in Section 2.10(a)(xiii) below;
(vi) As of the date of consummation of the Partial Release, after giving effect to the release of the Released Property from the lien of the related Security Instrument and the accordant partial prepayment of the Loan, the Debt Yield Service Coverage Ratio, calculated with respect to the Remaining Properties remaining Property (excluding the Released Property) shall be equal to or greater than the Closing Date Debt Yield (such test, the “Partial Release Test”); provided that with respect to a release in connection with a sale to a third-party, unrelated to any Borrower, Guarantor, Sponsor, or any Affiliate thereof on a -51- bona fide arm’s-length basis, at market pricing based on a market process, if the Partial Release Test would not be satisfied after giving effect to the release of the Released Property and payment of the Release Price, then such Partial Release shall be permitted upon payment of a release price least equal to the greater of (1i) one hundred 2.00 to 1.00 or (ii) the Debt Service Coverage Ratio for the Loan immediately prior to the proposed Release (including the Released Property). In the event the Debt Service Coverage Ratio of the remaining Property (excluding the Released Property) is less than the required level, Borrower shall have the right, subject to payment of the applicable Prepayment Premium, to pay Lender the amount necessary to increase the Debt Service Coverage Ratio of the remaining Property (excluding the Released Property) to the required level;
(f) Lender shall have determined that following the Property Release, the Loan to Value Ratio, calculated with respect to the remaining Property (excluding the Released Property), shall not exceed the lesser of (i) forty-five percent (10045%), or (ii) the Loan to Value Ratio of the net sales proceeds from the disposition of such Released Property (net including the Released Property) immediately prior to the proposed Release. In the event the Loan to Value Ratio of reasonable the remaining Property (excluding the Released Property) exceeds the required level, Borrower shall have the right, subject to payment of the Prepayment Premium, to pay Lender the amount necessary to reduce the Loan to Value Ratio of the remaining Property (excluding the Released Property) to the required level;
(g) At the time the Borrower makes its written request to Lender for a Property Release, Borrower shall pay to Lender a non-refundable administrative fee of $20,000.00. Such non-refundable administrative fee shall be deemed earned by Lender upon its receipt by Lender and customary shall not be applied to the Principal Payment Amount, the Prepayment Premium, or any other amount due under this provision;
(h) Whether or not the Property Release actually closes, Borrower shall pay to Lender all escrow, closing costs payable to third parties and recording charges and taxes including, but not limited to, the cost of preparing and delivering releases, any re-conveyance documentation and modifications of the Documents, including legal fees and costs, the cost of any title insurance endorsements that Lender may require, any expenses incurred by the Lender in connection with the disposition of such Released Property) Property Release, and (2) any sums then due and payable under the Release Price for such Released Property; provided, further, that, notwithstanding the foregoing, Borrower shall also have the right to satisfy the Partial Release Test by making an additional prepayment of the Debt, in accordance with the terms and conditions of Section 2.7(a) hereof (including, without limitation, payment of any applicable Interest Shortfall, Breakage Costs, and/or Prepayment Premium), in an amount which, when applied to the repayment of the Debt, together with the applicable Release Price is sufficient such that the Partial Release Test is satisfied. Upon request from ▇▇▇▇▇▇, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s calculation of the Debt Yield with respect to the Remaining PropertiesDocuments;
(vii) Borrower shall pay all recording charges, filing fees, taxes or other out-of-pocket expenses (including, without limitation, any mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the release of the Released Property;
(viii) Intentionally Omitted;
(ix) Intentionally Omitted;
(x) In the event that the Released Property is the last Individual Property owned by Borrower Interest Rate Cap Party, Borrower Interest Rate Cap Party shall have assigned all of its right, title and interest in and to the Interest Rate Cap Agreement to another Individual Borrower that owns one or more Properties that shall remain subject to the lien of the Security Instrument after such release (such Borrower, the “Assignee Borrower”). In connection with (and as a condition precedent to) such assignment, Assignor (as defined in the Collateral Assignment of Interest Rate Cap Agreement and which, for the avoidance of doubt, may refer to Borrower Interest Rate Cap Party or any Assignee Borrower that has assumed the interests of such Assignor pursuant to and in accordance with this Agreement) and the other Borrowers (as applicable) shall execute and deliver to Lender (i) an assumption of the existing Collateral Assignment of Interest Rate Cap Agreement reasonably acceptable to Lender (or a new collateral assignment of interest rate cap agreement in form and substance substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date and otherwise reasonably acceptable to Lender) and (ii) an acknowledgment and consent to such assumption or new assignment executed by Counterparty and reasonably acceptable to Lender. Any Assignee Borrower may further assign its rightFollowing any Property Release, title and interest in and to the Interest Rate Cap Agreement to another Assignee Borrower, provided all of the conditions set forth in this Section 2.10(a)(x) are satisfied; and
(xi) Subsequent to such release, each remaining Individual Borrower and each SPE Component Entity shall continue to be a Single Purpose Entity pursuant to, and in accordance with, Article 5 hereof;
(xii) Borrower shall have paid or reimbursed Lender and/or Servicer for all reasonable out-of-pocket costs and expenses actually incurred by ▇▇▇▇▇▇ and/or Servicer (including, without limitation, reasonable actually incurred attorneys’ fees and -52- disbursements), and shall have paid the customary fees of Servicer in connection with such release, which fee shall (A) not exceed (x) $10,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of between one (1) one of the Birmingham, Alabama and four (4) Napa Valley, California Individual Properties and (y) $20,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of five (5) or more Individual Properties; and
(xiii) Borrower shall deliver an Officer’s Certificate certifying that all requirements set forth in this Section 2.10 have been satisfied.
(b) In connection with any release under this Section 2.10, in the event that such release would result in the release of all Individual Properties held by an Individual Borrower (each an “Unencumbered Borrower”), such Unencumbered Borrower shall be released by Lender from the obligations remain part of the Loan Documents, except with respect to those obligations that are expressly provided herein to survive repayment of the Loan. In connection with a release or cancellation of each Unencumbered Borrower, ▇▇▇▇▇▇ agrees to deliver (i) a UCC-3 Financing Statement termination or amendment releasing ▇▇▇▇▇▇’s security interest in the collateral pledged to Lender relating to each Unencumbered Borrowerremaining Property, and (ii) instruments executed by one of the Fort Lauderdale, Florida; and Miami, Florida shall remain part of the remaining Property; and
(j) Such other terms and conditions as Lender shall reasonably necessary require. CENTRAL\31200109.7 -29- Following each Property Release, Lender shall distribute to evidence Borrower any amounts held in the release or cancellation FF&E Reserve on a pro rata basis based on four percent (4%) of each Unencumbered Borrower from its obligations under the Loan Documents. All reasonable out-of-pocket costs gross revenues of the Release Property and expenses actually incurred by Lender in connection with such release shall be paid by Borrowerfour percent (4%) of the gross revenues of the remaining Property.
Appears in 1 contract
Partial Release. So long as the Borrower has not transferred the Property in accordance with Section 5.03 hereof and upon Borrower's written request, to be received with not less than sixty (a60) Provided no Event of Default days prior notice, Lender shall have occurred and be continuing release not more than two (other than with respect to a Default Release), Borrower shall have the right at any time prior to the Maturity Date to obtain the release (a “Partial Release”2) of one or more Individual Properties (each such released Individual Propertydefined below) (during any one loan year, but subject to the “Released Property”, and the Individual Properties remaining encumbered by the Security Instrument, the “Remaining Properties”cumulative limits set out below) from the lien of the Security Instrument thereon Documents (and related Loan Documents) and the release of the applicable Individual Borrower’s obligations under the Loan Documents with respect to such Released Property (other than those expressly stated to survive"Release Property"), upon the satisfaction of each of the following conditions precedentterms and conditions:
(ia) Lender At the time of the request and the time of the release, there shall have received at least ten (10) Business Days’ (be no Event of Default under the Documents, and there shall exist no condition or a shorter period state of facts which with the passage of time if permitted by Lender in its sole discretion exercised in good faith) prior written or the giving of notice requesting or both, would constitute an Event of Default under the release of the Released PropertyDocuments;
(iib) Borrower shall, in accordance with Any such request may be made beginning six (6) months after the provisions date of Section 2.7(athis Instrument and any such partial release must occur prior to the last six (6) above, partially prepay months of the Loan term;
(c) For purposes of this Section 10.01, each Release Property released shall consist of one of the Individual Properties (herein so called) as identified by either a street address or a complex name on Exhibit E attached hereto and by this reference made a part hereof;
(d) For each Release Property, Borrower shall have made the "Release Price" payment to Lender, in an amount equal to one hundred fifteen percent (115%) of the lesser of (i) the Allocated Loan Amount (as set forth on Exhibit E) applicable to the Release Property, or (ii) the subsequently reduced allocated Loan Amount as a result of the payments made under this subparagraph 10.01(d) and allocated under subparagraph 10.01(e) together with the applicable Prepayment Premium under the Note (based on the Release Price);
(e) The Release Price shall be applied against the Note and Borrower shall, in addition, pay all amounts due with respect to such Release Price with respect to interest thereon due to the date of payment, Prepayment Premium and costs and expenses. Lender shall apply the portion of the Release Price or such other amounts as may be required to be prepaid in connection with such release under clause (vibut specifically excluding any Prepayment Premium) below (together with, without limitation, any Interest Shortfall (if applicable) and, with respect to any such payment which is in excess of the Free Prepayment AmountAllocated Loan Amount to the Release Property on a pro rata basis to all of the remaining Allocated Loan Amounts (which shall, the Prepayment Premium applicable theretoas to subparagraph 10.01(d), or such greater reduce the amount as may be required to satisfy the Partial for calculating future Release Test as set forth in clause (vi) belowPrices;
(iiif) Intentionally Omitted;
(iv) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith), a release or assignment of lien (and related Loan Documents) for the Released Property for execution by ▇▇▇▇▇▇. Such release or assignment shall be in a form appropriate in the State in which the Released Property is located and shall contain standard provisions, if any, protecting the rights of the releasing or assigning lenders. In addition, Borrower shall provide all other documentation in connection with such release or assignment as may be reasonably requested by ▇▇▇▇▇▇;
(v) Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender that the release of the Released Property will not violate any term or provision of any Major Lease, Property Document, PILOT Lease and/or PILOT Document, or Management Agreement in effect at the Remaining Property at At the time of the release of the Released Property, in each case in any material respect, which evidence may take the form of a certification from Borrower contained in the Officer’s Certificate referenced in Section 2.10(a)(xiii) below;
(vi) As of the date of consummation of the Partial Release, after giving effect to the release of the Released Property from the lien of the related Security Instrument and the accordant partial prepayment of the Loanrelease, the Debt Yield Service Coverage Ratio, calculated with respect to the Remaining Properties remaining property in the Portfolio (excluding the Release Property) shall be equal to or greater than 1.90 to 1.00;
(g) At the Closing Date Debt Yield (such testtime of the release, the “Partial Release Test”); provided that Loan to Value Ratio, calculated with respect to the remaining property in the Portfolio (excluding the Release Property), does not exceed sixty-two percent (62%). In the event the Loan to Value Ratio of the remaining property in the Portfolio (as determined by Lender in its sole discretion) exceeds the required level, Borrower shall have the right, subject to payment of the Prepayment Premium calculated in accordance with the provisions set forth in the Note, to pay Lender the amount necessary to reduce the Loan to Value Ratio of the remaining property in the Portfolio to the required level. Lender shall have determined, in its sole discretion, that following the proposed partial release, the entire Portfolio shall meet the leasing percentage requirements in the Assignment.
(h) In no event will Lender be required to release more than five (5) of the Individual Properties in total during the term of the Loan;
(i) For each Release Property requested to be released, Borrower shall pay to Lender a release fee equal to one-half percent (0.5%) of the principal balance of the Allocated Loan Amount (as the same may be reduced by payments described in Section 10.01(e) above) applicable to the Release Property (but in no event shall such release fee be less than $10,000), which shall be non-refundable and payable to Lender at the time of request for partial release;
(j) Borrower shall pay to Lender all escrow, closing and recording costs including, but not limited to, the cost of preparing and delivering any re-conveyance documentation and modification of the Documents, including legal fees and costs, the cost of any title insurance endorsements that Lender may require, any expenses incurred by the Lender in connection with a sale to a third-partythe partial release, unrelated to and any Borrower, Guarantor, Sponsor, or any Affiliate thereof on a -51- bona fide arm’s-length basis, at market pricing based on a market process, if sums then due and payable under the Partial Release Test would not be satisfied after giving effect to Documents;
(k) Lender has determined that following the release of the Released Release Property and payment the remaining property in the Portfolio shall have an aggregate allocated loan balance equal to or greater than 50% of the Release Price, then such Partial Release aggregate allocated loan balance of the property in the Portfolio on the Closing Date of the Loan; and
(l) Such other terms and conditions as Lender shall be permitted upon payment of a release price equal reasonably require. Notwithstanding anything to the greater contrary in this Section 10.01 and Section 10.02 below, (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 (3) one hundred 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 (10035%) of the net sales proceeds from the disposition of such Released Property (net of reasonable and customary closing costs payable to third parties in connection with the disposition of such Released Property) and (2) the Release Price for such Released Property; provided, further, that, notwithstanding the foregoing, Borrower shall also have the right to satisfy the Partial Release Test by making an additional prepayment of the Debt, in accordance with the terms and conditions of Section 2.7(a) hereof (including, without limitation, payment of any applicable Interest Shortfall, Breakage Costs, and/or Prepayment Premium), in an amount which, when applied to the repayment of the Debt, together with the applicable Release Price is sufficient such that the Partial Release Test is satisfied. Upon request from ▇▇▇▇▇▇, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s calculation of the Debt Yield with respect to the Remaining Properties;
(vii) Borrower shall pay all recording charges, filing fees, taxes or other out-of-pocket expenses (including, without limitation, any mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the release of the Released Property;
(viii) Intentionally Omitted;
(ix) Intentionally Omitted;
(x) In the event that the Released Property is the last Individual Property owned by Borrower Interest Rate Cap Party, Borrower Interest Rate Cap Party shall have assigned all of its right, title and interest in and to the Interest Rate Cap Agreement to another Individual Borrower that owns one or more Properties that shall remain subject to the lien of the Security Instrument after such release (such Borrower, the “Assignee Borrower”). In connection with (and as a condition precedent to) such assignment, Assignor total value (as defined in the Collateral Assignment of Interest Rate Cap Agreement and which, for the avoidance of doubt, may refer to Borrower Interest Rate Cap Party or any Assignee Borrower that has assumed the interests of such Assignor pursuant to and in accordance with this Agreement) and the other Borrowers (as applicable) shall execute and deliver to Lender (i) an assumption of the existing Collateral Assignment of Interest Rate Cap Agreement reasonably acceptable to Lender (or a new collateral assignment of interest rate cap agreement in form and substance substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date and otherwise reasonably acceptable to determined by Lender) and (ii) an acknowledgment and consent to such assumption or new assignment executed by Counterparty and reasonably acceptable to Lender. Any Assignee Borrower may further assign its right, title and interest in and to the Interest Rate Cap Agreement to another Assignee Borrower, provided of all of the conditions set forth in this Section 2.10(a)(x) are satisfied; and
(xi) Subsequent to such release, each remaining Individual Borrower and each SPE Component Entity shall continue to be a Single Purpose Entity pursuant to, and in accordance with, Article 5 hereof;
(xii) Borrower shall have paid or reimbursed Lender and/or Servicer for all reasonable out-of-pocket costs and expenses actually incurred by ▇▇▇▇▇▇ and/or Servicer (including, without limitation, reasonable actually incurred attorneys’ fees and -52- disbursements), and shall have paid the customary fees of Servicer in connection with such release, which fee shall (A) not exceed (x) $10,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of between one (1) and four (4) Individual Properties and (y) $20,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of five (5) or more Individual Properties; and
(xiii) Borrower shall deliver an Officer’s Certificate certifying that all requirements set forth in this Section 2.10 have been satisfiedany one market.
(b) In connection with any release under this Section 2.10, in the event that such release would result in the release of all Individual Properties held by an Individual Borrower (each an “Unencumbered Borrower”), such Unencumbered Borrower 10.01 shall be released by Lender from the obligations of the Loan Documents, except with respect personal to those obligations that are expressly provided herein to survive repayment of the Loan. In connection with a release or cancellation of each Unencumbered Borrower, ▇▇▇▇▇▇ agrees to deliver (i) a UCC-3 Financing Statement termination or amendment releasing ▇▇▇▇▇▇’s security interest in the collateral pledged to Lender relating to each Unencumbered Borrower, and (ii) instruments executed by Lender reasonably necessary to evidence neither the release or cancellation of each Unencumbered Borrower from its obligations Third Party Single Entity nor any other transferee shall have any rights under the Loan Documents. All reasonable out-of-pocket costs and expenses actually incurred by Lender in connection with such release shall be paid by Borrowerthis paragraph.
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Sources: Mortgage and Security Agreement (Cornerstone Realty Income Trust Inc)
Partial Release. (a) Provided no Event of Default shall have occurred and be continuing (other than with respect to a Default Release)continuing, Borrower shall have the right at any time after the Closing Date and prior to the Maturity Date to obtain the release (each a “Partial Release”) of one or more Individual Properties (each such released Individual Propertycollectively, the “Released Property”, and the Individual Properties remaining encumbered by the Security Instrument, the “Remaining Properties”) from the lien of the applicable Security Instrument thereon (and related Loan Documents) and the release of the applicable Individual Borrower’s obligations under the Loan Documents with respect to such Released Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions precedent:
(i) Borrower shall provide Lender shall have received at least ten not less than thirty (1030) Business Days’ days (or a such shorter period of time if permitted by Lender in its sole discretion exercised in good faithdiscretion) prior written notice requesting the release of the Released Propertyproposed Partial Release (the date of Lender’s receipt of such notice shall be referred to herein as a the “Partial Release Notice Date”);
(ii) Borrower shall, in accordance with the provisions of Section 2.7(a) above, partially prepay the Loan in an amount equal to the Release Price or such other amounts as may be required to be prepaid in connection with such release under clause (vi) below (together with, without limitation, any Interest Shortfall (if applicable) and, with respect to any such payment in excess of the Free Prepayment Amount, the Prepayment Premium applicable thereto), or such greater amount as may be required to satisfy the Partial Release Test as set forth in clause (vi) below;
(iii) Intentionally Omitted;
(iv) Borrower shall submit to Lender, not less than ten (10) Business Days days prior to the date of such release (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith)Partial Release, a release or assignment of lien (and related Loan Documents) for the Released Property for execution by ▇▇▇▇▇▇Lender. Such release or assignment shall be in a form appropriate in the State each jurisdiction in which the Released Property is located and shall contain standard provisions, if any, protecting the rights of the releasing or assigning lendersLender. In addition, Borrower shall provide all other documentation as may be required to satisfy the Prudent Lender Standard in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will effect such release in accordance with the terms of this Agreement, and (iii) will not impair or assignment otherwise adversely affect the liens, security interests and other rights of Lender under the Loan Documents not being released (or as may be reasonably requested by ▇▇▇▇▇▇to the parties to the Loan Documents and Individual Properties subject to the Loan Documents not being released);
(viii) Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender that the release of the The Released Property will not violate any term shall be conveyed to a Person other than Borrower or provision of any Major Lease, Property Document, PILOT Lease and/or PILOT Document, Operating Lessee or Management Agreement in effect at the Remaining Property at the time of the release of the Released Property, in each case in any material respect, which evidence may take the form of a certification from Borrower contained in the Officer’s Certificate referenced in Section 2.10(a)(xiii) belowan Affiliate thereof;
(viiv) As of each of the Partial Release Notice Date and as of the date of consummation of the Partial Release, after giving effect to the release of the lien of the Security Instrument(s) encumbering the Released Property from Property, the Actual Debt Service Coverage Ratio with respect to the remaining Individual Properties shall be greater than the greater of (1) the Actual Debt Service Coverage Ratio of all Individual Properties encumbered by the Security Instrument immediately prior to the Partial Release Notice Date or the consummation of the Partial Release (as applicable) and (2) the Minimum Debt Service Coverage Ratio;
(v) As of each of the Partial Release Notice Date and as of the date of consummation of the Partial Release, after giving effect to the release of the lien of the related Security Instrument and Instrument(s) encumbering the accordant partial prepayment of the LoanReleased Property, the Debt Yield with respect to the Remaining remaining Individual Properties shall be no greater than the greater of (1) the Debt Yield with respect to all of the Individual Properties immediately prior to the Partial Release Notice Date or the consummation of the Partial Release (as applicable) and (2) the Minimum Debt Yield;
(vi) Borrower shall (1) partially prepay the Debt in accordance with Section 2.4.1 hereof in an amount equal to (A) the Release Price for the Released Property (the “Release Amount”), plus (B) the Yield Maintenance Premium and (2) pay any applicable Short Interest due hereunder in connection therewith. Any portion of the Release Amount applied to the principal amount of the Debt in accordance herewith shall be applied (i) first, to reduce the Allocated Loan Amount attributable to the Released Property to zero and (ii) second, pro rata to reduce the Allocated Loan Amounts of each of the other remaining Individual Properties;
(vii) The Partial Release shall be permitted under REMIC Requirements in effect as of each of (1) the Partial Release Notice Date and (2) the consummation of the Partial Release;
(viii) If required by Lender, Lender shall have received a Rating Agency Confirmation with respect to the Partial Release; and
(ix) Borrower shall (A) deliver to Lender (1) a REMIC Opinion with respect to the Partial Release and (2) an opinion of counsel satisfying the Prudent Lender Standard and acceptable to the Rating Agencies (issued by counsel satisfying the Prudent Lender Standard and acceptable to the Rating Agencies) with respect to such other matters as may be required by Lender in order to satisfy the Prudent Lender Standard and (B) pay all of Lender’s reasonable costs and expenses, and the costs and expenses, of the Rating Agencies in connection with the Partial Release, including, without limitation, reasonable counsel fees.
(b) Notwithstanding the foregoing provisions of this Section 2.6, if the Loan is included in a REMIC Trust, then immediately following a Partial Release either (A) the Loan-to-Value Ratio of the remaining Properties after the Partial Release must be no greater than 125% and, if the Loan-to-Value Ratio of the remaining Properties after a Partial Release is greater than 125% (such value to be determined, in Lender’s sole discretion, by any commercially reasonable valuation method), then the principal balance of the Loan must be paid down by the least of the following amounts (i) by the fair market value of the Released Property at the time of the Partial Release, or (ii) an amount such that the Loan-to-Value Ratio of the Loan (as so determined by Lender) does not increase after the Partial Release, unless the Lender receives an opinion of counsel that the Loan will not fail to maintain its status as a qualified mortgage within the meaning of Code Section 860G(a)(3) as a result of the related Partial Release (collectively, a “Property Release Paydown”), or (B) the fair market value of the real estate collateral (such value to be determined, in Lender’s sole discretion, by any commercially reasonable valuation method) securing the Loan after the Partial Release must be equal to or greater than the Closing Date Debt Yield fair market value of the real estate collateral that secured the Loan immediately prior to the Partial Release.
(such testc) Further, notwithstanding anything to the contrary contained in this Section 2.6, the parties hereto hereby acknowledge and agree that after the Securitization of the Loan (or any portion thereof or interest therein), with respect to any Lender approval or similar discretionary rights over any matters contained in this Section 2.6 (any such matter, an “Partial Release Test”); provided that with respect to a release in connection with a sale to a third-party, unrelated to any Borrower, Guarantor, Sponsor, or any Affiliate thereof on a -51- bona fide arm’s-length basis, at market pricing based on a market process, if the Partial Release Test would not be satisfied after giving effect to the release of the Released Property and payment of the Release Price, then such Partial Release shall be permitted upon payment of a release price equal to the greater of (1) one hundred percent (100%) of the net sales proceeds from the disposition of such Released Property (net of reasonable and customary closing costs payable to third parties in connection with the disposition of such Released Property) and (2) the Release Price for such Released Property; provided, further, that, notwithstanding the foregoing, Borrower shall also have the right to satisfy the Partial Release Test by making an additional prepayment of the Debt, in accordance with the terms and conditions of Section 2.7(a) hereof (including, without limitation, payment of any applicable Interest Shortfall, Breakage Costs, and/or Prepayment Premium), in an amount which, when applied to the repayment of the Debt, together with the applicable Release Price is sufficient such that the Partial Release Test is satisfied. Upon request from ▇▇▇▇▇▇, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s calculation of the Debt Yield with respect to the Remaining Properties;
(vii) Borrower shall pay all recording charges, filing fees, taxes or other out-of-pocket expenses (including, without limitation, any mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the release of the Released Property;
(viii) Intentionally Omitted;
(ix) Intentionally Omitted;
(x) In the event that the Released Property is the last Individual Property owned by Borrower Interest Rate Cap Party, Borrower Interest Rate Cap Party shall have assigned all of its right, title and interest in and to the Interest Rate Cap Agreement to another Individual Borrower that owns one or more Properties that shall remain subject to the lien of the Security Instrument after such release (such Borrower, the “Assignee Borrower”). In connection with (and as a condition precedent to) such assignment, Assignor (as defined in the Collateral Assignment of Interest Rate Cap Agreement and which, for the avoidance of doubt, may refer to Borrower Interest Rate Cap Party or any Assignee Borrower that has assumed the interests of such Assignor pursuant to and in accordance with this Agreement) and the other Borrowers (as applicable) shall execute and deliver to Lender (i) an assumption of the existing Collateral Assignment of Interest Rate Cap Agreement reasonably acceptable to Lender (or a new collateral assignment of interest rate cap agreement in form and substance substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date and otherwise reasonably acceptable to Lender) and (ii) an acknowledgment and consent to such assumption or new assignment executed by Counterparty and reasonably acceptable to Lender. Any Assignee Borrower may further assign its right, title and interest in and to the Interest Rate Cap Agreement to another Assignee Borrower, provided all of the conditions set forth in this Section 2.10(a)(x) are satisfied; and
(xi) Subsequent to such release, each remaining Individual Borrower and each SPE Component Entity shall continue to be a Single Purpose Entity pursuant to, and in accordance with, Article 5 hereof;
(xii) Borrower shall have paid or reimbursed Lender and/or Servicer for all reasonable out-of-pocket costs and expenses actually incurred by ▇▇▇▇▇▇ and/or Servicer (including, without limitation, reasonable actually incurred attorneys’ fees and -52- disbursements), and shall have paid the customary fees of Servicer in connection with such release, which fee shall (A) not exceed (x) $10,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of between one (1) and four (4) Individual Properties and (y) $20,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of five (5) or more Individual Properties; and
(xiii) Borrower shall deliver an Officer’s Certificate certifying that all requirements set forth in this Section 2.10 have been satisfied.
(b) In connection with any release under this Section 2.10, in the event that such release would result in the release of all Individual Properties held by an Individual Borrower (each an “Unencumbered BorrowerApproval Item”), such Unencumbered Borrower rights shall be released by construed such that Lender from the obligations of the Loan Documents, except shall only be permitted to withhold its consent or approval with respect to those obligations that are expressly provided herein any Partial Release Approval Item if the same fails to survive repayment of meet the Loan. In connection with a release or cancellation of each Unencumbered Borrower, ▇▇▇▇▇▇ agrees to deliver (i) a UCC-3 Financing Statement termination or amendment releasing ▇▇▇▇▇▇’s security interest in the collateral pledged to Prudent Lender relating to each Unencumbered Borrower, and (ii) instruments executed by Lender reasonably necessary to evidence the release or cancellation of each Unencumbered Borrower from its obligations under the Loan Documents. All reasonable out-of-pocket costs and expenses actually incurred by Lender in connection with such release shall be paid by BorrowerStandard.
Appears in 1 contract
Partial Release. (a) Provided In the event of a sale of an Individual Property, and provided no Event of Default shall have has occurred and be continuing (other than with respect to a Default Release)continuing, Borrower shall have the right at any time prior to the Maturity Date to obtain the release (a “the "Partial Release”") of one or more such sold Individual Properties Property total (each such released Individual Property, the “"Released Property”, and the Individual Properties remaining encumbered by the Security Instrument, the “Remaining Properties”") from the lien of the applicable Security Instrument thereon (and related Loan Documents) and the release of the applicable Individual Borrower’s 's obligations under the Loan Documents with respect to such Released Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions precedent:
(i) Borrower shall provide Lender shall have received at least ten with thirty (1030) Business Days’ (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith) days prior written notice requesting the release of the Released Propertyproposed Partial Release;
(ii) Borrower shall, in accordance with the provisions of Section 2.7(a) above, partially prepay the Loan The Released Property shall be conveyed in an amount equal arm's length transfer to the Release Price a Person other than any Borrower or such other amounts as may be required to be prepaid in connection with such release under clause (vi) below (together with, without limitation, any Interest Shortfall (if applicable) and, with respect to any such payment in excess of the Free Prepayment Amount, the Prepayment Premium applicable thereto), or such greater amount as may be required to satisfy the Partial Release Test as set forth in clause (vi) belowits respective Affiliates;
(iii) Intentionally OmittedSubsequent to such release, Borrower shall continue to be a "special purpose entity" pursuant to, and in accordance with, with Section 2.1(f) hereof;
(iv) After giving effect to the Partial Release, the Debt Yield for the Individual Properties then remaining subject to the liens of the Security Instrument shall be greater than the higher of (i) the Debt Yield for all of the Individual Properties immediately prior to giving effect to the Partial Release or (ii) the Debt Yield for all of the Individual Properties as of the date hereof;
(v) Borrower shall have complied with Section 6(e) of the Note, including, but not limited to, Borrower's payment of the Release Price, which shall be deemed a voluntary prepayment for all purposes under the Loan Documents, and all other related sums due in accordance with Section 6(e) of the Note, including, without limitation, the Make-Whole Amount (as defined in the Note), as applicable;
(vi) Borrower shall submit to Lender, not less than ten (10) Business Days days prior to the date of such release (or a shorter period of time if permitted by Lender in its sole discretion exercised in good faith)Partial Release, a release or assignment of lien (and related Loan Documents) for the Released Property for execution by ▇▇▇▇▇▇Lender. Such release or assignment shall be in a form appropriate in the State each jurisdiction in which the Released Property is located and shall contain standard provisions, if any, protecting the rights of the releasing or assigning lendersLender. In addition, Borrower shall provide all other documentation as may be reasonably required by Lender in connection with such release, together with an Officer's Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will effect such release or assignment as may be reasonably requested by ▇▇▇▇▇▇;
(v) Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender that the release of the Released Property will not violate any term or provision of any Major Lease, Property Document, PILOT Lease and/or PILOT Document, or Management Agreement in effect at the Remaining Property at the time of the release of the Released Property, in each case in any material respect, which evidence may take the form of a certification from Borrower contained in the Officer’s Certificate referenced in Section 2.10(a)(xiii) below;
(vi) As of the date of consummation of the Partial Release, after giving effect to the release of the Released Property from the lien of the related Security Instrument and the accordant partial prepayment of the Loan, the Debt Yield with respect to the Remaining Properties shall be equal to or greater than the Closing Date Debt Yield (such test, the “Partial Release Test”); provided that with respect to a release in connection with a sale to a third-party, unrelated to any Borrower, Guarantor, Sponsor, or any Affiliate thereof on a -51- bona fide arm’s-length basis, at market pricing based on a market process, if the Partial Release Test would not be satisfied after giving effect to the release of the Released Property and payment of the Release Price, then such Partial Release shall be permitted upon payment of a release price equal to the greater of (1) one hundred percent (100%) of the net sales proceeds from the disposition of such Released Property (net of reasonable and customary closing costs payable to third parties in connection with the disposition of such Released Property) and (2) the Release Price for such Released Property; provided, further, that, notwithstanding the foregoing, Borrower shall also have the right to satisfy the Partial Release Test by making an additional prepayment of the Debt, in accordance with the terms of this Agreement, and conditions (iii) will not impair or otherwise adversely affect the liens, security interests and other rights of Section 2.7(a) hereof Lender under the Loan Documents not being released (including, without limitation, payment of any applicable Interest Shortfall, Breakage Costs, and/or Prepayment Premium), in an amount which, when applied or as to the repayment of the Debt, together with the applicable Release Price is sufficient such that the Partial Release Test is satisfied. Upon request from ▇▇▇▇▇▇, Borrower shall deliver to Lender an Officer’s Certificate confirming Borrower’s calculation of the Debt Yield with respect parties to the Remaining PropertiesLoan Documents and Properties subject to the Loan Documents not being released);
(vii) Borrower shall pay have provided Lender with evidence reasonably satisfactory to Lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, not otherwise permitted by the Loan Documents, encumbering the Remaining Property, which evidence may be in the form of a "bring down" or "date down" or other permitted endorsement to the title insurance policy insuring the lien of the applicable Security Instrument relating to the remaining Individual Properties, which endorsement shall be issued by the title insurance company that issued the original Lender's title insurance policy in connection with the Loan;
(viii) Borrowers shall reimburse Lender and any Servicer (as defined herein) for any costs and expenses arising from such release (including reasonable attorneys' fees and expenses) and Borrowers shall have paid, in connection with the Partial Release, (i) all recording charges, filing fees, taxes or other out-of-pocket expenses (including, without limitation, any mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the release of the Released Property;
therewith, and (viiiii) Intentionally Omitted;to any Servicer, any fee being assessed by such Servicer to effect such Partial Release; and
(ix) Intentionally Omitted;
(x) In the event that the Released Property is the last Individual Property owned by Borrower Interest Rate Cap Party, Borrower Interest Rate Cap Party shall have assigned all of its right, title and interest in and to the Interest Rate Cap Agreement to another Individual Borrower that owns one or more Properties that shall remain subject to the lien of the Security Instrument after such release (such Borrower, the “Assignee Borrower”). In connection with (and as a condition precedent to) such assignment, Assignor (as defined in the Collateral Assignment of Interest Rate Cap Agreement and which, for the avoidance of doubt, may refer to Borrower Interest Rate Cap Party or any Assignee Borrower that has assumed the interests of such Assignor pursuant to and in accordance with this Agreement) and the other Borrowers (as applicable) shall execute and deliver to Lender (i) an assumption of the existing Collateral Assignment of Interest Rate Cap Agreement reasonably acceptable to Lender (or a new collateral assignment of interest rate cap agreement in form and substance substantially similar to the Collateral Assignment of Interest Rate Cap Agreement delivered on the Closing Date and otherwise reasonably acceptable to Lender) and (ii) an acknowledgment and consent to such assumption or new assignment executed by Counterparty and reasonably acceptable to Lender. Any Assignee Borrower may further assign its right, title and interest in and to the Interest Rate Cap Agreement to another Assignee Borrower, provided all not obtain a release of the conditions set forth in this Section 2.10(a)(x) are satisfied; and
more than two (xi) Subsequent to such release, each remaining Individual Borrower and each SPE Component Entity shall continue to be a Single Purpose Entity pursuant to, and in accordance with, Article 5 hereof;
(xii) Borrower shall have paid or reimbursed Lender and/or Servicer for all reasonable out-of-pocket costs and expenses actually incurred by ▇▇▇▇▇▇ and/or Servicer (including, without limitation, reasonable actually incurred attorneys’ fees and -52- disbursements), and shall have paid the customary fees of Servicer in connection with such release, which fee shall (A) not exceed (x) $10,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of between one (1) and four (42) Individual Properties and (y) $20,000.00 in the aggregate with respect to the coordinated release (simultaneously or on or about the same date) of five (5) or more Individual Properties; and
(xiii) Borrower shall deliver an Officer’s Certificate certifying that all requirements set forth in this Section 2.10 have been satisfied.
(b) Upon such Partial Release, Lender shall promptly release to the remaining Borrowers any funds in the Reserves held by Lender and any funds on deposit in the Destination Account, to the extent any of the foregoing is attributable or allocable to the Released Property.
(c) In connection with any a Partial Release, the Borrower that owns the Released Property ("Released Borrower") shall be automatically released from such Released Borrower's obligations under the Loan Documents (including the Environmental Indemnity), as to be evidenced by a written release under this Section 2.10from Lender to be delivered concurrently with the consummation of such Partial Release, in the event provided that such release would result in the release of all Individual Properties held by an Individual Borrower (each an “Unencumbered Borrower”), such Unencumbered Released Borrower shall be released by Lender from liability under the obligations Environmental Indemnity only upon the satisfaction of each of the Loan Documentsfollowing conditions precedent:
(i) Released Borrower shall maintain for such Released Property an environmental insurance policy substantially in the form of the environmental insurance in place as of the closing of the Loan, except which policy shall have a term of no less than two (2) years and shall name Lender as an additional insured;
(ii) At the time of such Partial Release or anytime thereafter Borrower furnishes to Lender an environmental site assessment in form and substance, and from an environmental consultant, reasonably acceptable to Lender, which environmental site assessment discloses, as of the date of the Partial Release (or if such environmental site assessment is furnished after the date of such Partial Release, as of the date of such environmental site assessment), no actual, potential or threatened (A) non-compliance with or violation of applicable environmental laws (or permits issued pursuant to environmental laws) in connection with the Released Property or operations thereon, (B) "recognized environmental condition" (as defined by the then-applicable professional standards) with respect to those obligations that are expressly provided herein to survive repayment of the Loan. In connection Released Property, (C) environmental liens encumbering the Released Property, (D) administrative processes or proceedings or judicial proceedings in any way connected with a release or cancellation of each Unencumbered Borrower, ▇▇▇▇▇▇ agrees to deliver (i) a UCC-3 Financing Statement termination or amendment releasing ▇▇▇▇▇▇’s security interest in the collateral pledged to Lender any environmental condition relating to each Unencumbered Borrowerthe Released Property, and (iiE) instruments executed by Lender reasonably necessary to evidence the presence or release of hazardous substances in, on, above, or cancellation of each Unencumbered Borrower from its obligations under the Loan Documents. All reasonable out-of-pocket costs and expenses actually incurred by Lender Released Property in connection with such release shall be paid by Borrowerviolation of applicable laws; and
(iii) There are no Environmental Claims that are pending or threatened relating to the Released Property.
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