Exhibit 10.1
ABP AL (MIDFIELD) LLC
AND THE OTHER PARTIES IDENTIFIED AS LANDLORDS HEREIN,
Landlord,
and
BLUELINX CORPORATION
,
Tenant
AMENDED AND RESTATED MASTER LEASE AGREEMENT
DATED
: as of June 9, 2006
TABLE OF CONTENTS
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Page
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ARTICLE 1. BASIC LEASE PROVISIONS
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1
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ARTICLE 2. PREMISES, TERM AND RENT
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2
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ARTICLE 3. USE AND OCCUPANCY
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5
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ARTICLE 4. CONDITION OF THE PREMISES
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6
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ARTICLE 5. ALTERATIONS
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6
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ARTICLE 6. REPAIRS
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8
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ARTICLE 7. IMPOSITIONS
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9
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ARTICLE 8. COMPLIANCE WITH LAWS
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11
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ARTICLE 9. INSURANCE
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12
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ARTICLE 10. DAMAGE TO PREMISES
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17
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ARTICLE 11. EMINENT DOMAIN
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17
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ARTICLE 12. ASSIGNMENT AND SUBLETTING
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19
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ARTICLE 13. SUBORDINATION; ESTOPPEL CERTIFICATES
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21
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ARTICLE 14. MANAGEMENT; ACCESS TO PREMISES
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24
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ARTICLE 15. DEFAULT
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25
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ARTICLE 16. REMEDIES AND DAMAGES
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26
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ARTICLE 17. FEES AND EXPENSES
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28
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ARTICLE 18. NO REPRESENTATIONS BY LANDLORD
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29
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ARTICLE 19. END OF TERM
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29
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ARTICLE 20. QUIET ENJOYMENT
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30
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ARTICLE 21. NO WAIVER; NON-LIABILITY
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30
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ARTICLE 22. WAIVER OF TRIAL BY JURY
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31
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ARTICLE 23. INABILITY TO PERFORM
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32
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Page
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ARTICLE 24. BILLS AND NOTICES
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32
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ARTICLE 25. BROKER
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33
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ARTICLE 26. INDEMNITY
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33
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ARTICLE 27. ENVIRONMENTAL MATTERS; HAZARDOUS MATERIALS
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35
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ARTICLE 28. RELEASE AND/OR SUBSTITUTION OF PREMISES
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36
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ARTICLE 29. ADDITIONAL RIGHTS OF LANDLORD AND TENANT
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37
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ARTICLE 30. FINANCIAL REPORTING
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37
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ARTICLE 31. RELATIONSHIP AMONG THE LANDLORDS
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38
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ARTICLE 32. MISCELLANEOUS
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39
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EXHIBIT A DESCRIPTION OF THE LAND
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EXHIBIT B PERMITTED ENCUMBRANCES
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EXHIBIT C DEFINITIONS
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EXHIBIT D RENT PAYMENT DIRECTION LETTER
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EXHIBIT E FIXED RENT ALLOCATIONS
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EXHIBIT F FORM OF NON-DISTURBANCE AGREEMENT
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ii
AMENDED AND RESTATED MASTER LEASE AGREEMENT
THIS AMENDED AND RESTATED MASTER LEASE AGREEMENT
(this
Lease
), dated as of June 9,
2006, is made by and between
ABP AL (MIDFIELD) LLC
, a Delaware limited liability company with an
office at 4300 Wildwood Parkway, Atlanta, Georgia, 30339, Attention: Gary Cummings (
Landlord
Agent
), and the parties identified as Landlords on the signature pages hereof (each,
individually and collectively with Landlord Agent,
Landlord
), and
BLUELINX CORPORATION
, a
Georgia corporation with an office at 4100 Wildwood Parkway, Atlanta, Georgia, 30339, Attention:
General Counsel (
Tenant
).
Landlord and Tenant hereby covenant and agree as follows:
ARTICLE 1.
BASIC LEASE PROVISIONS
Section 1.1.
This
Section 1.1
sets forth the basic terms of this Lease and, as
applicable, constitutes the definition of those terms as used in this Lease:
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LAND:
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The parcels of land more particularly
described on
Exhibit A
to this Lease,
individually and collectively.
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IMPROVEMENTS:
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Collectively, the buildings,
structures, parking areas, driveways,
access roads, railroad spur lines and
related facilities (to the extent of
Landlords interest therein), and other
improvements and appurtenances now
located or hereafter erected, located,
attached to or placed in or on the
Land, and any and all Alterations
thereto and renewals and replacements
thereof, additions thereto and
substitutes therefor, except for
Tenants Property (as defined in
Exhibit C
).
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PREMISES:
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The Land and all Improvements now or
hereafter located thereon, individually
and collectively.
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COMMENCEMENT DATE:
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The date of this Lease.
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EXPIRATION DATE:
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June 8, 2021.
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TERM:
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The period commencing on the
Commencement Date and ending on the
Expiration Date.
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PERMITTED USES:
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The use of the Premises by Tenant as
(i) a distribution center for the
transaction of Tenants building
products distribution business and for
warehousing uses ancillary thereto,
and/or (ii) as general offices for the
transaction of Tenants business, and
for no other purpose.
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All capitalized terms used in the text of this Lease without definition are defined in this
Article 1
or in
Exhibit C
.
Section 1.2.
All of the Exhibits attached to this Lease are incorporated in and made a part of
this Lease, but in the event of any conflict or inconsistency between the provisions of this Lease
and the Exhibits, the provisions of this Lease shall control. As used in this Lease: (a) the word
or is not exclusive and the word including is not limiting, (b) references to a law include any
rule or regulation issued under the law and any amendment to the law, rule or regulation, (c)
whenever the words include, includes, or including appear, they shall be deemed to be
followed by the words without limitation, (d) personal pronouns shall be deemed to include the
other genders and the singular to include the plural, and (e) all Article and Section references
shall, unless otherwise expressly stated, be deemed references to the Articles and Sections of this
Lease. Wherever a period of time is stated in this Lease as commencing or ending on specified
dates, such period of time shall be deemed (i) inclusive of such stated commencement and ending
dates, and (ii) to commence at 12:00 A.M. Eastern Time on such stated commencement date and to end
at 11:59 P.M. Eastern Time on such stated ending date. Whenever a financial obligation is stated
to be at a partys expense, such obligation shall be at such partys sole cost and expense. The
captions used in this Lease are inserted only as a matter of convenience and for reference, and in
no way define, limit or describe the scope of this Lease nor the intent of any provision hereof.
Section 1.3.
This Lease amends and restates in its entirety that certain Amended and Restated
Master Lease, dated as of October 26, 2004, between Landlord and Tenant, as amended, with respect
to the Premises.
ARTICLE 2.
PREMISES, TERM AND RENT
Section 2.1.
(a) Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, for
the Term and upon the terms, covenants and conditions set forth in this Lease, all of Landlords
right, title and interest in and to the Premises, and any and all rights, privileges, easements and
appurtenances now or hereafter appertaining, attaching or in any way belonging to or benefiting the
Premises, subject only to (i) those matters described on
Exhibit B
attached hereto
(collectively, the
Permitted Exceptions
), and (ii) all applicable Laws.
(b) Landlord and Tenant agree that Landlord shall be deemed to have delivered possession of
the Premises to Tenant and Tenant shall be deemed to have accepted possession of the Premises from
Landlord immediately upon the Commencement Date.
(c) Subject to
Section 28.1
, this Lease constitutes a single, unitary, indivisible,
non-severable true lease of all the Premises. This Lease does not constitute separate leases
contained in one document each governed by similar terms. The use of the expression
unitary
lease
to describe this Lease is not merely for convenient reference. It is the conscious
choice of a substantive appellation to express the intent of the parties in regard to an integral
part of this transaction: To accomplish the creation of an indivisible lease, the parties agree
that from an economic point of view the individual Premises leased pursuant to this Lease
constitute one economic unit and that the Fixed Rent and all other provisions have been negotiated
and agreed to based on a demise of the entire Premises covered by this Lease as a single,
composite, inseparable transaction. Except as expressly provided in this Lease for specific
isolated purposes
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(and in such cases only to the extent expressly so stated), all provisions of
this Lease, including definitions, commencement and expiration dates, rental provisions, use
provisions, breach, default, enforcement and termination provisions and assignment and subletting,
shall apply equally and uniformly to the Premises as one unit and are not severable. The economic
terms of this Lease would have been substantially different had separate leases or a divisible
lease been acceptable to Landlord. A default of any of the terms or conditions of this Lease
occurring with respect to any Premises shall be a default under this Lease with respect to the
entire Premises. Except as expressly provided in this Lease for specific isolated purposes (and in
such cases only to the extent expressly so stated), Landlord and Tenant agree that the provisions
of this Lease shall at all times be construed, interpreted, and applied such that the intention of
Landlord and Tenant to create a unitary lease shall be preserved and maintained. The parties agree
that for the purposes of any assumption, rejection or assignment of this Lease under Section 365 of
the Bankruptcy Code (as hereinafter defined) or any amendment or successor section thereof, this is
one indivisible and non-severable lease dealing with and covering one legal and economic unit which
must be assumed, rejected or assigned as a whole with respect to all (and only all) of the Premises
covered hereby.
Section 2.2.
(a) Commencing on the Commencement Date and continuing thereafter during the
Term, Tenant shall pay to or as directed by Landlord annual rent for the entire Premises
(
Fixed Rent
) at the rate of Thirty Million Seventy-Two Thousand Five Hundred Ten and
00/100 Dollars ($30,072,510.00) per Lease Year ($2,506,042.50 per month).
(b) Tenant shall pay to or as directed by Landlord (i) Fixed Rent in equal monthly
installments in advance on the first (1st) day of each calendar month from and after the
Commencement Date during the Term, except that if the first (1st) day of a calendar month is not a
Business Day, then Tenant shall pay Fixed Rent on the Business Day immediately preceding the first
(1st) day of such calendar month, and (ii) Additional Rent, in each case, as and when due and
payable hereunder, at the office of Landlord or such other place as Landlord may designate, without
notice or demand, and without any set-off, counterclaim, credit, abatement or deduction whatsoever,
except as expressly set forth in this Lease; provided, however, that Landlord may at any time and
from time to time, upon prior written notice to Tenant, change the day of the calendar month on
which installments of Fixed Rent are paid hereunder. Fixed Rent and Additional Rent shall be
payable in lawful money of the United States, by check drawn upon a bank which is a member of the
New York Clearinghouse Association, or on any other bank reasonably acceptable to Landlord, or by
wire transfer of immediately available funds to an account designated by Landlord. If the
Commencement Date is not the first (1st) day of a calendar month, then Tenant shall pay to Landlord
on the Commencement Date (x) the installment of Fixed Rent for the first (1
st
) full
calendar month of the Term after the Commencement Date, and (y) a sum equal to Eighty-Three
Thousand Five Hundred Thirty Four and 75//100 Dollars ($83,534.75), multiplied by the number of
calendar days in the period from the Commencement Date to the last day of the month in which the
Commencement Date occurs. In no event shall Tenant be permitted or required to pay any Fixed Rent
more than thirty (30) days in advance.
Section 2.3.
Tenant hereby acknowledges delivery to it of a written notice from Landlord
hereunder, a copy of which is annexed hereto as
Exhibit D
(such notice, as the same may be
modified, replaced or rescinded in accordance with the terms thereof, the
Rent Payment
3
Direction Letter
). Subject to the terms of the Rent Payment Direction Letter and this
Section 2.3(c)
, during the term of the Mortgage described in Rent Payment Direction Letter,
Tenant shall pay to the account (the
Lockbox Account
) specified in the Rent Payment
Direction Letter the following:
(a) all Fixed Rent, in equal monthly installments as set forth in
Section 2.2(a)
hereof;
(b) Taxes and premiums for all insurance policies that Tenant is required under
Article
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to obtain and maintain, on the first (1st) day of each calendar month, in an amount equal to
one-twelfth (12th) of the then annual amount of Taxes or insurance premiums;
(c) all amounts that Tenant is required hereunder to deposit with Landlord as security for the
performance of any Alterations or in connection with Tenants contest of any Taxes or other liens;
and
(d) upon Tenants receipt of notice from the Mortgagee that an event of default under such
Mortgage or any other event that, pursuant to the terms of such Mortgage or the Rent Payment
Direction Letter, entitles the Mortgagee to receive all rent and other amounts payable with respect
to the Premises has occurred and Mortgagees written demand therefor, all (i) Additional Rent, (ii)
Utility Charges, (iii) amounts required under such Mortgage to be deposited with the Mortgagee for
any required repairs or Alterations (including any capital improvements) to the Premises, (iv) the
Management Fee (as hereinafter defined), if any, and (v) other amounts payable by Tenant hereunder
with respect to the operation of the Property.
Section 2.4.
If Tenant shall fail to pay any installment or other payment of Fixed Rent or
Additional Rent when due (or, if Tenant shall fail to pay any installment of Fixed Rent due on any
non-Business Day on the Business Day immediately preceding the date on which such installment is
due) and such failure shall continue for a period of five (5) days following the date on which such
installment or payment is due, Tenant shall pay to Landlord interest on such amount past due, from
the date such Rent became due until the date paid, at the Default Rate, and such interest shall be
deemed to be Additional Rent.
Section 2.5.
All amounts payable by Tenant pursuant to this Lease, including Fixed Rent and
all Additional Rent, shall constitute rent under this Lease, and in the event of Tenants failure
to pay such amounts or any portion thereof, Landlord shall have all of the rights and remedies
provided for herein or by law or at equity in the case of non-payment of Rent.
Section 2.6.
(a) Landlord and Tenant intend and agree that this Lease is a fully net lease,
and that all costs, expenses, liabilities and obligations of every kind and nature whatsoever
relating to the Premises, the appurtenances thereto and the use and occupancy thereof by Tenant or
anyone claiming by, through or under Tenant, which may arise or become due during or with respect
to the Term, shall be paid by and be the responsibility of Tenant, so that the Fixed Rent payable
hereunder shall be net to Landlord. Tenant hereby assumes the sole responsibility for the
condition, use, operation, maintenance and management of the Premises, and Landlord shall not be
required to furnish any facilities, services or utilities, or make any repairs or Alterations
thereto.
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(b) Except as otherwise expressly provided herein, this Lease shall not terminate, nor shall
Tenant have any right to terminate this Lease or be entitled to the abatement of any rent or any
reduction thereof, nor shall the obligations hereunder of Tenant be otherwise affected, any present
or future Law to the contrary notwithstanding, by reason of: (i) any damage to, or the destruction
of, the Premises or any portion thereof, from whatever cause; (ii) the taking of the Premises or
any portion thereof by condemnation or otherwise; (iii) the prohibition, limitation, or restriction
of Tenants use of the Premises or any portion thereof, or the interference with such use by any
Person; (iv) the inadequacy or inaccuracy of the description of the Premises or the failure to
demise and let to Tenant the property intended to be leased hereby or any eviction by paramount
title or otherwise; (v) Tenants acquisition of ownership of, or any interest in, any Premises;
(vi) any action, omission or breach on the part of Landlord under this Lease or under any other
agreement, or the impossibility or illegality of performance by Landlord or Tenant or both; (vii)
any latent or other defect in the Improvements or any portion thereof, or in the title, condition,
design, configuration, construction, physical structure and materials, durability or fitness for a
particular use of the Improvements; (viii) any restriction, deprivation (including eviction) or
prevention of, or any interference with or interruption of, any use or occupancy of any Premises
(whether due to any defect in or failure of Landlords interest in any Premises, any lien or
otherwise); or (viii) any other cause whatsoever, whether similar or dissimilar to the foregoing,
it being the intention of the parties hereto that the Fixed Rent and Additional Rent reserved
hereunder shall continue to be payable in all events, and the obligations of Tenant hereunder shall
continue unaffected, unless the requirement to pay or perform the same shall be terminated or
apportioned pursuant to an express provision of this Lease.
(c) Tenant agrees that it shall remain obligated under this Lease in accordance with its
provisions and that it shall not take any action to terminate, rescind or avoid this Lease, with
respect to all or any of the Premises, notwithstanding (i) any bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution, winding-up or other proceeding
affecting Landlord, (ii) the exercise of any remedy, including foreclosure, under any Mortgage, or
(iii) any action with respect to this Lease, or any part thereof (including the disaffirmance
hereof) which may be taken by Landlord under Title 11 of the United States Code 11 U.S.C. §§ 101
et
seq
. (the
Bankruptcy Code
), or by any trustee, receiver or liquidator
of Landlord or by any court under the Bankruptcy Code or otherwise.
(d) This Lease is the absolute and unconditional obligation of Tenant. Tenant waives all
rights which are not expressly stated in this Lease but which may now or hereafter otherwise be
conferred by applicable Law: (i) to quit, terminate, cancel or surrender this Lease, (ii) to any
setoff, counterclaim, recoupment, abatement, suspension, deferment, diminution, deduction,
reduction or defense of or to Fixed Rent, Additional Rent or any other sums payable under this
Lease, regardless of whether such rights shall arise from any present or future Laws, and (iii) for
any statutory lien or offset right against Landlord or any of its property.
ARTICLE 3.
USE AND OCCUPANCY
Section 3.1.
Tenant shall use and occupy the Premises for the Permitted Uses and for no other
purpose. Tenant, at its expense, shall obtain and at all times maintain and
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comply with the terms
and conditions of all licenses and permits required for the lawful conduct of the Permitted Uses in
the Premises.
Section 3.2.
Tenant shall not use or occupy or permit the use or occupancy of any part of the
Premises in any manner not permitted hereunder, or for any unlawful or illegal business, use or
purpose, or for any business, use or purpose deemed disreputable or extra hazardous, or in such
manner as to constitute a nuisance of any kind, or for any purpose in violation of any present or
future applicable Laws.
ARTICLE 4.
CONDITION OF THE PREMISES
Tenant has examined and is familiar with the condition of the Premises, and agrees (a) to
accept possession of the Premises in their as is condition on the Commencement Date, (b) that
neither Landlord nor Landlords agents have made any representations or warranties with respect to
Premises, except as expressly set forth herein, and (c) that Landlord has no obligation to perform
any work, supply any materials, incur any expenses or make any improvements or installations in
order to prepare the Premises for Tenants occupancy. The taking of possession of the Premises by
Tenant shall be conclusive evidence as against Tenant that at the time such possession was so
taken, the Premises were in good and satisfactory condition.
ARTICLE 5.
ALTERATIONS
Section 5.1.
Tenant shall not make any Alterations that affect the load-bearing walls, curtain
wall, columns, foundation or other structural elements of any of the Improvements (
Structural
Alterations
), without Landlords prior written consent in each instance, which consent shall
not be unreasonably withheld, delayed or conditioned. Subject to the provisions of this
Article 5
, Tenant shall have the right to make any Alterations to the Improvements, other
than Structural Alterations, without the prior written consent of Landlord, but upon prior written
notice to Landlord.
Section 5.2.
Tenant agrees and, during the performance of any Alteration, including any
Structural Alteration to which Landlord has given its prior written consent, Tenant shall be deemed
to represent and warrant to Landlord, that in connection with such Alteration: (a) the fair market
value of the applicable Premises and the Improvements located thereon shall not be materially
reduced after the completion of any such Alteration, nor shall the structural integrity of the
Improvements located thereon be impaired or adversely affected; (b) the Alteration and any
Alterations theretofore made or thereafter to be made shall not in the aggregate reduce the square
foot area of the Improvements by more than ten percent (10%); (c) all such Alterations shall be
performed in a good and workmanlike manner (the quality of materials and workmanship being at least
equal to that currently existing in the applicable Improvements), and shall be expeditiously
completed in compliance with all Laws and the provisions of this Lease; (d) no such Alteration
shall change the Permitted Use of any Premises;
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(e) Tenant shall promptly pay all costs and
expenses of any such Alteration, and shall discharge all liens filed against any Premises arising
out of the same as provided in
Section 5.5
; (f) all such Alterations shall become a part of
the Improvements and shall be subject to this Lease; (g) the Alteration will not materially impair
the utility, useful life or operation of such Improvements or any other portion of the applicable
Premises; (h) no such Alteration shall create any debt or other encumbrance(s) on all or any
portion of such Premises, and (i) in the case of any Structural Alteration, such Structural
Alteration shall be made in accordance with plans and specifications therefor approved by Landlord
and the provisions of
Section 5.3
. No Alteration that does not satisfy all of the
foregoing requirements of this
Section 5.2
shall be made without Landlords prior written
consent, which consent may be granted or withheld in Landlords sole discretion.
Section 5.3.
Prior to making any Structural Alterations, Tenant shall (a) submit to Landlord,
for Landlords written approval, detailed plans and specifications therefor in form satisfactory to
Landlord, together with a certificate from an architect and/or engineer licensed in the State in
which the applicable Premises are located stating that such Structural Alterations, if constructed
in accordance with the proposed plans and specifications, will not adversely affect the structural
integrity or Building Systems of the Improvements and will conform with all applicable Laws, (b) if
such Structural Alterations require a filing with any Governmental Authority or require the consent
of such authority, then such plans and specifications shall (i) be prepared and certified by a
registered architect or licensed engineer, and (ii) comply with all Laws to the extent necessary
for such governmental filing or consent, (c) at its expense, obtain all required permits, approvals
and certificates, (d) furnish to Landlord duplicate original policies or certificates of insurance
which evidence workers compensation coverage (covering all persons to be employed by Tenant, and
all contractors and subcontractors supplying materials or performing work in connection with such
Alterations), comprehensive general liability insurance (including property damage coverage),
comprehensive form automobile liability insurance and Builders Risk coverage (issued on a
completed value basis) all in such form, with such companies, for such periods and in such amounts
as Landlord may require, naming Landlord and any Mortgagee and Superior Lessor as an additional
insured, and, (e) with respect to such Structural Alteration that is estimated to cost more than
$500,000 to complete, furnish to Landlord a payment and performance bond, a cash deposit, letter of
credit or other security reasonably satisfactory to Landlord and its Mortgagee as security for the
performance and completion of such Structural Alteration. All Structural Alterations shall be
planned and constructed under the supervision of an architect and/or engineer licensed in the State
in which the applicable Premises are located. Upon completion of any Structural Alteration,
Tenant, at its expense, shall promptly obtain certificates of final approval of such Structural
Alteration as may be required by any Governmental Authority, and shall furnish Landlord with copies
thereof, together with as-built plans and specifications for such Structural Alterations prepared
on an Autocad Computer Assisted Drafting and Design System, Version 12 or later (or such other
system or medium as Landlord may accept in Landlords sole discretion). Tenant shall promptly
reimburse Landlord, as Additional Rent within ten (10) days after demand, for all costs and
expenses incurred by Landlord in connection with Landlords review of Tenants plans and
specifications.
Section 5.4.
All Alterations made by Tenant shall become the property of Landlord upon the
expiration or sooner termination of this Lease and, upon the Expiration Date or earlier termination
of the Term, (a) Tenant shall remove Tenants Property from the Premises,
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at Tenants sole costs
and expense, and (b) unless Landlord notifies Tenant no later than thirty (30) days prior to the
Expiration Date that any Alteration made by Tenant may be removed from the Premises, Tenant shall
not remove any Alterations from the Premises. Tenant shall repair any damage to the Improvements
caused by the removal of Tenants Property and Tenants Alterations in a good and workmanlike
manner and, upon the expiration or sooner termination of this Lease, shall restore the Improvements
to their condition as existing on the date hereof (reasonable wear and tear excepted). Any of
Tenants Alterations or Tenants Property not so removed by Tenant at or prior to the Expiration
Date or earlier termination of the Term shall be deemed abandoned and may, at the election of
Landlord, either be retained as Landlords property or be removed from the Premises by Landlord at
Tenants expense. The provisions of this
Section 5.4
shall survive the expiration or
earlier termination of this Lease.
Section 5.5.
If, because of any act or omission of Tenant or any Tenant Party, any mechanics
lien, U.C.C. financing statement or other lien, charge or order for the payment of money shall be
filed against Landlord, or against all or any portion of any Premises, Tenant shall, at its own
expense, cause the same to be discharged of record, by bonding or otherwise, within thirty (30)
days after the filing thereof, and Tenant shall indemnify, defend and save Landlord harmless
against and from all costs, expenses, liabilities, suits, penalties, claims and demands (including
reasonable attorneys fees and disbursements) resulting therefrom.
ARTICLE 6.
REPAIRS
Section 6.1.
Throughout the Term, Tenant, at its sole cost and expense, shall (a) take good
care of the Premises, including all of the buildings, structures, parking areas, driveways, access
roads, railroad spur lines and related facilities (to the extent of Landlords obligation to
maintain or repair the same pursuant to any applicable agreement with the railroad company), and
all other Improvements, and put, keep and maintain the same in clean, good and safe order and
condition, and, (b) subject to the provisions of
Article 5
, make all repairs therein and
thereon, interior and exterior, structural and nonstructural, ordinary and extraordinary, and
unforeseen and foreseen, necessary, in Landlords reasonable judgment, to keep the same in good and
safe order and condition, howsoever the necessity or desirability therefor may occur, and whether
or not necessitated by wear, tear, obsolescence or defects, latent or otherwise. Tenant shall not
commit or suffer, and shall use all reasonable precaution to prevent, waste, damage, or injury to
the Premises. As used in this
Section 6.1
and the other Sections of this Lease, the term
repairs includes all necessary replacements, renewals, alterations, improvements, and additions,
including structural repairs and capital improvements. All repairs made by Tenant shall be equal
in quality and class to the quality and class of the Improvements existing on the date hereof.
Section 6.2.
Tenant shall, at its sole cost and expense, keep all driveways, parking areas,
sidewalks, ground areas and curbs on, in front of or adjacent to the Premises reasonably clean and
free from dirt, snow, ice, rubbish, obstructions and encumbrances.
Section 6.3.
Landlord shall not be required to furnish any services, utilities or facilities
whatsoever to the Premises. Landlord shall have no duty or obligation to make any
8
alteration, change, improvement, replacement or repair to any Premises, whether foreseen or unforeseen, or to
maintain any Premises, and Tenant hereby expressly waives the right to make repairs at the expense
of Landlord, which right may be provided for in any Laws now or hereafter in effect. Tenant assumes
the full and sole responsibility for the condition, operation, repair, alteration, improvement,
replacement, maintenance and management of the Premises.
ARTICLE 7.
IMPOSITIONS
Section 7.1.
(a) Tenant shall pay any and all (i) general and special real estate taxes
(including any personal property taxes, sales taxes, use taxes, and the like), assessments, water
and sewer rents, rates and charges, excise taxes, levies, license and permit fees, fines, penalties
and other governmental charges and any interest or costs with respect thereto (collectively,
Taxes
), and (ii) charges for public and private utilities (including gas, electricity,
light, heat, air-conditioning, power and telephone and other communication services) (collectively,
Utility Charges
), general and special, ordinary and extraordinary, foreseen and
unforeseen, of any kind and nature whatsoever which at any time prior to or during the Term may be
assessed, levied, confirmed, imposed upon, or grow or become due and payable out of or in respect
of, or charged with respect to or become a lien on, the Premises (all of the foregoing Taxes and
Utility Charges, collectively,
Impositions
).
(b) Landlord shall use commercially reasonable efforts, and shall cooperate with Tenant, in
requesting that all bills for Taxes and Utility Charges be sent directly by the billing Entities to
Tenant throughout the Term.
(c) If the Commencement Date or the Expiration Date shall occur on a date other than January 1
or December 31, respectively, any Impositions payable by Tenant under this
Article 7
for
the year in which the Commencement Date or Expiration Date shall occur shall be apportioned in that
percentage which the number of days in the period from the Commencement Date to December 31 or from
January 1 to the Expiration Date, as the case may be, both inclusive, shall bear to the total
number of days in such year. Notwithstanding anything to the contrary set forth in this Lease,
Tenant shall have no obligation to pay any Impositions attributable to any period prior to the
Commencement Date or after the Expiration Date.
Section 7.2.
Nothing herein contained shall require Tenant to pay municipal, state or federal
income, inheritance, estate, succession, transfer or gift taxes of Landlord, or any corporate
franchise tax imposed upon Landlord.
Section 7.3.
(a) Tenant shall have the right, at its own expense, to contest by appropriate
proceedings the amount or validity, in whole or in part, of any Imposition or any lien or
encumbrance and, to the extent permitted by applicable Laws, to defer payment of such contested
Imposition or lien during such contest, provided that Tenants right to commence and/or to continue
any such contest shall be conditioned upon the following:
(i) Prior to the commencement of any contest, Tenant shall have given Landlord written
notice thereof, and, in the case of any Imposition or lien that exceeds
9
$1,476,807.00, in
the aggregate, Tenant shall have furnished to Landlord a surety company bond, a cash
deposit, letter of credit other security reasonably satisfactory to Landlord, securing
payment of the contested Imposition or lien, and interest, charge, or penalty arising from
such contest;
(ii) neither the Premises nor any part thereof would, in Landlords reasonable
judgment, be in material danger of being forfeited or lost by reason of such contest;
(iii) if any lien or encumbrance is filed against the Premises as a result of such
contest, Tenant shall, at its own cost and expense, cause the same to be discharged of
record, by bonding or otherwise; and
(iv) such content will not, in Landlords reasonable judgment, subject or threaten to
subject Tenant or Landlord to any criminal or material civil liability.
(b) Tenant shall keep Landlord and each Mortgagee and Superior Lessor whose name and address
has been furnished to Tenant advised as to the status of any proceedings referred to in this
Section 7.3
, and shall provide to Landlord and each Mortgagee such information regarding
such proceeding as Landlord may from time to time reasonably request.
(c) Upon the termination of such proceedings, Tenant shall pay the amount of such Imposition
or part thereof as finally determined in such proceedings, the payment of which may have been
deferred during the prosecution of such proceedings, together with any costs, fees (including
counsel fees), interest, penalties or other liabilities in connection therewith.
Section 7.4.
At Tenants request and expense, Landlord shall join in any proceedings referred
to in
Section 7.3
, and if any Law shall require that such proceedings be brought by or in
the name of Landlord, Landlord shall permit the same to be brought in its name. Landlord shall not
ultimately be subject to any liability for the payment of any costs or expenses in connection with
any such proceedings, and Tenant will indemnify and save harmless Landlord from any such costs and
expenses. Any reduction or abatement of any Imposition pertaining to any part of the Term shall
inure to Tenants benefit, regardless of whether resulting from Tenants action, and regardless of
whether such reduction or abatement occurs during or after the Term. The provisions of this
Section 7.4
shall survive the expiration or other termination of this Lease.
Section 7.5.
If at any time during the Term, Taxes are required to be paid (either to the
appropriate taxing authorities or as a tax escrow to the holder of a Superior Lease or Mortgage) on
any other date or dates other than as presently required, then Tenants payment obligations in
respect of Taxes shall be correspondingly accelerated or revised so that such payments are due on
or prior to the date payments are due to such taxing authorities, Superior Lessor or Mortgagee, as
appropriate. Upon request by Tenant, Landlord will furnish Tenant with copies of all available tax
bills for the current Tax Year or the immediately preceding Tax Year with respect to the Real
Property.
10
ARTICLE 8.
COMPLIANCE WITH LAWS
Section 8.1.
Tenant, at its sole expense, shall comply with all Laws applicable to the
Premises or the use and occupancy thereof by Tenant, and make all repairs or Alterations required
thereby, whether structural or nonstructural, ordinary or extraordinary, unless otherwise expressly
provided herein. Tenant shall not at any time use or occupy the Premises in violation of the
certificate of occupancy at such time issued for the Improvements and in the event that any
Governmental Authority shall hereafter contend or declare by notice, violation, order or in any
other manner whatsoever that the Premises are used for a purpose which is a violation of such
certificate of occupancy, Tenant shall, upon five (5) days written notice from Landlord or any
Governmental Authority, immediately discontinue such use of the Premises. Failure by Tenant to
discontinue such use after such notice shall be considered a default in the fulfillment of a
material covenant of this Lease and Landlord shall have the right to terminate this Lease
immediately, and in addition thereto shall have the right to exercise any and all rights and
privileges and remedies given to Landlord by and pursuant to the provisions of
Articles 15
and
16
.
Section 8.2.
(a) Tenant shall have the right, at its own expense, to contest by appropriate
proceedings the validity or applicability of any Laws and to defer compliance with any such
contested Laws during such contest, provided that Tenants right to commence and/or to continue any
such contest shall be conditioned upon the following:
(i) Prior to the commencement of any contest, Tenant shall have given Landlord written
notice thereof
(ii) neither the Premises nor any part thereof would, in Landlords reasonable
judgment, be in material danger of being forfeited or lost by reason of such contest;
(iii) if any lien or encumbrance is filed against the Premises as a result of such
contest, Tenant shall, at its own cost and expense, cause the same to be discharged of
record, by bonding or otherwise; and
(iv) neither such contest nor Tenants non-compliance with such Laws would, in
Landlords reasonable judgment, subject or threaten to subject Tenant or Landlord to any
criminal or material civil liability.
(b) Tenant shall keep Landlord and each Mortgagee and Superior Lessor whose name and address
has been furnished to Tenant advised as to the status of any proceedings referred to in this
Section 8.2
, and shall provide to Landlord and each Mortgagee such information regarding
such proceeding as Landlord may from time to time reasonably request.
(c) At Tenants request and expense, Landlord shall join in any proceedings referred to in
this
Section 8.2
, and if any Laws shall require that such proceedings be brought by or in
the name of Landlord, Landlord shall permit the same to be brought in its name, provided that
Landlord shall have no right to settle any such proceeding without the consent of Tenant.
11
Landlord shall not ultimately be subject to any liability for the payment of any costs or expenses in
connection with any such proceedings, and Tenant shall indemnify and save harmless Landlord from
any such costs and expenses. The provisions of this
Section 8.2
shall survive the
expiration or other termination of this Lease
Section 8.3.
Tenant shall defend, indemnify and hold harmless Landlord against any and all
Losses which Landlord shall suffer by reason of Tenants failure to comply with, or Tenants
contest of, any applicable Laws. The provisions of this
Section 8.3
shall survive the
expiration or other termination of this Lease.
ARTICLE 9.
INSURANCE
Section 9.1.
Tenant, at its expense, shall obtain and keep in full force and effect during the
Term:
(a) Insurance against loss or damage to the Improvements, Tenants Property, and all
Alterations to the Improvements, whether existing on the date of this Lease or hereafter installed,
by fire, lightning, windstorm, tornado and hail and against loss and damage by such other, further
and additional risks as may be now or hereafter are included in a standard special form policy
(formerly known as an all-risk endorsement policy), and against loss or damage by all other risks
and hazards covered by a standard extended coverage insurance policy, including, without
limitation, riot and civil commotion, vandalism, malicious mischief, burglary and theft, in an
amount equal to the greater of (i) such amount that the insurer would not deem Tenant a co-insurer
under said policies and (ii) one hundred percent (100%) of the full replacement (insurable) cost of
the Improvements, Tenants Property and all such Alterations from time to time, without reduction
for depreciation. The determination of the replacement cost amount shall be adjusted annually to
comply with the requirements of the insurer issuing such coverage or, at Landlords election, by
reference to such indices, appraisals or information as Landlord determines in its reasonable
discretion. Full replacement cost, with respect to such improvements, means the cost of replacing
such improvements, without regard to deduction for depreciation, exclusive of the cost of
excavations, foundations and footings below the lowest basement floor, and means, with respect to
such furniture, furnishings, fixtures, equipment and other items, the cost of replacing the same,
in each case, with inflation guard coverage to reflect the effect of inflation, or annual
valuation. Each policy or policies shall also insure the additional expense of demolition and if
any of the Improvements or the use of the Premises shall at any time constitute legal
non-conforming structures or uses, provide coverage for contingent liability from Operation of
Building Laws, Demolition Costs and Increased Cost of Construction Endorsements and containing an
Ordinance or Law Coverage or Enforcement endorsement and contain a replacement cost endorsement
and either an agreed amount endorsement (to avoid the operation of any co-insurance provisions) or
a waiver of any co-insurance provisions, all subject to Landlords approval. The deductible with
respect to such insurance shall not be greater than $1,000,000.00 per occurrence.
(b) Commercial general liability insurance and umbrella liability coverage for personal
injury, bodily injury, including accident or death and property damage, providing in
12
combination no less than $50,000,000 per occurrence and in the annual aggregate, and Automobile insurance
including coverage for Owned (if any), Hired and Non Owned vehicles. Tenant shall be named
as the named insured and Landlord and each Mortgagees and Superior Lessors shall be named as
additional insureds either on a specific endorsement or under a blanket endorsement, which
insurance shall provide primary coverage without contribution from any other insurance carried by
or for the benefit of Landlord or any Mortgagee or Superior Lessor, and Tenant agrees to obtain
blanket broad-form contractual liability and products and completed operations liability coverage
to insure its indemnity obligations set forth in
Article 26
. During any construction on
the Premises, the general contractor for such construction shall also provide the insurance
required by this
Section 9.1(b)
. Landlord hereby retains the right to periodically review
the amount of said liability insurance being maintained by Tenant and to require an increase in the
amount of said liability insurance should Landlord deem an increase to be reasonably prudent under
then existing circumstances. The deductible with respect to such insurance shall not be greater
than $1,000,000.00 per occurrence.
(c) Workers compensation insurance covering all persons employed by Tenant at the Premises as
required by applicable Laws.
(d) During the performance of any Alterations, until completion thereof (i) a so-called
Builders All-Risk Completed Value or Course of Construction insurance policy in non-reporting
completed value form including a Permission to Complete and Occupy endorsement, for full
replacement value of all such Alterations, naming Tenant as a named insured and naming Landlord,
the general contractor and construction manager, if any, and any subcontractor designated by Tenant
as loss payees, as their respective interests may appear, and naming each Mortgagee under a
standard form mortgagee endorsement or its equivalent, and (ii) workers compensation insurance
covering all persons engaged in such Alterations. The deductible for such insurance, if any, shall
be satisfactory to Landlord.
(e) If any Premises or portion thereof is identified by the Secretary of Housing and Urban
Development as being situated in an area now or subsequently designated as having special flood
hazards (including, without limitation, those areas designated as Zone A or Zone V), flood
insurance in an amount equal to the lesser of: (i) the minimum amount required, under the terms of
coverage, to compensate for any damage or loss on a replacement basis; or (ii) the maximum
insurance available under the appropriate National Flood Insurance Administration program. The
deductible with respect to such insurance for either Zone A or Zone V shall be five percent (5%) of
the total insurable value of such Premises and Tenants Property, subject to a minimum claim of
$1,000,000.00 per occurrence.
(f) Insurance against loss or damage from (i) leakage of sprinkler systems (if a result of a
peril required to be covered under
Section 9.1(a)
), and (ii) explosion of any steam or
pressure boilers or similar apparatus located in or about the Premises with a minimum liability
amount per accident equal to the lesser of (x) the replacement (insurable) value of the Premises
housing such boiler or pressure-fired machinery and (y) $10,000,000.00, per occurrence, and having
a deductible which shall not exceed $1,000,000.00 per claim, covering the Improvements and Tenants
Property (excluding footings and foundations and other parts of the Improvements which are not
insurable).
13
(g) If any Premises or portion thereof is or ever becomes non-conforming, including, but not
limited to, legal non-conforming, with respect to zoning, ordinance or law coverage to compensate
for the cost of demolition and the increased cost of construction in amounts requested by Landlord,
which will contain Coverage A: Loss Due to Operation of Law (with a minimum liability limit
equal to Replacement Cost With Agreed Value Endorsement), and Coverage B: Demolition Cost and
Coverage C: Increased Cost of Construction coverages.
(h) If an individual Premises is located in a major earthquake damage area and earthquake
insurance is available at a commercially reasonable premium, Tenant shall maintain throughout the
Term earthquake insurance applicable to such Premises for the full replacement value of such
Premises.
(i) Supplemental Business Interruption insurance in an amount equal to twelve (12) months
actual rental loss, including coverage for continuing expenses including rents and with a coverage
limit of $7,000,000. Each such insurance policy shall contain an agreed amount (coinsurance
waiver). In the event business interruption insurance is no longer available at commercially
reasonable rates, then in lieu of obtaining business interruption insurance, Tenant may elect to
deposit with Landlord or its Mortgagee, or deliver to such Mortgagee a letter of credit, in form
and substance reasonably satisfactory to Landlord and such Mortgagee, in either case in an amount
equal to (i) $7,000,000 or (ii) the difference between $7,000,000 amount of business interruption
insurance below $7,000,000 (the
Business Interruption Reserve Amount
), which Business
Interruption Reserve Amount shall be applied by Mortgagee toward any deficiency in the rent
resulting from a casualty or a taking.
(j) To the extent commercially available, Tenant shall maintain insurance with respect to the
Improvements and all Building Systems covering acts of sabotage or acts by terrorist groups or
individuals (
Terrorism Insurance
) throughout the Term consistent with the amounts of
insurance required by this
Sections 9.1
in an amount not less than $25,000,000, and having
a deductible commensurate with the deductibles under the insurance required by this
Sections
9.1
or such lesser coverage amount or such greater deductible, on a blanket basis, that is
acceptable to Landlord. Tenant agrees that if any property insurance policy covering any of the
Premises provides for any exclusions of coverage for acts of terrorism, then a separate Terrorism
Insurance policy in the coverage amount required under this
Sections 9.1(j)
and in form and
substance reasonably acceptable to Landlord will be obtained by Tenant for such Premises to the
extent such Terrorism Insurance is commercially available. Landlord agrees that Terrorism
Insurance coverage may be provided under a blanket policy that is reasonably acceptable to
Landlord. Notwithstanding anything to the contrary in this
Sections 9.1(j)
, Tenant shall
not be obligated to maintain Terrorism Insurance in an amount more than that which can be purchased
for a sum equal to $150,000 or such lesser amount of coverage acceptable to Landlord
(k) Storage Tank System Third Party Liability and Cleanup Insurance for the Premises providing
coverage amounts not less than $2,000,000 per occurrence and $4,000,000 in the annual aggregate.
(l) Such additional and/or other insurance with respect to the Premises and Tenants Property
or on any replacements or substitutions thereof or additions thereto as may
14
from time to time be
required by Landlord against other insurable hazards or casualties which at the time are commonly
insured against by prudent owners and tenants of property similarly situated, including, without
limitation, Sinkhole, Mine Subsidence, Mold and Environmental insurance, due regard being given to
the height and type of buildings, their construction, location, use and occupancy.
Section 9.2.
All insurance companies providing the coverage required under
Section 9.1
shall be selected by Tenant and shall have claims-paying-ability and financial strength ratings by
S&P of not less than A and (y) an Alfred M. Best Company, Inc. rating of A- or better and a
financial size category of not less than X, shall be licensed to write insurance policies in the
State in which the applicable Premises is located, and shall be acceptable to Landlord in
Landlords reasonable discretion. Tenant shall provide Landlord with copies of all certificates of
such coverage for the insurance required pursuant to this
Article 9
, including evidence of
waivers of subrogation required pursuant to
Section 9.5
. All commercial general liability
policies required pursuant to
Section 9.1
shall name Landlord, and each Mortgagees and
Superior Lessors (whose names shall have been furnished to Tenant) as additional insureds, and any
such coverage for additional insureds shall be primary and non-contributory with any insurance
carried by Landlord or any other additional insured, and all umbrella liability or excess liability
policies shall be so-called follow form with respect to such policies. All property insurance
policies required pursuant to
Section 9.1
shall name Landlord as a loss payee, as
Landlords interests may appear, and shall provide that all losses shall be payable as herein
provided. All such policies of insurance shall provide that the amount thereof shall not be
reduced and that none of the provisions, agreements or covenants contained therein shall be
modified or canceled by the insuring company or companies without thirty (30) days prior written
notice being given to Landlord and each Mortgagee and Superior Lessor. Each policy shall also
provide that any losses otherwise payable thereunder shall be payable notwithstanding any
unintentional error or omission of Landlord or Tenant which might, absent such provision, result in
a forfeiture of all or a part of such insurance payment. Such policy or policies of insurance may
also cover loss or damage to Tenants Property located on the Premises, and the insurance proceeds
applicable to Tenants Property shall not be paid to Landlord, but shall accrue and be payable
solely to Tenant. If said insurance or any part thereof shall expire, be withdrawn, become void by
breach of any condition thereof by Tenant or become void or unsafe by reason of the failure or
impairment of the capital of any insurer, Tenant shall immediately obtain new or additional
insurance reasonably satisfactory to Landlord.
Section 9.3.
Anything in this
Article 9
to the contrary notwithstanding, any insurance
which Tenant is required to obtain pursuant to
Section 9.1
may be carried under a blanket
policy or policies covering other properties or liabilities of Tenant, provided that, in the event
that any such coverage is provided in the form of a blanket policy, Tenant hereby acknowledges and
agrees that failure to pay any portion of the premium therefor which is not allocable to the
Premises and Tenants Property or by any other action not relating to the Premises and Tenants
Property which would otherwise permit the issuer thereof to cancel the coverage thereof, would
require the Premises and Tenants Property to be insured by a separate, single-property policy. In
the event any such insurance is carried under a blanket policy, Tenant shall deliver to Landlord
and each Mortgagee an ACORD certificate evidencing the issuance and effectiveness of the policy,
the amount and character of the coverage with respect to the
15
applicable Premises and the presence
in the policy of provisions of the character required in the above sections of this
Article
9
.
Section 9.4.
Tenant shall pay as they become due all premiums for the insurance required by
Section 9.1
, shall renew or replace each policy, and shall deliver to Landlord and each
Mortgagee a certificate or other evidence (reasonably satisfactory to Landlords Mortgagee and
Landlord) of the existing policy and such renewal or replacement policy at least thirty (30) days
prior to the expiration date of each policy. In the event of Tenants failure to comply with any
of the foregoing requirements of this
Article 9
within five (5) Business Days of the giving
of written notice by Landlord to Tenant, Landlord shall be entitled to procure such insurance. Any
sums expended by Landlord in procuring such insurance shall be Additional Rent and shall be repaid
by Tenant, together with interest thereon at the Default Rate, from the time of payment by Landlord
until fully paid by Tenant immediately upon written demand therefor by Landlord.
Section 9.5.
(a) Landlord and Tenant hereby waive any and all rights of recovery against the
other, or against the officers, employees, partners, agents and representatives of the other, for
loss of or damage to the property of the waiving party to the extent such loss or damage is
typically covered under standard forms of all risk insurance policies with extended coverage. In
addition, the parties hereto shall procure an appropriate clause in, or endorsement on, any fire or
extended coverage insurance covering the Premises, and personal property, fixtures and equipment
located thereon or therein, pursuant to which the insurance companies waive subrogation or consent
to a waiver of right of recovery and subject to obtaining such clauses or endorsements of waiver of
subrogation or consent to a waiver of right of recovery, hereby agree not to make any claim against
or seek to recover from the other for any loss or damage to its property or the property of others
resulting from fire or other hazards covered by such fire and extended coverage insurance;
provided
,
however
, that the release, discharge, exoneration and covenant not to sue
herein contained shall be limited by and coextensive with the terms and provisions of the waiver of
subrogation clause or endorsements or clauses or endorsements consenting to a waiver of right of
recovery. Tenant acknowledges that Landlord shall not carry insurance on and shall not be
responsible for damage to, the Improvements or Tenants Property, and that Landlord shall not carry
insurance against, or be responsible for any loss suffered by Tenant due to interruption of
Tenants business. The waiver of subrogation and releases described in this
Section 9.5(a)
shall apply to the Premises, the Adjacent Premises, and other property owned by Landlord.
(b) Notwithstanding anything in this Lease to the contrary, as to each party hereto, provided
such partys right of full recovery under such insurance as such party may or shall be required to
carry hereunder is not adversely affected, such party hereby releases the other (and its servants,
agents, contractors, employees and invitees) with respect to any claim (including a claim for
negligence) which it might otherwise have against the other party for loss, damages or destruction
of the type covered by such insurance with respect to its property by fire or other casualty
occurring during the Term.
16
ARTICLE 10.
DAMAGE TO PREMISES
Section 10.1.
If all or any portion of any Improvements on any parcel of Land shall be damaged
by fire or other casualty, Tenant shall promptly notify Landlord thereof and shall diligently
repair or reconstruct such Improvements, in a good and workmanlike manner, to a like or better
condition than existed prior to such damage or destruction, with such Alterations or modifications
thereto as Tenant shall deem necessary or desirable, subject to the provisions of
Article 5
(the
Restoration
), at Tenants sole cost and expense and whether or not the insurance
proceeds applicable to damage or destruction of such Improvements shall be sufficient.
Section 10.2.
So long as Tenant is not in default beyond applicable grace or notice provisions
in the payment or performance of its obligations hereunder, Tenant shall be entitled to receive all
insurance proceeds payable with respect to any damage to the Improvements or any of Tenants
Property by fire or other casualty. Landlord agrees to pay over to Tenant from time to time, for
the costs of the Restoration, any proceeds which may be received by Landlord from insurance carried
by Landlord or Tenant, less any actual, reasonable out-of-pocket expenses paid by Landlord in the
collection of such proceeds.
Section 10.3.
The Rent payable under this Lease shall not abate by reason of any damage or
destruction of any Improvements by reason of an insured or uninsured casualty;
provided
,
however
, that Tenant shall receive a credit against the Rent and other sums due hereunder
in an amount equal to the proceeds of any business interruption insurance carried by Tenant, to the
extent that such proceeds are paid to Landlord. Tenant hereby waives all rights under applicable
Laws to abate, reduce or offset Rent by reason of such damage or destruction.
Section 10.4.
Notwithstanding the foregoing provisions of this
Article 10
, if there
exists a Mortgage, (a) the terms and conditions of such Mortgage shall be satisfied prior to the
disbursement of any insurance proceeds for the Restoration of any damage to the Land or
Improvements, and (b) Mortgagee shall have the right to supervise and control the receipt and
disbursements of such insurance proceeds and, subject to the terms of such Mortgage, shall be
entitled to apply any insurance proceeds which are not used to pay for the costs of such
Restoration to the reduction of the debt secured by the Mortgage.
ARTICLE 11.
EMINENT DOMAIN
Section 11.1.
If all or substantially all of the Improvements on any parcel of Land (or such
portion of such Improvements that Tenant, in Tenants reasonable judgment, is unable to reasonably
operate its business in substantially the same manner as on the date immediately preceding an
acquisition or condemnation thereof), or any parcel of the Land, shall be acquired or condemned for
any public or quasi-public use or purpose, then Tenant shall promptly notify Landlord thereof and
this Lease and the Term shall end only with respect to such acquired or condemned parcel (or
parcels) of Land (and the Improvements located thereon) as of the date of the vesting of title
thereto with the same effect as if that date were the Expiration
17
Date. In the event that this
Lease is terminated pursuant to this
Section 11.1
with respect to any acquired or condemned
parcel (or parcels) of Land (and the Improvements located thereon), and Landlord shall not have
elected to substitute another parcel (or parcels) of land and improvements for the parcel (or
parcels) of Land and the Improvements so acquired or condemned in accordance with the provisions of
Article 28
, then the Fixed Rent payable hereunder shall be (a) reduced by the amount of the
Fixed Rent allocated to the acquired or condemned parcel (or parcels) of Land (and the Improvements
located thereon) as set forth on
Exhibit E
to this Lease as of the termination date, and
(b) paid or refunded up to and including, such termination date.
Section 11.2.
If a part of any of the Improvements shall be so acquired or condemned and this
Lease and the Term shall not be terminated with respect to the parcel (or parcels) of Land so
affected, then Tenant shall promptly commence and thereafter and diligently proceed to repair or
reconstruct such Improvements, in a good and workmanlike manner, to a like condition as, or better
condition than, existed prior to such damage or destruction, with such Alterations or modifications
thereto as Tenant shall deem necessary or desirable, subject to the provisions of
Article
5
, at Tenants sole cost and expense. So long as Tenant is not in default beyond applicable
grace or notice provisions in the payment or performance of its obligations hereunder, Tenant shall
be entitled to receive all or such portion of the condemnation award paid with respect to such
acquisition or condemnation as is required to pay all cost of the Restoration, including, subject
to the provisions of
Section 11.3
, the costs to repair or replace any Alterations and
Tenants Property damaged or taken in such acquisition or condemnation.
Section 11.3.
Subject to the provisions of
Section 11.2
, Landlord shall receive the
entire award for any acquisition or condemnation of all of the Improvements or the Land, and Tenant
shall have no claim against Landlord or the condemning authority for the value of any unexpired
portion of the Term, Tenants Alterations or improvements; and Tenant hereby assigns to Landlord
all of its rights in and to any such award. Nothing contained in this
Article 11
shall be
deemed to prevent Tenant from making a separate claim in any condemnation proceedings for the then
value of any Tenants Property included in such taking and for any moving expenses, provided any
such award is in addition to, and does not result in a reduction of, the award made to Landlord.
Section 11.4.
Except as otherwise expressly provided in
Section 11.1
, this Lease shall
not terminate and shall remain in full force and effect in the event of any acquisition or
condemnation of any Premises, or any portion thereof, and, except as otherwise expressly provided
by the provisions of this Lease, Tenant hereby waives all rights under applicable Laws to abate,
reduce or offset Rent by reason of such taking.
Section 11.5.
Notwithstanding the foregoing provisions of this
Article 11
, if there
exists a Mortgage, (a) the terms and conditions of such Mortgage shall be satisfied prior to the
disbursement of any condemnation award for the Restoration of any damage to the Land or
Improvements, and (b) Mortgagee shall have the right to supervise and control the receipt and
disbursements of such condemnation award and, subject to the terms of such Mortgage, shall be
entitled to apply any portion of the condemnation award which is not used to pay for the costs of
such Restoration to the reduction of the debt secured by the Mortgage.
18
ARTICLE 12.
ASSIGNMENT AND SUBLETTING
Section 12.1.
(a) Except as otherwise provided in this
Article 12
, and it being
agreed that Tenant shall have the right to place a lien on Tenants Property to the extent set
forth in documents evidencing Tenants Credit Facility, Tenant shall not assign, mortgage, pledge,
encumber, or otherwise transfer this Lease, whether by operation of law or otherwise, and shall not
sublet (or underlet), license, franchise or permit or suffer the Premises or any part thereof to be
used or occupied by others (whether for desk space, mailing privileges or otherwise), without
Landlords prior written consent, which consent may be granted or withheld in Landlords sole
discretion. Any assignment, sublease, license, franchise, mortgage, pledge, encumbrance or
transfer in contravention of the provisions of this
Article 12
shall be null and void.
(b) If, without Landlords consent, this Lease is assigned, or the Premises is sublet or
occupied by anyone other than Tenant, or this Lease or the Premises is encumbered (by operation of
law or otherwise), Landlord may collect rent from the assignee, subtenant or occupant and apply the
net amount collected to the Rent herein reserved. No such collection of rent shall be deemed to be
(i) a waiver of the provisions of this
Article 12
, (ii) an acceptance of the assignee,
subtenant or occupant as tenant, or (iii) a release of Tenant from the performance of any of the
terms, covenants and conditions to be performed by Tenant under this Lease, including the payment
of Rent.
(c) Landlords consent to any assignment or subletting shall not relieve Tenant from the
obligation to obtain Landlords express consent to any further assignment or subletting. In no
event shall any permitted subtenant assign or encumber its sublease or further sublet the Premises,
or otherwise suffer or permit any portion of the Premises to be used or occupied by others.
Section 12.2.
If Tenant shall, at any time or from time to time, during the Term desire to
assign this Lease or sublet all of the Premises, Tenant shall give notice (a
Tenants
Notice
) thereof to Landlord, which Tenants Notice shall set forth: (a) with respect to an
assignment of this Lease, the date Tenant desires the assignment to be effective and any
consideration Tenant would receive under such assignment; (b) with respect to a sublet of all of
the Premises (i) the dates upon which Tenant desires the sublease term to commence and expire, and
(ii) the rental rate and other material business terms upon which Tenant would sublet the Premises,
(c) a statement setting forth in reasonable detail the identity of the proposed assignee or
subtenant, the nature of its business and its proposed use of the Premises, (d) current financial
information with respect to the proposed assignee or subtenant, including its most recent financial
report, (e) a true and complete copy of the proposed assignment or sublease and any other
agreements relating thereto, and (f) an agreement by Tenant to indemnify, defend, protect and hold
harmless Landlord from and against any and all Losses resulting from any claims that may be made
against Landlord by the proposed assignee or subtenant or by any brokers or other Persons claiming
a commission or similar compensation in connection with the proposed assignment or sublease,
irrespective of whether Landlord shall give or decline to give its consent to any proposed
assignment or sublease.
19
Section 12.3.
(a) Notwithstanding anything to the contrary contained in
Section 12.1
(but subject to the consent rights of any Mortgagee or Superior Lessor), provided that no Event of
Default shall have occurred and be continuing under this Lease as of the time Landlords consent is
requested by Tenant, Landlord shall consent to a proposed assignment of this Lease or sublease of
all of the Premises;
provided
, that the proposed assignee or subtenant shall have a net
worth equal to or greater than the net worth of Tenant as of the Commencement Date (and evidence
reasonably satisfactorily to Landlord of such net worth shall have been delivered to Landlord).
(b) With respect to each and every sublease consented to by Landlord under the provisions of
this Lease, it is further agreed that:
(i) no sublease shall be for a term ending later than one day prior to the Expiration
Date of this Lease;
(ii) no sublease shall be delivered to any subtenant, and no subtenant shall take
possession of any part of the Premises, until an executed counterpart of such sublease has
been delivered to Landlord and approved in writing by Landlord; and
(iii) any sublease shall be subject and subordinate to this Lease and to the matters to
which this Lease is or shall be subordinate, and each subtenant by entering into a sublease
is deemed to have agreed that in the event of termination, re-entry or dispossession by
Landlord under this Lease, Landlord may, at its option, take over all of the right, title
and interest of Tenant, as sublandlord, under such sublease, and such subtenant shall, at
Landlord s option, attorn to Landlord pursuant to the then executory provisions of such
sublease, except that Landlord shall not (A) be liable for any previous act or omission of
Tenant under such sublease, (B) be subject to any counterclaim, offset or defense, not
expressly provided in such sublease, which theretofore accrued to such subtenant against
Tenant, (C) be bound by any previous modification of such sublease or by any previous
prepayment of more than one months Fixed Rent or of any Additional Rent, or (D) be
obligated to perform any work in the subleased space or to prepare it for occupancy, and in
connection with such attornment, the subtenant shall execute and deliver to Landlord any
instruments Landlord may reasonably request to evidence and confirm such attornment. Each
subtenant or licensee of Tenant shall be deemed, automatically upon and as a condition of
its occupying or using the Premises, to have agreed to be bound by the terms and conditions
set forth in this
Article 12
. The provisions of this
Article 12.3(b)
shall
be self-operative and no further instrument shall be required to give effect to this
provision.
(c) In the event that Tenant fails to execute and deliver the assignment or sublease to which
Landlord consented within one hundred twenty (120) days after the giving of such consent, then
Tenant shall again comply with all of the provisions and conditions of this
Article 12
before assigning this Lease or subletting all of the Premises.
Section 12.4.
Notwithstanding any assignment or subletting or any acceptance of Rent by
Landlord from any assignee or subtenant, Tenant shall remain fully liable for the
20
payment of all
Rent due and for the performance of all other terms, covenants and conditions contained in this
Lease on Tenants part to be observed and performed, and any default under any term, covenant or
condition of this Lease by any subtenant shall be deemed a default under this Lease by Tenant.
Section 12.5.
(a) Any Change of Control (as a result of one or more transactions) of Tenant
shall be deemed an assignment of this Lease for all purposes of this
Article 12
. The
limitations set forth in this
Section 12.5
shall be deemed to apply to assignees and
Guarantors of this Lease, if any, and any transfer of ownership interests in, or any merger,
consolidation or transfer of assets of, any such Entity in violation of this
Section 12.5
shall be deemed to be an assignment of this Lease in violation of
Section 12.1
.
Notwithstanding the forgoing or anything to the contrary contained in this Lease, the provisions of
this
Article 12
shall not apply to or prohibit, and Landlords consent shall not be
required with respect to (i) the transfer of shares of stock of Tenant or any Person that is an
Affiliate of Tenant that are publicly traded, in ordinary course trading on a nationally recognized
stock exchange, and/or (ii) an initial public offering of Tenants or such Persons stock, provided
that such initial public offering shall be subject to and made in compliance with all applicable
requirements set forth in any Mortgage or other loan documents made by Landlord with or in favor of
the Mortgagee thereunder.
(b) A modification, amendment or extension of a sublease shall be deemed a sublease for the
purposes of
Section 12.1
, and a lease takeover agreement shall be deemed an assignment of
this Lease for the purposes of
Section 12.1
.
Section 12.6.
Any assignment or transfer which is or is deemed to be an assignment of this
Lease shall be made only if, and shall not be effective until, the assignee shall (a) execute,
acknowledge and deliver to Landlord an agreement in form and substance satisfactory to Landlord
whereby the assignee shall assume the obligations of this Lease on the part of Tenant to be
performed or observed from and after the effective date of such assignment or transfer, and whereby
the assignee shall agree that the provisions of
Section 12.1
shall, notwithstanding such
assignment or transfer, continue to be binding upon it in respect of all future assignments and
transfers, and (b) deliver to Landlord the certificates of insurance as required under
Article
9
.
Section 12.7.
The joint and several liability of Tenant and any immediate or remote successor
in interest of Tenant for the due performance of the obligations on Tenants part to be performed
or observed pursuant to this Lease shall not be discharged, released or impaired in any respect by
any agreement or stipulation made by Landlord, or any grantee or assignee of Landlord by way of
mortgage or otherwise, extending the time for performance of, or otherwise modifying, any of such
obligations, or by any waiver or failure of Landlord, or any grantee or assignee of Landlord by way
of mortgage or otherwise, to enforce any of such obligations.
ARTICLE 13.
SUBORDINATION; ESTOPPEL CERTIFICATES
Section 13.1.
Subject to the provisions of
Section 13.4
, the rights and interests of
Tenant under this Lease any and all liens, rights and interests (whether choate or inchoate and
21
including, without limitation, all mechanics and materialmens liens under applicable law) owed,
claimed or held by Tenant in and to the Land and Improvements are and shall be in all respects
subject, subordinate and inferior to any Mortgage (and any other loan documents executed and/or
delivered in connection with such Mortgage), and to the liens, security interests and all other
rights and interests created or to be created therein or thereby for the benefit of Mortgagee, and
securing the repayment of the debt secured by any such Mortgage, including, without limitation,
those created under the Mortgage covering, amount other things, the Land and Improvements, and
filed or to be filed of record in the public records maintained for the recording of mortgages in
the jurisdiction where each parcel of Land is located, and all renewals, extensions, increases,
supplements, spreaders, consolidations, amendments, modifications and replacements thereof and to
all sums secured thereby and advances made thereunder with the same force and effect as if the
Mortgage and the loan documents executed in connection therewith had been executed and delivered
and the Mortgage recorded prior to the execution and delivery of this Lease. At its option and in
its sole discretion, Mortgagee may elect to give the rights and interest of Tenant and the Lease
priority over the lien of the Mortgage. In the event of such election, the rights and interest of
Tenant under the Lease automatically shall have the priority over the lien of the Mortgage and no
additional consent or instrument shall be necessary or required. Tenant agrees to execute and
deliver whatever instruments may be reasonably requested by Mortgagee for the purposes of this
Section 13.1
, and in the event that Tenant fails to do so after demand in writing, Tenant
does hereby make, constitute and irrevocably appoint Landlord as Tenants attorney-in-fact and in
its name, place and stead so to do.
Section 13.2.
In the event of any act or omission of Landlord which would give Tenant the
right, immediately or after lapse of a period of time, to cancel or terminate this Lease, or to
claim a partial or total eviction, Tenant shall not exercise such right (a) until it has given
written notice of such act or omission to each Mortgagee and Superior Lessor whose name and address
shall previously have been furnished to Tenant in writing, and (b) unless such act or omission
shall be one which is not capable of being remedied by Landlord or such Mortgagee or Superior
Lessor within a reasonable period of time, until a reasonable period for remedying such act or
omission shall have elapsed following the giving of such notice and following the time when such
Mortgagee or Superior Lessor shall have become entitled under such Mortgage or Superior Lease, as
the case may be, to remedy the same (which reasonable period shall in no event be more than thirty
(30) days longer than the period to which Landlord would be entitled under this Lease or otherwise,
after similar notice, to effect such remedy), provided such Mortgagee or Superior Lessor shall with
due diligence give Tenant written notice of its intention to remedy such act or omission, and such
Mortgagee or Superior Lessor shall commence and thereafter continue with reasonable diligence to
remedy such act or omission. If more than one Mortgagee or Superior Lessor shall become entitled
to any additional cure period under this
Section 13.2
, such cure periods shall run
concurrently, not consecutively.
Section 13.3.
If a Mortgagee or Superior Lessor shall succeed to the rights of Landlord under
this Lease, whether through possession or foreclosure action or delivery of a new lease or deed,
then at the request of such party so succeeding to Landlords rights (
Successor Landlord
)
and upon Successor Landlords written agreement to accept Tenants attornment, Tenant shall attorn
to and recognize Successor Landlord as Tenants landlord under this Lease, and shall promptly
execute and deliver any instrument that Successor Landlord may reasonably request to evidence such
attornment. Upon such attornment this Lease shall continue in full
22
force and effect as, or as if
it were, a direct lease between Successor Landlord and Tenant upon all of the terms, conditions and
covenants as are set forth in this Lease and shall be applicable after such attornment except that
Successor Landlord shall not:
(i) be liable for any previous act or omission of Landlord under this Lease (provided
that nothing contained herein shall be deemed to relieve any Successor Landlord of any
liability arising by reason of such Successor Landlords acts or omissions occurring after
the date such Successor Landlord succeeds to Landlords interest under this Lease);
(ii) be subject to any offset which shall have theretofore accrued to Tenant against
Landlord; or
(iii) be bound by any previous modification of this Lease, not expressly provided for
in this Lease, or by any previous prepayment of more than one months Fixed Rent, unless
such modification or prepayment shall have been expressly approved in writing by such
Successor Landlord.
Section 13.4.
Notwithstanding the foregoing provisions of this
Article 13
, as a
condition to Tenants agreement hereunder to subordinate Tenants interest in this Lease to any
existing or future Mortgages or Superior Leases, Landlord shall deliver to Tenant for execution and
acknowledgment a Non-Disturbance Agreement from the Mortgagee or Superior Lessor, as applicable,
under each Mortgage and Superior Lease. A
Non-Disturbance Agreement
shall mean a
subordination, attornment and non-disturbance agreement duly executed and acknowledged by a
Mortgagee or a Superior Lessor, as the case may be, and by Landlord, in form acceptable for
recording in each of the States in which the Premises are located, and (a) in the form attached as
Exhibit F
to this Lease, in the case of the existing Mortgagee, and (b) as to future
Mortgagees and Superior Lessors, in the form customarily employed by such Mortgagee or Superior
Lessor and reasonably satisfactory to Tenant, provided that in no event shall any such
Non-Disturbance Agreement materially increase the obligations or materially decrease the rights of
Tenant under this Lease. Tenant agrees to execute, acknowledge and deliver to Landlord any such
Non-Disturbance Agreement promptly after delivery by Landlord or any Mortgagee or Superior Lessor.
Section 13.5.
Landlord and Tenant agree that upon the request of Mortgagee made in accordance
with
Section 2.2(c)
, the Rent payable hereunder shall be paid directly to such Mortgagee or
as such Mortgagee may direct.
Section 13.6.
Each party agrees, at any time and from time to time, as requested by the other
party, upon not less than ten (10) days prior notice, to execute and deliver to the other a
written statement executed and acknowledged by such party (a) stating that this Lease is then in
full force and effect and has not been modified (or if modified, setting forth all modifications),
(b) setting forth the then annual Fixed Rent, (c) setting forth the date to which the Fixed Rent
and Additional Rent have been paid, (d) stating whether or not, to the best knowledge of the
signatory, the other party is in default under this Lease, and if so, setting forth the specific
nature of all such defaults, (e) stating whether there is a sublease affecting any Premises, (g)
stating the address of the signatory to which all notices and communication under the Lease shall
23
be sent, the Commencement Date and the Expiration Date, and (h) as to any other matters reasonably
requested by the party requesting such certificate. The parties acknowledge that any statement
delivered pursuant to this
Section 13.6
may be relied upon by others with whom the party
requesting such certificate may be dealing, including any purchaser or owner of any Land or any
Improvements, or of Landlords interest in any Land or any Improvements, or any Superior Lease, or
by any Mortgagee or Superior Lessor, or by any prospective or actual sublessee of the Premises or
assignee of this Lease, or permitted transferee of or successor to Tenant.
ARTICLE 14.
MANAGEMENT; ACCESS TO PREMISES
Section 14.1.
Tenant acknowledges and agrees that Landlord may elect at any time during the
Term to retain a Person to perform or supply certain services to Landlord in connection with the
management of the Premises and the administration of this Lease (a
Property Manager
). If
Landlord shall retain a Property Manager at any time during the Term, Landlord shall notify Tenant
thereof and provide to Tenant a copy of the agreement entered into by and between Landlord and the
Property Manager with respect the management of the Premises (the
Management Agreement
)
and/or information regarding the management fees, incentive fees and other compensation,
reimbursement of costs and expenses and other payments to be made to the Property Manager pursuant
to the terms of the Management Agreement (all such fees, compensation and reimbursements,
collectively, the
Management Fees
). Without limiting any of the provisions of this
Lease, Tenant agrees to pay, on behalf of Landlord, any and all Management Fees as and when the
same are due and payable to the Property Manager pursuant to the terms of the Management Agreement;
provided, however, that in no event shall Tenant be required to pay in any twelve (12) month period
any Management Fees in excess of an amount equal to three percent (3%) of the Fixed Rent payable by
Tenant hereunder during the same twelve (12) month period. Tenant agrees that it shall not retain
a Property Manager or enter into any Management Agreement without the prior the written approval of
Landlord and each Mortgagee.
Section 14.2.
Landlord and Landlords agents shall have the right to enter the Premises on not
less than forty-eight (48) hours advance notice (except no such prior notice shall be required in
case of emergency), accompanied by a representative of Tenant, if provided by Tenant, in order (a)
to inspect the Premises, no more frequently (except in respect of any default by Tenant, or if
Landlord reasonably believes such an inspection would be likely to disclose a default by Tenant
hereunder) than quarterly, and (b) to show the Premises to prospective purchasers or Mortgagees or,
during the last twenty-four (24) months of the Term, to prospective tenants of the Premises.
Tenant or any Tenant Party may designate one or more areas of the Premises as secure areas, and
Landlord and Landlords agents shall not enter such secure areas without a representative of Tenant
or such Tenant Party present during such entry, except in an emergency.
24
ARTICLE 15.
DEFAULT
Section 15.1.
Each of the following events shall be an
Event of Default
hereunder:
(a) if Tenant fails to pay (i) any installment of Fixed Rent, any Taxes or insurance premiums
on or prior to the fifth (5th) day of any calendar month (or, if the fifth (5th) day of a calendar
month is not a Business Day, on or prior to the Business Day immediately preceding the fifth (5th)
day of such calendar month) or (ii) any Additional Rent (other than Taxes and insurance premiums)
on or prior to the date that is five (5) Business Days after Landlords notice of such default is
given to Tenant; or
(b) if Tenant admits in writing its inability to pay its debts as they become due; or
(c) if Tenant commences or institutes any case, proceeding or other action (i) seeking relief
as a debtor, or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or
its debts under any existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, or (ii) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any substantial part of
its property; or
(d) if Tenant makes a general assignment for the benefit of creditors; or
(e) if any case, proceeding or other action is commenced or instituted against Tenant (i)
seeking to have an order for relief entered against it as debtor or to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, or (ii) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its property, which either
(A) results in any such entry of an order for relief, adjudication of bankruptcy or insolvency or
such an appointment or the issuance or entry of any other order having a similar effect, or (B)
remains undismissed for a period of ninety (90) days; or
(f) if any case, proceeding or other action is commenced or instituted against Tenant seeking
issuance of a warrant of attachment, execution, distraint or similar process against all or any
substantial part of its property which results in the entry of an order for any such relief which
has not been vacated, discharged, or stayed or bonded pending appeal within ninety (90) days from
the entry thereof; or
(g) if Tenant takes any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth in
Sections 15.1(c
), (
d
), (
e
)
or (
f
); or
25
(h) if a trustee, receiver or other custodian is appointed for any substantial part of the
assets of Tenant, which appointment is not vacated or effectively stayed within seven (7) Business
Days, or if any such vacating or stay does not thereafter remain in effect; or
(i) if Tenant defaults in the observance or performance of any other term, covenant or
condition of this Lease on Tenants part to be observed or performed and Tenant fails to remedy
such default within thirty (30) days after notice by Landlord to Tenant of such default, or, if
such default is of such a nature that it cannot be completely remedied within said period of thirty
(30) days, if Tenant fails to commence to remedy such default within such thirty-day period, or
fails thereafter to diligently prosecute to completion all steps necessary to remedy such default.
Section 15.2.
If an Event of Default occurs and is continuing, Landlord may at any time
thereafter either (a) elect to proceed by appropriate judicial proceedings, either at law or in
equity, to enforce the performance or observance by Tenant of the applicable provision or
provisions of this Lease and/or to recover damages for Tenants breach thereof, or (b) give written
notice to Tenant stating that this Lease and the Term shall expire and terminate on the date
specified in such notice, which date shall not be less than twenty (20) Business Days after the
giving of such notice. If Landlord gives such notice of termination, this Lease and the Term and
all rights of Tenant under this Lease shall expire and terminate as if the date set forth in such
notice were the fixed Expiration Date and Tenant immediately shall quit and surrender the Premises,
but Tenant shall remain liable as hereinafter provided.
ARTICLE 16.
REMEDIES AND DAMAGES
Section 16.1.
If an Event of Default shall occur, and this Lease and the Term shall expire and
come to an end pursuant to either the termination thereof by Landlord or judicial proceeding as
provided in
Article 15
:
(a) Tenant shall quit and peacefully surrender the Premises to Landlord, and Landlord and its
agents may immediately, or at any time after such Event of Default or after the date upon which
this Lease and the Term shall expire and come to an end, re-enter the Premises or any part thereof,
without notice, either by summary proceedings, or by any other applicable action or proceeding, or
by legal force or other legal means (without being liable to indictment, prosecution or damages
therefor), and may repossess the Premises and dispossess Tenant and any other Persons from the
Premises and remove any and all of their property and effects from the Premises; and
(b) Landlord shall use good faith efforts to relet all or any portion or portions of the
Premises to such tenant or tenants, for such term or terms ending before, on or after the
Expiration Date, at such rental or rentals and upon such other conditions, which may include
concessions and free rent periods, as Landlord, in its reasonable discretion, may determine;
provided
,
however
, that Landlord shall not be liable for any failure to relet all
or any portion of the Premises, or, in the event of any such reletting, for refusal or failure to
collect any
26
rent due upon any such reletting, and no such refusal or failure shall operate to
relieve Tenant of any liability under this Lease or otherwise affect any such liability, and
Landlord, at Landlords option, may make such repairs, replacements, alterations, additions,
improvements, decorations and other physical changes in and to the Premises as Landlord, in its
sole discretion, considers advisable or necessary in connection with any such reletting or proposed
reletting, without relieving Tenant of any liability under this Lease or otherwise affecting any
such liability.
Section 16.2.
If this Lease and the Term shall expire and come to an end as provided in
Article 15
, or by or under any summary proceeding or any other action or proceeding, or if
Landlord shall re-enter the Premises as provided in
Section 16.1
, or by or under any
summary proceeding or any other action or proceeding, then, in any of such events:
(a) Tenant shall pay to Landlord all Fixed Rent and Additional Rent payable under this Lease
by Tenant to Landlord to the date upon which this Lease and the Term shall have expired and come to
an end or to the date of re-entry upon the Premises by Landlord, as the case may be;
(b) Tenant also shall be liable for and shall pay to Landlord, as damages, any deficiency (the
Deficiency
) between (i) the Fixed Rent for the period which otherwise would have
constituted the unexpired portion of the Term, (conclusively presuming the Additional Rent for each
year thereof to be the same as was payable for the year immediately preceding such termination or
re-entry), and (ii) the net amount, if any, of rents collected under any reletting effected
pursuant to the provisions of
Section 16.1(b)
for any part of such period (first deducting
from the rents collected under any such reletting all of Landlords expenses in connection with the
termination of this Lease, Landlords re-entry upon the Premises and with such reletting including
all repossession costs, brokerage commissions, legal expenses, attorneys fees and disbursements,
alteration costs and other expenses of preparing the Premises for such reletting). Tenant shall
pay the Deficiency in monthly installments on the days specified in this Lease for payment of
installments of Fixed Rent, and Landlord shall be entitled to recover from Tenant each monthly
Deficiency as the same shall arise. No suit to collect the amount of the Deficiency for any month
shall prejudice Landlords right to collect the Deficiency for any subsequent month by a similar
proceeding; and
(c) whether or not Landlord shall have collected any Deficiency, Tenant shall pay to Landlord,
in lieu of any further Deficiency, as and for liquidated and agreed final damages, a sum equal to
(i) the amount by which Fixed Rent for the period which otherwise would have constituted the
unexpired portion of the Term (conclusively presuming the Additional Rent for each year thereof to
be the same as was payable for the year immediately preceding such termination or re-entry) exceeds
(ii) the then fair and reasonable rental value of the Premises, including Additional Rent for the
same period, both discounted to present value at the rate of four percent (4%) per annum,
less
(iii) the aggregate amount of the Deficiency previously collected by Landlord pursuant
to the provisions of
Section 16.1(b)
for the same period. If, before presentation of proof
of such liquidated damages to any court, commission or tribunal, Landlord shall have relet the
Premises or any part thereof for the period which otherwise would have constituted the unexpired
portion of the Term, or any part thereof, the amount of net rents reserved under the new lease for
all or the part of the Premises so relet shall
27
be deemed,
prima facie
, to be the fair and
reasonable rental value for such part or all of the Premises so relet during the term of the
reletting.
Section 16.3.
Upon the breach or threatened breach by Tenant, or any Persons claiming through
or under Tenant, of any term, covenant or condition of this Lease, Landlord shall have the right to
enjoin such breach and to invoke any other remedy allowed by law or in equity as if re-entry,
summary proceedings and other special remedies were not provided in this Lease for such breach.
The rights to invoke the remedies set forth above are cumulative and shall not preclude Landlord
from invoking any other remedy allowed at law or in equity.
Section 16.4.
No receipt of monies by Landlord from Tenant after termination of this Lease, or
after the giving of any notice of termination of this Lease, shall reinstate, continue or extend
the Term or affect any notice theretofore given to Tenant, or operate as a waiver of the right of
Landlord to enforce the payment of Rent payable by Tenant hereunder or thereafter falling due, or
operate as a waiver of the right of Landlord to recover possession of the Premises by proper
remedy, except as otherwise expressly provided herein, it being agreed that after the service of
notice to terminate this Lease or the commencement of suit or summary proceedings, or after final
order or judgment for the possession of the Premises, Landlord may demand, receive and collect any
monies due or thereafter falling due without in any manner affecting such notice, proceeding,
order, suit or judgment, all such monies collected being deemed payments on account of the use and
occupation of the Premises or, at the election of Landlord, on account of Tenants liability
hereunder.
Section 16.5.
Except as expressly provided to the contrary herein or as may be prohibited by
applicable Laws, Tenant hereby expressly waives the service of any notice of intention to re-enter
provided for in any statute, or of the institution of legal proceedings to that end which may
otherwise be required to be given under applicable Laws. Tenant, for and on behalf of itself and
all Persons claiming by, through or under Tenant, including creditors of all kinds, hereby
expressly waives any and all rights of redemption which it or any of them may have under applicable
Laws or otherwise and any rights of re-entry or repossession or to restore the operation of this
Lease in case Tenant shall be dispossessed by a judgment or by warrant of any court or judge or in
case of re-entry or repossession by Landlord or in case of any expiration or termination of this
Lease, whether such dispossess, re-entry, expiration or termination shall be by operation of law or
pursuant to the provisions of this Lease. The terms enter, reenter, entry or reentry, as
used in this Lease shall not be restricted to their technical, legal meanings.
ARTICLE 17.
FEES AND EXPENSES
Section 17.1.
If an Event of Default shall occur under this Lease, or if Tenant shall do or
permit to be done any act or thing upon the Premises which would cause Landlord to be in default
under any Mortgage or Superior Lease, or if Tenant shall fail to comply with its obligations under
this Lease and the preservation of property or the safety of any Person is threatened thereby,
Landlord or the Mortgagee under such Mortgage or Superior Lessor under such Superior Lease, as
applicable, may, after reasonable prior notice to Tenant except in an
28
emergency, perform the same
for the account of Tenant or make any expenditure or incur any obligation for the payment of money
for the account of Tenant. All amounts expended by Landlord in connection with the foregoing,
including reasonable attorneys fees and disbursements in instituting, prosecuting or defending any
action or proceeding or recovering possession, and the cost thereof, with interest thereon at the
Default Rate, shall be deemed to be Additional Rent hereunder and shall be paid by Tenant to
Landlord within ten (10) days of rendition of any bill or statement to Tenant therefor.
Section 17.2.
If Tenant shall fail to pay any installment of Fixed Rent and/or Additional Rent
when due, Tenant shall pay to Landlord, in addition to such installment of Fixed Rent and/or
Additional Rent, as the case may be, as a late charge and as Additional Rent, a sum equal to
interest at the Default Rate on the amount unpaid, computed from the date such payment was due to
and including the date of payment.
ARTICLE 18.
NO REPRESENTATIONS BY LANDLORD
Landlord and Landlords agents have made no warranties, representations, statements or
promises with respect to (a) the rentable and usable areas of the Premises, (b) the amount of any
current or future Impositions, (c) the compliance with applicable Laws of the Premises or the
Improvements, or (d) the suitability of the Premises for any particular use or purpose. No rights,
easements or licenses are acquired by Tenant under this Lease, by implication or otherwise, except
as expressly set forth herein. This Lease (including any Exhibits referred to herein and all
supplementary agreements provided for herein) contains the entire agreement between the parties
with respect to the subject matter hereof, and all understandings and agreements previously made
between Landlord and Tenant with respect thereto are hereby merged in this Lease, which alone fully
and completely expresses their agreement with respect thereto. Tenant is entering into this Lease
after full investigation, and is not relying upon any statement or representation made by Landlord
not embodied in this Lease.
ARTICLE 19.
END OF TERM
Section 19.1.
Upon the expiration or other termination of this Lease, Tenant shall quit and
surrender to Landlord the Premises, vacant, broom clean, in good order and condition, ordinary wear
and tear and damage for which Tenant is not responsible under the terms of this Lease excepted, and
Tenant shall remove all of Tenants Property from the Premises, and this obligation shall survive
the expiration or sooner termination of the Term. If the last day of the Term or any renewal
thereof falls on Saturday or Sunday, this Lease shall expire on the Business Day immediately
preceding such Saturday or Sunday.
Section 19.2.
Tenant acknowledges that Tenant or any Tenant Party remaining in possession of
the Premises after the expiration or earlier termination of this Lease would create an unusual
hardship for Landlord and for any prospective tenant. Tenant therefore covenants that if for any
reason Tenant or any Tenant Party shall fail to vacate and surrender possession of
29
the Premises or
any part thereof on or before the expiration or earlier termination of this Lease and the Term,
then Tenants continued possession of the Premises shall be as a holdover tenant, during which
time, without prejudice and in addition to any other rights and remedies Landlord may have under
this Lease or at law, Tenant shall pay to Landlord for each month and for each portion of any month
during which Tenant holds over, an amount equal to the greater of (a) two (2) times the Fixed Rent
and Additional Rent payable under this Lease for the last full calendar month of the Term, or (b)
two (2) times the fair market rental value of the Premises for such month (as determined by
Landlord based upon the then most recent leases of space in the Improvements). In addition, Tenant
shall be liable to Landlord for (i) any payment or rent concession which Landlord may be required
to make to any tenant obtained by Landlord for all or any part of the Premises (a
New
Tenant
) in order to induce such New Tenant not to terminate its lease by reason of the
holding-over by Tenant, and (ii) the loss of the benefit of the bargain if any New Tenant shall
terminate its lease by reason of the holding-over by Tenant. The provisions of this
Section
19.2
shall not in any way be deemed to (A) permit Tenant to remain in possession of the
Premises after the Expiration Date or sooner termination of this Lease, or (B) imply any right of
Tenant to use or occupy the Premises upon expiration or termination of this Lease and the Term, and
no acceptance by Landlord of payments from Tenant after the Expiration Date or sooner termination
of the Term shall be deemed to be other than on account of the amount to be paid by Tenant in
accordance with the provisions of this
Article 19
. Tenants obligations under this
Article 19
shall survive the expiration or earlier termination of this Lease.
ARTICLE 20.
QUIET ENJOYMENT
Provided no Event of Default has occurred and is continuing, Tenant may peaceably and quietly
enjoy the Premises without hindrance by Landlord or any Person lawfully claiming through or under
Landlord, subject, nevertheless, to the terms and conditions of this Lease.
ARTICLE 21.
NO WAIVER; NON-LIABILITY
Section 21.1.
No act or thing done by Landlord or Landlords agents during the Term shall be
deemed an acceptance of a surrender of the Premises, and no agreement to accept such surrender
shall be valid unless in writing and signed by Landlord. No employee of Landlord or of Landlords
agents shall have any power to accept the keys of the Premises prior to the termination of this
Lease. The delivery of keys to any employee of Landlord or of Landlords agents shall not operate
as a termination of this Lease or a surrender of the Premises. Any Improvements employee to whom
any property shall be entrusted by or on behalf of Tenant shall be deemed to be acting as Tenants
agent with respect to such property and neither Landlord nor its agents shall be liable for any
damage to property of Tenant or of others entrusted to employees of the Improvements, nor for the
loss of or damage to any property of Tenant by theft or otherwise.
30
Section 21.2.
The failure of Landlord to seek redress for violation of, or to insist upon the
strict performance of, any covenant or condition of this Lease, shall not prevent a subsequent act,
which would have originally constituted a violation, from having all of the force and effect of an
original violation. The receipt by Landlord of Fixed Rent and/or Additional Rent with knowledge of
the breach of any covenant of this Lease shall not be deemed a waiver of such breach. No provision
of this Lease shall be deemed to have been waived by Landlord, unless such waiver is made in
writing and signed by Landlord. No payment by Tenant or receipt by Landlord of a lesser amount
than the monthly Fixed Rent or any Additional Rent shall be deemed to be other than on account of
the next installment of Fixed Rent or Additional Rent, as the case may be, or as Landlord may elect
to apply same, nor shall any endorsement or statement on any check or any letter accompanying any
check or payment as Fixed Rent or Additional Rent be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to Landlords right to recover the
balance of such Fixed Rent or Additional Rent or pursue any other remedy in this Lease provided.
Any executory agreement hereafter made shall be ineffective to change, modify, discharge or effect
an abandonment of this Lease in whole or in part unless such executory agreement is in writing and
signed by the party against whom enforcement of the change, modification, discharge or abandonment
is sought. All references in this Lease to the consent or approval of Landlord shall be deemed to
mean the written consent or approval of Landlord and no consent or approval of Landlord shall be
effective for any purpose unless such consent or approval is set forth in a written instrument
executed by Landlord.
Section 21.3.
Neither Landlord nor its agents shall be liable for any injury or damage to
persons or property or interruption of Tenants business resulting from fire, explosion, falling
plaster, steam, gas, electricity, water, rain or snow or leaks from any part of the Improvements,
or from the pipes, appliances or plumbing works or from the roof, street or subsurface or from any
other place or by dampness or by any other cause of whatsoever nature; nor shall Landlord or its
agents be liable for any such damage caused by construction of any private, public or quasi-public
work; nor shall Landlord be liable for any latent defect in the Improvements. Nothing in the
foregoing shall affect any right of Landlord to the indemnity from Tenant to which Landlord may be
entitled under
Article 26
.
ARTICLE 22.
WAIVER OF TRIAL BY JURY
THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER (EXCEPT FOR PERSONAL INJURY OR PROPERTY
DAMAGE) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANTS USE OR OCCUPANCY OF THE PREMISES, OR FOR THE
ENFORCEMENT OF ANY REMEDY UNDER ANY STATUTE, EMERGENCY OR OTHERWISE. IF LANDLORD COMMENCES ANY
SUMMARY PROCEEDING AGAINST TENANT, TENANT WILL NOT INTERPOSE ANY COUNTERCLAIM OF WHATEVER NATURE OR
DESCRIPTION IN ANY SUCH PROCEEDING (UNLESS FAILURE TO IMPOSE SUCH COUNTERCLAIM WOULD PRECLUDE
TENANT FROM ASSERTING IN A SEPARATE ACTION THE CLAIM WHICH IS THE SUBJECT OF SUCH COUNTERCLAIM),
AND
31
WILL NOT SEEK TO CONSOLIDATE SUCH PROCEEDING WITH ANY OTHER ACTION WHICH MAY HAVE BEEN OR WILL
BE BROUGHT IN ANY OTHER COURT BY TENANT.
ARTICLE 23.
INABILITY TO PERFORM
Notwithstanding anything in this Lease to the contrary, if Landlord or Tenant shall be delayed
or hindered in, or prevented from the performance of, any act required under this Lease (other than
the payment of Rent by Tenant) by reason of strike, lockout, civil commotion, warlike operation,
invasion, rebellion, hostilities, military or usurped power, sabotage, terrorism or terrorist acts,
government regulations or controls, through floods, other natural disasters, or acts of God, or for
any other cause beyond the reasonable control of the party who is seeking additional time for the
performance of such act (
Unavoidable Delays
), then, unless the terms of this Lease shall
expressly provide that the provisions of this
Article 23
shall be inapplicable, performance
of such act shall be excused for the period of the delay and the period for the performance of any
such act shall be extended for a reasonable period, in no event to exceed a period equivalent to
the period of such delay.
ARTICLE 24.
BILLS AND NOTICES
Section 24.1.
Except as otherwise expressly provided in this Lease, all notices, bills,
statements, consents, approvals, demands, requests or other communications given or required to be
given under this Lease shall be in writing and shall be delivered by hand (provided a signed
receipt is obtained) or sent by a nationally recognized overnight courier service or by registered
or certified mail (return receipt requested) and addressed:
(a) if to Landlord, care of Landlord Agent at BlueLinx Holdings, Inc., 4300 Wildwood Parkway,
Atlanta, Georgia, 30339, Attention: Gary Cummings; with a copy to any Mortgagee or Superior Lessor
which shall have requested copies of notices, by notice given to Tenant in accordance with the
provisions of this
Article 24
, at the address designated by such Mortgagee or Superior
Lessor; or
(b) if to Tenant, at 4100 Wildwood Parkway, Atlanta, Georgia, 30339, Attention: General
Counsel.
Any such notice given as provided in this
Article 24
shall be deemed to have been rendered
or given (i) on the date when it shall have been hand delivered, (ii) three (3) Business Days from
the date when it shall have been mailed, or (iii) one (1) Business Day from the date when it shall
have been sent by overnight courier service.
Section 24.2.
Any bills, statements, consents, approvals, demands, requests or other
communications, other than notices given pursuant to
Section 24.1
, shall be in writing and
may be given by regular mail, by facsimile transmission (subject to telephone confirmation of
receipt by the recipient), or by any other manner reasonably calculated to achieve actual delivery
32
to the intended recipient in a timely manner, and shall be deemed given when received by the
recipient.
ARTICLE 25.
BROKER
Section 25.1.
Each of Landlord and Tenant represents and warrants to the other that it has not
dealt with any broker in connection with this Lease, and that to the best of its knowledge and
belief, no other broker, finder or similar Person procured or negotiated this Lease or is entitled
to any fee or commission in connection herewith.
Section 25.2.
Each of Landlord and Tenant shall indemnify, defend, protect and hold the other
party harmless from and against any and all losses, liabilities, damages, claims, judgments, fines,
suits, demands, costs, interest and expenses of any kind or nature (including reasonable attorneys
fees and disbursements) which the indemnified party may incur by reason of any claim of or
liability to any broker, finder or like agent arising out of any dealings claimed to have occurred
between the indemnifying party and the claimant in connection with this Lease, or the above
representation being false. The provisions of this
Article 25
shall survive the expiration
or earlier termination of the Term.
ARTICLE 26.
INDEMNITY
Section 26.1.
Subject to the provisions of
Section 9.4
, Tenant shall indemnify, defend
and hold harmless Landlord and all Landlord Parties from and against any and all Losses incurred by
or asserted against any of such parties arising from or in connection with (i) any negligence or
tortious conduct of Tenant or any Tenant Party, and (ii) any accident, injury or damage whatsoever
caused to any person or the property of any person occurring during the Term in, at or upon the
Premises, together with all costs, expenses and liabilities incurred in or in connection with each
such claim or action or proceeding brought thereon, including all reasonable attorneys fees and
expenses, except, in each case, to the extent that any such claim results from the acts or
omissions of Landlord or any other Landlord Party.
Section 26.2.
Subject to the provisions of
Section 9.5
, Landlord shall indemnify,
defend and hold harmless Tenant and all Tenant Parties from and against any and all Losses incurred
by or asserted against any of such parties arising from or in connection with any negligent or
tortious conduct of Landlord or any Landlord Party in, at or upon the Premises, together with all
costs, expenses and liabilities incurred in or in connection with each such claim or action or
proceeding brought thereon, including all reasonable attorneys fees and expenses, except, in each
case, to the extent that any such claim results from the acts or omissions of Tenant or any Tenant
Party.
Section 26.3.
(a) If any claim that is within the scope of any indemnity set forth in this
Lease is asserted against any indemnified party, then the indemnified party shall give prompt
notice (each, an
Indemnified Party Notice
) thereof to the indemnifying party
(
i.e.
,
33
within a time period so as not to prejudice the indemnifying partys or its
insurers ability to defend effectively any action or proceeding brought on such claim) and the
indemnifying party shall have the right and obligation to defend and control the defense of any
action or proceeding brought on such claim with counsel chosen by the indemnifying party subject to
the approval of the indemnified party (such approval not to be unreasonably withheld) or by the
indemnifying partys insurance company. If the indemnified party fails promptly to give such
notice or if the indemnified party shall not afford the indemnifying party the right to defend and
control the defense of any such action or proceeding then, in either of such events, the
indemnifying party shall have no obligation under the applicable indemnity set forth in this Lease
with respect to such action or proceeding or other actions or proceedings involving the same or
related facts. If the indemnifying party shall defend any such action or proceeding, then
(i) the indemnified party shall cooperate with the indemnifying party (or its insurer)
in the defense of any such action or proceeding in such manner as the indemnifying party (or
its insurer) may from time to time reasonably request and the indemnifying party shall not
be liable for the costs of any separate counsel employed by the indemnified party;
(ii) the indemnifying party shall not be liable for any settlement made without the
indemnifying partys consent;
(iii) if such action or proceeding can be settled by the payment of money and without
the need to admit liability on the indemnified partys part, then the indemnifying party
shall have the right to settle such action or proceeding without the indemnified partys
consent and the indemnifying party shall have no obligation under the applicable indemnity
set forth in this Lease with respect to such action or proceeding or other actions or
proceedings involving the same or related facts if the indemnified party refuses to agree to
such a settlement; and
(iv) if such action or proceeding cannot be settled merely by the payment of money and
without the need to admit liability on the indemnified partys part, then the indemnifying
party shall not settle such action or proceeding without the indemnified partys consent
(which consent shall not be unreasonably withheld, conditioned or delayed) and if the
indemnified party unreasonably withholds, conditions or delays its consent to any such
settlement, then the indemnifying party shall have no obligation under the applicable
indemnity set forth in this Lease with respect to such action or proceeding or other actions
or proceedings involving the same or related facts.
(b) If an indemnifying party shall, in good faith, believe that a claim set forth in an
Indemnified Party Notice is not within the scope of the indemnifying partys indemnity set forth in
this Lease then, pending determination of that question, the indemnifying party shall not be deemed
to be in default under this Lease by reason of its failure or refusal to indemnify and hold
harmless any indemnified party therefrom or to pay such costs, expenses and liabilities, but if it
shall be finally determined by a court of competent jurisdiction or that such claim was within the
scope of such indemnifying partys indemnity set forth in this Lease then such indemnifying party
shall be liable for any judgment or reasonable settlement or any
34
reasonable legal fees incurred by
the party entitled to indemnity hereunder. The provisions of this
Article 26
shall survive
the expiration or earlier termination of this Lease.
ARTICLE 27.
ENVIRONMENTAL MATTERS; HAZARDOUS MATERIALS
Section 27.1.
Tenant hereby agrees and covenants with Landlord as follows:
(a) Tenant shall be and remain, and shall cause the Premises to be and remain, in compliance,
in all material respects, with all Environmental Laws;
(b) Tenant shall obtain and maintain, and shall be and remain in material compliance with all
necessary Permits required under Environmental Laws in order to operate the Premises for the
Permitted Uses;
(c) Tenant shall promptly notify Landlord of any Release of Hazardous Materials at any
Premises that exceed a reportable quantity under applicable Environmental Laws, any material
violations of Environmental Laws, or any Environmental Claims which have been asserted in writing
against Tenant or the Premises. In the event of a Release which occurs after the Commencement
Date, Tenant shall take Remediation Actions that are required under Environmental Laws to address
the Release.
(d) Tenant shall furnish Landlord copies of all material environmental reports, studies,
investigations or correspondence regarding any environmental liabilities Premises that are in
either Tenants possession or under its reasonable control.
(e) Tenant will not use the Premises, nor will Tenant permit the Premises to be used, for the
purpose of refining, producing, storing, handling, transferring, processing, transporting,
generating, manufacturing, treating or disposing of any Hazardous Materials except in quantities
customarily used for the Tenants operations and in compliance with Environmental Laws.
(f) Tenant shall promptly notify Landlord of any Environmental Lien that is filed against or
threatened to be filed against the Premises In the event that an Environmental Lien is filed
against the Premises or any portion thereof, Tenant shall within thirty (30) days from the date
that Tenant is given notice that said Environmental Lien has been placed against the Premises or
within such shorter period of time in the event that any Governmental Authority has commenced steps
to cause the Premises or any portion thereof to be sold pursuant to said Environmental Lien, Tenant
shall either (i) pay the claim and remove the lien from the Premises or any portion thereof or (ii)
institute, at Tenants at its cost and expense, and acting in good faith, an appropriate legal
proceeding to contest, object or appeal the validity of any Environmental Lien. If Tenant does
contest the validity of the Environmental Lien, Tenant shall deliver to Landlord either (x) a bond
in an amount and with a surety satisfactory to Landlord, (y) a cash deposit in the amount of the
lien plus any interest that may accrue thereon, or (z) other security satisfactory to Landlord in
an amount sufficient to satisfy or discharge the claim out of which the Environmental Lien arises.
The contest, objection or appeal with respect to the validity of an Environmental Lien shall
suspend the Tenants obligation to eliminate such
35
Environmental Lien under this
Section
27.1(f)
pending a final determination by appropriate administrative or judicial authority of
the legality, enforceability or status of such Environmental Lien.
Section 27.2.
Tenant agrees to defend, indemnify and hold harmless Landlord from and against
any and all Environmental Liabilities which may be imposed on, incurred by or asserted against
Landlord in connection with or arising out of any (i) Releases or threatened Releases at the
Premises which occur after the commencement of this Lease.; (ii) any violations of Environmental
Laws involving the Premises; (iii) personal injury (including wrongful death) or property damage
(real or personal) arising out of exposure to Hazardous Materials used, handled generated, Released
or disposed at the Premises; and (iv) any breach of any warranty or representation, or covenant
made by Tenant regarding environmental matters.
ARTICLE 28.
RELEASE AND/OR SUBSTITUTION OF PREMISES
Section 28.1.
If, at any time during the Term, Landlord shall elect to sell or otherwise
transfer any Premises and obtain a release thereof from the lien of any and all Mortgages in
accordance with the terms thereof, then Landlord shall have the right, upon not less than thirty
(30) days prior written notice to Tenant, to terminate this Lease only with respect to such
Premises as of the date that such Premises is released from the lien of all Mortgages and title
thereto is conveyed by Landlord. In the event that this Lease is terminated pursuant to this
Section 28.1
with respect to any Premises, and Landlord shall not have elected to
substitute another parcel (or parcels) of land and improvements for the Premises so conveyed in
accordance with the provisions of
Section 28.2
, then the Fixed Rent payable hereunder shall
be (a) reduced by the amount of the Fixed Rent allocated to such Premises as set forth on
Exhibit E
to this Lease as of the termination date, and (b) paid or refunded up to and
including, the such termination date.
Section 28.2.
Without limiting the provisions of
Section 28.1
, Landlord shall have the
right at any time during the Term, upon not less than ninety (90) days prior written notice (a
Relocation Notice
) to Tenant (except in the case of the acquisition or condemnation of
any parcel (or parcels) of Land and the Improvements located thereon, in which case such Relocation
Notice may be given at any time prior to the date of the vesting of title), to substitute a parcel
(or parcels) of land and improvements designated by Landlord (each, a
Substitute
Premises
), for any parcel (or parcels) of Land and the Improvements located thereon demised
under this Lease (each, a
Withdrawn Premises
), and to remove Tenant from such Withdrawn
Premises and relocate Tenant to such Substitute Premises, at Landlords expense,
provided
that each Substitute Premises shall be substantially similar to the Withdrawn Premises in respect
of its location, square foot area, general utility for the Permitted Uses, and adequacy of parking
and access (including access by motor vehicle and rail), all as determined by Tenant in its
reasonable judgment. If Landlord relocates Tenant to any one or more Substitute Premises, this
Lease and each of its terms, covenants and conditions shall remain in full force and effect and
shall be deemed applicable to such Substitute Premises, and such Substitute Premises shall
thereafter be deemed to be part of the Premises as though Landlord and Tenant had entered into an
express written amendment of this Lease with respect thereto. Notwithstanding the foregoing
provisions
36
of this
Section 28.2
, in the event that the Impositions payable by Tenant with
respect to a Substitute Premises shall exceed the Impositions paid by Tenant with respect to the
related Withdrawn Premises, such excess shall not be a basis for such Substitute Premises to be or
be deemed unsatisfactory to Tenant, and Tenant shall be solely responsible for (and Landlord shall
have no obligation to reimburse Tenant for) the amount by which such Impositions exceed the
Impositions paid by Tenant with respect to the Withdrawn Premises.
ARTICLE 29.
ADDITIONAL RIGHTS OF LANDLORD AND TENANT
Section 29.1.
No right or remedy conferred upon or reserved to Landlord or Tenant in this
Lease or elsewhere is intended to be exclusive of any other right or remedy; and each and every
right and remedy shall be cumulative with and in addition to any other right or remedy contained in
this Lease. No delay or failure by Landlord or Tenant to enforce its rights under this Lease shall
be construed as a waiver, modification or relinquishment thereof. In addition to the other
remedies provided in this Lease, Landlord and Tenant shall be entitled, to the extent permitted by
applicable Laws, to injunctive relief in case of the violation or attempted or threatened violation
of any of the provisions of this Lease, or to specific performance of any of the provisions of this
Lease.
Section 29.2.
Notwithstanding anything to the contrary contained in this Lease, Landlord
hereby waives any and all right to distrain or levy upon Tenants Property and any landlords or
similar lien it may hold or be entitled to, whether statutory, constitutional, contractual or
otherwise, against Tenants Property, and any other inventory, equipment or other personal property
owned or leased by Tenant or any permitted subtenant or other permitted occupant of the Premises,
now or hereafter located at the Premises. Landlord agrees upon the written request of Tenant to
execute and deliver to Tenant within thirty (30) days after such request a waiver of any landlords
or similar lien for the benefit of any present or future holder of a security interest in Tenants
Property. Landlord hereby acknowledges the security interests in the Tenants Property created
pursuant to Tenants Credit Facility. In the event Tenant or any other Entity removes any of
Tenants Property, Tenant shall continue to pay all Fixed Rent and Additional Rent, and any and all
other amounts due under the Lease, and shall otherwise continue to comply with the terms of this
Lease, and any and all damages caused by such removal of Tenants Property shall be repaired, at
Tenants expense, so as to be in the condition required under the terms of hereof and otherwise to
the reasonable satisfaction of Landlord.
ARTICLE 30.
FINANCIAL REPORTING
Section 30.1.
During the Term of this Lease, Tenant shall keep books and records reflecting
its financial condition, including the operation of the Premises, in accordance with generally
accepted accounting principals, and shall furnish to Landlord, at Tenants expense, the following:
37
(a) Within forty-five (45) days after the end of each quarter of each Fiscal Year (as defined
in
Exhibit B
), commencing with the fiscal quarter ending in June, 2006, unaudited quarterly
financial statements of Tenant, internally prepared in accordance with generally accepted
accounting principals, reporting Tenants EBITDAR (as defined in
Exhibit B
) and including
(i) a balance sheet and a profit and loss statement, as of the end of such fiscal quarter and for
the corresponding fiscal quarter of the previous Fiscal Year, including a statement of net income
in respect of the Property for the year to date, (ii) a statement of revenues and expenses for such
fiscal quarter, together with a comparison of the year to date results with (A) the results for the
same period of the previous year, (B) the results that had been projected by Tenant for such period
and (C) the portion of Tenants annual budget applicable to such period, and (iii) a calculation of
the LCR (as defined on
Exhibit B
) for such period and a statement of the estimated
Additional Rent payable hereunder for such period.
(b) Within one hundred twenty (120) days after the end of each Fiscal Year of Tenant,
unaudited financial statements of Tenant, including a balance sheet as of the end of such Fiscal
Year and a statement of revenues and expenses for such Fiscal Year, as well as (i) a supplemental
schedule of net income or loss presenting the net income or loss for the Premises and the figures
for the previous Fiscal Year and the figures set forth in Tenants annual budget for such Fiscal
Year, (ii) a calculation of the LCR, the estimated Additional Rent payable hereunder for such
period, and (ii) copies of all federal income tax returns of Tenant if and to the extend such tax
returns are required to be filed under applicable law.
(c) Within ninety (90) days after the end of each calendar year during the Term an annual
summary of material capital expenditures made at the Premises during the prior twelve (12) month
period;
(d) All such other reasonable information regarding the business and financial condition of
Tenant as the Landlord may from time to time reasonably request.
Section 30.2.
Landlord and Tenant agree that this Lease (a) is a true lease and as such
Landlord shall be treated as the owner and landlord of the Premises and Tenant shall be treated as
the tenant thereof, and (b) does not represent a financing arrangement. Each party shall reflect
the transaction represented hereby in all applicable books, records and reports (including tax
filings) in a manner consistent with true lease treatment rather than financing treatment.
ARTICLE 31.
RELATIONSHIP AMONG THE LANDLORDS
Section 31.1.
Each Landlord hereby irrevocably appoints Landlord Agent as the sole
representative of Landlord (individually and collectively) to act as agent for and otherwise on
behalf of Landlord regarding any matter arising under or in connection with this Lease, including
for the purposes of: (i) accepting notices on behalf of Landlord in accordance with
Article
24
; (ii) executing and delivering, on behalf of Landlord, any and all notices, documents or
certificates to be executed and/or delivered by Landlord in connection with this Lease and the
transactions contemplated hereby; (iii) granting any consent or approval on behalf of Landlord
under this Lease; and (iv) taking any and all actions and doing any and all other things provided
38
in, contemplated by or related to this Lease or the actions contemplated by this Lease to be
performed on behalf of Landlord. As the representative of Landlord, Landlord Agent shall act as
agent for Landlord (individually and collectively), shall have authority to bind each such person
in accordance with this Lease and the transactions contemplated hereby, and Landlord Agent and
Tenant may rely on such appointment and authority until (and no change of Landlord Agent shall be
effective until) the receipt of by Landlord Agent and Tenant of two (2) business days prior
written notice of the appointment of a successor to Landlord Agent in its capacity as such.
Section 31.2.
Each Landlord hereby appoints Landlord Agent as such Landlords true and lawful
attorney-in-fact and agent, with full powers of substitution and resubstitution, in such Landlords
name, place and stead, in any and all capacities, in connection with the transactions contemplated
by this Lease, granting unto said attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to carry out Landlords obligations
hereunder.
Section 31.3.
Landlord Agent shall have no liability to Tenant or to any Landlord for any
default under this Lease by any Landlord. Except for fraud or willful misconduct on its part,
Landlord Agent shall have no liability to any Landlord under this Lease for any action or omission
by Landlord Agent on behalf of the other parties comprising Landlord.
ARTICLE 32.
MISCELLANEOUS
Section 32.1.
(a) The obligations of Landlord under this Lease shall not be binding upon
Landlord named herein after the sale, conveyance, assignment or transfer by such Landlord (or upon
any subsequent landlord after the sale, conveyance, assignment or transfer by such subsequent
landlord) of its interest in the Land or the Improvements, as the case may be, and in the event of
any such sale, conveyance, assignment or transfer, Landlord shall be and hereby is entirely freed
and relieved of all covenants and obligations of Landlord hereunder, and the transferee of
Landlords interest in the Land or the Improvements, as the case may be, shall be deemed to have
assumed all obligations under this Lease. Prior to any such sale, conveyance, assignment or
transfer, the liability of Landlord for Landlords obligations under this Lease shall be limited to
Landlords interest in the Premises and Tenant shall not look to any other property or assets of
Landlord or the property or assets of any of the Exculpated Parties (defined below) in seeking
either to enforce Landlords obligations under this Lease or to satisfy a judgment for Landlords
failure to perform such obligations.
(b) Notwithstanding anything set forth in this Lease to the contrary, Tenant shall look solely
to Landlord to enforce Landlords obligations hereunder and no partner, shareholder, director,
officer, principal, employee or agent, directly or indirectly, of Landlord (collectively, the
Exculpated Parties
) shall be personally liable for the performance of Landlords
obligations under this Lease. Tenant shall not seek any damages against any of the Exculpated
Parties.
39
Section 32.2.
Wherever in this Lease Landlords consent or approval is required, if Landlord
shall refuse such consent or approval, Tenant in no event shall be entitled to make, nor shall
Tenant make, any claim, and Tenant hereby waives any claim, for money damages (nor shall Tenant
claim any money damages by way of set-off, counterclaim or defense) based upon any claim or
assertion by Tenant that Landlord unreasonably withheld or unreasonably delayed its consent or
approval. Tenants sole remedy shall be an action or proceeding to enforce any such provision, for
specific performance, injunction or declaratory judgment.
Section 32.3.
(a) This Lease contains all the promises, agreements, conditions, inducements
and understandings between Landlord and Tenant relative to the Premises and there are no promises,
agreements, conditions, understandings, inducements, warranties or representations, oral or
written, expressed or implied, between them other than as herein set forth. This Lease may not be
changed, modified, terminated or discharged, in whole or in part, except in writing, executed by
the party against whom enforcement of the change, modification, termination or discharge is to be
sought.
(b) This Lease shall be governed in all respects by the laws of the State of New York
applicable to agreements executed in and to be performed wholly within the State, except to the
extent necessary or required that the law of the State where any Premises is located apply to the
enforcement of the terms and provisions hereof.
(c) If any term, covenant, condition or provision of this Lease, or the application thereof to
any person or circumstance, shall ever be held to be invalid or unenforceable, then in each such
event the remainder of this Lease or the application of such term, covenant, condition or provision
to any other person or any other circumstance (other than those as to which it shall be invalid or
unenforceable) shall not be thereby affected, and each term, covenant, condition and provision
hereof shall remain valid and enforceable to the fullest extent permitted by law.
(d) If at the commencement of, or at any time or times during the Term, the Fixed Rent and
Additional Rent reserved in this Lease shall not be fully collectible by reason of any Law, Tenant
shall enter into such agreements and take such other steps (without additional expense to Tenant)
as Landlord may request and as may be legally permissible to permit Landlord to collect the maximum
rents which may from time to time during the continuance of such legal rent restriction be legally
permissible (and not in excess of the amounts reserved therefor under this Lease). Upon the
termination of such legal rent restriction prior to the expiration of the Term, (i) Fixed Rent and
Additional Rent shall become and thereafter be payable hereunder in accordance with the amounts
reserved in this Lease for the periods following such termination, and (ii) Tenant shall pay to
Landlord, if legally permissible, an amount equal to (A) the items of Fixed Rent and Additional
Rent which would have been paid pursuant to this Lease but for such legal rent restriction less (B)
the rents paid by Tenant to Landlord during the period or periods such legal rent restriction was
in effect.
(e) The covenants, conditions and agreements contained in this Lease shall bind and inure to
the benefit of Landlord and Tenant and their respective legal representatives, successors, and,
except as otherwise provided in this Lease, their assigns.
40
Section 32.4.
Except as expressly provided to the contrary in this Lease, Tenant agrees that
all disputes arising, directly or indirectly, out of or relating to this Lease, and all actions to
enforce this Lease, shall be dealt with and adjudicated in the state courts of New York or the
Federal courts sitting in New York City; and for that purpose hereby expressly and irrevocably
submits itself to the jurisdiction of such courts. Tenant hereby irrevocably appoints the
Secretary of the State of New York as its authorized agent upon which process may be served in any
such action or proceeding.
Section 32.5.
Tenant hereby irrevocably waives, with respect to itself and its property, any
diplomatic or sovereign immunity of any kind or nature, and any immunity from the jurisdiction of
any court or from any legal process, to which Tenant may be entitled, and agrees not to assert any
claims of any such immunities in any action brought by Landlord under or in connection with this
Lease. Tenant acknowledges that the making of such waivers, and Landlords reliance on the
enforceability thereof, is a material inducement to Landlord to enter into this Lease.
Section 32.6.
The intention of the parties being to conform strictly to the applicable usury
laws, whenever any provision herein provides for payment by Tenant to Landlord of interest at a
rate in excess of the legal rate permitted to be charged, such rate herein provided to be paid
shall be deemed reduced to such legal rate.
Section 32.7.
Nothing contained in this Lease shall be deemed to create a partnership or joint
venture between Landlord and Tenant. The relationship of Landlord and Tenant in this Lease shall
be deemed to be one of landlord and tenant only.
Section 32.8.
There shall be no merger of the leasehold estate created by this Lease with the
fee estate in any of the Premises by reason of the fact that the same Person may acquire or hold or
own, directly or indirectly, (a) the leasehold estate created hereby or any part thereof or
interest therein and (b) the fee estate in any of the Premises or any part thereof or interest
therein, unless and until all Persons having any interest in the interests described in
clauses
(a)
and
(b)
above which are sought to be merged shall join in a written instrument
effecting such merger and shall duly record the same.
Section 32.9.
This Lease may be executed in duplicate counterparts, each of which shall be
deemed an original and all of which, when taken together, shall constitute one and the same
instrument.
Section 32.10.
If any Mortgagee or prospective Mortgagee shall request any modifications of
this Lease as a condition to the provision, continuance or renewal of any Mortgage, Tenant shall
not unreasonably withhold or delay its consent thereto, provided that, in each case, such
modification does not materially increase the obligations of Tenant hereunder or reduce Tenants
rights under this Lease.
Section 32.11.
Tenant hereby agrees to cooperate with Landlord and to execute and deliver any
instruments reasonably requested by Landlord (including, if necessary, the execution of an
amendment to this Lease) with respect to payment of Fixed Rent, Additional Rent and other sums
payable by Tenant hereunder in accordance with the escrow and/or reserve
41
requirements, and the cash
management procedures reasonably requested by any Mortgagee in connection with its Mortgage.
ARTICLE 33.
STATE SPECIFIC PROVISIONS
Section 33.1.
Louisiana. Except as expressly provided in this Lease, Tenant hereby (i) waives
any obligation on Landlords party to keep the Premises safe and in condition suitable for the
Permitted Uses, and (ii) waives all express or implied representations or warranties on the part of
Landlord, including, but not limited to, all warranties that the Premises are suitable for the
Permitted Uses or free from vices, defects, or deficiencies, whether hidden or apparent, and all
warranties under La. Civ. Code arts. 2682(2), 2684, 2691 or 2696-2699, or any other provision of
law, but only to the extent not expressly prohibited under Louisiana Law. Tenant hereby waives all
right to notice of termination under Louisiana Code of Civil Procedure article 4701 or any other
provision of law. As used in this Lease, the term joint and several shall mean solidary as
that term is used in Louisiana law.
[No Further Text on this Page; Signature Page Follows]
42
IN WITNESS WHEREOF
, Landlord and Tenant have respectively executed this Lease as
of the day and year first above written.
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ABP AL (MIDFIELD) LLC
, Landlord Agent
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By:
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/s/ David Morris
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Name:
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David Morris
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Title:
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Vice President
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BLUELINX CORPORATION
, Tenant
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By:
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/s/ David Morris
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Name:
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David Morris
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Title:
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Vice President
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[No Further Text on this Page; Further Signature Pages Follow]
F-1
LANDLORD
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ABP AL (MIDFIELD) LLC
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ABP AR (LITTLE ROCK) LLC
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ABP CA (CITY OF INDUSTRY) LLC
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ABP CA (NATIONAL CITY) LLC
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ABP CA (NEWARK) LLC
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ABP CO I (DENVER) LLC
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ABP CA (RIVERSIDE) LLC
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ABP CT (NEWTON) LLC
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ABP CO II (DENVER) LLC
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ABP FL (MIAMI) LLC
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ABP FL (LAKE CITY) LLC
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ABP FL (TAMPA) LLC
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ABP FL (PENSACOLA) LLC
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ABP GA (LAWRENCEVILLE) LLC
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ABP FL (YULEE) LLC
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ABP IL (UNIVERSITY PARK) LLC
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ABP IA (DES MOINES) LLC
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ABP KY (INDEPENDENCE) LLC
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ABP IN (ELKHART) LLC
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ABP MA (BELLINGHAM) LLC
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ABP LA (SHREVEPORT) LLC
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ABP ME (PORTLAND) LLC
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ABP MD (BALTIMORE) LLC
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ABP MI (GRAND RAPIDS) LLC
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ABP MI (DETROIT) LLC
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ABP MN (MAPLE GROVE) LLC
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ABP MN (EAGAN) LLC
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ABP MO (KANSAS CITY) LLC
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ABP MO (BRIDGETON) LLC
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ABP MS (PEARL) LLC
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ABP MO (SPRINGFIELD) LLC
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ABP NC (CHARLOTTE) LLC
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ABP NC (BUTNER) LLC
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ABP NJ (DENVILLE) LLC
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ABP ND (NORTH FARGO) LLC
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ABP NY (YAPHANK) LLC
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ABP NM (ALBUQUERQUE) LLC
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ABP OK (TULSA) LLC
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ABP OH (TALMADGE) LLC
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ABP PA (ALLENTOWN) LLC
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ABP OR (BEAVERTON) LLC
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ABP SC (CHARLESTON) LLC
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ABP PA (STANTON) LLC
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ABP TN (ERWIN) LLC
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ABP SD (SIOUX FALLS) LLC
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ABP TN (NASHVILLE) LLC
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ABP TN (MEMPHIS) LLC
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ABP TX (FORT WORTH) LLC
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ABP TX (EL PASO) LLC
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ABP TX (HOUSTON) LLC
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ABP TX (HARLINGEN) LLC
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ABP TX (SAN ANTONIO) LLC
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ABP TX (LUBBOCK) LLC
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ABP VA (VIRGINIA BEACH) LLC
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ABP VA (RICHMOND) LLC
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ABP WA (WOODINVILLE) LLC
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ABP VT (SHELBURNE) LLC
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ABP WI (WAUSAU) LLC
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By:
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/s/ David Morris
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Name:
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David Morris
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Title:
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Vice President
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F-2
Exhibit 10.2
LOAN AND SECURITY AGREEMENT
Dated as of June 9, 2006
between
The Borrowers Signatory Hereto,
as Borrower,
ABP MD (BALTIMORE) LLC,
as Maryland Loan Guarantor
and
GERMAN AMERICAN CAPITAL CORPORATION,
on behalf of the holders of the Notes,
as Lender
TABLE OF CONTENTS
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Page
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I.
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DEFINITIONS; PRINCIPLES OF CONSTRUCTION
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1
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1.1
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Definitions
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1
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1.2
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Principles of Construction
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26
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II.
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GENERAL TERMS
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26
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2.1
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Loan; Disbursement to Borrower
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2.1.1
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The Loan
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26
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2.1.2
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Disbursement to Borrower
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26
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2.1.3
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The Notes, Security Instrument and Loan Documents
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2.1.4
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Use of Proceeds
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27
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2.2
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Interest; Loan Payments; Late Payment Charge
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27
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2.2.1
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Payment of Principal and Interest
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27
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2.2.2
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Method and Place of Payment
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2.2.3
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Late Payment Charge
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2.2.4
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Usury Savings
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2.3
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Prepayments
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28
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2.3.1
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Prepayments
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2.3.2
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Prepayments After Event of Default; Application of Amounts Paid
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2.3.3
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Release of Property upon Repayment or Defeasance of Loan in Full
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2.3.4
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Release of Individual Properties
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2.3.5
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Defeasance
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2.3.6
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Substitution of Properties
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2.3.7
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Release of Outparcels
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2.3.8
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Excess Account Collateral
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2.3.9
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Reserve Requirements
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2.4
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Regulatory Change; Taxes
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40
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2.4.1
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Increased Costs
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2.4.2
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Special Taxes
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2.4.3
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Other Taxes
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2.4.4
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Indemnity
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41
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2.4.5
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Change of Office
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2.4.6
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Survival
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Page
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2.5
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Conditions Precedent to Closing
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2.5.1
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Representations and Warranties; Compliance with Conditions
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2.5.2
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Delivery of Loan Documents; Title Policy; Reports; Leases
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2.5.3
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Related Documents
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2.5.4
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Delivery of Organizational Documents
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2.5.5
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Counsel Opinions
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2.5.6
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Annual Budget
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2.5.7
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Completion of Proceedings
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2.5.8
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Payments
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2.5.9
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Account Agreement
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2.5.10
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Master Lease SNDA
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44
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2.5.11
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Reserved
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2.5.12
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Reserved
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2.5.13
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Independent Manager/Member Certificate
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44
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2.5.14
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Transaction Costs
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2.5.15
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Material Adverse Effect
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2.5.16
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Insolvency
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44
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2.5.17
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Leases
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44
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2.5.18
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Master Lease; Master Lease SNDA
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44
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2.5.19
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Tax Lot
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44
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2.5.20
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Physical Conditions Reports
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45
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2.5.21
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Appraisals
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45
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2.5.22
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Financial Statements
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45
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2.5.23
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Flood Certifications
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45
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2.5.24
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Intercreditor Agreement
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45
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III.
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CASH MANAGEMENT
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45
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3.1
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Cash Management
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45
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3.1.1
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Establishment of Accounts
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45
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3.1.2
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Pledge of Account Collateral
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46
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3.1.3
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Maintenance of Collateral Accounts
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47
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3.1.4
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Eligible Accounts
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47
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3.1.5
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Deposits into Sub-Accounts
|
|
|
47
|
|
|
|
|
|
3.1.6
|
|
Monthly Funding of Sub-Accounts; Master Lease Rent
Shortfalls; Master Lease Variable Additional Rent Reserve;
Sub-Account Shortfalls
|
|
|
48
|
|
|
|
|
|
3.1.7
|
|
Required Payments from Sub-Accounts
|
|
|
50
|
|
|
|
|
|
3.1.8
|
|
Cash Management Bank
|
|
|
50
|
|
|
|
|
|
3.1.9
|
|
Borrowers and Maryland Loan Guarantors Account
Representations, Warranties and Covenants
|
|
|
51
|
|
|
|
|
|
3.1.10
|
|
Account Collateral and Remedies
|
|
|
51
|
|
|
|
|
|
3.1.11
|
|
Transfers and Other Liens
|
|
|
52
|
|
|
|
|
|
3.1.12
|
|
Reasonable Care
|
|
|
52
|
|
|
|
|
|
3.1.13
|
|
Lenders Liability
|
|
|
52
|
|
|
|
|
|
3.1.14
|
|
Continuing Security Interest
|
|
|
53
|
|
ii
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
IV.
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
Borrower Representations
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1.1
|
|
Organization
|
|
|
53
|
|
|
|
|
|
4.1.2
|
|
Proceedings
|
|
|
54
|
|
|
|
|
|
4.1.3
|
|
No Conflicts
|
|
|
54
|
|
|
|
|
|
4.1.4
|
|
Litigation
|
|
|
54
|
|
|
|
|
|
4.1.5
|
|
Agreements
|
|
|
55
|
|
|
|
|
|
4.1.6
|
|
Title
|
|
|
55
|
|
|
|
|
|
4.1.7
|
|
No Bankruptcy Filing
|
|
|
55
|
|
|
|
|
|
4.1.8
|
|
Full and Accurate Disclosure
|
|
|
56
|
|
|
|
|
|
4.1.9
|
|
All Property
|
|
|
56
|
|
|
|
|
|
4.1.10
|
|
No Plan Assets
|
|
|
56
|
|
|
|
|
|
4.1.11
|
|
Compliance
|
|
|
56
|
|
|
|
|
|
4.1.12
|
|
Financial Information
|
|
|
57
|
|
|
|
|
|
4.1.13
|
|
Condemnation
|
|
|
57
|
|
|
|
|
|
4.1.14
|
|
Federal Reserve Regulations
|
|
|
57
|
|
|
|
|
|
4.1.15
|
|
Utilities and Public Access
|
|
|
57
|
|
|
|
|
|
4.1.16
|
|
Not a Foreign Person
|
|
|
58
|
|
|
|
|
|
4.1.17
|
|
Separate Lots
|
|
|
58
|
|
|
|
|
|
4.1.18
|
|
Subdivision
|
|
|
58
|
|
|
|
|
|
4.1.19
|
|
Enforceability
|
|
|
58
|
|
|
|
|
|
4.1.20
|
|
Assessments
|
|
|
58
|
|
|
|
|
|
4.1.21
|
|
Insurance
|
|
|
58
|
|
|
|
|
|
4.1.22
|
|
Use of Property
|
|
|
58
|
|
|
|
|
|
4.1.23
|
|
Certificate of Occupancy; Licenses
|
|
|
58
|
|
|
|
|
|
4.1.24
|
|
Flood Zone
|
|
|
58
|
|
|
|
|
|
4.1.25
|
|
Physical Condition
|
|
|
59
|
|
|
|
|
|
4.1.26
|
|
Boundaries
|
|
|
59
|
|
|
|
|
|
4.1.27
|
|
Leases and Subleases
|
|
|
59
|
|
|
|
|
|
4.1.28
|
|
Filing and Recording Taxes
|
|
|
59
|
|
|
|
|
|
4.1.29
|
|
Single Purpose Entity/Separateness
|
|
|
60
|
|
|
|
|
|
4.1.30
|
|
Illegal Activity
|
|
|
60
|
|
|
|
|
|
4.1.31
|
|
No Change in Facts or Circumstances; Disclosure
|
|
|
60
|
|
|
|
|
|
4.1.32
|
|
Tax Filings
|
|
|
61
|
|
|
|
|
|
4.1.33
|
|
Solvency/Fraudulent Conveyance
|
|
|
61
|
|
|
|
|
|
4.1.34
|
|
Investment Company Act
|
|
|
61
|
|
|
|
|
|
4.1.35
|
|
Labor
|
|
|
61
|
|
|
|
|
|
4.1.36
|
|
Brokers
|
|
|
62
|
|
|
|
|
|
4.1.37
|
|
No Other Debt
|
|
|
62
|
|
|
|
|
|
4.1.38
|
|
Taxpayer Identification Number
|
|
|
62
|
|
|
|
|
|
4.1.39
|
|
Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws
|
|
|
62
|
|
|
|
|
|
4.1.40
|
|
Rights of First Refusal or First Offer to Lease or Purchase
|
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
Survival of Representations
|
|
|
63
|
|
iii
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
4.3
|
|
Borrowers or Maryland Loan Guarantors Knowledge
|
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
V.
|
|
BORROWER AND MARYLAND LOAN GUARANTOR COVENANTS
|
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.1
|
|
Affirmative Covenants
|
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.1.1
|
|
Performance by Borrower and Maryland Loan Guarantor
|
|
|
63
|
|
|
|
|
|
5.1.2
|
|
Existence; Compliance with Legal Requirements; Insurance
|
|
|
63
|
|
|
|
|
|
5.1.3
|
|
Litigation
|
|
|
64
|
|
|
|
|
|
5.1.4
|
|
Single Purpose Entity
|
|
|
64
|
|
|
|
|
|
5.1.5
|
|
Consents
|
|
|
65
|
|
|
|
|
|
5.1.6
|
|
Access to Property
|
|
|
66
|
|
|
|
|
|
5.1.7
|
|
Notice of Default
|
|
|
66
|
|
|
|
|
|
5.1.8
|
|
Cooperate in Legal Proceedings
|
|
|
66
|
|
|
|
|
|
5.1.9
|
|
Insurance
|
|
|
66
|
|
|
|
|
|
5.1.10
|
|
Further Assurances; Severance of Notes and Mezzanine Loan
|
|
|
66
|
|
|
|
|
|
5.1.11
|
|
Mortgage Taxes
|
|
|
68
|
|
|
|
|
|
5.1.12
|
|
Business and Operations
|
|
|
68
|
|
|
|
|
|
5.1.13
|
|
Title to the Property
|
|
|
68
|
|
|
|
|
|
5.1.14
|
|
Costs of Enforcement
|
|
|
69
|
|
|
|
|
|
5.1.15
|
|
Estoppel Statements
|
|
|
69
|
|
|
|
|
|
5.1.16
|
|
Loan Proceeds
|
|
|
69
|
|
|
|
|
|
5.1.17
|
|
No Joint Assessment
|
|
|
69
|
|
|
|
|
|
5.1.18
|
|
No Further Encumbrances
|
|
|
70
|
|
|
|
|
|
5.1.19
|
|
Leases and Material Subleases
|
|
|
70
|
|
|
|
|
|
5.1.20
|
|
Management
|
|
|
70
|
|
|
|
|
|
5.1.21
|
|
Master Lease
|
|
|
70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.2
|
|
Negative Covenants
|
|
|
72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.2.1
|
|
Incur Debt
|
|
|
72
|
|
|
|
|
|
5.2.2
|
|
Encumbrances
|
|
|
72
|
|
|
|
|
|
5.2.3
|
|
Engage in Different Business
|
|
|
72
|
|
|
|
|
|
5.2.4
|
|
Make Advances
|
|
|
72
|
|
|
|
|
|
5.2.5
|
|
Partition
|
|
|
72
|
|
|
|
|
|
5.2.6
|
|
Commingle
|
|
|
72
|
|
|
|
|
|
5.2.7
|
|
Guarantee Obligations
|
|
|
73
|
|
|
|
|
|
5.2.8
|
|
Transfer Assets
|
|
|
73
|
|
|
|
|
|
5.2.9
|
|
Amend Organizational Documents
|
|
|
73
|
|
|
|
|
|
5.2.10
|
|
Dissolve
|
|
|
73
|
|
|
|
|
|
5.2.11
|
|
Bankruptcy
|
|
|
73
|
|
|
|
|
|
5.2.12
|
|
ERISA
|
|
|
73
|
|
|
|
|
|
5.2.13
|
|
Distributions
|
|
|
73
|
|
|
|
|
|
5.2.14
|
|
Management
|
|
|
73
|
|
|
|
|
|
5.2.15
|
|
Reserved
|
|
|
74
|
|
|
|
|
|
5.2.16
|
|
Modify Account Agreement
|
|
|
74
|
|
|
|
|
|
5.2.17
|
|
Zoning Reclassification
|
|
|
74
|
|
|
|
|
|
5.2.18
|
|
Change of Principal Place of Business
|
|
|
74
|
|
iv
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
5.2.19
|
|
Debt Cancellation
|
|
|
74
|
|
|
|
|
|
5.2.20
|
|
Misapplication of Funds
|
|
|
74
|
|
|
|
|
|
5.2.21
|
|
Single Purpose Entity
|
|
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
VI.
|
|
INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
|
|
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.1
|
|
Insurance Coverage Requirements
|
|
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.1.1
|
|
Property Insurance
|
|
|
75
|
|
|
|
|
|
6.1.2
|
|
Liability Insurance
|
|
|
75
|
|
|
|
|
|
6.1.3
|
|
Workers Compensation Insurance
|
|
|
75
|
|
|
|
|
|
6.1.4
|
|
Business Interruption Insurance
|
|
|
76
|
|
|
|
|
|
6.1.5
|
|
Builders All-Risk Insurance
|
|
|
76
|
|
|
|
|
|
6.1.6
|
|
Boiler and Machinery Insurance
|
|
|
76
|
|
|
|
|
|
6.1.7
|
|
Flood Insurance and Earthquake Insurance
|
|
|
76
|
|
|
|
|
|
6.1.8
|
|
Terrorism Insurance
|
|
|
77
|
|
|
|
|
|
6.1.9
|
|
Storage Tank System Third Party Liability and Cleanup Insurance
|
|
|
78
|
|
|
|
|
|
6.1.10
|
|
Other Insurance
|
|
|
78
|
|
|
|
|
|
6.1.11
|
|
Ratings of Insurers
|
|
|
78
|
|
|
|
|
|
6.1.12
|
|
Form of Insurance Policies; Endorsements
|
|
|
78
|
|
|
|
|
|
6.1.13
|
|
Evidence of Insurance
|
|
|
78
|
|
|
|
|
|
6.1.14
|
|
Separate Insurance
|
|
|
79
|
|
|
|
|
|
6.1.15
|
|
Blanket Policies
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.2
|
|
Condemnation and Insurance Proceeds
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.2.1
|
|
Notification
|
|
|
79
|
|
|
|
|
|
6.2.2
|
|
Proceeds
|
|
|
79
|
|
|
|
|
|
6.2.3
|
|
Lender to Take Proceeds
|
|
|
80
|
|
|
|
|
|
6.2.4
|
|
Borrower to Restore
|
|
|
81
|
|
|
|
|
|
6.2.5
|
|
Disbursement of Proceeds
|
|
|
83
|
|
|
|
|
|
|
|
|
|
|
|
|
VII.
|
|
IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS
|
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.1
|
|
Borrower or Maryland Loan Guarantor to Pay Impositions and Other Charges
|
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.2
|
|
No Liens
|
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.3
|
|
Contest
|
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
VIII.
|
|
TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS
|
|
|
85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.1
|
|
General Restriction on Transfers and Debt
|
|
|
85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.2
|
|
Sale of Building Equipment
|
|
|
86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.3
|
|
Immaterial Transfers and Easements, etc.
|
|
|
86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.4
|
|
Permitted Equity Transfers
|
|
|
87
|
|
v
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
8.5
|
|
Deliveries to Lender
|
|
|
88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.6
|
|
Loan Assumption
|
|
|
88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.7
|
|
Leases and Subleases
|
|
|
88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.7.1
|
|
Leasing Conditions
|
|
|
88
|
|
|
|
|
|
8.7.2
|
|
Delivery of New Sublease or Sublease Modification
|
|
|
89
|
|
|
|
|
|
8.7.3
|
|
Security Deposits
|
|
|
89
|
|
|
|
|
|
8.7.4
|
|
No Default Under Subleases
|
|
|
89
|
|
|
|
|
|
8.7.5
|
|
Subordination
|
|
|
89
|
|
|
|
|
|
8.7.6
|
|
Attornment
|
|
|
89
|
|
|
|
|
|
8.7.7
|
|
Non-Disturbance Agreements
|
|
|
90
|
|
|
|
|
|
|
|
|
|
|
|
|
IX.
|
|
RESERVED
|
|
|
90
|
|
|
|
|
|
|
|
|
|
|
|
|
X.
|
|
MAINTENANCE OF PROPERTY; ALTERATIONS
|
|
|
90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Maintenance of Property
|
|
|
90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
Conditions to Alteration
|
|
|
91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3
|
|
Costs of Alteration
|
|
|
91
|
|
|
|
|
|
|
|
|
|
|
|
|
XI.
|
|
BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.1
|
|
Books and Records
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.2
|
|
Financial Statements
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.2.1
|
|
Quarterly Reports
|
|
|
93
|
|
|
|
|
|
11.2.2
|
|
Annual Reports
|
|
|
94
|
|
|
|
|
|
11.2.3
|
|
Capital Expenditures Summaries
|
|
|
94
|
|
|
|
|
|
11.2.4
|
|
Master Lease
|
|
|
94
|
|
|
|
|
|
11.2.5
|
|
Annual Budget
|
|
|
94
|
|
|
|
|
|
11.2.6
|
|
Other Information
|
|
|
94
|
|
|
|
|
|
|
|
|
|
|
|
|
XII.
|
|
ENVIRONMENTAL MATTERS
|
|
|
94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.1
|
|
Representations
|
|
|
94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.2
|
|
Covenants
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.2.1
|
|
Compliance with Environmental Laws
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.3
|
|
Environmental Reports
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.4
|
|
Environmental Indemnification
|
|
|
96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.5
|
|
Recourse Nature of Certain Indemnifications
|
|
|
97
|
|
vi
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
XIII.
|
|
RESERVED
|
|
|
97
|
|
|
|
|
|
|
|
|
|
|
|
|
XIV.
|
|
SECURITIZATION
|
|
|
97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.1
|
|
Sale of Notes and Securitization
|
|
|
97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.2
|
|
Securitization Financial Statements
|
|
|
98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.3
|
|
Securitization Indemnification
|
|
|
98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.3.1
|
|
Disclosure Documents
|
|
|
98
|
|
|
|
|
|
14.3.2
|
|
Indemnification Certificate
|
|
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
XV.
|
|
ASSIGNMENTS AND PARTICIPATIONS
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.1
|
|
Assignment and Acceptance
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.2
|
|
Effect of Assignment and Acceptance
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.3
|
|
Content
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.4
|
|
Register
|
|
|
102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.5
|
|
Substitute Notes
|
|
|
102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.6
|
|
Participations
|
|
|
102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.7
|
|
Disclosure of Information
|
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.8
|
|
Security Interest in Favor of Federal Reserve Bank
|
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
|
XVI.
|
|
RESERVE ACCOUNTS
|
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.1
|
|
Tax Reserve Account
|
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.2
|
|
Insurance Reserve Account
|
|
|
104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.3
|
|
Structural Repair Reserve Account
|
|
|
105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.4
|
|
Immediate Repair and Remediation Reserve Account
|
|
|
105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.5
|
|
Master Lease Variable Additional Rent Reserve Account and LCR Deterioration Reserve Account
|
|
|
107
|
|
|
|
|
|
|
|
|
|
|
|
|
XVII.
|
|
DEFAULTS
|
|
|
108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17.1
|
|
Event of Default
|
|
|
108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17.2
|
|
Remedies
|
|
|
111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17.3
|
|
Remedies Cumulative; Waivers
|
|
|
112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17.4
|
|
Costs of Collection
|
|
|
113
|
|
|
|
|
|
|
|
|
|
|
|
|
XVIII.
|
|
SPECIAL PROVISIONS
|
|
|
113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18.1
|
|
Exculpation
|
|
|
113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18.1.1
|
|
Exculpated Parties
|
|
|
113
|
|
|
|
|
|
18.1.2
|
|
Carveouts From Non-Recourse Limitations
|
|
|
114
|
|
vii
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
XIX.
|
|
MISCELLANEOUS
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.1
|
|
Survival
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.2
|
|
Lenders Discretion
|
|
|
116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.3
|
|
Governing Law
|
|
|
116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.4
|
|
Modification, Waiver in Writing
|
|
|
117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.5
|
|
Delay Not a Waiver
|
|
|
117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.6
|
|
Notices
|
|
|
117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.7
|
|
TRIAL BY JURY
|
|
|
118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.8
|
|
Headings
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.9
|
|
Severability
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.10
|
|
Preferences
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.11
|
|
Waiver of Notice
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.12
|
|
Expenses; Indemnity
|
|
|
120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.13
|
|
Exhibits and Schedules Incorporated
|
|
|
122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.14
|
|
Offsets, Counterclaims and Defenses
|
|
|
122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.15
|
|
Liability of Assignees of Lender
|
|
|
122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.16
|
|
No Joint Venture or Partnership; No Third Party Beneficiaries
|
|
|
122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.17
|
|
Publicity
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.18
|
|
Waiver of Marshalling of Assets
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.19
|
|
Waiver of Counterclaim and other Actions
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.20
|
|
Conflict; Construction of Documents; Reliance
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.21
|
|
Prior Agreements
|
|
|
124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.22
|
|
Counterparts
|
|
|
124
|
|
viii
EXHIBITS AND SCHEDULES
|
|
|
EXHIBIT A
|
|
TITLE INSURANCE REQUIREMENTS, ENDORSEMENTS AND AFFIRMATIVE COVERAGES
|
EXHIBIT B
|
|
SURVEY REQUIREMENTS
|
EXHIBIT C
|
|
SINGLE PURPOSE ENTITY PROVISIONS
|
EXHIBIT D
|
|
ENFORCEABILITY OPINION REQUIREMENTS
|
EXHIBIT E
|
|
INTENTIONALLY DELETED
|
EXHIBIT F
|
|
INTENTIONALLY DELETED
|
EXHIBIT G
|
|
INTENTIONALLY DELETED
|
EXHIBIT H
|
|
INTENTIONALLY DELETED
|
EXHIBIT I
|
|
INTENTIONALLY DELETED
|
EXHIBIT J
|
|
INTENTIONALLY DELETED
|
EXHIBIT K
|
|
BORROWER ORGANIZATIONAL STRUCTURE
|
EXHIBIT L
|
|
INTENTIONALLY DELETED
|
EXHIBIT M
|
|
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
|
EXHIBIT N
|
|
FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
|
EXHIBIT O
|
|
INTENTIONALLY DELETED
|
EXHIBIT P
|
|
FORM OF MASTER LEASE RENT PAYMENT DIRECTION LETTER
|
EXHIBIT Q
|
|
INTENTIONALLY DELETED
|
EXHIBIT R
|
|
INTENTIONALLY DELETED
|
EXHIBIT S
|
|
INTENTIONALLY DELETED
|
EXHIBIT T
|
|
FORM OF INDEPENDENT MANAGER/MEMBER CERTIFICATE
|
|
|
|
SCHEDULE I
|
|
ALLOCATED LOAN AMOUNTS
|
SCHEDULE II
|
|
GEOGRAPHIC QUADRANTS
|
SCHEDULE III
|
|
IMMEDIATE REPAIRS AND REMEDIATION
|
SCHEDULE IV
|
|
LEASES
|
SCHEDULE V
|
|
INTENTIONALLY DELETED
|
SCHEDULE VI
|
|
LITIGATION SCHEDULE
|
SCHEDULE VII
|
|
OUTPARCEL LEGAL DESCRIPTIONS
|
SCHEDULE VIII
|
|
BORROWER TAXPAYER IDENTIFICATION NUMBERS
|
ix
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT, dated as of June 9, 2006 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this
Agreement
), by and among ABP
MD (BALTIMORE) LLC, a Delaware limited liability company (
Maryland Loan Guarantor
), the
borrowers signatory hereto (each an
Individual Borrower
and collectively,
Borrower
) having an office c/o BlueLinx Holdings Inc., 4300 Wildwood Parkway, Atlanta,
Georgia 30339, and GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, on behalf of the
holders of the Notes, having an address at 60 Wall Street, New York, New York 10005 (together with
its successors and assigns,
Lender
).
RECITALS:
WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from Lender;
WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance with the
terms of this Agreement and the other Loan Documents (as hereinafter defined).
NOW, THEREFORE, in consideration of the making of the Loan by Lender and the covenants,
agreements, representations and warranties set forth in this Agreement, the parties hereto hereby
covenant, agree, represent and warrant as follows:
I.
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
1.1
Definitions
. For all purposes of this Agreement, except as otherwise expressly required or
unless the context clearly indicates a contrary intent:
Account Agreement
shall mean the Account and Control Agreement, dated the date
hereof, among Lender, Borrower (other than Maryland Borrower), Maryland Loan Guarantor and Cash
Management Bank.
Account Collateral
shall have the meaning set forth in
Section 3.1.2
.
Additional Non-Consolidation Opinion
shall have the meaning set forth in
Section
4.1.29(b)
.
Affiliate
shall mean, with respect to any specified Person, any other Person that
(i) directly or indirectly Controls, is Controlled by or under direct or indirect Common Control
with such specified Person, (ii) is a general partner or managing member of such specified Person,
or (iii) is an officer or director of such specified Person.
Aggregate Appraised Value
shall mean the sum of (a) the aggregate Appraised Values
(as indicated in the Appraisals delivered by Borrower pursuant to
Section 2.5.21
) of all
Individual Properties which were subject to the Lien of the Security Instrument on the Closing Date
and remain subject to the Lien of the Security Instrument on the date such determination is made
and (b) the aggregate Appraised Value of the Substitute Properties, as reflected in the Appraisals
delivered in accordance with
Section 2.3.6(c)
.
Agreement
shall mean this Agreement, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
Allocated Loan Amount
shall mean with respect to each Individual Property, the
designated allocated portion of the Loan applicable to such Individual Property that is set forth
on
Schedule I
attached hereto. For the avoidance of doubt, no portion of the Loan shall be
allocated to any of the Outparcels.
ALTA
shall mean American Land Title Association, or any successor thereto.
Alteration
shall have the meaning set forth in
Section 10.2
.
Annual Budget
shall mean the operating budget for the Property prepared by or on
behalf of Borrower for the applicable Fiscal Year or other period setting forth, in reasonable
detail, Borrowers or Guarantors good faith estimates of the anticipated results of operation of
the Property, including, but not limited to, revenue from all sources, Master Lease Variable
Additional Rent, Master Lease Recurrent Additional Rent and Capital Expenditures.
Appraisals
shall mean FIRREA appraisals conducted by CB Richard Ellis (or another
Independent appraiser reasonably acceptable to Lender) which establish the Appraised Value of each
Individual Property (or, as applicable, each Substitute Property).
Appraised Value
shall mean, for an Individual Property or, as applicable, a
Substitute Property, the value of such Individual Property or Substitute Property as determined by
the Appraisal for such Individual Property or Substitute Property.
Approved Bank
shall have the meaning provided in the Account Agreement.
Architect
shall mean an architect, engineer or construction consultant selected by
Borrower, licensed to practice in the relevant State, having at least five (5) years of
architectural experience and which is selected by an Individual Borrower and reasonably acceptable
to Lender.
Assignment and Acceptance
shall mean an assignment and acceptance entered into by
Lender and an assignee, and accepted by Lender in accordance with
Article XV
and in
substantially the form of
Exhibit M
or such other form customarily used by Lender in
connection with the participation or syndication of mortgage loans at the time of such assignment.
Assignment of Leases
shall mean, with respect to each Individual Property, that
certain first priority Assignment of Master Lease, Leases, Rents and Security Deposits, dated as of
the date hereof, from each Individual Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor), as assignor, to Lender, as assignee, assigning to Lender all of such
Individual Borrowers (or Maryland Loan Guarantors) interest in and to the Master Lease, the
2
Leases and the Rents of such Individual Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
Bankruptcy Code
shall mean Title 11, U.S.C.A., as amended from time to time and any
successor statute thereto.
Blanket Policy
shall have the meaning provided in
Section 6.1.14
.
Borrower
shall have the meaning set forth in the first paragraph of this Agreement.
Borrowers Account
shall mean an account or accounts maintained by Borrower for its
own account at such bank and with such account number as may be designated in writing by Borrower
to Lender and Cash Management Bank from time to time.
Broker
shall mean CB Richard Ellis/L.J. Melody.
Building Equipment
shall have the meaning set forth in the Security Instrument.
Business Day
shall mean any day other than a Saturday, Sunday or any other day on
which national banks in New York are not open for business.
Capital Expenditures
shall mean, for any period, the amount expended for items
capitalized under GAAP, including expenditures for building improvements or major repairs, leasing
commissions and tenant improvements.
Cash
shall mean the legal tender of the United States of America.
Cash and Cash Equivalents
shall mean any one or a combination of the following: (i)
Cash, and (ii) U.S. Government Obligations.
Cash Management Bank
shall mean Wachovia Bank, National Association or any successor
Approved Bank acting as Cash Management Bank under the Account Agreement or other financial
institution approved by the Lender and, if a Securitization has occurred, the Rating Agencies.
Casualty Amount
shall mean ten percent (10%) of the Allocated Loan Amount of the
affected Individual Property.
Casualty/Condemnation Property Release
shall mean any Property Release obtained in
connection with a Proceeds Prepayment or other principal prepayment made pursuant to
Section
6.2.3
or Section 4(b) of the Note.
Close Affiliate
shall mean, with respect to any Person (the
First Person
),
any other Person (each, a
Second Person
) which is an Affiliate of the First Person and in
respect of which any of the following are true: (a) the Second Person owns, directly or
indirectly, at least seventy-five percent (75%) of all of the legal, beneficial and/or equitable interest in such
First Person, (b) the First Person owns, directly or indirectly, at least seventy-five percent
(75%) of
3
all of the legal, beneficial and/or equitable interest in such Second Person, or (c) a
third (3
rd
) Person owns, directly or indirectly, at least seventy-five percent (75%) of
all of the legal, beneficial and/or equitable interest in both the First Person and the Second
Person.
Closing Date
shall mean the date of this Agreement set forth in the first paragraph
hereof.
Closing Date LCR Ratio
shall mean 5.18x.
Closing Date LTV Ratio
shall mean 79.22%.
Code
shall mean the Internal Revenue Code of 1986, as amended, as it may be further
amended from time to time, and any successor statutes thereto, and applicable U.S. Department of
Treasury regulations issued pursuant thereto in temporary or final form.
Collateral Accounts
shall have the meaning set forth in
Section 3.1.1
.
Completion
shall have the meaning set forth in
Section 16.4
.
Control
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise, and the terms
Controlled
,
Controlling
and
Common Control
shall have correlative meanings.
Cut-Off Date
shall have the meaning set forth in
Section 6.2.3(a)
.
DBS
shall have the meaning set forth in
Section 14.3.2(b)
.
Debt
shall mean, with respect to any Person at any time, (a) indebtedness or
liability of such Person for borrowed money whether or not evidenced by bonds, debentures, notes or
other instruments, or for the deferred purchase price of property or services; (b) obligations of
such Person as lessee under leases which should have been or should be, in accordance with GAAP,
recorded as capital leases; (c) obligations issued for, or liabilities incurred on the account of,
such Person; (d) obligations or liabilities of such Person arising under letters of credit, credit
facilities or other acceptance facilities; (e) obligations of such Person under any guarantees or
other agreement to become secondarily liable for any obligation of any other Person, endorsements
(other than for collection or deposit in the ordinary course of business) and other contingent
obligations to provide funds for payment, to supply funds to invest in any Person or otherwise to
assure a creditor against loss; (f) subject to
Section 7.3
, obligations of such Person
secured by any Lien on any property of such Person; or (g) obligations of such Person under any
interest rate or currency exchange agreement.
Debt Service
shall mean, with respect to any particular period of time, scheduled
interest and/or principal payments under the Notes.
Debt Service Reserve Account
shall have the meaning set forth in
Section
3.1.1
.
4
Default
shall mean the occurrence of any event hereunder or under any other Loan
Document which, but for the giving of notice or passage of time, or both, would be an Event of
Default.
Default Rate
shall have the meaning set forth in the Note.
Defeasance Collateral
shall mean obligations or securities that (a) are not subject
to prepayment, call or early redemption, (b) provide for interest at a fixed rate, (c) have a
principal amount due at maturity that cannot vary or change, (d) are rated AAA or better by S&P
and Aaa or better by Moodys (or, if not rated by S&P, are eligible under S&Ps published criteria
in paragraphs 1, 2 or 3 of its Eligible Investment Criteria for AAA Rated Structured
Transactions), and (e) constitute government securities as defined in Section 2(a)(16) of the
Investment Company Act of 1940 as amended (15 U.S.C. 80a-1).
Defeasance Date
shall have the meaning set forth in
Section 2.3.5(a)
.
Defeasance Deposit
shall mean an amount equal to the Release Price for the
applicable Individual Property or Individual Properties subject to the Defeasance Event plus any
costs and expenses incurred or to be incurred in the purchase of Defeasance Collateral necessary to
meet the Scheduled Defeasance Payments.
Defeasance Event
shall have the meaning set forth in
Section 2.3.5(a)
.
Defeasance Lockout Period
shall have the meaning set forth in the Note.
Deficiency
shall have the meaning set forth in
Section 6.2.4(b)
.
Disclosure Documents
shall have the meaning set forth in
Section 14.3.1
.
Disqualified Transferee
shall mean any proposed transferee that, (i) has (within the
past ten (10) years) defaulted, or is now in default, beyond any applicable cure period, of its
material obligations, under any written agreement with Lender, any affiliate of Lender or any
financial institution; (ii) has a principal that has been convicted in a criminal proceeding for a
felony or a crime involving moral turpitude or that is an organized crime figure or is reputed (as
determined by Lender in its sole discretion) to have substantial business or other affiliations
with an organized crime figure; (iii) has at any time filed a voluntary petition under the
Bankruptcy Code or any other federal or state bankruptcy or insolvency law; (iv) as to which an
involuntary petition has at any time been filed under the Bankruptcy Code or any other federal or
state bankruptcy or insolvency law; (v) has at any time filed an answer consenting to or
acquiescing in any involuntary petition filed against it by any other person under the Bankruptcy
Code or any other federal or state bankruptcy or insolvency law; (vi) has at any time consented to
or acquiesced in or joined in an application for the appointment of a custodian, receiver, trustee
or examiner for itself or any of its property; (vii) has at any time made an assignment for the
benefit of creditors, or has at any time admitted its insolvency or inability to pay its debts as
they become due; or (viii) has been found by a court of competent jurisdiction or other
governmental authority in a comparable proceeding to have violated any federal or state securities
laws or regulations promulgated thereunder.
5
EBITDAR
shall mean earnings from operations before interest expense/income, federal,
state and local income taxes, depreciation and amortization, any rental expense on real property,
restructuring costs, unusual severance costs, debt issuance or stock offering costs, legal loss
reserve, casualty losses and/or related reserves, stock option expense and merger and acquisition
related expenses.
Eligible Account
shall mean (i) a segregated trust account or accounts maintained
with the corporate trust department of a federal depository institution or state-chartered
depository institution subject to regulations regarding fiduciary funds on deposit such as or
similar to Title 12 of the Code of Federal Regulations Section 9.10(b) which, in either case, has
corporate trust powers, acting in its fiduciary capacity or (ii) a segregated account maintained at
an Approved Bank. An Eligible Account will not be evidenced by a certificate of deposit, passbook
or other instrument.
Environmental Certificate
shall have the meaning set forth in
Section
12.2.1
.
Environmental Claim
shall mean any claim, action, cause of action, investigation or
written notice by any Person alleging potential liability (including potential liability for
investigatory costs, cleanup costs, natural resource damages, property damages, personal injuries
or penalties) arising out of, based upon or resulting from (a) the presence or release into the
environment of any Hazardous Materials from or at the Property, or (b) the violation, or alleged
violation, of any Environmental Law relating to the Property.
Environmental Event
shall have the meaning set forth in
Section 12.2.1
.
Environmental Indemnity
shall mean the Environmental Indemnity, dated the date
hereof, made by Guarantor in favor of Lender.
Environmental Insurance Policy
shall mean any environmental insurance policy
maintained by or for the benefit of Borrower with respect to the Property on the date hereof and
any environmental insurance policy hereafter obtained and maintained with respect to the Property
and acceptable to Lender.
Environmental Law
shall have the meaning provided in the Environmental Indemnity.
Environmental Reports
shall have the meaning set forth in
Section 12.1
.
ERISA
shall mean the United States Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and the rulings issued thereunder.
Event of Default
shall have the meaning set forth in
Section 17.1(a)
.
Excess Account Collateral
shall have the meaning set forth in
Section 2.3.8
.
Excess Cash Flow
shall have the meaning set forth in
Section 3.1.6
.
6
Exchange Act
shall have the meaning set forth in
Section 14.3.1
.
Excluded Personal Property
shall mean all personal property of the Master Lessee or
any other Tenants under Leases;
provided
,
however
, that Excluded Personal Property
shall not include walls or ceilings or any items that constitute fixtures (specifically including,
but not limited to plumbing and electrical fixtures, heating, ventilation and air conditioning,
wall and floor coverings, elevators and escalators). Excluded Personal Property shall include,
without limitation, any equipment attached to or installed at an Individual Property which is
unique to and used to further the business of Master Lessee or such Tenants at such Individual
Property, including, but not limited to, steel racking, dust collection systems, generators, order
pickers and other similar items. For purposes of this definition, the terms equipment and
fixtures shall have the meaning set forth in the Uniform Commercial Code in effect in the State
of New York.
Exculpated Parties
shall have the meaning set forth in
Section 18.1.1
.
Excusable Delay
shall mean a delay solely due to acts of God, governmental
restrictions, regulations or controls, stays, judgments, orders, decrees, enemy or hostile
governmental actions, terrorist acts, civil commotion, fire, casualty, strikes, work stoppages,
shortages of labor or materials or other causes beyond the reasonable control of Borrower, but
Borrowers lack of funds in and of itself shall not be deemed a cause beyond the control of
Borrower.
Fiscal Year
shall mean the fifty-two (52) or fifty-three (53) week period ending on
the Saturday immediately preceding the last day of each calendar year of the term of the Loan or
the portion of any such period falling within the term of the Loan in the event that such a period
occurs partially before or after, or partially during, the term of the Loan.
Fiscal Quarter
shall mean each quarter within a Fiscal Year in accordance with GAAP.
Fitch
shall mean Fitch Ratings Inc.
GAAP
shall mean the generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and authority within the
accounting profession), or in such other statements by such entity as may be in general use by
significant segments of the U.S. accounting profession, to the extent such principles are
applicable to the facts and circumstances on the date of determination.
General Release Conditions
shall have the meaning set forth in
Section
2.3.4
.
Geographic Quadrant
shall mean any geographic quadrant identified on
Schedule
II
attached hereto.
Governmental Authority
shall mean any court, board, agency, commission, office or
other authority of any nature whatsoever for any governmental unit (federal, state, county,
district, municipal, city or otherwise) whether now or hereafter in existence.
7
Guarantor
shall mean BlueLinx Holdings Inc., a Delaware corporation.
Hazardous Materials
shall have the meaning provided in the Environmental Indemnity.
Holding Account
shall have the meaning set forth in
Section 3.1.1
.
Immediate Repairs and Remediation Completion Deadline
shall have the meaning set
forth in
Section 16.4
.
Immediate Repair and Remediation Reserve Account
shall have the meaning set forth in
Section 3.1.1
.
Immediate Repairs and Remediation
shall mean, collectively, the immediate repairs
and environmental remediation required to be made to the Property (other than immediate repairs
required to be made to the portion of the Improvements that constitutes shed space) described in
Schedule III
attached hereto.
Impositions
shall mean all taxes (including all ad valorem, sales (including those
imposed on lease rentals), use, single business, gross receipts, value added, intangible
transaction, privilege or license or similar taxes), governmental assessments (including all
assessments for public improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not commenced or completed within the term of this Agreement), water,
sewer or other rents and charges, excises, levies, fees (including license, permit, inspection,
authorization and similar fees), and all other governmental charges, in each case whether general
or special, ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of
the Property and/or any Rents (including all interest and penalties thereon), which at any time
prior to, during or in respect of the term hereof may be assessed or imposed on or in respect of or
be a Lien upon (a) Borrower or Maryland Loan Guarantor (including all franchise or other taxes
imposed on Borrower or Maryland Loan Guarantor for the privilege of doing business in the
jurisdiction in which the Property is located), (b) the Property, or any other collateral delivered
or pledged to Lender in connection with the Loan, or any part thereof, or any Rents therefrom or
any estate, right, title or interest therein, or (c) any occupancy, operation, use or possession
of, or sales from, or activity conducted on, or in connection with the Property or the leasing or
use of all or any part thereof by Borrower or Maryland Loan Guarantor. Nothing contained in this
Agreement shall be construed to require Borrower or Maryland Loan Guarantor to pay any tax,
assessment, levy or charge imposed on (i) any Tenant occupying any portion of the Property or (ii)
Lender in the nature of a capital levy, estate, inheritance, succession, income or net revenue tax.
Improvements
shall have the meaning set forth in the Security Instrument.
Increased Costs
shall have the meaning set forth in
Section 2.4.1
.
Indebtedness
shall mean, at any given time, the Principal Amount, together with all
accrued and unpaid interest thereon and all other obligations and liabilities due or to become due
to Lender pursuant hereto, under the Notes or in accordance with the other Loan Documents
8
and all other amounts, sums and expenses paid by or payable to Lender hereunder or pursuant to
the Notes or the other Loan Documents.
Indemnified Parties
shall have the meaning set forth in
Section 19.12(b)
.
Independent
shall mean, when used with respect to any Person, a Person who: (i)
does not have any direct financial interest or any material indirect financial interest in any
Borrower or in any Affiliate of any Borrower, (ii) is not connected with any Borrower or any
Affiliate of any Borrower as an officer, employee, promoter, underwriter, trustee, partner, member,
manager, creditor, director, supplier, customer or person performing similar functions and (iii) is
not a member of the immediate family of a Person defined in clause (i) or (ii) above.
Independent Accountant
shall mean a firm of nationally recognized, certified public
accountants which is Independent and which is selected by Borrower and reasonably acceptable to
Lender. Lender acknowledges that Ernst & Young LLP constitutes an approved Independent Accountant.
Independent Architect
shall mean an architect, engineer or construction consultant
selected by Borrower which is Independent, licensed to practice in the State (if an architect), has
at least five (5) years of applicable experience and which is reasonably acceptable to Lender.
Lender acknowledges that, for purposes of the Physical Condition Reports, ATC Associates, Inc. and
Land America Assessment Corp. are each an approved Independent Architect.
Independent Director
,
Independent Manager
, or
Independent Member
shall mean a Person who is not and will not be while serving and has never been (i) a member (other
than an Independent Member), manager (other than an Independent Manager), director, (other than an
Independent Director), employee, attorney, or counsel of Borrower or its Affiliates, (ii) a
customer, supplier or other Person who derives more than one percent (1%) of its purchases or
revenues from its activities with Borrower or its Affiliates, (iii) a direct or indirect legal or
beneficial owner in any entity referred to in clause (i) or (ii) above or any of its Affiliates,
(iv) a member of the immediate family of any member, manager, employee, attorney, customer,
supplier or other Person referred to in clause (i), (ii) or (iii) above, or (v) a person
Controlling or under the common Control of anyone listed in clauses (i) through (iv) above. A
Person that otherwise satisfies the foregoing shall not be disqualified from serving as an
Independent Director or Independent Manager or Independent Member if such individual is at the time
of initial appointment, or at any time while serving as such, is an Independent Director or
Independent Manager or Independent Member, as applicable, of a Single Purpose Entity affiliated
with Borrower.
Individual Parcel
shall have the meaning set forth in the Security Instrument.
Individual Borrower
shall have the meaning set forth in the first paragraph of this
Agreement.
Individual Property
shall have the meaning set forth in the Security Instrument.
9
Insurance Requirements
shall mean, collectively, (i) all material terms of any
insurance policy required pursuant to this Agreement and (ii) all material regulations and
then-current standards applicable to or affecting the Property or any part thereof or any use or
condition thereof.
Insurance Reserve Account
shall have the meaning set forth in
Section 3.1.1
.
Insurance Reserve Amount
shall have the meaning set forth in
Section 16.2
.
Intangible
shall have the meaning set forth in the Security Instrument.
Intercreditor Agreement
shall mean that certain Mortgagee Agreement between
Wachovia, as agent for the lenders under the Revolving Loan, and Lender and Wachovia, as holders of
the Notes.
Interest Period
shall have the meaning set forth in the Notes.
Interest Rate
shall have the meaning set forth in the Notes.
Key Properties
shall mean, collectively, (i) any Individual Property which contains
greater than 200,000 square feet of main distribution building space and (ii) the Individual
Property located in Englewood, Colorado and containing 68,721 square feet of space, which
Individual Property is used by the Borrower for office purposes.
Land
shall have the meaning set forth in the Security Instrument.
Late Payment Charge
shall have the meaning set forth in
Section 2.2.3
.
Lease
shall mean any lease (including the Master Lease), sublease or subsublease,
letting, license, concession or other agreement (whether written or oral and whether now or
hereafter in effect), pursuant to which any Person is granted a possessory interest in, or right to
use or occupy all or any portion of any space in any Individual Property, and every modification,
amendment or other agreement relating to such lease, sublease, subsublease, or other agreement
entered into in connection with such lease, sublease, subsublease, or other agreement and every
guarantee of the performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto. Notwithstanding the foregoing, the term Lease
shall exclude all of the Subleases at all times prior to a termination of the Master Lease.
LCR
shall mean a ratio, as determined by Lender, in which: (i) the numerator is
Master Lessees EBITDAR, applied consistently, as stated on Master Lessees four (4) most recent
quarterly financial statements delivered to Lender by Borrower or Master Lessee pursuant to
Section 11.2.1
, for the trailing twelve (12) month period immediately prior to the
applicable calculation date; and (ii) the denominator is Master Lease Base Rent for the trailing
twelve (12) month period immediately prior to the applicable calculation date (and, in the event
that the calculation date occurs prior to the first anniversary of the date of the Master Lease,
Master Lease Base Rent applicable to any month prior to the date of the Master Lease shall be
deemed
10
to be equal to one-twelfth (1/12) of the Master Lease Base Rent payable during the first year
of the term of the Master Lease).
LCR Deterioration Reserve Account
shall have the meaning set forth in
Section
3.1.1
.
LCR Test
shall mean the test performed by Lender on a trailing four (4) Fiscal
Quarter basis pursuant to the terms of
Section 16.5
hereof following the end of each Fiscal
Quarter after the Closing Date to determine whether a Low LCR Cash Sweep Period has occurred and is
continuing.
Legal Requirements
shall mean all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of every Governmental Authority including,
without limitation, Environmental Laws and all covenants, restrictions and conditions now or
hereafter of record which may be applicable to Borrower, Maryland Loan Guarantor or to the Property
and the Improvements and the Building Equipment thereon, or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration, repair or reconstruction of the Property and the
Improvements and the Building Equipment thereon, including, without limitation, building and zoning
codes and ordinances and laws relating to handicapped accessibility.
Lender
shall have the meaning set forth in the first paragraph of this Agreement.
Lenders Consultant
shall mean an environmental and engineering consulting firm
selected by Lender and reasonably acceptable to Borrower having experience (i) conducting
environmental and engineering assessments for properties similar to the Property and (ii) preparing
and supervising remediation plans for properties similar to the Property.
Lender Group
shall have the meaning set forth in
Section 14.3.2(b)
.
Letter of Credit
shall mean an irrevocable, unconditional, transferable, clean sight
draft letter of credit (either an evergreen letter of credit or one which does not expire until at
least sixty (60) days after the Maturity Date (the
LC Expiration Date
)), in favor of
Lender and entitling Lender to draw thereon in New York, New York, based solely on delivery or a
sight draft containing a statement executed by an officer or authorized signatory of Lender and
issued by an Approved Bank. If at any time (a) the institution issuing any such Letter of Credit
shall cease to be an Approved Bank or (b) the Letter of Credit is due to expire prior to the LC
Expiration Date, Lender shall have the right immediately to draw down the same in full and hold the
proceeds thereof in accordance with the provisions of this Agreement, unless Borrower shall deliver
a replacement Letter of Credit from an Approved Bank within (i) as to (a) above, thirty (30) days
after Lender delivers written notice to Borrower that the institution issuing the Letter of Credit
has ceased to be an Approved Bank or (ii) as to (b) above, at least ten (10) Business Days prior to
the expiration date of said Letter of Credit.
Liabilities
shall have the meaning set forth in
Section 14.3.2(b)
.
License
shall have the meaning set forth in
Section 4.1.23
.
11
Lien
shall mean any mortgage, deed of trust, lien, pledge, hypothecation,
assignment, security interest, or any other encumbrance or charge on or affecting Borrower,
Maryland Loan Guarantor, the Property, any portion thereof or any interest therein, including,
without limitation, any conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, the filing of any financing
statement, and the filing of mechanics, materialmens and other similar liens and encumbrances,
excluding any such items solely affecting the Excluded Personal Property.
Loan
shall mean the loan in the amount of the Loan Amount made by Lender to Borrower
pursuant to this Agreement.
Loan Amount
shall mean the original principal amount of the Loan equal to
$295,000,000.
Loan Documents
shall mean, collectively, this Agreement, the Notes, the Security
Instrument, the Assignment of Leases, the Environmental Indemnity, the Master Lease, the Master
Lease SNDA, the Account Agreement, the Recourse Guaranty, the Maryland Loan Guaranty and all other
documents executed and/or delivered by Borrower, Maryland Loan Guarantor, Master Lessee or
Guarantor, as applicable, to Lender in connection with the Loan or in connection with any
Substitution, including any opinion certificates or other certifications or representations
delivered by or on behalf of Borrower or any Affiliate of Borrower to Lender.
Low LCR Cash Sweep Period
shall mean any period (a) commencing on the Payment Date
following the conclusion of any two (2) consecutive Fiscal Quarters for which the LCR is less than
2.50:1.00, as determined by an LCR Test in accordance with
Section 16.5
hereof, and (ii)
ending on the day immediately preceding the Payment Date following the conclusion of any two (2)
consecutive Fiscal Quarters for which the LCR equals or exceeds 2.50:1.00, as determined by an LCR
Test in accordance with
Section 16.5
hereof.
LTV Ratio
shall mean the ratio, expressed as a percentage, of the Principal Amount,
as of the date of determination, to the Aggregate Appraised Value, as of the date of determination.
Maryland Borrower
shall mean ABP MD (Baltimore) Subsidiary LLC, a Delaware limited
liability company and a wholly owned subsidiary of the Maryland Loan Guarantor.
Maryland Loan Guarantor
shall have the meaning provided in the first paragraph
hereof.
Maryland Loan Guaranty
shall mean that certain guaranty delivered by Maryland Loan
Guarantor in favor of Lender.
Maryland Property
shall mean the Individual Property located in Maryland.
Master Lease
shall mean that certain Amended and Restated Master Lease Agreement for
the Individual Properties by and between each Individual Borrower (or in the case
12
of the Maryland Property, the Maryland Loan Guarantor), as lessor, and Master Lessee, as
lessee, dated as of the date hereof, as more particularly described in
Section 5.1.23
.
Master Lease Base Rent
shall mean monthly payments under the Master Lease of
scheduled base rent.
Master Lease Recurrent Additional Rent
shall mean monthly payments under the Master
Lease of additional rent for scheduled pass-through expenses, including, without limitation, taxes
and insurance.
Master Lease Rent
shall mean, collectively, the Master Lease Scheduled Rent and the
Master Lease Variable Additional Rent.
Master Lease Rent Payment Direction Letter
shall mean a letter in the form of
Exhibit P pursuant to which Borrower (or in the case of the Maryland Property, the Maryland Loan
Guarantor) instructs Master Lessee to make payments of Master Lease Scheduled Rent and, during the
continuance of an Event of Default and during a Low LCR Cash Sweep Period, Master Lease Variable
Additional Rent directly to the Holding Account as more particularly set forth in
Section
3.1.9(a)
.
Master Lease Rent Shortfall
shall mean a shortfall in the Holding Account with
respect to all or any portion of the Master Lease Rent required to be deposited therein by Master
Lessee pursuant to the Master Lease Rent Payment Direction Letter.
Master Lease Scheduled Rent
shall mean, collectively, the Master Lease Base Rent and
the Master Lease Recurrent Additional Rent.
Master Lease SNDA
shall mean that certain Subordination, Non-Disturbance and
Attornment agreement among Borrower (or in the case of the Maryland Property, the Maryland Loan
Guarantor), Master Lessee and Lender dated of even date herewith.
Master Lease Variable Additional Rent
shall mean with respect to any month, payments
payable by the Master Lessee under the Master Lease of variable operating and occupancy expenses in
such month, including, without limitation, common area maintenance expenses, but excluding Master
Lease Recurrent Additional Rent.
Master Lessee
shall mean BlueLinx Corporation, a Georgia corporation.
Master Lessee Officers Certificate
shall mean a certificate executed by an
authorized signatory of Master Lessee that is familiar with the financial condition of Master
Lessee and the operation of the Property.
Material Adverse Effect
shall mean any event or condition that has a material
adverse effect on (i) the Property taken as a whole, (ii) the use, operation, or value of any Key
Property or the use, operation or value of the Property taken as a whole, (iii) the business,
profits, operations or financial condition of Borrower or the Maryland Loan Guarantor, (iv) the
ability of Maryland Loan Guarantor to satisfy any of Maryland Loan Guarantors obligations under
the
13
Loan Documents or (v) the ability of Borrower to repay the principal and/or interest of the
Loan as it becomes due or to satisfy any of Borrowers obligations under the Loan Documents.
Material Alteration
shall mean any Alteration which, when aggregated with all
related Alterations (other than decorative work such as painting, wall papering and carpeting and
the replacement of fixtures, furnishings and equipment to the extent being of a routine and
recurring nature and performed in the ordinary course of business) constituting a single project,
is estimated to cost in excess of forty percent (40%) of the Allocated Loan Amount for the
Individual Property to which such Alteration is to be made;
provided
,
however
, that
the term
Material Alteration
shall not include Alterations being undertaken at the sole
cost and expense of (a) the Master Lessee pursuant to the Master Lease so long as any security
required for any such material alteration under the Master Lease is deposited with Lender (or any
related guaranty permitted hereunder in lieu of such deposit runs to the benefit of Lender and is
delivered to Lender) or (b) a Tenant pursuant to a Lease.
Material Sublease
shall mean, during any Low LCR Cash Sweep Period, any Sublease to
a single Tenant covering more than 50,000 rentable square feet at any Individual Property.
Maturity Date
shall have the meaning set forth in the Notes.
Maturity Date Payment
shall have the meaning set forth in the Notes.
Maximum Legal Rate
shall mean the maximum non-usurious interest rate, if any, that
at any time or from time to time may be contracted for, taken, reserved, charged or received on the
indebtedness evidenced by the Notes and as provided for herein or the other Loan Documents, under
the laws of such state or states whose laws are held by any court of competent jurisdiction to
govern the interest rate provisions of the Loan.
Mezzanine Borrower
shall have the meaning set forth in
Section 5.1.11
.
Mezzanine Loan
shall have the meaning set forth in
Section 5.1.11
.
Mezzanine Loan Documents
shall have the meaning set forth in
Section 5.1.11
.
Monetary Default
shall mean a Default (i) that can be cured with the payment of
money or (ii) arising pursuant to
Section 17.1(a)(vi)
or
(vii)
.
Monthly Debt Service Payment Amount
shall have the meaning set forth in the Notes.
Monthly Insurance Reserve Amount
shall have the meaning set forth in
Section
16.2
.
Monthly Structural Repair Reserve Amount
shall mean an amount determined by Lender
equal to one-twelfth (1/12) of the product of (i) $0.05 and (ii) the aggregate square footage of
the portion of the Improvements that constitutes distribution center space that is subject to a
Sublease;
provided
,
however
, that in the event that, at the time of determination,
less
14
than ten percent (10%) the aggregate net rentable square footage of the Improvements is
subject to Subleases, the Monthly Structural Repair Reserve Amount shall be $0.00.
Monthly Tax Reserve Amount
shall have the meaning set forth in
Section 16.1
.
Moodys
shall mean Moodys Investors Service, Inc.
Mortgage Tax States
shall mean, collectively, Alabama, Florida, Kansas, Georgia,
Minnesota, New York, Oklahoma, Tennessee, Virginia and any other State in which an Individual
Property or any Substitute Property may be located which imposes a mortgage recording or other
mortgage tax.
New Sublease
shall have the meaning set forth in
Section 8.7.1
.
Non-Consolidation Opinion
shall have the meaning provided in
Section 2.5.5
.
Non-Disqualification Opinion
shall mean an opinion of outside tax counsel reasonably
acceptable to the Lender or the Rating Agencies to whom such opinion is addressed that a
contemplated action will neither cause any trust formed as a REMIC pursuant to a Securitization to
fail to qualify as a real estate mortgage investment conduit within the meaning of Section 860D
of the Code at any time that any regular interests in the REMIC are outstanding nor cause a
prohibited transaction tax (within the meaning of Section 860F(a)(2) of the Code) or prohibited
contribution tax (within the meaning of Section 860G(d) of the Code) to be imposed on any such
REMIC.
Non-Disturbance Agreement
shall have the meaning set forth in
Section 8.7.7
.
Notes
shall mean, collectively, (a) that certain Amended, Restated and Consolidated
Note A-1, dated the date hereof, made by Borrower, as maker, in favor of Lender, as payee, in the
principal amount of $147,500,000 and (b) that certain Amended, Restated and Consolidated Note A-2,
dated the date hereof, made by Borrower, as maker, in favor of Lender, as payee, in the principal
amount of $147,500,000, as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.
Obligations
shall have meaning set forth in the recitals of the Security Instrument.
OFAC
List means the list of specially designated nationals and blocked persons
subject to financial sanctions that is maintained by the U.S. Treasury Department, Office of
Foreign Assets Control and accessible through the internet website www.treas.gov/ofac/t11sdn.pdf.
Officers Certificate
shall mean a certificate executed by an authorized signatory
of Borrower that is familiar with the financial condition of Borrower and the operation of the
Property,
provided
that the Officers Certificate required under
Article XI
shall
be executed by the Chief Financial Officer of Borrower.
15
Opinion of Counsel
shall mean an opinion of counsel of a law firm selected by
Borrower and reasonably acceptable to Lender.
Other Charges
shall mean, collectively, (i) all sums, charges, fees, costs,
expenses, common area maintenance charges and other charges or assessments reserved in or payable
under any reciprocal easement agreements, if any, and (ii) maintenance charges, impositions other
than Impositions, and any other charges, including, without limitation, vault charges and license
fees for the use of vaults, chutes and similar areas adjoining the Property, now or hereafter
levied or assessed or imposed against the Property or any part thereof by any Governmental
Authority, other than those required to be paid by Master Lessee or any other Tenant pursuant to
its Lease.
Other Taxes
shall have the meaning set forth in
Section 2.4.3
.
Outparcel
shall mean each parcel of Land legally described in
Schedule VII
attached hereto.
Outparcel Release Instruments
shall have the meaning set forth in
Section
2.3.7
.
Payment Date
shall have the meaning set forth in the Notes.
Permitted Debt
shall mean collectively, (a) the Notes and the other obligations,
indebtedness and liabilities specifically provided for in any Loan Document and secured by this
Agreement, the Security Instrument and the other Loan Documents and (b) trade payables incurred in
the ordinary course of Borrowers (or in the case of the Maryland Property, Maryland Loan
Guarantors) business, not secured by Liens on the Property (other than Permitted Encumbrances and
other than liens being properly contested in accordance with the provisions of this Agreement or
the Security Instrument), not to exceed two percent (2%) of the aggregate Principal Amount for the
Property at any one time outstanding, payable by or on behalf of Borrower (or Maryland Loan
Guarantor, as applicable) for or in respect of the operation of the Property in the ordinary course
of operating Borrowers (or Maryland Loan Guarantor, as applicable) business,
provided
that
(but subject to the remaining terms of this definition) each such amount shall be paid within sixty
(60) days following the date on which each such amount is incurred. Nothing contained herein shall
be deemed to require Borrower or Maryland Loan Guarantor to pay any amount, so long as Borrower (or
Maryland Loan Guarantor, as applicable) is in good faith, and by proper legal proceedings,
diligently contesting the validity, amount or application thereof,
provided
that in each
case, at the time of the commencement of any such action or proceeding, and during the pendency of
such action or proceeding (i) no Event of Default shall exist and be continuing hereunder, (ii)
adequate reserves with respect thereto are maintained on the books of Borrower (or Maryland Loan
Guarantor, as applicable) in accordance with GAAP (as determined by Borrower (or Maryland Loan
Guarantor, as applicable) or, at its option, an Independent Accountant), and (iii) such contest
operates to suspend collection or enforcement, as the case may be, of the contested amount and such
contest is maintained and prosecuted continuously and with diligence. Notwithstanding anything set
forth herein, in no event shall Borrower or Maryland Loan Guarantor be permitted under this
provision to enter into a note (other than the Notes and the other Loan Documents) or other
instrument for borrowed money.
16
Permitted Encumbrances
shall mean collectively, (a) the Liens and security interests
created or permitted by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed
in the Title Policy or the Survey relating to such Individual Property or any part thereof, (c)
Liens, if any, for Impositions imposed by any Governmental Authority not yet due or delinquent (d)
Liens arising after the date hereof which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted in accordance with
Section 7.3
hereof, (e) easements and encumbrances permitted pursuant to
Section 8.3(ii)
and (f) such
other Liens as Lender may approve in writing in Lenders sole discretion.
Permitted Fund Manager
means any Person that on the date of determination is (i) a
nationally-recognized manager of investment funds investing in debt or equity interests (including
debt and equity interests relating to commercial real estate) and (ii) not subject to a bankruptcy
proceeding.
Permitted Investments
shall have the meaning set forth in the Account Agreement.
Person
shall mean any individual, corporation, partnership, joint venture, limited
liability company, estate, trust, unincorporated association, any federal, state, county or
municipal government or any bureau, department or agency thereof and any fiduciary acting in such
capacity on behalf of any of the foregoing.
Personal Property
shall have the meaning set forth in the Security Instrument.
Physical Conditions Reports
shall mean the structural engineering reports with
respect to the Individual Properties (i) prepared by an Independent Architect, (ii) addressed to
Lender, (iii) prepared based on a scope of work determined by Lender in Lenders reasonable
discretion, and (iv) in form and content acceptable to Lender, in Lenders reasonable discretion,
together with any amendments or supplements thereto. The Physical Conditions Reports may consist
of updates to the existing structural engineering reports,
provided
that (A) such updated
reports are in form and content acceptable to Lender in Lenders reasonable discretion and (B) the
Independent Architect preparing such updated reports shall provide to Lender a reliance letter
satisfactory to Lender.
Plan
shall have the meaning set forth in
Section 4.1.10
.
Principal Amount
shall mean, collectively, the aggregate Principal Amount under
each of the Notes, as such term is defined in each of the Notes.
Prohibited Person
means any Person identified on the OFAC List or any other Person
with whom a U.S. Person may not conduct business or transactions by prohibition of Federal law or
Executive Order of the President of the United States or America.
Proceeds
shall have the meaning set forth in
Section 6.2.2
.
Proceeds Prepayments
shall mean Proceeds applied by Lender as a prepayment of
principal in accordance with
Section 6.2.3 hereof
.
17
Proceeds Reserve Account
shall have the meaning set forth in
Section 3.1.1
.
Project
shall have the meaning set forth in
Section 16.3
.
Property
shall have the meaning set forth in the Security Instrument.
Property Release
shall have the meaning set forth in
Section 2.3.4
.
Property Release Notice
shall have the meaning set forth in
Section 2.3.4
.
Provided Information
shall have the meaning set forth in
Section 14.1
.
PZR
shall mean The Planning Zoning Resource Corporation.
Qualified Transferee
shall mean any entity (a) that together with its Close
Affiliates (i) has a net worth of at least $250,000,000 (calculated exclusive of the Property) as
of a date no more than six (6) months prior to the date of the transfer and (ii) manages or owns at
the time of the transfer assets of at least $600,000,000 (calculated exclusive of the Property);
provided
,
however
, that if such transferee has experience in operating warehouse or
distribution facilities, properties (excluding the Property) containing not fewer than 4,000,000
rentable square feet of warehouse space in the aggregate, then such transferee shall meet the
requirements of this clause (a) if it, together with its Close Affiliates (1) has a net worth of at
least $150,000,000 (calculated exclusive of the Property) as of a date no more than six (6) months
prior to the date of the transfer and (2) manages or owns at the time of the transfer assets of at
least $400,000,000 (calculated exclusive of the Property), and (b) that is not a Disqualified
Transferee.
Rating Agencies
shall mean (a) prior to a Securitization, each of S&P, Moodys and
Fitch and any other nationally-recognized statistical rating agency which has been approved by
Lender and (b) after a Securitization has occurred, each such Rating Agency which has rated the
Securities in the Securitization.
Rating Agency Confirmation
shall mean, collectively, a written affirmation from each
of the Rating Agencies that the credit rating of the Securities given by such Rating Agency
immediately prior to the occurrence of the event with respect to which such Rating Agency
Confirmation is sought will not be qualified, downgraded or withdrawn as a result of the occurrence
of such event, which affirmation may be granted or withheld in such Rating Agencys sole and
absolute discretion. In the event that, at any given time, no such Securities shall have been
issued and are then outstanding, then the term Rating Agency Confirmation shall be deemed instead
to require the written approval of Lender based on its good faith determination of whether the
Rating Agencies would issue a Rating Agency Confirmation if any such Securities were outstanding.
Recourse Guaranty
shall mean that certain Guaranty of Recourse Obligations of
Borrower, dated as of the date hereof, by Guarantor in favor of Lender, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
Register
shall have the meaning set forth in
Section 15.4
.
18
Regulatory Change
shall mean any change after the date of this Agreement in federal,
state or foreign laws or regulations or the adoption or the making, after such date, of any
interpretations, directives or requests applying to Lender, or any Person Controlling Lender or to
a class of banks or companies Controlling banks of or under any federal, state or foreign laws or
regulations (whether or not having the force of law) by any court or Governmental Authority or
monetary authority charged with the interpretation or administration thereof.
Related Remaining Property
shall have the meaning set forth in
Section
2.3.7
.
Release Date
shall have the meaning provided in
Section 2.3.4(a)
.
Release Instruments
shall have the meaning provided in
Section 2.3.4(c)
.
Release Price
shall mean the product of (a) the Allocated Loan Amount for the
Release Property and (b) either (1) with respect to any Release Property that is a Key Property,
one hundred twenty-five percent (125%) or (2) with respect to any Release Property that is not a
Key Property, the applicable Release Price Percentage. The amount of any Proceeds Prepayments
with respect to an Individual Property shall (after calculating such Release Price based upon the
original Allocated Loan Amount for such Property without deduction, for purposes of such
calculation, for any such prepayments) be deducted from the Release Price for such Property.
Release Price Percentage
shall mean, as of any Release Date, (i) if the Principal
Amount that would be outstanding immediately following the release of the applicable Release
Property is from $295,000,000 to and including $265,500,000, one hundred percent (100%) or (ii) if
the Principal Amount that would be outstanding immediately following the release of the applicable
Release Property is less than $265,500,000, one hundred ten percent (110%),
provided
that,
in the case of each of clause (i) and clause (ii), any prior reductions in the Principal Amount
outstanding as a result of payments of Release Prices in respect of Key Properties and any
mandatory prepayment made pursuant to the provisions of
Section 6.2.3
and Section 4(b) of
the Note shall be disregarded in determining the Principal Amount that would be outstanding
immediately following the release of the applicable Release Property.
Release Property
shall have the meaning provided in
Section 2.3.4
.
Rents
shall mean all rents, rent equivalents, moneys payable as damages or in lieu
of rent or rent equivalents, royalties (including, without limitation, all oil and gas or other
mineral royalties and bonuses), income, receivables, receipts, revenues, deposits (including,
without limitation, security, utility and other deposits), accounts, cash, issues, profits, charges
for services rendered, and other consideration of whatever form or nature received by or paid to or
for the account of or benefit of Borrower or Maryland Loan Guarantor from any and all sources
arising from or attributable to the Property, including, but not limited to the Master Lease and
the Leases, and Proceeds, if any, from business interruption or other loss of income insurance.
Notwithstanding the foregoing, Rents shall not include any sums payable under (i) the Oil, Gas and
Mineral Lease, dated as of June 17, 2003, between Georgia-Pacific Corporation, as landlord, and
Eagle Oil & Gas Co., as tenant, as amended by that certain Amendment to Oil, Gas and Mineral Lease,
dated as of May 31, 2005, by and between ABP TX (FORT WORTH) LLC, as
19
landlord, and Antero Resources I, LP and Eagle Oil & Gas Co., as tenant and (ii) the Oil and
Gas Lease, dated November 7, 1988, between Georgia-Pacific Corporation, as landlord, and GonzOil,
Inc., successor by assignment to Weinsz Oil & Gas, as successor by assignment to Spenser Petroleum
Corporation.
Replaced Property
shall have the meaning provided in
Section 2.3.6
.
Revolving Loan
shall mean the loan made by Wachovia pursuant to the Revolving Loan
Agreement (as such term is defined in the Intercreditor Agreement).
S&P
shall mean Standard & Poors Ratings Services, a division of The McGraw-Hill.
Scheduled Defeasance Payments
shall have the meaning provided in
Section
2.3.5(b)
.
Securities
shall have the meaning set forth in
Section 14.1
.
Securities Act
shall have the meaning set forth in
Section 14.3.1
.
Securitization
shall have the meaning set forth in
Section 14.1
.
Security Agreement
shall have the meaning set forth in
Section 2.3.5(a)
.
Security Deposits
shall have the meaning provided in the Assignment of Leases.
Security Instrument
shall mean that, collectively, those certain Amended, Restated
and Consolidated Mortgages, Security Agreements, Financing Statements, Fixture Filings and
Assignments of Master Lease, Leases, Rents and Security Deposits or similarly entitled instruments,
dated the date hereof, executed and delivered by the applicable Borrower (or in the case of the
Maryland Property, the Maryland Loan Guarantor) to Lender (or to a trustee for the benefit of
lender, as applicable) and encumbering, in each case, its Individual Property, as any of the
foregoing may be amended, restated, replaced, supplemented or otherwise modified from time to time.
Servicer
shall mean such Person designated in writing with an address for such
Person by Lender, in its sole discretion, to act as Lenders agent hereunder with such powers as
are specifically delegated to the Servicer by Lender, whether pursuant to the terms of this
Agreement, the Account Agreement or otherwise, together with such other powers as are reasonably
incidental thereto.
Single Purpose Entity
shall mean a Person, other than an individual, which
(i) is formed or organized solely for the purpose of (1) owning, holding, developing, using,
operating and financing an ownership interest in the Property or its Individual Property, entering
into this Agreement with the Lender, refinancing its Individual Property in connection with a
permitted repayment of the Loan or portion thereof, and transacting lawful business that is
incident, necessary and appropriate to accomplish the foregoing, or (2) acting as
20
a general partner of a limited partnership that owns the Property or an Individual Property or
the sole or managing member of a limited liability company that owns the Property or an Individual
Property, as applicable;
(ii) does not engage in any business unrelated to (1) the Property or its Individual Property
and the ownership, development, use, operation and financing thereof, or (2) acting as general
partner of a limited partnership that owns the Property or an Individual Property or the sole or
managing member of a limited liability company that owns the Property or an Individual Property, as
applicable;
(iii) has not and will not have (1) any material assets other than the Property or its
Individual Property and personal property necessary or incidental to its interest in the Property
or its Individual Property, or the operation, management and financing thereof, or its partnership
interest in a limited partnership, or the member interest in a limited liability company that owns
the Property or an Individual Property, or acts as the general partner or managing member thereof
(or, in the case of Maryland Borrower, acts as the Subsidiary of Maryland Loan Guarantor), as
applicable; or (2) any indebtedness other than the Permitted Debt;
(iv) maintains its own separate books and records and its own accounts, in each case which are
separate and apart from the books and records and accounts of any other Person;
(v) holds itself out as being a Person, separate and apart from any other Person;
(vi) does not and will not commingle its funds or assets with those of any other Person;
(vii) conducts its own business in its own name;
(viii) maintains separate financial statements and will not permit its assets to be listed as
assets on the financial statement of any other Person;
provided
,
however
, that any
such consolidated financial statement shall contain a note indicating that its separate assets and
liabilities are neither available to pay the debts of the consolidated entity nor constitute
obligations of the consolidated entity;
(ix) pays its own liabilities out of its own funds;
(x) observes in all material respects all partnership, corporate or limited liability company
formalities, as applicable;
(xi) pays the salaries of its own employees, if any, and maintains a sufficient number of
employees, if any, in light of its contemplated business operations;
(xii) except pursuant to the Loan Documents, does not guarantee or otherwise obligate itself
with respect to the debts of any other Person or hold out its credit as being available to satisfy
the obligations of any other Person;
21
(xiii) does not acquire obligations or securities of its partners, members or shareholders;
(xiv) allocates fairly and reasonably shared expenses, including, without limitation, any
overhead for shared office space, if any;
(xv) uses separate stationary, invoices, and checks;
(xvi) maintains an arms-length relationship with its Affiliates;
(xvii) except pursuant to the Loan Documents, does not and will not pledge its assets for the
benefit of any other Person or make any loans or advances to any other Person;
(xviii) does and will continue to use commercially reasonable efforts to correct any known
misunderstanding regarding its separate identity;
(xix) maintains adequate capital in light of its contemplated business operations; and
(xx) has not and will not engage in, seek, or consent to the dissolution, winding up,
liquidation, consolidation or merger and except as otherwise permitted in this Agreement, has not
and will not engage in, seek or consent to any asset sale, transfer of its partnership, membership
or shareholder interests (if such entity is a general partner in a limited partnership or the
managing member in a limited liability company), or amendments of its partnership or operating
agreement, certificate of incorporation, articles of organization or other organizational document.
In addition, if such Person is a partnership, (1) all general partners of such Person shall be
Single Purpose Entities; and (2) if such Person has more than one general partner, then the
organizational documents shall provide that such Person shall continue (and not dissolve) for so
long as a solvent general partner exists. In addition, if such Person is a corporation, then, at
all times: (a) such Person shall have at least two (2) Independent Directors and (b) the board of
directors of such Person may not take any action requiring the unanimous affirmative vote of one
hundred percent (100%) of the members of the board of directors unless all of the directors,
including the Independent Directors, shall have participated in such vote. In addition, if such
Person is a limited liability company, (a) with only one (1) member, then, such Person shall be
organized in the State of Delaware, have as its only member a non-managing member, and be managed
by a board of managers, (b) shall have at least two (2) Independent Managers or Independent
Members, (c) if such Person is managed by a board of managers, the board of managers of such Person
may not take any action requiring the unanimous affirmative vote of one hundred percent (100%) of
the members of the board of managers unless all of the managers, including the Independent
Managers, shall have participated in such vote, (c) if such Person is not managed by a board of
managers, the members of such Person may not take any action requiring the affirmative vote of one
hundred percent (100%) of the members of such Person unless all of the members, including the
Independent Members, shall have participated in such vote, (d) with more than one member, each
managing member shall be a Single Purpose Entity, and (e) its articles of organization, certificate
of formation and/or operating agreement, as applicable, shall provide that until all of the
Indebtedness and Obligations are paid in full such entity will not dissolve. In addition, the
organizational documents of such Person shall provide
22
that such Person (1) without the unanimous consent of all of the partners, directors or
members, as applicable, shall not with respect to itself or to any other Person in which it has a
direct or indirect legal or beneficial interest (a) seek or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, custodian or other similar official for the
benefit of the creditors of such Person or all or any portion of such Persons properties, or (b)
take any action that might cause such Person to become insolvent, petition or otherwise institute
insolvency proceedings or otherwise seek any relief under any laws relating to the relief from
debts or the protection of debtors generally, (2) has and will maintain its books, records,
resolutions and agreements as official records, (3) has held and will hold its assets in its own
name, (4) has and will maintain its financial statements, accounting records and other
organizational documents, books and records separate and apart from any other Person, and will not
permit its assets to be listed as assets on the financial statement of any other Person;
provided
,
however
, that any such consolidated financial statement shall contain a
note indicating that its separate assets and liabilities are neither available to pay the debts of
the consolidated entity nor constitute obligations of the consolidated entity, (5) will file its
own tax returns to the extent required by applicable law, (6) has not and will not identify its
partners, members or shareholders, or any affiliates of any of them as a division or part of it,
(7) has and will maintain an arms-length relationship with its Affiliates, and (8) has not and will
not enter into or be a party to any transaction with its partners, members, shareholders, or its
Affiliates except in the ordinary course of business and on terms which are intrinsically fair and
are no less favorable to it than would be obtained in a comparable arms-length transaction with a
third party.
Special Taxes
shall mean any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, or any liabilities with respect thereto, including those
arising after the date hereof as result of the adoption of or any change in law, treaty, rule,
regulation, guideline or determination of a Governmental Authority or any change in the
interpretation or application thereof by a Governmental Authority but excluding, in the case of
Lender, such taxes (including income taxes, franchise taxes and branch profit taxes) as are imposed
on or measured by Lenders net income by the United States of America or any Governmental Authority
of the jurisdiction under the laws under which Lender is organized or maintains a lending office.
SPE Entity
shall mean Borrower, Maryland Loan Guarantor and any other Person which
is required by this Agreement to be, as long as the Loan is outstanding, a Single Purpose Entity.
State
shall mean, with respect to each Individual Property, the State in which such
Individual Property or any part thereof is located.
Structural Repair Reserve Account
shall have the meaning set forth in
Section
3.1.1
.
Structural Repairs
shall mean structural repairs and replacements with respect to
the Improvements approved by Lender or for which disbursement is otherwise permitted in accordance
with
Section 16.3
.
Sub-Account(s)
shall have the meaning set forth in
Section 3.1.1
.
23
Sublease
shall mean any lease (other than the Master Lease), sublease or
subsublease, letting, license, concession or other agreement (whether written or oral and whether
now or hereafter in effect), pursuant to which any Person is granted by Master Lessee a possessory
interest in, or right to use or occupy all or any portion of any space in any Individual Property,
and every modification, amendment or other agreement relating to such lease, sublease, subsublease,
or other agreement entered into in connection with such lease, sublease, subsublease, or other
agreement and every guarantee of the performance and observance of the covenants, conditions and
agreements to be performed and observed by the other party thereto.
Sublease Modification
shall have the meaning set forth in
Section 8.7.1
.
Substitute Property
shall have the meaning provided in
Section 2.3.6(a)
.
Substitute Property Mortgage Spreader Agreement
shall have the meaning provided in
Section 2.3.6(a)
.
Substitution
shall have the meaning provided in
Section 2.3.6(a)
.
Substitution Date
shall have the meaning provided in
Section 2.3.6(c)
.
Substitution Due Diligence Package
shall have the meaning provided in
Section
2.3.6(c)
.
Substitution Notice
shall have the meaning provided in
Section 2.3.6(c)
.
Successor Borrower
shall have the meaning set forth in
Section 2.3.5(d)
.
Survey
shall mean a survey of each parcel of each Individual Property prepared by a
surveyor licensed in the State selected by Borrower and reasonably satisfactory to Lender and the
Title Company, and containing a certification of such surveyor satisfactory to Lender.
Taking
shall mean a temporary or permanent taking by any Governmental Authority as
the result or in lieu or in anticipation of the exercise of the right of condemnation or eminent
domain, of all or any part of the Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting the Property or any part
thereof.
Tax Reserve Account
shall have the meaning set forth in
Section 3.1.1
.
Tax Reserve Amount
shall have the meaning set forth in
Section 16.1
.
Tenant
shall mean any Person other than the Master Lessee leasing, subleasing or
otherwise occupying any portion of any Individual Property, and its permitted successors and
assigns.
Terrorism Insurance
shall have the meaning set forth in
Section 6.1.8
.
Threshold Amount
shall mean two percent (2%) of the Loan Amount.
24
Title Company
shall mean, collectively, Fidelity National Title Insurance Company
(as to fifty-five percent (55%) of coverage) and Lawyers Title Insurance Corporation (as to
forty-five percent (45%) of coverage), or, with respect to Substitutions from and after the date
hereof, any one of the foregoing subject to delivery of co-insurance endorsements from the other
Title Companies and, in states where available, tie-in endorsements from all of the Title Companies
with respect to such coverage.
Title Policy
shall mean an ALTA mortgagee title insurance policy or policies in a
form acceptable to Lender (or, if an Individual Property is in a State which does not permit the
issuance of such ALTA policy, such form as shall be permitted in such State and acceptable to
Lender) issued by the Title Company with respect to the Property and insuring the Lien of the
Security Instrument.
Total Loss
shall mean, with respect to each Individual Property, (i) a casualty,
damage or destruction of an Individual Property which, in the reasonable judgment of Lender, (A)
involves an actual or constructive loss of more than fifty percent (50%) (or, in the case of a Key
Property, twenty-five percent (25%)) of the Allocated Loan Amount for such Individual Property, or
(B) results in the cancellation of the Master Lease or of Leases comprising more than forty percent
(40%) of the rentable area of such Individual Property, and in either case with respect to which
the Master Lease and the Leases do not require Proceeds to be applied to the restoration of such
Individual Property or (ii) a permanent Taking which, in the reasonable judgment of Lender, (A)
involves an actual or constructive loss of more than thirty-five percent (35%) (or, in the case of
a Key Property, fifteen percent (15%)) of the Allocated Loan Amount for an Individual Property, or
(B) renders untenantable either more than thirty-five percent (35%) (or, in the case of a Key
Property, fifteen percent (15%)) of the rentable area of such Individual Property, or (iii) a
casualty, damage, destruction or Taking that affects so much of an Individual Property such that it
would be impracticable, in Lenders reasonable discretion, even after restoration, to operate such
Individual Property as an economically viable whole. Notwithstanding the foregoing, in no event
shall a Total Loss with respect to a particular Individual Property exist pursuant to clauses (i)
or (ii) above unless the aggregate Allocated Loan Amounts of Individual Properties then currently
impacted by a casualty, damage, destruction or Taking is greater than 10% of the Principal Amount.
Transfer
shall mean to, directly or indirectly, sell, assign, convey, mortgage,
transfer, pledge, hypothecate, encumber, grant a security interest in, exchange or otherwise
dispose of any beneficial interest or grant any option or warrant with respect to, or where used as
a noun, a direct or indirect sale, assignment, conveyance, transfer, pledge or other disposition of
any beneficial interest by any means whatsoever whether voluntary, involuntary, by operation of law
or otherwise.
UCC
or
Uniform Commercial Code
shall mean the Uniform Commercial Code as
in effect in the State.
Underwriter Group
shall have the meaning set forth in
Section 14.3.2(b)
.
U.S. Government Obligations
shall mean any direct obligations of, or obligations
guaranteed as to principal and interest by, the United States Government or any
25
agency or instrumentality thereof,
provided
that such obligations are backed by the
full faith and credit of the United States. Any such obligation must be limited to instruments
that have a predetermined fixed dollar amount of principal due at maturity that cannot vary or
change. If any such obligation is rated by S&P, it shall not have an r highlighter affixed to
its rating. Interest must be fixed or tied to a single interest rate index plus a single fixed
spread (if any), and move proportionately with said index. U.S. Government Obligations include,
but are not limited to: U.S. Treasury direct or fully guaranteed obligations, Farmers Home
Administration certificates of beneficial ownership, General Services Administration participation
certificates, U.S. Maritime Administration guaranteed Title XI financing, Small Business
Administration guaranteed participation certificates or guaranteed pool certificates, U.S.
Department of Housing and Urban Development local authority bonds, and Washington Metropolitan Area
Transit Authority guaranteed transit bonds. In no event shall any such obligation have a maturity
in excess of 365 days.
Wachovia
shall have the meaning set forth in
Section 14.3.2(b)
.
Work
shall have the meaning provided in
Section 6.2.4(a)
.
Yield Maintenance Premium
shall have the meaning set forth in the Notes.
Yield Maintenance Premium Release Date
shall have the meaning set forth in the
Notes.
1.2
Principles of Construction
. All references to sections and schedules are to sections
and schedules in or to this Agreement unless otherwise specified. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. When used herein, the term
financial statements shall include the notes and schedules thereto. Unless otherwise specified
herein or therein, all terms defined in this Agreement shall have the definitions given them in
this Agreement when used in any other Loan Document or in any certificate or other document made or
delivered pursuant thereto. All uses of the word including shall mean including, without
limitation unless the context shall indicate otherwise. Unless otherwise specified, the words
hereof, herein and hereunder and words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise
specified, all meanings attributed to defined terms herein shall be equally applicable to both the
singular and plural forms of the terms so defined.
II.
GENERAL TERMS
2.1
Loan; Disbursement to Borrower
.
2.1.1
The Loan
. Subject to and upon the terms and conditions set forth herein, Lender
hereby agrees to make and Borrower hereby agrees to accept the Loan on the Closing Date.
2.1.2
Disbursement to Borrower
. Borrower may request and receive only one borrowing
hereunder in respect of the Loan and any amount borrowed and repaid hereunder in respect of the
Loan may not be reborrowed. Borrower acknowledges and agrees that the full proceeds of the Loan
have been disbursed by Lender to Borrower on the Closing Date.
26
2.1.3
The Notes, Security Instrument and Loan Documents
. The Loan shall be evidenced by
the Notes and secured by the Security Instrument, the Assignment of Leases, this Agreement and the
other Loan Documents.
2.1.4
Use of Proceeds
. Borrower shall use the proceeds of the Loan (a) to (i) repay and
discharge any existing mortgage loans secured by the Property, (ii) make initial deposits into the
Sub-Accounts as required hereunder, and (iii) pay costs and expenses incurred in connection with
the closing of the Loan, and (b) as otherwise set forth on the closing statement executed by Lender
and Borrower in connection with the closing of the Loan.
2.2
Interest; Loan Payments; Late Payment Charge
.
2.2.1
Payment of Principal and Interest
.
(i) Except as set forth in
Section 2.2.1(ii)
, interest shall accrue on the Principal
Amount as set forth in the Notes.
(ii) Upon the occurrence and during the continuance of an Event of Default, and from and after
the Maturity Date if the entire Principal Amount is not repaid on the Maturity Date, interest on
the outstanding principal balance of the Loan and, to the extent permitted by law, overdue interest
and other amounts due in respect of the Loan shall accrue at the Default Rate calculated from the
date such payment was due without regard to any grace or cure periods contained herein. Interest
at the Default Rate shall be computed from the occurrence of the Event of Default until the actual
receipt and collection of the Indebtedness (or that portion thereof that is then due). This
paragraph shall not be construed as an agreement or privilege to extend the date of the payment of
the Indebtedness, nor as a waiver of any other right or remedy accruing to Lender by reason of the
occurrence of any Event of Default, and Lender retains its rights under the Notes to accelerate and
to continue to demand payment of the Indebtedness upon the happening of any Event of Default in
accordance with the terms hereof.
2.2.2
Method and Place of Payment
.
(a) On each Payment Date, Borrower shall pay to Lender interest accruing pursuant to the Notes
for the entire Interest Period preceding such Payment Date.
(b) All amounts advanced by Lender pursuant to the applicable provisions of the Loan
Documents, other than the Principal Amount, together with any interest at the Default Rate or other
charges as provided therein, shall be due and payable hereunder as provided in the Loan Documents.
In the event any such advance or charge is not so repaid by Borrower, Lender may, at its option,
first apply any payments received under the Notes to repay such advances, together with any
interest thereon, or other charges as provided in the Loan Documents, and the balance, if any,
shall be applied in payment of any installment of interest or principal then due and payable.
(c) The Maturity Date Payment shall be due and payable in full on the Maturity Date.
2.2.3
Late Payment Charge
. If any principal, interest or any other sums due under the Loan
Documents (other than the outstanding Principal Amount due and payable on the
27
Maturity Date) is not
paid by Borrower on or prior to the date which is five (5) days after the date on which it is due
(or if such fifth (5
th
) day is not a Business Day, then the Business Day immediately
preceding such fifth (5
th
) day), Borrower shall pay to Lender upon demand an amount
equal to the lesser of five percent (5%) of such unpaid sum or the Maximum Legal Rate (the
Late Payment Charge
) in order to defray the expense incurred by Lender in handling and
processing such delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by this Agreement, the Security Instrument
and the other Loan Documents to the extent permitted by applicable law.
2.2.4
Usury Savings
. This Agreement and the Notes are subject to the express condition
that at no time shall Borrower be obligated or required to pay interest on the principal balance of
the Loan at a rate which could subject Lender to either civil or criminal liability as a result of
being in excess of the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the principal balance
due under the Notes at a rate in excess of the Maximum Legal Rate, then the Interest Rate or the
Default Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal
Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been
payments in reduction of principal and not on account of the interest due under the Notes. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due
under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate of
interest from time to time in effect and applicable to the Loan for so long as the Loan is
outstanding.
2.3
Prepayments
.
2.3.1
Prepayments
. No prepayments of the Indebtedness shall be permitted except as set
forth in Section 4 of the Notes and as set forth herein.
2.3.2
Prepayments After Event of Default; Application of Amounts Paid
. If after the
occurrence and during the continuance of an Event of Default, Borrower tenders payment of all or
any part of the Indebtedness, or if all or any portion of the Indebtedness is recovered by Lender
after such Event of Default (including through application of any reserves held by Lender pursuant
to the terms hereof), (a) on any date other than a Payment Date, then such payment shall include
interest that would have accrued on such amounts through the end of the Interest Period during
which such payment is made, and such amounts shall be held by Lender as collateral security for the
Loan in an interest bearing account at an Eligible Institution, with interest accruing on such
amounts to the benefit of Borrower, and applied to the Loan on the next occurring Payment Date, (b)
such payment shall be deemed a voluntary prepayment by Borrower, and (c) Borrower shall pay, in
addition to the Indebtedness, an amount equal to the Yield Maintenance Premium and all other fees
and sums payable hereunder or under the Loan Documents, including without limitation, interest that
has accrued at the Default Rate and any Late Payment Charges.
2.3.3
Release of Property upon Repayment or Defeasance of Loan in Full
. Lender shall, upon
the written request and at the expense of Borrower, upon (a) payment in full of the
28
Principal
Amount and interest on the Loan and all other amounts due and payable under the Loan Documents in
accordance with the terms and provisions of the Notes and this Agreement or (b) a Defeasance Event
with respect to the Loan in whole, release the Lien of (i) this Agreement upon the Account
Collateral and (ii) the Security Instrument and Assignment of Leases on the Property (or, at
Borrowers request, assign it (together with the Notes), in whole or in part, to a new lender
without representation, warranty or recourse). In such event, Borrower shall submit to Lender, not
less than ten (10) Business Days prior to the date of such release or assignment, a release of lien
or assignment of lien, as applicable, for such property for execution by Lender. Such release or
assignment, as applicable, shall be in a form appropriate in each jurisdiction in which the
Property is located and satisfactory to Lender in its reasonable discretion. In addition, Borrower
shall provide all other documentation Lender reasonably requires to be delivered by Borrower in
connection with such release or assignment, as applicable.
2.3.4
Release of Individual Properties
. Subject to satisfaction of each of the conditions
set forth below (collectively, the
General Release Conditions
) with respect to any
Individual Property or Individual Properties (other than the portion of any Individual Property
that that is an Outparcel, the release of which Outparcels is governed by
Section 2.3.7
below), Lender shall (i) release such Individual Property or Individual Properties (each a
Release Property
) from the Lien of the Security Instrument and related Loan Documents (or
a deed of partial reconveyance, as the case may be) and the release of Borrowers (and in the case
of the Maryland Property, the Maryland Loan Guarantors)
obligations under the Loan Documents with respect to the Released Property, other than those
expressly stated herein or in such other Loan Documents to survive (or to the extent so requested
by Borrower, assign the Lien of the Security Instrument to a new lender without representation,
warranty or recourse) (each release under this
Section 2.3.4
or
Section 2.3.6
or in
connection with a partial defeasance of the Loan pursuant to
Section 2.3.5
, a
Property
Release
), (ii) instruct the Cash Management Bank to return to Borrower any Excess Account
Collateral subject to and in accordance with
Section 2.3.8
except to the extent otherwise
provided in such
Section 2.3.8
, (iii) comply with
Section 2.3.9
with regard to
adjusting the ongoing reserve requirements hereunder and (iv) adjust the Monthly Debt Service
Payment Amount in accordance with
Section 4(b)(ii)
of the Notes:
(a) Borrower delivers a written notice (a
Property Release Notice
) to Lender of its
desire to effect such Property Release, no later than fifteen (15) Business Days prior to the date
of such desired Property Release, and setting forth the Business Day (the
Release Date
)
on which Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) desires that
Lender release its interest in such Release Property.
(b) Borrower shall have paid to Lender (i) the Release Price, (ii) the applicable Yield
Maintenance Premium, if any, and (iii) all other sums due under the Notes in connection with such
prepayment. If the Release Date is not a Payment Date, then the Release Price shall include
interest that would have accrued on the Allocated Loan Amount for the Release Property through the
end of the Interest Period during which such payment is made, and the Release Price, and the
applicable Yield Maintenance Premium, if any, shall be held by Lender as collateral security for
the Loan in an interest bearing account at an Eligible Institution, with interest accruing on such
amounts to the benefit of Borrower, and applied to the Loan on the next occurring Payment Date.
29
(c) Borrower shall submit to Lender not less than ten (10) Business Days prior to the Release
Date (which must be on a Business Day), a release of Liens (and related Loan Documents) for each
applicable Release Property (for execution by Lender) in a form appropriate in the applicable State
and otherwise satisfactory to Lender, in its reasonable discretion, and all other documentation
Lender reasonably requires to be delivered by Borrower in connection with such Property Release
(collectively,
Release Instruments
), together with an Officers Certificate certifying
that the requirement described in paragraph (d) below is satisfied in connection with such Property
Release (together with calculations and supporting documentation demonstrating the same in
reasonable detail) and, simultaneously with the Release, Guarantor withdraws and is replaced as the
managing member of the applicable Borrower (or Maryland Loan Guarantor, as applicable) that is the
owner of the Release Property or such Borrower (or Maryland Loan Guarantor) is dissolved in
connection with the release.
(d) With respect to any Property Release, after giving effect to such Property Release, the
LCR as of the Release Date (calculated with reference to all of the Individual Properties then
remaining subject to the Liens of the Security Instrument) shall not be less than the greater of
(A) ninety percent (90%) of the Closing Date LCR and (B) seventy-five percent (75%) of the LCR for
all of the Individual Properties subject to the Lien of the Security Instrument immediately prior
to the Release Date.
(e) No Event of Default shall have occurred and then be continuing on the Release Date.
(f) The Release Property is simultaneously transferred to a party other than Borrower or
Maryland Loan Guarantor or any SPE Entity.
(g) Each of Borrower and Maryland Loan Guarantor executes and delivers such other instruments,
certificates, opinions of counsel and documentation as Lender and, if the Release Date occurs
following a Securitization, the Rating Agencies shall reasonably request in order to preserve,
confirm or secure the Liens and security granted to Lender by the Loan Documents, including any
amendments, modifications or supplements to any of the Loan Documents and partial release
endorsements to the existing Title Policy.
(h) Borrower shall pay for any and all out-of-pocket costs and expenses incurred by Lender in
connection with any proposed Property Release, including Lenders reasonable attorneys fees and
disbursements and all title insurance premiums for any customary endorsements to any existing Title
Policies required by Lender in connection with such proposed release.
Notwithstanding the foregoing, clauses (b)(ii) and (d) above shall not apply to
Casualty/Condemnation Property Releases.
2.3.5
Defeasance
.
(a)
Generally
. Borrower shall have the right, at any time following the expiration of
the Defeasance Lockout Period but prior to the Yield Maintenance Premium Release Date to
voluntarily defease the Loan in whole and obtain the release of the Property, or solely in
connection with a Property Release, in part, and obtain the release of the applicable Individual
30
Property or Individual Properties, by and upon satisfaction of the following conditions (such event
being a
Defeasance Event
):
(i) Borrower shall provide not less than thirty (30) days prior written notice to Lender
specifying the date (the
Defeasance Date
) on which the Defeasance Event shall occur;
provided
that Borrower shall have the right to revoke such notice upon written notice given
to Lender not Less than three (3 Business Days prior to the then scheduled Defeasance Date
provided
Borrower reimburses Lender for any actual out-of-pocket costs incurred by Lender
in connection with such revocation;
(ii) Borrower shall pay to Lender all accrued and unpaid interest on the portion of the
outstanding Principal Amount of the Loan then being defeased to and including the Defeasance Date;
(iii) Borrower shall pay to Lender all other sums, not including scheduled interest or
principal payments, then due and payable under the Note, this Agreement, the Security Instrument
and the other Loan Documents;
(iv) No Event of Default shall have occurred and then be continuing on the Defeasance Date;
(v) If the Loan is defeased in whole, Borrower shall comply with the conditions set forth in
Section 2.3.3
, and if the Loan is defeased only in part, Borrower shall also comply with
the conditions set forth in
Section 2.3.4(c)
with respect to the release of the applicable
Individual Property or Individual Properties;
(vi) Borrower shall deliver to Lender, at Borrowers option, either (A) the Defeasance Deposit
or (B) the Defeasance Collateral (such Defeasance Collateral to be in an amount equal to or greater
than that which could otherwise be purchased with the Defeasance Deposit had the required
Defeasance Deposit been delivered by Borrower);
(vii) Borrower (and/or, if requested by Lender in the case of the Maryland Property, the
Maryland Loan Guarantor) shall execute and deliver a pledge and security agreement, in form and
substance that would be reasonably satisfactory to a prudent lender, creating a first priority lien
on the Defeasance Collateral, in accordance with the provisions of this
Section 2.3.5
(the
Security Agreement
);
(viii) Borrower shall (A) deliver an Opinion of Counsel for Borrower that is standard in
commercial lending transactions and subject only to customary qualifications, assumptions and
exceptions opining, among other things, that (1) Lender has a perfected first priority security
interest in the Defeasance Collateral delivered by Borrower or the Maryland Loan Guarantor, as
applicable and (2), if applicable, Borrower (and/or Maryland Loan Guarantor, as applicable, in the
case of the Maryland Property), has duly and validly transferred and assigned to the Successor
Borrower the Defeasance Collateral and all obligations, rights and duties under and to the Notes
(or each Undefeased Note, as hereinafter defined) that are attributable to the Property, and (B) if
the Defeasance Event occurs after a Securitization, pay all reasonable costs of Lender obtaining a
Non-Disqualification Opinion with respect to such Defeasance Event;
31
(ix) With respect to any Defeasance Event occurring after a Securitization, Borrower shall
obtain a Rating Agency Confirmation to the effect that the Defeasance Collateral to be purchased
qualifies and is sufficient so that the substitution of such Defeasance Collateral for the Property
or the Individual Property or Individual Properties being released, as applicable, will not result
in a downgrade, withdrawal or qualification of the respective ratings in effect immediately prior
to such Defeasance Event for the Securities issued in connection with the Securitization which are
then outstanding. If required by the applicable Rating Agencies, Borrower shall also deliver or
cause to be delivered a Non-Consolidation Opinion with respect to any Successor Borrower in form
and substance (i) reasonably satisfactory to a prudent lender and (ii) satisfactory to the
applicable Rating Agencies;
(x) Borrower shall deliver a certificate (in form reasonably acceptable to Lender) of an
Independent Accountant engaged by Borrower certifying that the Defeasance Collateral shall generate
monthly amounts equal to or greater than the Scheduled Defeasance Payments;
(xi) In the case of a defeasance of the Loan in part, Borrower shall execute and deliver all
documents required by the Lender to amend and restate each of the Notes with two (2) substitute
Notes, (A) one Note having a principal balance equal to all sums required to be paid hereunder with
respect to such Release and Defeasance Event (the
Defeased Note
), and (B) one Note having
a principal balance equal to the outstanding principal balance of the Note immediately prior to the
Defeasance Event minus the all sums required to be paid hereunder with respect to such Release and
Defeasance Event (the
Undefeased Note
). Each Undefeased Note may be the subject of one
or more further Defeasance Events in accordance with the provisions of this
Section 2.3.5
.
From and after the Defeasance of the Loan in part, all references to the Note in this Agreement and
the other Loan Documents shall be deemed to refer to the Undefeased Note; and
(xii) Borrower shall pay all costs and expenses of Lender incurred in connection with the
Defeasance Event, including (A) any
out-of-pocket
costs and expenses associated with a release (in
full or in part, as applicable) of the Lien of the Security Instrument as provided in
Section
2.3.3
or
Section 2.3.4
, as applicable (including, in the case of a release of an
Individual Property or Individual Properties, all title insurance premiums for any endorsements to
any existing Title Policies reasonably required by Lender in connection with such proposed
release), (B) reasonable attorneys fees and expenses incurred in connection with the Defeasance
Event, (C) the costs and expenses of the Rating Agencies, if the Defeasance Event occurs after a
Securitization, and (D) any revenue, documentary stamp or intangible taxes or any other tax or
charge due in connection with the transfer of the Notes, or otherwise required to accomplish the
defeasance.
(b)
Scheduled Defeasance Payments
. In connection with any Defeasance Event, Borrower
shall purchase Defeasance Collateral (or Lender shall use the Defeasance Deposit to purchase such
Defeasance Collateral) which provide payments on or prior to, but as close as possible to, all
successive scheduled Payment Dates after the Defeasance Date but prior to the Yield Maintenance
Premium Release Date, in amounts equal to the scheduled payments of principal, interest, and any
other amounts due on each such Payment Date under the Loan Documents (or, in the case, of a partial
defeasance, the portions of such scheduled payments due
32
on each such Payment Date under this
Agreement and the Defeased Note) but assuming, for purposes hereof, that the Maturity Date Payment
shall be paid on the Yield Maintenance Premium Release Date (the aforedescribed payments, the
Scheduled Defeasance Payments
). Borrower (and/or Maryland Loan Guarantor, as applicable,
in the case of the Maryland Property) pursuant to the Security Agreement or other appropriate
document, shall authorize and direct that the payments received from the Defeasance Collateral may
be made directly to the Holding Account (unless otherwise directed by Lender) and applied to
satisfy the obligations of Borrower (and/or Maryland Loan Guarantor, as applicable in the case of
the Maryland Property) or Successor Borrower, if applicable, under this Agreement and the Notes (or
each Defeased Note, in the case of the defeasance of the Loan in part). Any portion of the
Defeasance Deposit in excess of the amount necessary to purchase the Defeasance Collateral required
by this
Section 2.3.5
and to satisfy Borrowers other obligations hereunder shall be
remitted to Borrower. Following the payment in full of the Notes (and each Defeased Note in the
case of a defeasance of the Loan in part) and all other Obligations on the Maturity Date, any
amounts remaining in the Defeasance Deposit, if any, shall be remitted to Borrower.
(c)
Defeasance Collateral
. The Defeasance Collateral shall be duly endorsed by the
holder thereof as directed by Lender or accompanied by a written instrument of transfer in form and
substance that would be reasonably satisfactory to a prudent lender and that does not require
Borrower or Maryland Loan Guarantor, as applicable, to incur any additional obligations or
liabilities, (including, without limitation, such instruments as may be reasonably required by the
depository institution holding such securities or by the issuer thereof, as the case may be, to
effectuate book-entry transfers and pledges through the book-entry facilities of such institution)
in order to perfect, upon the delivery of the Defeasance Collateral, a first priority security
interest therein in favor of the Lender in conformity with all applicable state and federal laws
governing the granting of such security interests.
(d)
Successor Borrower
. If the Defeasance Event occurs after a Securitization,
Borrower (and/or Maryland Loan Guarantor, as applicable, in the case of the Maryland Property)
may, at its option, or if so required by the applicable Rating Agencies, shall, establish or
designate a successor entity (the
Successor Borrower
) which shall be a single purpose
bankruptcy remote entity approved by the Rating Agencies with one (1) Independent Director, and
Borrower (and/or Maryland Loan Guarantor, as applicable, in the case of the Maryland Property)
shall transfer and assign all obligations, rights and duties under and to the Notes (or each
Defeased Note in the case of a defeasance of the Loan in part), together with the pledged
Defeasance Collateral to such Successor Borrower. Such Successor Borrower shall assume the
obligations under the Notes (or each Defeased Note in the case of a defeasance of the Loan in part)
and the Security Agreement and Borrower (and/or Maryland Loan Guarantor, as applicable, in the case
of the Maryland Property) shall be relieved of its obligations under such documents. Borrower
shall pay $1,000 to any such Successor Borrower as consideration for assuming the obligations under
the Notes and the Security Agreement. Notwithstanding anything in this Agreement to the contrary,
no other assumption fee shall be payable upon a transfer of the Note in accordance with this
Section 2.3.5(d)
, but Borrower shall pay all costs and expenses incurred by Lenders,
including Lenders reasonable attorneys fees and expenses and, if the Defeasance Event occurs
after a Securitization, any fees and expenses of any Rating Agencies, incurred in connection
therewith. Any Successor Borrower may be an Affiliate of Borrower or a defeasance consultant or
similar service provider.
33
(e)
Release of Defeased Property
. If Borrower has elected to defease the Loan or any
allocated portion thereof, and the requirements set forth in this
Section 2.3.5
have been
satisfied, the Property or the applicable Individual Property or Individual Properties shall be
released from the Lien of the Security Instrument and the Defeasance Collateral pledged pursuant to
the Security Agreement shall be the substitute sole source of collateral securing such amounts due
under the Notes (or a substitute source of collateral securing such amounts under each Defeased
Note in the case of a defeasance of the Loan in part). Further, the pledge of the related Account
Collateral and other property pledged under this Agreement and the other Loan Documents and all
other obligations of Borrower (and Maryland Loan Guarantor in the case of the Maryland Property)
created hereunder in respect of such Property, Individual Property or Individual Properties, as
applicable, shall be discharged, other than those expressly stated to survive.
2.3.6
Substitution of Properties
.
(a)
Generally
. An Individual Borrower may, subject to the conditions in this
Section 2.3.6
, substitute one or more warehouse or distribution facility properties (each a
Substitute Property
) for an existing Individual Property (each a
Replaced
Property
) and obtain the release of the Replaced Property from the Lien of the Security
Instrument and related Loan Documents (or a deed of partial reconveyance, as the case may be) and
the release of Borrowers (and, in the case of the Maryland Property, Maryland Loan Guarantors)
obligations under the Loan Documents with respect to the Replaced Property, other than those
expressly stated to survive (each such release and substitution, a
Substitution
);
provided
,
however
, such right of Substitution shall be limited to Individual
Properties whose aggregate Allocated Loan Amounts represent not greater than thirty percent (30%)
of the Loan Amount. From and after the Substitution of a Substitute Property in accordance
herewith, such Substitute Property shall thereafter be deemed a Property, and shall have the
Allocated Loan Amount applicable to the Replaced Property. Concurrently with the completion of all
steps necessary to effect a Substitution as provided in this
Section 2.3.6
, Lender shall
release such Replaced Property from the Lien of the Security Instrument and related Loan Documents.
In the event of a Substitution, the Notes shall remain in full force and effect, and the Lien of
the Security Instrument shall be spread to encumber the Substitute Property (each a
Substitute
Property Mortgage Spreader Agreement
).
(b)
Certain Requirements
. All Substitute Properties shall comply with this
Section 2.3.6
. To qualify as a Substitute Property, a property must, as of the
Substitution Date (in addition to the other criteria set forth in this
Section 2.3.6
):
(i) be subject to the Master Lease;
(ii) be a property as to which the applicable Individual Borrower (or, in the case of the
Maryland Property, Maryland Loan Guarantor) will hold insurable fee title free and clear of any
Lien or other encumbrance except for exceptions not materially impairing the value of such
property, and have an Appraised Value at least equal to the Appraised Value of the Replaced
Property;
(iii) be (A) free and clear, as evidenced by the environmental report referred to in paragraph
(c) below, of Hazardous Substances requiring remediation or other action under any
34
Environmental
Law and/or the presence of which violates Environmental Laws and (B) in material compliance with
all Environmental Laws;
(iv) be in good repair and condition, as evidenced by the engineering report referred to in
clause (c) below; and
(v) be in compliance, in all material respects, with Legal Requirements and Insurance
Requirements, as evidenced by diligence items required to be provided in paragraph (c) below.
(c)
Diligence Process
. The Borrower shall submit to the Lender written notice (a
Substitution Notice
) setting forth the Business Day no earlier than forty-five (45) days
after the date of such Substitution Notice on which Borrower desires to effect such Substitution
(the
Substitution Date
), together with the following materials (the
Substitution Due
Diligence Package
) relating to the proposed Substitute Property: (i) a description of the
proposed Substitute Property sufficient to obtain the Title Policy, (ii) two (2) years of
historical cash flow operating statements, if available, (iii) true, complete and correct copies of
any Leases affecting the proposed Substitute Property, (iv) a map and site plan, including an
existing Survey of the property dated not more than six (6) months prior to such submission, (v) a
copy of the proposed amendment to the Master Lease and Master Lease SNDA to include the Substitute
Property, (vi) copies of all permits, licenses and approvals required with respect to operation of
the Substitute Property, (vii) an environmental report issued by a recognized environmental
consultant, (viii) copies of all reciprocal easement agreements, if any, affecting the Substitute
Property, (ix) an engineers inspection report, (x) estoppel certificates from parties to any
reciprocal easement agreements and tenants under any Material Subleases, in each case in form
reasonably acceptable to Lender, together with any governmental consents required in order to
subject the Substitute Property to the Lien of the Security Instrument, (xi) a commitment from the
Title Company with respect to the issuance of a Title Policy, together with copies of all
exceptions referenced therein, (xii) upon the reasonable request of the Lender, a Probable Maximum
Loss study, (xiii) an Appraisal, (xiv) if such Substitute Property is not then owned by Borrower
(or in the case of property located in Maryland, Maryland Guarantor) or its Affiliate, a duly
executed copy of the purchase and sale agreement for such Substitute Property and copies of all
proposed documentation transferring title to the Substitute Property to Borrower (or, in the case
of property located in Maryland, the Maryland Guarantor), including any interim transfers to its
Affiliates, (xv) a copy of the flood certification, (xvi) either (A) a letter or other evidence
with respect to the proposed Substitute Property from the appropriate Governmental Authorities
concerning compliance with applicable zoning and building laws, (B) an ALTA 3.1 zoning endorsement
for the Title Policy or (C) a zoning report prepared by PZR or other similar company indicating
that the Substitute Property is in material compliance with applicable zoning and building laws,
(xvii) a copy of the valid permanent certificate of occupancy (if required by applicable law),
(xviii) calculations of the LTV Ratio and the LCR both before and after the proposed Substitution
and (xix) pro formas of the insurance certificates required under
Article VI
with respect
to such Substitute Property, and not revealing any Liens other than Permitted Encumbrances. In
addition, subject to the consent of the owner of the Substitute Property, Lender shall be permitted
to make an inspection of such Substitute Property as a condition to such substitution.
35
(d)
Additional Conditions Precedent
. In addition to the conditions in paragraphs (a),
(b) and (c) above, each Substitution shall be subject to the satisfaction of the following
conditions precedent:
(i)
Rating Agency Confirmation; Rating Agency Requirements
. For any Substitution made
after a Securitization, Lenders receipt of a Rating Agency Confirmation and Borrowers
satisfaction of such other conditions as may be required by the Rating Agencies;
(ii)
Release Conditions
. Borrowers compliance with the conditions set forth in
Section 2.3.4(c)
,
(f)
and
(g)
with respect to the release of the Replaced
Property;
(iii)
Financial and Other Tests
.
(1)
LCR
. After giving effect to such Substitution, the LCR as of the Substitution
Date (calculated with reference to all of the Individual Properties then remaining subject to the
Liens of the Security Instrument; i.e., including the Substitute Property and excluding the
Replaced Property) shall not be less than the greater of (A) ninety percent (90%) of the Closing
Date LCR and (B) seventy-five percent (75%) of the LCR for all of the Individual Properties subject
to the Lien of the Security Instrument immediately prior to the Substitution Date.
(2)
LTV Ratio
. After giving effect to such Substitution, as of the Substitution Date,
the LTV Ratio (as calculated by including the Substitute Property, but excluding the Replaced
Property), shall not be less than the Closing Date LTV Ratio.
(3)
Geographic Diversity
. The proposed Substitution does not cause the aggregate
Allocated Loan Amounts with respect to Individual Properties located in any single Geographic
Quadrant to exceed fifty percent (50%) of the Principal Amount.
(iv)
Lenders Costs and Expenses
. Borrower shall pay for any and all costs and
expenses of Lender incurred in connection with any proposed Substitution, including Lenders
reasonable attorneys fees and disbursements, all title insurance premiums for any endorsements to
any existing Title Policies reasonably required by Lender in connection with such proposed
Substitution, title premiums, mortgage recording taxes, transfer taxes and recording fees.
(v) Intentionally Omitted.
(vi)
Opinions of Counsel
. Borrower shall deliver to Lender the following favorable
original Opinions of Counsel or updates thereto in connection with the Substitute Property similar
in form and substance to the opinions which were delivered on the Closing Date in connection with
the Replaced Property, reasonably satisfactory to Lender (and satisfactory to the Rating Agencies,
if applicable) and addressed to the Lender on behalf of the holders of the Notes: (a) if requested
by the Rating Agencies following or in connection with a Securitization, a non-consolidation
opinion, (b) a local counsel enforceability opinion, (c) an enforceability opinion under New York
law, (d) an opinion to the effect that each of Borrower, Maryland Loan Guarantor, Master Lessee and
Guarantor is duly organized and validly existing under the laws of the state of its formation and
is qualified or licensed to do business in each jurisdiction where the
36
nature of its business in
which it is engaged makes such qualification or licensing necessary and (e) an opinion to the
effect that the Loan Documents or amendments thereto have been duly authorized, executed and
delivered by Borrower, Maryland Loan Guarantor, Master Lessee and Guarantor and are the valid and
binding obligations and agreements of such party, enforceable in accordance with their terms, in
each case with the same exceptions as made on Closing Date;
(vii)
No Event of Default
. No Event of Default shall have occurred and then be
continuing on the Substitution Date;
(viii)
Accuracy of Representations and Warranties
. The representations and warranties
set forth in the Loan Documents shall be true and correct as to the Substitute Property on the
Substitution Date in all material respects;
(ix)
Officers Certificate
. Delivery to Lender of an Officers Certificate certifying
to the truth and accuracy of the statements in clause (viii);
(x)
Non-Disqualification Opinion
. If the Substitution Date occurs after a
Securitization, delivery of a Non-Disqualification Opinion;
(xi)
Organizational Documents
. Delivery to Lender of (A) if required by the Rating
Agencies, copies of organizational documents of Borrower, Maryland Loan Guarantor, Master Lessee
and Guarantor, including, but not limited to a current certificate of good standing, (B) if the
Substitute Property is located in a state not previously covered by the Security Instrument,
evidence of Borrowers (or, in the case of property located in Maryland, the Maryland Loan
Guarantors) qualification to do business in the state where the Substitute Property is located if
and to the extent such qualification is required in the applicable jurisdiction and (C) appropriate
evidence of the authorization of the Borrower, Maryland Loan Guarantor, Master Lessee and Guarantor
approving the execution, delivery and performance of the Loan Documents or amendments thereto being
executed and delivered in connection with the Substitution, duly adopted by the Borrower, Maryland
Loan Guarantor, Master Lessee and Guarantor, as applicable, and accompanied by an Officers
Certificate stating that such authorizations have not been altered or repealed and are in full
force and effect, and certifying as to the names of the Persons authorized to sign on behalf of
such parties, together with the true signatures of each such Person;
(xii)
Insurance Certificates
. Delivery of the insurance certificates with respect to
the Substitute Property required under
Article VI
; and
(xiii)
Loan Documents
. Delivery to Lender of originals of the following Loan
Documents or amendments thereto:
(1) a Substitute Property Mortgage Spreader Agreement, duly executed and acknowledged by
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor);
(2) a first priority Assignment of Master Lease, Leases, Rents and Security Deposits, from
Borrower (or in the case of property located in Maryland, Maryland Loan Guarantor), as assignor, to
Lender, as assignee, assigning to Lender all of Borrowers (or
37
Maryland Loan Guarantors, as
applicable) interest in and to the Master Lease, the Leases, Rents and Security Deposits as
security for the Loan with respect to the Substitute Property, or a counterpart original of the
Assignment of Leases, modified as necessary, duly executed and acknowledged by Borrower or Maryland
Loan Guarantor, as applicable;
(3) UCC financing statements (Form UCC-1) (or other forms required in any jurisdiction),
covering all fixtures and Building Equipment and other Personal Property (other than the Excluded
Personal Property), and all proceeds thereof, naming Borrower (or in the case of property located
in Maryland, Maryland Loan Guarantor) as debtor and Lender as secured party;
(4) the Title Policy or endorsements to the Title Policy, as applicable, issued by the Title
Company in an amount equal to the amount of coverage that had been
provided for the Replaced Property (or, if such Substitute Property is located in a Mortgage
Tax State and the Replaced Property is not, an amount equal to 125% of the amount of coverage that
had been provided for the Replaced Property), reflecting the addition of such Substitute Property
and containing such affirmative coverage similar in form and substance to the affirmative coverage
provided in connection with the Replaced Property, insuring that the Substitute Property Mortgage
Spreader Agreement creates a valid first lien on Borrowers (or in the case of property located in
Maryland, Maryland Loan Guarantors) fee title in the Substitute Property, subject to the Permitted
Encumbrances, and insuring the perfected first priority interest of Lender pursuant to the
Substitute Property Mortgage Spreader Agreement, together with any title insurance premiums, fees
or charges due in connection therewith, and the Borrower shall cooperate with the Lender and
execute such further instruments and documents and perform such further acts as the Lender or the
Title Company shall reasonably request to carry out the creation and perfection of the liens and
security interests contemplated by the documents described in clauses (i), (ii) and (iii) and the
release, discharge and removal of any encumbrances required for the issuance of the Title Policy;
(5) an amendment to the Master Lease and to the Master Lease SNDA incorporating the Substitute
Property and eliminating the Replaced Property;
(6) updates to any Exhibits and Schedules to the Loan Documents, as applicable, without
disclosing matters inconsistent with the requirements of this
Section 2.3.6
; and
(7) a Confirmation of Guaranty and Indemnity in customary form duly executed and delivered by
Guarantor, adding the Substitute Property to, and affirming its obligations under, the Recourse
Guaranty and the Environmental Indemnity.
(e)
Additional Deliveries
. Lender shall have received such other deliveries
reasonably requested by Lender,
provided
such requests are customary and are consistent
with the deliveries required with respect to the Property on the Closing Date.
2.3.7
Release of Outparcels
. Provided no Event of Default has occurred and is continuing,
Borrower may request that Lender release an Outparcel from the Lien of the Security Instrument in
accordance with the terms of this
Section 2.3.7
. Lender shall have no obligation to
38
release any Outparcel from the Lien of the Security Instrument until Borrower shall have satisfied
the following conditions, as reasonably determined by Lender: (1) the Outparcel to be released
shall constitute a separate conveyable legal parcel in accordance with the subdivision map act or
the equivalent thereof in the jurisdiction of such Outparcel or other relevant granted government
approvals in such jurisdiction; (2) to the extent any easements or restrictive covenants benefiting
or burdening such Outparcel are necessary or appropriate for the use or operation of or
preservation of value with respect to any remaining Individual Property that is in the vicinity of,
or otherwise related to, the Outparcel (a
Related Remaining Property
), such easements
shall have been granted or reserved prior to or at the time of the release or reconveyance of such
Outparcel and shall have been approved by Lender, which approval shall not be unreasonably withheld
or delayed; (3) each Related Remaining Property shall remain a legal parcel (or parcels) in
compliance in all material
respects with all Legal Requirements, zoning, subdivision, land use and other applicable laws and
regulations; (4) at the time of, but not prior to, any such release or reconveyance, such Outparcel
shall be transferred to a person or entity that does not result in a breach of Borrowers or
Maryland Loan Guarantors obligation to be a Single Purpose Entity; (5) Lender shall have received
satisfactory evidence that any tax, bond or assessment that constitutes a lien against such
Outparcel has (i) prior to such release, been properly allocated between the Outparcel and any
Related Remaining Property and (ii) after such release, will be properly assessed against the
Outparcel and such Related Remaining Property separately; (6) Lender shall have received such
endorsements to the Title Policy (or substantially equivalent assurance) as Lender may reasonably
require confirming continuing title insurance and that (A) the Security Instrument constitutes a
first priority lien on any Related Remaining Property after the release of the Outparcel, (B) such
Related Remaining Property constitutes a separate tax lot or tax lots and (C) such release shall
not result in such Related Remaining Property ceasing to comply in all material respects with all
applicable Legal Requirements, zoning, land use and subdivision laws; (7) Borrower (and in the case
of Outparcels located in Maryland, Maryland Loan Guarantor) shall have executed and delivered such
documents (including amendments to the Loan Documents) as Lender may reasonably require to reflect
such release; (8) Borrower shall pay to Lender all costs and expenses incurred by Lender
(including, without limitation, reasonable attorneys fees and any applicable costs and expenses of
the Rating Agencies) in connection with each such release; (9) Borrower shall have provided Lender
at least fifteen (15) Business Days prior written notice of such requested release; and (10)
Borrower shall submit to Lender, not less than fifteen (15) days prior to the date of such proposed
release (which must be on a Business Day), a release of Liens (and related Loan Documents) for such
Outparcel, in a form appropriate in the applicable State and otherwise satisfactory to Lender in
its reasonable discretion, and all other documentation Lender reasonably requires to be delivered
by Borrower in connection with such release (collectively,
Outparcel Release
Instruments
).
2.3.8
Excess Account Collateral
. Upon the occurrence of any Property Release,
provided
no Low LCR Cash Sweep Period exists and no Event of Default has occurred and is
continuing, Lender shall promptly perform an analysis of the Account Collateral in order to
reasonably determine the amount of the Account Collateral (including, but not limited to, Proceeds)
attributable to the Release Property (the
Excess Account Collateral
), and shall promptly
instruct Cash Management Bank to return to Borrower the Excess Account Collateral, if any, except
to the extent that Lender reasonably determines that a shortfall exists in such Sub-Account with
respect to the Property other than the Release Property.
39
2.3.9
Reserve Requirements
. Upon the occurrence of a Property Release,
provided
no
Low LCR Cash Flow Sweep Period exists and no Event of Default has occurred and is continuing,
Lender shall promptly prepare a revised estimate of Impositions and Other Charges and insurance
premiums with respect to the remaining Individual Properties in accordance with
Sections
16.1
and
16.2
, as applicable, and shall promptly provide Borrower and Cash Management
Bank with notice of the revised Monthly Tax Reserve Amount and Monthly Insurance Reserve Amount.
2.4
Regulatory Change; Taxes
.
2.4.1
Increased Costs
. If as a result of any Regulatory Change or compliance of Lender
therewith, the basis of taxation of payments to Lender or any company Controlling Lender of the
principal of or interest on the Loan is changed or Lender or the company Controlling Lender shall
be subject to (i) any tax, duty, charge or withholding of any kind with respect to this Agreement
(excluding federal taxation of the overall net income of Lender or the company Controlling Lender);
or (ii) any reserve, special deposit or similar requirements relating to any extensions of credit
or other assets of, or any deposits with or other liabilities, of Lender or any company Controlling
Lender is imposed, modified or deemed applicable; or (iii) any other condition affecting loans to
borrowers subject to fixed interest rates is imposed on Lender or any company Controlling Lender
and Lender determines that, by reason thereof, the cost to Lender or any company Controlling Lender
of making, maintaining or extending the Loan to Borrower is increased, or any amount receivable by
Lender or any company Controlling Lender hereunder in respect of any portion of the Loan to
Borrower is reduced, in each case by an amount deemed by Lender in good faith to be material (such
increases in cost and reductions in amounts receivable being herein called
Increased
Costs
), then Lender shall provide notice thereof to Borrower and Borrower agrees that it will
pay to Lender upon Lenders written request such additional amount or amounts as will compensate
Lender or any company Controlling Lender for such Increased Costs to the extent Lender reasonably
determines that such Increased Costs are allocable to the Loan. If Lender requests compensation
under this
Section 2.4.1
, Borrower may, by notice to Lender, require that Lender furnish to
Borrower a statement setting forth the basis for requesting such compensation and the method for
determining the amount thereof.
2.4.2
Special Taxes
. Borrower shall make all payments hereunder free and clear of and
without deduction for Special Taxes. If Borrower shall be required by law to deduct any Special
Taxes from or in respect of any sum payable hereunder or under any other Loan Document to Lender,
(i) the sum payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under this
Section
2.4.2
) Lender receives an amount equal to the sum it would have received had no such deductions
been made, (ii) Borrower shall make such deductions, and (iii) Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable law. Notwithstanding
anything to the contrary contained in this
Section 2.4.2
, Borrower shall not be liable for
any amounts as a result of withholding for Special Taxes or additional costs incurred as a result
of the assignment of all or any portion of the Loan by Lender to any Person that is subject to
Special Taxes and which is organized under or has its principal place of business outside of the
United States of America or any political subdivision thereof.
40
2.4.3
Other Taxes
. In addition, Borrower agrees to pay any present or future stamp or documentary taxes or other
excise or property taxes, charges, or similar levies which arise from any payment made hereunder,
or from the execution, delivery or registration of, or otherwise with respect to, this Agreement,
the other Loan Documents or the Loan (hereinafter referred to as
Other Taxes
).
2.4.4
Indemnity
. Borrower shall indemnify Lender for the full amount of Special Taxes and
Other Taxes (including any Special Taxes or Other Taxes imposed by any Governmental Authority on
amounts payable under this
Section 2.4.4
) paid by Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification
shall be made within thirty (30) days after the date Lender makes written demand therefor.
2.4.5
Change of Office
. To the extent that changing the jurisdiction of Lenders
applicable office would have the effect of minimizing Special Taxes, Other Taxes or Increased
Costs, Lender shall use reasonable efforts to make such a change.
2.4.6
Survival
. Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in this
Section 2.4
shall
survive the payment in full of principal and interest hereunder, and the termination of this
Agreement.
2.5
Conditions Precedent to Closing
. The obligation of Lender to make the Loan hereunder
is subject to the fulfillment by, or on behalf of, Borrower or waiver by Lender of the following
conditions precedent no later than the Closing Date;
provided
,
however
, that unless
a condition precedent shall expressly survive the Closing Date pursuant to a separate agreement, by
funding the Loan, Lender shall be deemed to have waived any such conditions not theretofore
fulfilled or satisfied.
2.5.1
Representations and Warranties; Compliance with Conditions
. The representations and
warranties of Borrower and Maryland Loan Guarantor contained in this Agreement and the other Loan
Documents shall be true and correct in all material respects on and as of the Closing Date with the
same effect as if made on and as of such date, and no Default or Event of Default shall have
occurred and be continuing; and Borrower and Maryland Loan Guarantor shall be in compliance in all
material respects with all terms and conditions set forth in this Agreement and in each other Loan
Document on its part to be observed or performed.
2.5.2
Delivery of Loan Documents; Title Policy; Reports; Leases
.
(a)
Loan Documents
. Lender shall have received an original copy of this Agreement,
the Notes and all of the other Loan Documents, in each case, duly executed (and to the extent
required, acknowledged) and delivered on behalf of Borrower and any other parties thereto.
(b)
Security Instrument, Assignment of Leases
. Lender shall have received evidence
that original counterparts of the Security Instrument and Assignment of Leases, in proper form for
recordation, have been delivered to the Title Company for recording, so as effectively to create,
in the reasonable judgment of Lender, upon such recording valid and enforceable first priority
Liens upon the Property, in favor of Lender (or such other trustee as may be required or
41
desired
under local law), subject only to the Permitted Encumbrances and such other Liens as are permitted
pursuant to the Loan Documents.
(c)
UCC Financing Statements
. Lender shall have received evidence that the UCC
financing statements relating to the Security Instrument and this Agreement have been delivered to
the Title Company for filing in the applicable jurisdictions.
(d)
Title Insurance
. Lender shall have received a Title Policy issued by the Title
Company and dated as of the Closing Date. Such Title Policy shall (i) provide coverage in an
amount equal to one hundred percent (100%) of the Loan (or in the case of the Individual Properties
in the Mortgage Tax States, one hundred twenty-five percent (125%) of the Allocated Loan Amount),
(ii) insure Lender that the Security Instrument creates a valid, first priority Lien on the
Property, free and clear of all exceptions from coverage other than Permitted Encumbrances and
standard exceptions and exclusions from coverage (as modified by the terms of any endorsements),
(iii) contain the endorsements and affirmative coverages set forth on
Exhibit A
and such
additional endorsements and affirmative coverages as Lender may reasonably request to the extent
available in the applicable State, and (iv) name Lender as the insured. Lender also shall have
received evidence that all premiums in respect of such Title Policy have been paid and that all
appropriate releases or discharges of encumbrances necessary for the delivery of the Title Policy
have been delivered for recording.
(e)
Surveys
. With respect to each of the Individual Properties, Lender shall have
received (i) a current Survey containing the survey certification substantially in the form
attached hereto as
Exhibit B
or (ii) copies of existing Surveys prepared in connection with
the financing being repaid with proceeds of the Loan, together with so called no change
affidavits executed by Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor), each in form sufficient to enable the Title Company to omit the standard survey
exception to title coverage and to issue the endorsements to the Title Policy required by Lender
(to the extent available in the applicable State), including, but not limited to, contiguity,
comprehensive, subdivision, land same as survey and access endorsements. Each such Survey shall
reflect the same legal description contained in the Title Policy referred to in paragraph (d) above
and shall include, among other things, a metes and bounds description (or such other description as
is required by Title Company) of the applicable Individual Property, any such description to be
reasonably satisfactory to Lender. The surveyors seal shall be affixed to each Survey.
(f)
Insurance
. Lender shall have received valid certificates of insurance for the
policies of insurance required hereunder, satisfactory to Lender in its sole discretion, and
evidence of the payment of all insurance premiums currently due and payable for the existing
policy period.
(g)
Environmental Reports
. Lender shall have received the Environmental Reports in
respect of the Individual Properties satisfactory to Lender (and Lender agrees and acknowledges
that the Environmental Reports may consist of updates to the existing environmental reports,
provided
that (A) such updated reports are in form and content acceptable to Lender in
Lenders reasonable discretion and (B) the environmental consultant preparing such updated reports
shall provide to Lender a reliance letter satisfactory to Lender).
42
(h)
Zoning
. Lender shall have received with respect to each Individual Property one
of the following: (i) letters or other evidence with respect to the Property from the appropriate
municipal authorities (or other Persons) concerning compliance with applicable zoning and building
laws acceptable to Lender, (ii) an ALTA 3.1 zoning endorsement for the Title Policy or (iii) a
zoning report reasonably acceptable to Lender prepared by PZR or another nationally recognized
zoning due diligence firm acceptable to Lender.
(i)
Certificate of Occupancy
. Lender shall have received a copy of the valid
permanent certificate of occupancy for each Individual Property located in a jurisdiction that
requires certificates of occupancy under applicable law, in each case acceptable to Lender.
(j)
Encumbrances
. Borrower shall have taken or caused to be taken such actions in
such a manner so that Lender has a valid and perfected first Lien as of the Closing Date on the
Property, subject only to Permitted Encumbrances and such other Liens as are permitted pursuant to
the Loan Documents, and Lender shall have received satisfactory evidence thereof.
2.5.3
Related Documents
. Each additional document not specifically referenced herein, but
relating to the transactions contemplated herein, shall have been duly authorized, executed and
delivered by all parties thereto and Lender shall have received and approved certified copies
thereof.
2.5.4
Delivery of Organizational Documents
. On or before the Closing Date, Borrower shall
deliver, or cause to be delivered, to Lender copies, certified by an Officers Certificate, of all
organizational documentation related to Borrower, Maryland Loan Guarantor, Master Lessee, any other
SPE Entity and Guarantor as have been requested by Lender and/or the formation, structure,
existence, good standing and/or qualification to do business of Borrower, Maryland Loan Guarantor,
any other SPE Entity and Guarantor as Lender may request in its sole discretion, including, without
limitation, good standing certificates, qualifications to do business in the appropriate
jurisdictions, resolutions authorizing the entering into of the Loan and incumbency certificates as
may be requested by Lender. Each of the organizational documents of any SPE Entity shall contain
single purpose entity provisions having a substantive effect materially similar to that of the
language set forth in
Exhibit C
.
2.5.5
Counsel Opinions
(a) Lender shall have received a Non-Consolidation Opinion in a form approved by Lender (the
Non-Consolidation Opinion
).
(b) Lender shall have received the Opinion of Counsel substantially in compliance with the
requirements set forth in
Exhibit D
(and including a non-contravention opinion with respect
to the Revolving Loan) or in such other form approved by the Lender (
provided
that Lender
shall not unreasonably withhold its approval of the general form of any Opinion of Counsel that was
used by the applicable counsel in connection with the financing being repaid with proceeds of the
Loan).
2.5.6
Annual Budget
. Borrower shall have delivered the Annual Budget for the current
Fiscal Year, which Annual Budget shall be acceptable to Lender and shall be certified by an
Officers Certificate.
43
2.5.7
Completion of Proceedings
. All corporate and other proceedings taken or to be taken
in connection with the transactions contemplated by this Agreement and other Loan Documents and all
documents incidental thereto shall be satisfactory in form and substance to Lender, and Lender
shall have received all such counterpart originals or certified copies of such documents as Lender
may reasonably request.
2.5.8
Payments
. All payments, deposits or escrows, if any, required to be made or
established by Borrower under this Agreement, the Notes and the other Loan Documents on or before
the Closing Date shall have been paid.
2.5.9
Account Agreement
. Lender shall have received the original of the Account Agreement
executed by each of Cash Management Bank, Borrower (other than Maryland Borrower) and Maryland Loan
Guarantor.
2.5.10
Master Lease SNDA
. Borrower shall have, prior to Closing, delivered to Lender the
Master Lease SNDA executed by Master Lessee with respect to the Master Lease.
2.5.11
Reserved.
2.5.12
Reserved.
2.5.13
Independent Manager/Member Certificate
. Lender shall have received an executed Independent Manager/Member certificate substantially in
the form attached as
Exhibit T
.
2.5.14
Transaction Costs
. Borrower shall have paid or reimbursed Lender for all title
insurance premiums, recording and filing fees, costs of Environmental Reports, Physical Condition
Reports, seismic reports, zoning reports, searches, flood certifications, appraisals and other
reports, the reasonable fees and costs of Lenders counsel and all other third party out-of-pocket
expenses incurred in connection with the origination of the Loan.
2.5.15
Material Adverse Effect
. No change, circumstance, event or effect shall have
occurred since the date of Borrowers most recent financial statements delivered to Lender which
has, or could reasonably be expected to, have a Material Adverse Effect.
2.5.16
Insolvency
. None of Borrower, Master Lease Guarantor or Guarantor shall be the
subject of any bankruptcy, reorganization, or insolvency proceeding.
2.5.17
Leases
. Lender shall have received copies of all Leases.
2.5.18
Master Lease; Master Lease SNDA
. Lender shall have received a certified copy of the
Master Lease and shall have received the duly executed Master Lease SNDA in form and substance
reasonably acceptable to Lender.
2.5.19
Tax Lot
. Lender shall have received a tax lot endorsement to the Title Policy or
other evidence that each Individual Property constitutes one (1) or more separate tax lots, which
endorsement or other evidence shall be reasonably satisfactory in form and substance to Lender.
44
2.5.20
Physical Conditions Reports
. Lender shall have received the Physical Conditions
Reports with respect to the Individual Properties, which shall be satisfactory in form and
substance to Lender.
2.5.21
Appraisals
. Lender shall have received an Appraisal of each Individual Property,
which shall be satisfactory in form and substance to Lender.
2.5.22
Financial Statements
. Lender shall have confirmed the accuracy of all financial statements and other financial
information with respect to the Property delivered by Borrower to Lender.
2.5.23
Flood Certifications
. Lender shall have received a flood zone certification with
respect to each Individual Property.
2.5.24
Intercreditor Agreement
. Lender shall have received the Intercreditor Agreement as
well as certified copies of the loan documents evidencing the Revolving Loan (including any
amendments thereto).
III.
CASH MANAGEMENT
3.1
Cash Management
.
3.1.1
Establishment of Accounts
. Borrower hereby confirms that, simultaneously with the
execution of this Agreement and pursuant to the Account Agreement, Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) has established with Cash Management Bank, in the name
of Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) for the benefit of
Lender, as secured party, the holding account (the
Holding Account
), which has been
established as a securities account. The Holding Account and each sub-account of such account and
the funds deposited therein and securities and other assets credited thereto shall serve as
additional security for the Loan. Pursuant to the Account Agreement, Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) shall irrevocably instruct and authorize Cash
Management Bank to disregard any and all orders for withdrawal from the Collateral Accounts made
by, or at the direction of, Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor). Borrower agrees that, prior to the payment in full of the Indebtedness, the terms and
conditions of the Account Agreement shall not be amended or modified without the prior written
consent of Lender (which consent Lender may grant or withhold in its sole discretion), and if a
Securitization has occurred, the delivery by Borrower of a Rating Agency Confirmation. In
recognition of Lenders security interest in the funds deposited into the Collateral Accounts, the
Holding Account shall be named as follows: BlueLinx Portfolio Holding Account f/b/o German
American Capital Corporation, as secured party, (Account Number 5000000140431). Borrower confirms
that it has established with Cash Management Bank the following sub-accounts of the Holding Account
(each, a
Sub-Account
and, collectively, the
Sub-Accounts
and together with the
Holding Account, the
Collateral Accounts
), which (i) may be ledger or book entry
sub-accounts and need not be actual sub-accounts, (ii) shall each be linked to the Holding Account,
(iii) shall each be a
Securities Account
pursuant to Article 8 of the UCC and (iv) shall
each be an Eligible Account to which
45
certain funds shall be allocated and from which disbursements
shall be made pursuant to the terms of this Agreement:
(a) a sub-account for the retention of Account Collateral in respect of Impositions and Other
Charges for the Property (the
Tax Reserve Account
);
(b) a sub-account for the retention of Account Collateral in respect of insurance premiums for
the Property (the
Insurance Reserve Account
);
(c) a sub-account for the retention of Account Collateral in respect of Debt Service on the
Loan (the
Debt Service Reserve Account
);
(d) a sub-account for the retention of Account Collateral in respect of reserves relating to
Master Lease Variable Additional Rent (the
Master Lease Variable Additional Rent Reserve
Account
);
(e) a sub-account for the retention of Account Collateral in respect of reserves for the
Immediate Repair Conditions and the Environmental Remediation Conditions (the
Immediate Repair
and Remediation Reserve Account
);
(f) a sub-account for the retention of Account Collateral in respect of reserves for
Structural Maintenance Items (the
Structural Repair Reserve Account
);
(g) a sub-account for the retention of Account Collateral in respect of certain Proceeds, as
more fully set forth in
Section 6.2
(the
Proceeds Reserve Account
); and
(h) a sub-account for the retention of Account Collateral in respect of reserves of Excess
Cash Flow required during a Low LCR Cash Sweep Period pursuant to
Section 16.5(c)
(the
LCR Deterioration Reserve Account
).
3.1.2
Pledge of Account Collateral
. To secure the full and punctual payment and
performance of the Obligations, Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) hereby collaterally assigns, grants a security interest in and pledges to Lender, to the
extent not prohibited by applicable law, a first priority continuing security interest in and to
the following property of Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor), whether now owned or existing or hereafter acquired or arising and regardless of where
located (all of the same, collectively, the
Account Collateral
):
(a) the Collateral Accounts and all cash, checks, drafts, securities entitlements,
certificates, instruments and other property, including, without limitation, all deposits and/or
wire transfers from time to time deposited or held in, credited to or made to Collateral Accounts;
(b) any and all amounts invested in Permitted Investments;
(c) subject to the provisions of
Section 3.1.4
, all interest, dividends, cash,
instruments, securities entitlements and other property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any or all of the foregoing or purchased with
funds from the Collateral Accounts; and
46
(d) to the extent not covered by clauses (a), (b) or (c) above, all proceeds (as defined under
the UCC) of any or all of the foregoing.
In addition to the rights and remedies herein set forth, Lender shall have all of the rights
and remedies with respect to the Account Collateral available to a secured party at law or in
equity, including, without limitation, the rights of a secured party under the UCC, as if such
rights and remedies were fully set forth herein.
This Agreement shall constitute a security agreement for purposes of the Uniform Commercial
Code and other applicable law.
3.1.3
Maintenance of Collateral Accounts
. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) agrees that each of the Collateral Accounts is and shall be
maintained (i) as a securities account (as such term is defined in Section 8-501(a) of the UCC),
(ii) in such a manner that Lender shall have control (within the meaning of Section 8-106(d)(2) of
the UCC) over the Collateral Accounts, (iii) such that no Person other than Lender shall have any
right of withdrawal from the Collateral Accounts and, except as provided herein, no Account
Collateral shall be released to the Borrower or any Affiliate of Borrower from the Collateral
Accounts, (iv) in such a manner that the Cash Management Bank shall agree to treat all property
credited to the Collateral Accounts as financial assets and (v) such that all securities or other
property underlying any financial assets credited to the Collateral Accounts shall be registered in
the name of Cash Management Bank, indorsed to Cash Management Bank or in blank or credited to
another securities account maintained in the name of Cash Management Bank and in no case will any
financial asset credited to any of the Collateral Accounts be registered in the name of Borrower,
payable to the order of Borrower or specially indorsed to Borrower, except to the extent the
foregoing have been specially indorsed to Cash Management Bank or in blank. Without limiting
Borrowers obligations under the immediately preceding sentence, Borrower shall only establish and
maintain the Collateral Accounts with a financial institution that has executed an agreement
substantially in the form of the Account Agreement or in such other form acceptable to Lender in
its sole discretion.
3.1.4
Eligible Accounts
. The Collateral Accounts shall be Eligible Accounts. The
Collateral Accounts shall be subject to such applicable laws, and such applicable regulations of
the Board of Governors of the Federal Reserve System and of any other banking or governmental
authority, as may now or hereafter be in effect. Income and interest accruing on the Collateral
Accounts or any investments held in such accounts for the benefit of Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) shall be added to the principal amount of such
account on a daily basis (or with such frequency as the Cash Management Bank can accommodate) and
shall be held, disbursed and applied in accordance with the provisions of this Agreement and the
Account Agreement. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
shall be the beneficial owner of the Collateral Accounts for federal income tax purposes and shall
report all income on the Collateral Accounts.
3.1.5
Deposits into Sub-Accounts
. On the date hereof, Borrower has deposited the following
amounts into the Sub-Accounts:
(i) $1,252,579.76 into the Tax Reserve Account;
47
(ii) $1,193,316.37 into the Insurance Reserve Account;
(iii) $0.00 into the Debt Service Reserve Account;
(iv) $0.00 into the Master Lease Variable Additional Rent Reserve Account;
(v) $0.00 into the Structural Repair Reserve Account;
(vi) $404,310 into the Immediate Repair and Remediation Reserve Account; and
(vii) $0.00 into the Proceeds Reserve Account; and
(viii) $0.00 into the LCR Deterioration Reserve Account.
3.1.6
Monthly Funding of Sub-Accounts; Master Lease Rent Shortfalls; Master Lease Variable
Additional Rent Reserve; Sub-Account Shortfalls
.
(a)
Monthly Funding of Sub-Accounts
. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) hereby irrevocably authorizes Lender to transfer (and, pursuant
to the Account Agreement shall irrevocably authorize Cash Management Bank to execute any
corresponding instructions of Lender), and Lender shall transfer, from the Holding Account by 11:00
a.m. New York time on the date on which each payment of Master Lease Rent under the Master Lease is
made to the Holding Account, or as soon thereafter as sufficient funds are in the Holding Account
to make the applicable transfers, commencing on the date of the first payment of Master Lease Rent
under the Master Lease following the date of this Agreement, funds in the following amounts and in
the following order of priority:
(i) funds in an amount equal to the Monthly Tax Reserve Amount and any other amounts required
pursuant to
Section 16.1
for the month in which the transfer from the Holding Account is
made to the Tax Reserve Account;
(ii) funds in an amount equal to the Monthly Insurance Reserve Amount and any other amounts
required pursuant to
Section 16.2
for the month in which the transfer from the Holding
Account is made to the Insurance Reserve Account;
(iii) funds in an amount equal to the amount of Debt Service due on the Payment Date
immediately following the date the transfer from the Holding Account is made to the Debt Service
Reserve Account;
(iv) funds in an amount equal to the Monthly Structural Repair Reserve Amount for the month in
which the transfer from the Holding Account is made to the Structural Repair Reserve Account;
(v) during the continuance of an Event of Default and during any Low LCR Cash Sweep Period,
funds in an amount equal to the Master Lease Variable Additional Rent payable under the Master
Lease for the month following the month in which the transfer from the Holding Account is made to
the Master Lease Variable Additional Rent Reserve Account;
48
(vi) during the continuance of an Event of Default or a Low LCR Cash Sweep Period, funds in an
amount equal to the balance (if any) remaining or deposited in the Holding Account after the
foregoing transfers (such remainder being hereinafter referred to as
Excess Cash Flow
) to
the LCR Deterioration Reserve Account; and
(vii)
provided
no Low LCR Cash Sweep Period or Event of Default is then continuing,
the Excess Cash Flow to the Borrowers Account.
(b)
Master Lease Rent Shortfalls
. If there is a Master Lease Rent Shortfall, subject
to the provisions of
Section 3.1.6(c)
below, Lender shall have the right, at its election,
to direct the Cash Management Bank to transfer (but shall not be obligated to so direct the Cash
Management Bank to transfer) from the LCR Deterioration Reserve Account to the Holding Account,
without notice to Borrower, an amount equal to such Master Lease Rent Shortfall.
(c)
Master Lease Variable Additional Rent Reserve
. In the event that no Low LCR Cash
Sweep Period or Event of Default is then continuing, Lender shall direct the Cash Management Bank
to transfer the funds in the Master Lease Variable Additional Rent Reserve Account to Borrower (or,
if directed by Borrower, to Master Lessee). During the continuance of any Low LCR Cash Sweep
Period or Event of Default, Lender shall pay or direct the Cash Management Bank to pay from the
Master Lease Variable Additional Rent Reserve Account, monthly payments of Master Lease Variable
Additional Rent directly to the Person having the right to receive such funds on the respective due
dates therefor and shall promptly notify Borrower and Master Lessee of any such payment.
(d)
Sub-Account Shortfalls
. If Lender shall reasonably determine that there will be
insufficient amounts in the Holding Account to make any of the transfers required pursuant to this
Section 3.1.6
, Lender shall provide notice to Borrower of such insufficiency (it being
understood that in no event shall Lender be required to notify Borrower of any deficiency in the
Debt Service Reserve Account, such deficiency on the fifth (5
th
) day of any month (or,
if such fifth (5
th
) day is not a Business Day then the immediately preceding Business
Day) being an Event of Default) and, within five (5) days after receipt of said notice and prior to
the expiration of any grace period applicable to such payment, Borrower shall deposit into the
Holding Account an amount equal to the shortfall of available funds in the Holding Account taking
into account any funds which accumulate in the Holding Account during such five (5) day period.
Notwithstanding anything to the contrary contained in this Agreement or in the other Loan
Documents, Borrower shall not be deemed to be in default hereunder or thereunder in the event funds
sufficient for a required transfer are held in an appropriate Sub-Account and Lender or
Cash Management Bank fails to timely make any transfer from such Sub-Account, as contemplated
by this Agreement, unless due to the negligence or willful misconduct of Borrower.
(e) Notwithstanding anything to the contrary contained herein or in the Security Instrument,
Lender shall have the right, upon five (5) Business Days prior written notice thereof to Borrower,
to withdraw from the Holding Account an amount equal to any mortgage recording tax, costs, expenses
or other amounts pursuant to
Section 19.12
of this Agreement then due and owing and pay
such amounts to the Person(s) entitled thereto.
49
3.1.7
Required Payments from Sub-Accounts
. Borrower irrevocably authorizes Lender to make
and,
provided
no Event of Default shall have occurred and be continuing, Lender hereby
agrees to make or to direct the Cash Management Bank to make, the following payments from the
Sub-Accounts to the extent of the monies on deposit therefor:
(i) funds from the Tax Reserve Account to Lender sufficient to permit Lender to pay (A)
Impositions and (B) Other Charges, on the respective due dates therefor, and Lender shall so pay
such funds to the Governmental Authority having the right to receive such funds;
(ii) funds from the Insurance Reserve Account to Lender sufficient to permit Lender to pay
insurance premiums for the insurance required to be maintained pursuant to the terms of this
Agreement and the Security Instrument, on the respective due dates therefor, and Lender shall so
pay such funds to the insurance company having the right to receive such funds;
(iii) funds from the Debt Service Reserve Account to Lender sufficient to pay Debt Service on
each Payment Date, and Lender, on each Payment Date, shall apply such funds to the payment of the
Debt Service payable on such Payment Date;
(iv) as provided in
Section 16.3
, funds from the Structural Repair Reserve Account to
the Borrowers Account to pay for Structural Repairs;
(v) as provided in
Section 16.4
, funds from the Immediate Repair and Remediation
Reserve Account to the Borrowers Account to reimburse Borrower for, or to pay, the cost of the
Immediate Repairs and Remediation;
(vi) as applicable, funds from the Master Lease Variable Additional Rent Reserve Account in
accordance with
Section 3.1.6(c)
and
Section 16.5(b)
, and Lender shall so pay such
funds to the Person having the right to receive such funds; and
(vii) as applicable, funds from the LCR Deterioration Reserve Account in accordance with
Section 16.5(c)
.
3.1.8
Cash Management Bank
.
(a) Lender shall have the right at Borrowers sole cost and expense to replace the Cash
Management Bank with a financial institution reasonably satisfactory to Borrower in the event that
(i) the Cash Management Bank fails, in any material respect, to comply with the Account Agreement,
(ii) the Cash Management Bank named herein is no longer the Cash Management Bank or (iii) the Cash
Management Bank is no longer an Approved Bank. Upon the occurrence and during the continuance of
an Event of Default, Lender shall have the right at Borrowers sole cost and expense to replace
Cash Management Bank at any time, upon prior written notice to Borrower. Borrower shall cooperate
with Lender in connection with the appointment of any replacement Cash Management Bank and the
execution by the Cash Management Bank and the Borrower of an Account Agreement and delivery of same
to Lender.
(b) So long as no Event of Default shall have occurred and be continuing, Borrower shall have
the right at its sole cost and expense to replace the Cash Management Bank with a financial
institution that is an Approved Bank
provided
that such financial institution and
50
Borrower
shall execute and deliver to Lender an Account Agreement substantially similar to the Account
Agreement executed as of the Closing Date, or in such other form reasonably required by Lender or
required by the Rating Agencies, with such changes therein as shall be reasonably acceptable to
Lender.
3.1.9
Borrowers and Maryland Loan Guarantors Account Representations, Warranties and
Covenants
.
(a) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) represents,
warrants and covenants that as of the date hereof, Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) has irrevocably directed the Master Lessee, pursuant to a letter
substantially in the form of the Master Lease Rent Payment Direction Letter, to (i) make all
payments of Master Lease Scheduled Rent directly to the Holding Account at all times during the
term of the Loan and (ii) make all payment of Master Lease Variable Additional Rent directly to the
Holding Account at all times during the continuance of a Low LCR Cash Sweep Period or an Event of
Default.
(b) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) further
represents, warrants and covenants that (i) it shall cause Master Lessee to deposit all amounts
payable to it pursuant to the Master Lease directly into the Holding Account, (ii) it shall pay or
cause to be paid all Rents, Cash and Cash Equivalents or other items of operating income not
covered by the preceding subsection (a) within one Business Day after receipt thereof by Borrower
or its Affiliates directly into the Holding Account and, until so deposited, any such amounts held
by Borrower or its Affiliates shall be deemed to be Account Collateral and shall be held in trust
by it for the benefit, and as the property, of Lender and shall not be commingled with any other
funds or property of Borrower or its Affiliates, (iii) there are no accounts other than the
Collateral Accounts maintained by Borrower or any other Person with respect to the Property or the
collection of Rents and (vii) so long as the Loan shall be outstanding, neither Borrower nor any
other Person shall open any other operating accounts with respect to the Property or the collection
of Rents, except for the Collateral Accounts;
provided
that Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) shall not be prohibited from
utilizing one or more separate accounts for the disbursement or retention of funds that have
been transferred to the Borrowers Account pursuant to
Section 3.1.6
.
3.1.10
Account Collateral and Remedies
.
(a) Upon the occurrence and during the continuance of an Event of Default, without additional
notice from Lender to Borrower, (i) Lender may, in addition to and not in limitation of Lenders
other rights, make any and all withdrawals from, and transfers between and among, the Collateral
Accounts as Lender shall determine in its sole and absolute discretion to pay any Obligations,
operating expenses and/or Capital Expenditures for the Property, (ii) all Excess Cash Flow shall be
retained in the Holding Account or applicable Sub-Accounts and (iii) Lender may liquidate and
transfer any amounts then invested in Permitted Investments to the Collateral Accounts to which
they relate or reinvest such amounts in other Permitted Investments as Lender may reasonably
determine is necessary to perfect or protect any security interest granted or purported to be
granted hereby or to enable Lender to exercise and enforce Lenders rights and
51
remedies hereunder
with respect to any Account Collateral or to preserve the value of the Account Collateral.
(b) Borrower (and in the case of the Maryland Property, Maryland Loan Guarantor) hereby
expressly waives, to the fullest extent permitted by law, presentment, demand, protest or any
notice of any kind in connection with this Agreement or the Account Collateral. Borrower (and in
the case of the Maryland Property, Maryland Loan Guarantor) acknowledges and agrees that twenty
(20) days prior written notice of the time and place of any public sale of the Account Collateral
or any other intended disposition thereof shall be reasonable and sufficient notice within the
meaning of the UCC.
3.1.11
Transfers and Other Liens
. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) agrees that it will not (i) sell or otherwise dispose of any of the
Account Collateral or (ii) create or permit to exist any Lien upon or with respect to all or any of
the Account Collateral, except for the Lien granted to Lender under this Agreement.
3.1.12
Reasonable Care
. Beyond the exercise of reasonable care in the custody thereof,
Lender shall have no duty as to any Account Collateral in its possession or control as agent
therefor or bailee thereof or any income thereon or the preservation of rights against any person
or otherwise with respect thereto. Lender shall be deemed to have exercised reasonable care in the
custody and preservation of the Account Collateral in its possession if the Account Collateral is
accorded treatment substantially equal to that which Lender accords its own property, it being
understood that Lender shall not be liable or responsible for any loss or damage to any of the
Account Collateral, or for any diminution in value thereof, by reason of the act or omission of
Lender, its Affiliates, agents, employees or bailees, except to the extent that such loss or damage
results from Lenders gross negligence or willful misconduct. In no event shall Lender be liable
either directly or indirectly for losses or delays resulting from any event which may be the basis
of an Excusable Delay,
computer malfunctions, interruption of communication facilities, labor difficulties or other causes
beyond Lenders reasonable control or for indirect, special or consequential damages except to the
extent of Lenders gross negligence or willful misconduct. Notwithstanding the foregoing, Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) acknowledges and agrees that (i)
Lender does not have custody of the Account Collateral, (ii) Cash Management Bank has custody of
the Account Collateral, (iii) the initial Cash Management Bank was chosen by Borrower and (iv)
Lender has no obligation or duty to supervise Cash Management Bank or to see to the safe custody of
the Account Collateral.
3.1.13
Lenders Liability
.
(a) Lender shall be responsible for the performance only of such duties with respect to the
Account Collateral as are specifically set forth in this
Section 3.1
or elsewhere in the
Loan Documents, and no other duty shall be implied from any provision hereof. Lender shall not be
under any obligation or duty to perform any act with respect to the Account Collateral which would
cause it to incur any expense or liability or to institute or defend any suit in respect hereof, or
to advance any of its own monies. Borrower (and in the case of the Maryland Property, Maryland
Loan Guarantor) shall indemnify and hold harmless Lender, its employees and officers, from and
against any loss, cost or damage (including, without limitation, reasonable attorneys
52
fees and
disbursements) incurred by Lender in connection with the transactions contemplated hereby with
respect to the Account Collateral except as such may be caused by the gross negligence or willful
misconduct of Lender, its employees, officers or agents.
(b) Lender shall be protected in acting upon any notice, resolution, request, consent, order,
certificate, report, opinion, bond or other paper, document or signature believed by it in good
faith to be genuine, and, in so acting, it may be assumed that any person purporting to give any of
the foregoing in connection with the provisions hereof has been duly authorized to do so. Lender
may consult with counsel, and the opinion of such counsel shall be full and complete authorization
and protection in respect of any action taken or suffered by it hereunder and in good faith in
accordance therewith.
3.1.14
Continuing Security Interest
. This Agreement shall create a continuing security
interest in the Account Collateral and shall remain in full force and effect until payment in full
of the Indebtedness. Upon payment in full of the Indebtedness, this security interest shall
automatically terminate without further notice from any party and Borrower shall be entitled to the
return of such of the Account Collateral as shall not have been sold or otherwise applied pursuant
to the terms hereof, and Lender shall execute such instruments and documents as may be reasonably
requested by Borrower to evidence such termination and the release and return of the Account
Collateral to Borrower.
IV.
REPRESENTATIONS AND WARRANTIES
4.1
Borrower Representations
. Borrower (and in the case of the Maryland Property, Maryland Loan Guarantor) represents and
warrants as of the Closing Date that:
4.1.1
Organization
. Each Borrower and Maryland Loan Guarantor is a limited liability
company and has been duly organized and is validly existing and in good standing pursuant to the
laws of the State of Delaware with requisite power and authority to own its properties and to
transact the businesses in which it is now engaged. Guarantor is a corporation and has been duly
organized and is validly existing and in good standing pursuant to the laws of the State of
Delaware with requisite power and authority to own its properties and to transact the businesses in
which it is now engaged. Master Lessee is a corporation and has been duly organized and is validly
existing and in good standing pursuant to the laws of the State of Georgia with requisite power and
authority to own its properties and to transact the businesses in which it is now engaged. Each
Borrower, Maryland Loan Guarantor, Guarantor and Master Lessee has duly qualified to do business
and is in good standing in each jurisdiction where it is required to be so qualified in connection
with its properties, businesses and operations. Each of Borrower, Maryland Loan Guarantor and
Guarantor possesses all material rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own its properties and to transact the businesses in which it
is now engaged, and the sole business of Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) is the ownership of the Property. The organizational structure of
Borrower is accurately depicted by the schematic diagram attached hereto as
Exhibit K
.
Neither Borrower nor Maryland Loan Guarantor shall not change its name, identity, corporate form or
structure or jurisdiction of organization unless it shall have given Lender thirty (30) days prior
written notice of any such
53
change and shall have taken all steps reasonably requested by Lender to
grant, perfect, protect and/or preserve the liens and security interest granted to Lender under the
Loan Documents.
4.1.2
Proceedings
. Each of Borrower, Maryland Loan Guarantor, Guarantor and Master Lessee
has full power, and has taken all necessary action, to authorize the execution, delivery and
performance of the Loan Documents to which it is a party. The Loan Documents to which such Person
is a party have been duly executed and delivered by, or on behalf of, Borrower, Maryland Loan
Guarantor, Guarantor and Master Lessee, as applicable, and constitute legal, valid and binding
obligations of such Persons, as applicable, enforceable against such Persons, as applicable, in
accordance with their respective terms, subject only to applicable bankruptcy, insolvency and
similar laws affecting rights of creditors generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at
law).
4.1.3
No Conflicts
. The execution, delivery and performance of this Agreement and the
other Loan Documents by Borrower, Maryland Loan Guarantor, Guarantor and Master Lessee, as
applicable, will not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property or assets of any
such Person pursuant
to the terms of any indenture, mortgage, deed of trust, loan agreement, partnership agreement or
other agreement or instrument to which any such Person is a party or by which any of such Persons
property or assets is subject (unless consents from all applicable parties thereto have been
obtained), nor will such action result in any violation of the provisions of any statute or any
order, rule or regulation of any Governmental Authority, and any material consent, approval,
authorization, order, registration or qualification of or with any Governmental Authority required
for the execution, delivery and performance by Borrower, Maryland Loan Guarantor and Guarantor of
this Agreement, except for any violation that would not individually or in the aggregate reasonably
be expected to result in a Material Adverse Effect, or any other Loan Documents has been obtained
and is in full force and effect.
4.1.4
Litigation
. Except as set forth on
Schedule VI
attached hereto, there are no
arbitration proceedings, governmental investigations, actions, suits or proceedings at law or in
equity by or before any Governmental Authority now pending or, to Borrowers knowledge, threatened
against or affecting Borrower, Maryland Loan Guarantor, Guarantor, Master Lessee or any Individual
Property (other than (a) claims for nonpayment brought by Borrower, Maryland Loan Guarantor,
Guarantor or Master Lessee as plaintiff, and (b) claims (i) which are being covered by insurance,
(ii) which are being defended by the relevant insurance company and (iii) as to which Borrower (or
in the case of the Maryland Property, Maryland Loan Guarantor) has not received a notice from such
insurance company that the claim exceeds the total amount of insurance coverage with respect to
such claim, provided that none of such unscheduled claims could reasonably be expected to
individually or in the aggregate to have a Material Adverse Effect if adversely determined). The
actions, suits or proceedings identified on
Schedule VI
, if determined against Borrower,
Maryland Loan Guarantor, Guarantor, Master Lessee or the applicable Individual Property or
Individual Properties, would not materially and adversely affect the condition (financial or
otherwise) or business of any such Person or the condition or operation of any Individual Property.
54
4.1.5
Agreements
. The Master Lease and the Subleases constitute all of the agreements to
which Borrower or any of its Affiliates are party or are bound which are material to the ownership
and operation of any Individual Property other than the Master Lease. Neither Borrower nor
Maryland Loan Guarantor is a party to any agreement or instrument or subject to any restriction
which is reasonably likely to materially and adversely affect it or its business, properties or
assets, operations or condition, financial or otherwise. Neither Borrower nor Maryland Loan
Guarantor is in default in any material respect in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement or instrument to which
it is a party or by which Borrower, Maryland Loan Guarantor or the Property is bound. Neither
Borrower nor Maryland Loan Guarantor has any material financial obligation (contingent or
otherwise) under any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it or the Property is otherwise bound, other than (a)
obligations constituting Permitted Debt which are incurred in the ordinary course of the ownership
and operation of the Property and (b) obligations under the Loan Documents and the Master Lease.
There are no prior sales, transfers or assignments of the Master Lease or any
portion of the Rents due and payable or to become due and payable which are presently outstanding
following the funding of the Loan, other than those being terminated or assigned to Lender
concurrently herewith.
4.1.6
Title
. Borrower (or in the case of the Maryland Property, the Maryland Loan
Guarantor) has good, marketable and insurable fee simple title to the Land and the Improvements,
free and clear of all Liens whatsoever except the Permitted Encumbrances, such other Liens as are
permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. Borrower (or
in the case of the Maryland Property, the Maryland Loan Guarantor) has good and marketable title to
the remainder of the Property, free and clear of all Liens whatsoever except the Permitted
Encumbrances. The Security Instrument, when properly recorded in the appropriate records, together
with any Uniform Commercial Code financing statements required to be filed in connection therewith,
will create (i) a valid, perfected first mortgage lien on the Land and the Improvements, subject
only to Permitted Encumbrances and (ii) perfected security interests in and to, and perfected
collateral assignments of, all Personal Property (including the Leases) and any leases of equipment
from third parties, all in accordance with the terms thereof, in each case subject only to any
applicable Permitted Encumbrances. To Borrowers knowledge, there are no claims for payment for
work, labor or materials affecting the Property which are or may become a lien prior to, or of
equal priority with, the Liens created by the Loan Documents other than the Permitted Encumbrances.
Borrower and Maryland Loan Guarantor represent and warrant that none of the Permitted Encumbrances
would individually or in the aggregate reasonably be expected to result in a Material Adverse
Effect as of the Closing Date and thereafter. Borrower (or in the case of the Maryland Property,
the Maryland Loan Guarantor) shall preserve its right, title and interest in and to the Property
for so long as the Notes remains outstanding and will warrant and defend same and the validity and
priority of the Lien hereof from and against any and all claims whatsoever other than the Permitted
Encumbrances.
4.1.7
No Bankruptcy Filing
. None of Borrower, Maryland Loan Guarantor, Guarantor or Master
Lessee is contemplating either the filing of a petition by it under any state or federal bankruptcy
or insolvency laws or the liquidation of all or a major portion of such entitys assets or
property, to Borrowers knowledge, no Person is contemplating the filing of any such
55
petition
against it or against Borrower, Maryland Loan Guarantor, Guarantor or Master Lessee, as applicable.
4.1.8
Full and Accurate Disclosure
. No statement of material fact made by Borrower or
Maryland Loan Guarantor in this Agreement or in any of the other Loan Documents contains any untrue
statement of a material fact or omits to state any material fact necessary to make statements
contained herein or therein not misleading. There is no fact presently known to Borrower or
Maryland Loan Guarantor which has not been disclosed which could reasonably be expected to have a
Material Adverse Effect.
4.1.9
All Property
. The Property constitutes all of the real property, personal property, equipment and fixtures
currently (i) owned or leased by Borrower (or in the case of the Maryland Property, the Maryland
Loan Guarantor) and (ii) used in the operation of the business located on the Property, other than
the Excluded Personal Property.
4.1.10
No Plan Assets
.
(a) Neither Borrower nor Maryland Loan Guarantor maintains an employee benefit plan as defined
by Section 3(3) of ERISA, which is subject to Title IV of ERISA, and (i) to Borrowers knowledge,
neither Borrower nor Maryland Loan Guarantor has incurred or expect to incur any material liability
which is or remains unsatisfied for any taxes or penalties with respect to any employee benefit
plan, within the meaning of Section 3(3) of ERISA, or any plan, within the meaning of Section
4975(e)(1) of the Internal Revenue Code or any other benefit plan (other than a multiemployer plan)
maintained, contributed to, or required to be contributed to by Borrower (or in the case of the
Maryland Property, the Maryland Loan Guarantor) or by any entity that is under common control with
Borrower or Maryland Loan Guarantor within the meaning of ERISA Section 4001(a)(14) (a
Plan
) or any plan that would be a Plan but for the fact that it is a multiemployer plan
within the meaning of ERISA Section 3(37); and (ii) Borrower (or in the case of the Maryland
Property, the Maryland Loan Guarantor) has made and shall continue to make when due all required
contributions to all such Plans, if any. Each such Plan has been and will be administered in
compliance with its terms and the applicable provisions of ERISA, the Internal Revenue Code, and
any other applicable federal or state law; and no action shall be taken or fail to be taken that
would result in the disqualification or loss of tax-exempt status of any such Plan intended to be
qualified and/or tax exempt; and
(b) Neither Borrower nor Maryland Loan Guarantor is an employee benefit plan, as defined in
Section 3(3) of ERISA, subject to Title I of ERISA, none of the assets of Borrower or Maryland Loan
Guarantor constitutes or will constitute plan assets of one or more such plans within the meaning
of 29 C.F.R. Section 2510.3-101 and neither Borrower nor Maryland Loan Guarantor is a governmental
plan within the meaning of Section 3(32) of ERISA and transactions by or with Borrower and Maryland
Loan Guarantor are not subject to state statutes regulating investment of, and fiduciary
obligations with respect to, governmental plans similar to the provisions of Section 406 of ERISA
or Section 4975 of the Code currently in effect, which prohibit or otherwise restrict the
transactions contemplated by this Agreement.
4.1.11
Compliance
. To Borrowers knowledge, Borrower, Maryland Loan Guarantor and the
Property and the use thereof comply in all material respects with all applicable Legal
56
Requirements, including, without limitation, building and zoning ordinances and codes. To
Borrowers knowledge, neither Borrower nor Maryland Loan Guarantor is in default or in violation of
any order, writ, injunction, decree or demand of any Governmental Authority. To Borrowers
knowledge, there has not been committed by Borrower or Maryland Loan Guarantor any act or omission
affording the federal government or any other Governmental Authority the right of forfeiture as
against the Property
or any part thereof or any monies paid in performance of Borrowers or Maryland Loan Guarantors
obligations under any of the Loan Documents.
4.1.12
Financial Information
. To Borrowers knowledge, all financial data including,
without limitation, the statements of cash flow and income and operating expense, that have been
delivered by or on behalf of Borrower to Lender in respect of the Property (i) are true, complete
and correct in all material respects, (ii) fairly represent the financial condition of the Property
as of the date of such reports and (iii) to the extent prepared or audited by an independent
certified public accounting firm, have been prepared in accordance with GAAP throughout the periods
covered, except as disclosed therein. To Borrowers knowledge, neither Borrower nor Maryland Loan
Guarantor has any contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments that are known to
Borrower and could reasonably be expected to have a Material Adverse Effect. Since the date of
such financial statements, there has been no material adverse change in the financial condition,
operations or business of Borrower or Maryland Loan Guarantor from that set forth in said financial
statements.
4.1.13
Condemnation
. No Taking is pending or, to Borrowers knowledge, is contemplated
with respect to all or any portion of the Property. No Taking is pending or, to Borrowers
knowledge, is contemplated for the relocation of roadways providing access to the Property.
4.1.14
Federal Reserve Regulations
. None of the proceeds of the Loan will be used for the
purpose of purchasing or carrying any margin stock as defined in Regulation U, Regulation X or
Regulation T or for the purpose of reducing or retiring any Indebtedness which was originally
incurred to purchase or carry margin stock or for any other purpose which might constitute this
transaction a purpose credit within the meaning of Regulation U or Regulation X. As of the
Closing Date, neither Borrower nor Maryland Loan Guarantor owns any margin stock.
4.1.15
Utilities and Public Access
. Each Individual Property has rights of access to one
or more public ways, either directly or through a recorded easement set forth in, and insured
under, the Title Policy. Each Individual Property is served by water, sewer, sanitary sewer and
storm drain facilities adequate to service the Property for its intended uses. To Borrowers
knowledge, all utilities necessary to the existing use of the Property are located either in the
public right-of-way abutting the Property (which are connected so as to serve the Property without
passing over other property) or in recorded easements serving the Property and such easements are
set forth in and insured by the Title Policy. All roads necessary for the use of the each
Individual Property for its current purposes have been completed and, if necessary, dedicated to
public use.
57
4.1.16
Not a Foreign Person
. Neither Borrower nor Maryland Loan Guarantor is a foreign person within the meaning of
§1445(f)(3) of the Code.
4.1.17
Separate Lots
. Each Individual Property is comprised of one (1) or more contiguous
parcels which constitute a separate tax lot or lots and does not constitute or include a portion of
any other tax lot not a part of such Individual Property.
4.1.18
Subdivision
. The Individual Properties comply in all material respects with all
applicable subdivision laws, ordinances and regulations.
4.1.19
Enforceability
. The Loan Documents are not subject to any existing right of
rescission, set-off, counterclaim or defense by Borrower or Maryland Loan Guarantor, including the
defense of usury, nor would the operation of any of the terms of the Loan Documents, or the
exercise of any right thereunder, render the Loan Documents unenforceable (subject to applicable
bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject as to
enforceability, to general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law)), and neither Borrower nor Maryland Loan Guarantor has asserted any
right of rescission, set-off, counterclaim or defense with respect thereto.
4.1.20
Assessments
. To Borrowers knowledge, there are no pending or proposed special or
other assessments for public improvements or otherwise affecting the Property, nor are there any
contemplated improvements to the Property that may result in such special or other assessments.
4.1.21
Insurance
. Borrower has obtained and, to the extent requested by Lender, has
delivered to Lender evidence of all insurance policies required under this Agreement, reflecting
the insurance coverages, amounts and other requirements set forth in this Agreement. Borrower has
not, and to Borrowers knowledge no Person has, done by act or omission anything which would impair
the coverage of any such policy.
4.1.22
Use of Property
. Each Individual Property is used primarily as a distribution
facility, other than the Individual Property located in Englewood, Colorado, which Individual
Property is used by the Borrower for office purposes.
4.1.23
Certificate of Occupancy; Licenses
. To Borrowers knowledge, all certifications, permits, licenses and approvals, including without
limitation, certificates of completion and occupancy permits required of Borrower (or in the case
of the Maryland Property, the Maryland Loan Guarantor) for the legal use, occupancy and operation
of each Individual Property for its current use as a distribution facility (or, in the case of the
Individual Property located in Englewood, Colorado, an office building) (collectively, the
Licenses
), have been obtained and are in full force and effect. Borrower (or in the case
of the Maryland Property, the Maryland Loan Guarantor) shall keep and maintain all Licenses
necessary for the operation of each Individual Property in accordance with its current use as
aforesaid. To Borrowers knowledge, the use being made of each Individual Property is in
conformity with the certificate of occupancy issued for such Individual Property.
4.1.24
Flood Zone
. None of the Improvements on the Property are located in an area as
identified by the Federal Emergency Management Agency as an area having special flood
58
hazards,
except as identified on the flood certifications delivered to Lender prior to the date hereof, and
Borrower has obtained the insurance required under
Article VI
with respect to any
Improvements located in any such special flood hazards.
4.1.25
Physical Condition
. To Borrowers knowledge and except as expressly disclosed in
the Physical Conditions Reports, the Property, including, without limitation, all buildings,
Improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and
doors, landscaping, irrigation systems and all structural components, are in good condition, order
and repair in all material respects; to Borrowers knowledge and except as expressly disclosed in
the Physical Conditions Reports, there exists no structural or other material defects or damages in
or to the Property, whether latent or otherwise, and neither Borrower nor Maryland Loan Guarantor
has received any written notice from any insurance company or bonding company of any defects or
inadequacies in the Property, or any part thereof, which would adversely affect the insurability of
the same or cause the imposition of extraordinary premiums or charges thereon or of any termination
or threatened termination of any policy of insurance or bond.
4.1.26
Boundaries
. Except as set forth in and insured pursuant to the Title Policy, to
Borrowers knowledge and in reliance on the Surveys, (a) all of the Improvements lie wholly within
the boundaries and building restriction lines of the Land relating to the applicable Individual
Property, (b) no improvements on adjoining properties encroach upon the Land, and (c) no easements
or other encumbrances upon the Land encroach upon any of the Improvements.
4.1.27
Leases and Subleases
. The Property is not subject to any Leases other than the
Master Lease. To Borrowers knowledge, the Property is not subject to any Subleases other than the
Subleases set forth on
Schedule IV
attached hereto. No Person has any possessory interest
in the Property or right to occupy the same except under and pursuant to the provisions of the
Master Lease and the
Subleases. The Master Lease and, to Borrowers knowledge, the current Subleases are in full force
and effect and to Borrowers knowledge, there are no material defaults thereunder by either party
(other than as expressly disclosed on
Schedule IV
or in the estoppel certificates, if any,
delivered to Lender in connection with the closing of the Loan) and there are no conditions that,
with the passage of time or the giving of notice, or both, would constitute material defaults
thereunder. No Master Lease Rent has been paid more than one (1) month in advance of its due date,
except as disclosed in the Master Lease SNDA delivered to Lender in connection with the closing of
the Loan. There has been no prior sale, transfer or assignment, hypothecation or pledge by
Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor) or Master Lessee of
the Master Lease or of the Master Lease Rents received therein, which will be outstanding following
the funding of the Loan, other than those being assigned to Lender concurrently herewith. To
Borrowers knowledge, no Tenant under any Sublease has a right or option pursuant to such Sublease
or otherwise to purchase all or any part of the Property of which the leased premises are a part.
Master Lessee does not have a right or option pursuant to the Master Lease or otherwise to purchase
all or any part of the Property of which the leased premises are a part.
4.1.28
Filing and Recording Taxes
. To Borrowers knowledge, all transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid
59
by
any Person under applicable Legal Requirements currently in effect in connection with the transfer
of the Property to Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor)
have been paid and the granting and recording of the Security Instrument and the UCC financing
statements required to be filed in connection with the Loan. To Borrowers knowledge, all
mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any
Person under applicable Legal Requirements currently in effect in connection with the execution,
delivery, recordation, filing, registration, perfection or enforcement of any of the Loan
Documents, including, without limitation, the Security Instrument, have been paid, and, under
current Legal Requirements, the Security Instrument is enforceable against Borrower (or in the case
of the Maryland Property, the Maryland Loan Guarantor) in accordance with its terms by Lender (or
any subsequent holder thereof) subject only to applicable bankruptcy, insolvency and similar laws
affecting rights of creditors generally, and subject as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or at law.
4.1.29
Single Purpose Entity/Separateness
.
(a) Until the Indebtedness has been paid in full, Borrower and Maryland Loan Guarantor hereby
represent, warrant and covenant that Borrower, Maryland Loan Guarantor and each other SPE Entity
is, shall be, and shall continue to be, a Single Purpose Entity.
(b) To Borrowers knowledge, all of the assumptions made in the Non-Consolidation Opinion,
including, but not limited to, any exhibits attached thereto, are true and correct in all respects
and any assumptions made in any subsequent non-consolidation opinion delivered in connection with
the Loan Documents (an
Additional Non-Consolidation Opinion
), including,
but not limited to, any exhibits attached thereto, will have been and shall be true and
correct in all respects. Each of Borrower Maryland Loan Guarantor has complied and will comply
with all of the assumptions made with respect to it in the Non-Consolidation Opinion. Each of
Borrower and Maryland Loan Guarantor will have complied and will comply with all of the assumptions
made with respect to it in any Additional Non-Consolidation Opinion. Each entity other than
Borrower and Maryland Loan Guarantor with respect to which an assumption shall be made in any
Additional Non-Consolidation Opinion will have complied and will comply with all of the assumptions
made with respect to it in any Additional Non-Consolidation Opinion.
4.1.30
Illegal Activity
. No portion of the Property has been or will be purchased with
proceeds of any illegal activity.
4.1.31
No Change in Facts or Circumstances; Disclosure
. To Borrowers knowledge , all
financial statements submitted by Borrower in connection with the Loan are accurate, complete and
correct in all material respects. All other material written information, reports, certificates
and other documents submitted by Borrower to Lender in connection with the Loan are, to Borrowers
knowledge, accurate, complete and correct in all material respects except as would not have a
Material Adverse Effect. Except with respect to such representations and warranties contained in
this Agreement or in any other Loan Document which are qualified as being made to Borrowers
knowledge, all representations and warranties made by Borrower or Maryland Loan Guarantor in this
Agreement or in any other Loan Document, are accurate, complete and correct in all material
respects except as would not have a Material Adverse Effect.
60
There has been no material adverse
change known to Borrower in any condition, fact, circumstance or event that would make any such
information inaccurate, incomplete or otherwise misleading in any material respect or that
otherwise materially and adversely affects the Property or the business operations or the financial
condition of Borrower or Maryland Loan Guarantor.
4.1.32
Tax Filings
. To the extent required by applicable law, each of Borrower and
Maryland Loan Guarantor has filed (or has obtained effective extensions for filing) all federal,
state and local tax returns required to be filed and has paid or made adequate provision for the
payment of all federal, state and local taxes, charges and assessments payable by Borrower and
Maryland Loan Guarantor.
4.1.33
Solvency/Fraudulent Conveyance
. Neither Borrower nor Maryland Loan Guarantor (a)
has entered into the transaction contemplated by this Agreement or any Loan Document with the
actual intent to hinder, delay, or defraud any creditor and (b) has received reasonably equivalent
value in exchange for its obligations under the Loan Documents. After giving effect to the Loan,
the fair saleable value of Borrowers and Maryland Loan Guarantors assets exceeds and will,
immediately following the making of the Loan, exceed Borrowers and Maryland Loan Guarantors total
liabilities, including, without limitation, subordinated, unliquidated, disputed and contingent
liabilities. The fair saleable value of Borrowers and Maryland Loan Guarantors assets is and
will, immediately following the making of the Loan, be greater than Borrowers and Maryland Loan
Guarantors
probable liabilities, including the maximum amount of its contingent liabilities on its Debts as
such Debts become absolute and matured. Borrowers and Maryland Loan Guarantors assets do not
and, immediately following the making of the Loan will not, constitute unreasonably small capital
to carry out its business as conducted or as proposed to be conducted. Neither Borrower nor
Maryland Loan Guarantor intends to, and does not believe that it will, incur Debt and liabilities
(including contingent liabilities and other commitments) beyond its ability to pay such Debt and
liabilities as they mature (taking into account the timing and amounts of cash to be received by it
and the amounts to be payable on or in respect of its obligations).
4.1.34
Investment Company Act
. Neither Borrower nor Maryland Loan Guarantor is (a) an
investment company or a company Controlled by an investment company, within the meaning of the
Investment Company Act of 1940, as amended, (b) a holding company or a subsidiary company of a
holding company or an affiliate of either a holding company or a subsidiary company within the mean
of the Public Utility Holding Company Act of 1935, as amended or (c) subject to any other federal
or state law or regulation which purports to restrict or regulate its ability to borrow money.
4.1.35
Labor
. No organized work stoppage or labor strike is pending or, to Borrowers
knowledge, threatened by employees and other laborers at the Property. Neither Borrower nor
Maryland Loan Guarantor (i) is involved in or, to Borrowers knowledge, threatened with, any labor
dispute, grievance or litigation relating to labor matters involving any employees and other
laborers at the Property, including, without limitation, violation of any federal, state or local
labor, safety or employment laws (domestic or foreign) and/or charges of unfair labor practices or
discrimination complaints which, if adversely determined, would have a Material Adverse Effect,
(ii) has not engaged in any unfair labor practices within the meaning of the National Labor
Relations Act or the Railway Labor Act or (iii) is not a party to, or bound by,
61
any collective
bargaining agreement or union contract with respect to employees and other laborers at the Property
and no such agreement or contract is currently being negotiated by Borrower or Maryland Loan
Guarantor.
4.1.36
Brokers
. Except for Broker, neither Borrower (or Maryland Loan Guarantor) nor
Lender has dealt with any broker or finder with respect to the transactions contemplated by the
Loan Documents, and neither party has done any acts, had any negotiations or conversations, or made
any agreements or promises which will in any way create or give rise to any obligation or liability
for the payment by either party of any brokerage fee, charge, commission or other compensation to
any Person with respect to the transactions contemplated by the Loan Documents. Each of Borrower
and Maryland Loan Guarantor covenants and agrees that it shall pay as and when due any and all
brokerage fees, charges, commissions or other compensation or reimbursement due to Broker with
respect to the transactions contemplated by the Loan Documents. Borrower, Maryland Loan Guarantor
and Lender shall each indemnify and hold harmless the other from and against any loss, liability,
cost or expense, including any judgments, attorneys fees, or costs of appeal, incurred by the
other party and arising out of or relating to any breach or default by the indemnifying party of
its representations, warranties and/or agreements set forth in this
Section
4.1.36
. The provisions of this
Section 4.1.36
shall survive the expiration and
termination of this Agreement and the payment of the Indebtedness.
4.1.37
No Other Debt
. Neither Borrower nor Maryland Loan Guarantor has borrowed or
received debt financing that has not been heretofore repaid in full, other than the Permitted Debt.
4.1.38
Taxpayer Identification Number
. Borrowers and Maryland Loan Guarantors Federal
taxpayer identification number is as set forth on
Schedule VIII
.
4.1.39
Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws
. (i) None of
the Borrower, Master Lessee, Maryland Loan Guarantor or any Guarantor or any Person who owns any
equity interest in or Controls any of such listed Persons currently is identified on the OFAC List
or otherwise qualifies as a Prohibited Person, and (ii) none of Borrower, Maryland Loan Guarantor
or Guarantor is in violation of any Legal Requirements relating to anti-money laundering or
anti-terrorism, including, without limitation, Legal Requirements related to transacting business
with Prohibited Persons or the requirements of the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56,
and the related regulations issued thereunder, including temporary regulations, all as amended from
time to time. To Borrowers knowledge, no Tenant currently is identified on the OFAC List or
otherwise qualifies as a Prohibited Person, and no Tenant is owned or Controlled by a Prohibited
Person.
4.1.40
Rights of First Refusal or First Offer to Lease or Purchase
. No Person, whether
pursuant to a Lease or a Sublease or otherwise has a right of first refusal, right of first offer
or other right or option pursuant to such Lease or Sublease or otherwise to lease or purchase or to
restrict or impose requirements upon the lease or purchase of all or any part of any Individual
Property.
62
4.2
Survival of Representations
. Borrower and Maryland Loan Guarantor agree that all of
the representations and warranties of Borrower and Maryland Loan Guarantor set forth in
Section
4.1
and elsewhere in this Agreement and in the other Loan Documents shall survive for so long
as any amount remains owing to Lenders under this Agreement or any of the other Loan Documents by
Borrower or Maryland Loan Guarantor (it being understood, however, that except as otherwise
provided in this Agreement or any of the other Loan Documents, such representations and warranties
shall be true and correct only as of the date hereof). All representations, warranties, covenants
and agreements made in this Agreement or in the other Loan Documents by Borrower and Maryland Loan
Guarantor shall be deemed to have been relied upon by Lender notwithstanding any investigation
heretofore or hereafter made by Lender or on its behalf.
4.3
Borrowers or Maryland Loan Guarantors Knowledge
. Wherever in this Agreement a
representation and warranty is made to Borrowers knowledge (and variations thereon used herein,
including an Individual Borrowers knowledge), or to the knowledge of Borrower (and variations
thereon used herein, including to the knowledge of an Individual Borrower, such representation and
warranty shall also be deemed to be limited to Maryland Loan Guarantors, and such knowledge shall
mean the actual (as opposed to constructive or imputed) knowledge of any of the following
individuals after reasonable inquiry under the circumstances of the applicable representation and
warranty: Gary Cummings, Vice President of Real Estate and Doug Goforth, Controller, which Persons
Borrower and Maryland Loan Guarantor hereby represent and warrant are in a position to have
meaningful knowledge with respect to the subject matter of such representations and warranties.
V.
BORROWER AND MARYLAND LOAN GUARANTOR COVENANTS
5.1
Affirmative Covenants
. From the Closing Date and until payment and performance in full
of all obligations of Borrower and Maryland Loan Guarantor under the Loan Documents or the earlier
release of the Liens of the Security Instrument encumbering the Property (and all related
obligations) in accordance with the terms of this Agreement and the other Loan Documents, each of
Borrower and Maryland Loan Guarantor hereby covenants and agrees with Lenders that:
5.1.1
Performance by Borrower and Maryland Loan Guarantor
. Each of Borrower and Maryland
Loan Guarantor shall in a timely manner observe, perform and fulfill each and every covenant, term
and provision of each Loan Document executed and delivered by, or applicable to, it, and shall not
enter into or otherwise suffer or permit any amendment, waiver, supplement, termination or other
modification of any Loan Document executed and delivered by, or applicable to, it, as applicable,
without the prior written consent of Lender.
5.1.2
Existence; Compliance with Legal Requirements; Insurance
. Subject to Borrowers (or
in the case of the Maryland Property, Maryland Loan Guarantors) right of contest pursuant to
Section 7.3
, Borrower (or in the case of the Maryland Property, Maryland Loan Guarantors)
shall at all times comply and cause Master Lessee and the Property to be in compliance with all
Legal Requirements applicable to Borrower, Maryland Loan Guarantor, Master Lessee and/or the
Property and/or the uses permitted upon the Property. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantors) shall do or cause to be done all
63
things necessary to preserve,
renew and keep in full force and effect its existence, rights, licenses, permits and franchises
necessary to comply with all Legal Requirements applicable to it and the Property. There shall
never be committed by Borrower or Maryland Loan Guarantor, and neither Borrower nor Maryland Loan
Guarantor shall knowingly permit Master Lessee to commit any act or omission affording the federal
government or any state or local government the right of forfeiture as against the Property or any
part thereof or any monies paid in performance of Borrowers or Maryland Loan Guarantors
obligations under any of the Loan Documents. Each of Borrower and Maryland Loan Guarantor hereby
covenants and agrees
not to commit, knowingly permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantors) shall at
all times maintain, preserve and protect all franchises and trade names, and preserve all the
remainder of its property used in the conduct of its business and shall keep or cause the Master
Lessee to keep the Property in good working order and repair, and from time to time make, or cause
to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements
thereto, all as more fully set forth in the Security Instrument. Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantors) shall keep the Property insured at all times to such
extent and against such risks, and maintain liability and such other insurance, as is more fully
set forth in this Agreement.
5.1.3
Litigation
. Borrower shall give prompt written notice to Lender of any litigation or
governmental proceedings pending or, to Borrowers knowledge, threatened in writing against
Borrower, Maryland Loan Guarantor, Master Lessee or the Property which, if determined adversely,
would reasonably be expected to have a Material Adverse Effect.
5.1.4
Single Purpose Entity
. Each of Borrower, Maryland Loan Guarantor and each other SPE
Entity has been since the date of its formation and shall remain a Single Purpose Entity.
(a) Each of Borrower, Maryland Loan Guarantor and each other SPE Entity shall continue to
maintain its own deposit account or accounts, separate from those of any Affiliate, with commercial
banking institutions. None of the funds of Borrower, Maryland Loan Guarantor or any other SPE
Entity will be diverted to any other Person or for other than business uses of Borrower, Maryland
Loan Guarantor or such other SPE Entity, as applicable, nor will such funds be commingled with the
funds of any other Affiliate.
(b) To the extent that Borrower, Maryland Loan Guarantor or any other SPE Entity shares the
same officers or other employees as any of Borrower, Maryland Loan Guarantor, any other SPE Entity
or their Affiliates, the salaries of and the expenses related to providing benefits to such
officers and other employees shall be fairly allocated among such entities, and each such entity
shall bear its fair share of the salary and benefit costs associated with all such common officers
and employees.
(c) To the extent that Borrower, Maryland Loan Guarantor or any other SPE Entity jointly
contracts with any of Borrower, Maryland Loan Guarantor, any other SPE Entity or any of their
Affiliates, as applicable, to do business with vendors or service providers or to share overhead
expenses, the costs incurred in so doing shall be allocated fairly among such entities, and each
such entity shall bear its fair share of such costs. To the extent that any of Borrower,
64
Maryland
Loan Guarantor or any other SPE Entity contracts or does business with vendors or service providers
where the goods and services provided are partially for the benefit of any other Person, the costs
incurred in so doing shall be fairly allocated to or among such entities for whose benefit the
goods and services are provided, and each such entity shall bear its fair share of such costs. All
material transactions between (or among) Borrower, Maryland Loan
Guarantor or each other SPE Entity and any of their respective Affiliates shall be conducted
on substantially the same terms (or on more favorable terms for Borrower, Maryland Loan Guarantor
or any other SPE Entity, as applicable) as would be conducted with third parties.
(d) To the extent that Borrower, Maryland Loan Guarantor any other SPE Entity or any of their
Affiliates have offices in the same location, there shall be a fair and appropriate allocation of
overhead costs among them, and each such entity shall bear its fair share of such expenses.
(e) Borrower, Maryland Loan Guarantor and each other SPE Entity shall conduct its affairs
strictly in accordance with its organizational documents, and observe all necessary, appropriate
and customary corporate, limited liability company or partnership formalities, as applicable,
including, but not limited to, obtaining any and all members consents necessary to authorize
actions taken or to be taken, and maintaining accurate and separate books, records and accounts,
including, without limitation, payroll and intercompany transaction accounts.
(f) In addition, Borrower, Maryland Loan Guarantor and each other SPE Entity shall each: (i)
maintain books and records separate from those of any other Person; (ii) maintain its assets in
such a manner that it is not more costly or difficult to segregate, identify or ascertain such
assets; (iii) hold regular meetings of its board of directors, shareholders, partners or members,
as the case may be, and observe all other corporate, partnership or limited liability company, as
the case may be, formalities; (iv) hold itself out to creditors and the public as a legal entity
separate and distinct from any other entity; (v) prepare separate tax returns and financial
statements, or if part of a consolidated group, it will be shown as a separate member of such
group; (vi) transact all business with its Affiliates on an arms-length basis and pursuant to
enforceable agreements; (vii) conduct business in its name and use separate stationery, invoices
and checks; (viii) not commingle its assets or funds with those of any other Person; and (ix) not
assume, guarantee or pay the debts or obligations of any other Person.
5.1.5
Consents
. If Borrower, Maryland Loan Guarantor or any other SPE Entity is a
corporation, the board of directors of such Person may not take any action requiring the unanimous
affirmative vote of one hundred percent (100%) of the members of the board of directors unless all
of the directors, including the Independent Directors, shall have participated in such vote. If
Borrower, Maryland Loan Guarantor or any other SPE Entity is a limited liability company, (a) if
such Person is managed by a board of managers, the board of managers of such Person may not take
any action requiring the unanimous affirmative vote of one hundred percent (100%) of the members of
the board of managers unless all of the managers, including the Independent Managers, shall have
participated in such vote, (b) if such Person is not managed by a board of managers, the members of
such Person may not take any action requiring the affirmative vote of one hundred percent (100%) of
the members of such Person unless all of the members, including the Independent Members, shall have
participated in such vote. An affirmative vote of one hundred percent (100%) of the directors,
board of managers or members,
65
as applicable, of Borrower, Maryland Loan Guarantor and any other SPE
Entity shall be required to (i) file a bankruptcy or insolvency petition or otherwise institute
insolvency proceedings or to authorize Borrower, Maryland Loan Guarantor or any other SPE Entity to
do so or (ii) file an involuntary bankruptcy petition against
any Affiliate. Furthermore, the formation documents of Borrower, Maryland Loan Guarantor and each
other SPE Entity shall expressly state that for so long as the Loan is outstanding, none of
Borrower, Maryland Loan Guarantor nor any other SPE Entity shall be permitted to (i) dissolve,
liquidate, consolidate, merge or sell all or substantially all of the assets of Borrower, Maryland
Loan Guarantor or any other SPE Entity, other than in connection with the repayment of the Loan or
(ii) engage in any other business activity and such restrictions shall not be modified or violated
for so long as the Loan is outstanding.
5.1.6
Access to Property
. Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) shall permit agents, representatives and employees of Lender and the Rating Agencies to
inspect the Property or any part thereof during normal business hours on Business Days upon
reasonable advance notice.
5.1.7
Notice of Default
. Borrower and Maryland Loan Guarantor shall promptly advise Lender
(a) of any event or condition that has or is likely to have a Material Adverse Effect and (b) of
the occurrence of any Default or Event of Default of which Borrower has knowledge.
5.1.8
Cooperate in Legal Proceedings
. Borrower and Maryland Loan Guarantor shall cooperate
fully with Lender with respect to any proceedings before any court, board or other Governmental
Authority which would reasonably be expected to affect, in any material adverse way, the rights of
Lender hereunder or under any of the other Loan Documents and, in connection therewith, permit
Lender, at its election, to participate in any such proceedings which may have a Material Adverse
Effect.
5.1.9
Insurance
.
(a) Borrower and Maryland Loan Guarantor shall cooperate with Lender in obtaining for Lender
the benefits of any Proceeds lawfully or equitably payable in connection with any Individual
Property and Lender shall be reimbursed for any actual out-of-pocket expenses incurred in
connection therewith (including reasonable attorneys fees and disbursements) out of such Proceeds.
(b) Borrower and Maryland Loan Guarantor shall comply with all Insurance Requirements and
shall not bring or keep or permit to be brought or kept any article upon any of the Property or
cause or permit any condition to exist thereon which would be prohibited by any Insurance
Requirement, or would invalidate insurance coverage required hereunder to be maintained by Borrower
or Maryland Loan Guarantor on or with respect to any part of the Property pursuant to
Section
6.1
.
5.1.10
Further Assurances; Severance of Notes and Mezzanine Loan
.
(a) Borrower and Maryland Loan Guarantor shall execute and acknowledge (or cause to be
executed and acknowledged) and deliver to Lender all documents, and take all actions, reasonably
required by Lender from time to time to confirm the rights created or now or hereafter intended to
be created under this Agreement and the other Loan Documents and any
66
security interest created or
purported to be created thereunder, to protect and further the validity, priority and
enforceability of this Agreement and the other Loan Documents, to subject to the Loan Documents any
property of Borrower (or in the case of the Maryland Property, Maryland Loan Guarantors) intended
by the terms of any one or more of the Loan Documents to be encumbered by the Loan Documents, or
otherwise carry out the purposes of the Loan Documents and the transactions contemplated
thereunder.
(b) Borrower and Maryland Loan Guarantor each agrees that it shall, upon request, reasonably
cooperate with Lender in connection with any request by Lender to sever one or more of the Notes
into two (2) or more separate substitute notes in an aggregate principal amount equal to the
Principal Amount and to reapportion the Loan among such separate substitute notes, including,
without limitation, by executing and delivering to Lender new substitute notes to replace the
applicable Note or Notes, amendments to or replacements of existing Loan Documents to reflect such
severance and/or Opinions of Counsel with respect to such substitute notes, amendments and/or
replacements. Borrower shall bear no costs or expenses in connection with any such severance or
bifurcation, except that Borrower shall be responsible for one hundred percent (100%) of the costs
and expenses of Borrower and Lender with respect to the initial bifurcation of the Loan and the
related transfer of a portion of the Loan to Wachovia. Any such substitute notes may have varying
principal amounts and economic terms,
provided
,
however
, that (i) Borrower shall
not be required to incur, suffer or accept (except to a de minimis extent)) any greater obligations
or liabilities than as currently set forth in the Loan Documents, (ii) the maturity date of any
such substitute notes shall be the same as the scheduled Maturity Date of the Notes immediately
prior to the issuance of such substitute notes, (iii) the weighted average Interest Rate (as
defined in the Notes) for the term of the substitute notes shall not exceed the Interest Rate (as
defined in the Notes) under the Notes, whether before, after or during an Event of Default (it
being acknowledged that the Default Rate shall be applicable during the continuance of an Event of
Default); and (iv) the economics of the Loan, taken as a whole, shall not change in a manner which
is adverse to Borrower. Subject to the foregoing clauses (i) through (iv), upon the occurrence and
during the continuance of an Event of Default, Lender may apply payment of all sums due under such
substitute notes in such order and priority as Lender shall elect in its sole and absolute
discretion.
(c) Borrower, Maryland Loan Guarantor and Lender agree that, subject to the conditions set
forth in the last sentence of this
Section 5.1.11(c)
, Lender may, at any time, elect to
reduce the mortgage debt on the Property and re-size the principal amount of the Loan and allocate
the reduced portion to one or more mezzanine loans (a
Mezzanine Loan
). In connection
with the foregoing, at Lenders sole cost and expense, Borrower and Maryland Loan Guarantor each
agrees to (i) create one or more (as applicable) new single purpose entities which will become the
mezzanine borrower (a
Mezzanine Borrower
) and cause the Mezzanine Borrower and any
members of Mezzanine Borrower to enter into the documents deemed reasonably necessary by Lender to
evidence the Mezzanine Loan, including, without limitation, a
promissory note and a mezzanine loan agreement and such other documents reasonably required by
Lender which are in a form and substance reasonably satisfactory to Borrower and substantially
similar to the Loan Documents (collectively, the
Mezzanine Loan Documents
); (ii) cause
Mezzanine Borrower to pledge the equity interests in Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor); and (iii) execute and deliver such documents and other
agreements reasonably required by Lender to reduce the amount of the mortgage debt
67
encumbering the
Property, including, without limitation, an amendment to the Notes and the other Loan Documents, an
endorsement to the Title Policy reflecting a change in the insured amount thereunder, legal
opinions and other customary loan documentation. Borrowers and Maryland Loan Guarantors
obligations under the foregoing provisions of this
Section 5.1.11(c)
are subject to the
condition that (A) Borrower shall bear no costs or expenses in connection therewith; (B) Borrower
shall not be required to incur, suffer or accept (except to a de minimis extent)) any greater
obligations or liabilities than as currently set forth in the Loan Documents; (C) the maturity date
of any mezzanine notes shall be the same as the scheduled Maturity Date of the Notes immediately
prior to the issuance of such mezzanine notes; (D) the weighted average Interest Rate (as defined
in the Notes) for the term of the mezzanine notes shall not exceed the Interest Rate (as defined in
the Notes) under the Notes, whether before, after or during an Event of Default (it being
acknowledged that the Default Rate shall be applicable during the continuance of an Event of
Default); and (E) the economics of the Loan, taken as a whole, shall not change in a manner which
is adverse to Borrower.
5.1.11
Mortgage Taxes
. Borrower and Maryland Loan Guarantor shall pay all taxes, charges,
filing, registration and recording fees, excises and levies payable with respect to the Notes or
the Liens created or secured by the Loan Documents, other than income, franchise and doing business
taxes imposed on Lender. In the case of the Maryland Property, such taxes shall include any
recordation taxes imposed by Title 12 of the Tax-Property Article of the Maryland Annotated Code
(1994 Replacement Volume), as amended from time to time, including any fines, penalties, interest
or similar charges arising from the non-payment thereof, which may now or hereafter become due and
payable in connection with the Security Instrument and shall be paid by Borrower and Maryland Loan
Guarantor as and when the same becomes due and payable, whether at the time of the recording of the
Security Instrument or any later date. Subject to the terms and provisions of Section 18.1 of
this Agreement, Borrower and Maryland Loan Guarantor shall, jointly and severally, indemnify,
defend and hold harmless Lender from and against any and all claims, charges, actions, suits,
proceedings, law suits, obligations, losses, damages, expenses or liabilities, including attorneys
fees, suffered or incurred by Lender as a result of any assessment by any applicable governmental
authority with respect to recording fees and expenses. This indemnity shall be a continuing one
and shall be unaffected by repayment of the Loan.
5.1.12
Business and Operations
. Borrower and Maryland Loan Guarantor shall each continue
to engage in the businesses presently conducted by it as and to the extent the same are necessary
for the ownership, maintenance, management and operation of the Property. Borrower (or in the case
of the Maryland Property, Maryland Loan Guarantor) shall qualify to do business and shall remain in
good standing under the laws of the State in which the Property is located to the extent required
for the ownership, maintenance, management and operation of the Property.
5.1.13
Title to the Property
. Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantors) shall warrant and defend (a) its title to each Individual Property and every part
thereof, subject only to Liens permitted hereunder (including Permitted Encumbrances) and (b) the
validity and priority of the Liens of the Security Instrument, the Assignment of Leases and this
Agreement on the Property, subject only to Liens permitted hereunder (including Permitted
Encumbrances), in each case against the claims of all Persons whomsoever. Borrower and Maryland
Loan Guarantor shall reimburse Lender for any losses, costs, damages or expenses
68
(including
reasonable attorneys fees and court costs) incurred by Lender if an interest in any Individual
Property, other than as permitted hereunder, is claimed by another Person.
5.1.14
Costs of Enforcement
. In the event (a) that this Agreement or the Security
Instrument is foreclosed upon in whole or in part or that this Agreement or the Security Instrument
is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of the
foreclosure of any security agreement prior to or subsequent to this Agreement encumbering any
Individual Property in which proceeding Lender is made a party, or a mortgage prior to or
subsequent to the Security Instrument encumbering any Individual Property in which proceeding
Lender is made a party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of Borrower, Maryland Loan Guarantor or any of their respective constituent
Persons or an assignment by Borrower, Maryland Loan Guarantor or any of their respective
constituent Persons for the benefit of its creditors, Borrower and Maryland Loan Guarantor, and
their successors or assigns, shall be chargeable with and agrees to pay all costs of collection and
defense, including reasonable attorneys fees and costs, incurred by Lender or Borrower in
connection therewith and in connection with any appellate proceeding or post-judgment action
involved therein, together with all required service or use taxes.
5.1.15
Estoppel Statements
.
(a) Borrower and Maryland Loan Guarantor shall, from time to time, upon thirty (30) days
prior written request from Lender, execute, acknowledge and deliver to the Lender, an Officers
Certificate, stating that this Agreement and the other Loan Documents are unmodified and in full
force and effect (or, if there have been modifications, that this Agreement and the other Loan
Documents are in full force and effect as modified and setting forth such modifications), stating
the amount of accrued and unpaid interest and the outstanding principal amount of the Notes and
containing such other information with respect to the Borrower, Maryland Loan Guarantor, the
Property and the Loan as Lender shall reasonably request. The estoppel certificate shall also
state that to Borrowers knowledge either that no Event of Default exists hereunder or, if any
Event of Default shall exist hereunder, specify such Event Default and the steps being taken to
cure such Event of Default.
(b) Lender shall, from time to time, upon thirty (30) days prior written request from
Borrower, execute, acknowledge and deliver to the Borrower, a certificate executed by an officer of
Lender, stating that this Agreement and the other Loan Documents are unmodified and in full force
and effect (or, if there have been modifications, that this Agreement and the other Loan Documents
are in full force and effect as modified and setting forth such modifications), stating the amount
of accrued and paid interest and the outstanding balance of the Notes, and such other information
as Borrower may reasonably request. The estoppel certificate shall also state whether Lender has
issued any notice of an Event of Default.
5.1.16
Loan Proceeds
. Borrower shall use the proceeds of the Loan received by it on the
Closing Date only for the purposes set forth in
Section 2.1.4
.
5.1.17
No Joint Assessment
. Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) shall not suffer, permit or initiate the joint assessment of the Property, (a) with
any other real property constituting a tax lot separate from the Property and (b) which
69
constitutes
real property with any portion of the Property which may be deemed to constitute personal property,
or any other procedure whereby the lien of any taxes which may be levied against such personal
property shall be assessed or levied or charged to such real property portion of the Property.
5.1.18
No Further Encumbrances
. Borrower shall do, or cause to be done, all things
necessary to keep and protect the Property and all portions thereof unencumbered from any Liens,
easements or agreements granting rights in or restricting the use or development of the Property,
except for (a) Permitted Encumbrances, (b) Liens permitted pursuant to the Loan Documents, (c)
Liens for Impositions prior to the imposition of any interest, charges or expenses for the
non-payment thereof and (d) any Liens permitted pursuant to the Leases.
5.1.19
Leases and Material Subleases
. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall, promptly after receipt thereof, deliver to Lender a copy of any
notice received with respect to the Leases or any Material Subleases claiming that Borrower,
Maryland Loan Guarantor or Master Lessee, as applicable, is in default in the performance or
observance of any of the material terms, covenants or conditions of any of the Leases or Material
Subleases.
5.1.20
Management
.
(a) Borrower(or in the case of the Maryland Property, Maryland Loan Guarantor) shall, and
shall use commercially reasonable efforts to cause any third party property manager under any
management agreement executed pursuant to
Section 5.2.14
to, (i) promptly perform and/or
observe all of the covenants and agreements required to be performed and observed by it
under such management agreement and do all things necessary to preserve and to keep unimpaired
its material rights thereunder; (ii) promptly notify Lender of any event of default under such
management agreement of which it is aware; (iii) promptly deliver to Lender a copy of each
financial statement, capital expenditures plan, property improvement plan and any other notice,
report and estimate received by it under such management agreement; and (iv) enforce in a
commercially reasonable manner the performance and observance of all of the covenants and
agreements required to be performed and/or observed by it under such management agreement.
(b) If (a) an Event of Default has occurred and is continuing or (b) the third party property
manager under any management agreement executed pursuant to
Section 5.2.14
shall become
insolvent, Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall, at
the request of Lender, terminate or cause Master Lessee to terminate such management agreement and
replace the third party property manager thereunder with a third party property manager approved by
Lender in accordance with
Section 5.2.14
.
5.1.21
Master Lease
.
(a) Each Individual Property shall at all times be leased directly and exclusively by the
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) to Master Lessee under
the Master Lease (and not to any other Person under the Master Lease or any replacement Master
Lease). Master Lessee shall be permitted to enter into Leases subject to and in accordance with
Section 8.7
.
70
(b) The Master Lease shall have a term extending at least through 2021.
(c) The Master Lease shall require Master Lessee to make payments of Master Lease Rent.
Pursuant to the Master Lease and the Master Lease Rent Payment Direction Letter (i) all Master
Lease Scheduled Rent shall at all times during the term of the Loan be made directly to the Holding
Account (the Master Lessee Base Rent portion of which shall be payable on a monthly basis), (ii)
other than during any Low LCR Cash Sweep Period or any period during which an Event of Default is
continuing, all Master Lease Variable Additional Rent shall be paid directly by Master Lessee to
the Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) or to the party
entitled to such sums, as specified in the Master Lease, and (iii) during any Low LCR Cash Sweep
Period or any period during which an Event of Default is continuing, all Master Lease Variable
Additional Rent shall be paid directly to the Holding Account, and none of the foregoing payments
of Master Lease Rent under clauses (i) and (iii) above shall be deemed made until such payment has
been deposited into the Holding Account. Lender shall pay all Master Lease Variable Additional
Rent directly to the Person having the right to receive such funds on or prior to the respective
due dates therefore, and shall promptly notify Borrower of such payments in accordance with the
terms of
Section 3.1.6
.
(d) The Master Lease shall require the Master Lessee to prepare applicable reports of expenses
and revenue in accordance with
Article XI
and to submit copies to Lender.
(e) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall not
terminate the Master Lease or consent to the termination of the Master Lease without
the prior written consent of Lender. The Master Lease shall provide for the release of an
Individual Property therefrom only in connection with (i) a casualty or Taking in the circumstances
set forth therein, (ii) the payment of amounts with respect to such Individual Property as required
by, and the release of such Individual Property from the lien of the Security Instrument pursuant
to, the provisions of
Section 2.3
, (iii) the release of an Outparcel, or (iv) the
substitution of an Individual Property with a Replaced Property in accordance with the provisions
of
Section 2.3
. Upon any such release of an Individual Property from the Master Lease, the
Master Lease will be amended to reduce the Master Lease Rent by the amount allocable to such
Individual Property (as specified in the Master Lease).
(f) Except for the Assignment of Leases and the Permitted Encumbrances, Borrower (or in the
case of the Maryland Property, Maryland Loan Guarantor) shall not shall pledge, transfer, sublease,
assign, mortgage, encumber, or allow to be encumbered its interest in the Master Lease or any
interest therein without the prior written consent of the Lender. The Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) shall not permit and shall not consent to any
assignment by the Master Lessee of its interest in the Master Lease or its rights and interests
thereunder without the prior written consent of the Lender.
(g) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall not,
without the prior written consent of Lender, (i) renew (other than pursuant to renewal rights
expressly set forth in the Master Lease), extend, release any Individual Property from (except in
connection with a Property Release, the release of an Outparcel, a Defeasance or a Substitution in
compliance with
Sections 2.3.4
,
2.3.5
,
2.3.6
and
2.3.7
hereof),
terminate, waive any provisions of, reduce rents or other sums payable under, accept a surrender
of, or shorten the
71
term of, the Master Lease, (ii) waive any provisions of the Master Lease or
(iii) amend or modify any provision of the Master Lease in any material respect except as permitted
in the last sentence of
Section 5.1.21(e)
.
(h) The Master Lease shall be subject and subordinate to the Loan pursuant to the Master Lease
SNDA. Each of Borrower and Maryland Loan Guarantor agrees to terminate the Master Lease and/or
exercise and enforce its remedies under the Master Lease as directed by Lender following an event
of default under the Master Lease, as more particularly set forth in Section 2(B) of the Master
Lease SNDA.
(i) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall (i)
promptly perform and/or observe all of the covenants and agreements required to be performed and
observed by it under the Master Lease and do all things necessary to preserve and to keep
unimpaired its material rights thereunder; (ii) promptly notify Lender of default by Master Lessee
under the Master Lease; (iii) promptly deliver to Lender a copy of each financial statement,
capital expenditures plan, property improvement plan and any other notice, report and estimate
received by it under the Master Lease; and (iv) enforce in a commercially reasonable manner the
performance and observance of all of the covenants and agreements required to be performed and/or
observed by the Master Lessee under the Master Lease.
5.2
Negative Covenants
. From the Closing Date until payment and performance in full of all obligations of Borrower and
Maryland Loan Guarantor under the Loan Documents or the earlier release of the Lien of this
Agreement or the Security Instrument in accordance with the terms of this Agreement and the other
Loan Documents, Borrower and Maryland Loan Guarantor each covenants and agrees with Lender that it
will not do, directly or indirectly, any of the following:
5.2.1
Incur Debt
. Incur, create or assume any Debt other than Permitted Debt or Transfer
or lease all or any part of the Property or any interest therein, except as permitted in the Loan
Documents;
5.2.2
Encumbrances
. Incur, create or assume or permit the incurrence, creation or
assumption of any Debt secured by an interest in Borrower, Maryland Loan Guarantor, Master Lessee
or any other SPE Entity;
5.2.3
Engage in Different Business
. Engage, directly or indirectly, in any business other
than that of entering into this Agreement and the other Loan Documents to which Borrower and/or
Maryland Loan Guarantor is a party and the use, ownership, management, leasing, renovation,
financing, development, operation and maintenance of the Property and activities related thereto;
5.2.4
Make Advances
. Make advances or make loans to any Person, or hold any investments,
except as expressly permitted pursuant to the terms of this Agreement or any other Loan Document;
5.2.5
Partition
. Partition any Individual Property;
5.2.6
Commingle
. Commingle its assets with the assets of any of its Affiliates;
72
5.2.7
Guarantee Obligations
. Guarantee any obligations of any Person;
5.2.8
Transfer Assets
. Transfer any asset other than in the ordinary course of business or
Transfer any interest in the Property except, in each case, as may be permitted hereby or in the
other Loan Documents;
5.2.9
Amend Organizational Documents
. Amend or modify any of its organizational documents
without Lenders consent, other than in connection with any Transfer permitted pursuant to
Article VIII
or to reflect any change in
capital accounts, contributions, distributions, allocations or other provisions that do not and
could not reasonably be expected to have a Material Adverse Effect and
provided
that
Borrower, Maryland Loan Guarantor and each other SPE Entity each remain a Single Purpose Entity;
5.2.10
Dissolve
. Dissolve, wind-up, terminate, liquidate, merge with or consolidate into
another Person, except as expressly permitted pursuant to this Agreement;
5.2.11
Bankruptcy
. (i) File a bankruptcy or insolvency petition or otherwise institute
insolvency proceedings, (ii) dissolve, liquidate, consolidate, merge or sell all or substantially
all of Borrowers or Maryland Loan Guarantors assets other than in connection with the repayment
of the Loan, (iii) engage in any other business activity or (iv) file or solicit the filing of an
involuntary bankruptcy petition against Borrower, Maryland Loan Guarantor, Master Lessee, Guarantor
or any SPE Entity without obtaining the prior consent of all of the directors, members or managers,
as applicable, of the applicable Person;
5.2.12
ERISA
. Engage in any activity that would subject Borrower or Maryland Loan
Guarantor to regulation under ERISA or qualify it as an employee benefit plan (within the meaning
of Section 3(3) of ERISA) to which ERISA applies and Borrowers and Maryland Loan Guarantors
assets do not and will not constitute plan assets within the meaning of 29 C.F.R. Section
2510.3-101;
5.2.13
Distributions
. From and after the occurrence and during the continuance of an Event
of Default, make any distributions to or for the benefit of any of its partners or members or its
or their Affiliates;
5.2.14
Management
.
(a) The Property is currently self-managed by Master Lessee. None of Borrower, Maryland Loan
Guarantor nor Master Lessee shall, without the prior written consent of Lender, which consent shall
not be unreasonably withheld or delayed (
provided
, if a Securitization shall have occurred,
Borrower obtains a Rating Agency Confirmation with respect to such action) retain a third party
property manager to manage the Property. Upon the retention of a third party property manager in
accordance with the foregoing sentence, Lender, and if a Securitization shall have occurred, the
Rating Agencies, shall have the right to approve any management agreement with such third party
property manager (which approval by Lender shall not be unreasonably withheld or delayed). Without
limitation to the foregoing, none of Borrower, Maryland Loan Guarantor nor Master Lessee shall
enter into a management agreement for the Property unless Lender shall have received a managers
consent and subordination of management agreement, executed by Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor),
73
Master Lessee and the applicable third party property
manager, in form and substance reasonably
acceptable to Lender, pursuant to which the management agreement is collaterally assigned to
Lender and the third party property manager agrees that its rights under the management agreement
are subject and subordinate to the Loan;
(b) With respect to any management agreement executed by Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) or Master Lessee in accordance with
Section
5.2.14(a)
, neither Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
nor Master Lessee shall, without the prior written consent of Lender, which consent shall not be
unreasonably withheld or delayed (
provided
, if a Securitization shall have occurred,
Borrower obtains a Rating Agency Confirmation with respect to such action): (i) materially modify,
change, supplement, alter or amend such management agreement or waive or release any of its right
and remedies under such management agreement or (ii) replace the third party property manager under
such management agreement with any Person which has not been approved in accordance with
Section 5.2.14(a)
;
5.2.15
Reserved
.
5.2.16
Modify Account Agreement
. Without the prior consent of Lender, which shall not be
unreasonably withheld, delayed or conditioned (and if a Securitization shall have occurred, a
Rating Agency Confirmation obtained by Borrower), execute any modification to the Account
Agreement;
5.2.17
Zoning Reclassification
. Without the prior written consent of Lender, (a) initiate
or consent to any zoning reclassification of any portion of the Property, (b) seek any variance
under any existing zoning ordinance that could result in the use of the Property becoming a
non-conforming use under any zoning ordinance or any other applicable land use law, rule or
regulation, or (c) allow any portion of the Property to be used in any manner that could result in
the use of the Property becoming a non-conforming use under any zoning ordinance or any other
applicable land use law, rule or regulation;
5.2.18
Change of Principal Place of Business
. Change its principal place of business and
chief executive office set forth on the first page of this Agreement without first giving Lender
thirty (30) days prior written notice (but in any event, within the period required pursuant to
the UCC) and there shall have been taken such action, reasonably satisfactory to Lender, as may be
necessary to maintain fully the effect, perfection and priority of the security interest of Lender
hereunder in the Account Collateral at all times;
5.2.19
Debt Cancellation
. Cancel or otherwise forgive or release any material claim or
debt owed to it by any Person, except for adequate consideration or in the ordinary course of its
business and except for termination of a Lease as permitted by
Section 8.7
;
5.2.20
Misapplication of Funds
. Distribute any revenue from the Property or any Proceeds
in violation of the provisions of this Agreement, fail to remit amounts to the Holding Account as
required by
Section 3.1
, misappropriate any security deposit or portion thereof or apply
the proceeds of the Loan in violation of
Section 2.1.4
; or
74
5.2.21
Single Purpose Entity
. Fail to be a Single Purpose Entity or take or suffer any
action or inaction the result of which would be to cause it or any SPE Entity to cease to be a
Single Purpose Entity.
VI.
INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
6.1
Insurance Coverage Requirements
. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall, at its sole cost and expense, keep in full force and effect, or
cause the Master Lessee to keep in full force and effect, insurance coverage of the types and
minimum limits as follows during the term of this Agreement (it being understood that to the extent
that Master Lessee maintains any such coverage on the Closing Date, but thereafter fails to
maintain such coverage, Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
shall obtain such coverage at its sole cost and expense):
6.1.1
Property Insurance
. Insurance against loss customarily included under so called All
Risk policies including flood, windstorm, earthquake, vandalism, and malicious mischief, boiler
and machinery, and such other insurable hazards as, under good insurance practices, from time to
time are insured against for other property and buildings similar to the Improvements and Building
Equipment in nature, use, location, height, and type of construction. Such insurance policy shall
also insure the additional expense of demolition and if any of the Improvements or the use of the
Property shall at any time constitute legal non-conforming structures or uses, provide coverage for
contingent liability from Operation of Building Laws, Demolition Costs and Increased Cost of
Construction Endorsements and containing an Ordinance or Law Coverage or Enforcement
endorsement. The amount of such All Risk insurance shall be not less than one hundred percent
(100%) of the replacement cost value of the Improvements and the Building Equipment. Each such
insurance policy shall contain an agreed amount (coinsurance waiver) and replacement cost value
endorsement and shall cover, without limitation, all tenant improvements and betterments which
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) is required to insure
in accordance with any Lease. Lender shall be named Loss Payee on a Standard Mortgagee
Endorsement and be provided not less than thirty (30) days advance notice of change in coverage,
cancellation or non-renewal.
6.1.2
Liability Insurance
. Commercial General Liability insurance and Umbrella
Liability coverage for Personal Injury, Bodily Injury including Accident or Death and
Property Damage, providing in
combination no less than $50,000,000 per occurrence and in the annual aggregate and Automobile
insurance including coverage for Owned (if any), Hired and Non Owned vehicles. The policies
described in this paragraph shall cover Contractual Liability including elevators, escalators and
independent contractors (covering Borrowers (or in the case of the Maryland Property, Maryland
Loan Guarantor) obligation to indemnify Lender as required under this Agreement and Products and
Completed Operations Liability coverage). All liability insurance shall name Lender as
Additional Insured either on a specific endorsement or under a blanket endorsement reasonably
satisfactory to Lender.
6.1.3
Workers Compensation Insurance
. Workers compensation insurance as required by law.
75
6.1.4
Business Interruption Insurance
. Supplemental Business Interruption
insurance in an amount equal to twelve (12) months actual rental loss and with a coverage limit of
$7,000,000. Each such insurance policy shall contain an agreed amount (coinsurance waiver). In
the event business interruption insurance is no longer available at commercially reasonable rates,
then in lieu of obtaining business interruption insurance, Borrower may elect to deposit into the
LCR Deterioration Reserve Account Cash or Cash Equivalents or deliver to Lender a Letter of Credit,
in either case in an amount equal to (i) $7,000,000 or (ii) the difference between $7,000,000 and
the amount of business interruption insurance below $7,000,000 (the
Business Interruption
Reserve Amount
). The Business Interruption Reserve Amount shall be applied by Lender against
Master Lease Rent Shortfalls resulting from a casualty or a Taking. During the continuance of an
Event of Default, Lender shall have the right to draw all undrawn sums on any such Letter of Credit
and deposit same into the LCR Deterioration Reserve Account for application as set forth in the
preceding sentence, and, notwithstanding anything to the contrary contained herein, the Business
Interruption Reserve Amount shall not be applied against the Obligations during the continuance of
an Event of Default. In the event of a Master Lease Rent Shortfall resulting from a casualty or
Taking, Lender shall have the right to draw an amount equal to such Master Lease Rent Shortfall on
any such Letter of Credit and deposit same into the LCR Deterioration Reserve Account. Upon
written request of Borrower, Lender agrees to reasonably modify the requirements herein in the
event business interruption insurance is no longer commercially available.
6.1.5
Builders All-Risk Insurance
. During any period of repair or restoration, builders
All-Risk insurance in an amount equal to not less than the full insurable value of the Property
against such risks (including so called All Risk perils coverage and collapse of the Improvements
to agreed limits as Lender may request, in form and substance acceptable to Lender).
6.1.6
Boiler and Machinery Insurance
. Comprehensive boiler and machinery insurance
(without exclusion for explosion) covering all mechanical and electrical equipment against physical
damage, rent loss and improvements loss and covering, without limitation, all tenant improvements
and betterments that Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) or
Master Lessee is required to
insure pursuant to the Master Lease or any Lease on a replacement cost basis. The minimum amount
of limits to be provided shall be $10,000,000 per accident.
6.1.7
Flood Insurance and Earthquake Insurance
.
(a) If any portion of the Improvements is located within an area designated as flood Zone A
or V or a special flood hazard area (as defined under the regulations adopted under the National
Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973), flood insurance shall
be provided, in an amount not less than the maximum limit of coverage available under the Federal
Flood Insurance plan with respect to the Property. Lender reserves the right to require flood
insurance in excess of that available under the Federal Flood Insurance plan in commercially
reasonable amounts. Lender agrees to (a) reasonably modify the requirements herein if such
insurance is not commercially available and (b) accept any reduced coverage requirements acceptable
to the Rating Agencies as evidenced by a Rating Agency Confirmation.
76
(b) If earthquake insurance limits and aggregates are shared with locations other than the
Property insured on the same policy as any of the Property or, if the amount of Earthquake
insurance provided is less than one hundred percent (100%) of the insurable values of the Property
and business interruption coverage combined, then the amount of earthquake coverage shall be based
on a Probable Maximum Loss Study for the applicable Individual Property, which must be conducted
by a firm satisfactory to Lender, which for purposes of this Agreement, Lender agrees that Aon Risk
Services, Borrowers property insurance broker is satisfactory. The results of the Probable
Maximum Loss Study, on an Individual Property basis and for all locations insured in the same
earthquake insurance policies, shall be used to determine the amount of earthquake coverage to be
provided by Borrower. The amount of insurance shall be determined by adding the total expected
damage to all Improvements subject to a single earthquake event in a given region together along
with the expected loss of Rents and other income from the applicable Individual Property. The
total amount of earthquake insurance in limits shall be the sum of expected property damage,
reconstruction cost and annual business income expected loss. Should the available aggregate
limits of earthquake insurance be eroded by losses so that the remaining limits available to pay
losses are less than forty percent (40%) of the required limits, Borrower shall purchase additional
coverage to restore the available limit and aggregate limit to not less than eighty percent (80%)
of the required amount of insurance. If the earthquake insurance and associated aggregate limits
are shared among other locations the risks associated with other locations also insured in the same
policy shall be taken into consideration in determining the amount of insurance to be provided
herein. Lender agrees to (a) reasonably modify the requirements herein if such insurance is not
commercially available and (b) accept any reduced coverage requirements acceptable to the Rating
Agencies as evidenced by a Rating Agency Confirmation.
6.1.8
Terrorism Insurance
. To the extent commercially available, Borrower (or in the case
of the Maryland Property, Maryland Loan Guarantor) shall be required to carry insurance with
respect to the Improvements and Building Equipment covering acts of sabotage or acts by terrorist
groups or individuals
(
Terrorism Insurance
) throughout the Loan term consistent with the amounts of insurance
required by
Sections 6.1.1
and
6.1.5
in an amount not less than $25,000,000, and
having a deductible commensurate with the deductibles under the insurance required by
Sections
6.1.1
and
6.1.5
, or following a Securitization, such lesser coverage amount or such
greater deductible, on a blanket basis, that is acceptable to the Rating Agencies as evidenced by a
Rating Agency Confirmation. Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) agrees that if any property insurance policy covering any Individual Property provides
for any exclusions of coverage for acts of terrorism, then a separate Terrorism Insurance policy in
the coverage amount required under this section and in form and substance reasonably acceptable to
Lender will be obtained by the Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) for such Property to the extent such Terrorism Insurance is commercially available.
Lender agrees that Terrorism Insurance coverage may be provided under a Blanket Policy that is
reasonably acceptable to Lender. Notwithstanding anything to the contrary in this
Section
6.1.8
, Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall not be
obligated to maintain Terrorism Insurance in an amount more than that which can be purchased for a
sum equal to $150,000 or such lesser amount of coverage acceptable to the Rating Agencies as
evidenced by a Rating Agency Confirmation.
77
6.1.9
Storage Tank System Third Party Liability and Cleanup Insurance
. Storage Tank
System Third Party Liability and Cleanup Insurance providing coverage amounts not less than
$2,000,000 per occurrence and $4,000,000 in the annual aggregate.
6.1.10
Other Insurance
. At Lenders reasonable request, such other insurance (including,
without limitation, to the extent requested by Lender, windstorm insurance) with respect to the
Property against loss or damage of the kinds from time to time customarily insured against and in
such amounts as are generally required by institutional lenders on loans of similar amounts and
secured by properties comparable to, and in the general vicinity of, the Property.
6.1.11
Ratings of Insurers
. Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) shall maintain the insurance coverage described in
Section 6.1.1
through
Section 6.1.10
above, in all cases, with one or more domestic primary insurers reasonably
acceptable to Lender, having both (x) claims-paying-ability and financial strength ratings by S&P
of not less than A and its equivalent by the other Rating Agencies and (y) an Alfred M. Best
Company, Inc. rating of A- or better and a financial size category of not less than X. All
insurers providing insurance required by this Agreement shall be authorized to issue insurance in
the State.
6.1.12
Form of Insurance Policies; Endorsements
. All insurance policies shall be in such
form and with such endorsements as are specified herein (and Lender shall have the right to
reasonably approve deductibles and loss payees on the Property secured under this Agreement). A
certificate of insurance with respect to all of the above-mentioned insurance policies has been
delivered to Lender and copies of all such policies shall be delivered to Lender when the same are
available upon request by Lender and shall be
held by Lender. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall
name Lender as an additional insured, shall provide that all Proceeds (except with respect to
Proceeds of general liability, automobile liability, excess liability and workers compensation
insurance) be payable to Lender as and to the extent set forth in Section 6.2, and shall contain:
(i) a standard non-contributory mortgagee endorsement or its equivalent relating, inter alia, to
recovery by Lender notwithstanding the negligent or willful acts or omissions of Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor); (ii) a waiver of subrogation
endorsement in favor of Lender; (iii) an endorsement providing for a deductible per loss of an
amount not more than that which is customarily maintained by prudent owners of properties with a
standard of operation and maintenance comparable to and in the general vicinity of the Property,
but in no event in excess of an amount reasonably acceptable to Lender (and Lender hereby agrees
and acknowledges that in no event shall Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) be required to maintain a deductible in an amount less than $1,000,000 with respect
to any insurance policy obtained pursuant to Section 6.1.1); and (iv) a provision that such
policies shall not be canceled, terminated or expire without at least thirty (30) days prior
written notice to Lender, in each instance.
6.1.13
Evidence of Insurance
. Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) shall deliver to Lender annually, prior to the expiration of the insurance policies
required hereunder, evidence that the insurance policies required pursuant to this Section 6.1 are
maintained with insurers who comply with the terms of Section 6.1.10, setting forth a schedule
describing all premiums required to be paid to maintain the policies of
78
insurance required under
this Section 6.1, and stating that Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) has or will pay such premiums when due. Evidence of insurance with respect to all
replacement policies shall be delivered to Lender prior to the expiration date of any of the
insurance policies required to be maintained hereunder. If Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) fails to maintain and deliver to Lender the evidence of
insurance required by this Agreement, Lender may procure such insurance, and all costs thereof (and
interest thereon at the Default Rate) shall be added to the Indebtedness. Lender shall not, by the
fact of approving, disapproving, accepting, preventing, obtaining or failing to obtain any
insurance, incur any liability for or with respect to the amount of insurance carried, the form or
legal sufficiency of insurance contracts, solvency of insurance companies, or payment or defense of
lawsuits, and Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) hereby
expressly assumes full responsibility therefor and all liability, if any, with respect to such
matters.
6.1.14
Separate Insurance
. Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) shall not take out separate insurance contributing in the event of loss with such
required to be maintained pursuant to this
Section 6.1
unless such insurance complies with
this
Section 6.1
.
6.1.15
Blanket Policies
. The insurance coverage required under this
Section 6.1
may be effected under a blanket
policy or policies covering the Property and other properties and assets not constituting a part of
the Property (a
Blanket Policy
),
provided
that any blanket insurance policy shall
cover each Individual Property in an amount of coverage that is not less than the amounts required
pursuant to this
Section 6.1
and which shall in any case comply in all other respects with
the requirements of this
Section 6.1
.
6.2
Condemnation and Insurance Proceeds
.
6.2.1
Notification
. Borrower shall promptly notify Lender in writing upon obtaining
knowledge of (i) the institution of any proceedings relating to any Taking (whether material or
immaterial) of, or (ii) the occurrence of any casualty, damage or injury to, the Property or any
portion thereof, the restoration of which is estimated by Borrower in good faith to cost more than
the Casualty Amount as to any Individual Property. In addition, each such notice shall set forth
such good faith estimate of the cost of repairing or restoring such casualty, damage, injury or
Taking in reasonable detail if the same is then available and, if not, as soon thereafter as it can
reasonably be provided. Borrower shall promptly provide Lender with copies of any material
documentation available to Borrower and requested by Lender relating to any Taking.
6.2.2
Proceeds
. In the event of any Taking of or any casualty or other damage or injury to
the Property, Borrowers (or in the case of the Maryland Property, Maryland Loan Guarantor) right,
title and interest in and to all compensation, awards, proceeds, damages, claims, insurance
recoveries, causes and rights of action (whether accrued prior to or after the date hereof) and
payments which Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) may
receive or become entitled with respect to the Property or any part thereof other than payments
received in connection with any liability or business interruption insurance and other than any of
the foregoing with respect to the Excluded Personal Property (collectively,
79
Proceeds
) in
connection with any such Taking of, or casualty or other damage or injury to, the Property or any
part thereof are hereby assigned by Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) to Lender and, except as otherwise herein provided, shall be paid to the Lender.
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall, in good faith
and in a commercially reasonable manner, file and prosecute the adjustment, compromise or
settlement of any claim for Proceeds and, subject to Borrowers (or in the case of the Maryland
Property, Maryland Loan Guarantors) right to receive the direct payment of any Proceeds as herein
provided, will cause the same to be paid directly to Lender to be held and applied in accordance
with the provisions of this Agreement. Except upon the occurrence and during the continuance of an
Event of Default, Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) may
settle any insurance claim with respect to Proceeds which does not exceed the Casualty Amount as to
any Individual Property. Whether or not an Event of Default shall have occurred and be continuing,
Lender shall have the right to approve, such approval not to be unreasonably withheld, any
settlement which might result in any Proceeds in
excess of the Casualty Amount as to any Individual Property and Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) shall deliver or cause to be delivered to Lender all
instruments reasonably requested by Lender to permit such approval. Borrower shall pay all
reasonable out-of-pocket costs, fees and expenses reasonably incurred by Lender (including all
reasonable attorneys fees and expenses, the reasonable fees of insurance experts and adjusters and
reasonable costs incurred in any litigation or arbitration), and interest thereon at the Default
Rate to the extent not paid within ten (10) Business Days after delivery of a request for
reimbursement by Lender, in connection with the settlement of any claim for Proceeds and seeking
and obtaining of any payment on account thereof in accordance with the foregoing provisions. If
any Proceeds are received by Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) and may be retained by Borrower or Maryland Loan Guarantor pursuant to this
Section
6.2
, such Proceeds shall, until the completion of the related Work, be held in trust for Lender
and shall be segregated from other funds of Borrower and Maryland Loan Guarantor to be used to pay
for the cost of the Work in accordance with the terms hereof, and in the event such Proceeds exceed
the Casualty Amount as to any Individual Property, such Proceeds shall be forthwith paid directly
to and held by Lender in the Proceeds Reserve Account in trust for Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor), in each case to be applied or disbursed in accordance
with this
Section 6.2
. Notwithstanding anything to the contrary set forth in this
Agreement, however, and excluding situations requiring prepayment of the Notes, to the extent any
Proceeds (either singly or when aggregated with all other then unapplied Proceeds with respect to
the Property) do not exceed the Casualty Amount as to any Individual Property, such Proceeds are to
be paid directly to Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) to
be applied to restoration of the Property in accordance with the terms hereof (except that Proceeds
paid in respect of the insurance described in
Section 6.1.4
shall be deposited directly to
the Holding Account as revenue of the Property).
6.2.3
Lender to Take Proceeds
. If (i) the Proceeds with respect to any
particular Individual Property shall equal or exceed the Allocated Loan Amount for such Individual
Property at a time when the aggregate Allocated Loan Amounts of Individual Properties then
currently impacted by a casualty, damage, destruction or Taking is greater than 10% of the
Principal Amount, (ii) an Event of Default shall have occurred and be continuing, (iii) a Total
Loss with respect to any Individual Property shall have occurred, (iv) the Work is not capable of
80
being completed before the earlier to occur of the date which is six (6) months prior to the
earlier of the Maturity Date and the date on which the business interruption insurance carried with
respect to such Individual Property on which the business interruption insurance carried with
respect to such Individual Property shall expire (the
Cut-Off Date
), unless on or prior
to the Cut-Off Date (A) Borrower shall deliver to the Lender and there shall remain in effect a
binding written offer, subject only to customary conditions, of an Approved Bank or such other
financial institution or investment bank duly authorized to originate loans secured by real
property located in the State and reasonably satisfactory to Lender for a loan from such Approved
Bank or such other financial institution or investment bank to the Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) in a principal amount of not less than the then
outstanding Allocated Loan Amount for such Individual Property and which shall, in the Lenders
reasonable judgment, enable the Borrower (or in the
case of the Maryland Property, Maryland Loan Guarantor) to refinance the Allocated Loan Amount
with respect to such Individual Property at or prior to the Maturity Date and (B) if a
Securitization shall have occurred, Borrower shall obtain a Rating Agency Confirmation, (v) the
Individual Property is not capable of being restored substantially to its condition prior to such
Taking or casualty and such incapacity shall have a Material Adverse Effect, (vi) the Master Lessee
or Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall exercise any
termination right under the Master Lease or (vii) Lender determines that, upon the completion of
the restoration, the gross cash flow and the net cash flow of the Property will not be restored to
a level sufficient to cover all carrying costs and operating expenses of the Property, including,
without limitation, debt service on the Notes at a coverage ratio (after deducting all required
reserves, as required by Lender, from net operating income) of at least 1.0 to 1.0, which coverage
ratio shall be determined by Lender in its reasonable discretion; then in any such case, all
Proceeds shall be paid over to Lender (if not paid directly to Lender) for application as set forth
in clause (b) below. Any Proceeds remaining after reimbursement of Lenders or its agents costs
and expenses incurred in connection with recovery of any such Proceeds (including, without
limitation, administrative costs and inspection fees) shall, except to the extent required under
the provisions hereof to be applied for restoration, be paid to the Holding Account to be applied
by Lender to prepay the Notes to the extent of the Release Price for such Individual Property in
accordance with the provisions hereof (without the imposition of any Yield Maintenance Premium),
with the balance, if any, to be paid to the Borrowers Account. If the Proceeds applied by Lender
pursuant to the preceding sentence equal or exceed the Release Price for such Individual Property,
Borrower shall be entitled to obtain a Property Release subject to and in accordance with
Section 2.3.4
. If the Proceeds so applied by Lender pursuant to clauses (a)(iii), (v) or
(vi) above are not sufficient to pay the Release Price with respect to an Individual Property in
full, Borrower shall be entitled to prepay the remainder of the Release Price and obtain a Property
Release with respect to the Individual Property for which the Proceeds were received in accordance
with
Section 2.3.4
without the imposition of any Yield Maintenance Premium and otherwise in
accordance with the terms and provisions of the Note.
6.2.4
Borrower to Restore
.
(a) Subject to Borrowers rights pursuant to
Section 2.3.4
to cause the Property to be
released from the Lien of the Security Instrument, and provided that the Proceeds, if any, shall be
made available to Borrower by Lender, Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) shall (whether or not such Proceeds shall be sufficient) promptly
81
after the
occurrence of any damage or destruction to all or any portion of the Property or a Taking of a
portion of the Property, commence and diligently prosecute, or cause to be commenced and diligently
prosecuted, to completion, subject to Excusable Delays, the repair, restoration and rebuilding of
the Property (in the case of a partial Taking, to the extent it is capable of being restored) so
damaged, destroyed or remaining after such Taking in full compliance with all material Legal
Requirements and free and clear of any and all Liens except Permitted Encumbrances (such repair,
restoration and rebuilding are collectively referred to herein as the
Work
). The plans
and specifications shall require that the Work be done in a
workmanlike manner at least equivalent to the quality and character prior to the damage or
destruction (
provided
,
however
, that in the case of a partial Taking, the Property
restoration shall be done to the extent reasonably practicable after taking into account the
consequences of such partial Taking), so that upon completion thereof, the Property shall be at
least equal in value and general utility to the Property prior to the damage or destruction; it
being understood, however, that Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) shall not be obligated to restore the Property to the precise condition of the Property
prior to any partial Taking of, or casualty or other damage or injury to, the Property, if the Work
actually performed, if any, or failed to be performed, shall have no Material Adverse Effect on the
value of the Property from the value that the Property would have had if the same had been restored
to its condition immediately prior to such Taking or casualty.
(b) If Proceeds are not required to be applied toward payment of the Indebtedness pursuant to
the terms hereof, then Lender shall make the Proceeds which it is holding pursuant to the terms
hereof (after payment of any expenses incurred by Lender in connection with the collection thereof
plus interest thereon at the Default Rate from the date advanced through the date of reimbursement)
available to Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) for
payment or reimbursement of Borrowers (or in the case of the Maryland Property, Maryland Loan
Guarantors) or the applicable Tenants expenses incurred with respect to the Work, upon the terms
and subject to the conditions set forth in paragraphs (i), (ii) and (iii) below and in
Section
6.2.5
:
(i) at the time of loss or damage or at any time thereafter while Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) is holding any portion of the Proceeds, there shall
be no Event of Default;
(ii) if, at any time, the estimated cost of the Work (as estimated by the Independent
Architect referred to in clause (iii) below) shall exceed the Proceeds (a
Deficiency
) and
for so long as such Deficiency shall exist, Lender shall not be required to make any Proceeds
disbursement to Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) unless
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) (within a reasonable
period of time after receipt of such estimate), at its election, either deposits with or delivers
to Lender (A) Cash and Cash Equivalents or a Letter or Letters of Credit in an amount equal to the
estimated cost of the Work less the Proceeds available, or (B) such other evidence of Borrowers
(or in the case of the Maryland Property, Maryland Loan Guarantors) ability to meet such excess
costs and which is satisfactory to Lender and the Rating Agencies;
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(iii) Each of Lender and the Independent Architect shall have reasonably approved the plans
and specifications for the Work and any change orders in connection with such plans and
specifications; and
(iv) Lender shall, within a reasonable period of time prior to request for initial
disbursement, be furnished with an estimate of the cost of the Work accompanied by an Independent
Architects certification as to such costs and appropriate plans and specifications for the Work.
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall restore all
Improvements such that when they are fully restored and/or repaired, such
Improvements and their contemplated use fully comply with all applicable Legal Requirements
including zoning, environmental and building laws, codes, ordinances and regulations.
6.2.5
Disbursement of Proceeds
.
(a) Disbursements of the Proceeds in Cash or Cash Equivalents to Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) hereunder shall be made from time to time (but not
more frequently than once in any month) by Lender but only for so long as no Event of Default shall
have occurred and be continuing, as the Work progresses upon receipt by Lender of (i) an Officers
Certificate dated not more than ten (10) Business Days prior to the application for such payment,
requesting such payment or reimbursement and describing the Work performed that is the subject of
such request, the parties that performed such Work and the actual cost thereof, and also certifying
that such Work and materials are or, upon disbursement of the payment requested to the parties
entitled thereto, will be free and clear of Liens other than Permitted Encumbrances, (ii) evidence
reasonably satisfactory to Lender that (A) all materials installed and work and labor performed in
connection with such Work have been paid for in full and (B) there exists no notices of pendency,
stop orders, mechanics liens or notices of intention to file same (unless the same is required by
the applicable State law as a condition to the payment of a contractor) or any liens or
encumbrances of any nature whatsoever on the Property arising out of the Work which have not been
either fully bonded to the satisfaction of Lender or discharged of record or in the alternative,
fully insured to the satisfaction of Lender by the Title Company and (iii) an Independent
Architects certificate certifying performance of the Work together with an estimate of the cost to
complete the Work. No payment made prior to the final completion of the Work, as certified by the
Architect, except for payment made to contractors or subcontractors whose Work shall have been
fully completed and from which final lien waivers have been received, shall exceed ninety percent
(90%) of the value of the Work performed and materials furnished and incorporated into the
Improvements from time to time, and at all times the undisbursed balance of said Proceeds together
with all amounts deposited, bonded, guaranteed or otherwise provided for pursuant to
Section
6.2.4(b)
above, shall be at least sufficient to pay for the estimated cost of completion of the
Work; final payment of all Proceeds remaining with Lender shall be made upon receipt by Lender of a
certification by an Independent Architect, as to the completion of the Work substantially in
accordance with the submitted plans and specifications, final lien releases, and the filing of a
notice of completion and the expiration of the period provided under the law of the applicable
State for the filing of mechanics and materialmens liens which are entitled to priority as to
other creditors, encumbrances and purchasers, as certified pursuant to an Officers Certificate,
and delivery of a certificate of occupancy with respect to the Work, or, if not applicable, an
Officers Certificate to the effect that a certificate of occupancy is not required.
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(b) If, after the Work is completed in accordance with the provisions hereof and Lender
receives evidence that all costs of completion have been paid, there are excess Proceeds, such
excess Proceeds shall be paid over to Lender for application in accordance with
Section
6.2.3(b)
.
VII.
IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS
7.1
Borrower or Maryland Loan Guarantor to Pay Impositions and Other Charges
. Borrower (or
in the case of the Maryland Property, Maryland Loan Guarantor) shall pay all Impositions now or
hereafter levied or assessed or imposed against the Property or any part thereof prior to the
imposition of any interest, charges or expenses for the non-payment thereof and shall pay all Other
Charges on or before the date they are due. Borrower shall deliver to Lender annually, no later
than fifteen (15) Business Days after the first day of each fiscal year of Borrower, and shall
update as new information is received, a schedule describing all Impositions, payable or estimated
to be payable during such fiscal year attributable to or affecting the Property or Borrower.
Subject to Borrowers right of contest set forth in
Section 7.3
, as set forth in the next
two (2) sentences and
provided
that there are sufficient funds available in the Tax Reserve
Account, Lender, on behalf of Borrower, shall pay all Impositions and Other Charges which are
attributable to or affect the Property or Borrower, prior to the date such Impositions or Other
Charges shall become delinquent or late charges may be imposed thereon, directly to the applicable
taxing authority with respect thereto. Lender shall, or Lender shall direct the Cash Management
Bank to, pay to the taxing authority such amounts to the extent funds in the Tax Reserve Account
are sufficient to pay such Impositions. Nothing contained in this Agreement or the Security
Instrument shall be construed to require Borrower or Maryland Loan Guarantor to pay any tax,
assessment, levy or charge imposed on Lender in the nature of a franchise, capital levy, estate,
inheritance, succession, income or net revenue tax.
7.2
No Liens
. Subject to its right of contest set forth in
Section 7.3
, Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) shall at all times keep, or
cause to be kept, the Property free from all Liens (other than Permitted Encumbrances) and shall
pay when due and payable (or bond over) all claims and demands of mechanics, materialmen, laborers
and others which, if unpaid, might result in or permit the creation of a Lien on the Property or
any portion thereof and shall in any event cause the prompt, full and unconditional discharge of
all Liens imposed on or against the Property or any portion thereof within forty-five (45) days
after receiving written notice of the filing (whether from Lender, the lienor or any other Person)
thereof. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall do or
cause to be done, at the sole cost of Borrower, everything reasonably necessary to fully preserve
the first priority of the Lien of the Security Instrument against the Property, subject to the
Permitted Encumbrances. Upon the occurrence and during the continuance of an Event of Default with
respect to its Obligations as set forth in this
Article VII
, Lender may (but shall not be
obligated to) make such payment or discharge such Lien, and Borrower shall reimburse Lender on
demand for all such advances pursuant to
Section 19.12
(together with interest thereon at
the Default Rate).
7.3
Contest
. Nothing contained herein shall be deemed to require Borrower to pay, or cause
to be paid, any Imposition or to satisfy any Lien, or to comply with any Legal Requirement or
Insurance Requirement, so long as Borrower (or in the case of the Maryland Property,
84
Maryland Loan
Guarantor) is in good faith, and by proper legal proceedings, where appropriate, diligently
contesting the validity, amount or application thereof,
provided
that in each case, at the
time of the commencement of any such action or proceeding, and during the pendency of such action
or proceeding (i) no Event of Default shall exist and be continuing hereunder, (ii) Borrower shall
keep Lender informed of the status of such contest at reasonable intervals, (iii) if Borrower is
not providing security as provided in clause (vi) below, adequate reserves with respect thereto are
maintained on Borrowers books in accordance with GAAP or in the Tax Reserve Account or Insurance
Reserve Account, as applicable, (iv) either such contest operates to suspend collection or
enforcement as the case may be, of the contested Imposition, Lien or Legal Requirement and such
contest is maintained and prosecuted continuously and with diligence or the Imposition or Lien is
bonded, (v) in the case of any Insurance Requirement, the failure of Borrower to comply therewith
shall not impair the validity of any insurance required to be maintained by Borrower under
Section 6.1
or the right to full payment of any claims thereunder, and (vi) in the case of
Impositions and Liens which are not bonded in excess of an amount equal to five percent (5%) of the
Allocated Loan Amount of the applicable Individual Property, or Two Million Dollars ($2,000,000) in
the aggregate, during such contest, Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor), shall deposit with or deliver to Lender either Cash and Cash Equivalents or a
Letter of Credit or Letters of Credit in an amount equal to one hundred twenty-five percent (125%)
of (A) the amount of Borrowers (or in the case of the Maryland Property, Maryland Loan
Guarantors) obligations being contested plus (B) any additional interest, charge, or penalty
arising from such contest. Notwithstanding the foregoing, the creation of any such reserves or the
furnishing of any bond or other security, Borrower and Maryland Loan Guarantor promptly shall
comply with any contested Legal Requirement or Insurance Requirement or shall pay any contested
Imposition or Lien, and compliance therewith or payment thereof shall not be deferred, if, at any
time the Property or any portion thereof shall be, in Lenders reasonable judgment, in imminent
danger of being forfeited or lost or Lender is likely to be subject to criminal damages as a result
thereof. If such action or proceeding is terminated or discontinued adversely to Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor), Borrower or Maryland Loan Guarantor,
as applicable, shall deliver to Lender reasonable evidence of its compliance with such contested
Imposition, Lien, Legal Requirements or Insurance Requirements, as the case may be.
VIII.
TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS
8.1
General Restriction on Transfers and Debt
. Unless such action is permitted by the
provisions of this Agreement, Borrower and Maryland Loan Guarantor shall not, and shall not permit
Master Lessee or any Person holding any direct or indirect ownership interest in Borrower, Maryland
Loan Guarantor, Master Lessee, or any other SPE Entity or the Property to, except with the prior
written consent of Lender and, if a Securitization has occurred, delivery of a Rating Agency
Confirmation, (i) Transfer all or any part of the Property, (ii) incur any Debt, other than
Permitted Debt or Permitted Encumbrances, or (iii) permit any Transfer (directly or indirectly) of
any direct or indirect interest in Borrower, Maryland Loan Guarantor, Master Lessee, any SPE Entity
or Guarantor. Notwithstanding the forgoing or anything to the contrary contained in this
Agreement, the provisions of this
Article VIII
shall not apply to or prohibit and the
Lenders consent shall not be required for (A) the transfer of shares of stock of any Person (other
than Borrower or Maryland Loan Guarantor) that is an Affiliate of Borrower, Maryland Loan
Guarantor, Master Lessee, any SPE Entity or
Guarantor (1) in connection with an initial
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public offering of such Persons stock
provided
that Borrower complies with
Section 8.4(b)(i)
,
(ii)
,
(iv)
,
(v)
and
(vi)
and/or (2) if such Person is publicly traded, in ordinary course trading on a
nationally recognized stock exchange, or (B) the incurrence of Debt by Master Lessee and the grant
of a Lien by Master Lessee on the Excluded Personal Property as security for such Debt.
8.2
Sale of Building Equipment
. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) may Transfer or dispose of Building Equipment which is being replaced or
which is no longer necessary in connection with the operation of the Property free from the Lien of
the Security Instrument
provided
that such Transfer or disposal will not have a Material
Adverse Effect on the value of the Property taken as a whole, will not materially impair the
utility of the Property and will not result in a reduction or abatement of, or right of offset
against, the Rents payable under the Master Lease or any Lease, in either case as a result thereof,
and
provided
,
further
, that any new Building Equipment acquired by Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) (and not so disposed of) shall be
subject to the Lien of the Security Instrument. Lender shall, from time to time, upon receipt of
an Officers Certificate requesting the same and confirming satisfaction of the conditions set
forth above, execute a written instrument in form reasonably satisfactory to Lender to confirm that
such Building Equipment which is to be, or has been, sold or disposed of is free from the Lien of
the Security Instrument.
8.3
Immaterial Transfers and Easements, etc.
Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) may, without the consent of Lender, (i) make immaterial
Transfers of portions of the Property to Governmental Authorities for dedication or public use
(subject to the provisions of
Section 6.2
) or, portions of the Property to third parties
for the purpose of erecting and operating additional structures whose use is integrated with the
use of the Property, and (ii) grant easements, restrictions, covenants, reservations and rights of
way in the ordinary course of business for access, water and sewer lines, telephone and telegraph
lines, electric lines or other utilities or for other similar purposes,
provided
that no
such Transfer, conveyance or encumbrance set forth in the foregoing clauses (i) and (ii) shall
materially impair the utility and operation of the Property or have a Material Adverse Effect on
the value of the Property taken as a whole. In connection with any Transfer permitted pursuant to
this
Section 8.3
, Lender shall execute and deliver any instrument reasonably necessary or
appropriate, in the case of the Transfers referred to in clause (i) above, to release the portion
of the Property affected by such Taking or such Transfer from the Lien of the Security Instrument
or, in the case of clause (ii) above, to subordinate the Lien of the Security Instrument to such
easements, restrictions, covenants, reservations and rights of way or other similar grants upon
receipt by Lender of:
(a) thirty (30) days prior written notice thereof;
(b) a copy of the instrument or instruments of Transfer;
(c) an Officers Certificate stating (x) with respect to any Transfer, the consideration, if
any, being paid for the Transfer and (y) that such Transfer does not materially impair the utility
and operation of the Property, materially reduce the value of the Property or have a Material
Adverse Effect; and
86
(d) reimbursement of all of Lenders costs and expenses incurred in connection with such
Transfer.
8.4
Permitted Equity Transfers
.
(a) A Transfer (but not a pledge or encumbrance) of a direct or indirect beneficial interest
in Borrower (other than Maryland Borrower), Maryland Loan Guarantor or Master Lessee that is
otherwise prohibited hereunder shall nevertheless be permitted without Lenders prior written
consent if (i) Lender receives thirty (30) days prior written notice thereof, (ii) immediately
prior to such Transfer, no Event of Default shall have occurred and be continuing, (iii) no more
than forty-nine percent (49%) of the direct or indirect ownership interests in Borrower is being
Transferred (in the aggregate of all such Transfers), (iv) the transferee is not a Disqualified
Transferee, (v) Guarantor retains Control of Borrower and Master Lessee and continues to own,
directly and/or indirectly, at least fifty-one percent (51%) of the equity interests in Borrower
and Master Lessee, (vi) Master Lessee remains the master lessee under the Master Lease, (vii)
Borrower retains control and management of the Property, (viii) Maryland Loan Guarantor retains a
100% direct ownership interest in Maryland Borrower and (ix) if the Loan has been restructured to
include any mezzanine component, such Transfer is not a Transfer of the direct interests in
Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor) which serve as
collateral for such mezzanine loan.
(b) A Transfer of more than forty-nine percent (49%) of the direct or indirect ownership
interests in Borrower (other than direct interests in Maryland Borrower) and Maryland Loan
Guarantor (in the aggregate of all such Transfers) shall be permitted only upon the satisfaction of
the following conditions precedent: (i) Lender shall have received thirty (30) days prior written
notice thereof, (ii) immediately prior to such Transfer, no Event of Default shall have occurred
and be continuing, (iii) Lender shall have granted its prior written consent to such Transfer, such
consent not to be unreasonably withheld, conditioned or delayed, (iv) the proposed transferee shall
be a Qualified Transferee, (v) Borrower shall have reimbursed to Lender all of Lenders costs and
expenses incurred in connection with such Transfer, (vi) Borrower shall have delivered to Lender
and, if a Securitization has occurred, the Rating Agencies, (A) a Non-consolidation Opinion and (B)
such other documentation and Opinions of Counsel as shall be reasonably required by Lender and/or,
if a Securitization has occurred, required by the Rating Agencies, in each case in a form
reasonably satisfactory to Lender and, if the Loan is the subject of a Securitization, in a form
satisfactory to the Rating Agencies in their sole discretion and (vii) prior to such Transfer,
Borrower shall have obtained a Rating Agency Confirmation.
(c) Notwithstanding anything herein to the contrary, the following Transfers shall not require
the prior written consent of Lender or a Rating Agency Confirmation (but shall be subject to the
remaining conditions of
Section 8.4(a)
and
(b)
as applicable other than
8(a)(v)
,
8(b)(iii)
,
(iv)
and
(vii)
all of which shall not be
required: a Transfer (but not a pledge or
encumbrance) of any direct or indirect interests in Guarantor, Master Lessee, Maryland Loan
Guarantor or Borrower (other than direct interests in Maryland Borrower), provided that subsequent
to any such Transfer, more than fifty-one percent (51%) percent of Borrower, Maryland Loan
Guarantor and Master Lessee is directly or indirectly owned by one or more investment funds,
limited liability companies, limited partnerships or general partnerships with
87
combined committed
capital of at least $1,000,000,000 where one or more Permitted Fund Managers acts as the general
partners, managing members or fund managers and at least fifty-one percent (51%) of the equity
interests in each of such Permitted Fund Managers are owned, directly or indirectly, by Guarantor,
Cerberus Capital Management, L.P. or a wholly owned subsidiary of Guarantor or Cerberus Capital
Management, L.P.
8.5
Deliveries to Lender
. Not less than thirty (30) days prior to the closing of any
transaction subject to the provisions of this
Article VIII
, Borrower shall deliver to
Lender an Officers Certificate describing the proposed transaction and stating that such
transaction is permitted by this
Article VIII
, together with any appraisal or other
documents upon which such Officers Certificate is based. In addition, Borrower shall provide
Lender with copies of executed deeds or other similar closing documents within ten (10) Business
Days after such closing.
8.6
Loan Assumption
. Upon receipt of Lenders prior written consent (which consent shall
not be unreasonably withheld or delayed) and
provided
no Event of Default is then
continuing, Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) may sell,
assign, convey or transfer (but not mortgage, hypothecate or otherwise encumber or grant a security
interest in) legal or equitable title to all (but not fewer than all) of the Individual Properties
only if, after giving effect to the proposed transaction, the Individual Properties will be owned
by one or more Single Purpose Entities wholly owned by a Qualified Transferee which shall have
executed and delivered to Lender an assumption agreement in form and substance acceptable to
Lender. Any such assumption of the Loan shall be conditioned upon, among other things, (i) the
delivery of financial information, including, without limitation, audited financial statements, for
such purchaser and the direct and indirect owners such purchaser, (ii) the delivery of evidence
that the purchaser is a Single Purpose Entity and is a Qualified Transferee, (iii) the execution
and delivery of all documentation reasonably requested by Lender or, if applicable, requested by
the Rating Agencies, (iv) the delivery of Opinions of Counsel requested by Lender or the Rating
Agencies, including, without limitation, a Non-Consolidation Opinion with respect to the purchaser
and other entities identified by Lender and Opinions of Counsel with respect to the valid
formation, due authority and good standing of the purchaser and any additional pledgors and the
continued enforceability of the Loan Documents and any other matters requested by Lender or, if
applicable, the Rating Agencies, (v) the delivery of an endorsement to the Title Policy in form and
substance acceptable to Lender, insuring the lien of the Security Instrument, as assumed, subject
only to the Permitted Encumbrances, (vi) the payment of (A) all of Lenders fees, costs and
expenses, including, without limitation, reasonable attorneys fees and costs, incurred by Lender
in connection with such assumption, (B) any fees of the Rating Agencies and (C) an assumption fee
in the amount of $200,000 and (vii) if the Loan is the subject of a Securitization, delivery of a
Rating Agency Confirmation with respect to such assumption.
8.7
Leases and Subleases
.
8.7.1
Leasing Conditions
. Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) shall not enter into any Lease without the prior written consent of Lender. During the
continuance of Event of Default, Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) shall not permit Master Lessee to (i) enter into any
88
Sublease (a
New Sublease
)
or (ii) modify any Sublease (including, without limitation, accept a surrender of any portion of
the Property subject to a Sublease (unless otherwise permitted or required by law), allow a
reduction in the term of any Sublease or a reduction in the rent payable under any Sublease, change
any renewal provisions of any Sublease, materially increase the obligations of the landlord or
materially decrease the obligations of any Tenant) or terminate any Sublease unless the Tenant
under such Sublease is in default (any such action referred to in clause (ii) being referred to
herein as a
Sublease Modification
), without the prior written consent of Lender. If no
Event of Default is then continuing, Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) may permit Master Lessee to enter into any New Sublease or execute or effect any
Sublease Modification without Lenders consent (
provided
that, in each case, the terms
thereof are market terms and, unless consented to in writing by Lender (such consent not to be
unreasonably, withheld, conditioned or delayed) the tenant thereunder is a bona fide third party);
provided
,
however
, that during any Low LCR Cash Flow Sweep Period, Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) shall not permit Master Lessee to enter
into a New Sublease that is a Material Sublease or execute or effect any Sublease Modification with
respect to a Material Sublease, without the prior written consent of Lender.
8.7.2
Delivery of New Sublease or Sublease Modification
. Upon the execution of any New
Sublease or Sublease Modification, as applicable, Borrower shall deliver to Lender an executed copy
of thereof.
8.7.3
Security Deposits
. All security or other deposits of Tenants of the Property shall
be treated by Borrower as trust funds and shall not be commingled with any other funds of Borrower,
and such deposits shall be deposited, upon receipt of the same by Borrower in a separate trust
account maintained by Borrower expressly for such purpose. Within ten (10) Business Days after
written request by Lender, Borrower shall furnish to Lender reasonably satisfactory evidence of
compliance with this
Section 8.7.3
, together with a statement of all lease securities
deposited with Borrower by the Tenants and the location and account number of the account in which
such security deposits are held.
8.7.4
No Default Under Subleases
. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall cause Master Lessee to (i) use reasonable efforts to promptly
perform and observe all of the material terms, covenants and conditions required to be performed
and observed by Master Lessee under
the Subleases, (ii) exercise, within ten (10) Business Days after a written request by Lender made
not more than two (2) times in any calendar year, any right to request from the Tenant under any
Lease a certificate with respect to the status thereof and (iii) not collect any of the rents
thereunder, more than one (1) month in advance.
8.7.5
Subordination
. All Sublease Modifications and New Subleases entered into by Master
Lessee after the date hereof shall by their express terms be subject and subordinate to the Master
Lease.
8.7.6
Attornment
. Each New Sublease entered into from and after the date hereof shall
provide that, (a) in the event of a termination of the Master Lease the Tenant under such Sublease
shall attorn to Borrower (or in the case of the Maryland Property, Maryland Loan
89
Guarantor) and
shall recognize Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) as
lessor under such Sublease without change in the provisions thereof and (b) in the event, following
any termination of the Master Lease, of the enforcement by Lender of any remedy under this
Agreement or the Security Instrument, the Tenant under such Lease shall, at the option of Lender or
of any other Person succeeding to the interest of Lender as landlord under such Lease as a result
of such enforcement, attorn to Lender or to such Person and shall recognize Lender or such
successor in the interest as lessor under such Lease without change in the provisions thereof;
provided
,
however
, Lender or such successor in interest shall not be liable for or
bound by (i) any payment of an installment of rent or additional rent made more than thirty (30)
days before the due date of such installment, (ii) any act or omission of or default by Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) or Master Lessee, as applicable,
under any such Lease, (iii) any credits, claims, setoffs or defenses which any Tenant may have
against Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) or Master
Lessee, as applicable, (iv) any obligation on the part of Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) or Master Lessee, as applicable, pursuant to such Lease, to
perform any tenant improvement work or (v) any obligation on the part of Borrower (or in the case
of the Maryland Property, Maryland Loan Guarantor) or Master Lessee, as applicable, pursuant to
such Lease, to pay any sum of money to any Tenant. Each such New Sublease shall also provide that,
upon the reasonable request by Lender or such successor in interest, the Tenant shall execute and
deliver an instrument or instruments confirming such attornment.
8.7.7
Non-Disturbance Agreements
. Lender shall enter into, and, if required by applicable
law to provide constructive notice or requested by a Tenant, record in the county where the subject
Property is located, a subordination, attornment and non-disturbance agreement, substantially in
form and substance substantially similar to the form attached hereto as
Exhibit N
(a
Non-Disturbance Agreement
), with any Tenant (other than an Affiliate of Borrower)
entering into a Lease or Sublease, within ten (10) Business Days after written request therefor by
Borrower;
provided
that Lenders consent to such Lease or Sublease has been obtained if and
to the extent required hereunder and such request is accompanied by an Officers Certificate
stating that such Lease or Sublease (as
applicable) complies in all material respects with this
Section 8.7
and payment of all
costs and expenses incurred by Lender in connection with the negotiation, preparation, execution
and delivery of any Non-Disturbance Agreement, including, without limitation, reasonable attorneys
fees and disbursements.
IX.
RESERVED
X.
MAINTENANCE OF PROPERTY; ALTERATIONS
10.1
Maintenance of Property
. Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) shall keep and maintain, or cause to be kept and maintained, the Property and every
part thereof in good condition and repair, subject to ordinary wear and tear, and, subject to
Excusable Delays and the provisions of this Agreement with respect to damage or destruction caused
by casualty events or Takings, shall not permit or commit any waste, impairment or deterioration of
any portion of the Property in any material respect. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) further covenants to do all other acts which from the character
or use of the Property may be reasonably necessary to protect the
90
security hereof, the specific
enumerations herein not excluding the general. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall not remove or demolish any Improvement on the Property except as the
same may be necessary in connection with an Alteration or a restoration in connection with a Taking
or casualty, or as otherwise permitted herein, in each case in accordance with the terms and
conditions hereof.
10.2
Conditions to Alteration
. Provided that no Event of Default shall have occurred and
be continuing hereunder, Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) shall have the right, without Lenders consent, to undertake any alteration,
improvement, demolition or removal of the Property or any portion thereof (any such alteration,
improvement, demolition or removal, an
Alteration
) so long as (i) Borrower provides
Lender with prior written notice of any Material Alteration, and (ii) such Alteration is undertaken
in accordance with the applicable provisions of this Agreement and the other Loan Documents, is not
prohibited by any relevant Lease or Sublease and shall not, upon completion (giving credit to rent
and other charges attributable to Leases executed upon such completion), have a Material Adverse
Effect on the value, use or operation of the Property taken as a whole or otherwise. Any Material
Alteration shall be conducted under the supervision of an Independent Architect and, in connection
with any Material Alteration, Borrower shall deliver to Lender, for information purposes only and
not for approval by Lender, detailed plans and specifications and cost estimates therefor prepared
or approved by such Independent Architect, as well as an Officers Certificate stating that such
Alteration will involve estimated costs of no more than the Threshold Amount. Such plans and
specifications may be revised at any time and from time to time by such Independent Architect
provided
that material revisions of such plans and specifications are filed with Lender,
for information purposes only. All work done in connection with any Alteration shall be performed
with due diligence in a good and workmanlike manner, all materials used in connection with any
Alteration shall not be less than the standard of quality of the materials currently used at the
Property and all materials used shall be in accordance with all applicable material Legal
Requirements and Insurance Requirements.
10.3
Costs of Alteration
. Notwithstanding anything to the contrary contained in this
Article X
, no Material Alteration or Alteration which, when aggregated with all other
Alterations (other than Material Alterations) then being undertaken by Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) or Master Lessee (exclusive of Alterations being
directly paid for by Tenants at the Property), exceeds the Threshold Amount shall be performed by
or on behalf of Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) or
Master Lessee unless Borrower shall have delivered to Lender Cash and Cash Equivalents and/or a
Letter of Credit as security in an amount not less than (a) the estimated cost of the Material
Alteration or the Alterations minus the Threshold Amount (as set forth in the Independent
Architects written estimate referred to above) or (b) in the case of Alterations being performed
by or on behalf of the Master Lessee, any sums required to be deposited by Master Lessee under the
Master Lease. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall
deliver to Lender any security deposited by the Master Lessee for any Alteration under the Master
Lease. In addition to payment or reimbursement from time to time of Borrowers expenses incurred
in connection with any Material Alteration or any such Alteration, the amount of any such security
shall be reduced on any given date to the Independent Architects written estimate of the cost to
complete the Material Alteration or the Alterations (including any retainages), free and clear of
Liens, other than Permitted
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Encumbrances. Costs which are subject to retainage (which in no event
shall be less than five percent (5%) in the aggregate until fifty percent (50%) of the work to be
performed under the applicable contract has been substantially completed) shall be treated as due
and payable and unpaid from the date they would be due and payable but for their characterization
as subject to retainage. In the event that any Material Alteration or Alteration shall be made in
conjunction with any restoration with respect to which Borrower shall be entitled to withdraw
Proceeds pursuant to
Section 6.2
, the amount of the Cash and Cash Equivalents and/or Letter
of Credit to be furnished pursuant hereto need not exceed the aggregate cost of such restoration
and such Material Alteration or Alteration (as estimated by the Independent Architect), less the
sum of the amount of any Proceeds which Borrower may be entitled to withdraw pursuant to
Section 6.2
and which are held by Lender in accordance with
Section 6.2
. Payment
or reimbursement of Borrowers expenses incurred with respect to any Material Alteration or any
such Alteration shall be accomplished upon the terms and conditions specified in
Section
6.2
.
At any time after substantial completion of any Material Alteration or any such Alteration in
respect of which Cash and Cash Equivalents and/or a Letter of Credit is deposited pursuant hereto,
the whole balance of any Cash and Cash Equivalents so deposited by Borrower with Lender and then
remaining on deposit (together with earnings thereon), as well as all retainages, may be withdrawn
by Borrower and shall be paid by Lender to Borrower, and any other Cash and Cash Equivalents and/or
a Letter of Credit so deposited or delivered shall, to the extent it has not been called upon,
reduced or theretofore released, be released to Borrower, within ten (10) days after receipt by
Lender of an application for such withdrawal and/or release together with an Officers Certificate,
and signed also (as to the following clause (a)) by the Independent Architect, setting forth in
substance as follows:
(a) that to the knowledge of the certifying Person, the Material Alteration or Alteration in
respect of which such Cash and Cash Equivalents and/or a Letter of Credit was deposited has been
substantially completed in all material respects substantially in accordance with any plans and
specifications therefor previously filed with Lender under
Section 10.2
and that, if
applicable, a certificate of occupancy has been issued with respect to such Material Alteration or
Alteration by the relevant Governmental Authority(ies) or, if not applicable, that a certificate of
occupancy is not required; and
(b) that to the knowledge of the certifying Person all amounts which Borrower is or may become
liable to pay in respect of such Material Alteration or Alteration through the date of the
certification have been paid in full or adequately provided for or are being contested in
accordance with
Section 7.3
and that, except to the extent of such contests, lien waivers
have been obtained from the general contractor and major subcontractors performing such Material
Alterations or Alterations (or such waivers are not customary and reasonably obtainable by prudent
owners in the area where the Property is located).
Notwithstanding the foregoing, in lieu of posting Cash and Cash Equivalents and/or a Letter of
Credit with Lender pursuant to the provisions of this
Section 10.3
, Borrower may, at its
election, deliver to lender a guaranty from Guarantor in form acceptable to Lender, pursuant to
which Guarantor unconditionally guaranties the lien free completion of the subject Alteration and
payment in full of all costs related thereto in excess of the Threshold Amount.
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XI.
BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION
11.1
Books and Records
. Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) shall keep and maintain on a fiscal year basis proper books and records separate from
any other Person, in which accurate and complete entries shall be made of all dealings or
transactions of or in relation to the Notes, the Property and the business and affairs of Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) relating to the Property which
shall reflect all items of income and expense in connection with the operation of the Property and
in connection with any services, equipment or furnishings provided in connection with the operation
of the Property, in accordance with GAAP. Lender and its authorized representatives shall have the
right, at reasonable times and upon reasonable notice, to examine the books and records of Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) relating to the operation of the
Property and to make such copies or extracts thereof as Lender may reasonably require.
11.2
Financial Statements
.
11.2.1
Quarterly Reports
. Commencing not later than forty-five (45) days following the end
of each Fiscal Quarter (commencing with the Fiscal Quarter ending in June, 2006), Borrower shall
deliver, and shall cause Master Lessee to deliver, to Lender unaudited financial statements of
Guarantor, Borrower, Maryland Loan Guarantor and Master Lessee, internally prepared in accordance
with GAAP, reporting Master Lessees EBITDAR, including (i) a balance sheet and profit and loss
statement, as of the end of such Fiscal Quarter and for the corresponding Fiscal Quarter of the
previous year, including a statement of net income (in respect of the Property) for the year to
date and (ii) a statement of revenues and expenses for such Fiscal Quarter, together with a
comparison of the year to date results with (A) the results for the same period of the previous
year, (B) the results that had been projected by Borrower and Master Lessee for such period and (C)
the portion of the Annual Budget applicable to such period, and (c) a calculation of the LCR for
such period and a statement of the Master Lease Variable Additional Rent and Master Lease Recurrent
Additional Rent for such period. Such statements for each Fiscal Quarter shall be accompanied by
an Officers Certificate certifying to the signers knowledge, (1) that such statements fairly
represent the financial condition and results of operations of Borrower, Maryland Loan Guarantor
and Master Lessee, (2) that as of the date of such Officers Certificate, no Default exists under
this Agreement, the Notes or any other Loan Document or, if so, specifying the nature and status of
each such Default and the action then being taken by Borrower or proposed to be taken to remedy
such Default, (3) that as of the date of each Officers Certificate, no litigation exists (A)
involving Borrower, Maryland Loan Guarantor or the Property in which the amount involved is
$500,000 (in the aggregate) or more or in which all or substantially all of the potential liability
is not covered by insurance, or (B) involving Master Lessee which if adversely determined would be
reasonably likely to have a Material Adverse Effect, or if so, specifying such litigation and the
actions being taking in relation thereto and (4) the amount by which actual operating expenses were
greater than or less than the operating expenses anticipated in the applicable Annual Budget.
Borrower shall provide such other financial information as shall be reasonably requested by Lender
for purposes of calculations to be made by Lender pursuant to the terms of this Agreement.
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11.2.2
Annual Reports
. Concurrently with the public filings of any financial statements of
Borrower and in any event not later than one-hundred twenty (120) days after the end of each Fiscal
Year of Borrowers operations, Borrower shall deliver, and shall cause Master Lessee to deliver, to
Lender (a) consolidated audited financial statements of Guarantor certified by an Independent
Accountant in accordance with GAAP and unaudited financial statements of Borrower, Maryland Loan
Guarantor and Master Lessee, including a balance sheet as of the end of such Fiscal Year and a
statement of revenues and expenses for such Fiscal Year, as well as a supplemental schedule of net
income or loss presenting the net income or loss for the Property and the figures for the previous
Fiscal Year and the figures set forth in the Annual Budget for such Fiscal Year, (b) a calculation
of the LCR, Master Lease Variable Additional Rent and Master Lease Recurrent Additional Rent for
such period and (c) copies of all federal income tax returns of Borrower, Maryland Loan Guarantor,
Master Lessee and Guarantor if and to the extend such tax returns are required to be filed under
applicable law. Such annual financial statements shall also be accompanied by an Officers
Certificate in the form required pursuant to
Section 11.2.1
.
11.2.3
Capital Expenditures Summaries
. Borrower shall, or shall cause Master Lessee to,
within ninety (90) days after the end of each calendar year during the term of the Notes, deliver
to Lender an annual summary of material Capital Expenditures made at the Property during the prior
twelve (12) month period.
11.2.4
Master Lease
. Without duplication of any other provision of this Agreement or any
other Loan Documents, Borrower shall deliver to Lender, within ten (10) Business Days of the
receipt thereof by Borrower, a copy of all reports prepared by Master Lessee, if any, pursuant to
the Master Lease, including, without limitation, the Annual Budget and any inspection reports.
11.2.5
Annual Budget
. Borrower shall deliver to Lender the Annual Budget for Lenders
review, but not approval, not more than ninety (90) days after the end of each Fiscal Year. Any
proposed modifications to such Annual Budget shall be delivered to Lender for its review, but not
approval.
11.2.6
Other Information
. Borrower shall, promptly after written request by Lender or, if
a Securitization shall have occurred, the Rating Agencies, furnish or cause to be furnished to
Lender, in such manner and in such detail as may be reasonably requested by Lender or requested by
the Rating Agencies, such reasonable additional financial information as may be reasonably
requested by Lender or requested by the Rating Agencies with respect to the Property, Borrower,
Maryland Loan Guarantor, Master Lessee and/or Guarantor.
11.2.7
Consolidation
11.2.8 . Lender acknowledges that all financial reporting of
Borrower and Maryland Loan Guarantor will be consolidated.
XII.
ENVIRONMENTAL MATTERS
12.1
Representations
. Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) hereby represents and warrants that except as set forth in the environmental reports and
studies delivered to Lender (the
Environmental Reports
), to Borrowers knowledge,
94
(i) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) has not engaged in or
knowingly permitted any operations or activities upon, or any use or occupancy of the Property, or
any portion thereof, for the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or disposal of any
Hazardous Materials on, under, in or about the Property, or transported any Hazardous Materials to,
from or across the Property, except in all cases in material compliance with Environmental Laws and
only in the course of legitimate business operations at the Property; (ii) no tenant, occupant or
user of the Property, or any other Person, has engaged in or permitted any operations or activities
upon, or any use or occupancy of the Property, or any portion thereof, for the purpose of or in any
material way involving the handling, manufacture, treatment, storage, use, generation, release,
discharge, refining, dumping or disposal of any Hazardous Materials on, in or about the Property,
or transported any Hazardous Materials to, from or across the Property, except in all cases in
material compliance with Environmental Laws and only in the course of legitimate business
operations at the Property; (iii) no Hazardous Materials are presently constructed, deposited,
stored, or otherwise located on, under, in or about the Property except in material compliance with
Environmental Laws; (iv) no Hazardous Materials have migrated from the Property upon or beneath
other properties which would reasonably be expected to result in material liability for Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor); and (v) no Hazardous Materials
have migrated or threaten to migrate from other properties upon, about or beneath the Property
which would reasonably be expected to result in material liability for Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor).
12.2
Covenants
.
12.2.1
Compliance with Environmental Laws
. Subject to Borrowers right to contest under
Section 7.3
, each of Borrower and Maryland Loan Guarantor covenants and agrees with Lender
that it shall comply with all Environmental Laws. If at any time during the continuance of the
Lien of the Security Instrument, a Governmental Authority having jurisdiction over the Property
requires remedial action to correct the presence of Hazardous Materials in, around, or under the
Property (an
Environmental Event
), Borrower shall deliver prompt notice of the occurrence
of such Environmental Event to Lender. Within thirty (30) days after Borrower has knowledge of the
occurrence of an Environmental Event, Borrower shall deliver to Lender an Officers Certificate (an
Environmental Certificate
) explaining the Environmental Event in reasonable detail and
setting forth the proposed remedial action, if any. Borrower shall promptly provide Lender with
copies of all notices which allege or identify any actual or potential violation or noncompliance
received by or prepared by or for Borrower in connection with any Environmental Law. For purposes
of this paragraph, the term notice shall mean any summons, citation, directive, order, claim,
pleading, letter, application, filing, report, findings, declarations or other materials pertinent
to compliance of the Property and Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) with such Environmental Laws.
12.3
Environmental Reports
. Upon the occurrence and during the continuance of an
Environmental Event with respect to any Individual Property or any Event of Default, Lender shall
have the right to have its consultants perform a comprehensive environmental audit of such affected
Individual Property. Such audit shall be conducted by an environmental consultant chosen by Lender
and may include a visual survey, a record review, an area reconnaissance
95
assessing the presence of
hazardous or toxic waste or substances, PCBs or storage tanks at such Individual Property, an
asbestos survey of such Individual Property, which may include random sampling of the Improvements
and air quality testing, and such further site assessments as Lender may reasonably require due to
the results obtained from the foregoing. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) grants Lender, its agents, consultants and contractors the right to enter
any Individual Property affected by an Environmental Event as reasonable or appropriate for the
circumstances for the purposes of performing such studies and the reasonable cost of such studies
shall be due and payable by Borrower to Lender upon demand and shall be secured by the Lien of the
Security Instrument. Lender shall not unreasonably interfere with, and Lender shall direct the
environmental consultant to use its commercially reasonable efforts not to hinder, Borrowers,
Maryland Loan Guarantors, Master Lessees or any Tenants operations upon such Individual Property
when conducting such audit, sampling or inspections. By undertaking any of the measures identified
in and pursuant to this
Section 12.3
, Lender shall not be deemed to be exercising any
control over the operations of Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) or the handling of any environmental matter or hazardous wastes or substances of
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) for purposes of
incurring or being subject to liability therefor.
12.4
Environmental Indemnification
. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall protect, indemnify, save, defend, and hold harmless the Indemnified
Parties from and against any and all liability, loss, damage, actions, causes of action, costs or
expenses whatsoever (including reasonable attorneys fees and expenses) and any and all claims,
suits and judgments which any Indemnified Party may suffer, as a result of or with respect to: (a)
any Environmental Claim relating to or arising from the Property; (b) the violation of any
Environmental Law in connection with the Property; (c) any release, spill, or the presence of any
Hazardous Materials affecting the Property; and (d) the presence at, in, on or under, or the
release, escape, seepage, leakage, discharge or migration at or from, the Property of any Hazardous
Materials, whether or not such condition was known or unknown to Borrower,
provided
that,
in each case, the liabilities and obligations of Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) hereunder shall not apply to the extent that any event or condition
described in the foregoing
clauses (a)
through
(d)
(i) is fully insured against by
an Environmental Insurance Policy and the related insurer defends Lender and fully pays Lenders
claims thereunder, (ii) is caused by or results from the gross negligence or willful misconduct of
any of the Indemnified Parties or any of their respective Affiliates, agents, employees or
contractors, or (iii) did not occur (but need not have been discovered) prior to (A) the
foreclosure of the Security Instrument, (B) the delivery by Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) to Lender or its designee of a deed-in-lieu of
foreclosure with respect to the Property, or (C) Lenders or its designees taking possession and
control of the Property after the occurrence of an Event of Default. If any action or other
proceeding shall be brought against Lender which Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) is required to defend pursuant to the foregoing provisions of this
Section 12.4
, upon written notice from Borrower to Lender (given reasonably promptly
following Lenders notice to Borrower of such action or proceeding), Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) shall be entitled to assume the defense thereof, at
Borrowers expense, with counsel reasonably acceptable to Lender;
provided
,
however
, Lender may, at its own expense, retain separate counsel to participate in such
defense, but such
96
participation shall not be deemed to give Lender a right to control such defense,
which right Borrower expressly retains. Notwithstanding the foregoing, each Indemnified Party
shall have the right to employ separate counsel in any action or other proceeding which Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) is required to defend pursuant
to the foregoing provisions of this
Section 12.4
, at Borrowers expense if, in the
reasonable opinion of legal counsel, a conflict or potential conflict exists between the
Indemnified Party and Borrower that would make such separate representation advisable.
Notwithstanding the foregoing, Lender and the other Indemnified Parties agree to seek recovery
against Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) for losses for
which they are indemnified under this
Section 12.4
only after a claim for such losses has
been filed under any Environmental Insurance Policy then in full force and effect which covers such
losses and Lender has received any written communication from the insurer rejecting such claim. In
addition, Borrower shall have no obligation to indemnify an Indemnified Party for damage or loss
resulting from such Indemnified Partys gross negligence or willful misconduct.
12.5
Recourse Nature of Certain Indemnifications
. Except as otherwise provided in this
Agreement or in any other Loan Document, including, without limitation, the provisions of
Article XVIII
, the indemnification provided in
Section 12.4
shall be fully recourse
to Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) and shall be
independent of, and shall survive, the discharge of the Indebtedness, the release of the Lien
created by the Security Instrument, and/or the conveyance of title to the Property to Lender or any
purchaser or designee in connection with a foreclosure of the Security Instrument or conveyance in
lieu of foreclosure.
XIII.
RESERVED
XIV.
SECURITIZATION
14.1
Sale of Notes and Securitization
. At the request of Lender and, to the extent not
already required to be provided by Borrower or Maryland Loan Guarantor under this Agreement,
Borrower and Maryland Loan Guarantor shall use reasonable efforts to cooperate with Lender and the
Rating Agencies in connection with the sale of one or more of the Notes or a participation interest
therein as part of the securitization (such sale and/or securitization, the
Securitization
) of rated single or multi-class securities (the
Securities
)
secured by or evidencing ownership interests in the applicable Note or Notes and this Agreement,
including using reasonable efforts to cooperate with Lender and the Rating Agencies in connection
with the actions set forth in clauses (a) through (d) below, but Borrower shall not, in connection
with a Securitization, be required to incur, suffer or accept (except to a de minimis extent)) (i)
any greater obligations or liabilities than as currently set forth in the Loan Documents or (ii)
any cost or expense.
(a)
Provided Information
. (i) Use reasonable efforts to provide such financial and
other information (but not projections) with respect to the Property, Borrower, Maryland Loan
Guarantor, Master Lessee and Guarantor to the extent such information is reasonably available to
Borrower and provided any such request for financial information is consistent with the financial
reporting requirements set forth in
Article XI
, (ii) provide business plans (but not
projections) and budgets relating to the Property, to the extent previously prepared by or on
behalf of the
97
Borrower, and (iii) cooperate with the holder of the Notes (and its representatives)
in obtaining such site inspection, appraisals, market studies, environmental reviews and reports,
engineering reports and other due diligence investigations of the Property, as may be reasonably
requested by the holder of the Notes or reasonably requested by the Rating Agencies (all
information provided pursuant to this
Section 14.1
together with all other information
heretofore provided to Lender in connection with the Loan, as such may be updated, at Lenders
request, in connection with a Securitization, or hereafter provided to Lender in connection with
the Loan or a Securitization, being herein collectively called the
Provided Information
);
(b)
Opinions of Counsel
. Use reasonable efforts to cause to be rendered such
customary updates or customary modifications to the Opinions of Counsel delivered at the closing of
the Loan as may be reasonably requested by the holder of the Notes or the Rating Agencies in
connection with the Securitization;
(c)
Modifications to Loan Documents
. Execute such amendments to the Security
Instrument and Loan Documents as may be reasonably requested by Lender or the Rating Agencies in
order to achieve the required rating or to effect the Securitization (including, without
limitation, modifying the Payment Date and modifying the commencement and expiration of the
Interest Period, in each case to dates other than as originally set forth in the Notes to the
extent provided in the Note), and
(d)
Cooperation with Rating Agencies
. Borrower and Maryland Loan Guarantor shall, on
reasonable prior notice, (i) at Lenders request, meet with representatives of the Rating Agencies
at reasonable times to discuss the business and operations of the Property and (ii) cooperate with
the reasonable requests of the Rating Agencies in connection with the Property. After a
Securitization and until the Obligations are paid in full, Lender may provide the Rating Agencies
with all financial reports and other information required hereunder, including copies of any
default notices or other material notices delivered to and received from Lender hereunder, to
enable them to continuously monitor the creditworthiness of Borrower and Maryland Loan Guarantor
and to permit an annual surveillance of the implied credit rating of the Securities.
14.2
Securitization Financial Statements
. Borrower acknowledges that all financial
information delivered by Borrower to Lender pursuant to
Article XI
may, at Lenders option,
be delivered to the Rating Agencies.
14.3
Securitization Indemnification
.
14.3.1
Disclosure Documents
. Borrower understands that certain of the Provided Information
may be included in disclosure documents in connection with the Securitization, including a
prospectus, private placement memorandum, collateral term sheet or a public registration statement
(each, a
Disclosure Document
) and may also be included in filings with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended (the
Securities
Act
) or the Securities and Exchange Act of 1934, as amended (the
Exchange Act
), or
provided or made available to investors or prospective investors in the Securities, the Rating
Agencies, and service providers relating to the Securitization. In the event that the Disclosure
Document is required to be revised prior to the sale of all Securities, upon request, Borrower and
Maryland Loan Guarantor shall reasonably cooperate with the holder of the Notes,
98
at no cost or
expense to Borrower, in updating the Provided Information for inclusion or summary in the
Disclosure Document by providing all current information pertaining to Borrower, Maryland Loan
Guarantor and the Property reasonably requested by Lender:
14.3.2
Indemnification Certificate
. In connection with each applicable Disclosure
Document, Borrower and Maryland Loan Guarantor each agrees to provide, at Lenders reasonable
request, an indemnification certificate:
(a) certifying that Borrower and Maryland Loan Guarantor each has carefully examined those
portions of such memorandum or prospectus, as applicable, reasonably designated in writing by
Lender for Borrowers review pertaining to Borrower, Maryland Loan Guarantor, the Property,
Guarantor, the Loan and/or the Provided Information and insofar as such sections or portions
thereof specifically pertain to Borrower, Maryland Loan Guarantor, the Property, Guarantor, the
Provided Information or the Loan (such portions, the
Relevant Portions
), the Relevant
Portions do not (except to the extent specified by Borrower if Borrower does not agree with the
statements therein), as of the date of such certificate, to Borrowers knowledge, contain any
untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made, not misleading.
(b) subject to the provisions of
Article XVIII
hereof, indemnifying Lender and the
Affiliates of Deutsche Bank Securities, Inc. (collectively,
DBS
) as well as Wachovia
Bank, National Association and its Affiliates (
Wachovia
) that have prepared the
Disclosure Document relating to the Securitization, each of their respective directors, each of
their respective officers who have signed the Disclosure Document and each person or entity who
controls DBS or Wachovia within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act (collectively, the
Lender Group
), and DBS and Wachovia, together with
the Lender Group, each of their respective directors and each person who controls DBS or Wachovia
or the Lender Group, within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act (collectively, the
Underwriter Group
) for any actual, out-of-pocket losses,
third party claims, damages (excluding lost profits, diminution in value and other consequential
damages) or liabilities arising out of third party claims (the
Liabilities
) to which any
member of the Underwriter Group may become subject to the extent such Liabilities arise out of or
are based upon any untrue statement of any material fact contained in the Relevant Portions and in
the Provided Information or arise out of or are based upon the omission by Borrower to state
therein a material fact required to be stated in the Relevant Portions in order to make the
statements in the Relevant Portions in light of the circumstances under which they were made, not
misleading (except that (x) Borrowers obligation to indemnify in respect of any information
contained in a Disclosure Document that is derived in part from information provided by Borrower or
any Affiliate of Borrower and in part from information provided by others unrelated to or not
employed by Borrower, and (y) Borrower shall have no responsibility for the failure of any member
of the Underwriting Group to accurately transcribe written information supplied by Borrower or to
include such portions of the Provided Information);
provided
that Liabilities shall exclude
all actual, out-of-pocket losses, third party claims, damages or liabilities arising out any
corrections, qualifications and/or clarifications to the Relevant Portions which are disclosed by
Borrower to Lender in writing as provided above and as to which Lender does not change the Relevant
Portions to reflect such corrections,
99
qualifications and/or clarifications). The indemnity
contained in the indemnification certificate will be in addition to any liability which Borrower
may otherwise have.
(c) The indemnification certificate shall provide that Borrowers and Maryland Loan
Guarantors liability under the indemnification certificate shall be (i) limited solely to
Liabilities arising solely out of or based upon any such untrue statement or omission made in a
Disclosure Document in reliance upon and in conformity with the Relevant Portions and (ii) subject
to the provisions of
Article XVIII
hereof.
(d) The indemnification certificate shall also provide that promptly after receipt by an
indemnified party of notice of the commencement of any action covered by the indemnification
certificate, such indemnified party will notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability which the indemnifying party may have to any indemnified
party thereunder except to the extent that failure to notify causes prejudice to the indemnifying
party. In the event that any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be entitled, jointly
with any other indemnifying party, to participate therein and, to the extent that it (or they) may
elect by written notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After such notice from the indemnifying party to such
indemnified party of its assumption of such defense, the indemnifying party shall not be liable for
any legal or other expenses subsequently incurred by such indemnified party in connection with the
defense thereof;
provided
,
however
, if an indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there are any legal defenses
available to it that are different from or in conflict with those available to the indemnifying
party, or indemnified party or parties shall have the right to select separate counsel to assert
such legal defenses and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties at the expense of the indemnifying party.
(e)
Retention of Servicer
. Lender reserves the right to retain the Servicer at no
cost or expense to Borrower. Lender has advised Borrower that the Servicer initially retained by
Lender shall be Wachovia Bank, National Association or its Affiliate. Borrower shall pay any fees
and expenses of the Servicer and any reasonable third party fees and expenses of the Servicer,
including, without limitation, special servicing fees, work out fees and reasonable attorneys fees
and disbursements, in connection with a prepayment, release or substitution of the Property,
assumption or modification of the Loan, or following an event of Default, special servicing or work
out of the Loan or enforcement of the Loan Documents; provided however that Servicer fees
(excluding any reasonable third party fees and expenses) for releases, substitutions and
prepayments shall not exceed the following amounts:
(i) Releases: $2500 (inclusive of payoff calculation) per release;
(ii) Substitutions: $7500 per substitution; and
(iii) Prepayments: $300 for payoff quote calculation.
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XV. ASSIGNMENTS AND PARTICIPATIONS
15.1
Assignment and Acceptance
. Lender may assign to one or more Persons all or a portion
of its rights and obligations under this Agreement and the other Loan Documents (including, without
limitation, all or a portion of one or more of the Notes);
provided
that the parties to
each such assignment shall execute and deliver to Lender, for its acceptance and recording in the
Register (as hereinafter defined), an Assignment and Acceptance. In addition, Lender may
participate to one or more Persons all or any portion of its rights and obligations under this
Agreement and the other Loan Documents (including without limitation, all or a portion of one or
more of the Notes) utilizing such documentation to evidence such participation and the parties
respective rights thereunder as Lender, in its sole discretion, shall elect.
15.2
Effect of Assignment and Acceptance
. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of Lender, as the case may be, hereunder and such assignee shall be deemed to have
assumed such rights and obligations, and (ii) Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement and the other Loan
Documents (and, in the case of an Assignment and Acceptance covering all or the remaining portion
of Lenders rights and obligations under this Agreement and the other Loan Documents, Lender shall
cease to be a party hereto) accruing from and after the effective date of the Assignment and
Acceptance, except with respect to (A) any payments made by Borrower to Lender pursuant to the
terms of the Loan Documents after the effective date of the Assignment and Acceptance and (B) any
letter of credit, cash deposit or other deposits or security (other than the Lien of the Security
Instrument and the other Loan Documents) delivered to or for the benefit of or deposited with
German American Capital Corporation, on behalf of the holders of the Notes, as Lender, for which
German American Capital Corporation, on behalf of the holders of the Notes, shall remain
responsible for the proper disposition thereof until such items are delivered to a party who is
qualified as an Approved Bank and agrees to hold the same in accordance with the terms and
provisions of the agreement pursuant to which such items were deposited.
15.3
Content
. By executing and delivering an Assignment and Acceptance, Lender and the
assignee thereunder confirm to and agree with each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Acceptance, Lender makes no representation or
warranty and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to be created under or
in connection with, this Agreement or any other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (ii) Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of Borrower or Maryland Loan Guarantor or
the performance or observance by Borrower or Maryland Loan
101
Guarantor of any of its obligations
under any Loan Documents or any other instrument or document furnished pursuant thereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with copies of such other
documents and information as it has deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon Lender and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents; (v) such assignee appoints and authorizes Lender to take
such action as agent on its behalf and to exercise such powers and discretion under the Loan
Documents as are delegated to Lender by the terms hereof together with such powers and discretion
as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform, in
accordance with their terms, all of the obligations which by the terms of this Agreement and the
other Loan Documents are required to be performed by Lender.
15.4
Register
. Lender shall maintain a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and addresses of Lender and each
assignee pursuant to this
Article XV
and the principal amount of the Loan owing to each
such assignee from time to time (the
Register
). The entries in the Register shall, with
respect to such assignees, be conclusive and binding for all purposes, absent manifest error. The
Register shall be available for inspection by Borrower or any assignee pursuant to this
Article
XV
at any reasonable time and from time to time upon reasonable prior written notice.
15.5
Substitute Notes
. Upon its receipt of an Assignment and Acceptance executed by an
assignee, together with any Note or Notes subject to such assignment, Lender shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit M
hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in
the Register, and (iii) give prompt written notice thereof to Borrower. Within five (5) Business
Days after its receipt of such notice, Borrower, at Lenders expense, shall execute and deliver to
Lender in exchange and substitution for the surrendered Note or Notes a new Note to the order of
such assignee in an amount equal to the portion of the Loan assigned to it and a new Note to the
order of Lender in an amount equal to the portion of the Loan retained by it hereunder. Such new
Note or Notes shall be in an aggregate principal amount equal to the aggregate then outstanding
principal amount of such surrendered Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of the Notes
(
modified
,
however
, to the extent necessary so as not to impose duplicative or
increased obligations on Borrower and to delete obligations previously satisfied by Borrower).
Notwithstanding the provisions of this
Article XV
, Borrower shall not be responsible or
liable for any additional taxes, reserves, adjustments or other costs and expenses that are related
to, or arise as a result of, any transfer of the Loan or any interest or participation therein that
arise from the transfer of the Loan or any interest or participation therein or from the execution
of the new Note contemplated by this
Section 15.5
, including, without limitation, any
mortgage tax. Lender and/or the assignees, as the case may be, shall from time to time designate
one agent through which Borrower shall request all approvals and consents required or contemplated
by this Agreement and on whose statements Borrower may rely.
15.6
Participations
. Each assignee pursuant to this
Article XV
may sell
participations to one or more Persons (other than Borrower or any of its Affiliates) in or to all
or a portion of its
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rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of the Note held by it);
provided
,
however
, that (i) such assignees obligations under this Agreement and the other Loan
Documents shall remain unchanged, (ii) such assignee shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such assignee shall remain the holder
of any such Note for all purposes of this Agreement and the other Loan Documents, (iv) Borrower,
Lender and the assignees pursuant to this
Article XV
shall continue to deal solely and
directly with such assignee in connection with such assignees rights and obligations under this
Agreement and the other Loan Documents, (v) Borrower shall bear no costs or expenses in connection
therewith, (vi) Borrower shall not be required to incur, suffer or accept (except to a de minimis
extent)) any greater obligations or liabilities than as currently set forth in the Loan Documents,
and (vii) the economics of the Loan, taken as a whole, shall not change in a manner which is
adverse to Borrower. In the event that more than one (1) party comprises Lender, Lender shall
designate one party to act on the behalf of all parties comprising Lender in providing approvals
and all other necessary consents under the Loan Documents and on whose statements Borrower may
rely.
15.7
Disclosure of Information
. Any assignee pursuant to this
Article XV
may, in
connection with any assignment or participation or proposed assignment or participation pursuant to
this
Article XV
, disclose to the assignee or participant or proposed assignee or
participant, any information relating to Borrower furnished to such assignee by or on behalf of
Borrower;
provided
,
however
, that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree in writing for the benefit of Borrower
to preserve the confidentiality of any confidential information received by it.
15.8
Security Interest in Favor of Federal Reserve Bank
. Notwithstanding any other
provision set forth in this Agreement or any other Loan Document, any assignee pursuant to this
Article XV
may at any time create a security interest in all or any portion of its rights
under this Agreement or the other Loan Documents (including, without limitation, the amounts owing
to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.
XVI.
RESERVE ACCOUNTS
16.1
Tax Reserve Account
. In accordance with the time periods set forth in
Section
3.1
, Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall cause to
be deposited into the Tax Reserve Account an amount equal to (a) one-twelfth of the annual
Impositions that Lender reasonably estimates, based on the most recent tax bill for the Property,
will be payable during the next ensuing twelve (12) months in order to accumulate with Lender
sufficient funds to pay all such Impositions thirty (30) days prior to the imposition of any
interest, charges or expenses for the non-payment thereof and (b) one-twelfth of the annual Other
Charges that Lender reasonably estimates will be payable during the next ensuing twelve (12) months
(said monthly amounts in (a) and (b) above hereinafter called the
Monthly Tax Reserve
Amount
, and the aggregate amount of funds held in the Tax Reserve Account being the
Tax
Reserve Amount
). As of the Closing Date, the Monthly Tax Reserve Amount is $739,696.79, but
such amount is subject to adjustment by Lender upon notice to Borrower. The Monthly Tax Reserve
Amount shall be paid by Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
to Lender on each Payment Date. Lender will apply the Monthly Tax Reserve
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Amount to payments of
Impositions and Other Charges required to be made by Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) pursuant to
Article V
and
Article VII
and under
the Security Instrument, subject to Borrowers right to contest Impositions in accordance with
Section 7.3
. In making any payment relating to the Tax Reserve Account, Lender may do so
according to any bill, statement or estimate procured from the appropriate public office, without
inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof. If the amount of funds in the
Tax Reserve Account shall exceed the amounts due for Impositions and Other Charges pursuant to
Article V
and
Article VII
, Lender shall credit such excess against future payments
to be made to the Tax Reserve Account. If at any time Lender reasonably determines that the Tax
Reserve Amount is not or will not be sufficient to pay Impositions and Other Charges by the dates
set forth above, Lender shall notify Borrower of such determination and Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) shall increase its monthly payments to Lender by
the amount that Lender reasonably estimates is sufficient to make up the deficiency at least thirty
(30) days prior to the imposition of any interest, charges or expenses for the non-payment of the
Impositions and Other Charges. Upon payment of the Impositions and Other Charges, Lender shall
reassess the amount necessary to be deposited in the Tax Reserve Account for the succeeding period,
which calculation shall take into account any excess amounts remaining in the Tax Reserve Account.
16.2
Insurance Reserve Account
. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall, in accordance with the time periods set forth in
Section
3.1
, cause to be deposited into the Insurance Reserve Account an amount equal to one-twelfth of
the insurance premiums that Lender reasonably estimates, based on the most recent bill, will be
payable for the renewal of the coverage afforded by the insurance policies upon the expiration
thereof in order to accumulate with Lender sufficient funds to pay all such insurance premiums
thirty (30) days prior to the expiration of the policies required to be maintained by Borrower
pursuant to the terms hereof (said monthly amounts hereinafter called the
Monthly Insurance
Reserve Amount
, and the aggregate amount of funds held in the Insurance Reserve Account being
the
Insurance Reserve Amount
). As of the Closing Date, the Monthly Insurance Reserve
Amount is $206,007.88, but such amount is subject to adjustment by Lender upon notice to Borrower.
The Monthly Insurance Reserve Amount shall be paid by Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) to Lender on each Payment Date. Lender will apply the Monthly
Insurance Reserve Amount to payments of insurance premiums required to be made by Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) pursuant to
Article VI
and
under the Security Instrument. In making any payment relating to the Insurance Reserve Account,
Lender may do so according to any bill, statement or estimate procured from the insurer or agent,
without inquiry into the accuracy of such bill, statement or estimate or into the validity thereof.
If the amount of funds in the Insurance Reserve Account shall exceed the amounts due for insurance
premiums pursuant to
Article VI
, Lender shall credit such excess against future payments to
be made to the Insurance Reserve Account. If at any time Lender reasonably determines that the
Insurance Reserve Amount is not or will not be sufficient to pay insurance premiums by the dates
set forth above, Lender shall notify Borrower of such determination and Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) shall increase its monthly payments to Lender by
the amount that Lender reasonably estimates is sufficient to make up the deficiency at least thirty
(30) days prior to expiration of the applicable insurance policies. Upon payment of such insurance
premiums, Lender shall reassess the
104
amount necessary to be deposited in the Insurance Reserve
Account for the succeeding period, which calculation shall take into account any excess amounts
remaining in the Insurance Reserve Account.
16.3
Structural Repair Reserve Account
.
(a) In accordance with the time periods set forth in
Section 3.1
, Borrower (or in the
case of the Maryland Property, Maryland Loan Guarantor) shall deposit, or cause to be deposited
into the Structural Repair Reserve Account, an amount equal to the Monthly Structural Repair
Reserve Amount to be held by the Cash Management Bank for the benefit of Lender as additional
security for the Loan in accordance with
Section 3.1
and the Account Agreement.
(b) Lender shall make disbursements from the Structural Repair Reserve Account to or as
directed by Borrower to pay or reimburse Borrower for the cost of Structural Repairs in accordance
with and in the manner provided in this
Section 16.3
. Any Structural Repairs that in the
aggregate with all related Structural Repairs (collectively, a
Project
) would reasonably
be expected to cost in excess of the Threshold Amount shall be subject to compliance with
Section 10.2
. Lender shall, within fifteen (15) Business Days of a written request from
Borrower and upon satisfaction of the requirements set forth in this
Section 16.3
, disburse
to Borrower amounts from the Structural Repair Reserve Account necessary to pay for the actual
costs incurred with respect to Structural Repairs, which work shall be subject to the inspection of
Lender for compliance with the requirements of this Agreement. In no event shall Lender be
obligated to disburse funds from the Structural Repair Reserve Account if a Monetary Default or an
Event of Default exists.
(c) Each request for disbursement from the Structural Repair Reserve Account shall be in a
form reasonably specified or reasonably approved by Lender and be submitted together with an
Officers Certificate specifying the specific items for which the disbursement is requested,
certifying that such item qualifies as a Structural Repair, the estimated cost for the applicable
Project through completion and the cost of each item purchased. Each request for disbursement
shall be delivered at least fifteen (15) Business Days prior to the date of the requested
disbursement and shall include copies of invoices for all costs incurred and each request shall
include evidence satisfactory to Lender of payment of all such amounts or evidence that such
amounts will be paid by such disbursement. Borrower shall not make a request for disbursement from
the Structural Repair Reserve Account more frequently than once in any calendar month and the total
amount of any request shall not be less than $10,000 (except in the case of the final request for
disbursement).
16.4
Immediate Repair and Remediation Reserve Account
.
(a) On the Closing Date, a portion of the Loan in the amount of $404,310, representing one
hundred twenty-five percent (125%) of the cost to complete the Immediate Repairs and Remediation,
will be deposited by Lender into the Immediate Repair and Remediation Reserve Account. Subject to
the pre-conditions to disbursement set forth in this
Section 16.4
, Lender shall make
disbursements of amounts deposited in the Immediate Repair and Remediation Reserve Account from
time to time (but no more frequently than once a calendar month) to pay for the costs of completing
the Immediate Repairs and Remediation.
105
Lender shall, upon written request from Borrower and
satisfaction of the requirements to final disbursement set forth in this
Section 16.4
(the
Completion
), instruct the Cash Management Bank to disburse to Borrower the amounts
remaining in the Immediate Repair and Remediation Reserve Account. Subject to Excusable Delay, the
Completion shall occur on or before the date which is one hundred eighty (180) days following the
date hereof (the
Immediate Repairs and Remediation Completion Deadline
). In the event
Completion does not occur on or before the Immediate Repairs Completion Deadline, Lender shall
notify Borrower of such fact and Borrower shall have a period of at least thirty (30) days, as
determined by Lender and set forth in such notice, to effect the Completion. It shall be an Event
of Default hereunder in the event the Completion does not occur on or before the Immediate Repairs
and Remediation Completion Deadline or any date afforded by Lenders notice to effect the
Completion as set forth in Lenders notice, and upon such event, Lender shall have no further
obligation to disburse the remaining amounts deposited in the Immediate Repair and Remediation
Reserve Account to Borrower and such remaining amounts shall be applied by Lender reduce the
Principal Amount then outstanding under the Notes.
(b) Amounts deposited in the Immediate Repair and Remediation Reserve Account may be disbursed
from time to time, (
provided
that Borrower shall not make a request for disbursement
therefrom more frequently than once in any calendar month and the total amount of any request shall
not be less than $10,000 (except in the case of the final request for disbursement)) upon
Borrowers satisfaction of the conditions set forth in subsection (c) below, except that the final
disbursement of amounts deposited in the Immediate Repair and Remediation Reserve Account shall not
be disbursed until the conditions set forth in subsection (c)(ii)(E) shall have also been
satisfied.
(c) The obligation of Lender to disburse any portion of the amounts deposited in the Immediate
Repair and Remediation Reserve Account is subject to the condition precedent that all of the
following requirements shall have been completed to Lenders reasonable satisfaction:
(i) No Event of Default shall have occurred and be continuing;
(ii) Lender shall have received the following items:
(A) a request for advance duly executed by an authorized officer of the Borrower delivered to
Lender no earlier than ten (10) Business Days prior to the date the disbursement is requested;
(B) with respect to all but the final disbursement of the amounts deposited in the Immediate
Repair and Remediation Reserve Account, a certificate from Borrower certifying to Lender that there
are sufficient funds remaining in the Immediate Repair and Remediation Reserve Account to attain
Completion;
(C) with respect to all but the final disbursement of the amounts deposited in the Immediate
Repair and Remediation Reserve Account, evidence reasonably satisfactory to Lender that the
applicable Immediate Repairs and Remediation have been
106
completed and all amounts due in respect
thereof have been paid, including specific general ledger entries and/or copies of invoices, in
either case, equal to (or greater than) the amount being disbursed from the Immediate Repair and
Remediation Reserve Account;
(D) payment of all of Lenders costs and expenses, if any, incurred in connection with
disbursement from the Immediate Repair and Remediation Reserve Account, including, without
limitation, reasonable attorneys fees and disbursements (which may, at the option of Lender, be
paid from the amounts deposited in the Immediate Repair and Remediation Reserve Account); and
(E) in connection with the final disbursement (in addition to satisfying each of the
conditions, other than the condition in clauses (B) and (C), set forth above), a certificate from
Lenders Consultant certifying to Lender that the Immediate Repairs and Remediation have been
completed to the satisfaction of such Person.
16.5
Master Lease Variable Additional Rent Reserve Account and LCR Deterioration Reserve
Account
.
(a) Pursuant to and in accordance with the provisions of
Section 3.1
, during a Low LCR
Cash Sweep Period, certain monies shall be transferred, in accordance with
Section 3.1
hereof, from the Holding Account into the Master Lease Variable Additional Rent Reserve Account and
retained by Lender as additional security for the Indebtedness and shall be applied or disbursed as
hereinafter provided. From and after the occurrence and continuation of an Event of Default,
Lender shall have the right to apply any amounts then remaining in the Master Lease Variable
Additional Rent Reserve Account to repay the Indebtedness or any other amounts due hereunder or
under the other Loan Documents in such order, manner and amount as Lender shall determine in its
sole discretion. Provided no Event of Default has occurred and is then continuing hereunder,
Lender shall instruct the Cash Management Bank to transfer to Borrowers Account, free and clear of
all Liens, any amounts remaining in the Master Lease Variable Additional Rent Reserve Account
within ten (10) Business Days following the termination of a Low LCR Cash Sweep Period.
(b) Following each Fiscal Quarter after the Closing Date, Lender will perform an LCR Test to
determine whether a Low LCR Cash Sweep Period has occurred and is continuing. Such LCR Test shall
be made by Lender based on the financial information delivered by Borrower pursuant to
Section
11.1
hereof. Pursuant to and in accordance with the provisions of
Section 3.1
, during
a Low LCR Cash Sweep Period, the Excess Proceeds shall be transferred, in accordance with
Section 3.1
hereof, from the Holding Account into the LCR Deterioration Reserve Account and
retained by Lender as additional security for the Indebtedness and shall be applied or disbursed as
hereinafter provided. From and after the occurrence and continuation of an Event of Default,
Lender shall have the right to apply any amounts then remaining in the LCR Deterioration Reserve
Account to repay the Indebtedness or any other amounts due hereunder or under the other Loan
Documents in such order, manner and amount as Lender shall determine in its sole discretion.
Provided no Event of Default has occurred and is then continuing hereunder, Lender shall instruct
the Cash Management Bank to transfer to Borrowers Account, free and
107
clear of all Liens, any
amounts remaining in the LCR Deterioration Reserve Account within ten (10) Business Days following
the termination of a Low LCR Cash Sweep Period.
XVII.
DEFAULTS
17.1
Event of Default
.
(a) Each of the following events shall constitute an event of default hereunder (an
Event
of Default
):
(i) if (A) the Indebtedness is not paid in full on the Maturity Date, (B) any regularly
scheduled monthly payment of interest due under the Notes is not paid in full on or before the
fifth (5
th
) calendar day following the applicable Payment Date (or, if such fifth
(5
th
) calendar day is not a Business Day, on or before the immediately preceding
Business Day), (C) any prepayment of principal due under this Agreement or the Notes is not paid on
or before the fifth (5
th
) calendar day following the date the same is due (or, if such
fifth (5
th
) calendar day is not a Business Day, on or before the immediately preceding
Business Day), (D) the Yield Maintenance Premium is not paid when due, (E) any deposit to the
Holding Account is not made when due, and such failure continuing for ten (10) Business Days after
Lender delivers written notice thereof to Borrower, or (F) except as to any amount included in (A),
(B), (C) or (D) of this clause (i), any other amount payable pursuant to this Agreement, the Notes
or any other Loan Document is not paid in full when due and payable in accordance with the
provisions of the applicable Loan Document, with such failure continuing for ten (10) Business Days
after Lender delivers written notice thereof to Borrower;
(ii) subject to Borrowers right to contest as set forth in
Section 7.3
, if any of the
Impositions or Other Charges are not paid prior to the imposition of any interest, penalty, charge
or expense for the non-payment thereof;
(iii) if the insurance policies required by
Section 6.1
are not kept in full force and
effect or if certified copies of any of such insurance policies are not delivered to Lender within
fifteen (15) days of the effective date of such insurance policies;
(iv) if, except as permitted pursuant to this Agreement, any of the following shall occur:
(a) any Transfer of any direct or indirect legal, beneficial or equitable interest in all or any
portion of the Property, (b) any Transfer of any direct or indirect interest in Borrower, Master
Lessee, Maryland Loan Guarantor any other SPE Entity or Guarantor, (c) Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) fails to remove any Lien or encumbrance (other than
a Permitted Encumbrance) on all or any portion of the Property (other than a Permitted Encumbrance)
within thirty (30) days after Lender delivers written notice thereof to Borrower, (d) any pledge,
hypothecation, creation of a security interest in or other encumbrance of any direct or indirect
interests in Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity or Guarantor or
(e) the filing of a declaration of condominium with respect to the Property;
(v) if any representation or warranty made by Borrower or Maryland Loan Guarantor herein or by
Borrower, Maryland Loan Guarantor or Guarantor in any other Loan Document, or in any report,
certificate, financial statement or other instrument, agreement or
108
document furnished to Lender shall have been false or misleading in any material respect as of the date the representation or
warranty was made, unless, if the representation or warranty is of a nature that can be made to be
true and correct as of the then-current date, and is not likely to have a Material Adverse Effect
and was not intentionally false or misleading in any material respect when made, then same does not
constitute an Event of Default if Borrower makes such representation or warranty true and correct
and not misleading within thirty (30) days after written notice thereof from Lenders;
(vi) if Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity or Guarantor
shall make an assignment for the benefit of creditors;
(vii) if a receiver, liquidator or trustee shall be appointed for Borrower, Maryland Loan
Guarantor, Master Lessee, any other SPE Entity or Guarantor or Borrower, Maryland Loan Guarantor,
Master Lessee, any other SPE Entity or Guarantor shall be adjudicated a bankrupt or insolvent, or
if any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law,
or any similar federal or state law, shall be filed by or against, consented to, or acquiesced in
by, Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity or Guarantor, or if any
proceeding for the dissolution or liquidation of Borrower, Maryland Loan Guarantor, Master Lessee,
any other SPE Entity or Guarantor shall be instituted;
provided
,
however
, if such
appointment, adjudication, petition or proceeding was involuntary and not consented to by Borrower,
Maryland Loan Guarantor, Master Lessee, any other SPE Entity or Guarantor upon the same not being
discharged, stayed or dismissed within one hundred (120) days;
(viii) if Borrower, Maryland Loan Guarantor, any other SPE Entity or Guarantor, as applicable,
attempts to assign its rights under this Agreement or any of the other Loan Documents or any
interest herein or therein in contravention of the Loan Documents;
(ix) with respect to any term, covenant or provision set forth herein (other than the other
subsections of this
Section 17.l
) which specifically contains a notice requirement or grace
period, if Borrower, Maryland Loan Guarantor, any other SPE Entity or Guarantor shall be in default
under such term, covenant or condition after the giving of such notice or the expiration of such
grace period;
(x) if any of the assumptions contained in the Non-Consolidation Opinion, in any Additional
Non-Consolidation Opinion or in any other non-consolidation opinion delivered to Lender in
connection with the Loan, or in any other non-consolidation opinion delivered subsequent to the
closing of the Loan, is or shall become untrue;
(xi) if Borrower or Maryland Loan Guarantor shall fail to comply with any covenants set forth
in
Section 5.1.4
,
Section 5.2.9
or
Section 5.2.21
;
(xii) except as provided clause (xi) above, if Borrower or Maryland Loan Guarantor shall fail
to comply with any covenants set forth in
Article V
or
Section XI
with such failure
continuing for ten (10) Business Days after Lender delivers written notice thereof to Borrower;
109
(xiii) if Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall
fail to comply with any covenants set forth in Section 3(d) or Section 8 of the Security Instrument
with such failure continuing for ten (10) Business Days after Lender delivers written notice
thereof to Borrower;
(xiv) if Borrower or Maryland Loan Guarantor shall fail to deposit any sums required to be
deposited in the Collateral Accounts pursuant to
Article XVI
when due;
(xv) if this Agreement or any other Loan Document or any Lien granted hereunder or thereunder,
in whole or in part, shall terminate or shall cease to be effective or shall cease to be a legally
valid, binding and enforceable obligation of Borrower, Maryland Loan Guarantor or Guarantor, or any
Lien securing the Indebtedness shall, in whole or in part, cease to be a perfected first priority
Lien, subject to the Permitted Encumbrances (except in any of the foregoing cases in accordance
with the terms hereof or under any other Loan Document or by reason of any affirmative act of
Lender);
(xvi) except as expressly permitted pursuant to the Loan Documents, if Borrower (or in the
case of the Maryland Property, Maryland Loan Guarantor) or Master Lessee grants any easement,
covenant or restriction (other than the Permitted Encumbrances) over the Property and such
easement, covenant or restriction is not terminated within thirty (30) days after Lender delivers
written notice thereof to Borrower;
(xvii) if the Master Lease shall be materially modified without the prior written consent of
Lender, except as expressly permitted hereunder;
(xviii) if Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall
be in default in any material obligation on the part of Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) beyond any applicable notice periods and cure periods pursuant
to the terms of the Master Lease and such default is reasonably likely to have a Material Adverse
Effect;
(xix) if the Master Lease shall terminate;
(xx) if Borrower or Maryland Loan Guarantor shall continue to be in Default under any of the
other terms, covenants or conditions of this Agreement or of any Loan Document not specified in
clauses (i) through (xix) above, for thirty (30) days after notice from Lender;
provided
,
however
, that if such Default is susceptible of cure but cannot reasonably be cured within
such thirty (30) day period and
provided
,
further
, that Borrower or Maryland Loan
Guarantor, as applicable, shall have commenced to cure such Default within such thirty (30) day
period and thereafter diligently proceeds to cure the same, such thirty (30) day period shall be
extended for such time as is reasonably necessary for Borrower or Maryland Loan Guarantor, as
applicable, in the exercise of due diligence to cure such Default, such additional period not to
exceed ninety (90) days.
(b) Unless waived in writing by Lender, upon the occurrence and during the continuance of an
Event of Default (other than an Event of Default described in clauses (a)(vi), (vii) or (viii)
above) Lender may, without notice or demand, in addition to any other rights or remedies available
to it pursuant to this Agreement and the other Loan Documents or at law or in
110
equity, take such
action that Lender deems advisable to protect and enforce its rights against Borrower and Maryland
Loan Guarantor and in the Property, including, without limitation, (i) declaring immediately due
and payable the entire Principal Amount together with interest thereon and all other sums due by
Borrower and Maryland Loan Guarantor under the Loan Documents, (ii) collecting interest on the
Principal Amount at the Default Rate whether or not Lender elects to accelerate the Notes and (iii)
enforcing or availing itself of any or all rights or remedies set forth in the Loan Documents
against Borrower, Maryland Loan Guarantor and the Property, including, without limitation, all
rights or remedies available at law or in equity; and upon any Event of Default described in
clauses (a)(vi) or (a)(vii) above, the Indebtedness and all other obligations of Borrower and
Maryland Loan Guarantor hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and Borrower and Maryland Loan
Guarantor each hereby expressly waives any such notice or demand, anything contained herein or in
any other Loan Document to the contrary notwithstanding. The foregoing provisions shall not be
construed as a waiver by Lender of its right to pursue any other remedies available to it under
this Agreement, the Security Instrument or any other Loan Document. Any payment hereunder may be
enforced and recovered in whole or in part at such time by one or more of the remedies provided to
Lender in the Loan Documents.
17.2
Remedies
.
(a) Unless waived in writing by Lender, upon the occurrence and during the continuance of an
Event of Default, all or any one or more of the rights, powers, privileges and other remedies
available to Lender against Borrower and Maryland Loan Guarantor under this Agreement or any of the
other Loan Documents executed and delivered by, or applicable to, Borrower or Maryland Loan
Guarantor or at law or in equity may be exercised by Lender at any time and from time to time,
whether or not all or any of the Indebtedness shall be declared due and payable, and whether or not
Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its
rights and remedies under any of the Loan Documents with respect to the Property. Any such actions
taken by Lender shall be cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as Lender may determine in its
sole discretion, to the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of Lender permitted by law, equity or contract or as set forth herein
or in the other Loan Documents. Without limiting the generality of the foregoing, Borrower and
Maryland Loan Guarantor each agrees that if an Event of Default is continuing (i) Lender shall not
be subject to any one action or election of remedies law or rule and (ii) all liens and other
rights, remedies or privileges provided to Lender shall remain in full force and effect until
Lender has exhausted all of its remedies against the Property and the Security Instrument has been
foreclosed, sold and/or otherwise realized upon in satisfaction of the Indebtedness or the
Indebtedness has been paid in full.
(b) Upon the occurrence and during the continuance of an Event of Default, with respect to the
Account Collateral, the Lender may:
(i) without notice to Borrower, except as required by law, and at any time or from time to
time, charge, set-off and otherwise apply all or any part of the Account Collateral
111
against the
Obligations, operating expenses and/or Capital Expenditures for the Property or any part thereof;
(ii) in Lenders sole discretion, at any time and from time to time, exercise any and all
rights and remedies available to it under this Agreement, and/or as a secured party under the UCC;
(iii) demand, collect, take possession of or receipt for, settle, compromise, adjust, sue for,
foreclose or realize upon the Account Collateral (or any portion thereof) as Lender may determine
in its sole discretion; and
(iv) take all other actions provided in, or contemplated by, this Agreement.
(c) With respect to Borrower, Maryland Loan Guarantor, the Account Collateral and the
Property, nothing contained herein or in any other Loan Document shall be construed as requiring
Lender to resort to the Property for the satisfaction of any of the Indebtedness, and Lender may
seek satisfaction out of the Property or any part thereof, in its absolute discretion in respect of
the Indebtedness. In addition, Lender shall have the right from time to time to partially
foreclose this Agreement and the Security Instrument in any manner and for any amounts secured by
this Agreement or the Security Instrument then due and payable as determined by Lender in its sole
discretion including, without limitation, the following circumstances: (i) in the event Borrower
or Maryland Loan Guarantor defaults beyond any applicable grace period in the payment of one or
more scheduled payments of principal or interest, Lender may foreclose this Agreement and the
Security Instrument to recover such delinquent payments, or (ii) in the event Lender elects to
accelerate less than the entire outstanding principal balance of the Loan, Lender may foreclose
this Agreement and the Security Instrument to recover so much of the principal balance of the Loan
as Lender may accelerate and such other sums secured by this Agreement or the Security Instrument
as Lender may elect. Notwithstanding one or more partial foreclosures, the Property shall remain
subject to this Agreement and the Security Instrument to secure payment of sums secured by this
Agreement and the Security Instrument and not previously recovered.
17.3
Remedies Cumulative; Waivers
. The rights, powers and remedies of Lender under this
Agreement and the Security Instrument shall be cumulative and not exclusive of any other right,
power or remedy which Lender may have against Borrower or Maryland Loan Guarantor pursuant to this
Agreement or the other Loan Documents, or existing at law or in equity or otherwise. Lenders
rights, powers and remedies may be pursued singly, concurrently or otherwise, at such time and in
such order as Lender may determine in Lenders sole discretion. No delay or omission to exercise
any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or
power or shall be construed as a waiver thereof, but any such remedy, right or power may be
exercised from time to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower, Maryland Loan Guarantor or Guarantor shall not be
construed to be a waiver of any subsequent Default or Event of Default by Borrower, Maryland Loan
Guarantor or Guarantor or to impair any remedy, right or power consequent thereon.
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17.4
Costs of Collection
. In the event that after an Event of Default: (i) the Notes or
any of the Loan Documents is placed in the hands of an attorney for collection or enforcement or is
collected or enforced through any legal proceeding; (ii) an attorney is retained to represent
Lender in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors
rights and involving a claim under the Notes or any of the Loan Documents; or (iii) an attorney is
retained to protect or enforce the lien or any of the terms of this Agreement, the Security
Instrument or any of the Loan Documents; then Borrower shall pay to Lender all reasonable
attorneys fees, costs and expenses actually incurred in connection therewith, including costs of
appeal, together with interest on any judgment obtained by Lender at the Default Rate.
XVIII.
SPECIAL PROVISIONS
18.1
Exculpation
.
18.1.1
Exculpated Parties
. Except as set forth in this
Section 18.1
, the Recourse
Guaranty and the Environmental Indemnity, no personal liability shall be asserted, sought or
obtained by Lender or enforceable against (i) Borrower, (ii) any Affiliate of Borrower, (iii) any
Person owning, directly or indirectly, any legal or beneficial interest in Borrower or any
Affiliate of Borrower or (iv) any direct or indirect partner, member, principal, officer,
Controlling Person, beneficiary, trustee, advisor, shareholder, employee, agent, Affiliate or
director of any Persons described in clauses (i) through (iii) above (collectively, the
Exculpated Parties
) and none of the Exculpated Parties shall have any personal liability
(whether by suit deficiency judgment or otherwise) in respect of the Obligations, this Agreement,
the Security Instrument, the Notes, the Property or any other Loan Document, or the making,
issuance or transfer thereof, all such liability, if any, being expressly waived by Lender. The
foregoing limitation shall not in any way limit or affect Lenders right to any of the following
and Lender shall not be deemed to have waived any of the following:
(a) Foreclosure of the lien of this Agreement and the Security Instrument in accordance with
the terms and provisions set forth herein and in the Security Instrument;
(b) Action against any other security at any time given to secure the payment of the Notes and
the other Obligations;
(c) Exercise of any other remedy set forth in this Agreement or in any other Loan Document
which is not inconsistent with the terms of this
Section 18.1
;
(d) Any right which Lender may have under Sections 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the Indebtedness secured
by this Agreement and the Security Instrument or to require that all collateral shall continue to
secure all of the Indebtedness owing to Lender in accordance with the Loan Documents; or
(e) The liability of any given Exculpated Party with respect to any separate written guaranty
or agreement given by any such Exculpated Party in connection with the Loan (including, without
limitation, the Recourse Guaranty and the Environmental Indemnity).
113
18.1.2
Carveouts From Non-Recourse Limitations
. Notwithstanding the foregoing or anything
in this Agreement or any of the other Loan Documents to the contrary, there shall at no time be any
limitation on Borrowers, Maryland Loan Guarantors or, except as set forth in the Recourse
Guaranty, Guarantors liability for the payment, in accordance with the terms of this Agreement,
the Notes, the Security Instrument and the other Loan Documents, to Lender of and for:
(a) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other
obligation incurred by or on behalf of Lender arising out of or in connection with fraud or
intentional material misrepresentation by Borrower, Maryland Loan Guarantor, Master Lessee,
Guarantor or any of their principals, officers, agents or employees in connection with the Loan;
(b) damage to the Property arising from intentional misconduct of Borrower, Maryland Loan
Guarantor, Master Lessee, Guarantor or any of their principals, officers, agents or employees, and
any removal of assets forming part of any Individual Property by Borrower, Maryland Loan Guarantor
or Master Lessee in violation of the Loan Documents;
(c) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other
obligation incurred by or on behalf of Lender arising out of or in connection with the breach of
any representation, warranty, covenant or indemnification provision in the Environmental Indemnity
or herein concerning environmental laws, hazardous substances and asbestos and any indemnification
of Lender with respect thereto in the Environmental Indemnity or herein, but only to the extent
that the same are not insured against by an Environmental Insurance Policy;
(d) the amount of any misappropriation or conversion by Borrower, Maryland Loan Guarantor or
Master Lessee of (A) any Proceeds paid by reason of any casualty, damage or destruction of the
Property, (B) any Proceeds received in connection with a Taking, (C) any Rents following and during
the continuance of an Event of Default, or (D) any Rents paid more than one (1) month in advance
(it being agreed that no use of funds for the repair, maintenance or operations of the Property
shall be treated as a misappropriation hereunder);
(e) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other
obligation incurred by or on behalf of Lender arising out of or in connection with a breach of any
representation set forth in
Section 4.1.29
;
(f) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other
obligation incurred by or on behalf of Lender arising out of or in connection with Borrowers or
Maryland Loan Guarantors failure to obtain Lenders prior consent to any Debt or voluntary Lien
encumbering the Property as required by this Agreement or by the Security Instruments;
(g) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other
obligation incurred by or on behalf of Lender (including, without limitation, reasonable attorneys
fees, causes of action, suits, claims, demands and adjustments of any nature or description
whatsoever) which may at any time be imposed upon, incurred by or awarded against Lender, in the
event (and arising out of such circumstances) that Borrower or Maryland Loan
114
Guarantor should raise
any defense, counterclaim and/or allegation in any foreclosure action by Lender relative to any
Individual Property or the Account Collateral or any part thereof which is found by a court of
competent jurisdiction in a final, unappealable decision to have been raised by Borrower or
Maryland Loan Guarantor in bad faith or to be without basis in fact or law;
(h) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other
obligation incurred by or on behalf of Lender arising out of or in connection with (A) any Borrower
or Maryland Loan Guarantor filing a voluntary petition under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law; (B) any Borrower or Maryland Loan Guarantor
soliciting or causing to be solicited petitioning creditors for an involuntary petition against any
Borrower or Maryland Loan Guarantor under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law, or an involuntary case being commenced against any Borrower or
Maryland Loan Guarantor under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law with the collusion of any Individual Borrower or Maryland Loan Guarantor or any of
its Affiliates, (C) any Borrower or Maryland Loan Guarantor filing an answer consenting to or
otherwise acquiescing in or joining in any involuntary petition filed against it, by any other
Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (D)
any Borrower or Maryland Loan Guarantor consenting to or acquiescing in or joining in an
application for the appointment of a custodian, receiver, trustee, or examiner for any such
Borrower or Maryland Loan Guarantor or any portion of the Property; (E) any Borrower or Maryland
Loan Guarantor making an assignment for the benefit of creditors, or admitting, in writing or in
any legal proceeding, its insolvency or inability to pay its debts as they become due;
(i) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other
obligation incurred by or on behalf of Lender arising out of or in connection with any Borrowers
or Maryland Loan Guarantors failure to obtain Lenders prior written consent to any Transfer as
required by the Loan Agreement or the Security Instruments; or
(j) reasonable attorneys fees and expenses incurred by Lender in connection with any
successful suit filed on account of any of the foregoing clauses (a) through (i).
Notwithstanding the foregoing provisions of this
Section 18.1.2
, Borrower and Maryland
Loan Guarantor shall not be liable for the payment of any such costs and expenses to the extent
that a court of competent jurisdiction determines in a final decision that the same arose by reason
of the gross negligence, criminal acts, fraud or willful misconduct of Lender.
XIX.
MISCELLANEOUS
19.1
Survival
. This Agreement and all covenants, indemnifications, agreements,
representations and warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Lender of the Loan and the execution and delivery to Lender of the Notes, and
shall continue in full force and effect so long as all or any of the Indebtedness is outstanding
and unpaid unless a longer period is expressly set forth herein or in the other Loan Documents.
Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed
to include the successors and assigns of such party. All covenants, promises and agreements in
this Agreement, by or on behalf of Borrower or Maryland Loan Guarantor, shall
115
inure to the benefit
of the successors and assigns of Lender. If Borrower consists of more than one person, the
obligations and liabilities of each such person hereunder and under the other Loan Documents shall
be joint and several. The obligations and liabilities of Borrower and Maryland Loan Guarantor
hereunder and under the other Loan Documents shall be joint and several.
19.2
Lenders Discretion
. Whenever pursuant to this Agreement, Lender exercises any right
given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender,
the decision of Lender to approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically herein provided) be in
the sole discretion of Lender and shall be final and conclusive.
19.3
Governing Law
.
(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY LENDER AND
ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW
OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER AND MARYLAND
LOAN GUARANTOR EACH HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW
OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTES, AND THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER OR MARYLAND LOAN GUARANTOR
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDERS OPTION BE INSTITUTED IN ANY FEDERAL OR
STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW AND BORROWER AND MARYLAND LOAN GUARANTOR EACH WAIVES ANY OBJECTIONS WHICH
IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER AND MARYLAND LOAN GUARANTOR EACH HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER AND MARYLAND LOAN
GUARANTOR EACH DOES HEREBY DESIGNATE AND APPOINT:
116
CORPORATION SERVICE COMPANY
80 STATE STREET
ALBANY, NEW YORK 12207-2543
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS
WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW
YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN
NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER AND MARYLAND LOAN GUARANTOR IN THE MANNER
PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER AND
MARYLAND LOAN GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER
AND MARYLAND LOAN GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS
AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE
SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS
DISSOLVED WITHOUT LEAVING A SUCCESSOR.
19.4
Modification, Waiver in Writing
. No modification, amendment, extension, discharge,
termination or waiver of any provision of this Agreement, or of the Notes, or of any other Loan
Document, or consent to any departure therefrom, shall in any event be effective unless the same
shall be in a writing signed by the party against whom enforcement is sought (and, if a
Securitization shall have occurred, a Rating Agency Confirmation is obtained), and then such waiver
or consent shall be effective only in the specific instance, and for the purpose, for which given.
Except as otherwise expressly provided herein, no notice to or demand on Borrower shall entitle
Borrower to any other or future notice or demand in the same, similar or other circumstances.
19.5
Delay Not a Waiver
. Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or agreement, or exercising any
right, power, remedy or privilege hereunder, or under the Notes or under any other Loan Document,
or any other instrument given as security therefor, shall operate as or constitute a waiver
thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under this Agreement, the
Notes or any other Loan Document, Lender shall not be deemed to have waived any right either to
require prompt payment when due of all other amounts due under this Agreement, the Notes or the
other Loan Documents, or to declare a default for failure to effect prompt payment of any such
other amount.
19.6
Notices
. All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document shall be given in writing and shall be effective for all
purposes if hand delivered or sent by (a) certified or registered United States mail, postage
prepaid, return receipt requested, or (b) expedited prepaid delivery service, either commercial or
117
United States Postal Service, with proof of attempted delivery, addressed as follows (or at such
other address and Person as shall be designated from time to time by any party hereto, as the case
may be, in a written notice to the other parties hereto in the manner provided for in this
Section):
|
|
|
If to Lender:
|
|
German American Capital Corporation, on behalf of the holders of the Notes
|
|
|
60 Wall Street, 10
th
floor
|
|
|
New York, NY 10005
|
|
|
Attention: Todd Sammann and General Counsel
|
|
|
|
With a copy to:
|
|
Wachovia Bank, National Association, as Servicer, at such notice address as shall be
designated by notice delivered in accordance with this Section.
|
|
|
|
With a copy to:
|
|
Skadden, Arps, Slate, Meagher & Flom LLP
|
|
|
Four Times Square
|
|
|
New York, New York 10036
|
|
|
Attention: Harvey R. Uris, Esq.
|
|
|
|
With a copy to:
|
|
Wachovia Bank, National Association
|
|
|
375 Park Avenue, 5
th
Floor
|
|
|
New York, New York 10022
|
|
|
Attention: Mr. Peter Scola
|
|
|
|
If to Borrower (which shall
|
|
|
be deemed notice to
|
|
|
Maryland Loan Guarantor):
|
|
c/o BlueLinx Holdings Inc.
|
|
|
4300 Wildwood Parkway
|
|
|
Atlanta, Georgia 30339
|
|
|
Attention: Mr. David Morris, CFO & Treasurer
|
|
|
|
With a copy to:
|
|
Schulte Roth & Zabel LLP
|
|
|
919 Third Avenue
|
|
|
New York, New York 10022
|
|
|
Attention: Jeffrey A. Lenobel, Esq.
|
All notices, elections, requests and demands under this Agreement shall be effective and deemed
received upon the earliest of (i) the actual receipt of the same by personal delivery or otherwise,
(ii) one (1) Business Day after being deposited with a nationally recognized overnight courier
service as required above, or (iii) three (3) Business Days after being deposited in the United
States mail as required above. Rejection or other refusal to accept or the inability to deliver
because of changed address of which no notice was given as herein required shall be deemed to be
receipt of the notice, election, request, or demand sent.
19.7
TRIAL BY JURY
. EACH OF BORROWER, MARYLAND LOAN GUARANTOR AND LENDER AND ALL PERSONS
CLAIMING BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY AND
118
INTENTIONALLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS
AGREEMENT, THE SECURITY INSTRUMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT, INCLUDING, WITHOUT
LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT,
THE SECURITY INSTRUMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT (AS NOW OR HEREAFTER MODIFIED) OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE;
AND BORROWER AND MARYLAND LOAN GUARANTOR EACH HEREBY AGREES AND CONSENTS THAT AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY. BORROWER AND MARYLAND LOAN GUARANTOR
EACH ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING OF THIS WAIVER AND
ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THE LOAN. THIS WAIVER
SHALL SURVIVE THE REPAYMENT OF THE LOAN.
19.8
Headings
. The Article and/or Section headings and the Table of Contents in this
Agreement are included herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose.
19.9
Severability
. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
19.10
Preferences
. To the extent Borrower or Maryland Loan Guarantor makes a payment or
payments to Lender, which payment or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law, common law or equitable
cause, then, to the extent of such payment or proceeds received, the obligations hereunder or part
thereof intended to be satisfied shall be revived and continue in full force and effect, as if such
payment or proceeds had not been received by Lender.
19.11
Waiver of Notice
. Borrower and Maryland Loan Guarantor shall not be entitled to any
notices of any nature whatsoever from Lender except with respect to matters for which this
Agreement or the other Loan Documents specifically and expressly provide for the giving of notice
by Lender to Borrower and except with respect to matters for which Borrower is not, pursuant to
applicable Legal Requirements, permitted to waive the giving of notice. Borrower hereby expressly
waives the right to receive any notice from Lender with respect to any matter
119
for which this
Agreement or the other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower.
19.12
Expenses; Indemnity
.
(a) Borrower and Maryland Loan Guarantor each covenants and agrees to pay or, if Borrower or
Maryland Loan Guarantor fails to pay, to reimburse, Lender upon receipt of written notice from
Lender for all reasonable costs and expenses (including reasonable attorneys fees and
disbursements) actually incurred by Lender in connection with (i) the preparation, negotiation,
execution and delivery of this Agreement and the other Loan Documents and the consummation of the
transactions contemplated hereby and thereby and all the costs of furnishing all opinions by
counsel for Borrower (including without limitation any opinions requested by Lender pursuant to
this Agreement); (ii) the servicing of the Loan by the Servicer after the Closing Date in
accordance with
Section 14.3.2(e)
; (iii) the negotiation, preparation, execution, delivery
and administration of any consents, amendments, waivers or other modifications to this Agreement
and the other Loan Documents and any other documents or matters as required herein or under the
other Loan Documents; (iv) securing Borrowers compliance with any requests made pursuant to the
provisions of this Agreement; (v) the filing and recording fees and expenses, mortgage recording
taxes, title insurance and reasonable fees and expenses of counsel for providing to Lender all
required legal opinions, and other similar expenses incurred in creating and perfecting the Lien in
favor of Lender pursuant to this Agreement and the other Loan Documents; (vi) enforcing or
preserving any rights, in response to third party claims or the prosecuting or defending of any
action or proceeding or other litigation, in each case against, under or affecting Borrower,
Maryland Loan Guarantor, this Agreement, the other Loan Documents, the Property, or any other
security given for the Loan; (vii) enforcing any obligations of or collecting any payments due from
Borrower or Maryland Loan Guarantor under this Agreement, the other Loan Documents or with respect
to the Property or in connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a work-out or of any insolvency or bankruptcy
proceedings and (viii) procuring insurance policies pursuant to
Section 6.1
;
provided
,
however
, that Borrower shall not be liable for the payment of any such
costs and expenses to the extent the same arise by reason of the gross negligence, illegal acts,
fraud or willful misconduct of Lender. Any cost and expenses due and payable to Lender may be paid
from any amounts in the Holding Account.
(b) Subject to the non-recourse provisions of
Section 18.1
, Borrower and Maryland Loan
Guarantor shall protect, indemnify and save harmless Lender, and all officers, directors,
stockholders, members, partners, employees, agents, successors and assigns thereof (collectively,
the Indemnified Parties) from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and expenses (including all reasonable attorneys fees and expenses
actually incurred) imposed upon or incurred by or asserted against the Indemnified Parties or the
Property or any part of its interest therein, by reason of the occurrence or existence of any of
the following (to the extent Proceeds payable on account of the following shall be inadequate; it
being understood that in no event will the Indemnified Parties be required to actually pay or incur
any costs or expenses as a condition to the effectiveness of the foregoing indemnity) prior to (i)
the acceptance by Lender or its designee of a deed-in-lieu of foreclosure with respect to the
Property, or (ii) an Indemnified Party or its designee taking possession or control of the Property
or (iii) the foreclosure of the Security Instrument, except to the extent caused by the actual
120
willful misconduct or gross negligence of any Indemnified Party (other than such willful
misconduct, criminal acts, fraud or gross negligence imputed to the Indemnified Parties because of
their interest in the Property): (1) ownership of Borrowers (or in the case of the Maryland
Property, Maryland Loan Guarantors) interest in the Property, or any interest therein, or receipt
of any Rents or other sum therefrom, (2) any accident, injury to or death of any persons or loss of
or damage to property occurring on or about the Property or any Appurtenances thereto, (3) any
design, construction, operation, repair, maintenance, use, non-use or condition of the Property or
Appurtenances thereto, including claims or penalties arising from violation of any Legal
Requirement, Environmental Law or Insurance Requirement, as well as any claim based on any patent
or latent defect, whether or not discoverable by Lender, any claim the insurance as to which is
inadequate, and any Environmental Claim except to the extent such Environmental Claim is covered by
the Environmental Insurance Policy and the related insurer agrees to pay Lenders claims
thereunder, (4) any Event of Default under this Agreement or any of the other Loan Documents, (5)
any performance of any labor or services or the furnishing of any materials or other property in
respect of the Property or any part thereof, (6) any negligence or tortious act or omission on the
part of Borrower, Maryland Loan Guarantor or any of its agents, contractors, servants, employees,
sublessees, licensees or invitees, (7) any contest referred to in
Section 7.3
hereof, or
(8) any obligation or undertaking relating to the performance or discharge of any of the terms,
covenants and conditions of the landlord contained in the Leases. Any amounts the Indemnified
Parties are legally entitled to receive under this
Section 19.12(b)
which are not paid
within thirty (30) days after written demand therefor by the Indemnified Parties or Lender, setting
forth in reasonable detail the amount of such demand and the basis therefor, shall bear interest
from the date of demand at the Default Rate, and shall, together with such interest, be part of the
Indebtedness and secured by the Security Instrument. In case any action, suit or proceeding is
brought against the Indemnified Parties by reason of any such occurrence, Borrower shall at
Borrowers expense resist and defend such action, suit or proceeding or will cause the same to be
resisted and defended by counsel at Borrowers reasonable expense for the insurer of the liability
or by counsel designated by Borrower (unless reasonably disapproved by Lender promptly after Lender
has been notified of such counsel);
provided
,
however
, that nothing herein shall
compromise the right of Lender (or any Indemnified Party) to appoint its own counsel at Borrowers
reasonable expense for its defense with respect to any action which in its reasonable opinion
presents a conflict or potential conflict between Lender and Borrower that would make such separate
representation advisable;
provided
,
further
, that if Lender shall have appointed
separate counsel pursuant to the foregoing, Borrower shall not be responsible for the expense of
additional separate counsel of any Indemnified Party unless in the reasonable opinion of Lender a
conflict or potential conflict exists between such Indemnified Party and Lender. So long as
Borrower is resisting and defending such action, suit or proceeding as provided above in a prudent
and commercially reasonable manner, Lender and the Indemnified Parties shall not be entitled to
settle such action, suit or proceeding without Borrowers consent which shall not be unreasonably
withheld or delayed, and claim the benefit of this
Section 19.12(b)
with respect to such
action, suit or proceeding and Lender agrees that it will not settle any such action, suit or
proceeding without the consent of Borrower. Any Indemnified Party will give Borrower prompt notice
after such Indemnified Party obtains actual knowledge of any potential claim by such Indemnified
Party for indemnification hereunder.
121
19.13
Exhibits and Schedules Incorporated
. The Exhibits and Schedules annexed hereto are
hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the
body hereof.
19.14
Offsets, Counterclaims and Defenses
. Any assignee of Lenders interest in and to
this Agreement, the Notes and the other Loan Documents shall take the same free and clear of all
offsets, counterclaims or defenses which are unrelated to such documents which Borrower or Maryland
Loan Guarantor may otherwise have against any assignor of such documents, and no such unrelated
counterclaim or defense shall be interposed or asserted by Borrower or Maryland Loan Guarantor in
any action or proceeding brought by any such assignee upon such documents and any such right to
interpose or assert any such unrelated offset, counterclaim or defense in any such action or
proceeding is hereby expressly waived by Borrower and Maryland Loan Guarantor.
19.15
Liability of Assignees of Lender
. No assignee of Lender shall have any personal
liability, directly or indirectly, under or in connection with this Agreement or any other Loan
Document or any amendment or amendments hereto made at any time or times, heretofore or hereafter,
any different than the liability of Lender hereunder. In addition, no assignee shall have at any
time or times hereafter any personal liability, directly or indirectly, under or in connection with
or secured by any agreement, lease, instrument, encumbrance, claim or right affecting or relating
to the Property or to which the Property is now or hereafter subject any different than the
liability of Lender hereunder. The limitation of liability provided in this
Section 19.15
is (i) in addition to, and not in limitation of, any limitation of liability applicable to the
assignee provided by law or by any other contract, agreement or instrument, and (ii) shall not
apply to any assignees gross negligence or willful misconduct.
19.16
No Joint Venture or Partnership; No Third Party Beneficiaries
.
(a) Borrower and Lender intend that the relationships created hereunder and under the other
Loan Documents be solely that of borrower and lender. Nothing herein or therein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between
Borrower and Lender or to grant Lender any interest in the Property other than that of mortgagee,
beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for the benefit of Lender and
Borrower and Maryland Loan Guarantor and nothing contained in this Agreement or the other Loan
Documents shall be deemed to confer upon anyone other than Lender, Borrower and Maryland Loan
Guarantor any right to insist upon or to enforce the performance or observance of any of the
obligations contained herein or therein. All conditions to the obligations of Lender to make the
Loan hereunder are imposed solely and exclusively for the benefit of Lender and no other Person
shall have standing to require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of strict compliance
with any or all thereof and no other Person shall under any circumstances be deemed to be a
beneficiary of such conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lenders sole discretion, Lender deems it advisable or desirable to do so.
122
19.17
Publicity
. Other than legally required disclosures, filings and reporting
requirements, all news releases, publicity or advertising by Borrower or Lender or their respective
Affiliates through any media intended to reach the general public which refers to the Loan
Documents or the financing evidenced by the Loan Documents, to Lender, or any of its Affiliates
shall be subject to the prior written approval of Lender and Borrower.
19.18
Waiver of Marshalling of Assets
. To the fullest extent permitted by law, Borrower
and Maryland Loan Guarantor, for itself and its successors and assigns, waives all rights to a
marshalling of the assets of Borrower, Maryland Loan Guarantor, Borrowers and Maryland Loan
Guarantors members and others with interests in Borrower, Maryland Loan Guarantor and of the
Property, and agrees not to assert any right under any laws pertaining to the marshalling of
assets, the sale in inverse order of alienation, homestead exemption, the administration of estates
of decedents, or any other matters whatsoever to defeat, reduce or affect the right of Lender under
the Loan Documents to a sale of the Property for the collection of the Indebtedness without any
prior or different resort for collection or of the right of Lender to the payment of the
Indebtedness out of the net proceeds of the Property in preference to every other claimant
whatsoever.
19.19
Waiver of Counterclaim and other Actions
. Borrower and Maryland Loan Guarantor each
hereby expressly and unconditionally waives, in connection with any suit, action or proceeding
brought by Lender on this Agreement, the Notes, the Security Instrument or any Loan Document, any
and every right it may have to (i) interpose any counterclaim therein (other than a counterclaim
which can only be asserted in the suit, action or proceeding brought by Lender on this Agreement,
the Notes, the Security Instrument or any Loan Document and cannot be maintained in a separate
action) and (ii) have any such suit, action or proceeding consolidated with any other or separate
suit, action or proceeding.
19.20
Conflict; Construction of Documents; Reliance
. In the event of any conflict between
the provisions of this Agreement and any of the other Loan Documents, the provisions of this
Agreement shall control. The parties hereto acknowledge that they were represented by competent
counsel in connection with the negotiation, drafting and execution of the Loan Documents and that
such Loan Documents shall not be subject to the principle of construing their meaning against the
party which drafted same. Borrower acknowledges that, with respect to the Loan, Borrower shall
rely solely on its own judgment and advisors in entering into the Loan without relying in any
manner on any statements, representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in the exercise of
any rights or remedies available to it under any of the Loan Documents or any other agreements or
instruments which govern the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Lender of any equity interest any of them may acquire in Borrower or Maryland Loan
Guarantor, and Borrower and Maryland Loan Guarantor each hereby irrevocably waives the right to
raise any defense or take any action on the basis of the foregoing with respect to Lenders
exercise of any such rights or remedies. Borrower acknowledges that Lender engages in the business
of real estate financings and other real estate transactions and investments which may be viewed as
adverse to or competitive with the business of Borrower or its Affiliates.
123
19.21
Prior Agreements
. This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and
thereby, and all prior agreements among or between such parties, whether oral or written, are
superseded by the terms of this Agreement and the other Loan Documents and unless specifically set
forth in a writing contemporaneous herewith the terms, conditions and provisions of any and all
such prior agreements do not survive execution of this Agreement.
19.22
Counterparts
. This Agreement may be executed in multiple counterparts, each of which
shall constitute an original, but all of which shall constitute one document.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their duly authorized representatives, all as of the day and year first above written.
BORROWER:
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ABP AL (MIDFIELD) LLC
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ABP AR (LITTLE ROCK) LLC
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ABP CA (CITY OF INDUSTRY) LLC
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ABP CA (NATIONAL CITY) LLC
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ABP CA (NEWARK) LLC
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ABP CO I (DENVER) LLC
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ABP CA (RIVERSIDE) LLC
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ABP CT (NEWTON) LLC
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ABP CO II (DENVER) LLC
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ABP FL (MIAMI) LLC
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ABP FL (LAKE CITY) LLC
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ABP FL (TAMPA) LLC
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ABP FL (PENSACOLA) LLC
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ABP GA (LAWRENCEVILLE) LLC
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ABP FL (YULEE) LLC
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ABP IL (UNIVERSITY PARK) LLC
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ABP IA (DES MOINES) LLC
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ABP KY (INDEPENDENCE) LLC
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ABP IN (ELKHART) LLC
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ABP MA (BELLINGHAM) LLC
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ABP LA (SHREVEPORT) LLC
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ABP ME (PORTLAND) LLC
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ABP MD (BALTIMORE) SUBSIDIARY LLC
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ABP MI (GRAND RAPIDS) LLC
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ABP MI (DETROIT) LLC
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ABP MN (MAPLE GROVE) LLC
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ABP MN (EAGAN) LLC
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ABP MO (KANSAS CITY) LLC
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ABP MO (BRIDGETON) LLC
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ABP MS (PEARL) LLC
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ABP MO (SPRINGFIELD) LLC
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ABP NC (CHARLOTTE) LLC
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ABP NC (BUTNER) LLC
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ABP NJ (DENVILLE) LLC
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ABP ND (NORTH FARGO) LLC
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ABP NY (YAPHANK) LLC
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ABP NM (ALBUQUERQUE) LLC
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ABP OK (TULSA) LLC
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ABP OH (TALMADGE) LLC
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ABP PA (ALLENTOWN) LLC
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ABP OR (BEAVERTON) LLC
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ABP SC (CHARLESTON) LLC
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ABP PA (STANTON) LLC
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ABP TN (ERWIN) LLC
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ABP SD (SIOUX FALLS) LLC
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ABP TN (NASHVILLE) LLC
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ABP TN (MEMPHIS) LLC
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ABP TX (FORT WORTH) LLC
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ABP TX (EL PASO) LLC
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ABP TX (HOUSTON) LLC
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ABP TX (HARLINGEN) LLC
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ABP TX (SAN ANTONIO) LLC
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ABP TX (LUBBOCK) LLC
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ABP VA (VIRGINIA BEACH) LLC
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ABP VA (RICHMOND) LLC
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ABP WA (WOODINVILLE) LLC
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ABP VT (SHELBURNE) LLC
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ABP WI (WAUSAU) LLC
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By:
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/s/ David J. Morris
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Name:
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David Morris
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Title:
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Vice President
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S-1 (Borrower)
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MARYLAND LOAN GUARANTOR:
ABP MD (BALTIMORE) LLC
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By:
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/s/ David J. Morris
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Name:
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David Morris
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Title:
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Vice President
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[Lenders signature appears on following page]
S-2 (Borrower)
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LENDER:
GERMAN AMERICAN CAPITAL
CORPORATION, a Maryland corporation, on
behalf of the holders of the Notes
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By:
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/s/ Todd O. Sammann
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Name:
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Todd O. Sammann
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Title:
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Vice President
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By:
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/s/ Thomas R. Traynor
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Name:
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Thomas R. Traynor
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Title:
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Authorized Signature
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