MASTER INDENTURE
Dated as of July 28, 2021
___________________
among
CMFT NET LEASE MASTER ISSUER LLC
as Issuer,
and
CITIBANK, N.A.,
as Indenture Trustee
NET-LEASE MORTGAGE NOTES
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
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Section 1.01 Definitions
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Section 1.02 Rules of Construction.
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ARTICLE II THE NOTES
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Section 2.01 Forms; Denominations
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Section 2.02 Execution, Authentication, Delivery and Dating
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Section 2.03 Certification of Receipt of the Issuer Collateral
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Section 2.04 The Notes Generally; New Issuances
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Section 2.05 Registration of Transfer and Exchange of Notes
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Section 2.06 Book-Entry Notes
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Section 2.07 Mutilated, Destroyed, Lost or Stolen Notes
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Section 2.08 Noteholder Lists
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Section 2.09 Persons Deemed Owners
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Section 2.10 Payment Account
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Section 2.11 Payments on the Notes
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Section 2.12 Final Payment Notice
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Section 2.13 Compliance with Withholding Requirements
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Section 2.14 Cancellation
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Section 2.15 Reserved
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Section 2.16 The Hedge Agreements
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Section 2.17 Tax Treatment of the Notes
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Section 2.18 DSCR Reserve Account
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Section 2.19 Representations and Warranties with Respect to the Issuer
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Section 2.20 Securities Accounts
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Section 2.21 Representations and Warranties With Respect To Properties and Leases
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ARTICLE III SATISFACTION AND DISCHARGE
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Section 3.01 Satisfaction and Discharge of Indenture
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Section 3.02 Application of Trust Money
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ARTICLE IV EVENTS OF DEFAULT; REMEDIES
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Section 4.01 Events of Default
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Section 4.02 Acceleration of Maturity; Rescission and Annulment
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Section 4.03 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee
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Section 4.04 Remedies
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Section 4.05 Application of Money Collected
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Section 4.06 Limitation on Suits
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Section 4.07 Unconditional Right of Noteholders to Receive Principal and Interest
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Section 4.08 Restoration of Rights and Remedies
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Section 4.09 Rights and Remedies Cumulative
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Section 4.10 Delay or Omission Not Waiver
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Section 4.11 Control by Requisite Global Majority
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Section 4.12 Waiver of Past Defaults
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Section 4.13 Undertaking for Costs
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Section 4.14 Waiver of Stay or Extension Laws
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Section 4.15 Sale of Issuer Collateral
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Section 4.16 Action on Notes
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ARTICLE V THE INDENTURE TRUSTEE
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Section 5.01 Certain Duties and Responsibilities
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Section 5.02 Notice of Defaults
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Section 5.03 Certain Rights of Indenture Trustee
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Section 5.04 Compensation; Reimbursement; Indemnification
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Section 5.05 Corporate Indenture Trustee Required; Eligibility
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Section 5.06 Authorization of Indenture Trustee
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Section 5.07 Merger, Conversion, Consolidation or Succession to Business
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Section 5.08 Resignation and Removal; Appointment of Successor
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Section 5.09 Acceptance of Appointment by Successor
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Section 5.10 Unclaimed Funds
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Section 5.11 Illegal Acts
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Section 5.12 Communications by the Indenture Trustee
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Section 5.13 Separate Indenture Trustees and Co-Trustees
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Section 5.14 Communications with the Rating Agency
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ARTICLE VI REPORTS TO NOTEHOLDERS
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Section 6.01 Reports to Noteholders and Others
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Section 6.02 Certain Communications with the Rating Agencies
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Section 6.03 Access to Certain Information.
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ARTICLE VII REDEMPTION
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Section 7.01 Redemption of the Notes
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ARTICLE VIII SUPPLEMENTAL INDENTURES; AMENDMENTS
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Section 8.01 Supplemental Indentures or Amendments Without Consent of Noteholders
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Section 8.02 Supplemental Indentures With Consent
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Section 8.03 Delivery of Supplements and Amendments
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Section 8.04 Series Supplements
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Section 8.05 Execution of Supplemental Indentures, Etc.
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ARTICLE IX COVENANTS; WARRANTIES
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Section 9.01 Maintenance of Office or Agency
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Section 9.02 Existence and Good Standing
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Section 9.03 Payment of Taxes and Other Claims
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Section 9.04 Validity of the Notes; Title to the Issuer Collateral; Lien
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Section 9.05 Protection of Issuer Collateral Pool and Collateral Pool
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Section 9.06 Covenants
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Section 9.07 Statement as to Compliance
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Section 9.08 Issuers May Consolidate, Etc., Only on Certain Terms
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Section 9.09 Litigation
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Section 9.10 Notice of Default
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Section 9.11 Cooperate in Legal Proceedings
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Section 9.12 Insurance Benefits
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Section 9.13 Costs of Enforcement
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Section 9.14 Performance of Issuers’ Duties by the Related Issuer Member
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Section 9.15 Further Acts, etc.
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Section 9.16 Payment of Debts
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Section 9.17 Single-Purpose Status
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Section 9.18 Separateness of The Issuer
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Section 9.19 Capitalization of the Issuer
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Section 9.20 Maintenance of Assets
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Section 9.21 Compliance with Representations and Warranties
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Section 9.22 Independent Managers or Independent Directors
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Section 9.23 Employees
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Section 9.24 Assumptions in Insolvency Opinion
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Section 9.25 Performance by the Issuer
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Section 9.26 Use of Proceeds
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Section 9.27 Other Rights, etc.
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Section 9.28 Books and Records
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Section 9.29 Overhead Expenses
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Section 9.30 Embargoed Persons
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ARTICLE X RESERVED
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ARTICLE XI COSTS
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Section 11.01 Performance at the Issuer’ Expense
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ARTICLE XII MISCELLANEOUS
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Section 12.01 Electronic Signatures and Transmission.
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Section 12.02 Execution Counterparts
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Section 12.03 Compliance Certificates and Opinions, Etc.
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Section 12.04 Form of Documents Delivered to Indenture Trustee
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Section 12.05 No Oral Change
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Section 12.06 Acts of Noteholders
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Section 12.07 Computation of Percentage of Noteholders
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Section 12.08 Notice to the Indenture Trustee, the Issuer and Certain Other Persons
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Section 12.09 Notices to Noteholders; Notification Requirements and Waiver
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Section 12.10 Successors and Assigns
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Section 12.11 Interest Charges; Waivers
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Section 12.12 Severability Clause
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Section 12.13 Governing Law
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Section 12.14 Effect of Headings and Table of Contents
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Section 12.15 Benefits of Indenture
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Section 12.16 Trust Obligation
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Section 12.17 Inspection
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Section 12.18 Method of Payment
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Section 12.19 Non-Petition
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Section 12.20 Non-Recourse
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Exhibits
Exhibit A-1 Form of Restricted Global Net-Lease Mortgage Note
Exhibit A-2 Form of Regulation S Global Net-Lease Mortgage Note
Exhibit A-3 Form of Definitive Net-Lease Mortgage Note
Exhibit B Form of Trustee Report
Exhibit C-1 Form of Transferor Certificate for Transfers of Definitive Notes
Exhibit C-2 Form of Transferee Certificate for Transfers of Definitive Notes
Exhibit D-1 Form of Transfer Certificate for Transfers From Regulation S Global Note or Definitive Note to Restricted Global Note
Exhibit D-2 Form of Transfer Certificate for Transfer from Restricted Global Note or Definitive Note to Regulation S Global Note During the Restricted Period
Exhibit D-3 Form of Transfer Certificate for Transfer from Restricted Global Note or Definitive Note to Regulation S Global Note After the Restricted Period
Exhibit D-4 Form of Regulation S Letter for Exchange of Interests in the Temporary Regulation S Global Note for Interests in the Permanent Regulation S Global Note
Exhibit E-1 Form of Certificate with Respect to Information Request by Beneficial Owner
Exhibit E-2 Form of Certificate with Respect to Information Request by Prospective Purchaser
Exhibit F Form of Noteholder Confidentiality Agreement
MASTER INDENTURE, dated as of July 28, 2021 (as amended, modified or supplemented from time to time as permitted hereby, the “Indenture”), between CMFT Net Lease Master Issuer LLC (the “Issuer”) and CITIBANK, N.A., a national banking association duly organized and existing under the laws of the United States of America, not in its individual capacity, but solely as Indenture Trustee (the “Indenture Trustee”) under this Indenture.
PRELIMINARY STATEMENT
WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to provide for the issuance of their respective series of Net-Lease Mortgage Notes (collectively, the “Notes”), to be issued pursuant to this Indenture, and the Notes issuable under this Indenture shall be issued in series (each, a “Series”), as from time to time may be created by supplements (each, a “Series Supplement”) to this Indenture;
NOW THEREFORE, all things necessary to make the Notes, when the Notes are executed by the Issuer and authenticated and delivered by the Indenture Trustee hereunder and duly issued by the Issuer, the valid and legally binding obligations of the Issuer enforceable in accordance with their terms, and to make this Indenture a valid and legally binding agreement of the Issuer enforceable in accordance with its terms, have been done.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee on the applicable Series Closing Date, for the benefit of the Indenture Trustee and the Noteholders, all of the Issuer’s right, title and interest in and to all of the Issuer’s “accounts,” “deposit accounts,” “chattel paper,” “payment intangibles,” “commercial tort claims,” “supporting obligations,” “promissory notes,” “letter-of-credit rights,” “documents,” “goods,” “fixtures,” “general intangibles,” “instruments,” “inventory,” “equipment,” “investment property,” “proceeds,” “intangibles,” “documents of title,” (as each of the foregoing terms is defined in the UCC), rights, interests and property (whether now owned or hereafter acquired or arising) (individually, the “Issuer Collateral” and, collectively, the “Issuer Collateral Pool”), including the following: (i) all of the Issuer’s rights under the Guaranties, (ii) all of the Issuer’s rights, title and interests in all of the membership interests of the Property Owners (the “Pledged Securities”), (iii) the Collection Account, the Release Account, the DSCR Reserve Account, the Payment Account, the Liquidity Reserve Account, the Exchange Reserve Account, in each case, as applicable, and any sub-accounts of such accounts and any other accounts established under the Indenture or Property Management Agreement for purposes of receiving, retaining and distributing amounts received in respect of the Issuer Collateral Pool and making payments to the Holders of the Notes and making distributions to the Holders of the Issuer Interests, and all funds and Permitted Investments as may from time to time be deposited therein, (iv) all present and future claims, demands and causes of action in respect of the foregoing, and (v) all proceeds of the foregoing of every kind and nature whatsoever, including, without limitation, all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, United States government securities, rights to payment of any and every kind and other forms of obligations
and receivables, instruments and other property that at any time constitute all or part of or are included in the proceeds of the foregoing; provided, however, that if the Grant given hereunder by any Issuer with respect to any contract or permit would result in the termination or breach of such contract or permit or is otherwise prohibited or ineffective (whether by the terms thereof or under Applicable Law), then such contract or permit shall not be subject to the Grant but shall be held in trust by the Issuer for the benefit of the Indenture Trustee and, on the exercise by the Indenture Trustee of any of its rights or remedies under this Indenture following an Event of Default shall be assigned by the Issuer as directed by the Indenture Trustee; provided, further, that: (x) the security interests granted hereunder shall attach to such contract or permit, or applicable portion thereof, immediately at such time as the condition causing such termination or breach is remedied, and (y) if a term in a contract that prohibits or restricts the grant of the security interests granted hereunder in the whole of an Account or Chattel Paper forming part of the Issuer Collateral is unenforceable against the Indenture Trustee under Applicable Law, then the exclusion from the security interests set out above shall not apply to such Account or Chattel Paper; and provided, further, that the Issuer Collateral Pool will not include any right, title or interest in, to or under certain funds and accounts or Properties in connection with the “like-kind exchange” program established by the Issuer Manager on behalf of the Issuer, as set forth in the Property Management Agreement.
The foregoing Grants are made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture and each Series Supplement. Any amounts, proceeds or other property expressly released from the lien of the Indenture shall cease to constitute “Issuer Collateral” and shall cease to be part of the “Issuer Collateral Pool”.
The Issuer confirms that value has been given by the Noteholders to the Issuer, that the Issuer has rights in its Issuer Collateral existing at the date of this Indenture and that the Issuer and the Indenture Trustee have not agreed to postpone the time for attachment of the Grant pursuant to this Granting Clause to any of the Issuer Collateral of the Issuer.
GENERAL COVENANT
IT IS HEREBY COVENANTED AND DECLARED that the Notes are to be authenticated and delivered by the Indenture Trustee on the applicable Series Closing Dates, that the Issuer Collateral is to be held by or on behalf of the Indenture Trustee and that moneys in or from the Issuer Collateral Pool are to be applied by the Indenture Trustee for the benefit of the Noteholders, subject to the further covenants, conditions and trusts hereinafter set forth, and the Issuer does hereby represent and warrant, and covenant and agree, to and with the Indenture Trustee, for the equal and proportionate benefit and security of each Noteholder, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section I.01Definitions.
Whenever used in this Indenture, including in the Preliminary Statement, the Granting Clause and the General Covenant hereinabove set forth, the following capitalized terms, unless the context otherwise requires, shall have the meanings specified in this Section 1.01 or, if not specified in this Section 1.01, then in the Property Management Agreement or Property Owner Guaranty, as applicable.
“1939 Act”: The Trust Indenture Act of 1939, as amended, and the rules, regulations and published interpretations of the SEC promulgated thereunder from time to time.
“1940 Act”: The Investment Company Act of 1940, as amended, and the rules, regulations and published interpretations of the SEC promulgated thereunder from time to time.
“3-Month Average DSCR”: With respect to any Determination Date, the average of the Monthly DSCRs for such Determination Date and the two immediately preceding Determination Dates.
“95-Person Limit”: As defined in Section 2.05(n).
“Access Laws”: As defined in Section 10.09.
“Account Control Agreement”: An agreement with respect to a deposit account or a securities account, in form and substance satisfactory to the Indenture Trustee, pursuant to which the institution at which such account is maintained agrees to follow the instructions or entitlement orders, as the case may be, of the Indenture Trustee or, in certain instances, the Issuer Manager with respect thereto.
“Accounts”: Each of the Collection Account, the Release Account, the DSCR Reserve Account, the Payment Account, the Liquidity Reserve Account.
“Accredited Investor”: As defined in Section 2.05(d)(i).
“Accrual Period”: With respect to any Class of Notes, as defined in the applicable Series Supplement.
“Act”: As defined in Section 12.05.
“Additional Class Notes”: Any classes of Notes not designated as “Class A”.
“Additional Class Notes Adjusted Principal Balance”: For each of the Additional Class Notes designated on any Payment Date, the outstanding principal balance of such class of any Additional Class Notes before giving effect to any payments of principal on such payment date (or, in the case of the initial Payment Date, the initial principal balance as of
the related Series closing date), minus the Additional Class Note Adjustment Amount of such class on such payment date. In no event, will the Additional Class Notes Adjusted Principal Balance exceed the outstanding principal balance of the Additional Class Notes or be a number less than zero. On the related Series closing date, the Additional Class Notes Adjusted Principal Balance for each of the Additional Class Notes will be equal to the outstanding principal balance of such class on the related Series closing date.
“Additional Class Notes Adjustment Amount”: For each of the Additional Class Notes on any Payment Date, (i) the quotient of (a) the outstanding principal balance of such Class, divided by (b) the sum of (A) the outstanding principal balance of the Additional Class Notes and (B) the aggregate outstanding principal balance of all the Additional Class Notes with the same alphabetical designation that are Notes, multiplied by (ii) the Aggregate Additional Class Notes Adjustment Amount with the same alphabetical designation on such payment date.
“Advance”: As defined in the Property Management Agreement.
“Affiliate”: With respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Aggregate Additional Class Notes Adjustment Amount”: On any Payment Date, for each class of Additional Class Notes with the same alphabetical designation, the lesser of (i) the aggregate outstanding principal balance of all Additional Class Notes of all Series with such alphabetical designation and (ii) the greater of (a) the amount by which the Aggregate Adjustment Amount exceeds the Aggregate Additional Class Note Adjustment Amount of all classes of Additional Class Notes of all Series with higher alphabetical designations, if any, and (b) zero. In no event will the Aggregate Additional Class Notes Adjustment Amount for each class of Additional Class Notes with the same alphabetical designation be greater than the outstanding principal balance of the Additional Class Notes with such alphabetical designation.
“Aggregate Adjustment Amount”: On any Payment Date, the amount, if any, by which the Aggregate Series Principal Balance before giving effect to any payments of principal on such payment date exceeds (i) the aggregate collateral value minus (ii) the sum of collateral value of the defaulted assets and collateral value of the delinquent assets as of the last day of the collection period related to such payment date. In no event will the Aggregate Adjustment Amount be greater than the aggregate outstanding principal balance of the Additional Class Notes.
“Aggregate Series Principal Balance”: On any date of determination, the sum of all Series Principal Balances, in each case, as of such date of determination, after giving effect to any payments of principal on such date.
“Anticipated Repayment Date” For any Series of Notes, the Anticipated Repayment Date for such Series of Notes, as specified in the related Series Supplement.
“Applicable Law”: Any federal, state or local law, order, ordinance, court order of law (including common law), statute, constitution, treaty, decree, code, ordinance, rule, regulation, judgment or injunction (whether temporary, preliminary or permanent), arbitration award, license, permit or other requirement of Governmental Authority.
“Applicable Paydown Percentage”: With respect to any Series of Notes and as of any applicable Payment Date upon which Unscheduled Proceeds are paid pursuant to Section 2.11(b) and/or upon which a Voluntary Prepayment in part is made, a fraction expressed as a percentage, the numerator of which is the related Series Principal Balance subject to paydown and the denominator of which is the Aggregate Series Principal Balance before giving effect to any payment on such Payment Date.
“Appraised Value”: As defined in the Property Management Agreement.
“Asbestos”: Asbestos or any substance or material containing asbestos.
“Authenticating Agent”: As defined in Section 2.02(b).
“Authorized Officer”: With respect to the Issuer, any person who is authorized to act for the Issuer and who is identified on the list delivered by the Issuer to the Indenture Trustee on the applicable Series Closing Date (as such list may be modified or supplemented from time to time thereafter).
“Authorized Persons”: As defined in Section 5.03(r).
“Available Amount”: As defined in the Property Management Agreement.
“Back-Up Management Fee”: As defined in the Property Management Agreement.
“Back-Up Manager”: KeyBank National Association, a national banking association, or its successor in interest.
“Bankruptcy Code”: The federal Bankruptcy Code of 1878, Title 11 of the United States Code, as amended from time to time.
“Bank”: As defined in Section 12.07.
“Benefit Plan Investor”: A Plan that is subject to Title I of ERISA or Section 4975 of the Code.
“Book-Entry Custodian”: Initially, the Indenture Trustee and thereafter, such other bank or trust company as the Indenture Trustee shall appoint pursuant to Section 2.06(a).
“Book-Entry Note”: Any Note registered in the name of the Depository or its nominee.
“Business Day”: Any day other than a Saturday, a Sunday or a day on which banking institutions are authorized or obligated by law or executive order to remain closed in New York, New York, or any other city in which the principal office of the Issuer, the primary servicing office of the Property Manager, the Issuer Manager or the Special Servicer or the Indenture Trustee’s Office is located.
“Cash”: Coin or currency of the United States or immediately available federal funds, including such funds delivered by wire transfer.
“CERCLA”: The Comprehensive Environmental Response, Compensation and Liability Act, as amended.
“Class”: Collectively, all of the Notes of a particular Series that bear the same name and the same alphabetical and, if applicable, numerical class designations.
“Code”: The Internal Revenue Code of 1986, as amended.
“Collateral”: Shall have the meaning specified in the Property Owner Guaranty.
“Collateral Pool”: Shall have the meaning in the Property Owner Guaranty.
“Collection Account”: As defined in the Property Management Agreement.
“Collection Period”: As defined in the Property Management Agreement.
“Control Person”: With respect to any Person, any other Person that constitutes a “controlling person” within the meaning of Section 15 of the Securities Act.
“Controlling Party”: With respect to any Series, as defined in the applicable Series Supplement.
“Custodian”: U.S. Bank National Association or its successor in interest.
“Custody Agreement”: As defined in the Property Management Agreement.
“Deferred Post-ARD Additional Interest”: With respect to any Payment Date and any Series of Notes, applicable accrued and unpaid Post-ARD Additional Interest from any prior Payment Date. For the avoidance of doubt, Deferred Post-ARD Additional Interest will not bear interest.
“Definitive Note”: As defined in Section 2.01(b)(ii).
“Department of Labor Regulations”: The U.S. Department of Labor regulations at 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA.
“Depository”: The Depository Trust Company or any successor depository hereafter named as contemplated by Section 2.06. The nominee of the initial Depository, for purposes of registering such Notes that are Book-Entry Notes, is Cede & Co. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(4) of the UCC of the State of New York and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act.
“Depository Participant”: A broker, dealer, bank or other financial institution or other Person for whom from time to time the Depository effects book-entry transfers and pledges of securities deposited with the Depository.
“Determination Date”: With respect to any Payment Date, the 10th day of the month in which such Payment Date occurs or, if such 10th day is not a Business Day, the Business Day immediately succeeding such 10th day.
“Disposition Period”: If any Series Principal Balance is greater than zero on its related Series Disposition Period Date, a period commencing on such Series Disposition Period Date and ending on the earlier of (i) the date upon which such Series Principal Balance is reduced to zero and (ii) the Rated Final Payment Date for such Series.
“DSCR Reserve Account”: As defined in Section 2.18(a).
“DSCR Sweep Period”: A period that shall commence on any Determination Date for which the Monthly DSCR is less than or equal to 1.25x and an Early Amortization Period is not in effect, and shall continue until the Monthly DSCR is greater than 1.25x for three (3) consecutive Determination Dates or an Early Amortization Period commences.
“Early Amortization Period”: A period that shall commence on any Determination Date: (A) if the 3-Month Average DSCR as of such Determination Date is less than or equal to 1.15x; provided, however, that such Early Amortization Period under this clause (A) shall continue until the 3-Month Average DSCR is greater than 1.15x for three (3) consecutive Determination Dates; (B) if an Event of Default, after giving effect to any grace period, shall have occurred and shall not have been cured or waived in accordance with the terms hereof; or (C)(i) in the event that the Issuer does not repay the Outstanding Principal Balance of any Series of Notes in full on or prior to the Anticipated Repayment Date applicable to such Series or (ii) in the event that the Issuer does not fully repay the outstanding principal balance of any Notes on or prior to such Series’ respective anticipated repayment date; provided, that if the Outstanding Principal Balance of each Class of Notes for which the Anticipated Repayment Date has occurred is subsequently repaid, then such Early Amortization Period shall be deemed to have been cured for all purposes and no longer continuing.
“Eligible Account”: Any of (i) a segregated account maintained with a federal- or state-chartered depository institution or trust company, the long-term deposit or long-term unsecured debt obligations of which (or of such institution’s parent holding company) are rated “A” or better by S&P (or, with respect to the Collection Account, the Servicing Account, the Payment Account, the DSCR Reserve Account and the General Receipts Account, “A-” or better
by S&P), if the deposits are to be held in the account for more than thirty (30) days, or the short-term deposit or short-term unsecured debt obligations of which (or of such institution’s parent holding company) are rated “A-1” by S&P (or, with respect to a Collection Account, the Servicing Account and the General Receipts Account, “A-2” or better by S&P) if the deposits are to be held in the account for thirty (30) days or less, in any event at any time funds are on deposit therein, (ii) a segregated trust account maintained with a federal- or state-chartered depository institution or trust company acting in its fiduciary capacity, which, in the case of a state-chartered depository institution or trust company is subject to regulations regarding fiduciary funds on deposit therein substantially similar to 12 C.F.R. § 9.10(b), and which, in either case, has a combined capital and surplus of at least $50,000,000 and is subject to supervision or examination by federal or state authority, or (iii) any other account that is acceptable to the Rating Agencies (as evidenced by written confirmation from such Rating Agencies); provided, that in the event that any of the accounts no longer qualifies as an Eligible Account under this definition, the Issuer shall promptly, and in no event later than thirty (30) calendar days following such account failing to qualify as an Eligible Account, direct the Indenture Trustee to remit all funds in such account to a specified Eligible Account. Eligible Accounts may bear interest.
“Email Recipient”: As defined in Section 5.03(q).
“Embargoed Person”: As defined in Section 2.19(v).
“Environmental Laws”: As defined in Section 10.08(a).
“ERISA”: The Employee Retirement Income Security Act of 1974, as amended.
“Event of Default”: As defined in Section 4.01.
“Exchange Reserve Account”: As defined in the Property Management Agreement.
“Extraordinary Expense Cap”: (A) With respect to the Extraordinary Expenses paid and payable each calendar year, an amount equal to the greater of (i) $250,000 per Series per calendar year and (ii) 0.07% of the Aggregate Series Principal Balance (as of the most recent Series Closing Date and each anniversary thereof) per year and 1/12 of such amount per month (such amount as set forth in clause (i) or (ii) above to be cumulative for each month in a calendar year if not used, although any such cumulative amount will not be carried forward into the next calendar year) and (B) with respect to the aggregate Extraordinary Expenses paid and payable pursuant to this Indenture since the Series Closing Date, an amount equal to $6,000,000.
“Extraordinary Expenses”: Unanticipated expenses required to be borne by the Issuer, that consist of, among other expenses: (i) amounts to be paid for the transfer of the Lease Files and other administrative expenses incurred in connection with the sale or transfer of the related Leases or Properties by the Issuer and related Property Owners; (ii) payments to the Property Manager, the Issuer Manager, the Special Servicer, any Issuers, the Indenture Trustee or any of their respective directors, officers, employees, agents and Control Persons of amounts for certain expenses and liabilities as specified in this Indenture (including, but not limited to,
Section 5.04(a)(2)), the Notes, the Property Owner Guaranty, the Property Management Agreement, the Issuer Operating Agreements, the Property Owner Operating Agreements, the Custody Agreement or any other agreement related thereto; (iii) payments for the advice of counsel and the cost of certain Opinions of Counsel; provided, however, such expenses shall be subject to the Extraordinary Expense Cap; (iv) costs and expenses incurred in connection with environmental remediation with respect to any Property; and (v) certain indemnities that are not paid under the related Lease or the Guaranties, including, but not limited to, indemnities payable by the Issuer under the Indenture, the Property Management Agreement or other transaction documents.
“FDIC”: Federal Deposit Insurance Corporation or any successor.
“Final Payment Date”: With respect to any Class of Notes, the Payment Date on which the final payment on such Notes is made hereunder by reason of all principal, interest and other amounts due and payable on such Notes having been paid.
“Foreclosure Proceeding”: Any proceeding, non-judicial sale or power of sale or other proceeding (judicial or non-judicial) for the foreclosure, sale or assignment of any Property or Lease or any other Collateral under the Property Owner Guaranty and/or any Mortgage.
“Full Redemption Amount”: With respect to any Series, as defined in the applicable Series Supplement.
“Governmental Authority”: means any (i) federal, state, local, municipal, foreign or other government, (ii) governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), whether foreign or domestic, or (iii) body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, whether foreign or domestic, including any arbitral tribunal.
“Grant”: To mortgage, pledge, bargain, sell, warrant, alienate, demise, convey, assign, transfer, create, charge and grant a security interest in and right of set-off against, deposit, set over and confirm. A Grant of Issuer Collateral shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including, without limitation, the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of such Issuer Collateral and all other moneys and proceeds payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything which the granting party is or may be entitled to do or receive thereunder or with respect thereto.
“Guaranties”: Each of (i) that certain guaranty, dated as of the Initial Closing Date (as may be amended or supplemented from time to time, the “Sponsor Guaranty”), by the Sponsor, in favor of the Indenture Trustee, for the benefit of the Noteholders, and (ii) that certain guaranty, dated as of the Series Closing Date (as may be amended or supplemented from time to
time, the “Property Owner Guaranty”), executed by the Property Owners in favor of the Indenture Trustee, for the benefit of the Noteholders.
“Hazardous Substances”: As defined in the Property Management Agreement.
“Hedge Agreement”: With respect to any Series, as defined in the related Series Supplement, if applicable.
“Hedge Counterparty”: With respect to any Series, as defined in the related Series Supplement, if applicable.
“Hedge Counterparty Account”: With respect to any Series, as defined in the related Series Supplement, if applicable.
“Indenture”: This Indenture, as may be supplemented or amended from time to time by one or more indentures supplemental hereto, entered into pursuant to the applicable provisions hereof, including, with respect to any Series, the related Series Supplement.
“Indenture Trustee”: Citibank, N.A., a national banking association, in its capacity as trustee under this Indenture, or its successor in interest, or any successor trustee appointed as provided in this Indenture.
“Indenture Trustee Fee” With respect to any Determination Date and each Series of Notes issued under this Indenture, a monthly fee that will be an amount equal to the product of (a) 1/12 of the applicable Indenture Trustee Fee Rate and (b) the Series Principal Balance for such Series as of such Determination Date.
“Indenture Trustee Fee Rate”: With respect to any Series of Notes issued under this Indenture, the percentage set forth as defined in the applicable Series Supplement.
“Indenture Trustee’s Office”: The corporate trust office of the Indenture Trustee at which at any particular time its mortgage-backed securities trust business with respect to this Indenture shall be administered, which office at the date of the execution of this Indenture is located at (i) solely for purpose of the transfer, surrender, exchange or presentation of Notes for final payment, Citibank, N.A., 480 Washington Boulevard, 30th Floor, Jersey City, New Jersey 07310, Attention: Citibank Agency & Trust - CMFT Net Lease Master Issuer LLC, and (ii) for all other purposes, 388 Greenwich Street Trading, 4th Floor, New York, New York 10013, Attention: Securities Window – CMFT Net Lease Master Issuer LLC or call 888-855-9695 to ask for the deal administrator’s email address, or at such other address as the Indenture Trustee or Note Registrar may designate from time to time.
“Independent”: As defined in the Property Management Agreement.
“Independent Manager”: As defined in Section 9.24.
“Initial Closing Date”: The Series Closing Date of the first Series of Notes issued under this Master Indenture and related Series Supplement.
“Initial Principal Balance”: With respect to any Class of any Series of Notes, as defined in the applicable Series Supplement.
“Initial Purchasers”: With respect to a Series of Notes, any Person named as such in the applicable Series Supplement or any successor thereto.
“Insolvency Opinion”: As defined in Section 9.26.
“Interest Carry-Forward Amount”: For any Additional Class Notes on any Payment Date, the sum of (i) interest accrued during the related Accrual Period at the applicable note rate for such class on the excess, if any, of the outstanding principal balance of such class over the Additional Class Notes Adjusted Principal Balance of such class before giving effect to any payments of principal on such Payment Date and (ii) any amounts calculated pursuant to clause (i) above for such Additional Class Notes from all prior payment dates remaining unpaid, if any, plus, to the extent permitted by law, interest thereon for each Accrual Period for such Additional Class Note at the applicable Note Rate. Interest Carry-Forward Amounts on the Additional Class Notes will be computed on the basis of a 360-day year consisting of twelve 30-day months.
“Interested Person”: Any Issuer, the related Issuer Member, the holder of any related Issuer Interest, any Property Owner, or an Affiliate of any such Person.
“Issuer”: CMFT Net Lease Master Issuer LLC and any other party designated as an “Issuer” in any Series Supplement, as the context may require. References to a “related” or “applicable” Issuer shall refer to the Issuer that owns the Issuer Collateral or has issued or co-issued the Notes being addressed.
“Issuer Collateral”: As defined in the Granting Clause hereto.
“Issuer Collateral Defect”: As defined in the Property Management Agreement.
“Issuer Collateral Pool”: As defined in the Granting Clause hereto.
“Issuer Collateral Pool Expenses”: As defined in Section 2.11(b).
“Issuer Collateral Transfer”: Any voluntary or involuntary sale, transfer, exchange, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, grant of any options with respect to, or any other transfer or disposition of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record), of a Property including but not limited to: (i) an installments sales agreement wherein the Issuer and/or related Property Owner agrees to sell a related Property or any part thereof for a price to be paid in installments or (ii) an agreement by the Issuer and/or related Property Owner leasing all or a substantial part of a related Property for other than actual occupancy by a Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, the Issuer’s and related Property Owner’s right, title and interest in and to any Leases or any rents.
“Issuer Expense Cap”: (A) With respect to the Issuer Expenses paid and payable each calendar year, an amount equal to 0.10% of the Aggregate Series Principal Balance (as of the most recent Series Closing Date and each anniversary thereof) per year and 1/12 of such amount per month (such amount to be cumulative for each month in a calendar year if not used, although any such cumulative amount shall not be carried forward into the next calendar year) and (B) with respect to the aggregate Issuer Expenses paid and payable pursuant to this Indenture since the most recent Series Closing Date, an amount equal to $6,000,000; provided, that, upon satisfaction of the Rating Condition, the Issuer may increase the Issuer Expense Cap.
“Issuer Expenses”: The costs and expenses relating to the Issuer Collateral Pool and Collateral Pool for (i) general liability insurance policies maintained by or on behalf of the applicable Property Owners as owners of the Properties or their respective proportionate share of premiums with respect to general liability insurance policies maintained by Affiliates of the Property Owners, (ii) casualty insurance policies maintained by or on behalf of the Property owners as owners of the Properties or their proportionate share of the premiums with respect to casualty insurance policies maintained by Affiliates of the Property Owners to insure casualties not otherwise insured by a Tenant due to a default by such Tenant under the insurance covenants of its Lease or because a Tenant permitted to self-insure fails to pay for casualty losses, and (iii) certain state franchise taxes prohibited by the Leases or by law from being passed through by the applicable Property Owner as lessor to a Tenant.
“Issuer Interests”: The limited liability company interests in any of the Issuer under any Series Supplement.
“Issuer Manager Fee”: As defined in the Property Management Agreement.
“Issuer Manager”: CIM Real Estate Finance Operating Partnership, LP or its successor in interest.
“Issuer Member”: With respect to each Series of Notes, as defined in the applicable Series Supplement.
“Issuer Operating Agreement”: With respect to each Series, as defined in the applicable Series Supplement.
“Issuer Order”: A written order signed in the name of the Issuer by (i) a Responsible Officer of the related Issuer, in his or her capacity as an officer of the Issuer or (ii) the Issuer Member.
“Issuer Request”: A written request signed in the name of the Issuer by (i) a Responsible Officer of the related Issuer, in his or her capacity as an officer of the Issuer or (ii) the Issuer Member.
“Issuer’s Office”: The principal office of any Issuer, located at the address provided in the related Issuer Operating Agreement.
“Lease”: As defined in the Property Management Agreement.
“Lease File”: As defined in the Property Management Agreement.
“Lease Guarantor”: As defined in the Property Management Agreement.
“Lease Guaranty”: As defined in the Property Management Agreement.
“Legal Requirements”: With respect to the Issuer Collateral or Collateral, as applicable, all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting the related Pledged Securities or related Property or any part thereof, as applicable, or in the case of any such Property, the construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force, and all permits, licenses and authorizations and regulations relating thereto.
“Letter of Representations”: With respect to any Series of Notes, the Letter of Representations, dated on or before the applicable Series Closing Date, among the Depository and the Issuer.
“Licenses”: As defined in Section 2.20(k).
“Lien”: With respect to each Pledged Security or Property, any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer of, on or affecting such Pledged Security or Property, as applicable, 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 mechanic’s, materialmen’s and other similar liens and encumbrances.
“Liquidation Proceeds”: As defined in the Property Management Agreement.
“Liquidity Reserve Account”: As defined in Section 2.15(a).
“Make Whole Amount”: With respect to each Series, as defined in the applicable Series Supplement.
“Material Action”: With respect to any Issuer, to consolidate or merge the Issuer with or into any Person, or sell all or substantially all of the assets of the Issuer, or to institute proceedings to have the Issuer be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against the Issuer or file a petition seeking, or consent to, reorganization or relief with respect to the Issuer under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Issuer or a substantial part of its property, or make any assignment for the benefit of creditors of the Issuer, or admit in writing the Issuer’s inability
to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate the Issuer.
“Maturity”: With respect to any Note, the date as of which the principal of and interest on such Note has become due and payable as herein provided, whether on the Rated Final Payment Date, by acceleration or otherwise.
“Maximum Property Concentration”: As defined in the Series Supplement relating to the most recent Series of Notes.
“Modified Lease”: Where a Property Owner, as landlord of such Lease, may have contingent obligations for structural obligations in the related Lease including foundation, floor slabs, load-bearing exterior walls, roof structural elements, utility systems, fire suppression systems, paved areas and other limited elements on the related Properties, as applicable
“Modified Lease Expense”: Any cost or expense relating to Modified Leases in the Issuer Collateral Pool incurred by a Property Owner, as landlord, for structural obligations in the related Lease including foundation, floor slabs, load-bearing exterior walls, roof structural elements, utility systems, fire suppression systems, paved areas and other limited elements on the related Properties, as applicable.
“Monthly DSCR”: As defined in the Property Management Agreement.
“Monthly Lease Payment”: As defined in the Property Management Agreement.
“Mortgage”: As defined in the Property Management Agreement.
“New Issuance”: As defined in Section 2.04(c).
“Non-consolidation Opinion”: As defined in Section 2.19(t).
“Nonrecoverable Advance”: As defined in the Property Management Agreement.
“Note”: Any of the Issuer’s Net-Lease Mortgage Notes, executed, authenticated and delivered hereunder and under the related Series Supplements, substantially in the forms attached as Exhibits A-1, A-2 and A-3 hereto.
“Note Interest”: On any Payment Date for any Class of Notes, the interest accrued during the related Accrual Period at the Note Rate for such Class, applied to the Principal Balance of such Class of Notes on such Payment Date before giving effect to any payments of principal on such Payment Date. The Note Interest for a Class of Notes will be calculated in the matter set forth in the related Series Supplement.
“Note Owner”: With respect to a Book-Entry Note, the Person who is the beneficial owner of such Note as reflected on the books of the Depository, a Depository Participant or an indirect participating brokerage firm for which a Depository Participant acts as
agent. With respect to a Definitive Note, the Person who is the holder of such Note as reflected on the Note Register.
“Note Rate”: With respect to any Class of Notes, the note interest rate specified in the applicable Series Supplement.
“Note Register”: As defined in Section 2.05(a).
“Note Registrar”: Initially, the Indenture Trustee and thereafter, such other bank or trust company as the Indenture Trustee may appoint pursuant to Section 2.05(a).
“Note Transfer Restrictions”: As defined in Section 2.05(m).
“Noteholder” or “Holder”: With respect to any Note, the Person in whose name such Note is registered on the Note Register maintained pursuant to Section 2.05. All references herein to “Noteholders” shall reflect the rights of Note Owners as they may indirectly exercise such rights through the Depository and the Depository Participants, except as otherwise specified herein; provided, however, that the parties hereto shall be required to recognize as a “Noteholder” or “Holder” only the Person in whose name a Note is registered in the Note Register as of the related Record Date.
“Notice of Default”: As defined in Section 5.02.
“Officer’s Certificate”: A certificate signed by a Responsible Officer of the Issuer, the Issuer Member, or the Indenture Trustee, as the case may be.
“OTS”: Office of Thrift Supervision or any successor thereto.
“Outstanding”: When used with respect to Notes, subject to the provisions of the applicable Series Supplement, means as of any date of determination, any Note theretofore authenticated and delivered under this Indenture, except:
(i) Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation (other than any Note as to which any amount that has become due and payable in respect thereof has not been paid in full); and
(ii) Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, other than any such Notes in respect of which there shall have been presented to the Note Registrar proof satisfactory to it that such Notes are held by a bona fide purchaser in whose hands such Notes are valid obligations of the Issuer;
provided, however, that in determining whether the Holders of the requisite amount or percentage have given any request, demand, authorization, vote, direction, notice, consent or waiver hereunder, except as set forth in the applicable Series Supplement, Notes owned by an Interested Person shall be disregarded and deemed not to be Outstanding (other than with respect to a request for consent pursuant to Section 8.02 or unless any such Person or Persons owns all
such Notes), except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes which a Responsible Officer of the Indenture Trustee actually knows to be so owned shall be so disregarded. Notes owned by an Interested Person which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Note Registrar in its sole discretion the pledgee’s right to act with respect to such Notes and that the pledgee is not an Interested Person.
“Outstanding Principal Balance”: With respect to any Class of Notes on any date of determination, the applicable Initial Principal Balance for such Class of Notes, less the sum of all principal payments actually distributed to the holders of such Class as of such date.
“Ownership Interest”: As to any Note, any ownership or security interest in such Note as held by the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee.
“Partial Redemption Amount”: As defined in Section 7.10(d).
“Patriot Act”: As defined in Section 2.19(v).
“Payment Account”: As defined in Section 2.10(a).
“Payment Date”: The 20th day of each calendar month, or, if such 20th day is not a Business Day, the next succeeding Business Day, commencing with respect to each Series on the date specified in the applicable Series Supplement, and with respect to any Voluntary Prepayment, the applicable Redemption Date as set forth herein or in the applicable Series Supplement.
“Payoff Amount”: As defined in the Property Management Agreement.
“Percentage Interest”: With respect to any Note, the fraction, expressed as a percentage, the numerator of which is the initial principal balance of such Note on the applicable Series Closing Date as set forth on the face thereof, and the denominator of which is the Initial Principal Balance of the related Class of Notes on the applicable Series Closing Date.
“Percentage Rent”: As defined in the Property Management Agreement.
“Permanent Regulation S Global Note”: As defined in Section 2.01(c).
“Permitted Encumbrances”: With respect to any Property, collectively, (a) the Liens and security interests created by the Transaction Documents, (b) all Liens, encumbrances and other matters disclosed in the Title Insurance Policies or in surveys relating to such Property or any part thereof, (c) Liens, if any, for taxes imposed by any Governmental Authority not yet delinquent, (d) Leases, (e) such other title and survey exceptions as are required by the Lease for such Property, and (f) such other easements, covenants, restrictions, rights-of-way and encumbrances as the Issuer or the related Property Owner or, in accordance with the Servicing
Standard, the Property Manager has approved or may approve in writing, which Permitted Encumbrances in the aggregate do not materially adversely affect the value or use or operation of such Property, the security intended to be provided by the related Mortgage or the Issuer’s ability to pay in full the principal and interest on the Notes in a timely manner. If reasonably requested by the Issuer, the related Property Owner or the Property Manager, the Indenture Trustee shall join in the execution of a Permitted Encumbrance described in (e) and (f) above and subordinate the liens under the Transaction Documents to the same.
“Permitted Investments”: Any one or more of the following obligations or securities:
(i) direct obligations of, or guaranteed as to timely payment of principal and interest by, the United States of America or any agency or instrumentality thereof provided that such obligations are backed by the full faith and credit of the United States of America;
(ii) direct obligations of, or guaranteed as to timely payment of principal and interest by, the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank, the Federal National Mortgage Association or the Federal Farm Credit System, provided that any such obligation, at the time of purchase or contractual commitment providing for the purchase thereof, is qualified by any Rating Agency as an investment of funds backing securities rated “AAA” (or such comparable rating);
(iii) demand and time deposits in or certificates of deposit of, or bankers’ acceptances issued by, any bank or trust company, savings and loan association or savings bank fully insured by the Federal Deposit Insurance Corporation, which such bank, trust company, savings and loan association or savings bank shall have a rating of not less than A-2 from S&P;
(iv) repurchase obligations collateralized at 102% by any security described in clause (i) or (ii) above entered into with a depository institution or trust company (acting as principal) described in clause (iii) above; and
(v) money market funds registered under the Investment Company Act which funds have credit ratings of “Aaa-mf” by Moody’s and “AAA” by S&P, respectively; and
(vi) such other obligations as the Issuer consents to in writing and would not cause a downgrade of the Notes.
“Permitted Materials”: As defined in the Property Management Agreement.
“Person”: Any individual, corporation, partnership, limited liability company, joint venture, joint-stock company, estate, trust, association, unincorporated organization, or any federal, state, county or municipal government or any agency or political subdivision thereof.
“Plan”: Any one of: (i)(A) an “employee benefit plan” within the meaning of Section 3(3) of ERISA that is subject to the provisions of Title I of ERISA, or (B) a “plan” within the meaning of Section 4975(e)(1) of the Code that is subject to the provisions of Section
4975 of the Code; (ii) an entity whose underlying assets include assets of any such employee benefit plan or plan as set forth in clause (i) of this definition by reason of an investment in such entity by such employee benefit plan or plan; or (iii) a governmental, church or non-U.S. plan that is subject to any Similar Law.
“Plan Fiduciary”: The fiduciary or other person making the decision to acquire the Notes on behalf of the Benefit Plan Investor or who otherwise has discretion or control over the investment and management of “plan assets”.
“Pledged Security”: As defined in the Granting Clause.
“Post-ARD Additional Interest”: On any Payment Date on or after the Anticipated Repayment Date of any applicable Class of Notes, the interest accrued at the applicable Post-ARD Additional Interest Rate from and after such Payment Date on the Outstanding Principal Balance of such Class determined prior to giving effect to any payments of principal on such Payment Date.
“Post-ARD Additional Interest Rate”: With respect to any applicable Class of Notes, the note interest rate specified in the applicable Series Supplement.
“Principal Terms”: With respect to any Series: (i) the name or designation of such Series; (ii) the initial principal amount of the Notes to be issued for such Series; (iii) the interest rate to be paid with respect to such Series (or method for the determination thereof); (iv) the Pledged Securities pledged to the Indenture Trustee in connection with such Series ; (v) the Properties and related Leases owned by the Property Owners; (vi) the designation of any Series Accounts and the terms governing the operation of any such Series Accounts; (vii) the Rated Final Payment Date for the Series; and (viii) such other terms and provisions as may be specified in the applicable Series Supplement with respect to the related Notes and the Issuer Collateral Pool.
“Private Placement Memorandum”: With respect to each Series, as defined in the applicable Series Supplement.
“Proceeding”: Any suit in equity, action at law or other judicial or administrative proceeding.
“Property”: As defined in the Property Management Agreement.
“Property Management Agreement”: The Property Management Agreement, dated as of July 28, 2021, among the Issuer, the Property Owners, the Property Manager, the Issuer Manager, the Special Servicer, the Sponsor, the Indenture Trustee, the Back-Up Manager, and any other joining party thereto, each such joining party as an Issuer or Property Owner, as applicable, as the same may be further amended or supplemented from time to time.
“Property Management Fee”: As defined in the Property Management Agreement.
“Property Manager”: CREI Advisors, LLC or its successor in interest.
“Property Owners”: As defined in the Property Owner Guaranty.
“Property Owner Operating Agreement”: With respect to each Series, as defined in the applicable Series Supplement.
“Qualified Institutional Buyer”: A “qualified institutional buyer” within the meaning of Rule 144A.
“Qualified Release Amount”: As defined in the Property Management Agreement.
“Qualified Substitute Property”: As defined in the Property Management Agreement.
“Rated Final Payment Date”: With respect to any Series of Notes, the date specified in the applicable Series Supplement.
“Rating Agency”: With respect to any Class of Notes as of any date of determination, each nationally recognized statistical rating organization that is then rating such Class of such Notes at the request of the Issuer.
“Rating Condition”: With respect to any action or event or proposed action or event, will be satisfied by each Rating Agency confirming in writing that such action or event or proposed action or event will not result in the downgrade, qualification or withdrawal of the current rating of any Class of Notes then rated by such Rating Agency.
“Record Date”: As to any Payment Date with respect to Book-Entry Notes, the Business Day immediately preceding such Payment Date. As to any Payment Date with respect to Definitive Notes, the last Business Day of the preceding calendar month.
“Redemption Amount”: A Full Redemption Amount or a Partial Redemption Amount, as the context requires.
“Redemption Date”: As defined in Section 7.01(a).
“Redemption Notice”: As defined in Section 7.01(e).
“Refinancing Date”: With respect to each Series, as defined in the applicable Series Supplement.
“Regulation S”: Regulation S promulgated under the Securities Act.
“Regulation S Global Note”: As defined in Section 2.01(c).
“Release Account”: As defined in the Property Management Agreement.
“Remittance Date”: The Business Day preceding the Payment Date.
“Requisite Global Majority”: Noteholders representing more than 66 2/3% of the Aggregate Series Principal Balance.
“Resolution”: With respect to any Issuer or Property Owner, a copy of a resolution certified by an Authorized Officer of the Issuer Member, to have been duly adopted by the Issuer Member to be in full force and effect on the date of such certification.
“Responsible Officer”: With respect to the Indenture Trustee, any officer of the Indenture Trustee assigned to its Agency & Trust Group (or any successor thereto), customarily performing functions with respect to corporate trust matters and having direct responsibility for the administration of this Indenture and, with respect to a particular corporate trust matter under this Indenture, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject, in each case, having direct responsibility for the administration of this Indenture; with respect to the Property Manager, the Issuer Manager, the Back-Up Manager or the Special Servicer, any officer or employee involved in or responsible for the administration or servicing of the Leases or Properties under the Property Management Agreement or any other relevant Transaction Document and whose name and specimen signature appear on a list prepared by each party and delivered to the other party, as such list may be amended from time to time by either party; and, with respect to the Issuer, the Issuer Member and/or the Property Owners, any officer or number of officers or other Person or number of Persons duly authorized to perform the indicated action on behalf of such Person.
“Restricted Global Note”: As defined in Section 2.01(b).
“Restricted Period”: With respect to the Notes of any Series, the period of time to and including forty (40) days after the later of (a) the date upon which such Notes were first offered to any Persons (other than distributors) in reliance upon Regulation S and (b) the applicable Series Closing Date.
“Rule 144A”: Rule 144A promulgated under the Securities Act.
“Rule 501(a)”: Rule 501(a) promulgated under the Securities Act.
“S&P”: S&P Global, Inc.
“Scheduled Principal Payment”: With respect to each Series and each Class within such Series, the scheduled principal payment as defined in the related Series Supplement.
“Securities Exchange Act”: The Securities Exchange Act of 1934, as amended, and the rules, regulations and published interpretations of the SEC promulgated thereunder from time to time.
“SEC”: The U.S. Securities and Exchange Commission.
“Securities Act”: The Securities Act of 1933, as amended, and the rules, regulations and published interpretations of the SEC promulgated thereunder from time to time.
“Series”: Any series of Notes issued pursuant to this Indenture.
“Series Account”: Any Account described in a related Series Supplement as established in the name of the Indenture Trustee for the benefit of the related Noteholders.
“Series Available Amount”: As defined in Section 2.11(b).
“Series Closing Date”: With respect to any Series, the series closing date specified in the applicable Series Supplement.
“Series Issuer Collateral Release”: As defined in the Property Management Agreement.
“Series Issuer Collateral Release Price”: As defined in the Property Management Agreement.
“Series Disposition Period Date”: With respect to each Series of Notes, as defined in the related Series Supplement.
“Series Note”: Any one of the Notes with the same Series designation, executed by the Issuer and authenticated by or on behalf of the Indenture Trustee.
“Series Principal Balance”: For any date of determination and any Series, the sum of the Outstanding Principal Balances of each Class of Notes of such Series.
“Series Supplement”: With respect to any Series, a supplement to this Indenture, executed and delivered in connection with the original issuance of the Notes of such Series under Section 2.04 hereof, including all amendments thereof and supplements thereto.
“Series Transaction Documents”: With respect to any Series of Notes, any and all of the related Series Supplements, any related supplements or amendments to the Transaction Documents, and any and all other agreements, documents and instruments executed and delivered by or on behalf or in support of the Issuer with respect to the issuance and sale of such Series of Notes, as the same may from time to time be amended, modified, supplemented or renewed.
“Servicer Replacement Event”: As defined in the Property Management Agreement.
“Servicing Standard”: As defined in the Property Management Agreement.
“Similar Law”: Any federal, state, local or non-U.S. law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the Code.
“Special Servicer”: As defined in the Property Management Agreement.
“Special Servicing Fee”: As defined in the Property Management Agreement.
“Specially Managed Unit”: As defined in the Property Management Agreement.
“Sponsor”: CIM Real Estate Finance Operating Partnership, LP.
“Successor Person”: As defined in Section 9.08(a)(i).
“Tax Opinion”: An Opinion of Counsel in respect of Taxes.
“Taxes”: As defined in Section 9.03(a).
“Temporary Regulation S Global Note”: As defined in Section 2.01(b).
“Tenant”: With respect to each Lease, the tenant under such Lease and any successor or assign thereof.
“Tenant Ground Lease”: A Property secured by a related Property Owner’s fee interest in the land comprising such Property, but not by the improvements thereon.
“Third Party Purchase Option”: As defined in the Property Management Agreement.
“Transaction Documents”: This Indenture, the Property Management Agreement, the Hedge Agreements, the Issuer Operating Agreement and Property Owner Operating Agreements and other organizational documents of the Issuer and Property Owners, as applicable, each Account Control Agreement, the Guaranties, the Custody Agreement and other Series Transaction Documents specified in the related Series Supplement.
“Transaction Party”: The Issuer, the Property Owners, the Property Manager, the Issuer Manager, the Sponsor, the Indenture Trustee, or any provider of credit support or other service provider contemplated by the Transaction Documents or any of their Affiliates.
“Transfer”: Any direct or indirect transfer, sale, pledge, hypothecation or other form of assignment of any Ownership Interest in a Note.
“Transfer Date”: The date on which a Property is acquired by the applicable Property Owner.
“Transfer-Restricted Note”: As defined in Section 2.05(m).
“Treasury Regulations”: Temporary, final or proposed regulations (to the extent that by reason of their proposed effective date such proposed regulations would apply to the Issuer) of the United States Department of the Treasury.
“TRIPRA”: As defined in Section 2.21(zz).
“Trustee Report”: As defined in Section 6.01(a).
“UCC”: The Uniform Commercial Code, as in effect in any applicable jurisdiction.
“UCC Financing Statement”: A financing statement executed and in form sufficient for filing pursuant to the UCC, as in effect in the relevant jurisdiction.
“Unscheduled Principal Payment”: On any Payment Date, the sum of (A) the Unscheduled Proceeds set forth in clauses (i) through (vii) of the definition thereof that are deposited into the Collection Accounts for such Payment Date and (B) all Allocated Release Amounts associated with any Release Price deposited into the Collection Accounts (including Allocated Release Amounts disbursed from the Release Account to the Collection Account) during the related Collection Period.
“Unscheduled Proceeds”: As defined in the Property Management Agreement.
“U.S. Person”: As defined in Regulation S.
“Voluntary Prepayment”: Any voluntary prepayment of any Class of Notes, in whole or in part, in accordance with the procedures set forth in Section 7.01.
Section I.02Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1)the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
(2)all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP, and, except as otherwise herein expressly provided, the terms “generally accepted accounting principles” or “GAAP” with respect to any computation required or permitted hereunder means such accounting principles as are generally accepted in the United States;
(3)the word “including” shall be construed to be followed by the words “without limitation”;
(4)article and section headings are for the convenience of the reader and shall not be considered in interpreting this Indenture or the intent of the parties hereto;
(5)the definition of or any reference to any agreement, document or instrument herein shall be construed as referring to such agreement,
document or instrument as from time to time amended, restated, supplemented or otherwise modified;
(6)references to any law, constitution, statute, treaty, regulation, rule or ordinance, including any section or other part thereof, shall refer to such law, constitution, statute, treaty, regulation, rule or ordinance as amended from time to time, and shall include any successor thereto;
(7)references herein to any Person shall be construed to include such Person’s successors and permitted assigns;
(8)the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular article, section or other subdivision; and
(9)the pronouns used herein are used in the masculine and neuter genders but shall be construed as feminine, masculine or neuter, as the context requires.
ARTICLE II
THE NOTES
Section II.01Forms; Denominations.
(a)Each Series of Notes shall be substantially in the form specified in the applicable Series Supplement and be designated as the “Net-Lease Mortgage Notes”. The Notes may be issued with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon consistent herewith, as determined by the officers executing such Notes, as evidenced by their execution thereof. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note. The number of Series of Notes which may be created by this Indenture is not limited. The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture is unlimited.
(b)Forms of Notes.
(i)Except as set forth in Section 2.01(b)(ii) below and as otherwise set forth in the related Series Supplement, the Notes of each Class in a Series, upon original issuance, shall be issued as Book-Entry Notes in substantially the form of (i) a global note without interest coupons representing the Notes of such Class sold to Qualified Institutional Buyers, in substantially the form of Exhibit A-1 hereto, with such applicable legends as may be set forth in such exhibit (the “Restricted Global Note”), and (ii) a temporary global note without interest coupons representing the Notes of such Class sold in “offshore transactions” (within the meaning of Regulation S) to non-U.S.
Persons in reliance on Regulation S, in substantially the form of Exhibit A-2 hereto, with such applicable legends as may be set forth in such exhibit (the “Temporary Regulation S Global Note”).
(ii)Notes held as of the related Series Closing Date by the Issuer or an Affiliate of the Issuer may be issued initially in the form of certificated notes in definitive, fully registered form without interest coupons in substantially the form of Exhibit A-3 hereto, with such applicable legends as may be set forth in such exhibit (each, a “Definitive Note”) which shall be registered in the name of the beneficial owner or nominee thereof, duly executed by the Issuer and authenticated by the Indenture Trustee as hereinafter provided.
(iii)Each Class of Notes will be issuable only in denominations of not less than $100,000 and in integral multiples of $1 in excess thereof or as otherwise specified in the applicable Series Supplement. Each Note will be registered on issuance in the names of the initial Noteholders thereof.
(c)After such time as the Restricted Period shall have terminated, and subject to the receipt by the Indenture Trustee of a certificate substantially in the form of Exhibit D-4 hereto (subject to Section 12.03), beneficial interests in a Temporary Regulation S Global Note may be exchanged for an equal aggregate principal amount of beneficial interest in a permanent global note without interest coupons (a “Permanent Regulation S Global Note” and, together with the Temporary Regulation S Global Notes, the “Regulation S Global Notes”), substantially in the form of Exhibit A-2 hereto, with such applicable legends as may be set forth in such exhibit. Upon any exchange of any beneficial interest in a Temporary Regulation S Global Note for a beneficial interest in a Permanent Regulation S Global Note, (i) such Temporary Regulation S Global Note shall be endorsed by the Indenture Trustee to reflect the reduction of the principal amount evidenced thereby, whereupon the principal amount of such Temporary Regulation S Global Note shall be reduced for all purposes by the amount so exchanged and endorsed and (ii) such Permanent Regulation S Global Note shall be endorsed by the Indenture Trustee to reflect the increase of the principal amount evidenced thereby, whereupon the principal amount of such Permanent Regulation S Global Note shall be increased for all purposes by the amount so exchanged and endorsed.
(d)Each Restricted Global Note will be deposited with the Book-Entry Custodian and registered in the name of the Depository or a nominee thereof. Each Regulation S Global Note will be deposited with the Book-Entry Custodian and registered in the name of the Depository or a nominee thereof for the accounts of Clearstream Banking, société anonyme, or its successors, and/or Euroclear Bank S.A./N.V., as operator of the Euroclear System, or its successors. Each Definitive Note will be delivered to and registered in the name of the applicable Noteholder.
Section II.02Execution, Authentication, Delivery and Dating.
(a)The Notes of each Series shall be executed by manual or facsimile signature on behalf of the Issuer by any Authorized Officers of the Issuer. Notes bearing the
manual or facsimile signatures of individuals who were at any time the Authorized Officers of such applicable Issuers shall be entitled to all benefits under this Indenture, subject to the following sentence, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery or Final Payment Date of such Notes or did not hold such offices at the date of such Notes. No Note shall be entitled to any benefit under this Indenture, or be valid for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein, executed by the Indenture Trustee by manual or facsimile signature, and such certificate of authentication upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. All Notes shall be dated the respective dates of their authentication.
(b)At the election of the Indenture Trustee, the Indenture Trustee may appoint one or more agents (each, an “Authenticating Agent”) with power to act on its behalf and subject to its direction in the authentication of Notes in connection with transfers and exchanges under Sections 2.05 and 2.07, as fully to all intents and purposes as though each such Authenticating Agent had been expressly authorized under those Sections to authenticate the Notes. For all purposes of this Indenture, the authentication of Notes by an Authenticating Agent shall be deemed to be the authentication of such Notes “by the Indenture Trustee.” The Indenture Trustee shall be the initial Authenticating Agent.
Any corporation, bank, trust company or association into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation, bank, trust company or association resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation, bank, trust company or association succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, without the execution or filing of any further act on the part of the parties hereto or such Authenticating Agent or such successor corporation, bank, trust company or association.
Any Authenticating Agent may at any time resign by giving written notice of resignation to the Indenture Trustee and the Issuer. The Indenture Trustee may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and the Issuer. Upon receiving such notice of resignation or upon such a termination, the Indenture Trustee may promptly appoint a successor Authenticating Agent, and give written notice of such appointment to the Issuer and to the Noteholders. Upon the resignation or termination of the Authenticating Agent and prior to the appointment of a successor, the Indenture Trustee shall act as Authenticating Agent.
Each Authenticating Agent shall be entitled to all limitations on liability, rights of reimbursement and indemnities that the Indenture Trustee is entitled to hereunder as if it were the Indenture Trustee.
(c)The Indenture Trustee shall upon Issuer Request authenticate and deliver Notes of each Series for original issue in an aggregate amount equal to the initial Outstanding Principal Balance for each related Class as set forth in the applicable Series Supplement.
Section II.03Certification of Receipt of the Issuer Collateral.
(a)The Custodian, as provided in the Custody Agreement, has acknowledged receipt of all assets granted to the Indenture Trustee and included in the Issuer Collateral Pool and has acknowledged that it is holding such assets for the benefit of the Indenture Trustee for the benefit of all present and future Noteholders. The Indenture Trustee has not received written notice of any adverse claim.
(b)The Indenture Trustee shall not be under any duty or obligation to inspect, review or examine any of the documents, instruments, certificates or other papers relating to the Properties and Leases delivered to it to determine that the same are valid, legal, effective, genuine, enforceable, in recordable form, sufficient or appropriate for the represented purpose or that they are other than what they purport to be on their face.
(c)The parties hereto acknowledge and each Holder by its acceptance of its Note or interest therein thereby acknowledges that the Custodian shall perform the applicable review of the assets and provide the respective certifications as provided in the Custody Agreement.
Section II.04The Notes Generally; New Issuances.
(a)Each Note of a particular Class shall rank pari passu with each other Note of such Class and be equally and ratably secured by the Issuer Collateral included in the Issuer Collateral Pool with each other Note of such Class. All Notes of a particular Class shall be substantially identical except as to denominations and as expressly permitted in this Indenture.
(b)This Indenture shall evidence a continuing lien on and security interest in the Issuer Collateral Granted hereunder or subsequently included in the Issuer Collateral Pool to secure the full payment of the principal, interest and other amounts on the Notes of all Series, which shall in all respects be equally and ratably secured hereby for payment as provided herein, and without preference, priority or distinction on account of the actual time or times of the authentication and delivery of the Notes of any Class with respect to any Series, all in accordance with the terms and provisions of this Indenture and each Series Supplement.
(c)Pursuant to one or more Series Supplements, the Issuer may, from time to time, direct the Indenture Trustee, on behalf of the Issuer, to issue one or more new Series of Notes (a “New Issuance”). The Notes of all outstanding Series shall, except as specified in the applicable Series Supplement, be equally and ratably entitled as provided herein to the benefits of this Indenture without preference, priority or distinction on account of the actual time of the authentication and delivery of any such Notes, all in accordance with the terms and provisions of this Indenture and each Series Supplement.
On or before the Series Closing Date relating to any New Issuance, the Issuer shall execute and deliver a Series Supplement which shall specify the Principal Terms with respect to such Series. The Indenture Trustee shall execute the Series Supplement, the Issuer
shall execute the Notes of such Series and the Notes of such Series shall be delivered to the Indenture Trustee for authentication and delivery.
(d)The issuance of the first Series of Notes (which Series shall be issued pursuant to a Series Supplement dated as of the Initial Closing Date) shall be subject to the satisfaction of the following conditions:
(i)receipt by the Indenture Trustee of the Issuer Order authorizing the execution and authentication of such Notes;
(ii)receipt by the Indenture Trustee of the Transaction Documents and the related Series Transaction Documents duly executed and delivered by the parties thereto and being in full force and effect, free of any breach or waiver;
(iii)all Lease Files with respect to the Issuer Collateral Pool, as set forth herein, shall have been delivered to the Custodian pursuant to the terms of the Custody Agreement together with all UCC Financing Statements, documents of similar import in other jurisdictions, and other documents reasonably necessary to perfect the Indenture Trustee’s security interest in such Issuer Collateral for the benefit of the Noteholders of all Series;
(iv)receipt by the Indenture Trustee of Opinions of Counsel, (A) relating to the corporate and enforceability matters, as well as securities law matters, reasonably acceptable to the related Initial Purchaser and its counsel; (B) relating to the perfection of the Indenture Trustee’s security interest; (C) relating to the consolidation of the assets and liabilities of the Issuer in a bankruptcy proceeding that involves the Issuer, the Issuer Member or the Sponsor; (D) relating to the characterization of the particular Class of Notes indicated in the related Series Supplement as debt for U.S. federal income tax purposes; (E) all opinions relating to enforceability of the related local Mortgage; and (F) any other opinion required under the related Series Supplement;
(v)receipt by the Indenture Trustee of copies of letters signed by each applicable Rating Agency confirming that each Class of Notes has been given the ratings as indicated in the related Series Supplement;
(vi)any applicable Issuer has delivered a certificate of the Issuer to the Indenture Trustee, dated the applicable Series Closing Date, to the effect that the Issuer is a solvent, special-purpose entity, organized with an Independent Manager; and
(vii)receipt by the Indenture Trustee of an Officer’s Certificate from the Issuer, upon which the Indenture Trustee shall be permitted to fully rely and shall not have any liability for so relying, stating that the conditions precedent to such issuance have been fulfilled.
(e)The issuance of the Notes of any Series other than pursuant to Section 2.04(d) above shall be subject to the satisfaction of the following conditions:
(i)receipt by the Indenture Trustee of the Issuer Order authorizing the execution and authentication of such Notes;
(ii)receipt by the Indenture Trustee of the Transaction Documents and the related Series Transaction Documents duly executed and delivered by the parties thereto and being in full force and effect, free of any breach or waiver;
(iii)all Lease Files with respect to the Issuer Collateral Pool, as set forth herein, shall have been delivered to the Custodian pursuant to the terms of Custody Agreement together with all UCC Financing Statements, documents of similar import in other jurisdictions, and other documents reasonably necessary to perfect the Indenture Trustee’s security interest in such Issuer Collateral for the benefit of the Noteholders of all Series;
(iv)each Rating Agency then rating any existing Series of Notes shall have confirmed in writing that such issuance will not result in the downgrade, qualification or withdrawal of the then current rating of any Class of Notes of such Series or any other Series;
(v)receipt by the Indenture Trustee of a Tax Opinion to the effect that, for U.S. federal income tax purposes, such New Issuance (A) will not adversely affect the tax characterization of any outstanding Notes treated as debt for U.S. federal income tax purposes, (B) will not cause any Issuer not otherwise classified as a corporation for U.S. federal income tax purposes to be classified as an association or a “publicly traded partnership” taxable as a corporation, and will cause any Issuer, or portions thereof, to be classified as a taxable mortgage pool, and (C) will not cause or constitute an event in which any taxable gain or loss would be recognized by any Noteholder, any holder of Notes or the Issuer without the unanimous consent of the holders of Notes affected thereby;
(vi)receipt by the Indenture Trustee of Opinions of Counsel, (A) relating to corporate and enforceability matters, as well as securities law matters reasonably acceptable to the related Initial Purchaser; (B) relating to the perfection of the Indenture Trustee’s security interest in the Issuer Collateral added to the Issuer Collateral Pool in connection with the related Series Closing Date; (C) relating to the consolidation of the assets of the Issuer in a bankruptcy proceeding that involves the Issuer, the Issuer Member or the Sponsor; (D) relating to the characterization of any Class of Notes indicated in the related Series Supplement as debt for U.S. federal income tax purposes; (E) all opinions relating to enforceability of the related local Mortgage; and (F) any other opinion required under the related Series Supplement;
(vii)receipt by the Indenture Trustee of copies of letters signed by each applicable Rating Agency confirming that each other Class of Notes has been given the then-current ratings by such Rating Agencies;
(viii)any applicable Issuer of such Series of Notes shall be a solvent, special-purpose entity, organized with an Independent Manager and shall have delivered a certificate to such effect to the Indenture Trustee, dated the applicable Series Closing Date;
(ix)the Rated Final Payment Date with respect to such Notes shall be no earlier than the earliest Rated Final Payment Date with respect to any issued Series of Notes;
(x)no Early Amortization Period is continuing at the time of such issuance and such issuance will not result in the occurrence of an Early Amortization Period;
(xi)either (A) no uncured Event of Default is continuing at the time of such New Issuance and such New Issuance shall not result in the occurrence of an Event of Default and the Issuer has delivered to the Indenture Trustee an Officer’s Certificate, dated the applicable Series Closing Date (upon which the Indenture Trustee may rely), to the effect that (1) based on the facts known to the Person executing such Officer’s Certificate, the Issuer reasonably believe that no uncured Event of Default is continuing at the time of such New Issuance and that such New Issuance shall not result in the occurrence of an Event of Default and (2) all conditions precedent to such execution, authentication and delivery have been satisfied or (B) the proceeds of such New Issuance will be used to redeem all outstanding Notes in full and pay all accrued and unpaid Note Interest, Interest Carry-Forward Amount, Post-ARD Additional Interest and Deferred Post-ARD Additional Interest with respect such outstanding Notes;
(xii)receipt by the Indenture Trustee of an Officer’s Certificate from each applicable Issuer, upon which the Indenture Trustee shall be permitted to fully rely and shall not have any liability for so relying, stating that the conditions precedent to such issuance have been fulfilled; and
(xiii)any additional conditions as set forth in the related Series Supplement.
Section II.05Registration of Transfer and Exchange of Notes.
(a)At all times during the term of this Indenture, there shall be maintained at the office of the Note Registrar a “Note Register” in which, subject to such reasonable regulations as the Note Registrar may prescribe, the Note Registrar shall provide for the registration of Notes and of transfers and exchanges of Notes as herein provided. The offices of the Note Registrar shall be initially located (as of the date hereof) at Citibank, N.A., 480 Washington Boulevard, 30th Floor, Jersey City, New Jersey 07310, Attention: Agency & Trust – CMFT Net Lease Master Issuer LLC. The Indenture Trustee is hereby initially appointed (and hereby agrees to act in accordance with the terms hereof) as “Note Registrar” for the purpose of registering Notes and transfers and exchanges of Notes as herein provided. The Indenture Trustee may appoint, by a written instrument delivered to the Issuer, any other bank or trust
company to act as Note Registrar under such conditions as the predecessor Indenture Trustee may prescribe; provided, that the Indenture Trustee shall not be relieved of any of its duties or responsibilities hereunder by reason of such appointment. If the Indenture Trustee resigns or is removed in accordance with the terms hereof, the successor trustee shall immediately succeed to its predecessor’s duties as Note Registrar. The Issuer, the Property Manager, the Issuer Manager, the Special Servicer, the Back-Up Manager and the Indenture Trustee shall have the right to inspect the Note Register or to obtain a copy thereof at all reasonable times, and to rely conclusively upon a certificate of the Note Registrar as to the information set forth in the Note Register. Upon written request of any Noteholder made for purposes of communicating with other Noteholders with respect to their rights under this Indenture, the Note Registrar shall promptly furnish such Noteholder with a list of the other Noteholders of record identified in the Note Register at the time of the request.
(b)No Transfer of any Note or interest therein shall be made unless that Transfer is made pursuant to an effective registration statement under the Securities Act, and effective registration or qualification under applicable state securities laws, or is made in a transaction that does not require such registration or qualification. No purported Transfer of any interest in any Note or any portion thereof which is not made in accordance with this Section 2.05 shall be given effect by or be binding upon the Indenture Trustee and any such purported Transfer shall be null and void ab initio and vest in the transferee no rights against the Issuer Collateral Pool or the Indenture Trustee.
None of the Issuer or any other person shall be obligated to register or qualify any Notes under the Securities Act or any other securities law or to take any action not otherwise required under this Indenture to permit the transfer of any Note or interest therein without registration or qualification.
By its acceptance of a Note or an Ownership Interest therein, each Holder and Note Owner, respectively, will be deemed to have represented and agreed (or, in the case of Definitive Notes, shall represent and agree) that the Transfer thereof is restricted and agrees that it shall Transfer such Note or Ownership Interest only in accordance with the terms of this Indenture and such Note (including the legends applicable thereto) and in compliance with Applicable Law.
(c)A Noteholder or Note Owner may exchange or Transfer a Book-Entry Note or Ownership Interest therein only in accordance with the following provisions:
(i)No Transfer of any Book-Entry Note or an Ownership Interest therein shall be made unless such Transfer is made to a Qualified Institutional Buyer in reliance on Rule 144A or in an “offshore transaction” (within the meaning of Regulation S) to a non-U.S. Person in reliance on Regulation S, and pursuant to exemption, registration or qualification under applicable state securities laws. The Indenture Trustee shall be entitled to rely upon the representations made or deemed made by each transferee pursuant to this Section 2.05, and shall have no duty to undertake any investigation or verify that any Transfer satisfies the requirements of this paragraph.
(ii)Restricted Global Note to Regulation S Global Note during Restricted Period. If a Holder of or a Note Owner with respect to a Restricted Global Note wishes at any time during the Restricted Period to exchange its interest in such Restricted Global Note for an interest in the corresponding Regulation S Global Note, or to Transfer such Restricted Global Note or an Ownership Interest therein to a Person who wishes to take delivery thereof in the form of a Regulation S Global Note or an Ownership Interest therein, such Holder or Note Owner may, subject to the provisions of this Section 2.05, exchange or Transfer such Restricted Global Note for a Regulation S Global Note of the same Series and Class or an Ownership Interest therein with an equivalent principal amount. Upon receipt by the Indenture Trustee of a certificate substantially in the form of Exhibit D-2 (subject to Section 12.03) given by the transferee of such Note or Ownership Interest (stating that such transferee is a non-U.S. Person and the exchange or Transfer of such interest has been made in compliance with the transfer restrictions applicable to such Notes and in accordance with Regulation S), the Indenture Trustee shall cancel the Restricted Global Note so exchanged or transferred (or reduce the principal amount of the Notes evidenced thereby), the Issuer shall, concurrently with such cancellation (or reduction), issue and the Indenture Trustee shall cause to be authenticated to the transferee a Regulation S Global Note of the same Series and Class (or increase the principal amount of the Notes evidenced by such Regulation S Global Note) in an aggregate principal amount equal to the aggregate principal amount of the Restricted Global Note so exchanged or transferred.
(iii)Restricted Global Note to Regulation S Global Note after the Expiration of Restricted Period. If a Holder of or a Note Owner with respect to a Restricted Global Note wishes at any time after the expiration of the Restricted Period to exchange its interest in such Restricted Global Note for an interest in the corresponding Regulation S Global Note, or to Transfer such Restricted Global Note or an Ownership Interest therein to a Person who wishes to take delivery thereof in the form of a Regulation S Global Note or an Ownership Interest therein, such Noteholder or Note Owner may, subject to provisions of this Section 2.05, exchange or Transfer such Restricted Global Note for a Regulation S Global Note of the same Series and Class or an Ownership Interest therein with an equivalent principal amount. Upon receipt by the Indenture Trustee of a certificate substantially in the form of Exhibit D-3 (subject to Section 12.03) given by the transferee (stating that the Transfer of such interest has been made in compliance with the transfer restrictions applicable to such Notes and pursuant to and in accordance with Regulation S), the Indenture Trustee shall cancel the Restricted Global Note so exchanged or transferred (or reduce the principal amount of the Notes evidenced thereby) and the Issuer shall, concurrently with such cancellation (or reduction), issue and the Indenture Trustee shall cause to be authenticated to the transferee a Regulation S Global Note of the same Series and Class (or increase the principal amount of the Notes evidenced by such Regulation S Global Note) in an aggregate principal amount equal to the aggregate principal amount of the Restricted Global Note so exchanged or transferred.
(iv)Regulation S Global Note to Restricted Global Note. If a Holder of or a Note Owner with respect to a Regulation S Global Note wishes at any time to exchange its interest in such Regulation S Global Note for an interest in a Restricted Global Note or to Transfer such Regulation S Global Note or an Ownership Interest therein to a Qualified Institutional Buyer who wishes to take delivery thereof in the form of a Restricted Global Note or an Ownership Interest therein, such Noteholder or Note Owner may, subject to the provisions of this Section 2.05, exchange or Transfer such Regulation S Global Note for a Restricted Global Note of the same Series and Class or an Ownership Interest therein in an equivalent principal amount. Upon receipt by the Indenture Trustee of a certificate substantially in the form of Exhibit D-1 (subject to Section 12.03) given by the transferee and stating that such transferee is a Qualified Institutional Buyer and is obtaining such Restricted Global Note or Ownership Interest therein in a transaction meeting the requirements of Rule 144A, the Indenture Trustee shall cancel the Regulation S Global Note so exchanged or transferred (or reduce the principal amount of the Notes evidenced thereby) and the Issuer shall, concurrently with such cancellation (or reduction), issue and the Indenture Trustee shall cause to be authenticated to the transferee a Restricted Global Note of the same Series and Class (or increase the principal amount of the Notes evidenced by such Restricted Global Note) in an aggregate principal amount equal to the aggregate principal amount of the Regulation S Global Note so exchanged or transferred.
(v)Transfer of Ownership Interests in Book-Entry Notes. Ownership Interests in Book-Entry Notes shall be exchanged or transferred in accordance with the
rules and procedures of the Depository and the Depository Participants, including, with respect to Regulation S Global Notes, Clearstream Banking, société anonyme, or its successors, and Euroclear Bank S.A./N.V., as operator of the Euroclear System, or its successors.
(vi)Book-Entry Note to Definitive Note. If any Book-Entry Note or an Ownership Interest therein is to be exchanged for a corresponding interest held in the form of a Definitive Note, or if any Transfer of a Book-Entry Note or an Ownership Interest therein is to be held by the related transferee in the form of a Definitive Note, then the Note Registrar shall refuse to register such exchange or Transfer unless it receives (and, upon receipt, may conclusively rely upon) (A) an executed transferor certificate from the transferor substantially in the form attached as Exhibit C-1 (subject to Section 12.03), and (B) an executed transferee certificate from the prospective transferee substantially in the form attached as Exhibit C-2 (subject to Section 12.03). If any such transfer of a Book-Entry Note or Ownership Interest held by the related transferor and also to be held by the related transferee in the form of a Book-Entry Note is to be made without registration under the Securities Act, the transferor will be deemed to have made as of the transfer date each of the representations and warranties set forth on Exhibit C-1 in respect of such Note and the transferee will be deemed to have made as of the transfer date each of the representations and warranties set forth on Exhibit C-2 in respect of such Note, in each case as if such Note were evidenced by a Definitive Note.
(d)A Noteholder or Note Owner may exchange or Transfer a Definitive Note or Ownership Interest therein only in accordance with the following provisions:
(i)No Transfer of any Definitive Note shall be made unless such Transfer is made to a Qualified Institutional Buyer in reliance on Rule 144A or in an “offshore transaction” (within the meaning of Regulation S) to a non-U.S. Person in reliance on Regulation S, and pursuant to exemption, registration or qualification under applicable state securities laws; provided, however, that a Noteholder may Transfer a Definitive Note to the Issuer or an Affiliate of the Issuer that is an accredited investor within the meaning of Rule 501(a) (1), (2), (3) or (7) of the Securities Act (an “Accredited Investor”) and has certified that it is an Affiliate of the Issuer and an Accredited Investor, upon Indenture Trustee’s receipt of (A) such Holder’s Definitive Note properly endorsed for assignment to the transferee, (B) an executed transferor certificate from the transferor substantially in the form attached as Exhibit C-1 (subject to Section 12.03), and (C) an executed transferee certificate from the prospective transferee substantially in the form attached as Exhibit C-2 (subject to Section 12.03). The Indenture Trustee shall be entitled to rely upon the representations made or deemed made by each transferee pursuant to this Section 2.05, and shall have no duty to undertake any investigation or verify that any Transfer satisfies the requirements of this paragraph.
(ii)Transfer of Definitive Note to Regulation S Global Note during Restricted Period. If a Holder of or a Note Owner with respect to a Definitive Note wishes at any time during the Restricted Period to exchange its interest in such Definitive
Note for an interest in the corresponding Regulation S Global Note, or to Transfer such Definitive Note or an Ownership Interest therein to a Person who wishes to take delivery thereof in the form of a Regulation S Global Note or an Ownership Interest therein, such Holder or Note Owner may, subject to the provisions of this Section 2.05, exchange or Transfer such Definitive Note for a Regulation S Global Note of the same Series and Class or an Ownership Interest therein with an equivalent principal amount. Upon receipt by the Indenture Trustee of (A) such Holder’s Definitive Note properly endorsed for assignment to the transferee and (B) a certificate substantially in the form of Exhibit D-2 (subject to Section 12.03) given by the transferee of such Note or Ownership Interest (stating that such transferee is a non-U.S. Person and the exchange or Transfer of such interest has been made in compliance with the transfer restrictions applicable to such Notes and in accordance with Regulation S), the Indenture Trustee shall cancel the Definitive Note so exchanged or transferred (or reduce the principal amount of the Notes evidenced thereby), the Issuer shall, concurrently with such cancellation (or reduction), issue and the Indenture Trustee shall cause to be authenticated to the transferee a Regulation S Global Note of the same Series and Class (or increase the principal amount of the Notes evidenced by such Regulation S Global Note) in an aggregate principal amount equal to the aggregate principal amount of the Definitive Note so exchanged or transferred.
(iii)Transfer of Definitive Note to Regulation S Global Note after the Expiration of Restricted Period. If a Holder of or a Note Owner with respect to a Definitive Note wishes at any time after the expiration of the Restricted Period to exchange its interest in such Definitive Note for an interest in the corresponding Regulation S Global Note, or to Transfer such Definitive Note or an Ownership Interest therein to a Person who wishes to take delivery thereof in the form of a Regulation S Global Note or an Ownership Interest therein, such Noteholder or Note Owner may, subject to provisions of this Section 2.05, exchange or Transfer such Definitive Note for a Regulation S Global Note of the same Series and Class or an Ownership Interest therein with an equivalent principal amount. Upon receipt by the Indenture Trustee of (A) such Holder’s Definitive Note properly endorsed for assignment to the transferee and (B) a certificate substantially in the form of Exhibit D-3 (subject to Section 12.03) given by the transferee (stating that the Transfer of such interest has been made in compliance with the transfer restrictions applicable to such Notes and pursuant to and in accordance with Regulation S), the Indenture Trustee shall cancel the Definitive Note so exchanged or transferred (or reduce the principal amount of the Notes evidenced thereby) and the Issuer shall, concurrently with such cancellation (or reduction), issue and the Indenture Trustee shall cause to be authenticated to the transferee a Regulation S Global Note of the same Series and Class (or increase the principal amount of the Notes evidenced by such Regulation S Global Note) in an aggregate principal amount equal to the aggregate principal amount of the Definitive Note so exchanged or transferred.
(iv)Transfer of Definitive Note to Restricted Global Note. If a Holder of or a Note Owner with respect to a Definitive Note wishes at any time to exchange its interest in such Definitive Note for an interest in a Restricted Global Note or to Transfer
such Definitive Note or an Ownership Interest therein to a Qualified Institutional Buyer who wishes to take delivery thereof in the form of a Restricted Global Note or an Ownership Interest therein, such Noteholder or Note Owner may, subject to the provisions of this Section 2.05, exchange or Transfer such Definitive Note for a Restricted Global Note of the same Series and Class or an Ownership Interest therein in an equivalent principal amount. Upon receipt by the Indenture Trustee of (A) such Holder’s Definitive Note properly endorsed for assignment to the transferee and (B) a certificate substantially in the form of Exhibit D-1 (subject to Section 12.03) given by the transferee and stating that such transferee is a Qualified Institutional Buyer and is obtaining such Restricted Global Note or Ownership Interest therein in a transaction meeting the requirements of Rule 144A, the Indenture Trustee shall cancel the Definitive Note so exchanged or transferred (or reduce the principal amount of the Notes evidenced thereby) and the Issuer shall, concurrently with such cancellation (or reduction), issue and the Indenture Trustee shall cause to be authenticated to the transferee a Restricted Global Note of the same Series and Class (or increase the principal amount of the Notes evidenced by such Restricted Global Note) in an aggregate principal amount equal to the aggregate principal amount of the Definitive Note so exchanged or transferred.
(v)Transfer of Definitive Note to Definitive Note. If a Holder of a Definitive Note wishes at any time to transfer such Definitive Note to a Person who wishes to take delivery thereof in the form of one or more Definitive Notes, such Holder may transfer or cause the transfer of such Note as provided below. Upon receipt by the Indenture Trustee of (A) such Holder’s Definitive Note, properly endorsed for assignment to the transferee, (B) an executed transferor certificate from the transferor substantially in the form attached as Exhibit C-1 (subject to Section 12.03), and (C) an executed transferee certificate from the prospective transferee substantially in the form attached as Exhibit C-2 (subject to Section 12.03), then the Indenture Trustee shall cancel such original Definitive Note in accordance with Section 2.14, record the transfer in the Note Register in accordance with Section 2.05 and upon execution by the Issuer, authenticate and deliver one or more Definitive Notes bearing the same designation as the Definitive Notes, endorsed for transfer, registered in the names specified in the assignment described in clause (A) above, in the aggregate Outstanding Principal Balances designated by the transferee (the aggregate Outstanding Principal Balances being equal to the aggregate Outstanding Principal Balance of the Definitive Notes, surrendered by the transferor), and in authorized denominations.
(e)If a Person is acquiring any Note as a fiduciary or agent for one or more accounts, such Person shall be required to deliver to the Note Registrar a certification to the effect that, and such other evidence as may be reasonably required by the Note Registrar to confirm that, it has (i) sole investment discretion with respect to each such account and (ii) full power to make the foregoing acknowledgments, representations, warranties, certifications and agreements with respect to each such account as set forth in subsections (b) and (c) of this Section 2.05.
(f)Subject to the preceding provisions of this Section 2.05, upon surrender for registration of transfer of any Note at the offices of the Note Registrar maintained for such purpose, the Issuer shall execute, and the Indenture Trustee shall cause to be authenticated and delivered, in the name of the designated transferee or transferees, one or more new Notes of the same Series and Class of a like Percentage Interest.
(g)At the option of any Holder, its Notes may be exchanged for other Notes of authorized denominations of the same Series and Class of a like Percentage Interest upon surrender of the Notes to be exchanged at the offices of the Note Registrar maintained for such purpose. Whenever any Notes are so surrendered for exchange, the Issuer shall execute, and the Indenture Trustee shall cause to be authenticated and delivered the Notes which the Noteholder making the exchange is entitled to receive.
(h)Every Note presented or surrendered for transfer or exchange shall (if so required by the Note Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer in the form satisfactory to the Note Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing.
(i)All Notes issued upon any transfer or exchange of the Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the related Notes surrendered upon such registration of transfer or exchange.
(j)No service charge shall be imposed for any transfer or exchange of Notes, but the Indenture Trustee or the Note Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Notes.
(k)All Notes surrendered for transfer and exchange shall be physically canceled by the Note Registrar, and the Note Registrar shall dispose of such canceled Notes in accordance with its customary procedures.
(l)The Note Registrar or the Indenture Trustee shall provide to the Issuer, the Property Manager, the Issuer Manager and the Special Servicer upon reasonable written request and at the expense of the requesting party a current copy of the Note Register.
(m)Each transferee of a Note or an Ownership Interest therein will be deemed to have represented, warranted and agreed (or, in the case of Definitive Notes, shall represent, warrant and agree) that either (i) such transferee is not, and is not purchasing such Note on behalf of, as a fiduciary of, as trustee of, or with the assets of, a Plan or (ii)(A) such Note is rated investment grade or better as of the date of the purchase, (B) such transferee acknowledges that it cannot acquire such Note unless it is properly treated as indebtedness without substantial equity features for purposes of Department of Labor Regulations and agrees to so treat such Note and (C) such transferee’s acquisition and continued holding of such Note or Ownership Interest therein will not constitute or give rise to a non-exempt prohibited transaction described in Section 406 of ERISA or Section 4975 of the Code (or violate any Similar Law).
(n)Moreover, each prospective transferee of a Note or an Ownership Interest therein that is a Benefit Plan Investor will be deemed to have represented, warranted and agreed (or, in the case of Definitive Notes, shall represent, warrant and agree) that (i) none of the Transaction Parties has provided any investment recommendation or investment advice to the Benefit Plan Investor or Plan Fiduciary, on which either the Benefit Plan Investor or Plan Fiduciary has relied in connection with the decision to invest in such Note, (ii) the Transaction Parties are not otherwise acting as a “fiduciary”, as that term is defined in Section 3(21) of ERISA or Section 4975(e)(3) of the Code, to the Benefit Plan Investor or Plan Fiduciary in connection with the Benefit Plan Investor’s investment in such Note and (iii) the Plan Fiduciary is exercising its own independent judgment in evaluating the transaction.
(o)If any Note or Class of Notes is directly or indirectly owned by a beneficial owner that owns equity interests in the Issuer such that the Note or Class of Notes is treated for U.S. federal income tax purposes as not properly issued and outstanding for U.S. federal income tax purposes (a “Transfer-Restricted Note”), then such Transfer-Restricted Note may be sold or transferred to any Person only if (a) the Note Registrar receives on the date of such transfer an opinion of nationally recognized tax counsel knowledgeable in the tax aspects of securitization to the effect that at the time of such sale or transfer for U.S. federal income tax purposes such Transfer-Restricted Note is treated as indebtedness or (b)(1) the transferee is a “United States person” within the meaning of Section 7701(a)(30) of the Code and (2) the Note Registrar and the Issuer receive on the date of such transfer an opinion of nationally recognized tax counsel knowledgeable in the tax aspects of securitization to the effect that at the time of such sale or transfer for U.S. federal income tax purposes such sale or transfer will not cause the Issuer, or any portion thereof, to be classified as an association or “publicly traded partnership” that is taxable as a corporation or as a “taxable mortgage pool” (the “Note Transfer Restrictions”).
Section II.06Book-Entry Notes.
(a)The Book-Entry Notes of each Series shall be delivered as one or more Notes held by the Book-Entry Custodian or, if appointed to hold such Notes as provided below, the Depository, and registered in the name of the Depository or its nominee and, except as set forth in any related Series Supplement or as otherwise provided in Section 2.06(c) below, transfer of such Notes may not be registered by the Note Registrar unless such transfer is to a successor Depository that agrees to hold such Notes for the respective Note Owners with Ownership Interests therein. Except as provided in Sections 2.01 and 2.05 above, and Section 2.06(c) below, such Note Owners shall hold and transfer their respective Ownership Interests in and to such Notes through the book-entry facilities of the Depository and, except as provided in Sections 2.01 and 2.05 above, and Section 2.06(c) below, shall not be entitled to Definitive Notes in respect of such Ownership Interests. All transfers by Note Owners of their respective Ownership Interests in the Book-Entry Notes to be held by the related transferees as Book-Entry Notes shall be made in accordance with the procedures established by the Depository Participant or brokerage firm representing each such Note Owner. Each Depository Participant shall only transfer the Ownership Interests in the Book-Entry Notes of Note Owners it represents or of brokerage firms for which it acts as agent in accordance with the Depository’s normal
procedures. The Indenture Trustee is hereby initially appointed as the Book-Entry Custodian and hereby agrees to act as such in accordance herewith and in accordance with the agreement that it has with the Depository authorizing it to act as such. Neither the Indenture Trustee nor the Note Registrar shall have any responsibility to monitor or restrict the transfer of any Book-Entry Note transferable through the book-entry facilities of the Depository. The Book-Entry Custodian may, and, if it is no longer qualified to act as such, the Book-Entry Custodian shall, appoint, by a written instrument delivered to the Issuer, the Property Manager, the Issuer Manager and the Special Servicer, and, if the Indenture Trustee is not the Book-Entry Custodian, the Indenture Trustee, any other transfer agent (including the Depository or any successor Depository) to act as Book-Entry Custodian under such conditions as the predecessor Book-Entry Custodian and the Depository or any successor Depository may prescribe; provided, that the predecessor Book-Entry Custodian shall not be relieved of any of its duties or responsibilities by reason of any such appointment other than with respect to an appointment of the Depository. If the Indenture Trustee resigns or is removed in accordance with the terms hereof, the successor trustee or, if it so elects, the Depository shall immediately succeed to its predecessor’s duties as Book-Entry Custodian. The Issuer shall have the right to inspect, and to obtain copies of, any Notes held as Book-Entry Notes by the Book-Entry Custodian.
(b)The Issuer, the Indenture Trustee, the Property Manager, the Issuer Manager, the Special Servicer, the Back-Up Manager and the Note Registrar may for all purposes, including the making of payments due on the Book-Entry Notes, deal with the Depository as the Noteholder and the authorized representative of the Note Owners with respect to such Notes for the purposes of exercising the rights of Noteholders hereunder. The rights of Note Owners with respect to the Book-Entry Notes shall be limited to those established by law and agreements between such Note Owners and the Depository Participants and brokerage firms representing such Note Owners, and all references in this Indenture to actions by the Noteholders shall refer to actions taken by the Depository upon instructions from the Depository Participants, and all references in this Indenture to distributions, notices, reports and statements to the Noteholders shall refer to distributions, notices, reports and statements to the Depositor, as registered holder of the Notes of such Series of Notes for distribution to the Note Owners in accordance with the procedures of the Depository. Multiple requests and directions from, and votes of, the Depository as holder of the Book-Entry Notes with respect to any particular matter shall not be deemed inconsistent if they are made with respect to different Note Owners. The Indenture Trustee may establish a reasonable record date in connection with solicitations of consents from or voting by Noteholders and shall give notice to the Depository of such record date. Whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Noteholders evidencing a specified percentage of the principal amount of Notes, the applicable Depository shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners and/or their related Depository Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes and has delivered such instructions to the Indenture Trustee. Whenever notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to such Note Owners, the Indenture Trustee and the Issuer shall give all such notices and communications specified herein to be given to Noteholders to the applicable Depository for distribution to the Note Owners.
(c)If (i) the Issuer advises the Indenture Trustee and the Note Registrar in writing that the Depository is no longer willing or able to properly discharge its responsibilities with respect to the Book-Entry Notes (or any portion thereof), and (ii) the Issuer is unable to locate a qualified successor, the Note Registrar shall notify all affected Note Owners, through the Depository, of the occurrence of any such event and of the availability of Definitive Notes to such Note Owners requesting the same. Upon surrender to the Note Registrar of the Book-Entry Notes (or any portion thereof) by the Book-Entry Custodian or the Depository, as applicable, and the delivery of registration instructions from the Depository for registration of transfer, the Issuer shall execute, and the Indenture Trustee shall cause to be authenticated and delivered, the Definitive Notes in respect of such Notes to the Note Owners identified in such instructions. None of the Issuer, the Property Owners, the Indenture Trustee, the Property Manager, the Issuer Manager, the Special Servicer, the Back-Up Manager or the Note Registrar shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions.
(d)Upon the issuance of Definitive Notes, for purposes of evidencing ownership of any Notes formerly held as Book-Entry Notes, the registered holders of such Definitive Notes shall be recognized as Noteholders hereunder and, accordingly, shall be entitled directly to receive payments on, to exercise voting and consent rights with respect to, and to transfer and exchange such Definitive Notes. Upon the issuance of Definitive Notes, all references herein to obligations imposed upon or to be performed by the applicable Depository with respect to such Notes shall be deemed to be imposed upon and performed by the Indenture Trustee, to the extent applicable with respect to such Definitive Notes, and the Indenture Trustee shall recognize the Noteholders of the Definitive Notes of such Series of Notes as Noteholders of such Series of Notes hereunder.
(e)The Issuer shall provide an adequate inventory of Definitive Notes of each Class of each Series to the Indenture Trustee.
Section II.7Mutilated, Destroyed, Lost or Stolen Notes.
If any mutilated Note is surrendered to the Note Registrar, the Issuer shall execute and the Indenture Trustee shall cause to be authenticated and delivered, in exchange therefor, a new Note of the same Series, Class and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Issuer, the Indenture Trustee and the Note Registrar (i) evidence to their satisfaction of the destruction (including mutilation tantamount to destruction), loss or theft of any Note and the ownership thereof, and (ii) indemnity as may be reasonably required by them to hold each of them and any of their agents harmless, then, in the absence of notice to the Issuer or the Note Registrar that such Note has been acquired by a bona fide purchaser, the Issuer shall execute and the Indenture Trustee shall cause to be authenticated and delivered, in lieu of any such destroyed, lost or stolen Note, a new Note of the same Series, Class, tenor and denomination registered in the same manner, dated the date of its authentication and bearing a number not contemporaneously outstanding.
Upon the issuance of any new Note under this Section 2.07, the Issuer, the Indenture Trustee and the Note Registrar may require the payment by the Noteholder of an amount sufficient to pay or discharge any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the reasonable fees and expenses of the Authenticating Agent and the Indenture Trustee) in connection therewith.
Every new Note issued pursuant to this Section 2.07 in lieu of any destroyed, mutilated, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the destroyed, mutilated, lost or stolen Note shall be at any time enforceable by any Person, and such new Note shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes of its Class and Series duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude (to the extent permitted by Applicable Law) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section II.8Noteholder Lists.
The Note Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of the Noteholders of each Series, which list, upon request, will be made available to the Indenture Trustee insofar as the Indenture Trustee is no longer the Note Registrar. Upon written request of any Noteholder made for purposes of communicating with other Noteholders with respect to their rights under this Indenture, the Note Registrar shall promptly furnish such Noteholder at such Noteholder’s expense with a list of the Noteholders of record identified in the Note Register at the time of the request. Every Noteholder, by receiving such access, or by receiving a Note or an interest therein, agrees with the Note Registrar that the Note Registrar will not be held accountable in any way by reason of the disclosure of any information as to the names and addresses of any Noteholder regardless of the source from which such information was derived.
Section II.9Persons Deemed Owners.
The Issuer, the Indenture Trustee, the Note Registrar and any of their agents, may treat the Person in whose name a Note is registered as the owner of such Note as of the related Record Date for the purpose of receiving payments of principal, interest and other amounts in respect of such Note and for all other purposes, whether or not such Note shall be overdue, and none of the Issuer, the Indenture Trustee, the Note Registrar or any agents of any of them, shall be affected by notice to the contrary.
Section II.10Payment Account.
(a)On or prior to the Initial Closing Date, the Indenture Trustee shall establish and maintain one or more segregated trust accounts (collectively, the “Payment Account”) at Citibank, N.A., in its name, as Indenture Trustee, bearing a designation clearly indicating that such account and all funds deposited therein are held for the exclusive benefit of
the Noteholders and the Issuer as their interests may appear. At all times, the Payment Account shall be an Eligible Account or a sub-account of an Eligible Account. On each Remittance Date, the Indenture Trustee shall deposit or cause to be deposited in the Payment Account, as provided in the Property Management Agreement, the Available Amounts for such Payment Date. Except as otherwise provided in this Indenture, the Indenture Trustee, in accordance with the terms of this Indenture, shall have exclusive control and sole right of withdrawal with respect to the Payment Account. Funds in the Payment Account shall not be commingled with any other moneys. All moneys deposited from time to time in the Payment Account shall be held by and under the control of the Indenture Trustee in the Payment Account for the benefit of the Noteholders and the Issuer as herein provided.
(b)Amounts in the Payment Account shall be held uninvested.
(c)The Indenture Trustee is authorized to make withdrawals from the Payment Account (the order set forth hereafter in this subsection (c) not constituting an order of priority for such withdrawals) to make payments on the Notes and to other parties as set forth in the priorities of payments pursuant to Section 2.11(b) of this Indenture, and to the Issuer as provided in Section 2.11.
(d)The Indenture Trustee will only make payments in USD. The Indenture Trustee shall not be responsible for remitting any taxes or withholding taxes.
(e)Upon the satisfaction and discharge of this Indenture pursuant to Section 3.01, the Indenture Trustee shall pay to the Issuer or to the holders of the Issuer Interests, as directed by the Issuer, as their interests may appear, all amounts, if any, held by it remaining as part of the Issuer Collateral Pool.
Section II.11Payments on the Notes.
(a)Subject to Section 2.11(b), the Issuer agree to pay:
(i)on each Payment Date prior to the Rated Final Payment Date for the Classes of each Series of Notes (but only to the extent of the Available Amount pursuant to Section 2.11(b), in the case of payments of principal), interest on and principal of such Notes in the amounts and in accordance with the priorities set forth in Section 2.11(b); and
(ii)on the Rated Final Payment Date for the Classes of each Series of Notes, the entire applicable Series Principal Balance, together with all accrued and unpaid interest thereon.
Amounts properly withheld under the Code by any Person from a payment to any Holder of a Note of interest, principal or other amounts, or any such payment set aside on the Final Payment Date for such Note as provided in Section 2.11(b), shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture.
(b)With respect to each Payment Date, any interest, principal and other amounts payable on the Notes shall be paid to each Person that is a registered holder thereof at the close of business on the related Record Date; provided, however, that interest, principal and other amounts payable at the Final Payment Date of any Note shall be payable only against surrender thereof at the Indenture Trustee’s Office or such other address as may be specified in the notice of final payment. Payments of interest, principal and other amounts on the Notes shall be made on each Payment Date other than the Final Payment Date, subject to Applicable Law, by wire transfer to such accounts as each such Noteholder shall designate by written instruction received by the Indenture Trustee not later than the Record Date related to such Payment Date or otherwise by check mailed on or before such Payment Date to the Person entitled thereto at such Person’s address appearing on the Note Register as of the related Record Date. The Indenture Trustee shall pay each Note in whole or in part as provided herein on its Final Payment Date in immediately available funds from funds in the Payment Account as promptly as possible after presentation to the Indenture Trustee of such Note at the Indenture Trustee’s Office, but in no event later than the next Business Day after the day of such presentation. If presentation is made after 3:30 p.m., New York City time, on any day, such presentation shall be deemed to have been made on the immediately succeeding Business Day.
Each payment with respect to a Book-Entry Note shall be paid to the Depository, as holder thereof, and the Depository shall be responsible for crediting the amount of such payment to the accounts of its Depository Participants in accordance with its normal procedures. Each Depository Participant shall be responsible for disbursing such payments to the related Note Owners that it represents and to each indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”) for which it acts as agent. Each brokerage firm shall be responsible for disbursing funds to the related Note Owners that it represents. None of the parties hereto shall have any responsibility therefor except as otherwise provided by this Indenture or Applicable Law. The Issuer and the Indenture Trustee shall perform their respective obligations under each Letter of Representations.
Except as provided in the following sentence, if a Note is issued in exchange for any other Note during the period commencing at the close of business at the office or agency where such exchange occurs on any Record Date and ending before the opening of business at such office or agency on the related Payment Date, no interest, principal or other amounts will be payable on such Payment Date in respect of such new Note, but will be payable on such Payment Date only in respect of the prior Note. Interest, principal and other amounts payable on any Note issued in exchange for any other Note during the period commencing at the close of business at the office or agency where such exchange occurs on the Record Date immediately preceding the Final Payment Date for such Notes and ending on the Final Payment Date for such Notes, shall be payable to the Person that surrenders the new Note as provided in this Section 2.11(b).
All payments of interest, principal and other amounts made with respect to the Notes of a Class of any Series will be allocated pro rata among the Notes then Outstanding of such Class as set forth below.
If any Note on which the final payment was due is not presented for payment on its Final Payment Date, then the Indenture Trustee shall set aside such payment in a segregated, non-interest bearing account (and shall remain uninvested) separate from the Payment Account (but which may be a sub-account thereof) but which constitutes an Eligible Account (or a sub-account of an Eligible Account), and the Indenture Trustee and the Issuer shall act in accordance with Section 5.10 in respect of the unclaimed funds.
On each Payment Date, the Available Amount on such Payment Date will be applied by the Indenture Trustee, first to pay the following expenses of the Issuer related to the Notes (collectively, “Issuer Collateral Pool Expenses”) to the extent not withdrawn from the Collection Account by the Issuer Manager on or prior to the applicable Remittance Date in accordance with the Property Management Agreement in the following order of priority :
(I) to the Indenture Trustee, any earned and unpaid Indenture Trustee Fees;
(II) to the Back-Up Manager, any earned and unpaid Back-Up Management Fee (to the extent collected pursuant to the Property Management Agreement);
(III) to the Property Manager, any earned and unpaid Property Management Fees (to the extent collected pursuant to the Property Management Agreement);
(IV) to the Issuer Manager, any earned and unpaid Issuer Manager Fees (to the extent collected pursuant to the Property Management Agreement);
(V) to the Special Servicer, any earned and unpaid Special Servicing Fees (to the extent collected pursuant to the Property Management Agreement);
(VI) to the Back-Up Manager, the Property Manager, the Issuer Manager, the Special Servicer and the Indenture Trustee, as applicable, an amount equal to all unreimbursed Advances, including Nonrecoverable Advances (plus interest thereon at the Reimbursement Rate) and Extraordinary Expenses for such Payment Date and to the extent unpaid from any prior Payment Date with interest thereon at the Reimbursement Rate (in the case of Extraordinary Expenses, not to exceed the Extraordinary Expense Cap, unless an Event of Default resulting in the acceleration of any Notes has occurred and is then continuing, in which case, such Extraordinary Expense Cap will not apply);
(VII) to the extent unpaid from any prior Payment Date, to the Issuer Manager for any unreimbursed Modified Lease Expenses;
(VIII) to the parties entitled thereto, the amount of any Issuer Expenses (not to exceed the Issuer Expense Cap, unless an Event of Default resulting in the acceleration of any Notes has occurred and is then continuing, in which case, the Issuer Expense Cap will not apply); and
(IX) (a) first, to the Indenture Trustee in any of its capacities under the Indenture, (b) second, to the relevant party and (c) third, to the Property Manager, the Issuer Manager and the Special Servicer, the amount of Extraordinary Expenses for such Payment Date and to the extent unpaid from any prior Payment Date, to the extent not already reimbursed in sub-clauses (I) through (VIII) above, in each case, with interest thereon at the Reimbursement Rate (not to exceed the Extraordinary Expense Cap, unless an Event of Default resulting in the acceleration
of any Notes has occurred and is then continuing, in which case (i) such Extraordinary Expense Cap will not apply and (ii) indemnities due to the Issuer or any Control Person, member, manager, officer, employee or agent of the Issuer will be payable only after payments due to the Noteholders pursuant to the allocation of Series Available Amount below).
Subject to the terms and provisions of each Series Supplement, the Available Amount remaining on any Payment Date after payment of Issuer Collateral Pool Expenses will be allocated in the following manner and priority (the aggregate amount allocated pursuant to clauses (1) through (11) (but excluding clauses (5), (9) and (10) below, the “Series Available Amount”):
(1)to each Series, note interest, allocated pro rata based on all amounts due on such Payment Date to each Series in respect of Note Interest on the Notes designated as Class “A” (plus all unpaid Note Interest from prior Payment Dates and interest thereon at the applicable Note Rate);
(2)to each Series, as applicable, sequentially in alphabetical order with respect to this clause (2), to Additional Class Notes, allocated for all such Additional Class Notes with the same alphabetical designation with respect to this clause (2) pro rata based on amounts owing to such Series with respect to this clause (2), the note interest due on any Additional Class Notes for such Payment Date, plus all unpaid note interest in respect of such Additional Class Notes from any prior Payment Date and interest thereon at the applicable note rates;
(3)so long as no Early Amortization Period is in effect, sequentially:
a.to each Series, Scheduled Principal Payments, allocated pro rata based on all amounts due on such Payment Date to each Series in respect of the Notes of such Series designated as Class “A,” provided, however, that any Scheduled Principal Payments allocated to any Series shall not exceed the Series Principal Balance of the class A notes of such Series;
b.to each Series, as applicable, sequentially in alphabetical order with respect to this clause (3)(b), to any Additional Class Notes, allocated for all such Additional Class Notes with the same alphabetical designation with respect to this clause (3)(b), the scheduled class principal payment for such class, pro rata based on amounts owing to such Series with respect to this clause (3)(b) (and any unpaid scheduled principal payment for such class that were due on any prior Payment Dates) provided, however, that any scheduled principal payments allocated to any Series shall not exceed the series principal balance of such class of notes of such Series;
c.(i) on and after the Series Closing Date and prior to the Payment Date occurring thirty-six (36) months following the Series Closing Date,
to the Liquidity Reserve Account, all remaining Available Amounts until the amount on deposit in the Liquidity Reserve Account is equal to $2,000,000, (ii) beginning on the first Payment Date following the Payment Date occurring thirty-six (36) months following the Series Closing Date, to the Liquidity Reserve Account, all remaining Available Amounts until the amount on deposit in the Liquidity Reserve Account is equal to $2,000,000 plus $100,000 for each Payment Date occurring after thirty-six (36) months following the Series Closing Date and (iii) following the first Payment Date following fifty-six (56) months following the Series Closing Date and each Payment Date thereafter, to the Liquidity Reserve Account, all remaining Available Amounts until the amount on deposit in the Liquidity Reserve Account is equal to $4,000,000;
d.to each Series, unscheduled principal payments, allocated pro rata, based on the Outstanding Principal Balance of the Notes of such Series designated as Class “A,” provided, however, that any unscheduled principal payments allocated to any Series shall not exceed the outstanding principal balance of the class A notes of such Series; and
e.to each Series, as applicable, sequentially in alphabetical order with respect to this clause (3)(e), to any Additional Class Notes, allocated for all such Additional Class Notes with the same alphabetical designation with respect to this clause (3)(e), unscheduled principal payment, if any, pro rata, based on the outstanding principal balance of such class for such Payment Date; provided, however, that any unscheduled principal payments allocated to any class and Series pursuant to this clause (3)(e) shall not exceed the outstanding principal balance of such class of notes of such Series;
(4)during an Early Amortization Period, sequentially;
a.to each Series, all remaining Available Amounts, allocated pro rata based on the Outstanding Principal Balance of the Notes of such Series designated as Class “A,” provided, however, that such amount allocated to any Series shall not exceed the Series Principal Balance of such Series; and
b.to each Series, sequentially in alphabetical order with respect to this clause (4)(b), to any Additional Class Notes, allocated for all such Additional Class Notes with the same alphabetical designation with respect to this clause (4)(b) pro rata based on (A) the outstanding principal balance plus interest carry forward amounts of such Series with respect to this clause (4)(b) and (B) the outstanding principal balance of each such class plus interest carry forward amounts, provided, however, that such amount allocated to any class and Series pursuant to this clause (4)(b) shall not exceed the outstanding principal balance plus interest carry forward amounts of such class of notes of such Series;
(5)during a DSCR Sweep Period, to the DSCR Reserve Account, all remaining Available Amounts until the amount on deposit in
the DSCR Reserve Account is equal to the Aggregate Series Principal Balance;
(6)to each Series, sequentially:
a.Make Whole Amounts related to any Unscheduled Principal Payments due on the Notes of such Series designated as Class “A” in clause (3)(d) above, plus any unpaid Make Whole Amounts from any prior Payment Date, allocated pro rata based on the aggregate Make Whole Amount due to such Notes; and
b.in alphabetical order with respect to this clause (6)(b), to any Additional Class Notes, allocated for all such Additional Class Notes with the same alphabetical designation with respect to this clause (6)(b), pro rata based on amounts owing to such Series with respect to this clause (6)(b), make whole amounts related to any unscheduled principal payments due on any Additional Class Notes in clause (3)(e) above, plus any unpaid make whole amounts due on any Additional Class Notes from any prior Payment Date, allocated pro rata based on (A) the aggregate make whole amount due to such Series with respect to this clause (6)(b) and (B) the aggregate make whole amounts due to such class of notes of such Series;
(7)to each Series, sequentially in alphabetical order, Interest Carry-Forward Amounts, allocated pro rata based on all amounts due on such Payment Date to each Additional Class Notes with the same alphabetical designation (plus all unpaid interest carry forward amounts from prior Payment Dates and interest thereon at the applicable note rates);
(8)to each Series, sequentially:
a.the aggregate unpaid Post-ARD Additional Interest and deferred Post-ARD Additional Interest accrued on the Notes of such Series designated as Class “A”, allocated pro rata based on all amounts due on such Payment Date to each Series in respect of Post-ARD Additional Interest and Deferred Post-ARD Interest on such Notes; and
b.in alphabetical order, the unpaid aggregate Post-ARD Additional Interest and deferred Post-ARD Additional Interest accrued on the Additional Class Notes, allocated pro rata based on all amounts due on such Payment Date to each Series in respect of Additional Class Notes Post-ARD Additional Interest and Deferred Post-ARD Interest on such Additional Class Notes with the same alphabetical designation;
(9)to the extent not paid as Issuer Collateral Pool Expenses, any Issuer Expenses or Extraordinary Expenses for each Payment Date and to the
extent unpaid from any prior Payment Date with interest thereon at the Reimbursement Rate; and
(10)pro rata, to the Issuer (or the direct or indirect owners thereof) all remaining Available Amounts (which amounts will be released from the Lien of this Indenture).
The commencement of an Early Amortization Period caused by the occurrence of an event set forth under clause (A) or clause (B) of the definition of “Early Amortization Period” shall be waivable by the Requisite Global Majority. The occurrence of an event, upon the occurrence of which an Early Amortization Period under clause (C) of the definition of “Early Amortization Period” shall otherwise commence, shall be waivable by the Controlling Parties of all Series of Notes.
In addition, the Issuer shall be entitled to deposit amounts that are not otherwise subject to the lien of this Indenture, in accordance with the applicable Series Supplements, which amounts shall be added to the Series Available Amount for the applicable Series for the Payment Date following such deposit and distributed to such Series on such Payment Date in accordance with the priority of payments for such Series. Such deposit may only be used for the purpose of preventing the occurrence of an Early Amortization Period under clause (C) of the definition of “Early Amortization Period” or curing any such Early Amortization Period that has already occurred and may not occur more frequently than one (1) time with respect to any three (3) consecutive Collection Periods and more than three (3) times prior to the Rated Final Payment Date.
(c)In connection with making any payments pursuant to Section 2.11(b), the Indenture Trustee shall make available to the Issuer on the related Payment Date via the Indenture Trustee’s internet website specified in Section 6.01(a), a written statement detailing the amounts so paid; provided, that if such information is not so available on the Indenture Trustee’s internet website for any reason, the Indenture Trustee shall provide the Issuer with such written statement by facsimile transmission, confirmed in writing by first class mail or overnight courier.
Section II.12Final Payment Notice.
(a)Notice of final payment under Section 2.11(b) shall be given by the Indenture Trustee as soon as practicable, but not later than two (2) Business Days prior to the Final Payment Date for a Class of any Series, to each Noteholder of such Series as of the close of business on the Record Date in the calendar month preceding the Final Payment Date at such Noteholder’s address appearing in the Note Register and to each applicable Rating Agency and each applicable Issuer.
(b)All notices of final payment in respect of a Class of Notes of any Series shall state (i) the Final Payment Date for such Notes, (ii) the amount of the final payment for such Notes and (iii) the place where such Notes are to be surrendered for payment.
(c)Notice of final payment of a Class of Notes of any Series shall be given by the Indenture Trustee in the name and at the expense of the Indenture Trustee. Failure to give notice of final payment, or any defect therein, to any Noteholder of such Series shall not impair or affect the validity of the final payment of any other Note.
Section II.13Compliance with Withholding Requirements.
Notwithstanding any other provision of this Indenture, the Indenture Trustee shall comply with all federal, state, local or foreign withholding requirements with respect to payments to Noteholders of interest, original issue discount, or other amounts that the Indenture Trustee reasonably believes are applicable under the Code or any other applicable law. The consent of Noteholders shall not be required for any such withholding.
Section II.14Cancellation.
The Issuer may at any time deliver to the Note Registrar for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Note Registrar. Such cancelled Notes shall be deemed no longer to be outstanding for all purposes under this Indenture and the other transaction documents.
If any Note shall have been authenticated and delivered hereunder but never issued and sold by the Issuer, and the Issuer shall deliver such Note to the Indenture Trustee for cancellation as provided in this Section 2.14 together with a written statement stating that such Indenture Note has never been issued and sold by the Issuer, for all purposes of this Indenture such Note shall be deemed never to have been authenticated and delivered hereunder and shall not be entitled to the benefits of this Indenture.
All Notes delivered to the Indenture Trustee for payment shall be forwarded to the Note Registrar. All such Notes and all Notes surrendered for transfer and exchange in accordance with the terms hereof shall be canceled and disposed of by the Note Registrar in accordance with its customary procedures.
Section II.15Liquidity Reserve Account.
(a)On or prior to the date hereof, the Indenture Trustee shall establish and maintain at Citibank, N.A. a segregated account identified as the “Liquidity Reserve Account” (the “Liquidity Reserve Account”), in its name, as Indenture Trustee for the benefit of all Noteholders, bearing a designation clearly indicating that such account and all funds deposited therein are held for the exclusive benefit of the Noteholders and the Issuers as their interests may appear. At all times, the Liquidity Reserve Account shall be an Eligible Account or a sub-account of an Eligible Account.
(b)On the Initial Closing Date, the Issuer shall deposit or cause to be deposited in the Liquidity Reserve Account an amount equal to $2,00,000. After the Series Initial Closing Date, the Issuer may (directly or indirectly) deposit additional amounts into the
Liquidity Reserve Account on any subsequent Series Closing Date; provided, that the funds used for such deposits are not otherwise subject to the Lien of this Indenture. The Issuer, or Issuer Manager on behalf of the Issuer, may (but will not be required to) so deposit such additional funds to the Liquidity Reserve Account in an aggregate amount not to exceed $25,000,000. The Issuer (or the Issuer Manager on behalf of the Issuer) may not make any such additional deposit in accordance with this Section 2.15(b) more than two (2) times in any calendar year, or more than four (4) times in the aggregate from (and including) the most recent Series Closing Date, in each case, unless the Rating Condition is satisfied. All amounts held in the Liquidity Reserve Account shall be invested in Permitted Investments as directed by the Property Manager in accordance with terms and provisions of Section 13 of the Property Management Agreement.
(c)If on any Determination Date, a shortfall exists, solely with respect to the Collateral Pool Expenses or Note Interest with respect to any Series of Notes, in each case due and payable on the related Payment Date and identified in the applicable Determination Date Report, the Indenture Trustee shall transfer an amount (based on the relevant information contained in such Determination Date Report) on the applicable Remittance Date an amount equal to the lesser of (x) any such shortfall amount and (y) the amount then on deposit in the Liquidity Reserve Account to the Payment Account, to be applied as part of the Available Amount in respect of such Payment Date.
(d)Upon the commencement of an Early Amortization Period, any amounts remaining in the Liquidity Reserve Account shall be remitted to the Payment Account for application by the Indenture Trustee as part of the Available Amount in accordance with Section 2.11(b).
Section II.16The Hedge Agreements.
(a)On any Series Closing Date, the Issuer may enter into one or more Hedge Agreements with respect to any Class of any related Series of Notes as set forth in the applicable Series Supplement.
(b)The Indenture Trustee shall, on behalf of the Issuer, distribute amounts due to each Hedge Counterparty under the applicable Hedge Agreements on any Payment Date from the Payment Account in accordance with Section 2.11 and the applicable Series Supplement.
(c)The Indenture Trustee shall agree to any reduction in the notional amount of any Hedge Agreement requested by the Issuer; provided, that, if any Notes are then Outstanding and rated by the Rating Agencies, the Indenture Trustee shall first have received the written confirmation that the Rating Condition is satisfied. Any amount paid by a Hedge Counterparty to the Issuer in connection with such reduction shall constitute part of the Available Amount except as otherwise provided in the applicable Series Supplement.
(d)Each Hedge Agreement (unless otherwise provided in the applicable Series Supplement) shall permit the complete or partial termination thereof (without the payment by the Issuer of penalties or fees other than termination-related expenses) by the Issuer subject to
the provision of at least ten (10) Business Days notification to the Rating Agencies. The Indenture Trustee shall, prior to each applicable Series Closing Dates if required by the applicable Series Supplement, establish at Citibank, N.A. (or at such other financial institution as provided in the applicable Series Supplement and as necessary to ensure that the Hedge Counterparty Account is at all times an Eligible Account or a sub-account of an Eligible Account) a segregated trust account that shall be designated as a “Hedge Counterparty Account”, in its name, as Indenture Trustee, bearing a designation clearly indicating that such account and all funds deposited therein are held for the exclusive benefit of the applicable Noteholders, over which the Indenture Trustee shall have exclusive control and the sole right of withdrawal, and in which neither the Issuer nor any other Person shall have any legal or beneficial interest. The Hedge Counterparty Accounts may be sub-accounts of the Payment Account. The only permitted withdrawal from or application of funds on deposit in, or otherwise to the credit of, a Hedge Counterparty Account shall be for application to obligations of the applicable Hedge Counterparty to the Issuer under the related Hedge Agreement.
(e)In the event a Responsible Officer of the Indenture Trustee becomes aware that a Hedge Counterparty has defaulted in the payment when due of its obligations to the Issuer under the related Hedge Agreement, the Indenture Trustee shall make a demand on such Hedge Counterparty, or any guarantor, if applicable, demanding payment by 12:30 p.m., New York City time, on such date (or by such time on the next succeeding Business Day if such actual knowledge is obtained by such Responsible Officer of the Indenture Trustee after 11:00 a.m., New York City time). The Indenture Trustee shall give notice to the applicable Noteholders upon the continuing failure by such Hedge Counterparty to perform its obligations during the two (2) Business Days following a demand made by the Indenture Trustee on such Hedge Counterparty.
(f)If at any time a Hedge Agreement becomes subject to early termination due to the occurrence thereunder of an event of default or a termination event, the Issuer and the Indenture Trustee shall take such actions (following the expiration of any applicable grace period and after the expiration of the two (2) Business Day period referred to in Section 2.16(e), as applicable) to enforce the rights of the Issuer and the Indenture Trustee thereunder as may be permitted by the terms of such Hedge Agreement and consistent with the terms hereof, and shall apply the proceeds of any such actions (including, without limitation, the proceeds of the liquidation of any collateral pledged by the related Hedge Counterparty) to enter into a replacement Hedge Agreement on such terms or provide such other substitute arrangement (or forebear from doing either of the foregoing) as provided in the applicable Series Supplement. Any costs attributable to entering into a replacement Hedge Agreement which exceed the aggregate amount of the proceeds of the liquidation of the terminated Hedge Agreement shall constitute Issuer Expenses payable under Section 2.11(b). In addition, the Issuer will use their best efforts to cause the termination of a Hedge Agreement to become effective simultaneously with the entry into a replacement Hedge Agreement described as aforesaid.
(g)The applicable obligations under a Hedge Agreement must be non-recourse obligations of the Issuer payable only to the extent of available funds in accordance with Section 2.11(b). In addition, the provisions under each Hedge Agreement shall provide that
the related Hedge Counterparty shall not institute against, or join any other person or entity in instituting against, any of the Issuer, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceedings under any federal or state bankruptcy or similar law (including the Bankruptcy Code), for two (2) years and thirty-one (31) days after the last Note issued by the Issuer is paid in full, and that the agreements in such provisions shall survive termination of such Hedge Agreement.
Section II.17Tax Treatment of the Notes.
The Issuer has entered into this Indenture, and each Class of Notes will be issued, with the intention that, for purposes of any federal, state and local income or franchise tax and any other taxes imposed on or measured by income, such Notes will qualify as indebtedness (unless otherwise provided in the applicable Series Supplement) upon their issuance for federal income tax purposes. Notwithstanding the above, any Note that, as a result of being directly or indirectly owned by a beneficial owner that owns equity interests in the Issuer, is treated for U.S. federal income tax purposes as not properly issued and outstanding will not be treated as indebtedness for U.S. federal income tax purposes. The Issuer and each Noteholder, by its acceptance of its Note, and each Note Owner, by purchasing or otherwise acquiring an Ownership Interest in a Note, agree to treat the Notes and such Ownership Interests in a manner consistent with the aforementioned characterization.
Section II.18DSCR Reserve Account.
(a)On or prior to the date hereof, the Indenture Trustee shall establish and maintain at Citibank, N.A. one or more segregated trust accounts (collectively, the “DSCR Reserve Account”), in its name, as Indenture Trustee, bearing a designation clearly indicating that such account and all funds deposited therein are held for the exclusive benefit of the Noteholders and the Issuer as their interests may appear. At all times, the DSCR Reserve Account shall be an Eligible Account or a sub-account of an Eligible Account.
(b)The Indenture Trustee shall deposit or cause to be deposited in the DSCR Reserve Account during any DSCR Sweep Period the amount allocated for such purpose pursuant to Section 2.11(b). Except as provided in this Indenture, the Indenture Trustee, in accordance with the terms of this Indenture, shall have exclusive control and sole right of withdrawal with respect to the DSCR Reserve Account. Funds in the DSCR Reserve Account shall not be commingled with any other moneys. All moneys deposited from time to time in the DSCR Reserve Account shall be held by and under the control of the Indenture Trustee in the DSCR Reserve Account for the benefit of the Noteholders and the Issuer as herein provided.
(c)All amounts in the DSCR Reserve Account shall remain uninvested.
(d)Upon the termination of a DSCR Sweep Period, the Indenture Trustee shall remit such amounts to the Payment Account for application as Available Amount (other than as Unscheduled Proceeds) by the Indenture Trustee in accordance with Section 2.11(b). During an Early Amortization Period, the Indenture Trustee shall apply all amounts on deposit in the DSCR Reserve Account as Unscheduled Principal Payments and allocate such amounts to all
Series in accordance with Section 2.11(b) on the related Payment Date. On the Rated Final Payment Date of any Class of Notes, the Indenture Trustee shall transfer all amounts on deposit in the DSCR Reserve Account on such date to the Payment Account to be applied in accordance with Section 2.11(b).
Section II.19Representations and Warranties with Respect to the Issuer.
Except as otherwise provided in any applicable Series Supplement, each applicable Issuer hereby represents and warrants as to itself and each Property Owner (each such party, an “Issuer Party”, as applicable) to the other parties hereto, as of the applicable Series Closing Date, as follows:
(a)Each such Issuer Party is a limited liability company or limited partnership duly created and validly existing in good standing under the laws of, and is duly qualified to do business in, the State of Delaware and has full power, authority and legal right to own its properties and conduct its business as presently owned or conducted, to execute and deliver the Indenture and the other Transaction Documents to which such Issuer Party is a party and to perform its obligations under the Indenture and the other Transaction Documents to which it is a party.
(b)The execution and delivery by each such Issuer Party of the Transaction Documents and the performance by such Issuer Party of its obligations under the Indenture and the other Transaction Documents to which it is a party has been duly and validly authorized and directed and does not violate the Issuer Operating Agreement or Property Owner Operating Agreement or limited partnership agreement, as applicable, nor does such execution, delivery or performance require the authorization, consent or approval of, the giving of notice to, the filing or registration with, or the taking of any other action by, any arbitrator, court or other Governmental Authority or conflict with, or result in a breach or violation of, any provision of any law or regulation governing such Issuer Party or any order, writ, judgment or decree of any arbitrator, court or other Governmental Authority applicable to such Issuer Party or any of its assets, any material indenture, mortgage, deed of trust, partnership agreement or other agreement or instrument to which such Issuer Party is a party or by which such Issuer Party or any portion of the Issuer Collateral is a party or by which such Issuer Party or all or any portion of the Issuer Collateral is bound, which breach or violation would materially adversely affect either the ability of such Issuer Party to perform its obligations under the Indenture and the other Transaction Documents to which it is a party or the financial condition of such Issuer Party or the value of any Issuer Collateral or Collateral, as applicable.
(c)The Issuer owns all of the outstanding and issued membership and limited partnership interests of each Property Owner (collectively, the “Pledged Securities”), such Pledged Securities have been duly authorized and validly issued and are fully paid and non-assessable, there is no existing option, warrant, call, right, commitment or other agreement with respect to such Pledged Securities. Within the five (5) year period ending as of the related Series Closing Date, any such Property Owner has not conducted business under any name, changed its jurisdiction of formation, merged with or into or consolidated with any other Person, except as
disclosed in an applicable Schedule in the related Series Supplement. Such Issuer has requisite power and authority to own and pledge the Pledged Securities to the Indenture Trustee on behalf of the Noteholders and to transact the business in which it is now engaged and the Property Owners have the requisite power and authority to own the applicable Properties and to transact the businesses in which it is now engaged, the failure of which to obtain would result in a material adverse effect on either the ability of such Issuer Party to perform its obligations under the Indenture and the other Transaction Documents to which it is a party or the financial condition of such Issuer Party or the value of any such Property or the Pledged Securities. Such Issuer Party is duly qualified to do business and is in good standing in each jurisdiction where it is required to be so qualified in connection with the applicable Properties, its business and operations. . The sole business of such Issuer Party is as set forth in the Issuer Operating Agreement or Property Owner Operating Agreement, as applicable.
(d)The Indenture and the other Transaction Documents to which it is a party have been duly executed and delivered by such Issuer Party and, assuming due authorization, execution and delivery by each of the other parties hereto, constitutes a valid, legal and binding obligation of such Issuer Party, enforceable against such Issuer Party in accordance with the terms hereof, subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.
(e)Such Issuer Party has no employee benefit plans and is not required to make any contributions to any Plans.
(f)Such Issuer Party (a) has not entered into the Indenture or any of the other Transaction Documents 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 Indenture and such other Transaction Documents to which it is a party. Giving effect to the applicable Series of Notes, the fair saleable value of all Issuer’s and Property Owners’ assets exceed and will, immediately following the execution and delivery of the Transaction Documents, exceed the Issuer’s total liabilities, including, without limitation, subordinated, unliquidated, disputed or contingent liabilities. The Issuer’ and Property Owners’ assets do not and, immediately following the execution and delivery of the Transaction Documents will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. Such Issuer Party does not intend to, and does not believe that it will, incur debts and liabilities (including, without limitation, contingent liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into account the timing and amounts to be payable on or in respect of obligations of the Issuer).
(g)Such Issuer Party is not: (a) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the 1940 Act; (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 meaning of the Public Utility Holding Company Act of 1935, as amended; or (c) subject to any other federal or state law or regulation
which prevents such Issuer Party from entering into the Indenture or any other Transaction Document; the Indenture is not required to be qualified under the 1939 Act.
(h)No Issuer Party is, and neither the sale of the Notes in the manner contemplated by the Private Placement Memorandum nor the activities of any Issuer Party pursuant to this Indenture or any other Transaction Document will cause such Issuer Party to be, (a) an “investment company” or under the control of an “investment company” as defined in the 1940 Act and the rules and regulations thereunder or (b) required to be registered under the 1940 Act. The Issuer is not an “investment company” as defined in Section 3(a)(1) of the 1940 Act. The Issuer Party does not constitute a “covered fund” under the so-called Volcker Rule under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
(i)The Transaction Documents and the applicable Private Placement Memorandum (as defined in the applicable Series Supplement) do not contain any untrue statement of a material fact or omit to state any material fact necessary to make statements contained herein or therein not misleading.
(j)The applicable Series of Notes, the Indenture, the other Transaction Documents and the organizational documents of such Issuer Party are not subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, nor would the operation of any of the terms of such Series of Notes, the Indenture, any of the other Transaction Documents or the organizational documents of such Issuer Party, or the exercise of any right thereunder, render the Indenture unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury.
(k)The Indenture is in full force and effect and no Event of Default or violation under the Indenture or any of the other Transaction Documents or the organizational documents of such Issuer Party by any party thereunder has occurred and is continuing.
(l)Neither such Issuer Party nor any of its constituent Persons are 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 Issuer Party’s assets or property, and such Issuer Party has no knowledge of any Person contemplating the filing of any such petition against it or such constituent Persons.
(m)Such Issuer Party is not a “foreign person” within the meaning of Section 1445(f)(3) of the Code and the related Treasury Regulations, including temporary regulations.
(n)Such Issuer does not own any asset or property other than the Issuer Collateral; the Property Owners do not own any asset or property other than the applicable Collateral.
(o)Such Issuer Party has not incurred any indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), that has not been repaid in full, other than (i) the Notes, and (ii) trade and operational debt incurred in the
ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances.
(p)Such Issuer Party has not made any loans or advances to any third party (including any Affiliate or constituent party or any Affiliate of any constituent party).
(q)Such Issuer Party has done or caused to be done all things necessary to observe organizational formalities and preserve its existence.
(r)Such Issuer Party has maintained its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any Affiliate of any constituent party, or any other Person.
(s)Such Issuer Party has not guaranteed, become obligated for, pledged its assets as security for, or held itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except for (a) guarantees or pledges from which such Issuer Party has been released, (b) the Property Owner Guaranty or (c) the Notes, a applicable.
(t)All of the assumptions made in any applicable substantive non-consolidation opinion letter dated the date hereof, delivered by Dechert LLP in connection with the Notes and any subsequent non-consolidation opinion delivered on behalf of such Issuer Party as required by the terms and conditions of the Indenture (the “Non-consolidation Opinion”), including, but not limited to, any exhibits attached thereto, are true and correct in all material respects. Each Person other than such Issuer Party, if any, with respect to which an assumption is made in the applicable Non-Consolidation Opinion has complied with all of the assumptions made with respect to it in such Non-Consolidation Opinion.
(u)Upon the issuance of the applicable Series of Notes, the Indenture Trustee has a valid and enforceable first priority perfected lien or perfected security interest, as applicable, in the Issuer Collateral and the Collateral, subject only to Permitted Encumbrances. Upon the execution of any Account Control Agreement, the Indenture Trustee has a first priority perfected security interest in any accounts to which the Account Control Agreement relates.
(v)As of the date hereof, each applicable Series Closing Date and at all times throughout the term of the Notes, (i) none of the funds or other assets of such Issuer Party constitute property of, or are beneficially owned, directly or indirectly, by any Person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the USA PATRIOT Act of 2001 (including the anti-terrorism provisions thereof) (the “Patriot Act”), the International Emergency Economic Powers Act, 50 U.S.C. Sections 1701, et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder, with the result that the investment in such Issuer Party (whether directly or indirectly) is prohibited by law or the Notes are in violation of law (such person, an “Embargoed Person”), (ii) no Embargoed Person has any interest of any nature whatsoever in the Issuer, with the result that the investment in such Issuer Party (whether directly or indirectly) is prohibited by law or the Notes are in violation of law, and (iii) none of the funds of the Issuer
has been derived from any lawful activity with the result that the investment in such Issuer Party (whether directly or indirectly) is prohibited by law or the Notes are in violation of law.
(w)No part of the proceeds of the Notes will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation U or any other Regulations of such Board of Governors, or for any purposes prohibited by Legal Requirements or by the terms and conditions of this Indenture or the other Transaction Documents.
Section II.20Securities Accounts.
(a)The Issuer and the Indenture Trustee hereby appoint Citibank, N.A. as both “securities intermediary” (as defined in Section 8-102 of the UCC) and “bank” (as defined in Section 9-102 of the UCC) (in such capacities, the “Financial Institution”) with respect to each of the Accounts. The Financial Institution and all “Financial Assets” (as defined in Section 8-102(a)(9) of the UCC), cash or funds credited to the Accounts, including, without limitation, all amounts, securities, investments, Financial Assets, investment property and other property from time to time deposited in or credited to such account and all proceeds thereof, held from time to time in the Accounts will continue to be held by the Financial Institution for the Indenture Trustee for the benefit of the Noteholders. Upon the termination of this Indenture, the Indenture Trustee shall inform the Financial Institution of such termination. By acceptance of their Notes or interests therein, the Noteholders and all beneficial owners of Notes shall be deemed to have appointed Citibank, N.A. as Financial Institution. Citibank, N.A. hereby accepts such appointment as Financial Institution.
(i)With respect to any portion of the Issuer Collateral Pool that is credited to the Accounts, the Financial Institution agrees that:
(A)the Accounts are and will be maintained as either (1) “securities accounts” within the meaning of Section 8-501 of the UCC or (2) “deposit accounts” as defined in Section 9-102(a)(29) of the UCC and the Financial Institution qualifies as a “Securities Intermediary” under Section 8-102(a) of the UCC and the parties hereto intend that the Accounts are and will be maintained as “securities accounts” within the meaning of Section 8-501 of the UCC;
(B)each item of property (whether investment property, security, instrument or cash) credited to an Account shall be treated as a Financial Asset under Article 8 of the UCC;
(C)except for the claims and interest of the Indenture Trustee, the Noteholders and the Issuer in the Accounts, the Financial Institution does not know of any lien on, or claim to, or interest in, the Accounts or in any Financial Asset, cash or funds credited thereto; and
(D)if the Financial Institution has knowledge of the assertion by any other Person of any lien, encumbrance, or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against any Account or in any Financial Asset, cash or funds carried therein, the Financial Institution will promptly notify the Indenture Trustee, the Issuer, the Property Manager and the Issuer Manager.
(ii)The Financial Institution hereby confirms that (A) if an Account is a securities account (within the meaning of Section 8-501 of the UCC) such Account is an account to which Financial Assets are or may be credited, and the Financial Institution shall, subject to the terms of this Indenture, treat the Indenture Trustee as entitled to exercise the rights that comprise any Financial Asset credited to any Account, (B) any portion of the Issuer Collateral Pool in respect of any Account will be promptly credited by the Financial Institution to such account, and (C) all securities or other property (other than cash) underlying any Financial Assets credited to any Account shall be registered in the name of the Financial Institution, indorsed to the Financial Institution or in blank or credited to another securities account maintained in the name of the Financial Institution, and in no case will any Financial Asset credited to any Account be registered in the name of the Issuer payable to the order of the Issuer or specially indorsed to any Affiliates of such Persons unless the foregoing have been specially indorsed to the Financial Institution or in blank.
(iii)If at any time the Financial Institution shall receive (A) an “Entitlement Order” (as defined in Section 8-102(a)(8) of the UCC) from the Indenture Trustee directing transfer or redemption of any Financial Asset relating to any Account, or (B) any instruction directing the disposition of funds in any Account (such Entitlement Order or instruction, a “Secured Party Order”) the Financial Institution shall comply with such Secured Party Order without further consent by the Issuer or any other Affiliates thereof. Notwithstanding anything to the contrary contained herein, if at any time the Financial Institution shall receive conflicting orders or instructions from the Indenture Trustee and the Issuer (or any Affiliates thereof), the Financial Institution shall follow the orders or instructions of the Indenture Trustee and not the orders or instructions of the Issuer or any Affiliates thereof. If at any time the Indenture Trustee notifies the Financial Institution in writing that this Indenture has been discharged in accordance herewith, then thereafter if the Financial Institution shall receive any order from the Issuer (or any Affiliates thereof) directing transfer or redemption of any Financial Asset relating to any Account, the Financial Institution shall comply with such Entitlement Order without further consent by the Indenture Trustee or any other Person.
(iv)In the event that the Financial Institution has, or subsequently obtains, by agreement, by operation of law or otherwise a security interest in any Account, the Financial Institution agrees that such security interest shall be subordinate to the security interest of the Indenture Trustee.
(v)The Financial Assets and “Security Entitlements” (as defined in Section 8-102(a)(17) of the UCC) credited to the Accounts will not be subject to deduction, setoff, recoupment banker’s lien, or any other right in favor of any Person other than the Indenture Trustee in the case of the Accounts; provided, however, that the Financial Institution may set off the face amount of any checks which have been credited to an Account but are subsequently returned unpaid because of uncollected or insufficient funds. The Financial Institution has not entered into, and until satisfaction and discharge of this Indenture, will not enter into, any agreement with any other Person relating to the Accounts and/or any Financial Assets, cash or funds credited thereto pursuant to which it has agreed to comply with Entitlement Orders or instructions (within the meaning of Section 9-104 of the UCC) of such other Person and the Financial Institution has not entered into, and until the satisfaction and discharge of this Indenture will not enter into, any agreement with the Issuer or any Affiliates thereof purporting to limit or condition the obligation of the Financial Institution to comply with Secured Party Orders as set forth in Section 2.20(a)(iii).
(vi)There are no other agreements entered into between the Financial Institution in such capacity, and the Financial Institution agrees that it will not enter into any agreement, with the Issuer or any Affiliate thereof with respect to any Account. In the event of any conflict between this Indenture (or any provision of this Indenture) and any other agreement now existing or hereafter entered into with respect to the Accounts and Financial Assets, the terms of this Indenture shall prevail.
(vii)The rights and powers granted herein to the Indenture Trustee have been granted in order to perfect its interest in the Accounts and the Security Entitlements to the Financial Assets credited thereto, and are powers coupled with an interest and will neither be affected by the bankruptcy of the Issuer or any Affiliates thereof nor by the lapse of time. The obligations of the Financial Institution hereunder shall continue in effect until the interest of the Indenture Trustee in the Accounts and in such Security Entitlements, has been terminated pursuant to the terms of this Indenture and the Indenture Trustee has notified the Financial Institution of such termination in writing.
(b)Capitalized terms used in this Section 2.20 and not defined herein shall have the meanings assigned to such terms in the UCC. The Accounts shall be governed by the laws of the State of New York, regardless of any provision of any other agreement. For purposes of all applicable UCCs, New York shall be deemed to be the Financial Institution’s jurisdiction (within the meaning of Sections 8-110, 9-304 and 9-305 of the UCC) and the Accounts (as well as the Securities Entitlements related thereto) shall be governed by the laws of the State of New York.
(c)None of the Financial Institution or any director, officer, employee or agent of the Financial Institution shall be under any liability to the Indenture Trustee or the Noteholders for any action taken, or not taken, in good faith pursuant to this Indenture, or for errors in judgment; provided, however, that this provision shall not protect the Financial Institution against any liability to the Indenture Trustee or the Noteholders which would
otherwise be imposed by reason of the Financial Institution’s willful misconduct, bad faith or gross negligence in the performance of its obligations or duties hereunder. The Financial Institution and any director, officer, employee or agent of the Financial Institution may rely in good faith on any document of any kind which, prima facie, is properly executed and submitted by any Person respecting any matters arising hereunder. The Financial Institution shall be under no duty to inquire into or investigate the validity, accuracy or content of such document.
(d)Prior to the date which is one year and one day, or if longer the applicable preference period then in effect plus one day, after the payment in full of all of the Notes, the Financial Institution will not institute against, or join any other Person in instituting against, the Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any bankruptcy, insolvency, reorganization or similar law in any jurisdiction. This Section 2.20(d) will survive the resignation or removal of the Financial Institution under the Indenture and the satisfaction and discharge of this Indenture.
(e)Neither the Issuer nor the Financial Institution shall change the name or account number of any Account without the prior written consent of the Indenture Trustee.
Section II.21Representations and Warranties with Respect To Properties and Leases.
Except as set forth in Schedule I-B of the applicable Series Supplement, the Issuer shall make the following representations and warranties and the representations and warranties set forth in Exhibit A of such Series Supplement, as of (i) the date specified in the applicable representation or warranty or (ii) if no date is specified, the later of (a) the most recent Series Closing Date and (b) with respect to any Qualified Substitute Property, as of the applicable Transfer Date with respect to (x) the Pledged Securities, Properties and Leases indicated in such Series Supplement or otherwise added to the Issuer Collateral Pool by the Issuer or Collateral Pool by such Property Owner in connection with the issuance of any Series of Notes or (y) Qualified Substitute Properties acquired by a Property Owner from a third party, as applicable:
(a)There are no pending actions, suits or proceedings, arbitrations or governmental investigations against such Issuer Party, an adverse outcome of which would materially adversely affect (i) such Issuer Party’s performance under or ability to pay principal, interest or any other amounts due under the Notes, the Indenture (including any applicable Series Supplement) or the other Transaction Documents, as applicable, or the use of such Properties for the use currently being made thereof, the operation of such Properties as currently being operated or the value of such Properties or (ii) the collectability or enforceability of the Property Owner Guaranty and the Mortgages with respect to such Properties or the related Leases.
(b)Such Issuer has good, marketable and insurable title to the Pledged Securities, and each Property Owner has good, marketable (or with respect to the related Properties located in Texas, indefeasible) and insurable title to each Property, and has the full power, authority and right to deed, encumber, mortgage, give, grant, bargain, sell, alienate, setoff, convey, confirm, pledge, assign and hypothecate the same; and such Property Owner possesses an unencumbered fee estate, or ground lease interest, in each Property and, other than with respect to the Tenant Ground Leases, the improvements thereon, and it owns each Property
free and clear of all liens, encumbrances and charges whatsoever except for Permitted Encumbrances and each Mortgage is a valid and enforceable first lien on and security interest in the applicable Property, subject only to said Permitted Encumbrances.
(c)With respect to the Pledged Securities, such membership interests are “Securities” as defined in Article 8 of the UCC of the applicable jurisdiction as a result of actions by such Issuer Party or otherwise, and all such Pledged Securities are and will continue to be freely transferable and assignable, and none of such Pledged Securities are or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions, contractual restriction or Applicable Law that prohibits or adversely affects in any manner material and adverse to the Indenture Trustee the pledge of such Pledged Securities hereunder, the sale or disposition thereof pursuant hereto or the exercise by the applicable parties of rights and remedies hereunder.
(d)Upon the execution by the related Issuers of this Indenture and the execution and proper filing of UCC Financing Statements, the Indenture Trustee will have a valid first lien on the Pledged Securities, subject to no liens, charges or encumbrances.
(e)With respect to any Property operating in the NAICS industry group Gas/Convenience Stores, the insurance policies with respect to such Property comply with state insurance funds or maintain policies of at least of $1 million.
(f)Upon the execution by the related Property Owner and the recording of each Mortgage, and upon the execution and proper filing of UCC Financing Statements (if required by a jurisdiction to perfect the security interest set forth in such Mortgage), the Indenture Trustee will have a valid first lien on the related Properties and a valid security interest in such Property Owner’s interest in the “Equipment” (as defined in the Mortgages), if any, subject to no liens, charges or encumbrances other than the Permitted Encumbrances.
(g)Each Property is covered by an ALTA (or an equivalent form thereof as adopted in the applicable jurisdiction) title insurance policy (a “Title Policy”), in an amount at least equal to the initial Allocated Loan Amount of such Property, issued during the six (6) months after the date such Property was added to the Collateral Pool. Each Property insured for the Allocated Loan Amount includes an aggregation endorsement. The Title Policy insures, as of the date of such policy (or any date-down endorsement to such policy, if applicable), that the related Mortgage is a valid first lien on the fee or leasehold interest in such Property subject only to the Permitted Encumbrances (to the extent stated therein); such Title Policy is in full force and effect and names the Indenture Trustee as the mortgagee of record; such Title Policy is assignable to assignees of the insured in accordance with its terms. As of the Series Closing Date or the related date of substitution or acquisition, as applicable, all premiums for the Title Policy have been paid and no material claims have been made thereunder. The Title Policy has been issued by a company licensed to issue such policies in the state in which such Property is located.
(h)The related Properties have adequate rights of access to public ways and are served by adequate water, sewer, sanitary sewer and storm drain facilities. Except as
disclosed in surveys delivered to the Indenture Trustee in connection with the issuance of the Notes, all public utilities necessary for the continued use and enjoyment of each Property as presently used and enjoyed are located in the public right-of-way abutting such Property or an adjacent mortgaged property, and all such utilities are connected so as to serve such Property, directly from such public right-of-way, through such adjacent mortgaged property or through valid easements insured under the Title Policy. All roads necessary for the current utilization of each Property have been completed and dedicated to public use and accepted by all governmental authorities or are the subject of access easements for the benefit of the applicable Property or an adjacent mortgaged property.
(i)Except as disclosed in the Title Policies, to the knowledge of the Issuer, there are no material pending or proposed special or other assessments for public improvements or otherwise affecting the related Properties, nor, to the knowledge of the Issuer, are there any contemplated improvements to such Properties that may result in such special or other assessments.
(j)There are no delinquent or unpaid taxes affecting any Property which are or may become a lien of priority equal to or higher than the lien of the related Mortgage. For purposes of this representation and warranty, taxes shall not be considered delinquent or unpaid until the date on which interest and/or penalties would be payable thereon.
(k)Each related Property as of the date such Property was added to the Collateral Pool is free and clear of any mechanics’ and materialmen’s liens or similar liens which have not been bonded over that would materially and adversely affect the value of such Property.
(l)No material improvements on any Property are located in an area designated as Flood Zone A or Flood Zone V by the Federal Emergency Management Agency or otherwise located in a flood zone area as identified by the Federal Emergency Management Agency as a 100 year flood zone or special hazard area, except as may be shown on the surveys delivered to the Indenture Trustee in connection with the issuance of the Notes, for which such applicable Properties the related Property Owner has caused the Tenant under the related Lease to obtain flood insurance in accordance with the provisions of the Lease and the Property Management Agreement.
(m)All certifications, permits, licenses and approvals, including, without limitation, certificates of completion and occupancy permits required for the legal use, occupancy and operation of the related Properties (collectively, the “Licenses”) as currently being operated have been obtained and are in full force and effect except to the extent the failure of any such License to be in full force and effect would not have a material adverse effect on the Issuer or the use and operation of any Property under the related Lease. The related Properties are free of material damage and are in good repair in all material respects, and there is no proceeding pending or to the knowledge of the Issuer, is threatened or contemplated, for the total or partial condemnation of, or affecting, such Properties, or for the relocation of roadways providing access to any Property.
(n)There is no valid asserted dispute, claim, offset, defense or counterclaim to the related Property Owner’s rights in the Lease. The Lease, together with applicable state law, contains customary and enforceable provisions such as to render the rights and remedies of the lessors thereof adequate for the practical realization against the related Property of the principal benefits of the security intended to be provided thereby, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).
(o)Except as illustrated on surveys delivered to the Indenture Trustee in connection with the issuance of the Notes, (i) all of the material improvements which were included in determining the Appraised Value of each Property lie wholly within the boundaries and building restriction lines of such Property except to the extent such improvements may encroach upon an adjoining Property, (ii) no improvements on adjoining properties, other than an adjoining Property, encroach materially upon any Property, and (iii) no easements or other encumbrances upon a Property encroach materially upon any of the improvements, so as to adversely affect the value or marketability of any Property, except those which are insured against by the Title Policies.
(p)No such Issuer Party has received notice of any material defaults under any franchise agreements applicable to the Tenants.
(q)In connection with the acquisition of record title to each related Property, such Issuer Party inspected or caused to be inspected the related Property by (i) appraisal inspection performed by an independent, third party MAI appraiser and (ii) by a property condition engineer or (iii) otherwise as required by the Underwriting Guidelines then in effect; the related Lease File contains a survey with respect to such Property, which survey, together with any affidavit of no change provided by the applicable transferor, was deemed sufficient to delete the standard title survey exception to the related Title Policy (to the extent the deletion of such exception is available in the related state). In addition, such survey of such Property has been performed by a duly licensed surveyor or registered professional engineer in the jurisdiction in which such Property is situated, with the signature and seal of a licensed engineer or surveyor affixed thereto and does not fail to reflect any material matter known to such Issuer Party affecting such Property or the title thereto. Each appraisal contains a statement, or is accompanied by a letter from the appraiser, to the effect that the appraisal was performed in accordance with the requirements of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as in effect on the date such appraisal was obtained.
(r)The origination, servicing and collection of Monthly Lease Payments on such Lease is in all respects legal, proper and prudent and in accordance with customary industry standards. No portion of the related Properties has been purchased or leased by Issuer, the related Property Owners or any affiliate with proceeds of any illegal activity.
(s)To the extent required under applicable law, such Issuer Party was authorized to transact and do business in the jurisdiction in which such Property is located,
except where such failure to qualify would not result in a material adverse effect on the enforceability of the related Lease.
(t)Except as set forth on reports, Title Policies and surveys delivered to the Indenture Trustee in connection with the issuance of the Notes, to the knowledge of each Issuer Party, the related Properties and all improvements thereon are in compliance in all material respects with all recorded covenants and all legal requirements, including, without limitation, building and zoning ordinances and codes and subdivision laws, the failure of which to comply with the same would result in a material adverse effect on either the ability of such Issuer Party to perform its obligations under the Indenture (including the applicable Series Supplement) and the other Transaction Documents or the financial condition of such Issuer Party or the value of any related Property or the Pledged Securities.
(u)No fraudulent acts were committed by such Issuer Party during the origination process with respect to each related Lease; and, there has not been committed by such Issuer Party or, to the knowledge of each Issuer Party, any other person in occupancy of or involved in the operation or use of the related Properties any act or omission affording the federal government or any state or local government the right of forfeiture as against such Properties or any part thereof or any moneys paid in performance of such Issuer Party’s obligations under any of the Transaction Documents.
(v)Such Issuer Party is not a party to any agreement or instrument or subject to any restriction which might materially and adversely affect such Issuer Party, the Pledged Securities or any Property, or such Issuer Party’s business, properties or assets, operations or condition, financial or otherwise. Such Issuer Party is not 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 such Issuer Party, the Pledged Securities or any of the related Properties are bound, which default would materially adversely affect either the ability of such Issuer Party to perform its obligations under the Indenture and the other Transaction Documents or the financial condition of such Issuer Party or the value of any related Property or the Pledged Securities.
(w)All financial data that have been delivered to the Indenture Trustee in respect of the related Properties, including, to such Issuer Party’s knowledge, any such data relating to Tenants under Leases, (i) are true, complete and correct in all material respects, (ii) accurately represent the financial condition of such Properties 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; provided, however, that it is expressly understood by each party to the Indenture that any cost estimates, projections and other predictions contained in such data are not deemed to be representations of such Issuer Party. Since the date of such financial statements, there has been no materially adverse change in the financial condition, operations or business of such Issuer Party from that set forth in said financial statements.
(x)Each Property is comprised of one (1) or more parcels, which constitute a separate tax lot or lots, and does not constitute a portion of any other tax lot not a part of such Property or is subject to an endorsement under the related Title Policy insuring the Property, or in certain cases, an application has been made to the applicable governing authority for creation of separate tax lots, in which case an escrow amount sufficient to pay taxes for the existing tax parcel of which the Property is a part is required until the separate tax lots are created.
(y)The operation of any of the terms of the related Lease, or the exercise of any rights thereunder, does not render such Lease unenforceable, in whole or in part, or subject to any right of rescission, set-off, abatement, diminution, counterclaim or defense.
(z)Such Issuer Party has obtained and has delivered to the Indenture Trustee certificates of all insurance policies reflecting the insurance coverages, amounts and other requirements set forth in the Indenture or any of the other Transaction Documents. To such Issuer Party’s knowledge, no material pending claims have been made under any such policy, and no person, including such Issuer Party, has done, by act or omission, anything which would materially impair the coverage of any such policy.
(aa)Each Property is used exclusively for purposes related to each Tenant’s existing business on the date such Property is added to the Collateral Pool and other existing uses permitted under the related Leases, including subleasing.
(ab)Except as set forth on reports delivered to the Custodian on behalf of the Indenture Trustee in connection with the issuance of the Notes: (1) to the knowledge of each Issuer Party, each 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, is in good condition, order and repair in all material respects so as to not materially and adversely affect the use or value of such Property, and, to the knowledge of each Issuer Party, such Property is free of material damage and is in good repair in all material respects, in each case, as of the date such Property was added to the Collateral Pool; (2) to the knowledge of each Issuer Party, there exists no structural or other material defects or damages in any Property, whether latent or otherwise; and (3) no insurance company or bonding company has given notice of any defects or inadequacies in any Property as of the date such Property was added to the Collateral Pool, 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.
(ac)In connection with each Property with respect to which a Lease Guarantor has executed a Lease Guaranty with respect to all payments due under the related Lease:
(i)such Lease Guaranty is in full force and effect and, to the related Issuer Party’s knowledge, there are no defaults by the related Lease Guarantor thereunder;
(ii)such Lease Guaranty, on its face: (1) contains no conditions to such payment, other than a demand, notice and right to cure; (2) provides that it is the guaranty of both the performance and payment of the financial obligations of the Tenant under the Lease; and (3) does not provide that the rejection of the Lease in a bankruptcy or insolvency of the Tenant shall affect the related Lease Guarantor’s obligations under such Lease Guaranty; and
(iii)such Lease Guaranty is binding on the successors and assigns of the related Lease Guarantor and inures to the benefit of the lessor’s successors and assigns; such Lease Guaranty cannot be released or amended without the lessor’s consent or unless a predetermined performance threshold is achieved or a predetermined period of time has elapsed.
(ad)Except as set forth on a schedule to the applicable Series Supplement:
(i)the related Properties are not subject to any leases other than the Leases (and the subleases and assignments as permitted thereunder) as described in such lease schedule attached to the applicable Series Supplement and made a part of this Master Indenture. No person has any possessory interest in any Property or right to occupy the same except under and pursuant to the provisions of the Leases and subleases or assignments permitted thereunder. The Leases are in full force and effect and there are no material defaults thereunder by the related Property Owner or, to the knowledge of each Issuer Party, any Tenant. No rent (including security deposits) has been paid more than one (1) month in advance of its due date. All material work, if any, to be performed by such Property Owner under each Lease has been performed as required and, to the extent required therein, has been accepted by the applicable Tenant, and any payments, free rent, partial rent, rebate of rent or other payments, credits, allowances or abatements required to be given by such Property Owner to any Tenant have already been received by such Tenant. There has been no prior sale, transfer or assignment from the Issuer of the Pledged Securities except as provided in a schedule to the Series Supplement and no prior sale, transfer or assignment from such Property Owner of any Property or Leases in the Collateral or hypothecation or pledge by such Property Owner of any Lease or of the rents received therein, except for such hypothecation or pledges to the Indenture Trustee for the benefit of the holders of the Notes or that have been released. Except as permitted under certain leases referenced on a schedule to the applicable Series Supplement, no Tenant listed on such lease schedule attached to the Series Supplement has assigned its Lease, and, other than with respect to any Leasehold Property, no such Tenant holds its leased premises under assignment or sublease. Such lease schedule to the applicable Series Supplement sets forth a true and correct list of each Property that is subject to a Third Party Purchase Option or an option to terminate such Lease, in the Tenant’s sole discretion (i.e., not arising due to a casualty, condemnation, etc.) prior to the Rated Final Payment Date, together with the earliest date on which each such option may be exercised;
(ii)the Tenant under each Lease (or a permitted sublessee or assignee as permitted under such Lease) is in possession of the related Property and paying rent pursuant to the applicable Lease; the related Property Owner is the owner of the lessor’s interest in each Lease; the Tenant or an assignee as permitted under such Lease is required to make rental payments as directed by such Property Owner, as lessor, and its successors and assigns;
(iii)each lease requires that the Tenant comply with all applicable laws and to the best of such Issuer Party’s knowledge all Tenants are in compliance; no Issuer Party has received notice of any Tenant in default of such Tenant’s obligations under any such applicable license, permit or agreement, which default would materially and adversely affect its business operations on the subject Property; and no Issuer Party has received notice of a material default under any applicable franchise or operating agreement;
(iv)neither the related Issuer Party nor to such Issuer Party’s knowledge, any Tenant is the subject of any bankruptcy or insolvency proceeding;
(v)to the knowledge of such Issuer Party, there are no pending actions, suits or proceedings by or before any court or governmental authority against or affecting any Tenant that, if determined adverse to any Tenant, would materially and adversely affect the ability of any Tenant to pay any amounts due under the applicable Lease;
(vi)no Issuer Party has received notice from a Tenant that the obligations of the related Tenant under the Lease, including, but not limited to, the obligation of Tenant to pay rent, are not affected by reason of: (1) any damage to or destruction of any portion of a related Property, except damage to such Property caused by casualty in the last twelve (12) or twenty-four (24) months of the lease term or substantial damage to the Property such that the improvements cannot be repaired so as to allow Tenant to conduct a substantial part of its business within a specified time period ranging from one hundred eighty (180) days to one (1) year; (2) any taking of such Property, except a total condemnation and taking of the Property or a partial condemnation and taking that renders the Property unsuitable for the continuation of Tenant’s business; (3) any prohibition, limitation, interruption, cessation, restriction, prevention or interference of Tenant’s use, occupancy or enjoyment of such Property, except with respect to certain abatement rights in connection with casualty and condemnation which may be provided for under the related Lease;
(vii)every obligation associated with developing and operating the Property, including, but not limited to, the costs associated with utilities, taxes, insurance, capital and structural improvements, maintenance and repairs is an obligation of the Tenant, except for Tenants under Modified Leases (as identified as exceptions scheduled and set forth in this Master Indenture or any related Series Supplement) with respect to such improvements and maintenance and repair of such improvements;
(viii)all obligations related to the initial construction of the improvements on the Property have been satisfied and, except for the obligation to rebuild such improvements after a casualty, such Property Owner, as lessor under the Lease, does not have any outstanding material monetary or non-monetary obligations under the Leases and has made no representation or warranty under the Lease, the breach of which would result in the abatement of rent, a right of setoff or termination of the Lease;
(ix)except as otherwise provided in the related Lease, (x) the Tenant may not assign or sublease the Property without the consent of such Issuer Party, and (y) in the event the Tenant assigns or sublets the Property, the Tenant remains primarily obligated under the Lease;
(x)the Tenant has agreed to indemnify the related Property Owner, as lessor under the Lease, from any claims of any nature relating to the Lease and the Tenant’s operations at the related Property other than the lessor’s negligence or willful misconduct, including, without limitation, arising as a result of violations of environmental laws resulting from the Tenant’s operation of the property;
(xi)any obligation or liability imposed by any easement or reciprocal easement agreement is an obligation of the related Property Owner as owner of the land. However, in certain Leases, the related Issuer Party has no liability to the Tenant for the performance of the same;
(xii)pursuant to the terms of certain Leases, such Leases are automatically subordinate to the related Mortgage, and to the extent the terms of a Lease do not include such automatic subordination language, the related Property Owner and related Tenant have executed a subordination, non-disturbance, and attornment agreement unless identified as exceptions scheduled and set forth in this Master Indenture or any related Series Supplement;
(xiii)except for certain rights of first offer or rights of first refusal set forth in certain Leases, the Lease is freely assignable by the lessor and its successors and assigns (including, but not limited to, the Indenture Trustee, which acquires title to a Property by foreclosure or otherwise) to any person without the consent of the Tenant, and in the event the lessor’s interest is so assigned, the Tenant is obligated to recognize the assignee as lessor under such Lease, whether under the Lease, a subordination, non-disturbance and attornment agreement or by operation of law; and
(xiv)the Tenant has not been released, in whole or in part, from its obligations under the terms of the Lease.
(ae)No adverse selection was employed in selecting such Property or Lease for inclusion in the Collateral Pool.
(af)With respect to any Property which is the subject of a Master Lease, the related Property Owner is the current and sole lessor under such Master Lease;
(ag)All security deposits collected in connection with such Property are being held in accordance with all applicable laws.
(ah)With respect to any Property acquired and Lease entered into after the Series Closing Date, including with respect to any Qualified Substitute Properties purchased from a third party by a new Property Owner, the Pledged Securities of which are added to the Issuer Collateral Pool: (a) each Qualified Substitute Property satisfies the requirements set forth in the definition of Qualified Substitute Property; and (b) such Property and Lease are required to be acquired or entered into pursuant to the terms and provisions of the Indenture and the Property Management Agreement in accordance with the related Underwriting Guidelines.
(ai)All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes required to be paid by any person under applicable legal requirements currently in effect in connection with the transfer of the related Properties to the related Property Owner have been paid. All mortgage, mortgage recording, stamp, intangible or other similar taxes 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 Transaction Documents, including, without limitation, the Mortgages, have been paid, and, under current legal requirements, each of the Mortgages is enforceable in accordance with their respective terms by the Indenture Trustee (or any subsequent holder thereof), except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).
(aj)To such Issuer Party’s knowledge, except as disclosed in the environmental reports delivered to the Custodian in connection with the issuance of the Notes, in all material respects: (a) no Property is in violation of any environmental laws; (b) no Property is subject to any private or governmental lien or judicial or administrative notice or action or inquiry, investigation or claim relating to hazardous substances; (c) no hazardous substances are or have been (including the period prior to the Issuer’s acquisition of each Property) released, discharged, generated, treated, disposed of or stored on, incorporated in, or removed or transported from each Property other than in compliance with all environmental laws; and (d) no hazardous substances other than permitted materials, are present in, on or under any nearby real property which could migrate to or otherwise affect each Property.
(ak)To such Issuer Party’s knowledge, no asbestos is located on any related Property in violation of applicable laws except as may have been disclosed in the environmental reports delivered to the Custodian in connection with the issuance of the Notes.
(al)Where all or a material portion of the Property is a leasehold estate, and the related Mortgage does not also encumber the related ground lessor’s fee interest in such Property, based upon the terms of the ground lease and any estoppel letter or other writing
received from the ground lessor and included in the related Lease File and, if applicable, the related Mortgage:
(i)The ground lease or a memorandum regarding such ground lease has been duly recorded. The ground lessor has permitted the interest of the related lessee to be encumbered by the related Mortgage. There has been no material change in the terms of the ground lease since its recordation, except by any written instruments which are included in the related Lease File.
(ii)The ground lease may not be amended, modified, canceled or terminated without the prior written consent of the mortgagee and that any such action without such consent is not binding on the mortgagee, its successors or assigns.
(iii)The ground lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and is enforceable, by the mortgagee) that extends beyond the stated maturity of the related Mortgage.
(iv)Based on the Title Policy referenced in paragraph (g) above, the ground leasehold interest is not subject to any liens or encumbrances superior to, or of equal priority with, the Mort-gage, subject to Permitted Encumbrances and liens that encumber the ground lessor’s fee interest.
(v)The ground lease is assignable to the mortgagee and its assigns without the consent of the ground lessor thereunder.
(vi)Neither the related Issuer nor the Originator has received any written notice of default under or notice of termination of such ground lease. The ground lease is in full force and effect and, to the knowledge of such Issuer Party, no default has occurred under the ground lease and there is no existing condition which, but for the passage of time or the giving of notice, would result in a material default under the terms of the ground lease.
(vii)The ground lease or ancillary agreement between the ground lessor and the ground lessee re-quires the ground lessor to give to the mortgagee written notice of any default, provides that no notice of default or termination is effective unless such notice is given to the mortgagee, and requires that the ground lessor will supply an estoppel.
(viii)The mortgagee is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the ground lessee under the ground lease through legal proceedings, or to take other action so long as the mortgagee is proceeding diligently) to cure any default under the ground lease which is curable after the receipt of notice of any default, before the ground lessor may terminate the ground lease.
(ix)The ground lease does not impose restrictions on subletting that would be viewed as commercially unreasonable by a prudent commercial mortgage lender. The ground lessor is not permitted to disturb the possession, interest or quiet enjoyment of any subtenant of the ground lessee in the relevant portion of the related Property subject to the ground lease for any reason, or in any material manner, which would adversely affect the security provided by the related Mortgage, as long as the ground lessee keeps and performs all of its obligations under the ground lease.
(x)Any related insurance proceeds or condemnation award (other than in respect of a total or substantially total loss or taking) is required under the related ground lease to be applied either to the repair or restoration of all or part of the related Property, with the mortgagee or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses.
(xi)Any related insurance proceeds, or condemnation award in respect of a total or substantially total loss or taking of the related Property is required to be applied first to the payment of the outstanding principal balance of the Mortgage, together with any accrued interest (except as provided by applicable law or in cases where a different allocation would not be viewed as commercially unreasonable by any institutional investor, taking into account the relative duration of the ground lease and the related Mortgage and the ratio of the market value of the related Property to the outstanding principal balance of such Mortgage). Pursuant to the related ground lease, until the principal balance and accrued interest are paid in full, neither the lessee nor the ground lessor under the ground lease has an option to terminate or modify the ground lease without the prior written consent of the mortgagee as a result of any casualty or partial condemnation, except to provide for an abatement of the rent.
(xii)Provided that the lender cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease upon termination of the ground lease for any reason, including rejection of the ground lease in a bankruptcy proceeding.
ARTICLE III
SATISFACTION AND DISCHARGE
Section III.01Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect except as to (i) any surviving rights herein expressly provided for, including any rights of transfer or exchange of Notes herein expressly provided for, (ii) in the case of clause (1)(B) below, the rights of the Noteholders hereunder to receive payment of the Outstanding Principal Balance of and interest on the Notes and any other rights of the Noteholders hereunder, and (iii) the provisions of Section 3.02, when:
(1)either: (A) all Notes theretofore authenticated and delivered (other than (i) Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.07 and (ii) Notes for which payment of money has theretofore been deposited in the Payment Account by the Indenture Trustee and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 5.10) have been delivered to the Note Registrar for cancellation; or (B) all such Notes not theretofore delivered to the Note Registrar for cancellation (i) have become due and payable or (ii) will become due and payable on the next Payment Date, and in the case of clause (B)(i) or (B)(ii) above, cash in an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Note Registrar for cancellation or sufficient to pay the Outstanding Principal Balance thereof and any interest thereon accrued to the date of such deposit (in the case of Notes which have become due and payable) or to the end of the related Accrual Period for the next Payment Date has been deposited with the Indenture Trustee as trust funds in trust for these purposes;
(2)the Issuer has paid or caused to be paid all other sums payable or reasonably expected to become payable by the Issuer to the Indenture Trustee, the Property Manager, the Issuer Manager, the Special Servicer, the Back-Up Manager, each of the Rating Agencies, each of the other Persons to which amounts are payable hereunder and each of the Noteholders (in each case, if any);
(3)the Issuer has delivered to the Indenture Trustee an Officer’s Certificate of the Issuer Member (upon which the Indenture Trustee may rely) stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with; and
(4)the Issuer has furnished to the Indenture Trustee a Tax Opinion to the effect that the actions contemplated by this Section 3.01 will not (i) adversely affect the tax characterization of any outstanding Notes treated as debt for U.S. federal income tax purposes, or (ii) cause or constitute an event in which any U.S. federal income tax gain or loss would be recognized by any Noteholder or any Issuer;
provided, however, that if, at any time after the payment that would have otherwise resulted in the satisfaction and discharge of this Indenture and such obligations, such payment is rescinded or must otherwise be returned for any reason, effective upon such rescission or return such satisfaction and discharge of this Indenture and such obligations shall automatically be deemed never to have occurred and this Indenture and such obligations shall be deemed to be in full force and effect.
Notwithstanding the foregoing, the obligations of the Issuer to the Indenture Trustee under Section 5.04 hereof and the obligations of the Indenture Trustee to the Noteholders under Section 3.02 hereof shall survive satisfaction and discharge of this Indenture.
Section III.02Application of Trust Money.
Subject to the provisions of Section 2.11, Section 5.10 and Section 7.01, all Cash deposited with the Indenture Trustee pursuant to Section 3.01 shall be held in the Payment Account and applied by the Indenture Trustee, in accordance with the provisions of the Notes and this Indenture, to pay to the Persons entitled thereto the amounts to which such Persons are entitled pursuant to the provisions hereof.
ARTICLE IV
EVENTS OF DEFAULT; REMEDIES
Section IV.01Events of Default.
“Event of Default,” wherever used herein with respect to the Notes of any Series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(a)unless otherwise specified in the related Series Supplement, the failure of the Issuer or any applicable Co-Issuer to pay Note Interest on any Class of Notes or note interest on any Related Series Notes on any applicable Payment Date (not including any Post-ARD Additional Interest, Deferred Post-ARD Additional Interest or Interest Carry-Forward Amount, post-ARD additional interest, deferred post-ARD additional interest or interest carry-forward amount on any class of Related Series Notes) and such failure continues for two (2) business days;
(b)the failure of the Issuer or any applicable Co-Issuer to reduce to zero the Outstanding Principal Balance of any related Class of Notes on the applicable Rated Final Payment Date or any class of any Related Series Notes on its applicable Rated Final Payment Date;
(c)(i) any material default in the observance or performance of any material covenant or agreement by the Issuer or any applicable Co-Issuer in the Indenture or any other Transaction Document which would reasonably be expected to have a material adverse effect on the Issuer or any such Co-Issuer or the ability of the Issuer or any such Co-Issuer to timely satisfy its obligations under the Indenture or any other Transaction Document, as applicable (other than (A) a covenant or agreement, a default in the observance or performance of which is elsewhere in this Section 4.01 specifically addressed, (B) with respect to an Issuer Collateral Defect that has been either cured or has been exchanged by the Issuer or purchased by the Sponsor and (C) with respect to any Mortgage default or a Property-related default which, in either case, has been exchanged by the Issuer or which may be cured by a permitted substitution of Properties), which default shall continue unremedied for a period of thirty (30) days after there shall have been given to the Issuer by the Indenture Trustee, or to the Issuer and the Indenture Trustee by the Noteholders holding at least 25% of the Aggregate Series Principal Balance, a written notice specifying such default and requiring it to be remedied; (ii) any monetary default by any Issuer under any Transaction Document (other than the Indenture, any Mortgage or any
Series of Notes), which monetary default continues beyond any applicable cure period set forth in such Transaction Document, or if no cure period is set forth in such document, such default continues unremedied for a period of five (5) Business Days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Issuer by the Indenture Trustee; and (iii) any material default in the observance or performance of any non-monetary covenant or agreement on the part of any Issuer contained in any Transaction Document (other than the Indenture, any Mortgage or any Series of Notes), which continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Issuer by the Indenture Trustee, provided, however, if such default under this subclause (iii) is reasonably susceptible of cure, but not within such thirty (30) day period, then the Issuer may be permitted an additional sixty (60) days to cure such default;
(d)(i) the impairment of the validity or effectiveness of the Indenture, or the impairment of the validity or effectiveness of the lien of the Mortgages, the subordination of the lien of the Property Owner Guaranty or any such Mortgages, the creation of any lien or other encumbrance on any part of the Issuer Collateral Pool in addition to the lien of the Mortgages or the failure of the lien with respect to the Mortgages to constitute a valid first priority security interest in the Collateral included in the Collateral Pool, any of which such occurrence has a material adverse effect with respect to the Collateral Pool in each case, subject to liens expressly permitted under the terms of the Property Management Agreement and the related Mortgages; provided, that if susceptible of cure, no Event of Default shall arise until the continuation of any such default after any grace period specified in the applicable agreement, and if not specified in the applicable agreement, unremedied for a period of fifteen (15) days or, with respect to the lien hereof, of the Property Owner Guaranty or any Mortgage, thirty (30) days after receipt by the Issuer of notice thereof; or (ii) the creation of any mechanic’s, materialmen’s or other lien or encumbrance, other than a Permitted Encumbrance and subject to the Issuer’s right to contest such lien pursuant to Section 9.04(b), on any part of the Issuer Collateral in addition to the lien of the Property Owner Guaranty or any Mortgage, which lien is not removed of record or otherwise insured over to Indenture Trustee’s satisfaction within forty-five (45) days of the filing or recording of such lien;
(e)a breach of the representations and warranties of any Issuer or applicable Co-Issuer contained in this Indenture (other than as set forth in Section 2.21) and such breach materially and adversely affects the interests of the Noteholders and the holders of the Related series Notes, which continues unremedied for a period of thirty (30) days after the date on which written notice of such breach, requiring the same to be remedied, shall have been given to the Issuer by the Indenture Trustee;
(f)a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or appointing a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities and reorganization or similar proceedings, or for the winding up or liquidation of its affairs, shall have been entered
against any Issuer or Issuer Member and such decree or order shall have remained in force undischarged or unstayed for a period of ninety (90) days;
(g)any Issuer shall voluntarily file a petition for bankruptcy, reorganization, assignment for the benefit of creditors or similar proceeding or consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities, or similar proceedings of, or relating to, the Issuer or the related Issuer Member or of, or relating to, all or substantially all of the assets of the Issuer or the related Issuer Member;
(h)the Properties are subject to an Issuer Collateral Transfer other than as provided in this Indenture or the Property Management Agreement;
(i)any default on the obligations of any Issuer as set forth under any applicable Series Supplement, or any default under any other Transaction Document (that is deemed an “Event of Default under the Indenture” pursuant to the terms of such other Transaction Document); or
(j)any material default by the Issuer in the observance or performance of its obligations to maintain a duly appointed independent member of its board of directors, managers or similar entity, which default shall continue unremedied for a period of two (2) Business Days after the date on which written notice of such breach shall have been given to the Issuer.
Section IV.02Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than with respect to clause (f), clause (g) or clause (j) of the definition thereof) should occur and be continuing, at the written direction of the Requisite Global Majority (which shall have the right, but not the obligation, to direct the Indenture Trustee to accelerate the Notes), the Indenture Trustee shall declare all of the Notes to be immediately due and payable. If an Event of Default specified in Section 4.01(f), (g) or (j) occurs, the unpaid Outstanding Principal Balance of such Notes, together with all accrued interest thereon through the date of acceleration, shall automatically become due and payable in full without any declaration or other act on the part of the Indenture Trustee or any Noteholder.
At any time after such declaration of acceleration has been made and before a judgment or decree for payment of the money due in respect of the Notes has been obtained by the Indenture Trustee as hereinafter provided in this Article IV, the Requisite Global Majority may rescind and annul such declaration and its consequences if:
(a)the Issuer has paid to or deposited with the Indenture Trustee a sum sufficient to pay:
(i)all payments of principal of and interest on the Notes and all other amounts that would, in each case, then be due hereunder or upon the Notes if the Event of Default giving rise to such acceleration had not occurred; and
(ii)all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and counsel; and
(b)all Events of Default, other than the nonpayment of the principal of the Notes that has become due solely by virtue of such acceleration, have been cured or waived as provided in Section 4.12.
No such rescission and annulment shall affect any subsequent default or impair any right consequent thereto.
Section IV.03Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a)If the Issuer fails to pay all amounts due upon an acceleration of the Notes under Section 4.02 forthwith upon demand and such declaration and its consequences shall not have been rescinded and annulled, the Indenture Trustee, in its capacity as Indenture Trustee and as trustee of an express trust, shall, if directed by the Requisite Global Majority (which, subject to the provisions of Section 4.15, will have the right, but not the obligation, to direct the Indenture Trustee to cause the foreclosure and sale of the Issuer Collateral in the Issuer Collateral Pool and of the Collateral in the Collateral Pool), institute a judicial proceeding for the collection of the sums so due and unpaid, prosecute such proceeding to judgment or final decree and enforce the same against the Issuer or any other obligor upon such Notes and the Property Owners and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the Issuer Collateral and/or the Collateral, wherever situated, or may institute and prosecute such non-judicial proceedings in lieu of judicial proceedings as are then permitted by Applicable Law, and provide any such direction from the Requisite Global Majority with respect to judicial proceedings or the sale of Issuer Collateral and/or the Collateral.
(b)If an Event of Default occurs and is continuing, the Indenture Trustee may, in its discretion and in any order, proceed to protect and enforce its rights and the rights of the Noteholders by such appropriate proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or any Mortgage or by Applicable Law.
(c)In case (x) there shall be pending, relative to the Issuer or any Person having or claiming an interest in the Issuer Collateral Pool, proceedings under Title 11 of the
United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, (y) a receiver, assignee, debtor-in-possession or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or shall have taken possession of any Issuer or its property or (z) there shall be pending a comparable judicial proceeding brought by creditors of any Issuer or affecting the property of the Issuer, the Indenture Trustee, irrespective of whether the principal of or interest on any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise:
(i)to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective attorneys, and for reimbursement of all reasonable expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of willful misconduct, negligence or bad faith of the Indenture Trustee or any predecessor Indenture Trustee, as applicable) and of the Noteholders allowed in such proceedings;
(ii)unless prohibited by Applicable Law, to vote on behalf of the Noteholders in any election of a trustee, a standby trustee or Person performing similar functions in any such proceedings;
(iii)to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders and of the Indenture Trustee on their and its behalf; and
(iv)to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Noteholders allowed in any judicial proceedings relative to any Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in any such proceeding is hereby authorized by each of Noteholders to make payments to the Indenture Trustee, and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective attorneys, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of willful misconduct, negligence or bad faith of the Indenture Trustee or predecessor Indenture Trustee.
(d)Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any related Noteholder or to authorize the Indenture Trustee to vote in respect of the claim of
any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.
(e)In any proceedings brought by the Indenture Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Noteholders, and it shall not be necessary to make any Noteholder a party to any such proceedings.
(f)All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its counsel, be for the ratable benefit of the Noteholders in respect of which such judgment has been recovered, subject to the payment priorities of Section 2.11(b).
Section IV.04Remedies.
If an Event of Default has occurred and is continuing, and the Notes have been declared due and payable pursuant to Section 4.02 and such declaration and its consequences shall not have been rescinded and annulled, the Indenture Trustee shall, at the written direction of the Requisite Global Majority (subject to Section 4.15), in addition to performing any tasks as provided in Section 4.03, and shall do one or more of the following:
(a)institute, or cause to be instituted, Proceedings for the collection of all amounts then payable on or under the Issuer Collateral or this Indenture with respect to the Notes, whether by declaration of acceleration or otherwise, of the sums due and unpaid, prosecute such Proceedings, enforce any judgment obtained and collect from the Issuer Collateral included in the Issuer Collateral Pool the moneys adjudged to be payable;
(b)liquidate, or cause to be liquidated, all or any portion of the Properties at one or more public or private sales called and conducted in any manner permitted by Applicable Law; provided, however, that the Indenture Trustee shall give the Issuer written notice of any private sale called by or on behalf of the Indenture Trustee pursuant to this Section 4.04(b) at least ten (10) days prior to the date fixed for such private sale;
(c)institute, or cause to be instituted, Foreclosure Proceedings with respect to all or part of the Properties included in the Collateral Pool;
(d)exercise, or cause to be exercised, any remedies of a secured party under the UCC;
(e)maintain the lien of this Indenture over the Pledged Securities and other Issuer Collateral and the Property Owner Guaranty and the Mortgages over the Properties included in the Collateral Pool and, in its own name or in the name of the Issuer or otherwise,
collect and otherwise receive in accordance with the Property Management Agreement, the Property Owner Guaranty or this Indenture any money or property at any time payable or receivable on account of or in exchange for the Collateral in the Collateral Pool;
(f)take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee hereunder; and
(g)exercise, or cause to be exercised, any remedies contained in any Mortgage;
provided, however, that the Indenture Trustee shall not, unless required by law, sell or otherwise liquidate all or any portion of the Issuer Collateral Pool following any Event of Default except in accordance with Section 4.15; provided, further, that, with respect to instituting any remedies pursuant to this Section 4.04 in any state wherein the law prohibits more than one “judicial action” or “one form of action” to enforce a mortgage obligation, the Indenture Trustee shall enforce any of the Indenture Trustee’s rights hereunder with respect to any Properties in accordance with the directions of the Property Manager.
In the event that the Indenture Trustee, following an Event of Default hereunder, institutes Foreclosure Proceedings, the Indenture Trustee shall promptly give a notice to that effect to the Issuer and each Rating Agency.
In the absence of such direction, the Indenture Trustee shall not be obligated to exercise any such remedies.
Section IV.05Application of Money Collected.
Any money collected by the Indenture Trustee pursuant to this Article shall be deposited in the Payment Account and, on each Payment Date, shall be applied in accordance with Section 2.11 and, in case of the distribution of such money on account of the principal of or interest on the Notes, upon presentation and surrender of the Notes if fully paid.
Section IV.06Limitation on Suits.
Except as provided in Section 4.07, no Noteholder shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1)such Noteholder has previously given written notice to the Indenture Trustee of a continuing Event of Default;
(2)the Requisite Global Majority shall have made written request to the Indenture Trustee to institute proceedings in respect of such Event of Default in its own name as Indenture Trustee hereunder;
(3)such Noteholder has offered to the Indenture Trustee adequate indemnity or security satisfactory to the Indenture Trustee against the costs, expenses and liabilities to be incurred in compliance with such request;
(4)the Indenture Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity or security has failed to institute any such proceeding; and
(5)an Event of Default shall have occurred and be continuing;
it being understood and intended that no one or more of such Noteholders shall have any right in any manner whatever by virtue of, or by availing itself or themselves of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Noteholders, or to obtain or to seek to obtain priority or preference over any other of such Noteholders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Noteholders. Subject to the foregoing restrictions, the Noteholders may exercise their rights under this Section 4.06 independently.
Section IV.7Unconditional Right of Noteholders to Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Note at Maturity shall have the right, which is absolute and unconditional, to receive payments of interest, principal and other amounts then due on such Note (subject to Section 2.11) and to institute suit for the enforcement of any such payment (subject to Section 4.06), and such rights shall not be impaired without the consent of such Noteholder, unless a non-payment has been cured pursuant to the second paragraph of Section 4.02. The Issuer shall, however, be subject to only one consolidated lawsuit by the Noteholders, or by the Indenture Trustee on behalf of the Noteholders, for any one cause of action arising under this Indenture or otherwise.
Section IV.8Restoration of Rights and Remedies.
If the Indenture Trustee or any Noteholder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued, waived, rescinded or abandoned for any reason, or has been determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case, subject to any determination in such proceeding, the Issuer, the Indenture Trustee and the Noteholders shall be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such proceeding had been instituted.
Section IV.9Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07, no right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section IV.10Delay or Omission Not Waiver.
No delay or omission of the Indenture Trustee or any Noteholder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Indenture or by law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, to the extent permitted by Applicable Law, by the Indenture Trustee or the Noteholders, as the case may be.
Section IV.11Control by Requisite Global Majority.
The Requisite Global Majority shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee under Section 4.04, or exercising any trust or power conferred on the Indenture Trustee (including, without limitation, the exercise of its rights under any Account Control Agreement and the waiver of a Servicer Replacement Event under the Property Management Agreement); provided, that such direction shall not be in conflict with any rule of law or with this Indenture or involve the Indenture Trustee in personal liability; provided, further, that the Indenture Trustee may take any other action deemed proper by the Indenture Trustee which is not inconsistent with such direction. Notwithstanding the foregoing, the Requisite Global Majority will not be required to provide, and the Indenture Trustee will not be required to obtain, a Tax Opinion in the case of a direction by the Requisite Global Majority to the Indenture Trustee, following an Event of Default, to realize upon the Issuer Collateral included in the Issuer Collateral Pool by liquidating such Issuer Collateral or otherwise.
Section IV.12Waiver of Past Defaults.
Prior to the acceleration of the Maturity of the Notes, the Requisite Global Majority may waive any past default hereunder and its consequences, except a default:
(1)in the distribution of principal or interest on any Note, for which a waiver shall require the consent of Noteholders holding 100% of the Series Principal Balance of all Notes affected thereby;
(2)in respect of a covenant or provision hereof which under Article VIII cannot be modified or amended without the consent of the Holder of each Note affected thereby, for which a waiver shall require the consent by each such Holder;
(3)depriving the Indenture Trustee of a lien on any part the Issuer Collateral, for which a waiver shall require the consent of the Indenture Trustee; or
(4)depriving the Indenture Trustee of any fees, reimbursement, or indemnification, to which the Indenture Trustee is entitled, for which a waiver shall require the written consent of the Indenture Trustee.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom (and any Early Amortization Period under clause (B) of the definition thereof resulting therefrom) shall be deemed to have been cured, for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Any costs or expenses incurred by the Indenture Trustee in connection with such waiver shall be reimbursable to the Indenture Trustee, as applicable, as an Extraordinary Expense from amounts on deposit in the Payment Account.
Section IV.13Undertaking for Costs.
All parties to this Indenture agree, and each Noteholder and Note Owner by its acceptance of such Note or an Ownership Interest therein shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses based on time expended, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by any Issuer, or to any suit instituted by the Indenture Trustee, or to any suit instituted by any Noteholder or group of Noteholders, holding in the aggregate at least 25% of the Aggregate Series Principal Balance, or to any suit instituted by any Noteholder for the enforcement of the payment of the principal of or interest on any Note on or after the Maturity of such Note.
Section IV.14Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim to take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of such law and covenants that it will not hinder, delay or impede the exercise of any power herein granted to the Indenture Trustee, but will suffer and permit the exercise of every such power as though no such law had been enacted.
Section IV.15Sale of Issuer Collateral.
(a)The power to effect any public or private sale of any portion of the Issuer Collateral Pool pursuant to Section 4.03 or Section 4.04 shall not be exhausted by any one or more sales as to any portion of the Issuer Collateral remaining unsold, but shall continue unimpaired until either the entirety of the Issuer Collateral Pool shall have been sold or all amounts payable on the Notes and under this Indenture with respect thereto shall have been paid. The Indenture Trustee may from time to time postpone any sale by public announcement made at the time and place of such sale. The Indenture Trustee hereby expressly waives its right to any amount fixed by law as compensation for any such sale but such waiver does not apply to any amounts to which the Indenture Trustee is otherwise entitled under Section 5.04.
(b)The Indenture Trustee shall not sell the Issuer Collateral included in the Issuer Collateral Pool pursuant to Section 4.03 or Section 4.04, unless:
(i)the Holders of (a) 66 2/3% of the Outstanding Principal Balance of all Notes with a AAA(sf) rating from any Rating Agency, (b) 66 2/3% of the Outstanding Principal Balance of all Notes with a AA(sf) rating from any Rating Agency, (c) 66 2/3% of the Outstanding Principal Balance of all Notes with a A(sf) rating from any Rating Agency, and (d) 66 2/3% of the Outstanding Principal Balance of all Notes with a BBB(sf) rating from any Rating Agency each consent to or direct the Indenture Trustee to make the related sales; or
(ii)the proceeds of such liquidation would be greater than or equal to the Aggregate Series Principal Balance plus all accrued and unpaid interest thereon (including Interest Carry-Forward Amounts).
The foregoing provisions of this Section 4.15 shall not preclude or limit the ability of the Indenture Trustee or its designee to purchase all or any portion of the Issuer Collateral at any sale, public or private, and the purchase by the Indenture Trustee or its designee of all or any portion of the Issuer Collateral at any sale shall not be deemed a sale or disposition thereof for purposes of this Section 4.15(b).
(c)[Reserved].
(d)In connection with a sale of all or any portion of the Issuer Collateral Pool:
(i)any Holder or Holders of Notes may bid for and purchase the property offered for sale, and upon compliance with the terms of sale may hold, retain and possess and dispose of such property, without further accountability, and may, in paying the purchase money therefor, deliver any Notes then Outstanding or claims for interest thereon in lieu of cash up to the amount which shall, upon distribution of the net proceeds of such sale, be payable thereon, and such Notes, in case the amounts so payable thereon shall be less than the amount due thereon, shall be returned to the Holders thereof after being appropriately stamped to show such partial payment;
(ii)the Indenture Trustee shall execute and deliver, without recourse, an appropriate instrument of conveyance transferring its interest in any portion of the Issuer Collateral Pool in connection with a sale thereof;
(iii)the Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the Issuer to transfer and convey any the Issuer’s interest in any portion of the Issuer Collateral Pool in connection with a sale thereof, and to take all action necessary to effect such sale; and
(iv)no purchaser or transferee at such a sale shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.
Section IV.16Action on Notes.
The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. None of the lien of the Mortgages, the Property Owner Guaranty and this Indenture nor any rights or remedies of the Indenture Trustee, or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against any Issuer or by the levy of any execution under such judgment upon any portion of the Issuer Collateral Pool or Collateral Pool, as the case may be.
ARTICLE V
THE INDENTURE TRUSTEE
Section V.01Certain Duties and Responsibilities.
The Issuer hereby irrevocably constitute and appoint the Indenture Trustee, with full power of substitution, as their true and lawful attorney-in-fact with full irrevocable power and authority in place and stead of the Issuer and in the name of the Issuer or in its own name or in the name of a nominee, from time to time in the Indenture Trustee’s discretion, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Indenture, all as set forth in this Section.
(a)The rights, duties and liabilities of the Indenture Trustee in respect of this Indenture shall be as follows:
(i)The Indenture Trustee shall have the full power and authority to do all things not inconsistent with the provisions of this Indenture that it may deem advisable in order to enforce the provisions hereof or to take any action with respect to a default or an Event of Default hereunder, or to institute, appear in or defend any suit or other proceeding with respect hereto, or to protect the interests of the Noteholders. The Issuer shall prepare and file or cause to be filed, at the Issuer’s expense, a UCC Financing
Statement and any continuation statements, describing the Issuer as debtor, the Indenture Trustee as secured party and the Issuer Collateral included in the Issuer Collateral Pool as the collateral, in all appropriate locations in the State of Delaware promptly following the initial issuance of each Series of Notes, and within six months prior to each fifth anniversary of the original filing. The Indenture Trustee is hereby authorized and obligated to make, at the expense of the Issuer, all required filings and refilings with respect to which the Indenture Trustee receives written direction from an Issuer, necessary to preserve the liens created by the Mortgages and Property Owner Guaranty and this Indenture as provided therein and herein. The Indenture Trustee shall not be required to take any action to exercise or enforce the trusts hereby created which, in the opinion of the Indenture Trustee, shall be likely to involve expense or liability to the Indenture Trustee, unless the Indenture Trustee shall have received an agreement satisfactory to it in its reasonable discretion to indemnify it against such liability and expense. Except as otherwise expressly provided herein, the Indenture Trustee shall not be required to ascertain or inquire as to the performance or observance of any of the covenants or agreements contained herein, or in any other instruments to be performed or observed by the Issuer. For the avoidance of doubt, the Indenture Trustee shall have no obligations with respect to the Allocation agreement or any parties performance thereunder.
(ii)Subject to the other provisions of this Article V, the Indenture Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Indenture Trustee that are specifically required to be furnished pursuant to any provisions of this Indenture, shall examine them to determine whether they are on their face in the form required by this Indenture to the extent expressly set forth herein. If any such instrument is found on its face not to conform to the requirements of this Indenture in a material manner, the Indenture Trustee shall take such action as it deems appropriate to have the instrument corrected. The Indenture Trustee shall not incur any liability in acting upon any signature, notice, request, consent, certificate, opinion, or other instrument reasonably believed by it to be genuine. In administering the trusts hereunder, the Indenture Trustee may execute any of the trusts or powers hereunder directly or through its agents or attorneys; provided, that it shall remain liable for the acts of all such agents and attorneys. The Indenture Trustee may, at its own expense (except as otherwise provided in Section 5.04), consult with counsel, accountants and other professionals to be selected and employed by it, and the Indenture Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice of any such Person nor for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Indenture Trustee was negligent in ascertaining the pertinent facts.
(iii)The Indenture Trustee shall not, except as otherwise provided in Section 5.01(a)(i), have any duty to make, arrange or ensure the completion of any recording, filing or registration of any instrument or other document (including any UCC Financing Statements), or any amendments or supplements to any of said instruments or to determine if any such instrument or other document is in a form suitable for recording,
filing or registration, and the Indenture Trustee shall not have any duty to make, arrange or ensure the completion of the payment of any fees, charges or taxes in connection therewith.
(iv)Whenever in performing its duties hereunder, the Indenture Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Indenture Trustee may, in the absence of bad faith on the part of the Indenture Trustee, rely upon (unless other evidence in respect thereof be specifically prescribed herein) an Officer’s Certificate of any applicable Issuer Member and such Officer’s Certificate shall be full warrant to the Indenture Trustee for any action taken, suffered or omitted by it on the faith thereof.
(v)Except in its capacity as successor to the Property Manager, the Issuer Manager, the Indenture Trustee shall not have any obligations to see to the payment or discharge of any liens (other than the liens of this Indenture, the Property Owner Guaranty and the Mortgages) upon the Issuer Collateral included in the Issuer Collateral Pool or the Collateral included in the Collateral Pool, as applicable, or to see to the application of any payment of the principal of or interest on any Note secured thereby or to the delivery or transfer to any Person of any property released from any such lien, or to give notice to or make demand upon any mortgagor, mortgagee, trustor, beneficiary or other Person for the delivery or transfer of any such property. The Indenture Trustee (and any successor trustee or co-trustee in its individual capacity) nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any liens or encumbrances on the Issuer Collateral included in the Issuer Collateral Pool and the Collateral Pool, as applicable, arising as a result of the Indenture Trustee (or such successor trustee or co-trustee, as the case may be) acting negligently, in bad faith or with willful misconduct in its capacity as Indenture Trustee (or such successor trustee or co-trustee, as the case may be).
(vi)The Indenture Trustee shall not be concerned with or accountable to any Person for the use or application of any deposited moneys or of any property or securities or the proceeds thereof that shall be released or withdrawn in accordance with the provisions hereof or of any property or securities or the proceeds thereof that shall be released from the lien hereof or thereof in accordance with the provisions hereof or thereof and the Indenture Trustee shall not have any liability for the acts of other parties that are not in accordance with the provisions hereof.
(b)The rights, duties and liabilities of the Indenture Trustee in respect of the Issuer Collateral Pool and this Indenture, in addition to those set forth in Section 5.01(a), shall be as follows:
(i)except during the continuance of an Event of Default with respect to the Notes, the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and
(ii)the Indenture Trustee may, in the absence of bad faith on its part, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture or any other Transaction Document, as applicable; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Indenture Trustee, the Indenture Trustee shall be under a duty to examine the same to determine whether or not they conform on their face to the requirements of this Indenture, to the extent expressly set forth herein.
(c)Subject to Section 4.12, in case an Event of Default known to the Indenture Trustee with respect to the Notes has occurred and is continuing, the Indenture Trustee shall exercise such of the rights and powers vested in it by this Indenture, the Property Owner Guaranty and the Mortgages, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.
(d)No provision of this Indenture shall be construed to relieve the Indenture Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(i)this subsection shall not be construed to limit the effect of subsections (a), (b) or (c) of this Section;
(ii)the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Indenture Trustee was negligent in ascertaining the pertinent facts;
(iii)the Indenture Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the directions of any applicable party pursuant to a Transaction Document, the Requisite Global Majority, any Controlling Party or Noteholders of more than 50% (unless a lower or higher percentage of Noteholders is expressly permitted or required to authorize such action hereunder, in which case such lower or higher percentage) of the Aggregate Series Principal Balance, as the case may be, relating to the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee, or exercising or omitting exercise any trust or power conferred upon the Indenture Trustee, under this Indenture with respect to the Notes; and
(iv)the Indenture Trustee shall not be required to take notice or be deemed to have notice or knowledge of a default in the observance of any covenant contained in Section 9.06 or Article X unless either (i) a Responsible Officer of the Indenture Trustee shall have actual knowledge of such default or (ii) written notice of such default shall have been given by the Issuer or by any Noteholder to and received by a Responsible Officer of the Indenture Trustee. In the absence of receipt of such notice or actual knowledge the Indenture Trustee may conclusively assume that is no default or Event of Default.
The Indenture Trustee shall perform the duties and obligations specified to be performed by the Indenture Trustee in the Property Owner Guaranty and the Property Management Agreement and in the other Transaction Documents.
Section V.02Notice of Defaults.
The Indenture Trustee, promptly but not later than two (2) Business Days after a Responsible Officer of the Indenture Trustee acquires actual knowledge of the occurrence of any default under this Indenture, shall notify the Issuer the Noteholders and the Rating Agencies of any such default (a “Notice of Default”), unless all such defaults known to the Indenture Trustee shall have been cured before the giving of such notice or unless the same is rescinded and annulled, or waived by the Requisite Global Majority pursuant to Section 4.02 or Section 4.12. For the purpose of this Section 5.02, the term “default” means any event which is, or after notice, or direction of the Requisite Global Majority or lapse of time would become, an Event of Default with respect to the Notes.
Section V.03Certain Rights of Indenture Trustee.
Subject to the provisions of Section 5.01, in connection with this Indenture:
(a)the Indenture Trustee may request and rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties as may be required by such party or parties pursuant to the terms of this Indenture or any other Transaction Document, as applicable;
(b)any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by the Issuer Request or Issuer Order and any resolution of the board of managers of the Issuer Member may be sufficiently evidenced by a Resolution;
(c)whenever in the administration of this Indenture the Indenture Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Indenture Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate;
(d)the Indenture Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel rendered thereby shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(e)[reserved];
(f)the Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, other evidence of indebtedness
or other paper or document, but the Indenture Trustee in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Indenture Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney;
(g)the Indenture Trustee may, at its own expense (except as otherwise provided in Section 5.04), execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys of the Indenture Trustee; provided, that it shall remain liable for the acts of all such attorneys and agents;
(h)the Indenture Trustee shall not be required to provide any surety or bond of any kind in connection with the execution or performance of its duties hereunder;
(i)except with respect to the representations made by it in Section 5.06, the Indenture Trustee shall not make any representations as to the validity or sufficiency of this Indenture;
(j)the Indenture Trustee shall not at any time have any responsibility or liability with respect to the legality, validity or enforceability of the Issuer Collateral included in the Issuer Collateral Pool other than its failure to act in accordance with the terms of this Indenture, the Property Owner Guaranty or the Property Management Agreement;
(k)The Indenture Trustee shall be under no obligation to exercise any of the powers vested in it by this Indenture or any other Transaction Document, as applicable, or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Noteholders, pursuant to the provisions of this Indenture, unless such Noteholders shall have offered to the Indenture Trustee security or indemnity satisfactory to the Indenture Trustee against the costs, expenses and liabilities which may be incurred therein or thereby (which in the case of the Requisite Global Majority will be deemed to be satisfied by a letter agreement with respect to such costs from such Noteholders); nothing contained herein shall, however, relieve the Indenture Trustee of the obligation, upon the occurrence of an Event of Default of which a Responsible Officer of the Indenture Trustee shall have actual knowledge, and such Event of Default having not been cured, to exercise such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs;
(l)The Indenture Trustee shall not be personally liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or the rights and powers conferred upon it by this Indenture;
(m)The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture shall not be construed as a duty, and the Indenture Trustee shall not be answerable for other than its own negligence or willful misconduct in the performance of such act;
(n)The Indenture Trustee shall not be required to expend or risk its own funds or otherwise incur financial liability for the performance of any of its duties hereunder or the exercise of any of its rights or powers if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not assured to it;
(o)The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture shall not be construed as a duty, and Indenture Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such act;
(p)To help the U.S. government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When an account is opened, the Indenture Trustee shall ask for information that will allow the Indenture Trustee to identify relevant parties. The other parties hereto hereby acknowledge such information disclosure requirements and agree to comply with all such information disclosure requests from time to time from the Indenture Trustee;
(q)Notwithstanding anything to the contrary herein, any and all email communications (both text and attachments) by or from the Indenture Trustee that the Indenture Trustee deems to contain confidential, proprietary, and/or sensitive information may be encrypted. The recipient (the “Email Recipient”) of the encrypted email communication will be required to complete a registration process. Instructions on how to register and/or retrieve an encrypted message will be included in the first secure email sent by the Indenture Trustee to the Email Recipient;
(r)The Indenture Trustee shall have the right to require that any directions, instructions or notices provided to it by any Noteholder be signed by an Authorized Person (as hereinafter defined), be provided on corporate letterhead, be notarized or contain a medallion signature guarantee, or contain such other evidence as may be reasonably requested by the Indenture Trustee to establish the identity and/or signatures thereon. The identity of such Authorized Persons, as well as their specimen signatures, title, telephone number and e-mail address, shall be delivered to the Indenture Trustee in a list of authorized signers form acceptable to the Indenture Trustee and shall remain in effect until the applicable party, or an entity acting on its behalf, notifies the Indenture Trustee of any change thereto (the person(s) so designated from time to time, the “Authorized Persons”); and
(s)In the event the Indenture Trustee is requested to acknowledge and agree to the procedures of any third party prior to receiving a copy of such third party’s report, the Issuer hereby direct the Indenture Trustee to so agree to the terms and conditions requested by such third party as a condition to receiving documentation required by this Indenture or any other Transaction Document; it being understood and agreed that (i) the Indenture Trustee will deliver such acknowledgement or agreement in conclusive reliance on the foregoing direction of the Issuer, (ii) the Indenture Trustee shall make no inquiry or investigation as to, and shall have no obligation in respect of, the sufficiency, validity or correctness of such procedures, (iii) such acknowledgment or agreement may include (x) restrictions or prohibitions on the disclosure of
information or documents provided to it by such third party (including to the Holders), (y) releases of claims or other liabilities by the Indenture Trustee and (z) such other terms and conditions that the Issuer has determined are necessary or desirable. Notwithstanding the foregoing, in no event shall the Indenture Trustee be required to execute any agreement or acknowledge any document that the Indenture Trustee determines adversely affects it.
Section V.04Compensation; Reimbursement; Indemnification.
(a)Subject to Section 5.04(b), the Issuer hereby agrees:
(1)to pay or cause to be paid to the Indenture Trustee, in accordance with the terms of this Indenture, monthly, the related Indenture Trustee Fee as compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); and
(2)to reimburse, indemnify or cause to be indemnified and hold harmless the Indenture Trustee and its directors, officers, employees, agents, Affiliates and Control Persons for any loss, liability, claim, expense or disbursements (including without limitation costs and expenses of litigation, and of investigation, reasonable counsel fees, damages, judgments and amounts paid in settlement): (A) incurred in connection with any act (including any actions taken by the Indenture Trustee or its agents pursuant to Article IV) or omission on the part of the Indenture Trustee with respect to this Indenture (and the transactions contemplated in connection herewith), any other Transaction Documents, the Issuer Collateral Pool (including but not limited to protecting its interest in such Issuer Collateral or collecting any amount payable thereunder or in enforcing its rights with respect to such Issuer Collateral), the Collateral Pool (including but not limited to protecting its interest in such Collateral or collecting any amount payable thereunder or in enforcing its rights with respect to the Properties and the Leases, as applicable, whether or not any legal proceeding is commenced hereunder or under the Property Owner Guaranty and the Mortgages) or the Notes (in any such case, other than any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of the Indenture Trustee’s obligations or duties under this Indenture); (B) arising out of or in any way relating to any one or more of the following: (i) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about any Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (ii) any use, non-use or condition in, on or about any Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (iii) performance of any labor or services or the furnishing of any materials or other property in respect of any Property or any part thereof; and (iv) any failure of any Property to be in compliance with any Applicable Law; or (C) arising out of or in any way relating to any tax on the making and/or recording of any Mortgage.
With respect to any third party claim:
(i)the Indenture Trustee shall give the Issuer written notice thereof promptly after the Indenture Trustee shall have knowledge thereof;
(ii)while maintaining control over its own defense, the Indenture Trustee shall cooperate and consult fully with the Issuer in preparing such defense; and
(iii)notwithstanding the foregoing provisions of this Section 5.04(a), the Indenture Trustee shall not be entitled to reimbursement out of the Payment Account for settlement of any such claim by the Indenture Trustee entered into without the prior written consent of the Issuer, which consent shall not be unreasonably withheld.
The provisions of this Section 5.04(a) shall survive the termination of this Indenture and the resignation or termination of the Indenture Trustee.
Each of the Authenticating Agents and the Note Registrar shall be entitled to all limitations on liability, rights of reimbursement and indemnities that the Indenture Trustee is entitled to under this Indenture.
The Indenture Trustee agrees to fully perform its duties under this Indenture notwithstanding any failure on the part of any of the Issuer to make any payments, reimbursements or indemnifications to the Indenture Trustee pursuant to this Section 5.04(a); provided, however, that (subject to Sections 5.04(b) and 5.04(c)) nothing in this Section 5.04 shall be construed to limit the exercise by the Indenture Trustee of any right or remedy permitted under this Indenture in the event of any the Issuer’s failure to pay any sums due the Indenture Trustee pursuant to this Section 5.04.
(b)The obligations of the Issuer set forth in Section 5.04(a) are nonrecourse obligations solely of the Issuer and will be payable only from the Issuer Collateral Pool. The Indenture Trustee hereby agrees that it has no rights or claims against the Issuer directly and shall only look to the Issuer Collateral Pool to satisfy any Issuer’s obligations under Section 5.04(a). Notwithstanding the provisions of Section 4.03, the Indenture Trustee hereby agrees not to file or join in filing any petition in bankruptcy or commence any similar proceeding in respect of any Issuer.
(c)The Indenture Trustee shall not institute any proceeding seeking the enforcement of any lien against the Issuer Collateral Pool unless (i) such proceeding is in connection with a proceeding in accordance with Article IV hereof for enforcement of the lien of the Property Owner Guaranty and the Mortgages and/or this Indenture for the benefit of the Noteholders after the occurrence of an Event of Default (other than an Event of Default due solely to a breach of this Section 5.04) and a resulting declaration of acceleration of such Notes that has not been rescinded and annulled, or (ii) such proceeding does not and will not result in or cause a sale or other disposition of the Issuer Collateral included in the Issuer Collateral Pool.
Section V.05Corporate Indenture Trustee Required; Eligibility.
The Issuer hereby agree that there shall at all times be an Indenture Trustee hereunder which shall be a bank (within the meaning of Section 2(a)(5) of the 1940 Act) organized and doing business under the laws of the United States or any State thereof, authorized under such laws to exercise corporate trust powers, having aggregate capital, surplus and undivided profits of at least $100,000,000, and subject to supervision or examination by federal or state authority, the long-term unsecured debt of which is rated not lower than “A-” by S&P and the short-term debt of which is rated not lower than “A-1” by S&P, or another institution the retention of which satisfies the Rating Condition. If such bank publishes reports of condition at least annually, pursuant to law or to the requirements of the applicable supervising or examining authority, then for the purposes of this Section, the combined capital, surplus and undivided profits of such bank shall be deemed to be its combined capital, surplus and undivided profits as set forth in its most recent report of condition so published. The Indenture Trustee shall at all times meet the requirements of Section 26(a)(1) of the 1940 Act and shall in no event be an Affiliate of any Issuer or an Affiliate of any Person involved in the organization or operation of any Issuer or be directly or indirectly controlled by any Issuer. If at any time a Responsible Officer of the Indenture Trustee becomes aware that the Indenture Trustee has ceased to be eligible in accordance with the provisions of this Section, the Indenture Trustee shall resign immediately in the manner and with the effect hereinafter specified in this Article.
Section V.06Authorization of Indenture Trustee.
The Indenture Trustee represents and warrants as to itself: that it is duly authorized under applicable federal law, its charter and its by-laws to execute and deliver this Indenture, and to perform its obligations hereunder, including, without limitation, that (assuming it is enforceable against the other parties hereto) this Indenture constitutes its valid and binding obligation enforceable against it in accordance with the Indenture’s terms (subject to applicable bankruptcy and insolvency laws and general principles of equity), that it is duly authorized to accept the Grant to it of the Issuer Collateral included in the Issuer Collateral Pool and is authorized to authenticate any Series of Notes issued pursuant to the applicable Series Supplement, and that all corporate action necessary or required therefor has been duly and effectively taken or obtained and all federal and state governmental consents and approvals required with respect thereto have been obtained.
Section V.07Merger, Conversion, Consolidation or Succession to Business.
Any corporation, bank, trust company or association into which the Indenture Trustee may be merged or converted or with which it may be consolidated, or any corporation, bank, trust company or association resulting from any merger, conversion or consolidation to which the Indenture Trustee shall be a party, or any corporation, bank, trust company or association succeeding to all or substantially all the corporate trust business of the Indenture Trustee, shall be the successor of the Indenture Trustee hereunder; provided, that such corporation, bank, trust company or association shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.
Section V.08Resignation and Removal; Appointment of Successor.
(a)No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee pursuant to this Article shall become effective until (i) the acceptance of appointment by the successor Indenture Trustee in accordance with the applicable requirements of Section 5.09, (ii) payment to the predecessor Indenture Trustee of all unpaid fees and expenses and (iii) the Rating Condition is satisfied.
(b)Subject to Section 5.08(a), the Indenture Trustee may be removed at any time with respect to the Notes by the Requisite Global Majority and notice of such action by the Noteholders shall be delivered to the Indenture Trustee, the Issuer and the Rating Agencies.
(c)If at any time:
(i)the Indenture Trustee shall cease to be eligible under Section 5.05, or the representations of the Indenture Trustee in Section 5.06 shall prove to be untrue in any material respect, and the Indenture Trustee shall fail to resign after written request therefor by the Issuer Member or the Noteholders of 10% of the Aggregate Series Principal Balance; or
(ii)the Indenture Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Indenture Trustee or of its property shall be appointed or any public officer shall take charge or control of the Indenture Trustee or its property or affairs for the purpose of rehabilitation, conservation or liquidation;
then, in either such case, (i) the Issuer Member, may, by written notice, remove the Indenture Trustee, or (ii) subject to Section 4.13, any Noteholder may, on its own behalf and on behalf of all others similarly situated, petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.
(d)If the Indenture Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Indenture Trustee for any reason (including removal), the Issuer Member, on behalf of the Issuer, with the consent of the Requisite Global Majority, shall promptly appoint a successor Indenture Trustee, who shall comply with the applicable requirements of Section 5.09. If, within sixty (60) days after such resignation, or incapacity, or the occurrence of such vacancy, a successor Indenture Trustee shall not have been appointed by the Issuer Member, on behalf of the Issuer, and shall not have accepted such appointment in accordance with the applicable requirements of Section 5.09, then a successor Indenture Trustee shall be appointed by act of the Requisite Global Majority delivered to the Issuer and the retiring Indenture Trustee, and the successor Indenture Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 5.09, become the successor Indenture Trustee with respect to the Notes. If the Indenture Trustee shall resign pursuant to this Section 5.08, then such resigning Indenture Trustee must pay all costs and expenses associated with the transfer of its duties. If the Indenture
Trustee shall be removed pursuant to this Section 5.08, then the party requesting such removal of the Indenture Trustee shall pay all costs and expenses associated with the transfer of its duties.
If, within one hundred twenty (120) days after such resignation, removal or incapacity, or the occurrence of such vacancy, no successor Indenture Trustee shall have been so appointed and accepted appointment in the manner required by Section 5.09, the resigning Indenture Trustee may, on its own behalf, petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.
(e)The Issuer shall give notice of any resignation or removal of the Indenture Trustee and the appointment of a successor Indenture Trustee by giving notice of such event to the Rating Agencies and the Noteholders. Each notice shall include the name of the successor Indenture Trustee and the address of its corporate trust office.
Section V.9Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Indenture Trustee, the successor Indenture Trustee so appointed shall execute, acknowledge and deliver to the Issuer and to the retiring Indenture Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Indenture Trustee shall become effective and such successor Indenture Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Indenture Trustee; but, on the request of the Issuer Member or the successor Indenture Trustee, such retiring Indenture Trustee shall, upon payment of its fees, execute and deliver an instrument transferring to such successor Indenture Trustee all the rights, powers and trusts of the retiring Indenture Trustee, shall duly assign, transfer and deliver to such successor Indenture Trustee all property and money held by such retiring Indenture Trustee hereunder, and shall take such action as may be requested by the Issuer Member to provide for the appropriate interest in the Issuer Collateral Pool or Collateral Pool (including, without limitation, taking actions with respect to the Properties and Leases under the Property Owner Guaranty and the Mortgages) to be vested in such successor Indenture Trustee, but shall not be responsible for the recording of such documents and instruments as may be necessary to give effect to the foregoing.
Upon request of any such successor Indenture Trustee, the Issuer shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Indenture Trustee all such rights, powers and trusts referred to in this Section.
No successor Indenture Trustee shall accept its appointment unless at the time of such acceptance such successor Indenture Trustee shall be qualified and eligible under this Article.
Section V.10Unclaimed Funds.
The Indenture Trustee is required to hold any payments received by it with respect to the Notes that are not paid to the Noteholders in trust for the Noteholders. Notwithstanding the foregoing, at the expiration of three years following the Final Payment Date for any Class of
Notes of any Series any moneys set aside in accordance with Section 2.11(b) for payment of principal, interest and other amounts on such Notes remaining unclaimed by any lawful owner thereof, and, to the extent required by Applicable Law, any accrued interest thereon shall be remitted to the Issuer, as their interest may appear, to be held in trust by the Issuer for the benefit of the applicable Noteholder until distributed in accordance with Applicable Law, and all liability of the Indenture Trustee with respect to such money shall thereupon cease; provided, that the Indenture Trustee, before being required to make any such remittance, may, at the expense of the applicable Noteholder, payable out of such unclaimed funds, to the extent permitted by Applicable Law, and otherwise at the expense of the Issuer payable out of the Issuer Collateral Pool, cause to be published at least once but not more than three times in two newspapers in the English language customarily published on each Business Day and of general circulation in New York, New York, a notice to the effect that such moneys remain unclaimed and have not been applied for the purpose for which they were deposited, and that after a date specified therein, which shall be not less than 30 days after the date of first publication of said notice, any unclaimed balance of such moneys then remaining in the hands of the Indenture Trustee will be paid to the Issuer upon their written directions to be held in trust for the benefit of the applicable Noteholder until distributed in accordance with Applicable Law. Any successor to an Issuer through merger, consolidation or otherwise or any recipient of substantially all the assets of an Issuer in a liquidation of the Issuer shall remain liable for the amount of any unclaimed balance paid to the Issuer pursuant to this Section 5.10.
Section V.11Illegal Acts.
No provision of this Indenture or any amendment or supplement hereto shall be deemed to impose any duty or obligation on the Indenture Trustee to do any act in the performance of its duties hereunder or to exercise any right, power, duty or obligation conferred or imposed on it, which under any present or future law shall be unlawful, or which shall be beyond the corporate powers, authorization or qualification of the Indenture Trustee.
Section V.12Communications by the Indenture Trustee.
The Indenture Trustee, if any principal of or interest on any Notes due and payable hereunder is not paid, shall send to the Issuer, within one (1) Business Day after the Maturity thereof, a written demand for payment thereon.
Section V.13Separate Indenture Trustees and Co-Trustees.
(a)Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting legal requirements applicable to it in the performance of its duties hereunder, the Indenture Trustee shall have the power to, and shall execute and deliver all instruments to, appoint one or more Persons to act as separate trustees or co-trustees hereunder, jointly with the Indenture Trustee, of any portion of the Issuer Collateral Pool subject to this Indenture, and any such Persons shall be such separate trustee or co-trustee, with such powers and duties consistent with this Indenture as shall be specified in the instrument appointing such Person but without thereby releasing the Indenture Trustee from any of its duties hereunder. If the Indenture Trustee shall request the Issuer to do so, the Issuer shall join with the Indenture
Trustee in the execution of such instrument, but the Indenture Trustee shall have the power to make such appointment without making such request. A separate trustee or co-trustee appointed pursuant to this Section 5.13 need not meet the eligibility requirements of Section 5.05.
(b)Every separate trustee and co-trustee shall, to the extent not prohibited by law, be subject to the following terms and conditions:
(i)the rights, powers, duties and obligations conferred or imposed upon such separate or co-trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate or co-trustee jointly, as shall be provided in the appointing instrument, except to the extent that under any law of any jurisdiction in which any particular act is to be performed any nonresident trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such separate trustee or co-trustee at the direction of the Indenture Trustee;
(ii)all powers, duties, obligations and rights conferred upon the Indenture Trustee, in respect of the custody of all cash deposited hereunder shall be exercised solely by the Indenture Trustee; and
(iii)the Indenture Trustee may at any time by written instrument accept the resignation of or remove any such separate trustee or co-trustee, and, upon the request of the Indenture Trustee, the Issuer shall join with the Indenture Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to make effective such resignation or removal, but the Indenture Trustee shall have the power to accept such resignation or to make such removal without making such request. A successor to a separate trustee or co-trustee so resigning or removed may be appointed in the manner otherwise provided herein.
(c)Such separate trustee or co-trustee, upon acceptance of such trust, shall be vested with the estates or property specified in such instruments, jointly with the Indenture Trustee, and the Indenture Trustee shall take such action as may be necessary to provide for (i) the appropriate interest in the Issuer Collateral Pool and Collateral Pool to be vested in such separate trustee or co-trustee, and (ii) the execution and delivery of any transfer documentation or bond powers that may be necessary to give effect to the transfer of the lien of this Indenture, the Property Owner Guaranty and the Mortgages to the co-trustee. Any separate trustee or co-trustee may, at any time, by written instrument constitute the Indenture Trustee, its agent or attorney-in-fact with full power and authority, to the extent permitted by law, do all acts and things and exercise all discretion authorized or permitted by it, for and on behalf of it and in its name. If any separate trustee or co-trustee shall be dissolved, become incapable of acting, resign, be removed or die, all the estates, property, rights, powers, trusts, duties and obligations of said separate trustee or co-trustee, so far as permitted by law, shall vest in and be exercised by the Indenture Trustee, without the appointment of a successor to said separate trustee or co-trustee, until the appointment of a successor to said separate trustee or co-trustee is necessary as provided in this Indenture.
(d)Any notice, request or other writing, by or on behalf of any Noteholder, delivered to the Indenture Trustee shall be deemed to have been delivered to all separate trustees and co-trustees.
(e)Although co-trustees may be jointly liable, no co-trustee or separate trustee shall be severally liable by reason of any act or omission of the Indenture Trustee or any other such trustee hereunder.
(f)No appointment of a separate trustee or co-trustee pursuant to this Section 5.13 shall relieve the Indenture Trustee of any of its obligations, duties or responsibilities hereunder in any way or to any degree.
Section V.14Communications with the Rating Agency.
To the extent not transmitted to any applicable Rating Agency by the Issuer or the Property Manager, the Issuer Manager, the Indenture Trustee will make a copy of each statement, notice or other document required to be provided to any applicable Rating Agency available on its website specified in Section 6.01. Except as expressly provided in this Indenture, the Indenture Trustee shall not have any oral or written communications regarding the terms and provisions of the Transaction Documents or of the transactions contemplated hereunder or thereunder with any applicable Rating Agency without the prior written consent of the Sponsor.
ARTICLE VI
REPORTS TO NOTEHOLDERS
Section VI.01Reports to Noteholders and Others.
(a)Based on information with respect to the Properties and Leases provided to the Indenture Trustee by the Property Manager, the Issuer Manager, and the Special Servicer in a single aggregate report pursuant to the Property Management Agreement (and the Indenture Trustee’s calculations based on such information and the Indenture Trustee’s records with respect to the Notes), the Indenture Trustee shall prepare, or cause to be prepared, and make available either in electronic format or by first class mail on each Payment Date, or as soon thereafter as is practicable, to the Issuer, the Initial Purchasers, the Rating Agencies, each Noteholder and any other Person upon the direction of any Issuer a statement in respect of the payments made on such Payment Date setting forth the information set forth in Exhibit B hereto (the “Trustee Report”). The Indenture Trustee shall promptly make each Trustee Report available via the Indenture Trustee’s internet website to any Noteholder, Note Owner or prospective investor upon receipt by the Indenture Trustee from such person of a certification in the form of Exhibit E-1 or E-2 attached hereto, as applicable, and to the Issuer, designees of the Issuer, the Property Manager, the Issuer Manager, the Special Servicer, the Back-Up Manager, the Sub-Manager, the Rating Agencies and the Initial Purchasers. The Indenture Trustee’s internet website will be located at “http://www.sf.citidirect.com” or at such other address as the Indenture Trustee shall notify the parties hereto from time to time. For assistance with the Indenture Trustee’s internet website, Noteholders may call (888) 855-9695.
In connection with providing access to the Indenture Trustee’s internet website, the Indenture Trustee shall require registration and the acceptance of a disclaimer as well as the delivery of a request for information, substantially in the form of Exhibit E-1 or Exhibit E-2, as applicable. The Indenture Trustee shall not be liable for having disseminated information in accordance with this Indenture.
The Indenture Trustee shall be entitled to rely on and shall not be responsible for the content or accuracy of any information provided by third parties for purposes of preparing the Trustee Report and may affix thereto any disclaimer it deems appropriate in its reasonable discretion (without suggesting liability on the part of any other party hereto). The Indenture Trustee shall not be responsible for determining or in any way verifying any taxes or withholding taxes.
(b)Within a reasonable period of time after the end of each calendar year (but in no event more than sixty (60) days following the end of such calendar year), the Indenture Trustee shall prepare, or cause to be prepared, and make available either in electronic format or by first class mail to each Person who at any time during the calendar year was a Noteholder (i) a statement containing the aggregate amount of principal and interest payments on the Notes for such calendar year or applicable portion thereof during which such person was a Noteholder and (ii) such other customary information as the Indenture Trustee deems necessary or desirable for Noteholders to prepare their federal, state and local income tax returns including, without limitation (and to the extent provided to it by the Issuer which shall so cause such information to be provided), the amount of original issue discount accrued on the Notes, if applicable. The obligations of the Indenture Trustee in the immediately preceding sentence shall be deemed to have been satisfied to the extent that substantially comparable information has been provided by the Indenture Trustee.
Section VI.02Certain Communications with the Rating Agencies.
Upon request by any Rating Agency (and subject to Section 5.14), the Indenture Trustee shall make available or send, in the case of all material items, and shall endeavor to make available or send, in the case of all other items, a copy of each supplement, notice, certificate, request, demand, financial statement and amortization schedule sent by it or received by it pursuant to or in connection with this Indenture or the Issuer Collateral Pool or any part thereof, other than statements of the Indenture Trustee’s fees and expenses sent by it to the Issuer and any other communications of a similar and solely administrative nature in the Indenture Trustee’s sole opinion, to such Rating Agency.
Section VI.03Access to Certain Information.
(a)The Indenture Trustee shall afford to the Noteholders, the Issuer, the Property Manager, the Issuer Manager, the Sponsor, the Special Servicer, the Back-Up Manager, the OTS, the FDIC and any other banking or insurance regulatory authority that may exercise authority over any Noteholder, access to any documentation regarding the Issuer Collateral Pool within its control; provided, however, to the extent a Property Manager or the Issuer Manager delivers any operating statements or other financial information to the Indenture Trustee pursuant
to Section 24 of the Property Management Agreement (and such statements or information are designated in writing (by email or otherwise) by the Property Manager or the Issuer Manager to the Indenture Trustee as confidential), the Indenture Trustee shall not disseminate any such information to any Noteholder unless such Noteholder executes a confidentiality agreement substantially in the form attached hereto as Exhibit F. Any such confidentiality agreement executed by a Noteholder shall apply to all future disclosures of operating statements and other financial information delivered by the Property Manager or the Issuer Manager to the Indenture Trustee pursuant to Section 24 of the Property Management Agreement and provided to such Noteholder by the Indenture Trustee under this Section 6.03(a). Such access shall be afforded without charge but only upon reasonable prior written request and during normal business hours at the offices of the Indenture Trustee designated by it.
(b)The Indenture Trustee shall maintain at its office primarily responsible for administration of the Issuer Collateral Pool and shall deliver to the Issuer, the Rating Agencies and, subject to the succeeding paragraph, any Noteholder or Note Owner or Person identified to the Indenture Trustee as a prospective transferee of a Note or an Ownership Interest therein (at the reasonable request and, except for the Rating Agencies, expense of the requesting party), copies of the following items (to the extent that such items have been delivered to the Indenture Trustee or the Indenture Trustee can cause such items to be delivered to it without unreasonable burden or expense): (i) any private placement memorandum or disclosure document relating to the applicable Notes, in the form most recently provided to the Indenture Trustee by the Issuer or by any Person designated by the Issuer; (ii) this Indenture, the Issuer Operating Agreements, the Property Management Agreement and any amendments hereto or thereto; (iii) all reports prepared by, and all reports delivered to, the Indenture Trustee, the Property Manager, the Issuer Manager, the Special Servicer or the Back-Up Manager in such capacities since the Initial Closing Date; (iv) all Officer’s Certificates delivered by the Property Manager, the Issuer Manager and the Special Servicer since the Initial Closing Date pursuant to the Property Management Agreement; (v) all accountants’ reports caused to be delivered by the Property Manager, the Issuer Manager and the Special Servicer since the Initial Closing Date pursuant to Section 24(f) of the Property Management Agreement; (vi) all Determination Date Reports, Special Servicer Reports and Modified Issuer Collateral Detail and Realized Loss Reports (each, as defined in the Property Management Agreement) since the Initial Closing Date prepared pursuant to Section 24(a) of the Property Management Agreement; (vii) the Lease Files, including any and all modifications, waivers and amendments of the terms of each Lease, as applicable, entered into or consented to by the Property Manager, the Issuer Manager or the Special Servicer and delivered to the Indenture Trustee; and (viii) any and all Officer’s Certificates and other evidence to support the Property Manager’s, the Issuer Manager’s or the Special Servicer’s, as the case may be, determination that any Advance was or, if made, would be a Nonrecoverable Advance. The Indenture Trustee shall make available copies of any and all of the foregoing items upon written request of any party set forth in the previous sentence. However, the Indenture Trustee shall be permitted to require of such party the payment of a sum sufficient to cover the reasonable costs and expenses of providing such copies as are requested by such party.
If requested by any Noteholder, the Indenture Trustee (to the extent it is able to obtain such information from the Property Manager or the Issuer Manager) shall provide: (i) the most recent inspection report prepared by the Property Manager, the Issuer Manager or the Special Servicer in respect of each Property pursuant to Section 17(a) of the Property Management Agreement; (ii) the most recent available documentation and information collected by the Property Manager, the Issuer Manager or the Special Servicer pursuant to Section 17 of the Property Management Agreement, together with the accompanying written reports to be prepared by the Property Manager, the Issuer Manager or the Special Servicer, as the case may be, pursuant to Section 24 of the Property Management Agreement; and (iii) any and all notices and reports with respect to any Property as to which environmental testing is contemplated by Section 23 of the Property Management Agreement.
The Indenture Trustee will make available, upon reasonable advance notice and at the expense of the requesting party, copies of the above items to any Noteholder or Note Owner and to prospective purchasers of Notes; provided, that, as a condition to making such items available, the Indenture Trustee shall require (a) in the case of Noteholders or Note Owners, a confirmation executed by the requesting Person substantially in the form of Exhibit E-1 hereto generally to the effect that such Person is a Noteholder or Note Owner, is requesting the information solely for use in evaluating such Person’s investment in the related Notes and will otherwise keep such information confidential and (b) in the case of a prospective purchaser, confirmation executed by the requesting Person and such Person’s prospective transferor substantially in the form of Exhibit E-2 hereto generally to the effect that such Person is a prospective purchaser of Notes, is requesting the information solely for use in evaluating a possible investment in such Notes and will otherwise keep such information confidential.
(c)The Indenture Trustee shall not be liable for any dissemination of information made in accordance with Section 6.03(a) or (b).
(d)The Issuer shall permit agents, representatives and employees of the Indenture Trustee to inspect the Properties or any part thereof at reasonable hours upon reasonable advance notice, subject to the applicable Leases.
(e)The Issuer shall be required to furnish, upon request of any Noteholder, to such Noteholder and a prospective purchaser designated by such Noteholder, the information required to be delivered under Rule 144A(d)(4) under the Securities Act if at the time of the request the Issuer are not reporting companies under Section 13 or Section 15(d) of the Securities Exchange Act, and are not exempt from reporting pursuant to Rule 12g3-2(b) under the Securities Exchange Act.
ARTICLE VII
REDEMPTION
Section VII.01Redemption of the Notes.
(a)Redemption Date. Unless otherwise specified in a Series Supplement for a Series of Notes, and subject to Sections 7.01(b) and (e), on any Business Day, the Issuer may, at their option, elect to prepay the Notes then Outstanding (i) in whole in accordance with Section 7.01(c) or (ii) in part in accordance with Section 7.01(d) (the date of such prepayment, the “Redemption Date”).
(b)Redemption Amount. In the event that the Issuer elect to cause a Voluntary Prepayment pursuant to this Section 7.01, the Issuer shall deposit into the Collection Account not later than the applicable Redemption Date, the applicable Redemption Amount in immediately available funds equal to the amount described in Sections 7.01(c) or (d), as applicable. Upon confirmation that such deposit has been made, the Indenture Trustee shall: (1) remit principal amounts set forth in clause (i) of the definition of Full Redemption Amount pursuant to Section 7.01(c) or the Partial Redemption Amount pursuant to Section 7.01(d)(i)(1), as applicable, pro rata, to the applicable Noteholders based on their respective Outstanding Principal Balances, and shall remit interest amounts set forth in clause (ii) of the definition of Full Redemption Amount pursuant to Section 7.01(c) or the Partial Redemption Amount pursuant to Section 7.01(d)(i)(2), as applicable, in accordance with the respective accrued and unpaid amounts to which they are then entitled to payment; and (2) pay all amounts set forth in clause (iii) of the definition of Full Redemption Amount pursuant to Section 7.01(c) or under Section 7.01(d)(i)(3), as applicable, to each applicable party as set forth in the applicable Redemption Notice.
(c)Full Prepayment. Unless otherwise specified in the related Series Supplement, with respect to a Voluntary Prepayment in full of a Series of Notes, the Issuer will be required to deposit with the Indenture Trustee an amount equal to the Full Redemption Amount; provided, that a Series of Notes may only be prepaid in full if no other Class of Notes with a higher alphabetical designation and an Anticipated Repayment Date that is the same or sooner than the Anticipated Repayment Date of the Class of Notes being prepaid is still outstanding, unless (x) such Series is being prepaid in full in connection with a Series Issuer Collateral Release or (y) the applicable Redemption Date is on or after the Refinancing Date. For the avoidance of doubt, in connection with a prepayment of a Series in full as set forth in this clause (c), payments are not required to be allocated pro rata among all Series of Notes.
(d)Partial Prepayment.
(i)With respect to a Voluntary Prepayment in part of a Series of Notes, the Issuer will be required to deposit with the Indenture Trustee an amount equal to the sum (such amount, the “Partial Redemption Amount”) of (1) the Applicable Paydown Percentage with respect to the then outstanding Aggregate Series Principal Balance, (2) all accrued and unpaid interest (including any Interest Carry-Forward Amount, Post-ARD Additional Interest or Deferred Post-ARD Additional Interest) thereon, (3) all amounts owed to the Indenture Trustee, the Property Manager, the Issuer Manager, the Special Servicer and the Back-Up Manager and any other parties to the Transaction Documents and (4) the required Make Whole Amount, if any, and all such
amounts deposited pursuant to clauses (1) through (4) above shall be allocated pro rata among all Series of Notes.
(ii)Proceeds in connection with a Series Issuer Collateral Release shall not be used to effect a partial Voluntary Prepayment pursuant to this Section 7.01(d).
(e)Series Issuer Collateral Release. In accordance with Section 33 of the Property Management Agreement, the Issuer may elect to remove a Property from the Collateral Pool in connection with a prepayment in full of a Series of Notes, subject to the requirements set forth therein. The related Series Issuer Collateral Release Price received in connection with a Series Issuer Collateral Release shall be deposited into the Collection Account and shall be treated as the Redemption Amount and applied in accordance with the terms of Section 7.01(c) above; provided, that if any Series Issuer Collateral Release Price in the Collection Account exceeds the applicable Full Redemption Amount, such excess amounts shall be transferred to the Release Account and treated as a Release Price in accordance with the terms of the Property Management Agreement.
(f)Redemption Notice. No Voluntary Prepayment shall occur unless the Issuer provide written notice (a “Redemption Notice”) to the Indenture Trustee, the Property Manager, the Issuer Manager, the Special Servicer, the Back-Up Manager and the Rating Agencies no less than fifteen (15) days prior to the Redemption Date, which Redemption Notice shall specify (i) with respect to a Voluntary Prepayment in full of a Series of Notes, the Series of Notes that the Issuer are electing to prepay, (ii) with respect to a Voluntary Prepayment in part of a Series of Notes, the Applicable Paydown Percentage of the Notes to be purchased on such Redemption Date, (iii) the Redemption Amount required pursuant to Section 7.01(b), (iv) the parties to whom payments are owed and the respective amounts thereof pursuant to Sections 7.01(c) and (d), and (iv) the targeted Redemption Date.
(g)Make Whole Amount. Unless otherwise specified in the related Series Supplement, with respect to a Class of Notes, if a Redemption Date occurs (i) prior to the applicable Refinancing Date, a Make Whole Amount shall be due to the Noteholders of such Class or (ii) on or after the applicable Refinancing Date, a Make Whole Amount shall not be due to each Noteholder of such Class based on the principal amount of such prepayment.
(h)Release of Issuer Collateral. With respect to a purchase of all of the outstanding Notes by the Issuer or any Affiliate thereof, the Indenture Trustee shall release or cause to be released to the Issuer the Lease Files and for the Properties and the Leases specified in the applicable redemption notice and execute all assignments, endorsements and other instruments furnished to it by the Issuer and the Property Owners without recourse, as shall be necessary to effectuate transfer of the Notes, the Mortgages, the Properties and the Leases to the Issuer’ designees.
(i)In addition to the right of redemption set forth in this Article VII, a Series of Notes shall be subject to mandatory or optional redemption as specified in the applicable Series Supplement, if any.
ARTICLE VIII
SUPPLEMENTAL INDENTURES; AMENDMENTS
Section VIII.01Supplemental Indentures or Amendments Without Consent of Noteholders.
Without the consent of any Noteholder, but upon ten (10) days’ prior written notice to the Rating Agencies, the parties to each agreement listed below, at any time and from time to time, may enter into one or more indentures supplemental hereto, or one or more amendments hereto or to the Notes, the Property Management Agreement, the Guaranties, any Mortgage or any other Transaction Documents, as applicable, for any of the following purposes:
(1)to correct any typographical error or cure any ambiguity, or to cure, correct, amend or supplement any provision herein or in the Notes, the Property Management Agreement, the Guaranties, any Mortgage with respect to a Property or any other Transaction Document; provided, that such action shall not adversely affect the interests of the Noteholders in any material respect; provided, further, that if the Rating Condition is satisfied, any such action shall be deemed not to materially adversely affect the interests of any Noteholder;
(2)to cause any provision herein or in the Notes, the Property Management Agreement, the Guaranties, any Mortgage or any other Transaction Document to conform or be consistent with or in furtherance of the statements set forth in the applicable Private Placement Memorandum (as defined in the applicable Series Supplement) or to correct or supplement any provisions herein or therein which may be defective or inconsistent with any other provisions herein or therein, as applicable;
(3)to institute or modify any procedures relating to compliance with Rule 17g-5 under the Securities Exchange Act;
(4)to convey, transfer, assign, mortgage or pledge any property to the Indenture Trustee so long as the interests of the Noteholders would not be adversely affected in any material respect;
(5)to correct any manifestly incorrect description, or amplify the description, of any Issuer Collateral or Collateral subject to the lien of the Property Owner Guaranty, the Mortgages or this Indenture, as applicable;
(6)to modify the Indenture, the Property Management Agreement, any Mortgage, the Guaranties, or any other Transaction Documents as required or made necessary by any change in Applicable Law, so long as the interests of the Noteholders would not be adversely affected in any material respect; provided, that if the Rating Condition is satisfied, any such action shall be deemed not to materially adversely affect the interests of any Noteholder;
(7)to add to the covenants of any Issuer, or any other party for the benefit of the Noteholders, or to surrender any right or power conferred upon any Issuer under this Indenture, the Property Management Agreement, any Mortgage, the Guaranties or any other Transaction Document;
(8)to add any additional Events of Default hereunder or Servicer Replacement Events (as defined in the Property Management Agreement) under the Property Management Agreement; provided, that such action shall not adversely affect the interests of the Noteholders in any material respect; provided, further, that if the Rating Condition is satisfied, any such action shall be deemed not to materially adversely affect the interests of any Noteholder; or
(9)to evidence and provide for the acceptance of appointment by a successor Indenture Trustee, Custodian, Property Manager, the Issuer Manager, Special Servicer or Back-Up Manager.
No such supplemental indenture or amendment shall be effective unless the Indenture Trustee shall have first received a Tax Opinion to the effect that such amendment will not (x) adversely affect the tax characterization of any outstanding Notes treated as debt for U.S. federal income tax purposes, (y) cause the Issuer to be classified as an “association” or “publicly traded partnership” taxable as a corporation, or cause the Issuer or any portion thereof to be classified as a “taxable mortgage pool”, or (z) cause or constitute an event in which any taxable gain or loss would be recognized by any Noteholder or the Issuer without the express written consent of any affected Noteholders of holders of Notes.
Without the consent of any Noteholder, but upon ten (10) days’ prior written notice to the Rating Agencies, the Issuer and the Indenture Trustee, at any time and from time to time, may enter into one or more amendments to any Account Control Agreement.
Section VIII.02Supplemental Indentures With Consent.
With the consent of the Controlling Party of each Series with Notes Outstanding, and ten (10) days’ prior written notice to the Rating Agencies, the parties to the agreements listed below may enter into one or more indentures supplemental hereto, or one or more amendments hereto or to the Notes, the Property Management Agreement, any Mortgage, the Guaranties or any other Transaction Document for the purpose of adding any provisions hereto or thereto, changing in any manner or eliminating any of the provisions hereof or thereof or modifying in any manner the rights of the Noteholders hereunder or thereunder; provided, that no such supplemental indenture or amendment shall be effective unless the Indenture Trustee shall have first received a Tax Opinion to the effect that such amendment will not (x) adversely affect the tax characterization of any outstanding Notes treated as debt for U.S. federal income tax purposes, (y) cause the Issuer, or any portion thereof, to be classified as an “association” or “publicly traded partnership” taxable as a corporation, and as a “taxable mortgage pool”, or (z) cause or constitute an event in which any taxable gain or loss would be recognized by any Noteholder, or any of the Issuer without the express written consent of any affected Noteholders
of holders of Notes; provided, further, that no such supplemental indenture or amendment may, without the consent of the Noteholders of 100% of the Aggregate Series Principal Balance of the Notes then Outstanding affected thereby:
(1)change a Rated Final Payment Date or the Payment Date of any principal, interest or other amount on any Note;
(2)reduce the Outstanding Principal Balance of a Note, the applicable Note Rate or the applicable Post-ARD Additional Interest Rate (if any);
(3)authorize the Indenture Trustee to agree to delay the timing of, or reduce the payments to be made on or in respect of, the Pledged Securities, the Properties or the Leases, except as provided in this Indenture, in the Property Owner Guaranty or in the Property Management Agreement;
(4)change the coin or currency in which the principal of any Note or interest thereon is payable;
(5)impair the right to institute suit for the enforcement of any such payment on or after a Rated Final Payment Date;
(6)reduce the percentage of the Aggregate Series Principal Balance then Outstanding, the consent of whose Noteholders is required for any such supplemental indenture or amendment, or the consent of whose Noteholders is required for any waiver of defaults under this Indenture and their consequences provided for in this Indenture, or for any other reason under this Indenture;
(7)change any obligation of the Issuer to maintain an office or agency in the places and for the purposes set forth in this Indenture;
(8)except as otherwise expressly provided in this Indenture, in the Property Owner Guaranty, in the Property Management Agreement or in any Mortgage, deprive the Indenture Trustee of the benefit of a first priority security interest in the Issuer Collateral or Collateral, as applicable; or
(9)modify Section 2.11.
It shall not be necessary for the consent of the Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.
Notwithstanding anything to the contrary in this Indenture, none of the above-referenced Transaction Documents may be amended without the consent of the Property Manager, the Issuer Manager, the Special Servicer or the Back-Up Manager, as applicable, if
such person would be materially adversely affected by such amendment, regardless of whether any such person is a party to such agreement.
Section VIII.03Delivery of Supplements and Amendments.
Promptly after the execution by the Issuer and the Indenture Trustee (and any other party, if required) of any supplemental indenture or amendment pursuant to the provisions hereof, the Indenture Trustee, at the expense of the Issuer, payable out of the Issuer Collateral Pool pursuant to Section 5.04, shall furnish a notice setting forth in general terms the substance of such supplemental indenture or amendment to the Rating Agencies and to each Noteholder at the address for such Noteholder set forth in the Note Register.
Section VIII.04Series Supplements.
(a)For purposes of this Article VIII, a Series Supplement executed in accordance with the provisions of Section 2.04(c) shall not be considered an amendment or supplemental indenture for the purposes of this Article VIII. Accordingly, any Series Supplement executed in accordance with the provisions of Section 2.04(c) may amend, modify or supplement this Indenture and the Issuer and the other parties thereto may amend, modify or supplement the Property Owner Guaranty or any of the Mortgages, and any other of the Transaction Documents in connection with any such New Issuance, in each case without the consent of the Noteholders (other than any modification or amendment to clause (ii)(a) or (b) of the definition of “Maximum Property Concentrations”); provided, that no such Series Supplement may, without the consent of each Noteholder holding 100% of the Aggregate Series Principal Balance of the Outstanding Notes affected thereby:
(1)change the Rated Final Payment Date, or the Payment Date of any principal, interest or other amount on any such Note, or reduce the Outstanding Principal Balance thereof, the Note Rate thereon or the applicable Post-ARD Additional Interest Rate thereon (if any), or change the coin or currency in which the principal of any Note or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Rated Final Payment Date thereof;
(2)reduce the percentage of the then Aggregate Series Principal Balance, the consent of whose Holders is required for any such Series Supplement, or the consent of whose Holders is required for any waiver of defaults hereunder and their consequences provided for in this Indenture, or for any other reason under this Indenture (including for actions taken by the Indenture Trustee pursuant to Section 4.01);
(3)change any obligation of the Issuer to maintain an office or agency in the places and for the purposes set forth in this Indenture;
(4)except as otherwise expressly provided in this Indenture, in the Property Management Agreement, the Property Owner Guaranty or in any
Mortgage, deprive any Noteholder of the benefit of a valid first priority perfected security interest in the Issuer Collateral included in the Issuer Collateral Pool or Collateral included in the Collateral Pool, as applicable;
(5)modify the definition of Noteholder; or
(6)modify this Section 8.04.
Section VIII.05Execution of Supplemental Indentures, Etc.
In executing, or accepting the additional trusts created by, any supplemental indenture or amendment permitted by this Article or in accepting the modifications thereby of the trusts created by this Indenture or in giving any consent to any modification of any Lease pursuant to this Indenture, the Indenture Trustee shall be entitled to receive, at the Issuer’ expense payable out of the Issuer Collateral Pool pursuant to Section 5.04, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture, amendment or modification is authorized or permitted by this Indenture and each Series Supplement. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture or amendment or consent to any such modification which affects the Indenture Trustee’s own rights, duties or immunities under this Indenture or otherwise.
ARTICLE IX
COVENANTS; WARRANTIES
Section IX.01Maintenance of Office or Agency.
The Issuer shall maintain or cause to be maintained an office or agency in the continental United States where notices and demands to or upon the Issuer and the Property Owners in respect of the Notes, this Indenture, the Property Owner Guaranty and the Mortgages may be served. The Issuer shall give prompt written notice to the Indenture Trustee and the Noteholders of the location, and any change in the location, of such office or agency.
Section IX.02Existence and Good Standing.
Subject to Section 9.08, the Issuer shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect their existence, rights, licenses, permits and corporate franchises and comply in all material respects with all Legal Requirements applicable to them, the Pledged Securities and the Properties. There shall never be committed by any Issuer, any Property Owner or any other Person in occupancy of or involved with the operation or use of any Properties any act or omission affording any Governmental Authority the right of forfeiture as against any Property or any part thereof or any moneys paid in performance of the Issuer’s obligations under any of the Transaction Documents. The Issuer hereby covenant and agree not to commit, permit or suffer to exist any act or omission affording such right of forfeiture. The Issuer shall at all times maintain, preserve and protect, or cause to be maintained, preserved and protected, all franchises and trade names and preserve all the remainder of its
property required for the conduct of its business and shall keep (or cause to be kept) such properties 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, as is more fully provided in this Indenture, the Property Owner Guaranty and the Property Management Agreement. The Issuer shall cause the Property Owners to keep (or in turn cause the Tenants under each applicable Lease to keep) the Properties insured at all times by financially sound and reputable insurers, to such extent and against such risks, and maintain liability and such other insurance, as is more fully provided in this Indenture, the Property Owner Guaranty and the Property Management Agreement.
Section IX.03Payment of Taxes and Other Claims.
(a)The Issuer shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all applicable taxes, assessments and governmental charges and claims (the “Taxes”) levied or imposed by a governmental taxation authority upon the Issuer or upon the income, profits or property of the Issuer or any Property Owner, or shown to be due on the tax returns filed by the Issuer, except as set forth in Section 9.03(b); provided, that such failure to pay or discharge will not cause a forfeiture of, or a lien (other than a Permitted Encumbrance) to encumber, any property included in the Issuer Collateral or the Collateral. Upon the written direction of the Issuer Manager, the Indenture Trustee is authorized to pay out of the Payment Account, prior to making payments on the Notes, any such Taxes which, if not paid, would cause a forfeiture or sale of, or a lien (other than a Permitted Encumbrance) to encumber, any property included in the Issuer Collateral or the Collateral.
(b)After prior written notice to the Indenture Trustee, any Issuer, at its own expense, may in good faith contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the amount or validity or application in whole or in part of any applicable Taxes; provided, that: (i) no Event of Default has occurred and remains uncured; (ii) such proceeding shall not be precluded by, and be conducted in accordance with the provisions of, any other instrument to which the Issuer is subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances; (iii) no applicable Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, canceled or lost; (iv) the Issuer shall promptly upon final determination thereof pay, or cause to be paid, the amount of any such Taxes, together with all costs, interest and penalties which may be payable in connection therewith; (v) such proceeding shall suspend the collection of all or a portion of such contested Taxes from the applicable Pledged Securities or Property (provided that in the event that collection action is suspended only in respect of a portion of such Taxes, this Section 9.03(b) shall only apply in respect of such suspended portion); and (vi) the Issuer shall furnish such security and/or reserves as may be required in the proceeding, or as may be reasonably requested by the Indenture Trustee or as required in accordance with GAAP, to insure the payment of any such Taxes, together with all interest and penalties thereon; provided, that the Indenture Trustee shall not require the Issuer to post additional security if a contest is being conducted by a Tenant under an applicable Lease (even if the Issuer or related Property Owner has joined in such proceeding to accommodate such Tenant’s contest) if such contest is conducted in accordance
with such Lease and the related Tenant has provided such security as such Property Owner may be entitled to require under such Lease. The Indenture Trustee may transfer any such cash deposit or part thereof held by the Indenture Trustee to the claimant entitled thereto at any time when, in the judgment of the Indenture Trustee, the entitlement of such claimant is established.
Section IX.04Validity of the Notes; Title to the Issuer Collateral; Lien.
(a)The Issuer represents and warrants to the other parties hereto that the Issuer is duly authorized under Applicable Law and the related Issuer Operating Agreement to create and issue the Notes, to pledge the applicable Issuer Collateral included in the Issuer Collateral Pool to the Indenture Trustee, to execute and deliver this Indenture, the other documents referred to herein to which it is a party and all instruments included in the Issuer Collateral Pool which it has executed and delivered, and that all partnership, limited liability company, corporate or trust action and governmental consents, authorizations and approvals necessary or required therefor have been duly and effectively taken or obtained. The Notes, when issued, will be, and this Indenture and such other documents are, valid and legally binding obligations of the Issuer enforceable in accordance with their terms, subject only to bankruptcy, reorganization, insolvency and other laws affecting the enforcement of creditor’s rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law). The Issuer further represents and warrants to the other parties hereto that each related Property Owner is duly authorized under Applicable Law and the related Property Owner Operating Agreement to pledge the applicable Collateral included in the Collateral Pool to the Indenture Trustee, to execute and deliver the documents to which it is a party and all instruments included in the Collateral Pool which it has executed and delivered, and that all partnership, limited liability company, corporate or trust action and governmental consents, authorizations and approvals necessary or required therefor have been duly and effectively taken or obtained.
(b)The Issuer represents and warrants to the other parties hereto that (i) each applicable Property Owner has good title to, and is the sole owner of, each Property and Lease, as applicable, and all other applicable Collateral included in the Collateral Pool, free and clear of any pledge, lien, encumbrance or security interest other than Permitted Encumbrances and the liens created hereby and under the Property Owner Guaranty and the related Mortgages, (ii) this Indenture creates a valid and continuing security interest in each such item of the Issuer Collateral Pool and the Property Owner Guaranty creates a valid and continuing security interest in each such item of the Collateral Pool, in each case in which a security interest may be created under Article 9 of the UCC in favor of the Indenture Trustee, which security interest is prior to all other liens, encumbrances and security interests, subject only to exceptions permitted in this Indenture, in the Property Management Agreement and in the Property Owner Guaranty and the related Mortgages, as applicable, and is enforceable as such against creditors of and purchasers from the Issuer and/or related Property Owners, subject only to bankruptcy, reorganization, insolvency and other laws affecting the enforcement of creditor’s rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law), (iii) the Property Owner Guaranty and each Mortgage creates a valid lien upon the applicable Property and Lease specified therein, which lien is prior to all other liens,
encumbrances and security interests, subject only to exceptions permitted in this Indenture, in the Property Management Agreement, in the Property Owner Guaranty and in such Mortgage, and is enforceable as such against creditors of and purchasers from the Issuer and/or related Property Owners, subject only to bankruptcy, reorganization, insolvency and other laws affecting the enforcement of creditor’s rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law), (iv) the assignment of rents contained in each related Mortgage (or in a separate document, if required by the local jurisdiction) constitutes the legal, valid, binding and enforceable assignment of the related Property Owner’s rights in each related Lease, subject only to exceptions permitted in this Indenture, in the Property Management Agreement, in the Property Owner Guaranty and in such Mortgage or separate document and to bankruptcy reorganization, insolvency and other laws affecting the enforcement of creditor’s rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law, and (v) the Issuer and all related Property Owners have received all consents and approvals required by the terms of the applicable Issuer Collateral to Grant such Issuer Collateral included in the Issuer Collateral Pool to the Indenture Trustee as provided herein and to the terms of the applicable Collateral to Grant such Collateral included in the Collateral Pool to the Indenture Trustee as provided in the Property Owner Guaranty and related Mortgages.
(c)The Issuer have caused the filing of appropriate financing statements with the Secretary of State of the State of Delaware in order to perfect the security interests in the Issuer Collateral and Collateral granted to the Indenture Trustee hereunder, to the extent such security interests may be perfected by such filing.
(d)Other than the lien and security interest Granted to the Indenture Trustee hereunder and under the Property Owner Guaranty and the Mortgages (and as otherwise permitted in the Property Management Agreement, the Property Owner Guaranty or this Indenture), the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Issuer Collateral included in the Issuer Collateral Pool or any of the Collateral included in the Collateral Pool. The Issuer have not authorized the filing of and are not aware of any financing statements against any the Issuer that include a description of collateral covering the Issuer Collateral and/or the Collateral other than any financing statements filed in favor of the Indenture Trustee. The Issuer are not aware of any judgment or tax lien filings against any the Issuer.
(e)The Issuer shall ensure that all cash and investment property at any time owned by the Issuer and held as part of the Issuer Collateral Pool or owned by the Property Owners and held as part of the Collateral Pool is deposited and maintained in the Collection Account, the Payment Account, the DSCR Reserve Account, the Release Account, the Liquidity Reserve Account, the Hedge Counterparty Accounts or any other account subject to an Account Control Agreement. Each such Account (other than the Collection Account) shall be maintained in the name of the Indenture Trustee, and the Issuer shall not consent to the bank or securities intermediary maintaining any such account complying with instructions or entitlement orders of any Person other than a Property Manager, the Issuer Manager or any sub-manager in accordance with the Property Management Agreement or the Indenture Trustee. If any such account is not
held at a depository institution that is the same as the Indenture Trustee, the Issuer will cause the bank or securities intermediary maintaining the Collection Account, the Release Account, the Payment Account, the Liquidity Reserve Account, the DSCR Reserve Account or any other Account held as part of the Issuer Collateral Pool, to execute and deliver to the Indenture Trustee an Account Control Agreement with respect to such account.
(f)The Issuer represents and warrants that the Indenture is not required to be qualified under the 1939 Act and that it is not required to be registered as an “investment company” under the 1940 Act.
Section IX.05Protection of Issuer Collateral Pool and Collateral Pool.
The Issuer and, to the extent directed by the Issuer or the Requisite Global Majority, the Indenture Trustee, will from time to time execute and deliver all such amendments and supplements hereto (subject to Sections 8.01 and 8.02) and all such financing statements, continuation statements, instruments of further assurance and other instruments (provided, however, that the Indenture Trustee will not be obligated to prepare or file any such supplements, statements or other instruments), and will take such other action necessary or advisable to:
(a)Grant more effectively all or any portion of the Issuer Collateral Pool or to cause the Property Owners to Grant more effectively all or any portion of the Collateral Pool;
(b)maintain or preserve the lien (and the priority thereof) of the Property Owner Guaranty and the Mortgages and this Indenture or carry out more effectively the purposes hereof;
(c)perfect, publish notice of, or protect the validity of any Grant made or to be made by or by the Property Owners in the Property Owner Guaranty and the Mortgages or this Indenture;
(d)subject to the Property Management Agreement and the Leases, enforce any of the Leases included in the Collateral Pool; or
(e)preserve and defend title to the Issuer Collateral included in the Issuer Collateral Pool and to the Collateral included in the Collateral Pool and the rights of the Indenture Trustee in such Issuer Collateral or Collateral, as applicable, against the claims of all Persons and parties.
Each of the Issuer hereby designates the Indenture Trustee, its agent and attorney-in-fact, to execute and deliver any financing statement, continuation statement or other instrument required pursuant to this Section 9.05; provided, that, subject to and consistent with Section 5.01, the Indenture Trustee will not be obligated to prepare or file any such statements or instruments.
Section IX.06Covenants.
(a)For so long as the Notes of any Series are outstanding, no Issuer shall or shall cause a Property Owner to:
(i)cause or permit any Issuer Collateral Transfer of a legal or beneficial interest in any Property Owner, Property, Lease or any part thereof or any legal or beneficial interest therein or any other part of the Issuer Collateral Pool or Collateral Pool, as applicable, except as expressly permitted by this Indenture, the Property Owner Guaranty or the Property Management Agreement;
(ii)dissolve or liquidate in whole or in part, except as provided in Section 9.08;
(iii)engage, directly or indirectly, in any business other than that arising out of the issuance of the Notes and the actions contemplated or required to be performed under the related Issuer Operating Agreement or Property Owner Operating Agreement, as applicable, this Indenture or other Transaction Documents;
(iv)incur, create or assume any indebtedness for borrowed money other than the Notes or otherwise pursuant to this Indenture or other Transaction Documents;
(v)voluntarily file a petition for bankruptcy or reorganization, make an assignment for the benefit of creditors or commence any similar proceeding;
(vi)change its state of organization, name, identity or organizational status, or otherwise amend its Issuer Operating Agreement or Property Owner Operating Agreement, as applicable, without notifying the Indenture Trustee of such change in writing at least thirty (30) days prior to the effective date of such change and, in the case of a change in the Issuer’s or Property Owner’s organizational status or any such amendment, without first satisfying the Rating Condition;
(vii)withdraw or direct any party to withdraw any funds from the Collection Account, other than in accordance with the terms of this Indenture or the Property Management Agreement;
(viii)except as contemplated by the Transaction Documents, commingle its funds or assets with those of any other Person and shall not participate in any cash management system with any other Person;
(ix)pledge its assets to or for the benefit of any other Person other than with respect to loans secured by the Pledged Securities or the Property and no such pledge remains outstanding except to the Indenture Trustee, for the benefit of the Noteholders to secure the Notes;
(x)other than capital contributions and distributions permitted under the terms of its organizational documents and other than as contemplated by the Property Management Agreement and other Transaction Documents, enter into or be a party to, any transaction with any of its partners, members, shareholders or Affiliates except in the ordinary course of its business and on terms which are commercially reasonable terms comparable to those of an arm’s-length transaction with an unrelated third party;
(xi)other than as contemplated by the terms of its organizational document, indemnify its partners, officers, directors or members, as the case may be, in each case unless such an obligation or indemnification is fully subordinated to the Notes and shall not constitute a claim against it in the event that its cash flow is insufficient to pay the Notes;
(xii)other than with respect to a pledge or financing under a repurchase transaction of the related Issuer Interests, cause or permit a voluntary or involuntary sale, transfer, exchange, encumbrance, pledge or assignment or any other transfer or disposition of (directly, voluntarily or involuntarily, by operation of law or otherwise, and whether for consideration or of record) any of the ownership interests in the Issuer or the Issuer Member;
(xiii)without the consent the Requisite Global Majority, be, become or hold itself out (or permit itself to be held out) as being liable for the debts or other obligations of any other Person, or hold out its credit (or permit its credit to be held out) as being available to satisfy the obligation of any other Person; except for (A) debts or other obligations secured by the Issuer Collateral and assumed in its entirety by the Issuer at the time it acquired the related Issuer Collateral, and (B) the Notes; or
(xiv)take any action to cause any Issuer or Property Owner, or portions thereof, not otherwise classified as a corporation for U.S. federal income tax purposes to be classified as an association or “publicly traded partnership” that is taxable as a corporation or as a “taxable mortgage pool” including, without limitation, by filing any returns, elections or statements with the applicable United States tax authorities.
(b)For so long as the Notes of any Series are outstanding, the Issuer covenants, that:
(i)it shall cause each Property Owner to be organized solely for the purpose of:
(A)in the case of each Property Owner that is organized as a limited liability company: (1) to acquire, own, hold, sell, transfer, pledge, mortgage, borrow money against, finance, refinance or otherwise deal with the related Property as maybe described in each Property Owner’s limited liability company agreement, (2) to act as landlord, lessor, or similar designation for the related Lease and (3) to engage in any lawful act or activity and to exercise any powers permitted limited liability companies organized under the laws of the state of Delaware;
(B)in the case of each Property Owner that is organized as a limited partnership: (1) to acquire, own, hold, sell, transfer, pledge, mortgage, borrow money against, finance, refinance or otherwise deal with the related Property, to act as landlord, lessor, or similar designation under the related Lease and (2) to engage in any lawful act or activity and to exercise any powers permitted limited partnerships organized under the laws of the state of Delaware;
(ii)it shall and shall cause each Property Owner to not have any assets other than as contemplated in the Transaction Documents and personal property necessary or incidental to its ownership and operation of such assets;
(iii)it shall and shall cause each Property Owner to be structured as a single member, bankruptcy-remote, special-purpose entity consistent with the requirements of each applicable Rating Agency;
(iv)it (A) shall and shall cause each Property Owner to maintain its financial statements and accounting records, if any, and other entity documents separate from those of any other Person; (B) shall not permit its assets to be listed as assets on the financial statement of any of its Affiliates except as required by GAAP;
(v)it shall and shall cause each Property Owner to maintain an arm’s-length relationship with each of its Affiliates, not enter into any contract or agreement or amendment thereof with any of its Affiliates, unless the terms are commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties, and transact all business with its Affiliates pursuant to enforceable agreements with material terms established at the inception that will not be amendable except with the consent of each of the parties to such agreement; or
(vi)to the extent that any Issuer or Property Owner leases premises from an Affiliate, the Issuer or Property Owner shall pay appropriate, fair and reasonable compensation or rental to the lessor.
Section IX.07Statement as to Compliance.
The Issuer shall deliver to the Indenture Trustee and to each Rating Agency, within one hundred twenty (120) days after the end of each fiscal year commencing with 2021, an Officer’s Certificate of the related Issuer Member on behalf of the Issuer stating that, in the course of the performance by the officer executing such Officer’s Certificate of such officer’s present duties as an officer of the Issuer, such officer would normally obtain knowledge or have made due inquiry of employees of the Issuer and the Issuer’s Affiliates as to the existence of any condition or event which would constitute an Event of Default after the giving of notice or lapse of time or both and that to the best of the officer’s knowledge, (a) the Issuer has fulfilled all of its obligations under this Indenture and all related Property Owners have fulfilled all of their respective obligations under the Property Owner Guaranty in all material respects throughout such year, or, if there has been an Event of Default in the fulfillment of any such obligation in
any material respect, specifying each such default known to such officer and the nature and status thereof, and (b) as of the end of such fiscal year, no Event of Default has occurred and is continuing and no condition or event that would constitute an Event of Default after notice or lapse of time or both has occurred, or, if such an event has occurred and is continuing, specifying each such event known to such officer and the nature and status thereof.
Section IX.08Issuer May Consolidate, Etc., Only on Certain Terms.
(a)For so long as the Notes of any Series are outstanding, the Issuer may not consolidate or merge with or into any other Person or convey or transfer all or substantially all of the applicable Issuer Collateral Pool or cause any Property Owner to consolidate or merge with or into any other Person or convey or transfer all or substantially all of the applicable Collateral Pool to any Person (other than as provided in the Transaction Documents) without the consent of the Requisite Global Majority, unless:
(i)the Person (if other than any the Issuer) formed by or surviving such consolidation or merger or that acquires by conveyance or transfer the Issuer Collateral Pool or Collateral Pool (the “Successor Person”) shall be a Person organized and existing under the laws of the United States of America or of any State thereof, shall have expressly assumed by written instrument, and executed and delivered such written instrument to the Indenture Trustee, the obligation (to the same extent as the Issuer or Property Owner, as applicable was so obligated) to either make payments of principal, interest and other amounts, as applicable, on all of the applicable Notes and the obligation to perform every covenant of this Indenture on the part of the Issuer or to perform every obligation and covenant of the Property Owner Guaranty, respectively, to be performed or observed, all as provided herein and therein;
(ii)at the time of, and immediately after giving effect to, such transaction, no Event of Default shall have occurred and be continuing or Early Amortization Period shall have occurred and be continuing;
(iii)the Indenture Trustee shall have received written confirmation that the Rating Condition is satisfied;
(iv)any the Issuer shall or shall have caused the related Property Owner to have delivered to the Indenture Trustee an Officers’ Certificate and an Opinion of Counsel, each to the effect that, such consolidation, merger, conveyance or transfer complies with and satisfies all conditions precedent set forth in this Article IX;
(v)the Successor Person shall have delivered to the Indenture Trustee an Officer’s Certificate stating that (1) the Successor Person has good and marketable title to the applicable Issuer Collateral included in the Issuer Collateral Pool or the applicable Collateral included in the Collateral Pool, as applicable, free and clear of any lien, security interest or charge other than the lien and security interest of this Indenture or the Property Owner Guaranty and the related Mortgages, as applicable, and any other lien permitted hereby or thereby, and (2) immediately following the event which causes
the Successor Person to become the Successor Person, the Indenture Trustee continues to have a perfected security interest in such Issuer Collateral included in the Issuer Collateral Pool or such Collateral included in the Collateral Pool, as applicable, to the extent a security interest may be created and perfected under Article 9 of the UCC and a valid, first priority lien (subject to Permitted Encumbrances) in the related Pledged Securities or Properties and Leases, as applicable; and
(vi)the Successor Person shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that, with respect to a Successor Person that is a corporation, partnership or trust: such Successor Person shall be duly organized, validly existing and in good standing in the jurisdiction in which such Successor Person is organized; that the Successor Person has sufficient power and authority to assume the obligations set forth in clause (i) above and to execute and deliver an indenture supplement hereto for the purpose of assuming such obligation; that the Successor Person has duly authorized the execution, delivery and performance of any indenture supplement and that such supplemental indenture is a valid, legal and binding obligation of the Successor Person, enforceable in accordance with its terms, subject only to bankruptcy, reorganization, insolvency and other laws affecting the enforcement of creditor’s rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law); and that, immediately following the event which causes the Successor Person to become the Successor Person, the Indenture Trustee continues to have a perfected security interest in the applicable Issuer Collateral included in the Issuer Collateral Pool or applicable Collateral included in the Collateral Pool, as applicable, to the extent a security interest may be created and perfected under Article 9 of the UCC.
(b)Upon any consolidation or merger, or any conveyance or transfer of all or substantially all of the Issuer Collateral Pool or Collateral Pool (unless in connection with a Series Issuer Collateral Release), the Successor Person shall succeed to, and be substituted for, and may exercise every right and power of, an Issuer under this Indenture or a Property Owner under the Property Owner Guaranty with the same effect as if such Successor Person had been named as an Issuer or Property Owner herein or therein. In the event of any such conveyance or transfer of the Issuer Collateral Pool permitted by this Section 9.08, the Person named as an “Issuer” in the first paragraph of this Indenture, or any successor that shall theretofore have become such in the manner prescribed in this Article IX and that has thereafter effected such a conveyance or transfer, may be dissolved, wound up and liquidated at any time thereafter, and such Person thereafter shall be released from its liabilities as obligor and maker on all of the then outstanding Notes and from its obligations under this Indenture. In the event of any such conveyance or transfer of the Collateral Pool permitted by this Section 9.08, the Person named as a “Property Owner”, or any successor that shall theretofore have become such in the manner prescribed in this Article IX and that has thereafter effected such a conveyance or transfer, may be dissolved, wound up and liquidated at any time thereafter, and such Person thereafter shall be released from its liabilities as obligor and maker from its obligations under the Property Owner Guaranty.
Section IX.9Litigation. The Issuer shall give prompt written notice to the Indenture Trustee of any litigation or governmental proceedings pending against the Issuer or any Property Owner which reasonably may be expected to materially and adversely affect the Issuer’s (or Property Owner’s) condition (financial or otherwise) or business or any Pledged Security or Property.
Section IX.10Notice of Default. The Issuer shall promptly advise the Indenture Trustee in writing of any material adverse change in the Issuer’s or any related Property Owner’s condition, financial or otherwise not otherwise reported, or of the occurrence of any material Event of Default of which the Issuer has knowledge.
Section IX.11Cooperate in Legal Proceedings. The Issuer shall cooperate fully with the Indenture Trustee with respect to any proceedings before any court, board or other Governmental Authority which may in any way affect the rights of the Indenture Trustee hereunder or any rights obtained by the Indenture Trustee under any of the other Transaction Documents and, in connection therewith, permit the Indenture Trustee, at its election, to participate in any such proceedings.
Section IX.12Insurance Benefits. The Issuer shall and shall cause the Property Owners to cooperate with the Indenture Trustee in obtaining for the Indenture Trustee the benefits of any proceeds of the insurance policies lawfully or equitably payable in connection with any applicable Property, subject to the rights of Tenants under the applicable Leases and the terms of the Property Management Agreement, and the Indenture Trustee shall be reimbursed for any expenses incurred in connection therewith (including reasonable attorneys’ fees and disbursements) out of such insurance proceeds.
Section IX.13Costs of Enforcement. In the event (a) that any Mortgage encumbering any Property is foreclosed in whole or in part or that any such Mortgage is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of the foreclosure of any mortgage prior to or subsequent to any Mortgage encumbering any Property in which proceeding the Indenture Trustee is made a party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of any Issuer or related Issuer Member or any related Property Owner or an assignment by the Issuer or related Issuer Member or such Property Owner for the benefit of its creditors, the Issuer, its successors or assigns, shall be chargeable with and agrees to pay all reasonable costs of collection and defense, including reasonable attorneys’ fees and costs, incurred by the Indenture Trustee or the Issuer or Property Owner in connection therewith and in connection with any appellate proceeding or post-judgment action involved therein, together with all required service or use taxes.
Section IX.14Performance of Issuers’ Duties by the Related Issuer Member. The duties of the Issuer will be performed on behalf of the Issuer by its Board of Managers or the related Issuer Member pursuant to the Issuer Operating Agreement.
Section IX.15Further Acts, etc. The Issuer will, at the Issuer’s expense, and without expense to the Indenture Trustee, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, mortgages, assignments, notices of assignment, UCC Financing
Statements or continuation statements, transfers and assurances as the Indenture Trustee shall, from time to time, reasonably require, for the better assuring, conveying, assigning, transferring, and confirming unto the Indenture Trustee the property and rights hereby deeded, mortgaged, given, granted, bargained, sold, alienated, offset, conveyed, confirmed, pledged, assigned and hypothecated or intended now or hereafter so to be, or which the Issuer or any related Property Owner may be or may hereafter become bound to convey or assign to the Indenture Trustee, or for carrying out the intention or facilitating the performance of the terms of this Indenture or the Property Owner Guaranty or for filing, registering or recording this Indenture or the Property Owner Guaranty. The Issuer will promptly execute and deliver and hereby authorizes the Indenture Trustee to execute in the name of the Issuer or Property Owner or without the signature of the Issuer or Property Owner to the extent the Indenture Trustee may lawfully do so, one or more financing statements or other instruments, to evidence more effectively the security interest of the Indenture Trustee in the Pledged Securities and/or the Properties. Upon foreclosure, the appointment of a receiver or any other relevant action, each the Issuer will and will cause each Property Owner to, at the cost of the Issuer and without expense to the Indenture Trustee, cooperate fully and completely to effect the assignment or transfer of any license, permit, agreement or any other right necessary or useful to the operation of the Properties. The Issuer grants to the Indenture Trustee an irrevocable power of attorney coupled with an interest for the purpose of exercising and perfecting any and all rights and remedies available to the Indenture Trustee at law and in equity, including, without limitation, such rights and remedies available to the Indenture Trustee pursuant to this Section.
Section IX.16Payment of Debts. The Issuer will and will cause each Property Owner to remain solvent and the Issuer will and will cause each Property to pay its respective debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
Section IX.17Single-Purpose Status. The Issuer will not, nor will the Issuer permit the Issuer Member or any related Property Owner to, amend, modify or otherwise change the certificate of formation, limited liability agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of the Issuer in any manner that would affect the status of the Issuer or Issuer Member or such Property Owner as a single-purpose, bankruptcy-remote entity, without (i) the prior written consent of the Requisite Global Majority, in its sole discretion, and (ii) the satisfaction of the Rating Condition.
Section IX.18Separateness of The Issuer. The Issuer will and will cause each Property Owner to be, and at all times will and will cause each such Property Owner to hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of the Issuer), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
Section IX.19Capitalization of the Issuer. The Issuer shall and shall cause each Property Owner to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.
Section IX.20Maintenance of Assets. The Issuer will and will cause each Property Owner to maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any Affiliate of any constituent party, or any other Person.
Section IX.21Compliance with Representations and Warranties. The Issuer Member shall at all times comply, and will cause the Issuer and Property Owners to comply, with each of the applicable representations, warranties, and covenants contained in this Indenture (including any Series Supplement) and the Property Owner Guaranty, as applicable, as if such representation, warranty or covenant was made directly by the Issuer Member.
Section IX.22Independent Managers or Independent Directors. The Issuer shall at all times cause there to be at least one (1) duly appointed director or one (1) duly appointed manager (an “Independent Manager”) of the Issuer who is an individual duly who, at the time of such appointment, is not and will not be serving as the Manager of the Issuer, and has not been at any time during the preceding five (5) years: (a) a direct or indirect legal or beneficial owner of any equity interest in the Issuer, the Member or any of their respective Affiliates, (b) a creditor, customer, supplier, employee, officer, director, member, manager or contractor of, or other Person who derives any of its purchases or revenues from its activities with, the Issuer, the Member or any of their respective Affiliates (except as an Independent Manager of the Issuer), (c) an individual directly or indirectly controlling, controlled by or under common control with the Issuer, the Member or any of their respective Affiliates, or any creditors, suppliers, customers, employees, officers, other directors, Manager, or contractors of the Issuer, the Member or any of their respective Affiliates, or (d) a member of the immediate family of any individual described in (a), (b) or (c) above Each Independent Manager is designated as a “manager” of the Issuer within the meaning of Section 18-101(10) of the Act.
As used herein, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
Notwithstanding the foregoing, no individual shall be disqualified from serving as an Independent Manager solely on account of (i) his or her receipt of customary compensation, if any, from the Issuer in exchange for his or her service as Independent Manager, (ii) his or her employment by or ownership interest in any reputable, national service entity engaged by the Issuer to fill the position of Independent Manager required hereunder and that (A) is not an Affiliate of the Issuer or the Member and (B) regularly provides as a principal component of its business the services of an independent director, independent trustee or independent manager (as determined pursuant to requirements substantially similar in all material respects to those set forth in this definition) to special-purpose, bankruptcy-remote entities, (iii) his or her service as an independent director, independent trustee or independent manager (as determined pursuant to
requirements substantially similar in all material respects to those set forth in this definition) of another limited or special-purpose, bankruptcy-remote entity or (iv) his or her receipt of customary compensation, if any, in exchange therefor from such other limited or special-purpose bankruptcy-remote entity.
Section IX.23Employees. The Issuer shall and shall cause each related Property Owner to pay its own liabilities and expenses, including, without limitation, the salaries of its own employees, if any, out of its own funds and assets and maintain a sufficient number of employees if any are required in light of its contemplated business operations.
Section IX.24Assumptions in Insolvency Opinion. The Issuer shall and shall cause each related Property Owner to conduct its business so that the assumptions made with respect to the Issuer in any non-consolidation Opinion of Counsel, dated the date of the applicable Series Supplement, delivered in connection with the Notes and any subsequent non-consolidation opinion delivered on behalf of the Issuer or Property Owner as required by the terms and conditions of this Indenture (an “Insolvency Opinion”) shall be true and correct in all respects.
Section IX.25Performance by the Issuer. The Issuer shall and shall cause each related Property Owner to observe, perform and satisfy all the terms, provisions, covenants and conditions of, and shall pay when due all applicable costs, fees and expenses to the extent required under, the Transaction Documents executed and delivered by, or applicable to, the Issuer or Property Owner, as applicable.
(b)The Issuer shall and shall cause each related Property Owner to in a timely manner observe, perform, enforce and fulfill each and every covenant, term and provision of each Transaction Document executed and delivered by, or applicable to, the Issuer or Property Owner, or recorded instrument affecting or pertaining to the applicable Pledged Securities or Properties, to the extent the failure to observe or perform the same would materially and adversely affect the Issuer’s interest in such Pledged Securities or Property Owner’s interest in such Properties, and shall not enter into or otherwise suffer or permit any amendment, waiver, supplement, termination or other modification of any Transaction Document executed and delivered by, or applicable to, the Issuer except in accordance with the terms and provisions thereof and hereof.
Section IX.26Use of Proceeds. The Issuer shall use the proceeds of the Notes to (a) repay and discharge, or cause to be repaid and discharged, any existing loans relating to the Pledged Securities or the Properties, (b) pay costs and expenses incurred in connection with the closing of any transaction contemplated by this Indenture, (c) fund any working capital requirements of the Properties, (d) distribute the balance, if any, to their respective partners or equity holders, and (e) as otherwise provided in the related Series Supplement or Property Owner Guaranty.
Section IX.27Other Rights, etc. It is agreed that the risk of loss or damage to any Property is on the Issuer, and the Indenture Trustee shall have no liability whatsoever for decline in value of the Property or for failure to determine whether insurance in force is adequate as to the amount of risks insured.
Section IX.28Books and Records. The Issuer will and will cause the related Property Owners to maintain all of their respective books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and file its own tax returns (provided that each the Issuer’s or Property Owner’s financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of the Issuer and its assets and liabilities). The Issuer shall and shall cause each related Property Owner to maintain their respective books, records, resolutions and agreements as official records.
Section IX.29Overhead Expenses. The Issuer shall allocate fairly and reasonably overhead expenses, if any, that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate.
Section IX.30Embargoed Persons. The Issuer has performed and shall perform reasonable due diligence to insure that at all times throughout the term of the Notes, (a) none of the funds or other assets of the Issuer constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person; (b) no Embargoed Person has any interest of any nature whatsoever in the Issuer, with the result that the investment in the Issuer (whether directly or indirectly) is prohibited by law or the Notes are in violation of law; and (c) none of the funds of the Issuer, have been derived from, or are the proceeds of, any unlawful activity, including money laundering, terrorism or terrorism activities, with the result that the investment in the Issuer (whether directly or indirectly) is prohibited by law or the Notes are in violation of law, or may cause any of the related Pledged Securities and/or Properties to be subject to forfeiture or seizure.
ARTICLE X
RESERVED
ARTICLE XI
COSTS
Section XI.01Performance at the Issuer’s Expense.
The Issuer acknowledge and confirm that the Indenture Trustee shall impose certain administrative processing fees in connection with the release or substitution of any Property, which fees are payable to the Indenture Trustee under the Property Management Agreement as an Extraordinary Expense. The Issuer further acknowledge and confirm that they shall be responsible for the payment of all costs of reappraisal of any Property or any part thereof, whether required by law, regulation or any Governmental Authority. The Issuer hereby acknowledge and agree to pay all such fees (as the same may be reasonably increased or decreased from time to time), and any additional fees of a similar type or nature which may reasonably be imposed by the Indenture Trustee from time to time, upon the occurrence of any release or substitution of any Property or otherwise, in accordance with the priorities set forth herein and in the Property Management Agreement and as Extraordinary Expenses. Wherever it
is provided for herein that an Issuer pay any costs and expenses, such costs and expenses shall include, but not be limited to, all reasonable legal fees and disbursements of the Indenture Trustee in accordance with the priorities set forth herein.
ARTICLE XII
MISCELLANEOUS
Section XII.01Electronic Signatures and Transmission.
(a)For purpose of this Indenture, any reference to “written” or “in writing” means any form of written communication, including, without limitation, electronic signatures, and any such written communication may be transmitted by Electronic Transmission. “Electronic Transmission” means any form of communication not directly involving the physical transmission of paper, including the use of, or participation in, 1 or more electronic networks or databases (including 1 or more distributed electronic networks or databases), that creates a record that may be retained, retrieved and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated process. The Indenture Trustee is authorized to accept written instructions, directions, reports, notices or other communications delivered by Electronic Transmission and shall not have any duty or obligation to verify or confirm that the Person sending instructions, directions, reports, notices or other communications or information by Electronic Transmission is, in fact, a Person authorized to give such instructions, directions, reports, notices or other communications or information on behalf of the party purporting to send such Electronic Transmission; and the Indenture Trustee shall not have any liability for any losses, liabilities, costs or expenses incurred or sustained by any party as a result of such reliance upon or compliance with such instructions, directions, reports, notices or other communications or information to the Indenture Trustee, including, without limitation, the risk of the Indenture Trustee acting on unauthorized instructions, notices, reports or other communications or information, and the risk of interception and misuse by third parties.
(b)Any requirement in this Indenture or the Notes that a document, including the Notes, is to be signed or authenticated by “manual signature” or similar language shall not be deemed to prohibit signature to be by facsimile or electronic signature and shall not be deemed to prohibit delivery thereof by Electronic Transmission.
(c)Notwithstanding anything to the contrary in this Indenture, any and all communications (both text and attachments) by or from the Indenture Trustee that the Indenture Trustee in its sole discretion deems to contain confidential, proprietary and/or sensitive information and sent by Electronic Transmission will be encrypted. The recipient of the Electronic Transmission will be required to complete a one-time registration process.
Section XII.02Execution Counterparts.
This Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original regardless of whether delivered in physical or electronic form,
but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Indenture in Portable Document Format (PDF) or by facsimile transmission shall be as effective as delivery of a manually executed original counterpart of this Indenture.
Section XII.03Compliance Certificates and Opinions, Etc.
Upon any application or request by an Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall (at the request of the Indenture Trustee) furnish to the Indenture Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.
Section XII.04Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of an Issuer or Issuer Member or Property Owner may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of an Issuer or Issuer Member or Property Owner stating that the information with respect to such factual matters is in the possession of the Issuer or Issuer Member or Property Owner, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
Whenever this Indenture requires that a document or instrument (other than any Note) be delivered in substantially the form attached hereto as an exhibit, modifications and additions to and deletions from any such exhibit reflected in such document or instrument as delivered hereunder shall not impair the validity or acceptability of such document or instrument (nor shall any Person be entitled to reject such document or instrument as a result thereof) to the extent that such modifications, additions or deletions are approved by the Issuer and are made in a manner consistent with Applicable Law (including changes thereto).
Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that any Person shall deliver any document as a condition of the granting of such application, or as evidence of such Person’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of such Person to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article V.
Section XII.05No Oral Change.
This Indenture, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of any Issuer, Issuer Member, Property Owner or the Indenture Trustee, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought and otherwise in accordance herewith.
Section XII.06Acts of Noteholders.
(a)Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by the Noteholders of any Class of any Series or in their entirety may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” or “Acts” of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 5.01) conclusive in favor of the Indenture Trustee and the Issuer if made in the manner provided in this Section. With respect to authorization to be given or taken by Noteholders, the Indenture Trustee shall be authorized to follow the written directions or the vote of Noteholders of Notes representing more than 50% of the Aggregate Series Principal Balance (or Outstanding Notes of the affected Class, if applicable), unless any greater or lesser percentage is required by the terms hereunder.
(b)The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.
(c)The Series, Class, Outstanding Principal Balance and serial numbers of Notes held by any Person, and the date of holding the same, shall be proved by the Note Register.
(d)Any request, demand, authorization, direction, notice, consent, election, declaration, waiver or other act of any Noteholder shall bind every future Noteholder of the same Note and the Noteholder of every Note issued upon the transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, suffered or omitted to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.
Section XII.7Computation of Percentage of Noteholders.
Unless otherwise specified herein, whenever this Indenture states that any action may be taken by a specified percentage of the Noteholders or the Noteholders of any Class, such statement shall mean that such action may be taken by the Noteholders of such specified percentage of the Aggregate Series Principal Balance or of such Class of Notes, respectively.
Section XII.8Notice to the Indenture Trustee, the Issuer and Certain Other Persons.
Any communication provided for or permitted hereunder shall be in writing and, unless otherwise expressly provided herein, shall be deemed to have been duly given if delivered by courier or mailed by first class mail, postage prepaid, or if transmitted by facsimile or by e-mail and confirmed in a writing delivered or mailed as aforesaid, to: (i) in the case of any Issuer or Property Owner, to c/o c/o CMFT Net Lease Master Issuer LLC, 2398 E Camelback Road, 4th Floor, Phoenix, Arizona 85016, Attention: Nate DeBacker, Legal Counsel, or to such other address as provided in the applicable Series Supplement, as applicable; (ii) in the case of the Indenture Trustee, Citibank, N.A., 388 Greenwich Street Trading, 4th Floor, New York, New York 10013, or at such other address as the Indenture Trustee or Note Registrar may designate from time to time; and (iii) with respect to any applicable Series, in the case of any Rating Agency or Hedge Counterparty, the address of such Rating Agency or Hedge Counterparty as provided in the applicable Series Supplement, or, as to each such Person, such other address or facsimile number as may hereafter be furnished by such Person to the parties hereto in writing.
Citibank, N.A. (the “Bank”) (in each of its capacities hereunder and under the Transaction Documents) agrees to accept and act upon instructions or directions pursuant to this Indenture or any documents executed in connection herewith sent by unsecured email, facsimile transmission or other similar unsecured electronic methods, provided, however, that any person providing such instructions or directions shall provide to the Bank an incumbency certificate listing persons designated to provide such instructions or directions (including the email addresses of such persons), which incumbency certificate shall be amended whenever a person is added or deleted from the listing. If such person elects to give the Bank email (of .pdf or similar files) or facsimile instructions (or instructions by a similar electronic method) and the Bank in its discretion elects to act upon such instructions, the Bank’s reasonable understanding of such instructions shall be deemed controlling. The Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Bank’s reliance upon and compliance with such
instructions notwithstanding such instructions conflicting with or being inconsistent with a subsequent written instruction. Any person providing such instructions or directions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Bank, including without limitation the risk of the Bank acting on unauthorized instructions, and the risk of interception and misuse by third parties.
Section XII.9Notices to Noteholders; Notification Requirements and Waiver.
Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given if in writing and delivered by courier or mailed by first class mail, postage prepaid to each Noteholder affected by such event, at its address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is delivered or mailed in the manner herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular courier and mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to give any such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute a default or Event of Default.
Section XII.10Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer shall bind their successors and permitted assigns, whether so expressed or not.
Section XII.11Interest Charges; Waivers.
This Indenture is subject to the express condition that at no time shall any Issuer be obligated or required to pay interest hereunder at a rate which could subject the Indenture Trustee to either civil or criminal liability as a result of being in excess of the maximum interest rate which the Issuer is permitted by Applicable Law to contract or agree to pay. If by the terms of this Indenture, any Issuer is at any time required or obligated to pay interest hereunder at a rate
in excess of such maximum rate, such rate shall be deemed to be immediately reduced to such maximum rate and all previous payments in excess of the maximum rate shall be deemed to have been payments in reduction of principal and not on account of the interest due hereunder.
The Issuer expressly waives presentment, demand, diligence, protest and all notices of any kind whatsoever with respect to this Indenture, except for notices expressly provided for in this Indenture, the Mortgages or the Notes.
Section XII.12Severability Clause.
In case any provision of this Indenture or of the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall, to the extent permitted by law, not in any way be affected or impaired thereby.
Section XII.13Governing Law.
(a)THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES).
(b)Any action or proceeding against any of the parties hereto relating in any way to this Indenture or any Note or the Issuer Collateral included in the Issuer Collateral Pool or the Property Owner Guaranty or the Collateral included in the Collateral Pool may be brought and enforced in the courts of the State of New York sitting in the borough of Manhattan or of the United States District Court for the Southern District of New York and each of the Issuer irrevocably submits to the jurisdiction of each such court in respect of any such action or proceeding. The Issuer hereby waive, to the fullest extent permitted by law, any right to remove any such action or proceeding by reason of improper venue or inconvenient forum. As long as any of the Notes remain Outstanding, service of process upon any Issuer shall, to the fullest extent permitted by law, be deemed in every respect effective service in any such legal action or proceeding.
Section XII.14Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
Section XII.15Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Noteholders, the Property Manager, the Issuer Manager, the Special Servicer, the Back-Up Manager and any other party secured hereunder or named as a beneficiary of any provision hereof, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section XII.16Trust Obligation.
No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee, the Property Manager, the Issuer Manager, the Back-Up Manager or the Special Servicer, each in its individual capacity or (ii) any partner, owner, member, beneficiary, agent, officer, director, employee, advisor or Control Person of the Indenture Trustee, the Property Manager, the Issuer Manager, the Back-Up Manager or the Special Servicer in its individual capacity or of any successor or assignee of the Indenture Trustee, the Property Manager, the Issuer Manager, the Back-Up Manager or the Special Servicer, each in its individual capacity, except as any such Person may have expressly agreed (it being understood that none of the Indenture Trustee, the Property Manager, the Issuer Manager, the Back-Up Manager or the Special Servicer has any such obligations in its individual capacity).
Section XII.17Inspection.
The Issuer agrees and shall cause each Property Owner to agree that, prior to the occurrence and continuance of an Event of Default not more than once semi-annually and on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuer’s normal business hours, to examine all the books of account, records, reports, and other papers of the Issuer or Property Owner, to make copies and extracts therefrom and to discuss the Issuer’s or Property Owner’s affairs, finances and accounts relating to the Issuer or Property Owners with the officers of the Sponsor on behalf of the Issuer or Property Owners and the Issuer’s or any Property Owner’s employees and independent public accounting firm, all at such reasonable times and as often as may be reasonably requested. The Indenture Trustee shall and shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) or the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder.
Section XII.18Method of Payment.
Except as otherwise provided in Section 2.11(b), all amounts payable or to be remitted pursuant to this Indenture shall be paid or remitted or caused to be paid or remitted in immediately available funds by wire transfer to an account specified in writing by the recipient thereof.
Section XII.19Non-Petition.
Each of the Noteholders, by its acceptance of a Note, and the Indenture Trustee hereby covenants and agrees that, prior to the date which is two years and thirty-one days after the payment in full of the latest maturing Note, it will not institute against, or join with, encourage or cooperate with any other Person in instituting, against an Issuer or Property Owner any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any federal or state bankruptcy or similar law; provided, however, that
nothing in this Section 12.19 shall constitute a waiver of any right to indemnification, reimbursement or other payment from any Issuer pursuant to this Indenture. The provisions of this Section 12.19 shall survive the termination of this Indenture, and the resignation or removal of the Indenture Trustee. Nothing contained herein shall preclude participation by any Noteholder or the Indenture Trustee in the assertion or defense of its claims in any such proceeding involving an Issuer or Property Owner.
Section XII.20Non-Recourse.
The obligations of the Issuer under this Indenture are solely the obligations of the Issuer. No recourse shall be had for the payment of any amount owing in respect of any fee hereunder or any other obligation or claim arising out of or based upon this Indenture against any partner, owner, member, beneficiary, agent, advisor, officer, director, employee, agent or Control Person of the Issuer. Fees, expenses, costs or other obligations payable by an Issuer hereunder shall be payable by the Issuer only to the extent that funds are then available or thereafter become available for such purpose pursuant to Section 2.11. In the event that sufficient funds are not available for their payment pursuant to Section 2.11, the excess unpaid amount of such fees, expenses, costs or other obligations shall in no event constitute a claim (as defined in Section 101 of the Bankruptcy Code) against, or corporate obligation of, the Issuer. Nothing in this Section 12.20 shall be construed to limit the Indenture Trustee, on behalf of the Noteholders, from exercising its rights hereunder and otherwise in accordance with the provisions of the applicable Series Supplement with respect to the Issuer Collateral Pool.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the day and year first above written.
CITIBANK, N.A., not in its individual capacity but solely as Indenture Trustee
By: /s/ Dragana Boskovi
Name: Dragana Boskovi
Title: Senior Trust Officer
Master Indenture (CIM 2020-1)
CMFT NET LEASE MASTER ISSUER LLC, each a Delaware limited liability company, as an Issuer
By: /s/ Nathan DeBacker
Name: Nathan DeBacker
Title: Vice President, Chief Financial Officer and Treasure
Master Indenture (CIM 2020-1)
_____________________________________________________________________________
PROPERTY MANAGEMENT AGREEMENT
Among
CMFT NET LEASE MASTER ISSUER LLC,
as Issuer,
The Property Owners from time to time party hereto,
CIM REAL ESTATE FINANCE OPERATING PARTNERSHIP, LP,
as Issuer Manager,
CREI ADVISORS, LLC,
as Property Manager and as Special Servicer,
CITIBANK, N.A.,
as Indenture Trustee,
and
KEYBANK NATIONAL ASSOCIATION,
as Back-Up Manager
Dated as of July 28, 2021
_____________________________________________________________________________
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SECTION 1. Definitions
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SECTION 2. Appointment
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SECTION 3. Servicing Standard
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SECTION 4. Representations and Warranties of the Property Manager
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SECTION 5. Representations and Warranties of the Issuer Manager
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SECTION 6. Representations and Warranties of the Special Servicer
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SECTION 7. Representations and Warranties of the Back-Up Manager
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SECTION 8. Representations and Warranties of the Property Owners
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SECTION 9. Administration of the Properties and Leases.
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SECTION 10. Collection of Monthly Lease Payments; General Receipts Accounts; Collection Account; Release Account.
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SECTION 11. Advances
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SECTION 12. Withdrawals From the Collection Account, Release Account and Liquidity Reserve Account
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SECTION 13. Investment of Funds in the Collection Account, the Release Account, the Exchange Reserve Account and the Liquidity Reserve Account
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SECTION 14. Maintenance of Insurance Policies: Errors and Omissions and Fidelity Coverage
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SECTION 15. DSCR Reserve Account
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SECTION 16. Servicing Compensation: Interest on Advances.
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SECTION 17. Property Inspections: Collection of Financial Statements: Delivery of Certain Reports
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SECTION 18. Management of Properties Relating to Defaulted Assets
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SECTION 19. Renewals, Modifications, Waivers, Amendments; Consents and Other Matters
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SECTION 20. Transfer of Servicing Between Property Manager and Special Servicer; Record Keeping
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SECTION 21. Sub-Management Agreements.
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SECTION 22. Casualty and Condemnation
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SECTION 23. Environmental Matters
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SECTION 24. Reports to the Issuer and the Indenture Trustee
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SECTION 25. Exchange of Properties.
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SECTION 26. Sale Pursuant to Third Party Purchase Option.
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SECTION 27. Transfer of Lease to New Property
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SECTION 28. Release of Property by a Property Owner
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SECTION 29. Terminated Lease Property
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SECTION 30. Risk-Based Substitution
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SECTION 31. Disposition Period
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TABLE OF CONTENTS
(continued)
Page
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SECTION 32. Qualified Deleveraging Event
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SECTION 33. Series Collateral Release.
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SECTION 34. Like-Kind Exchange
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SECTION 35. Exchange Reserve Account
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SECTION 36. Termination
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SECTION 37. Servicer Replacement Events
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SECTION 38. Appointment of Successor Servicer
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SECTION 39. Back-Up Manager
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SECTION 40. Additional Remedies of the Issuer and the Indenture Trustee upon a Servicer Replacement Event
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SECTION 41. Term of Service; Property Manager and Special Servicer Not to Resign.
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SECTION 42. Rights of Certain Persons in Respect of the Property Manager, the Issuer Manager and the Special Servicer
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SECTION 43. Property Manager, Issuer Manager or Special Servicer as Owner of Notes
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SECTION 44. Indemnities.
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SECTION 45. Miscellaneous
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PROPERTY MANAGEMENT AGREEMENT
THIS PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is entered into as of July 28, 2021, by and among CMFT NET LEASE MASTER ISSUER LLC, a Delaware limited liability company, as issuer (the “Issuer”), the Property Owners (as hereinafter defined) from time to time party hereto, CIM REAL ESTATE FINANCE OPERATING PARTNERSHIP, LP, a Delaware limited partnership, as the issuer manager (the “Issuer Manager”), CREI ADVISORS, LLC, an Arizona limited liability company, as the property manager (in such capacity, the “Property Manager”) and as the special servicer (in such capacity, the “Special Servicer”), CITIBANK, N.A. (the “Indenture Trustee”), and KEYBANK NATIONAL ASSOCIATION (the “Back-Up Manager”).
WHEREAS, the Issuer and the Indenture Trustee are party to that certain Master Indenture, dated as of July 28, 2021 (such agreement, as supplemented by one or more indenture supplements or amendments thereto entered into from time to time, the “Indenture” and such date the “the Series Closing Date”);
WHEREAS, on the Series Closing Date and from time to time thereafter, Issuer will issue notes secured by the Issuer Collateral Pool and guaranteed by the Collateral Pool; and
WHEREAS, Property Manager is in the business of managing commercial real estate properties;
WHEREAS, each of the Property Owners has engaged the Property Manager to perform certain services, including pursuant to the applicable Property Management and Leasing Agreement (as hereinafter defined);
WHEREAS, the Issuer and the Property Owners desire to appoint the Property Manager to manage the Properties as set forth herein and the Property Manager desires to accept such appointment;
WHEREAS, the Special Servicer is in the business of servicing leases related to commercial real estate properties;
WHEREAS, the Issuer and the Property Owners desire to appoint the Special Servicer to service certain Leases as set forth herein and the Special Servicer desires to accept such appointment;
WHEREAS, the Issuer and the Property Owners desire to appoint the Issuer Manager to perform certain services on behalf of the Issuer as set forth herein and the Issuer Manager desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1.Definitions.
(a)Defined Terms. All capitalized terms used in this Agreement and not defined herein shall have the meanings ascribed to them in the Indenture. As used in this Agreement, the following terms shall have the following meanings:
2“Additional Contribution Amount” shall mean, as of any date of determination, an amount of cash the Issuer or the Issuer Manager (on behalf of the Issuer) has deposited in the Collection Account and identified to the Indenture Trustee as an “Additional Contribution Amount” that is not otherwise part of the Available Amount on or prior to such date of determination and is not otherwise subject to the lien of the Indenture; provided, that the Issuer (or the Issuer Manager on behalf of the Issuer) may not make a deposit of any Additional Contribution Amount more than twice in any calendar year, more than twice in any two (2) consecutive Collection Periods (whether or not occurring in the same calendar year), or more than four (4) times in the aggregate from (and including) the most recent series closing date, in each case, unless the Rating Condition is satisfied.
3“Additional Property Owner” shall mean any additional entity that becomes party to this agreement pursuant to Section 18 hereof.
4“Additional Servicing Compensation” shall mean, collectively, Property Manager Additional Servicing Compensation and Special Servicer Additional Servicing Compensation.
5“Additional Subsidies” shall mean funds deposited or held in the Exchange Account other than funds that constitute Relinquished Property Proceeds.
6“Adjusted EBITDAR” shall mean, with respect to any Property, such Property’s (i) pre-tax income, (ii) interest expense, (iii) all non-cash amounts in respect of depreciation and amortization, (iv) all non-recurring income or other one-time adjustments and overhead based on the related parent company’s general and administrative expenses (where available), for the related fiscal period.
7“Advance” shall mean a Property Protection Advance or a P&I Advance, as applicable.
8“Advance Interest” shall mean Interest accrued on any Advance at the Reimbursement Rate and payable to the Property Manager, the Back-Up Manager or the Indenture Trustee, as the case may be, each in accordance with Section 16.
9“Advisory Agreement” shall mean that certain Amended and Restated Management Agreement, dated as of August 20, 2019, by and between CIM Real Estate Finance Trust, Inc. and CIM Real Estate Finance Management, LLC.
10“Aggregate Appraised Value” shall mean, on any date of determination, the sum of the Appraised Values of all Properties.
11“Aggregate Collateral Value” shall mean, on any date of determination, the sum of the Collateral Values of the Properties in the Collateral Pool.
12“Allocated Loan Amount” shall mean, for any Property at any time, the product of (i) the Aggregate Series Principal Balance and (ii) a fraction, (a) the numerator of which is the Collateral Value of such Property and (b) the denominator of which is the Aggregate Collateral Value.
13“Allocated Release Amount” for a Released Property is an amount equal to the lesser of (A) the Fair Market Value and (B) one hundred ten percent (110%) of the Allocated Loan Amount of such Released Property
14“Appraised Value” shall mean, with respect to each Property, an appraised value obtained in accordance with the Indenture and determined pursuant to an independent appraisal completed by an appraiser who is an MAI and an MAI certified appraiser in accordance with the Uniform Standards of Professional Appraisal Practice and which takes into account the leased fee value of the related buildings and land of such Property, consistent with industry standards, and excludes the value of trade equipment and other tangible personal property and business enterprise value, and (i) with respect to any Property in the Collateral Pool as of the Series Closing Date or added to the Collateral Pool on an Issuance Date, is the most recent appraisal report completed by an MAI certified appraiser obtained in connection with the Series Closing Date or Issuance Date in accordance with the requirements of the FIRREA with respect to such Property as of such Issuance Date and (ii) with respect to any Qualified Substitute Property Owner Interest added to the Collateral Pool since the most recent Issuance Date, is the most recent appraisal report completed by an MAI certified appraiser and obtained for the Property related to such Qualified Substitute Property Owner Interest in conjunction with such addition (which appraisal need not be obtained in accordance with the requirements of FIRREA).
15“Agreement” shall mean this Management Agreement together with all amendments hereof and supplements hereto.
16“Available Amount” shall mean, without duplication: (i) all amounts received in respect of the Collateral Pool during the related Collection Period, (ii) all amounts on deposit in the Collection Accounts on the related Determination Date, including amounts earned, if any, on the investment of funds on deposit in the Collection Accounts, the Release Account and the Exchange Reserve Account during the related Collection Period, (iii) Unscheduled Proceeds, (iv) amounts received on account of payments under any Lease Guaranties, (v) amounts received on account of payments under the Sponsor Guaranty and the Property Owner Guaranty, (vi) any amounts that have been released from the Liquidity Reserve Account to the Payment Account to be treated as Available Amounts in accordance with the Indenture on such Payment Date, (vii) any amounts that have been received as a refund of taxes or withholding tax amounts that were previously excluded from the Available Amount by virtue of clause (e) below and (viii) amounts received in connection with a Voluntary Prepayment or Early Refinancing Prepayment; provided, however, that the following amounts will be excluded from Available Amount: (a) amounts on deposit in the Release Account and not transferred to the Collection Account for
such Payment Date, (b) the amount of any Workout Fees, Liquidation Fees or Additional Servicing Compensation, (c) amounts withdrawn from the Collection Accounts to reimburse the Issuer Manager, the Indenture Trustee or the Back-Up Manager, as applicable, for any unreimbursed Advances, including any Nonrecoverable Advances (plus interest thereon) and to pay the Property Management Fees, the Back-Up Management Fee, any Special Servicing Fee and any Emergency Property Expenses, (d) amounts required to be paid by the Issuer or any Co-Issuer as lessor under the Leases in respect of franchise or similar taxes, (e) any amount received from a Tenant as reimbursement for any cost paid by or on behalf of the Issuer or any applicable Co-Issuer as lessor under any Lease, (f) any amounts collected by or on behalf of the Issuer or any applicable Co-Issuer as lessor and held in escrow or impound to pay future obligations due under a Lease, as applicable and (g) amounts received in connection with a Series Collateral Release that are not required to be deposited into the Release Account.
17“Back-Up Management Fee” shall mean an amount equal to the product of (i) one-twelfth of 0.01% and (ii) the aggregate Allocated Loan Amount of all Properties in the Collateral Pool as of the related Determination Date
18“Back-Up Manager” shall mean KeyBank National Association, and its successors and permitted assigns.
19“Collateral Defect” shall mean, with respect to a Property or the related Lease, (a) (i) that any required document with respect to a Lease File is missing (after the date it is required to be delivered) or otherwise deficient or (ii) any representation or warranty set forth in Section 2.21 of the Indenture is breached with respect to such Property or the related Lease and (b) such absence, deficiency or breach materially and adversely affects the value of the related Property or related Lease or the interests of the Issuer, the Noteholders or the holders of any Related Series Notes in the related Property or Lease.
20“Collateral Value” shall mean, as of any determination date with respect to each Property, the Appraised Value of such Property.
21“Collection Account” shall mean the segregated deposit account established with the Collection Account Bank having account number 359954174710.
22“Collection Account Bank” shall mean KeyBank National Association.
23“Collection Period” shall mean, with respect to any Payment Date, the period commencing on the day immediately after the Determination Date in the month immediately preceding the month in which such Payment Date occurs (or, in the case of the initial Payment Date, commencing on the Series Closing Date) and ending on (and including) the Determination Date related to such Payment Date.
24“Condemnation” shall have the meaning set forth in Section 22.
25“Condemnation Proceeds” shall mean all proceeds received in connection with the Condemnation of any Property or Improvements.
“Corrected Unit” shall mean any Property that had been a Specially Managed Unit but with respect to which (a) as of the date of determination, no circumstance identified in clauses (a) through (e) of the definition of the term “Specially Managed Unit” then exists and (b) such of the following as are applicable occur:
(a) if a circumstance described in clause (a) of the definition of the term “Specially Managed Unit” previously existed with respect to such Property, such condition shall have ceased to exist and (i) the related Tenant has made two consecutive full and timely Monthly Lease Payments under the terms of the related Lease (as such terms may be changed or modified in connection with a bankruptcy, insolvency or similar proceeding involving the related Tenant or by reason of a modification, waiver or amendment granted or agreed to by the Special Servicer) or (ii) with respect to a Lease, the Lease has been terminated and the Property has been re-leased;
(b) if a circumstance described in clause (b) of the definition of the term “Specially Managed Unit”, such default is cured in the good faith and reasonable judgment of the Special Servicer;
26(c) if a circumstance described in clause (c) of the definition of the term “Specially Managed Unit” previously existed, such circumstances cease to exist in the good faith and reasonable judgment of the Special Servicer;
27(d) if a circumstance described in clause (d) of the definition of the term “Specially Managed Unit” previously existed, such default is cured; and
28(e) if a circumstance described in clause (e) of the definition of the term “Specially Managed Unit” previously existed, the notice has been revoked or rescinded by the Tenant.
29“Credit Risk” shall have the meaning set forth in Section 30.
30“Custodian” shall mean U.S. Bank National Association.
31“Custody Agreement” shall mean that certain Custody Agreement, dated as of the date hereof, by and among the Issuer, the Indenture Trustee and the Custodian.
32 “Default Interest” shall mean, with respect to any Lease, any amounts collected thereon (other than late payment charges or amounts representing the Third Party Option Price paid by the related Tenant or any third party) that represent penalty interest accrued at the rate specified in such Lease.
33“Defaulted Asset” shall mean, any Lease and related Property with respect to which a default (other than a Delinquent Asset) occurs that materially and adversely affects the interests of the Issuer and that continues unremedied for the applicable grace period under the terms of the Lease (or, if no grace period is specified, for 30 days).
34“Defaulting Party” shall have the meaning set forth in Section 38.
35“Delinquent Asset” shall mean, any Lease and related Property with respect to which any Monthly Lease Payment is overdue for more than sixty (60) consecutive days, and which Lease has not been rejected in any bankruptcy, insolvency or similar proceeding.
36“Determination Date Report” shall have the meaning set forth in Section 24.
37“Disposition Period” shall mean, if the Series Principal Balance is greater than zero on the Payment Date occurring in July 2048, the period commencing on such date and continuing until the earlier of (i) the date on which the Series Principal Balance is reduced to zero and (ii) the Rated Final Payment Date.
38“Early Refinancing Prepayment” shall mean a prepayment of an aggregate amount up to thirty-five percent (35%) of the Initial Principal Balance of the Notes.
39“Emergency Property Expenses” shall mean all costs, expenses and other amounts necessary to preserve the security interest in, and value of, each Property.
40“Escrow Agent” shall have the meaning set forth in the applicable Master Exchange Agreement.
41“Excess Proceeds” shall mean the amount by which Proceeds in connection with an Insured Casualty or Condemnation exceeds the Collateral Value of the related Property.
42“Exchange” shall mean exchange transaction pursuant to the terms of a Master Exchange Agreement.
43“Excess Exchange Amount” shall mean, as of any date, an amount equal to the greater of: (i) (x) all Relinquished Property Proceeds on deposit in the Exchange Account as of such date minus (y) the Exchange Threshold; and (ii) zero.
44“Exchange Account” shall have the meaning set forth in the applicable Master Exchange Agreement.
45“Exchange Program” shall have the meaning set forth in the applicable Master Exchange Agreement.
46“Exchange Reserve Account” shall mean the segregated account established and maintained by and in the name of the Indenture Trustee pursuant to the Indenture for the deposit and retention of cash collateral.
47“Exchange Threshold” shall mean an amount equal to the lesser of (i) $15,000,000 and (ii) 2.0% of the Aggregate Collateral Value as of such Determination Date.
48“Exchanged Property” shall mean a Property and the related that is exchanged for a Qualified Substitute Property in a transaction with a third party or an Affiliate of the Issuer Manager and subject to the conditions and limitations described in this Agreement.
49“Fair Market Value” shall mean, at any time, a price determined by the Property Manager (or by the Special Servicer with respect to a Specially Managed Unit (as defined herein)) in accordance with the Servicing Standard to be the most probable price that the Property Owner Membership Interest, related Lease or Property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. In making any such determination, the Property Manager or Special Servicer may obtain an MAI certified appraisal of the related Property and shall assume the consummation of a sale as of a specified date (and with respect to Properties, the passing of title from seller to buyer) under conditions whereby: (i) buyer and seller are typically motivated; (ii) both parties are well informed or well advised, and acting in what they consider their best interests; (iii) a reasonable time is allowed for exposure in the open market; (iv) payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and (v) the price represents the normal consideration for such Property Owner Membership Interest, Lease or Property unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
50“FCCR” shall mean, with respect to any Property the ratio of (1) such Property’s Adjusted EBITDAR, to (2) Fixed Charges; provided, that, in the event that sufficient financial information to calculate FCCR is not available for an individual Property, FCCR may be calculated based on corporate financial statements or may not be determined with respect to a Tenant or individual property.
51“Fee Trigger Event” shall mean, with respect to each of the Issuer Manager, Property Manager and the Special Servicer, either (a) the initial Issuer Manager, Property Manager or Special Servicer shall be replaced hereunder by any party that is not an Affiliate thereof, or (b) the Advisory Agreement shall cease to be in effect.
52“FIRREA” shall mean the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
53“Fixed Charges” shall mean, with respect to a Property, the sum of the Property’s Lease payable in respect of such Property or Tenant, in each case for the period of time as to which such figure is presented.
54“General Receipts Account” shall mean an account established and maintained, or caused to be established and maintained, by the Issuer Manager, to which Tenants make payments.
55“General Receipts Account Bank” shall mean each bank at which the Issuer Manager establishes and maintains a General Receipts Account.
56“Hazardous Substances” shall mean all or any of the following: (A) substances, materials, compounds, wastes, products, emissions and vapors that are defined or listed in, regulated by, or otherwise classified pursuant to, any applicable Environmental Laws because of their deleterious, harmful or dangerous properties, including any so defined, listed, regulated or classified as “hazardous substances”, “hazardous materials”, “hazardous wastes”, “toxic substances”, “pollutants”, “contaminants”, or any other formulation intended to regulate, define, list or classify substances by reason of deleterious, harmful or dangerous properties; (B) waste oil, oil, petroleum or petroleum-derived substances, natural gas, natural gas liquids or synthetic gas and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; (C) any flammable substances or explosives or any radioactive materials; (D) asbestos in any form; (E) electrical or hydraulic equipment which contains any oil or dielectric fluid containing polychlorinated biphenyls; (F) radon; (G) toxic mold; or (H) urea formaldehyde, provided, however, such definition shall not include (i) cleaning materials and other substances commonly used in the ordinary course of the Property Owners’ businesses, which materials exist in reasonable quantities and are stored, contained, transported, used, released, and disposed of in accordance with all applicable Environmental Laws, or (ii) cleaning materials and other substances commonly used in the ordinary course of the Property Owners, the Tenants or any of their respective agent’s, business, which materials exist in reasonable quantities and are stored, contained, transported, used, released, and disposed of in accordance with all applicable Environmental Laws.
57“Indemnified Party” and “Indemnitor” shall mean the Property Manager, the Issuer Manager, the Indenture Trustee and the Back-up Manager (and each of their respective employees, directors, officers, agents, representatives and shareholders), on the one hand, and the Property Owners, on the other hand, respectively, as to Section 44(a) and shall mean the Property Owners, on the one hand, and the Property Manager and the Issuer Manager, on the other hand, as to Section 44(b).
58“Indenture” shall have the meaning ascribed to it in the preamble hereto.
59“Independent” shall mean shall mean, when used with respect to any specified Person, that such Person (a) is in fact independent of the Property Owners, any other obligor on the Notes and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Property Owners, any such other obligor or any Affiliate of any of the foregoing Persons and (c) is not connected with the Property Owners, any such other obligor or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, agent, trustee, partner, director or person performing similar functions.
60“Insurance Proceeds” shall have the meaning set forth in Section 22.
61“Insured Casualty” shall have the meaning set forth in Section 22.
62“Issuer Management Fee” shall mean equal to the product of: (i) one-twelfth of 0.125% and (ii) the lesser of (a) the aggregate Allocated Loan Amount of each Property and (b) the Collateral Value (each as of the related Determination Date) of all Properties that did not relate to Specially Managed Units during the related Collection Period; provided, that, prior to the occurrence of a Fee Trigger Event, such fee will not be collected by the Issuer Manager.
63“KeyBank” shall mean KeyBank National Association.
64“Lease” shall mean each lease agreement between a Property Owner, as landlord, and a Tenant, as tenant, and all amendments, modifications, waivers, replacements and supplements thereto with respect to the applicable Property.
65“Lease Document” shall have the meaning set forth in the Custody Agreement.
66“Lease File” shall have the meaning set forth in the Custody Agreement.
67“Lease Guarantor” shall mean, with respect to a Lease, any Person who has entered into a Lease Guaranty with respect to such Lease.
68“Lease Guaranty” shall mean, with respect to a Lease, a guaranty of the Tenant’s payment obligations under such Lease.
69“Lease Schedule” shall have the meaning set forth in the Custody Agreement.
70“Liquidation Fee” shall mean a fee payable to the Special Servicer with respect to (a) each Lease or Property specially serviced by the Special Servicer purchased by the Sponsor due to a Collateral Defect if purchased after the applicable cure period, (b) any Specially Managed Unit specially serviced by the Special Servicer as to which the Special Servicer obtains a full, partial or discounted payoff for some or all of the Allocated Loan Amount of the Properties from the related Tenant, or (c) any Specially Managed Unit specially serviced by the Special Servicer as to which the Special Servicer recovered any Liquidation Proceeds; provided, that no Liquidation Fee will be payable from any Liquidation Proceeds collected in connection with the purchase of any Specially Managed Unit by the Issuer Manager or the Special Servicer.
71“Liquidation Proceeds” shall mean all net proceeds realized by the Issuer, the Property Manager or the Special Servicer in respect of the sale of a Property.
72“Liquidity Reserve Account” shall mean the segregated account established and maintained by and in the name of the Indenture Trustee pursuant to the Indenture for the deposit of Liquidity Reserve Amounts.
73“Liquidity Reserve Amounts” shall mean amounts deposited in the Liquidity Reserve Account.
74“MAI” shall mean a member of the Appraisal Institute.
75“Master Exchange Agreement” shall mean a master exchange agreement or exchange agreement, entered into by the Qualified Intermediary or the owner of the Qualified Intermediary, the Issuer Manager and the Issuer.
76“Modified Collateral Detail and Realized Loss Report” shall have the meaning set forth in Section 24.
77“Modified Lease” shall mean a Lease pursuant to which the Property Owner, as landlord, may have a contingent obligation generally confined to structural and related components of the improvements on the related Properties.
78“Monthly DSCR” shall mean an amount equal to the (i) the sum of all Monthly Lease Payments and any income earned from the investment of funds on deposit in the Collection Accounts, the Release Account, the Exchange Account and the Exchange Reserve Account in Permitted Investments during the related Collection Period and any Additional Contribution Amount deposited to the Collection Account during the related Collection Period, divided by (ii) the Total Debt Service for the related Payment Date; provided, with respect to the first Collection Period, the amount in clause (i) above will include the Property Manager’s good faith estimate (in accordance with the Servicing Standard) of what such amount would have been if such first Collection Period had commenced on the day immediately after the Determination Date in the month immediately preceding the first Payment Date, based on amounts actually received by the Property Manager during the initial Collection Period.
79“Monthly Lease Payment” shall mean, with respect to each Lease, the rent payment due each month on such Lease.
80“Mortgage” shall mean, with respect to each Property, a first priority mortgage (or deed of trust, deed to secure debt or debenture), assignment of leases and rents, security agreement and fixture filing, that has the benefit of a title policy insuring a first priority security interest subject only to Permitted Encumbrances, will be recorded in the public real estate records in the jurisdiction where such Property is located.
81“Net Investment Earnings” shall mean the amount by which the aggregate of all interest and other income realized during a Collection Period on funds held in the Collection Account, Release Account and any other accounts established under the Indenture from time to time, if any, exceeds the aggregate of all losses, if any, incurred during such Collection Period in connection with the investment of such funds in accordance with Section 14.
82“Nonrecoverable Advance” shall mean any P&I Advance or Property Protection Advance, previously made or proposed to be made, that the Issuer Manager, Back-up Manager, or Indenture Trustee, as applicable, determines will not be ultimately recoverable from late collections, Condemnation Proceeds, Insurance Proceeds, Liquidation Proceeds, or any other recovery on or in respect of the related Properties or Leases.
83“Non-Tenant Purchase Option” shall mean, with respect to any Lease, the option of another third party that is not the Tenant under a Lease, whether conditional or otherwise, to purchase the related Property before or at the expiration of the related Lease term.
84“Officer’s Certificate” shall mean a certificate signed by a Servicing Officer of the Issuer Manager, the Property Manager or the Special Servicer or a Responsible Officer of the Indenture Trustee, and with respect to any other Person, a certificate signed by the Chairman of the Board, the President, a Vice President or Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant Secretaries of such Person.
85“Opinion of Counsel” shall mean a written opinion of counsel (which shall be rendered by counsel that is Independent of the Issuer, the Indenture Trustee, the Issuer Manager, the Property Manager and the Special Servicer) in form and substance reasonably acceptable to and delivered to the addressees thereof.
86“P&I Advance” shall mean, with respect to any Payment Date, in the event the Series Available Amount allocated (or to be allocated) to any Series of notes on any Payment Date will be insufficient to pay in full (i) the scheduled principal payment (if any) with respect to each class of notes in such Series other than any such class of notes whose anticipated repayment date (x) occurs on such Payment Date or (y) has occurred prior to such Payment Date and (ii) accrued and unpaid note interest (not including any interest carry-forward amount) in respect of the notes of such Series due on such Payment Date, an advance sufficient to cover any resulting shortfall in the scheduled payment of principal and note interest on any class of notes for such Payment Date.
87“Payoff Amount” shall mean, with respect to any release of the Property Owner Membership Interest or a Released Property in connection with a Collateral Defect, an amount equal to the Collateral Value of such release Property Owner Membership Interest or Released Property plus any unpaid Monthly Lease Payments and any unreimbursed Advances, Emergency Property Expenses, Liquidation Fees, Workout Fees, Special Servicing Fees, Issuer Expenses, Back-Up Management Fees, Extraordinary Expenses and any fees and expenses incurred and any taxes incurred or withheld in connection with such release (in each case, plus interest thereon as applicable), in each case related to such released Property Owner Membership Interest, Released Property or the related Lease.
88“Percentage Rent” shall mean, with respect to a Lease, rent in addition to or in lieu of fixed or “base” rent, calculated as a percentage of the total sales generated by the related Tenant at the Property in excess of Monthly Lease Payments for the prior calendar year.
89“Permitted Materials” shall mean Hazardous Substances used or generated by any Tenant in the ordinary course of business and treated in accordance with applicable Environmental Laws.
90“Property” shall mean a commercial real estate property leased to a Tenant by a Property Owner.”
91“Property Management and Leasing Agreement” shall mean each agreement by and between the Property Manager and a Property Owner listed on Schedule II.
92“Property Management Fee” shall mean an amount equal to the product of: (i) one-twelfth of 0.125% and (ii) the lesser of (a) the aggregate Allocated Loan Amount of each Property and (b) the Collateral Value (each as of the related Determination Date) of all Properties that did not relate to Specially Managed Units during the related Collection Period; provided, that, prior to the occurrence of a Fee Trigger Event, the Property Management Fee will not be collected by the Property Manager.
93“Property Manager” shall have the meaning ascribed to it in the preamble hereto.
94“Property Manager Additional Servicing Compensation” shall mean the additional servicing compensation payable to the Property Manager pursuant to Section 19.
95“Property Owner” shall mean the Persons identified on Schedule I.
96“Property Owner Guaranty” shall mean that certain Property Owner Guaranty, dated as of the date hereof, by the Property Owners in favor of the Indenture Trustee.
97“Property Owner Membership Interests” shall mean the membership interests of the Property Owners.
98“Property Protection Advance” shall mean advance payments of customary, reasonable and necessary out-of-pocket costs and expenses, in accordance with the Servicing Standard and this Agreement, necessary to preserve the security interest in, or value of, each Property and Lease (including payments or advances required to be made in connection with any Modified Lease Expenses and any costs and expenses necessary to re-lease such Property).
99“Qualified Intermediary” shall mean the intermediary specified in a Master Exchange Agreement.
100“Qualified Release Amount” shall mean the portion of the Collateral Pool that may be released in connection with an Early Refinancing Prepayment, applying a Release Price for each asset to be released equal to the greater of Fair Market Value and one hundred ten percent (110%) of the Allocated Loan Amount of the Properties being released, that in the aggregate is no greater than the dollar amount of the Notes being prepaid in connection with such Early Refinancing Prepayment.
101“Qualified Substitute Property” shall mean a Property acquired by the Issuer in substitution for any Exchanged Property or with Release Proceeds deposited into the Release Account (or any portion thereof), which Property may be acquired directly by an existing Property Owner or indirectly by the Issuer pursuant to an acquisition by the Issuer of a Qualified Substitute Property Owner Interest that, in each case, on the date such Qualified Substitute Property is added to the Collateral Pool or such Qualified Substitute Property Owner Interest, as applicable, is added to the Issuer Collateral Pool, as applicable:
102(a) (i) in connection with any Exchanged Property, the related Property has a Collateral Value that, when combined with any cash proceeds received (or to be received) in connection with such substitution or sale, if applicable, and the Collateral Value of all other Qualified Substitute Properties acquired by the Issuer since the most recent Issuance Date, is equal to or greater than the Fair Market Value of all Exchanged Properties since the most recent Issuance Date (each measured on the date of their respective removals) and (ii) in connection with any Property acquired with the Release Price (or a portion thereof) on the date such Qualified Substitute Property is added to the Collateral Pool or such Qualified Substitute Property Owner Interest, as applicable, is added to the Issuer Collateral Pool, as applicable, the related Property; has a Collateral Value equal to the Release Price (or portion thereof) being applied to purchase such Qualified Substitute Property or Qualified Substitute Property Owner Interest, as applicable;
103(b) complies, in all material respects, with all of the representations and warranties required to be made with respect to Properties under the Indenture (subject to exceptions that are materially consistent with the underwriting criteria for the existing Properties);
104(c) has, together with all other Qualified Substitute Properties acquired by the Issuer since the most recent Issuance Date, the same or greater aggregate Monthly Lease Payments as the Exchanged Properties and Released Properties (to the extent a new Property has been acquired with the related Release Proceeds) since the most recent Issuance Date (each measured on the date of their respective removals);
105 (d) is leased pursuant to a Lease, that when combined with the Leases of all other Qualified Substitute Properties acquired since the most recent Issuance Date, has a Weighted Average remaining term that equals or exceeds the weighted average remaining term of the Leases associated with the Exchanged Properties and Released Properties (each measured on the date of their respective removals);
106(e) if the Tenant thereof or any third party has an option to purchase such Property, the contractual amount of such Third Party Option Price is not less than what the Allocated Loan Amount of such Property would be after giving effect to the substitution of such Property;
107(f) when combined with all other Qualified Substitute Properties (other than Select Qualified Substitute Properties (as defined below)) acquired since the most recent Issuance Date, does not cause the Weighted Average FCCR of such Qualified Substitute Properties to be less than the Weighted Average FCCR (measured as of the date of each respective substitution) of all Exchanged Properties and Released Properties released since the most recent Issuance Date other than those Exchanged Properties and Released Properties released for Select Qualified Substitute Properties; provided, however, with respect to no more than fifteen percent (15%) of the aggregate Appraised
Value of all Properties, the requirement set forth in this clause (f) will not apply so long as such Qualified Substitute Properties (the “Select Qualified Substitute Properties”):
108(i) either (a) have a Weighted Average unit FCCR not less than 2.0x or (b) are occupied by Tenants that have (or have a Lease Guarantor that has) a credit rating (long-term unsecured credit rating including any long-term corporate unsecured debt) no less than BBB-/bbb-/Baas3/BBB- (S&P/S&P Credit Assessment/Moody’s/Fitch, issued in a private or public rating); and
109(ii) the Property Manager, in accordance with the Servicing Standard, has determined that such substitution is in the best interest of the Issuer and the Noteholders; provided, further, that for the avoidance of doubt, if a Property being substituted out of the Master Indenture has an FCCR below zero (0.00x) or does not report FCCR, then such Qualified Substitute Property will have a minimum FCCR of 1.00x;
110(g) is leased pursuant to a “triple-net” lease or Modified Lease; and
111(h) has an appraisal that meets the requirements set forth in the definition of Appraised Value that was obtained no more than twelve (12) months prior to such substitution;
112provided, that, notwithstanding the foregoing, with respect to a Risk-Based Substitution, the related Qualified Substitute Property that replaces such Risk-Based Substitution shall not be required to meet the conditions in clauses (d), (e), or (f); provided, further, that No Property will constitute a Qualified Substitute Property unless, after giving effect to the transfer of such Property via the acquisition of a Qualified Substitute Property Owner Interest to the related Issuer, either (i) a Maximum Property Concentration is not exceeded, or (ii) if, prior to such substitution, an existing Maximum Property Concentration is already exceeded, the addition of such Qualified Substitute Property Owner Interest will reduce the Maximum Property Concentration or such Maximum Property Concentration will remain unchanged after giving effect to such substitution.
113“Qualified Substitute Property Owner Interest” shall mean the membership interests of a Property Owner owning a Qualified Substitute Property.
114“Reimbursement Rate” shall mean an annual rate equal to the “prime rate” published in the “Money Rates” section of The Wall Street Journal, as such “prime rate” may change from time to time plus 3.0%.
115“Release Account” shall mean the segregated account established and maintained by and in the name of the Indenture Trustee pursuant to the Indenture for the deposit and retention of (i) the Release Price received from the sale or release of any Released Property (other than any Release Price obtained in connection with a Senior Class A Release Event, Liquidation Proceeds with respect to Defaulted Assets, or any Series Collateral Release Prices) net of applicable taxes withheld therefrom or otherwise payable by the Issuer with respect thereto
and (ii) Excess Proceeds, net of applicable taxes withheld therefrom or otherwise payable by the Issuer with respect to such Excess Proceeds.
116“Released Property” shall have the meaning set forth in Section 28.
117“Release Price” shall mean, for any Released Property or released Property Owner Membership Interest will be an amount equal to (i) the Third Party Option Price, if the release occurs in connection with any Third Party Purchase Option, (ii) with respect to any Delinquent Asset or Defaulted Asset purchased by the Issuer Manager or any assignee thereof, the greater of (A) the Fair Market Value, plus any unreimbursed Advances, Emergency Property Expenses, Modified Lease Expenses, Liquidation Fees, Workout Fees, Special Servicing Fees and Extraordinary Expenses (plus interest thereon as applicable), in each case related to such Lease or Property, and (B) one hundred percent (100%) of the Allocated Loan Amount, (iii) the Payoff Amount with respect to any Released Property released due to a Collateral Defect, (iv) the greater of (A) Fair Market Value plus any unreimbursed Advances, Emergency Property Expenses, Modified Lease Expenses, Liquidation Fees, Workout Fees, Special Servicing Fees and Extraordinary Expenses (plus interest thereon as applicable) and (B) one hundred fifteen percent (115%) of the Allocated Loan Amount of the Properties being released, with respect to a Qualified Deleveraging Event or (v) in any other circumstances, including, without limitation, if the release occurs in connection with a Senior Class A Release Event, the lesser of (A) the Fair Market Value, plus any unreimbursed Advances, Emergency Property Expenses, Modified Lease Expenses, Liquidation Fees, Workout Fees, Special Servicing Fees and Extraordinary Expenses (plus interest thereon as applicable), in each case related to such Lease or Property or Property Owner Membership Interest, for any Released Property sold (B) one hundred ten percent (110%) of the Allocated Loan Amount of such Released Property.
118“Relinquished Property” shall have the meaning set forth in the applicable Master Exchange Agreement.
119“Relinquished Property Proceeds” shall mean funds derived from or otherwise attributable to the transfer of Relinquished Property pursuant to a Master Exchange Agreement.
120“Remittance Date” shall mean the Business Day preceding each Payment Date.
121“Removed Property” shall mean a Released Property or Exchanged Property that has either been released or substituted and that is removed from the Collateral Pool.
122“Replacement Property” shall have the meaning set forth in the applicable Master Exchange Agreement.
123“Senior Class A Release Event” shall mean, on the Payment Date in July 2037, any Class A-1 (AAA) Notes, Class A-2 (AAA) Notes, Class A-3 (AA) Notes or Class A-4 (AA) Notes are still outstanding, an Early Amortization Period is in effect, and the Collateral Values of all the Properties that became Defaulted Assets between the Series Closing Date and July 2036 exceed 45% of the Aggregate Collateral Value as of the Statistical Cut-off Date, the Property Manager will be required to use commercially reasonable efforts to sell Properties in an amount
equal to the lesser of (i) 40% of the Aggregate Collateral Value, taking into account the sum of the Collateral Value of all Released Properties released since the most recent series closing date by paying the Release Price and (ii) the sum of (A) the outstanding principal balance of all Notes with a AAA(sf) rating and (B) the outstanding principal balance of all Notes with a AA(sf) rating.
124“Series Collateral Release“ means a release of Released Properties in connection with a prepayment of a Series of notes in full; provided, however, the release of such Released Properties to the Issuer (i) shall not trigger an Indenture Event of Default or Early Amortization Period (including but not limited to the Issuer’s obligations to maintain the 3-month Average DSCR), (ii) shall result in the Rating Condition being satisfied and (iii) shall not cause a Maximum Property Concentration to be exceeded (or if, prior to such release, an existing Maximum Property Concentration is already exceeded, the release of such Released Properties will reduce the Maximum Property Concentration or such Maximum Property Concentration will remain unchanged after giving effect to such release).
125“Series Collateral Release Price” for any Released Property released at the time of a Series Collateral Release, an amount equal to the greater of (i) one hundred ten percent (110%) of the Allocated Loan Amount of such Released Property and (ii) the Fair Market Value of such Released Property plus any unreimbursed Advances, Emergency Property Expenses, Modified Lease Expenses, Liquidation Fees, Workout Fees, Special Servicing Fees and Extraordinary Expenses (plus interest thereon as applicable), in each case related to such Lease or Property.
126“Servicer Replacement Event” shall have the meaning set forth in Section 37.
127"Servicing File” shall mean any documents (other than documents required to be part of the related Lease File ) in the possession of the Property Manager or the Special Servicer and relating to the origination and servicing of any Lease or the administration of any Property.
128“Servicing Standard” shall mean the following standard of care: (a) in the same manner in which, and with the same care, skill, prudence and diligence with which, the Property Manager or the Special Servicer, as the case may be, services and administers similar leases and properties, including, without limitation, the granting of certain Permitted Encumbrances, for their own account and the account of their affiliates or any third party portfolios, to the extent applicable, or (b) in a manner normally associated with the prudent management and operation of similar properties, whichever standard is highest (provided that clause (a) will not be applicable to the Issuer Manager), and in each such case, in material compliance with all applicable laws, but without regard to: (i) any known relationship that such party or an affiliate of such party, may have with the Issuer, any Tenant, any of their respective affiliates or any other party to the Transaction Documents; (ii) the ownership of any Note, Related Series Note or Property Owner Membership Interest by such party or an affiliate of such party, as applicable; (iii) the Issuer Manager’s obligation to make Advances, or the Property Manager’s, the Issuer Manager’s or Special Servicer’s obligation to incur servicing expenses or to direct the Indenture Trustee to withdraw funds from the Collection Account to pay Emergency Property Expenses with respect to the Leases and Properties; (iv) such party’s right to receive compensation for its services or
reimbursements of the costs under this Agreement; (v) the ownership, servicing or management for others, by such party of any other leases, or commercial real properties; (vi) the release, transfer or indemnification obligations of such party; or (vii) the existence of any loans made to a Tenant by such party, or any affiliate of such party.
129“Servicing Transfer Agreement” shall have the meaning set forth in Section 41.
130“Servicing Transfer Agreement” shall have the meaning set forth in Section 41.
“Servicing Transfer Date” shall mean, with respect to any Property, the occurrence of any of the events described in clauses (a) through (e) of the definition of “Specially Managed Unit.”
“Servicing Transfer Event” shall mean the occurrence of any of the following with respect to a Lease and the related Property:
131(a) such Property is a Delinquent Asset;
132(b) such Property is a Defaulted Asset;
133(c) there shall have been commenced in a court or agency or supervisory authority having jurisdiction an involuntary action against the Tenant under any present or future federal or state bankruptcy, insolvency or similar law or the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities, or similar proceedings or for the winding up or liquidation of its affairs, which action shall not have been dismissed for a period of 90 days, and the subject Lease has not been rejected in any related proceeding; or the Tenant shall have consented to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Tenant or of or relating to all or substantially all of its property, and the subject Lease has not been rejected in any related proceeding; or the Tenant shall have admitted in writing its inability to pay its debts generally as they become due, filed a petition to take advantage of any applicable insolvency or reorganization statute, made an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations, and the subject Lease has not been rejected in any related proceeding;
134(d) the related Lease has expired, been terminated, or rejected in any bankruptcy, insolvency or related proceeding; or
135(e) the Property Manager receives written notice that a Tenant no longer intends to make any Monthly Lease Payments under such Tenant’s Lease.
136“Specially Managed Unit” shall mean any Property as to which a Servicing Transfer Event has occurred.
137“Special Servicer Additional Servicing Compensation” shall mean the additional servicing compensation payable to the Special Servicer pursuant to Section 19.
138“Special Servicer Report” shall have the meaning set forth in Section 24.
139“Special Servicing Fee” shall mean an amount equal to the product of: (i) one-twelfth of 0.75% and (ii) the lesser of (a) the aggregate Allocated Loan Amount of each Property that is a Specially Managed Unit and (b) the Collateral Value (each as of the related Determination Date) of all Properties that related to Specially Managed Units during the related Collection Period; provided, that, prior to the occurrence of a Fee Trigger Event, such fee will not be collected by the Special Servicer.
140“Sub-Manager” shall mean any Person with which the Property Manager, the Issuer Manager or the Special Servicer has entered into a Sub-Management Agreement.
141“Tenant Purchase Option” shall mean, with respect to any Lease, the option of the related Tenant, whether conditional or otherwise, to purchase the related Property before or at the expiration of the related Lease term.
142“Terminated Lease Property” shall mean a Property for which the related Lease has expired, has been terminated or has been rejected in a bankruptcy, insolvency or similar proceeding of the Tenant or from which the Tenant has been evicted or otherwise removed.
143“Third Party Option Price” shall mean, with respect to any Property pursuant to which a Purchase Option is exercised, a cash price equal to the amount specified in the related Lease or other Lease Document, as applicable, as payable by a Tenant or other third party in connection with the exercise of such Purchase Option.
144“Third Party Purchase Option” shall mean a Tenant Purchase Option or Non-Tenant Purchase Option, as applicable.
145“Total Debt Service” shall mean an amount equal to (A) the sum of (i) the Scheduled Class A Principal Payment and all Note Interest with respect to each Class of Notes, assuming for the Class B Notes there is no Class B Note Adjustment Amount, (ii) the scheduled principal payment and note interest with respect to all classes of Related Series Notes (in each case, less any scheduled principal payment due on the Anticipated Repayment Date with respect to each Class of Notes or the applicable anticipated repayment date with respect to any such Related Series Notes), assuming for class B notes there is no class B note adjustment amount, (iii) the Property Management Fee, (iv) the Special Servicing Fee, if any, (v) the Back-Up Management Fee and (vi) the Indenture Trustee Fee, each as accrued during the Collection Period minus (B) the Aggregate Excess Principal Payment Amount.
146“Unscheduled Proceeds” shall mean, without duplication, collectively, (i) Liquidation Proceeds and any other proceeds received by the Property Manager, the Issuer Manager or the Special Servicer with respect to the disposition of a Property that is a Defaulted Asset, (ii) Proceeds in connection with a Condemnation or Insured Casualty (to the extent deposited into the Collection Account), (iii) any Third Party Option Price received as a result of the exercise of a Third Party Purchase Option (only up to the Collateral Value) to the extent deposited into the Collection Account, (iv) Payoff Amounts received in connection with the
release and sale of a Lease or a Property in relation to a Collateral Defect, (v) any proceeds (other than Release Prices) derived from each un-leased Property (exclusive of related operating costs, including certain reimbursements payable to the Property Manager or the Issuer Manager in connection with the operation and disposition of such un-leased Property), (vi) all amounts disbursed to the Payment Account from the DSCR Reserve Account during an Early Amortization Period, (vii) any Release Price collected in connection with a Senior Class A Release Event, (viii) any proceeds transferred from the Exchange Account to the release Account pursuant to the Exchange Program and (ix) amounts disbursed from the Release Account to the Collection Account for the related Payment Date.
147“Weighted Average FCCR” shall mean an amount calculated by dividing (i) the sum of the products of the FCCRs and the Allocated Loan Amounts of each Property in the Collateral Pool (excluding properties for which FCCR is not available), by (ii) the aggregate Allocated Loan Amounts of all Properties in the Collateral Pool (excluding properties for which FCCR is not available).
148“Workout Fee” shall mean, with respect to each Corrected Unit, an amount payable out of and calculated by application of 0.50% to, each collection of rents, interest (other than any default interest) and principal (including scheduled payments, prepayment and payments at maturity) received on the related Lease, so long as it remains a Corrected Unit; provided, that no Workout Fee will be payable from any Liquidation Proceeds collected in connection with (i) the purchase of any Specially Managed Unit by the Issuer Manager or the Special Servicer or (ii) the purchase of any Specially Managed Unit by the Sponsor due to a Collateral Defect within the period provided to cure such Collateral Defect; provided, further, that, prior to the occurrence of a Fee Trigger Event, such Workout Fees will not be collected by the Special Servicer.
(b)Rules of Construction. Unless the context otherwise requires:
(i)a term has the meaning assigned to it;
(ii)an accounting term not otherwise defined herein and accounting terms partly defined herein, to the extent not defined, shall have the respective meanings given to them under GAAP as in effect from time to time;
(iii)“or” is not exclusive;
(iv)“including” means including without limitation;
(v)words in the singular include the plural and words in the plural include the singular;
(vi)all references to “$” are to United States dollars unless otherwise stated;
(vii)any agreement, instrument or statute defined or referred to in this Agreement or in any instrument or certificate delivered in connection herewith means such agreement, instrument
or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns; and
(viii)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, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.
Section 2.Appointment. On the terms and conditions set forth herein, each Property Owner hereby engages each of the Property Manager, the Issuer Manager and the Special Servicer to perform the applicable services as described herein. Each of the Property Manager, the Issuer Manager and the Special Servicer hereby accepts such engagement. Each of the Property Manager, the Issuer Manager and the Special Servicer is an independent contractor and nothing in this Agreement or in the relationship of any Property Owner with any of the Property Manager, the Issuer Manager and the Special Servicer shall constitute a partnership, joint venture or any other similar relationship.
Section 3.Servicing Standard. The Property Manager and the Special Servicer, either directly or through sub-servicers, shall provide property management services for the Properties located in the United States, and service the Leases and the Issuer Manager shall make Advances, in accordance with the Servicing Standard.
Section 4.Representations and Warranties of the Property Manager. The initial Property Manager makes the following representations and warranties to the Property Owners all of which shall survive the execution, delivery, performance or termination of this Agreement:
(a)The Property Manager is a limited liability company, validly existing and in good standing under the laws of the State of Arizona.
(b)The Property Manager’s execution and delivery of, performance under, and compliance with this Agreement, will not violate the Property Manager’s organizational documents or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in a material breach of, any material agreement or other material instrument to which it is a party or by which it is bound.
(c)The Property Manager has the full power and authority to conduct its business as presently conducted by it and to enter into and consummate all transactions contemplated by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement.
(d)Each Transaction Document to which the Property Manager is a party, upon the due authorization, execution and delivery of such Transaction Document and each of the other parties thereto, constitutes a valid, legal and binding obligation of the Property Manager, enforceable against the Property Manager in accordance with the terms thereof, subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors’ rights generally and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.
(e)The Property Manager is not in violation of, and its execution and delivery of, performance under and compliance with each of the Transaction Documents to which it is a party will not constitute a violation of, any law, any order or decree of any court or arbiter, or any order, regulation or demand of any federal, state or local governmental or regulatory authority, which violation, in the Property Manager’s good faith and reasonable judgment, is likely to affect materially and adversely either the ability of the Property Manager to perform its obligations under the Transaction Documents to which it is a party or the financial condition of the Property Manager.
(f)The Property Manager’s execution and delivery of, performance under and compliance with, each of the Transaction Documents to which it is a party do not breach or result in a violation of, or default under, any material indenture, mortgage, deed of trust, agreement or instrument to which the Property Manager is a party or by which the Property Manager is bound or to which any of the property or assets of the Property Manager are subject and such breach, violation or default could have a material adverse effect on the ability of the Property Manager to perform its duties hereunder.
(g)No consent, approval, authorization or order of any state or federal court or governmental agency or body is required for the consummation by the Property Manager of the transactions contemplated herein, except for those consents, approvals, authorizations or orders that previously have been obtained other than any of the foregoing the failure to have made or obtained which is not reasonably likely to cause a material adverse effect.
(h)No litigation is pending or, to the Property Manager’s knowledge, threatened against the Property Manager that, if determined adversely to the Property Manager, would prohibit the Property Manager from entering into any of the Transaction Documents to which it is a party, or that, in the Property Manager’s good faith and reasonable judgment, is likely to materially and adversely affect either the ability of the Property Manager to perform its obligations under the Transaction Documents to which it is a party or the financial condition of the Property Manager.
Section 5.Representations and Warranties of the Issuer Manager. The initial Issuer Manager makes the following representations and warranties to the Property Owners all of which shall survive the execution, delivery, performance or termination of this Agreement:
(a)The Issuer Manager is a limited partnership, validly existing and in good standing under the laws of the State of Delaware.
(b)The Issuer Manager’s execution and delivery of, performance under, and compliance with this Agreement, will not violate the Issuer Manager’s organizational documents or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in a material breach of, any material agreement or other material instrument to which it is a party or by which it is bound.
(c)The Issuer Manager has the full power and authority to conduct its business as presently conducted by it and to enter into and consummate all transactions contemplated by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement.
(d)Each Transaction Document to which the Issuer Manager is a party, upon the due authorization, execution and delivery of such Transaction Document and each of the other parties thereto, constitutes a valid, legal and binding obligation of the Issuer Manager, enforceable against the Issuer Manager in accordance with the terms thereof, subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.
(e)The Issuer Manager is not in violation of, and its execution and delivery of, performance under and compliance with each of the Transaction Documents to which it is a party will not constitute a violation of, any law, any order or decree of any court or arbiter, or any order, regulation or demand of any federal, state or local governmental or regulatory authority, which violation, in the Issuer Manager’s good faith and reasonable judgment, is likely to affect materially and adversely either the ability of the Issuer Manager to perform its obligations under the Transaction Documents to which it is a party or the financial condition of the Issuer Manager.
(f)The Issuer Manager’s execution and delivery of, performance under and compliance with, each of the Transaction Documents to which it is a party do not breach or result in a violation of, or default under, any material indenture, mortgage, deed of trust, agreement or instrument to which the Issuer Manager is a party or by which the Issuer Manager is bound or to which any of the property or assets of the Issuer Manager are subject and such breach, violation or default could have a material adverse effect on the ability of the Issuer Manager to perform its duties hereunder.
(g)No consent, approval, authorization or order of any state or federal court or governmental agency or body is required for the consummation by the Issuer Manager of the transactions contemplated herein, except for those consents, approvals, authorizations or orders that previously have been obtained other than any of the foregoing the failure to have made or obtained which is not reasonably likely to cause a material adverse effect.
(h)No litigation is pending or, to the Issuer Manager’s knowledge, threatened against the Issuer Manager that, if determined adversely to the Issuer Manager, would prohibit the Issuer Manager from entering into any of the Transaction Documents to which it is a party, or that, in the Issuer Manager’s good faith and reasonable judgment, is likely to materially and adversely affect either the ability of the Issuer Manager to perform its obligations under the Transaction Documents to which it is a party or the financial condition of the Issuer Manager.
Section 6.Representations and Warranties of the Special Servicer. The initial Special Servicer makes the following representations and warranties to the Property Owners all of which shall survive the execution, delivery, performance or termination of this Agreement:
(a)The Special Servicer is a limited liability company, validly existing and in good standing under the laws of the State of Arizona.
(b)The Special Servicer’s execution and delivery of, performance under, and compliance with this Agreement, will not violate the Special Servicer’s organizational documents or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in a material breach of, any material agreement or other material instrument to which it is a party or by which it is bound.
(c)The Special Servicer has the full power and authority to conduct its business as presently conducted by it and to enter into and consummate all transactions contemplated by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement.
(d)Each Transaction Document to which the Special Servicer is a party, upon the due authorization, execution and delivery of such Transaction Document and each of the other parties thereto, constitutes a valid, legal and binding obligation of the Special Servicer, enforceable against the Special Servicer in accordance with the terms thereof, subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.
(e)The Special Servicer is not in violation of, and its execution and delivery of, performance under and compliance with each of the Transaction Documents to which it is a party will not constitute a violation of, any law, any order or decree of any court or arbiter, or any order, regulation or demand of any federal, state or local governmental or regulatory authority, which violation, in the Special Servicer’s good faith and reasonable judgment, is likely to affect materially and adversely either the ability of the Special Servicer to perform its obligations under the Transaction Documents to which it is a party or the financial condition of the Special Servicer.
(f)The Special Servicer’s execution and delivery of, performance under and compliance with, each of the Transaction Documents to which it is a party do not breach or result in a violation of, or default under, any material indenture, mortgage, deed of trust, agreement or instrument to which the Special Servicer is a party or by which the Special Servicer is bound or to which any of the property or assets of the Special Servicer are subject and such breach, violation or default could have a material adverse effect on the ability of the Special Servicer to perform its duties hereunder.
(g)No consent, approval, authorization or order of any state or federal court or governmental agency or body is required for the consummation by the Special Servicer of the transactions contemplated herein, except for those consents, approvals, authorizations or orders that previously have been obtained other than any of the foregoing the failure to have made or obtained which is not reasonably likely to cause a material adverse effect.
(h)No litigation is pending or, to the Special Servicer’s knowledge, threatened against the Special Servicer that, if determined adversely to the Special Servicer, would prohibit the Special Servicer from entering into any of the Transaction Documents to which it is a party, or that, in the Special Servicer’s good faith and reasonable judgment, is likely to materially and adversely affect either the ability of the Special Servicer to perform its obligations under the Transaction Documents to which it is a party or the financial condition of the Special Servicer.
Section 7.Representations and Warranties of the Back-Up Manager. The initial Back-Up Manager makes the following representations and warranties to the Property Owners all of which shall survive the execution, delivery, performance or termination of this Agreement:
(a)The Back-Up Manager is a national banking association, validly existing and in good standing.
(b)The Back-Up Manager’s execution and delivery of, performance under, and compliance with this Agreement, will not violate the Back-Up Manager’s organizational documents or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in a material breach of, any material agreement or other material instrument to which it is a party or by which it is bound.
(c)The Back-Up Manager has the full power and authority to conduct its business as presently conducted by it and to enter into and consummate all transactions contemplated by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement.
(d)Each Transaction Document to which the Back-Up Manager is a party, upon the due authorization, execution and delivery of such Transaction Document and each of the other parties thereto, constitutes a valid, legal and binding obligation of the Back-Up Manager, enforceable against the Back-Up Manager in accordance with the terms thereof, subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.
(e)The Back-Up Manager is not in violation of, and its execution and delivery of, performance under and compliance with each of the Transaction Documents to which it is a party will not constitute a violation of, any law, any order or decree of any court or arbiter, or any order, regulation or demand of any federal, state or local governmental or regulatory authority, which violation, in the Back-Up Manager’s good faith and reasonable judgment, is likely to affect materially and adversely either the ability of the Back-Up Manager to perform its obligations under the Transaction Documents to which it is a party or the financial condition of the Back-Up Manager.
(f)The Back-Up Manager’s execution and delivery of, performance under and compliance with, each of the Transaction Documents to which it is a party do not breach or result in a violation of, or default under, any material indenture, mortgage, deed of trust, agreement or instrument to which the Back-Up Manager is a party or by which the Back-Up Manager is bound
or to which any of the property or assets of the Back-Up Manager are subject and such breach, violation or default could have a material adverse effect on the ability of the Back-Up Manager to perform its duties hereunder.
(g)No consent, approval, authorization or order of any state or federal court or governmental agency or body is required for the consummation by the Back-Up Manager of the transactions contemplated herein, except for those consents, approvals, authorizations or orders that previously have been obtained other than any of the foregoing the failure to have made or obtained which is not reasonably likely to cause a material adverse effect.
(h)No litigation is pending or, to the Back-Up Manager’s knowledge, threatened against the Back-Up Manager that, if determined adversely to the Back-Up Manager, would prohibit the Back-Up Manager from entering into any of the Transaction Documents to which it is a party, or that, in the Back-Up Manager’s good faith and reasonable judgment, is likely to materially and adversely affect either the ability of the Back-Up Manager to perform its obligations under the Transaction Documents to which it is a party or the financial condition of the Back-Up Manager.
Section 8.Representations and Warranties of the Property Owners. Each Property Owner makes the following representations and warranties to the Manager all of which shall survive the execution, delivery, performance or termination of this Agreement:
(a)Such Property Owner is a limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of its jurisdiction of organization.
(b)Such Property Owner’s execution and delivery of, performance under, and compliance with this Agreement, will not violate such Property Owner’s organizational documents or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in a material breach of, any material agreement or other material instrument to which it is a party or by which it is bound.
(c)Such Property Owner has the full power and authority to own its Properties, to conduct its business as presently conducted by it and to enter into and consummate all transactions contemplated by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement.
(d)This Agreement, upon the due authorization, execution and delivery by each of the other parties hereto, constitutes a valid, legal and binding obligation of such Property Owner, enforceable against such Property Owner in accordance with the terms hereof, subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.
(e)Such Property Owner is not in violation of, and its execution and delivery of, performance under and compliance with this Agreement will not constitute a violation of, any law, any order or decree of any court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority, which violation, in such Property Owner’s good faith and reasonable judgment, is likely to affect materially and adversely either the ability of such Property Owner to perform its obligations under this Agreement or the financial condition of such Property Owner.
(f)Such Property Owner’s execution and delivery of, performance under and compliance with, this Agreement do not breach or result in a violation of, or default under, any material indenture, mortgage, deed of trust, agreement or instrument to which such Property Owner is a party or by which such Property Owner is bound or to which any of the property or assets of such Property Owner are subject and such breach, violation or default could have a material adverse effect on the ability of the Property Owners to perform their duties hereunder.
(g)No consent, approval, authorization or order of any state or federal court or governmental agency or body is required for the consummation by such Property Owner of the transactions contemplated herein, except for those consents, approvals, authorizations or orders that previously have been obtained other than any of the foregoing the failure to have made or obtained which is not reasonably likely to cause a material adverse effect.
No litigation is pending or, to the Property Owner’s knowledge, threatened against such Property Owner that, if determined adversely to such Property Owner, would prohibit such Property Owner from entering into this Agreement or that, in such Property Owner’s good faith and reasonable judgment, is likely to materially and adversely affect either the ability of such Property Owner to perform its obligations under this Agreement or the financial condition of such Property Owner.
Section 9.Administration of the Properties and Leases.
(a)Each of the Property Manager and the Special Servicer shall service and administer the Properties and Leases that it is obligated to service and administer pursuant to this Agreement and, with respect to the Property Manager, pursuant to each Property Management and Leasing Agreement, on behalf of the Property Owners and in the best interests and for the benefit of the Noteholders and the Issuer, in accordance with any and all applicable laws and the terms of this Agreement and the respective Leases and, to the extent consistent with the foregoing, in accordance with the Servicing Standard. Without limiting the foregoing, and subject to Section 20, (i) the Property Manager shall service and administer each Lease (and each related Property) as to which no Servicing Transfer Event has occurred and each Corrected Unit, and (ii) the Special Servicer shall service and administer each Lease (and each related Property) as to which a Servicing Transfer Event has occurred and that is not a Corrected Unit or has not been released from the Lien of the related Property in accordance with this Agreement and the other Transaction Documents; provided, however, that the Property Manager shall continue to collect information and prepare and deliver all reports to the Indenture Trustee and the Issuer required hereunder with respect to any Specially Managed Unit (and the related Property or Leases), and further to render such incidental services with respect to any Specially Managed Unit as are specifically provided for herein. No direction, consent or approval or lack of direction, consent or approval of any Controlling Party or the Requisite Global Majority may
(and the Special Servicer or the Property Manager will ignore and act without regard to any such advice or approval or lack of approval that the Special Servicer or the Property Manager has determined, in its reasonable, good faith judgment, would) (A) require or cause the Special Servicer or the Property Manager to violate applicable law, the Servicing Standard or the terms of any Lease or (B) expand the scope of the Property Manager’s or Special Servicer’s responsibilities under this Agreement. In addition, neither the Property Manager nor the Special Servicer, acting in its individual capacity, shall take any action or omit to take any action if such action or omission would materially and adversely affect the interests of the Noteholders or the Property Owner Membership Interests, or the Issuer. None of the Property Manager, the Special Servicer or the Back-Up Manager shall be liable to the Indenture Trustee, any Noteholder or any other Person for following any direction of a Controlling Party or the Requisite Global Majority hereunder.
(b)Subject to Section 10(a), the Property Manager and the Special Servicer each shall have full power and authority, acting alone, to do or cause to be done any and all things in connection with such servicing and administration in accordance with the Servicing Standard. Without limiting the generality of the foregoing, each of the Property Manager and the Special Servicer, in its own name, with respect to each of the Properties and Leases it is obligated to service hereunder, is hereby authorized and empowered by any applicable Property Owner, the Issuer and the Indenture Trustee to execute and deliver, on behalf of such Property Owner, the Issuer and the Indenture Trustee: (i) any and all UCC Financing Statements, continuation statements and other documents or instruments necessary to maintain the lien created by any Mortgage or other security document in the related Lease File on the related Collateral; (ii) in accordance with the Servicing Standard and subject to Section 19, any and all modifications, waivers, amendments or consents to or with respect to any documents contained in the related Lease File, other than the Transaction Documents, (iii) subject to the Servicing Standard, all documents to be executed by the Indenture Trustee pursuant to the last sentence of the definition of Permitted Encumbrances and (iv) any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments. Each applicable Property Owner and the Issuer shall, at the written request of a Responsible Officer of the Property Manager or the Special Servicer, execute and deliver to the Property Manager or the Special Servicer, as the case may be, any limited powers of attorney (substantially in the form of Exhibit B attached hereto) and other documents furnished by the Property Manager or the Special Servicer, as applicable, and necessary or appropriate to enable it to carry out its servicing and administrative duties hereunder; provided, however, that none of the Property Owners, the Issuer or the Indenture Trustee shall be held liable for any misuse of any such power or power of attorney by the Property Manager or the Special Servicer and each of the Property Manager and the Special Servicer hereby agree to indemnify each Property Owner, the Issuer and the Indenture Trustee against, and hold each Property Owner, the Issuer and the Indenture Trustee harmless from, any cost, loss or liability arising from any misuse by of such power or power of attorney. Notwithstanding anything contained herein to the contrary, the Property Manager shall not, without the Indenture Trustee’s written consent: (i) initiate any action, suit or proceeding solely under the Indenture Trustee’s name without indicating the Indenture Trustee’s representative capacity or (ii) take any action with the intent to cause, and which actually does cause, the Indenture Trustee to be registered to do business in any state.
(c)Promptly after any request therefor, the Property Manager shall provide to the Indenture Trustee: (i) the most recent inspection report prepared or obtained by the Property Manager or the Special Servicer in respect of each Property pursuant to Section 17(a); (ii) the most recent available operating statement and financial statements of the related Tenant collected by the Property Manager or the Special Servicer pursuant to Section 17(b); and (iii) any and all notices and reports with respect to any Property as to which environmental testing is contemplated by this Agreement or the other Transaction Documents.
(d)The relationship of each of the Property Manager, the Issuer Manager and the Special Servicer to each Property Owner, the Issuer and the Indenture Trustee under this Agreement is intended by the parties to be and shall be that of an independent contractor and not that of a joint venturer, partner or agent.
Section 10.Collection of Monthly Lease Payments; General Receipts Accounts; Collection Account; Release Account.
(a)Each of the Property Manager and the Special Servicer shall undertake reasonable efforts to collect all payments called for under the terms and provisions of the Leases it is obligated to service hereunder and shall, to the extent such procedures shall be consistent with this Agreement, follow such collection procedures as it would follow were it the lessor under such Leases.
(b)The Issuer Manager shall establish and maintain, or cause to be established and maintained, one or more General Receipts Accounts with one or more General Receipts Account Bank. On or prior to the applicable Series Closing Date (or, if later, the date the related Lease is first included in the Collateral Pool), the Property Manager shall instruct each Tenant to make all payments into a General Receipts Account. Each General Receipts Account shall (i) be maintained at an institution that satisfies the institutional requirements of clauses (i) or (ii) of the definition of Eligible Account or (ii) is otherwise acceptable to the Rating Agency (as evidenced by written confirmation from the Rating Agency) and may be an account to which payments relating to other assets serviced or managed by the Property Manager are paid. Each of the Property Manager and the Special Servicer shall, on or prior to each Series Closing Date (or, if applicable, such other date of acquisition), as to those Leases it is obligated to service hereunder, instruct the related Tenant to make all Monthly Lease Payments to a General Receipts Account. The Issuer Manager shall cause all amounts deposited into the General Receipts Account with respect to the Collateral to be transferred to the Collection Account within two (2) Business Day after such funds have been identified, cleared and become available in accordance with the polices of the General Receipts Account Bank.
(c)The Issuer Manager shall establish and maintain the Collection Account, which shall be established in such manner and with the type of depository institution specified in this Agreement. The Collection Account shall be an Eligible Account. If the Collection Account Bank is not the same depository institution as the Indenture Trustee, then the Collection Account will be subject to an Account Control Agreement in form and substance reasonably satisfactory to the Indenture Trustee pursuant to which the Collection Account Bank agrees to follow the
instructions of the Indenture Trustee with respect to the Collection Account and the amounts on deposit therein. Subject to Sections 11 and 12, neither the Issuer Manager nor the Issuer will have any right of withdrawal from the Collection Account, and the Issuer Manager hereby covenants and agrees that it shall not withdraw, or direct any Person to withdraw, any funds from the Collection Account. The Collection Account shall be maintained by the Collection Account Bank as a segregated account, separate and apart from trust funds created for trust certificates or bonds of other series serviced and the other accounts of the Issuer Manager.
(d)The Issuer Manager shall deposit or cause to be deposited in the Collection Account, on each Business Day and within two (2) Business Days after receipt, the following payments and collections received or made by or on behalf of the Issuer Manager on or after the later of the related Series Closing Date and the applicable Transfer Date (other than payments due before the applicable Transfer Date) or, in the case of collections and payments to the General Receipts Account, the Issuer Manager shall instruct each General Receipts Account Bank to transfer the following amounts within two (2) Business Days directly into the Collection Account, immediately after such funds have been identified, cleared and become available in accordance with the policies of the General Receipts Account Bank:
(i)all payments on account of Monthly Lease Payments, net of applicable withholding taxes in the case of the Properties;
(ii)all payments of other amounts payable by the Tenants on the Leases (except with respect to escrows, security deposits and certain additional servicing compensation as set forth in the Property Management Agreement), net of any applicable withholding taxes in the case of the Properties;
(iii)all Insurance Proceeds up to the Collateral Value of such Property (net of applicable taxes payable by the Issuer with respect to such Insurance Proceeds) which shall not include (A) Insurance Proceeds applied to the restoration of property or released to the related Tenant or Issuer in accordance with this Agreement, or (B) Excess Proceeds;
(iv)all Condemnation Proceeds up to the Collateral Value of such Property (net of applicable taxes payable by the Issuer with respect to such Condemnation Proceeds), which shall not include (A) Condemnation Proceeds applied to the restoration of property or released to the related Tenant or the Issuer in accordance with this Agreement or (B) Excess Proceeds;
(v)except as otherwise deposited into the Release Account as set forth herein, (A) proceeds from the purchase or substitution of any Property in accordance with this Agreement, (B) all proceeds from the purchase of any Property in accordance with this Agreement, (C) all proceeds of the purchase of any Property relating to a Defaulted Asset by any party in accordance with this Agreement, and (D) all proceeds of the purchase of the Properties in connection with the termination of the Indenture and the early retirement
of the Notes, in each case net of applicable taxes payable by the Issuer in respect of the applicable disposition;
(vi)any amounts paid by any party to indemnify the Issuer pursuant to any provision of this Agreement, the Indenture, the Sponsor Guaranty, the Property Owner Guaranty;
(vii)any Series Collateral Release Price received in connection with a Series Collateral Release; provided, that any amounts in excess of the amount to be paid to Noteholders in connection with such Series Collateral Release will be deposited into the Release Account;
(viii)any amounts received by the Issuer on account of payments under the Sponsor Guaranty, the Property Owner Guaranty or the Lease Guaranties; and
(ix)any other amounts required to be so deposited under this Agreement.
Upon receipt of any of the amounts described in clauses (i) through (iii) above with respect to any Specially Managed Unit, the Special Servicer shall promptly but in no event later than the second Business Day after receipt remit such amounts to the Issuer Manager for deposit into the Collection Account in accordance with the third preceding paragraph, unless the Special Servicer determines, consistent with the Servicing Standard, that a particular item should not be deposited because of a restrictive endorsement or other reasonably appropriate reason. With respect to any such amounts paid by check to the order of the Special Servicer, the Special Servicer shall endorse such check to the order of the Issuer Manager and shall deliver promptly, but in no event later than one Business Day after receipt, any such check to the Issuer Manager by overnight courier, unless the Special Servicer determines, consistent with the Servicing Standard, that a particular item cannot be so endorsed and delivered because of a restrictive endorsement or other reasonably appropriate reason.
(e)The Issuer Manager shall establish and maintain at a bank designated by the Indenture Trustee a Release Account. The Release Account shall be an Eligible Account. The funds held in the Release Account may be held as cash or invested in Permitted Investments in accordance with the provisions of Section 13(a). The Release Account and the amounts on deposit therein will be pledged to the Indenture Trustee under the Indenture. The Issuer Manager will deposit or cause to be deposited in the Release Account, on the date of receipt, (i) the Release Price from the sale of any Released Property (other than any Series Collateral Release Price (except for any excess proceeds as described in the following sentence) or Relinquished Property Proceeds deposited into the Exchange Account pursuant to Section 34 herein and the applicable Master Exchange Agreement) and (ii) provided that such amounts are greater than or equal to the Collateral Value of the related Property, Condemnation Proceeds, Insurance Proceeds and proceeds of an Insured Casualty. Pursuant to the Escrow Agreement, Relinquished Property Proceeds in the Exchange Account may be transferred to the Release Account following the occurrence of certain events specified therein and, in accordance with Section 13(b), such Relinquished Property Proceeds may be used to acquire a Qualified Substitute Property.
Section 11.Advances.
(a) In accordance with the Servicing Standard, the Issuer Manager shall withdraw and remit to the Property Manager funds from the Collection Accounts and to use such funds in order to pay Emergency Property Expenses; provided, that, (i) the Issuer Manager shall have determined, in accordance with the Servicing Standard, that such costs and expenses, if paid by the Issuer Manager, would constitute a Nonrecoverable Advance, and (ii) the Issuer Manager shall have determined, in accordance with the Servicing Standard, that the making of such payment is in the best interest of the Noteholders and the holders of any Related Series Notes. Any such funds withdrawn from the Collection Accounts to pay Emergency Property Expenses shall not constitute part of the Available Amount on any Payment Date and will not be available to make payments to the Noteholders or to pay any other expenses or obligations of the Issuer. The Back-Up Manager will be required to make any required Property Protection Advance, in accordance with the Servicing Standard, to the extent any Property Protection Advance required to be made by the Issuer Manager pursuant to this Section 11 is not made and the Back-Up Manager receives notice thereof, subject to the Back-Up Manager’s determination (in its sole discretion exercised in good faith) that such Property Protection Advance will not be a Nonrecoverable Advance. The Indenture Trustee will be required to make any required Property Protection Advance to the extent that any Property Protection Advance required to be made by the Issuer Manager or the Back-Up Manager pursuant to this Section 11 is not made and the Indenture Trustee receives notice thereof, subject to the Indenture Trustee’s determination (in its sole discretion exercised in good faith) that such Property Protection Advance will not be a Nonrecoverable Advance.
(a)
(b)With respect to any Payment Date, in the event the Series Available Amount allocated (or to be allocated) to any Series of notes on any Payment Date will be insufficient to pay in full (i) the scheduled principal payment (if any) with respect to each class of notes in such Series other than any such class of notes whose anticipated repayment date (x) occurs on such Payment Date or (y) has occurred prior to such Payment Date and (ii) accrued and unpaid note interest (not including any interest carry-forward amount) in respect of the notes of such Series due on such Payment Date, the Issuer Manager, subject to its determination that such amounts are not Nonrecoverable Advances will be required to make P&I Advance. None of the Issuer Manager, the Property Manager, the Back-Up Manager and the Indenture Trustee will be required to make any advance to cover any shortfall in the scheduled payment of principal on any Class of Notes on or after the related Anticipated Repayment Date. The Back-Up Manager will be required to make any required P&I Advance, in accordance with the Servicing Standard, to the extent any P&I Advance required to be made by the Issuer Manager is not made and the Back-Up Manager receives notice thereof, subject to the Back-Up Manager’s determination (in its sole discretion exercised in good faith) that such P&I Advance will not be a Nonrecoverable Advance. If the Issuer Manager and the Back-Up Manager fail to make a P&I Advance and the Indenture Trustee receives notice thereof, the Indenture Trustee will be required to make any required P&I Advance by 3:00 p.m. New York City time on the related Payment Date, subject to
the Indenture Trustee’s sole discretion exercised in good faith, that such P&I Advance will not be a Nonrecoverable Advance.
(c)In accordance with the Servicing Standard, the Issuer Manager will be required to make Property Protection Advances necessary to preserve the security interest in, or value of, each Property and Lease (including any costs and expenses necessary to re-lease such Property) and the Property Manager will be required to enforce any Lease.
(d)If the Issuer Manager, Back-up Manager, or Indenture Trustee, as applicable, determines (in its commercially reasonable, good faith business judgment and in accordance with the Servicing Standard) that any P&I Advance or Property Protection Advance, previously made or proposed to be made, will be a Nonrecoverable Advance, the Issuer Manager, Back-up Manager, or Indenture Trustee, as applicable, will not be required to make such P&I Advance or Property Protection Advance.
(e)All Advances, together with Advance Interest thereon, shall be reimbursable in the first instance from collections from the related Leases and Properties and further as provided in Section 2.11(b) of the Indenture.
(f)The determination by the Issuer Manager or the Back-Up Manager that it has made a Nonrecoverable Advance or that any proposed Advance, if made, would constitute a Nonrecoverable Advance, shall be in accordance with (i) with respect to Property Protection Advances, the Servicing Standard and (ii) with respect to P&I Advances, Section 11(g) below, and, in each case, shall be evidenced by an Officer’s Certificate delivered promptly to the Issuer and to the Indenture Trustee setting forth the basis for such determination. The determination by the Back-Up Manager that it has made a Nonrecoverable Advance or that any proposed Advance, if made, would constitute a Nonrecoverable Advance, shall be made in good faith. The determination by the Indenture Trustee that it has made a Nonrecoverable Advance or that any proposed Advance, if made, would constitute a Nonrecoverable Advance, shall be made in good faith. Each of the Back-Up Manager and the Indenture Trustee may conclusively rely on any determination by the Issuer Manager that an Advance, if made, would be a Nonrecoverable Advance.
(g)In making a nonrecoverability determination with respect to any P&I Advance, the Issuer Manager (including the Back-Up Manager as successor Issuer Manager) and the Back-up Manager may only consider the obligations of the Issuer under the terms of the Transaction Documents as they may have been modified, the related Collateral in its “as is” or then current conditions and the timing and availability of anticipated cash flows as modified by such party’s assumptions regarding the possibility and effect of future adverse changes, together with such other factors, including but not limited to an estimate of future expenses, timing of recovery, the inherent risk of a protracted period to complete liquidation or the potential inability to liquidate Collateral as a result of intervening creditor claims or of a bankruptcy proceeding affecting the Issuer and the effect thereof on the existence, validity and priority of any security interest encumbering the Collateral, the direct and indirect equity interests in the Issuer, available cash on
deposit in the Collection Account, the future allocations and disbursements of cash on deposit in the Collection Account, and the net proceeds derived from any of the foregoing.
(i) In the event any Advances made by the Issuer Manager, the Back-Up Manager or the Indenture Trustee shall at any time be outstanding, or any amounts of interest thereon shall be accrued and unpaid, all amounts available to repay Advances and interest hereunder shall be applied first entirely to Advances (and the accrued and unpaid interest thereon) made by the Indenture Trustee and the Back-Up Manager, as applicable, until such Advances (and the accrued and unpaid interest thereon) made by the Indenture Trustee and the Back-Up Manager, as applicable, shall have been repaid in full and then to Advances (and the accrued and unpaid interest thereon) made by the Issuer Manager. Any costs or expenses in connection with any actions to be taken by the Issuer Manager or Special Servicer pursuant to this Section 11 shall be borne by the Issuer Manager or Special Servicer, as applicable.
Section 12.Withdrawals From the Collection Account and Liquidity Reserve Account.
The applicable Account Control Agreement shall provide that on each Remittance Date the Collection Account Bank shall deliver the Available Amount by wire transfer of immediately available funds for deposit into the Payment Account for application by the Indenture Trustee to make payments in accordance with the priorities set forth pursuant to Section 2.11(b) of the Indenture. On or prior to each Remittance Date, the Issuer Manager may withdraw funds from the Collection Account to pay any Property Management Fee, the Issuer Management Fee, the Back-Up Management Fee, Workout Fees, Liquidation Fees, Additional Servicing Compensation, any applicable Special Servicing Fee due and payable to the Property Manager, the Issuer Manager, the Back-Up Manager and the Special Servicer, and to pay any Emergency Property Expenses (pursuant to Section 11) and Advances (including Nonrecoverable Advances) plus interest thereon (including to reimburse the Indenture Trustee therefor); provided, however, that no other amounts may be withdrawn from the Collection Account by the Issuer Manager, except as otherwise provided in this Agreement. Funds withdrawn by the Issuer Manager for the payment of any Property Management Fee, the Issuer Management Fee, any Back-Up Management Fee, Workout Fees, Liquidation Fees, Additional Servicing Compensation, any reimbursements of Advances (including Nonrecoverable Advances) plus interest thereon, and any applicable Special Servicing Fee shall not constitute part of the Available Amount on any Payment Date.
Section 13.Investment of Funds in the Collection Account, the Release Account, the Exchange Reserve Account and the Liquidity Reserve Account.
(a)The Issuer Manager shall direct the Collection Account Bank to invest the funds held in the Collection Account in one or more Permitted Investments constituting short-term securities and other investment-grade obligations selected by the Issuer bearing interest or sold at a discount, and maturing, unless payable on demand, not later than the Business Day immediately preceding the next succeeding Remittance Date, which may be in the form of a standing direction. The Issuer Manager may direct any institution maintaining the Exchange
Reserve Account to invest the funds held therein in one or more specific Permitted Investments bearing interest or sold at a discount, and maturing, unless payable on demand, prior to the Payment Date following the date of such direction, which may be in the form of a standing direction; provided, that such Permitted Investment must have (i) a short-term rating of not less than “A-2” by S&P and (ii) a maturity date prior to the Payment Date following the date of such direction. The Issuer Manager may direct any institution maintaining the Release Account to invest the funds held therein in one or more specific Permitted Investments bearing interest or sold at a discount, and maturing, unless payable on demand, not later than the Business Day immediately preceding the day such amounts are required to be distributed pursuant to this Agreement, which may be in the form of a standing direction. All such Permitted Investments in the Collection Account and the Release Account shall be held to maturity, unless payable on demand. Any investment of funds in the Collection Account and the Release Account shall be made in the name of the Issuer for the benefit of the Indenture Trustee (in its capacity as such). The Issuer Manager may direct the Indenture Trustee to invest the funds held in the Liquidity Reserve Account in one or more Permitted Investments pursuant to the terms of the Indenture and bearing interest or sold at a discount, and maturing, unless payable on demand, not later than the Business Day immediately preceding the day such amounts are required to be distributed pursuant to this Agreement, which may be in the form of a standing direction. The Property Manager shall promptly deliver to the Indenture Trustee, and the Indenture Trustee shall maintain continuous possession of, any Permitted Investment that is either (i) a “certificated security,” as such term is defined in the Uniform Commercial Code, or (ii) other property in which a secured party may perfect its security interest by possession under the Uniform Commercial Code or any other applicable law. All such Permitted Investments in the Collection Account, the Liquidity Reserve Account, the Release Account and the Exchange Reserve Account shall be held to maturity, unless payable on demand. Any investment of funds in the Collection Account, the Liquidity Reserve Account, the Release Account and the Exchange Reserve Account shall be made in the name of the Issuer for the benefit of the Indenture Trustee (in its capacity as such). If amounts on deposit in the Collection Account, the Release Account, the Liquidity Reserve Account or the Exchange Account are at any time invested in a Permitted Investment payable on demand, the Property Manager shall:
(i)consistent with any notice required to be given thereunder, demand that payment thereon be made on the last day such Permitted Investment may otherwise mature hereunder in an amount equal to the lesser of (1) all amounts then payable thereunder and (2) the amount required to be withdrawn on such date; and
(ii)demand payment of all amounts due thereunder promptly upon determination by the Issuer Manager that such Permitted Investment would not constitute a Permitted Investment in respect of funds thereafter on deposit in the Collection Account or the Release Account, as applicable.
(b)Prior to an Early Amortization Period, in the event that (i) any Property Owner elects to release a Property from the Collateral Pool under Section 25 or Section 28, (ii) Relinquished Property Proceeds are transferred from the Exchange Account to the Release Account in accordance with the terms of the applicable Master Exchange Agreement and the
Escrow Agreement or (iii) amounts in connection with a Series Collateral Release are deposited into the Release Account pursuant to Section 33(c) and the Indenture amounts deposited in the Release Account shall be applied by the Issuer Manager, first, to reimburse the Issuer Manager, the Property Manager, the Special Servicer, the Back-Up Manager and the Indenture Trustee any amounts owed with respect to unreimbursed Extraordinary Expenses and Advances (plus Advance Interest) thereon and Emergency Property Expenses related to such Lease or Property and to pay the expenses related to such release and, second, either to (i) allow the Issuer to acquire a Qualified Substitute Property within twelve (12) months following the removal of the related Released Property or (ii) be deposited as Unscheduled Proceeds into the Collection Account. Any amounts remaining in the Release Account following the twelve (12) month period from the related release shall be transferred as Unscheduled Proceeds into the Collection Account. Notwithstanding the foregoing, during an Early Amortization Period, all amounts in the Release Account shall be deposited as Unscheduled Proceeds into the Collection Account and applied as Unscheduled Principal Payments on the Payment Date following the commencement of such Early Amortization Period.
(c)Whether or not the Issuer Manager directs the investment of funds in the Collection Account, the Release Account, the Liquidity Reserve Account, or the Exchange Reserve Account, (i) interest and investment income realized on funds deposited therein, to the extent of the Net Investment Earnings, if any, for the Collection Account, the Release Account or the Exchange Reserve Account for each Collection Period, shall be added to the Available Amount for such Collection Period and (ii) interest and investment income realized on funds deposited therein, to the extent of the Net Investment Earnings, if any, for the Liquidity Reserve Account shall remain on deposit therein until released in accordance with the Indenture.
(d)Except as otherwise expressly provided in this Agreement, if any default occurs in the making of a payment due under any Permitted Investment, or if a default occurs in any other performance required under any Permitted Investment, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate proceedings.
(e)Notwithstanding the investment of funds held in the Collection Account, the Release Account or the Exchange Reserve Account, for purposes of the calculations hereunder, including the calculation of the Available Amount, the amounts so invested shall be deemed to remain on deposit in the Collection Account, the Release Account or the Exchange Reserve Account, as applicable.
Section 14.Maintenance of Insurance Policies: Errors and Omissions and Fidelity Coverage.
(a)The Property Manager (other than with respect to Specially Managed Units) and the Special Servicer (with respect to Specially Managed Units) will use reasonable efforts in accordance with the Servicing Standard to cause the related Tenant to maintain for each Property all insurance coverage as is required under the terms of the related Lease (including for the avoidance of doubt, any environmental insurance policy); provided, that if and to the extent that
any such Lease permits the lessor thereunder any discretion (by way of consent, approval or otherwise) as to the insurance coverage that the related Tenant is required to maintain, the Property Manager or the Special Servicer, as the case may be, will exercise such discretion in a manner consistent with the Servicing Standard. If such Tenant does not maintain the required insurance or, with respect to any environmental insurance policy in place as of the related Series Closing Date or Transfer Date, the Property Manager or Special Servicer will itself cause such insurance to be maintained with insurance companies or security or bonding companies qualified to write the related property insurance policies in the relevant jurisdiction that have a claims-paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide; provided, that neither the Property Manager nor the Special Servicer will be required to maintain such insurance if the Indenture Trustee (as mortgagee of record on behalf of the Noteholders) does not have an insurable interest or the Property Manager or the Special Servicer, as applicable, has determined, in its reasonable judgment in accordance with the Servicing Standard, that either (i) such insurance is not available at a commercially reasonable rate and the subject hazards are at the time not commonly insured against by prudent owners of properties similar to the Property located in or around the region in which such Property is located or (ii) such insurance is F at any rate. The cost of any such insurance coverage obtained by the Property Manager or the Special Servicer will be a Property Protection Advance to be paid by the Issuer Manager, and such insurance coverage need not be obtained if the related Property Protection Advance would constitute a Nonrecoverable Advance. All insurance policies maintained by the Property Manager or the Special Servicer pursuant to the immediately preceding sentence will contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Property Manager, as agent of and for the account of the Issuer and the Indenture Trustee, and will be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Property Manager or the Special Servicer under any insurance policies (other than amounts to be applied to the restoration or repair of the related Property or amounts to be released to the related Tenant, in each case in accordance with the Servicing Standard) will be distributed in the manner set forth under Section 22.
(b)The Property Management Agreement will further provide that the Property Manager or the Special Servicer may satisfy the foregoing obligations by maintaining or causing to maintained a forced place or blanket policy and, in any such event, certain incremental costs of such insurance will constitute Property Protection Advances (and such insurance coverage will not be obtained if the related Property Protection Advance would constitute a Nonrecoverable Advance).
(c)Each of the Property Manager, the Issuer Manager and the Special Servicer will be required to maintain a fidelity bond and errors and omissions policy or their equivalent that provides coverage against losses that may be sustained as a result of errors and omissions of the Property Manager’s, the Issuer Manager’s or Special Servicer’s officers, employees and agents in connection with its servicing obligations under the Property Management Agreement. Such fidelity bond and errors and omissions insurance shall be in such form and amount as would not adversely affect any rating assigned by any Rating Agency to the Notes.
Section 15.DSCR Reserve Account. On each Payment Date occurring during any DSCR Sweep Period, the Indenture Trustee shall deposit funds into the DSCR Reserve Account in accordance with Section 2.11(b) and 2.18 of the Indenture. The DSCR Reserve Account shall be an Eligible Account. The Issuer Manager shall deliver to the Indenture Trustee a calculation of the Monthly DSCR on or before each Remittance Date. The Issuer grants to the Indenture Trustee a first-priority perfected security interest in the DSCR Reserve Account and any and all monies now or hereafter deposited in the DSCR Reserve Account as additional security for payment of the Notes. Until disbursed or applied in accordance herewith, the DSCR Reserve Account shall constitute additional security for the Notes. Upon the occurrence of an Event of Default, the Indenture Trustee may, in addition to any and all other rights and remedies available to the Indenture Trustee, apply any sums then present in the DSCR Reserve Account to the payment of the Notes in such order and priority as set forth in the Indenture.
Section 16.Servicing Compensation: Interest on Advances.
(a)As compensation for its activities hereunder, the Property Manager shall be entitled to receive the Property Management Fee with respect to each Property included in the Collateral Pool (excluding the Specially Managed Units, if any); provided, that, prior to the occurrence of a Fee Trigger Event, the Property Manager shall not collect any fees pursuant to this Agreement and fees that are not collected by the Property Manager shall not accrue or be considered compensation to the Property Manager. The Property Management Fee with respect to any Property shall cease to accrue if the Property becomes a Specially Managed Unit. The right to receive the Property Management Fee may not be transferred in whole or in part except in connection with the transfer of all of the Property Manager’s responsibilities and obligations under this Agreement. Earned but unpaid Property Management fees shall be distributable monthly on the Payment Date by the Indenture Trustee from the Available Amount pursuant to Section 2.11(b) of the Indenture.
(b)On each Payment Date, the Property Manager shall be entitled to receive, and the Indenture Trustee shall distribute to the Property Manager from the Payment Account as additional compensation, all transaction, returned check, assumption, modification and similar fees and late payment charges received with respect to Properties that are not Specially Managed Units. The Property Manager will also be entitled to any Default Interest collected on a Lease, but only to the extent that (i) such Default Interest is allocable to the period (not to exceed 60 days) when the related Property did not constitute a Specially Managed Unit and (ii) such Default Interest is not allocable to cover interest payable to the Property Manager, Back-up Manager, or the Indenture Trustee with respect to any Advances made in respect of the related Property.
(c)As compensation for its activities hereunder, the Special Servicer shall be entitled to receive the Special Servicing Fee with respect to each Specially Managed Unit; provided, that, prior to the occurrence of a Fee Trigger Event, the Special Servicer shall not collect any fees pursuant to this Agreement and fees that are not collected by the Special Servicer shall not accrue or be considered compensation to the Special Servicer. The Special Servicing Fee with respect to any Specially Managed Unit shall cease to accrue if (i) the related Property is sold or
otherwise released from the lien of the related Mortgage, or (ii) such Specially Managed Unit becomes a Corrected Unit. Earned but unpaid Special Servicing Fees shall be distributable monthly on the Payment Date by the Indenture Trustee out of general collections on the Leases and the Properties on deposit in the Payment Account pursuant to Section 2.11(b) of the Indenture. The Special Servicer’s right to receive the Special Servicing Fee may not be transferred in whole or in part except in connection with the transfer of all of the Special Servicer’s responsibilities and obligations under this Agreement.
(d)On each Payment Date, the Special Servicer shall be entitled to receive, and the Indenture Trustee shall distribute to the Special Servicer from the Payment Account, all returned check, assumption, modification and similar fees and late payment charges received on or with respect to the Specially Managed Units as Special Servicer Additional Servicing Compensation out of funds available for such purpose pursuant to Section 2.11(b) of the Indenture.
(e)As compensation for its activities hereunder, the Issuer Manager shall be entitled to receive the Issuer Management Fee with respect to each Property included in the Collateral Pool (excluding the Specially Managed Units, if any); provided, that, prior to the occurrence of a Fee Trigger Event, the Issuer Manager shall not collect any fees pursuant to this Agreement and fees that are not collected by the Issuer Manager shall not accrue or be considered compensation to the Issuer Manager. The Issuer Management Fee with respect to any Property shall cease to accrue if the Property becomes a Specially Managed Unit. The right to receive the Issuer Management Fee may not be transferred in whole or in part except in connection with the transfer of all of the Issuer Manager’s responsibilities and obligations under this Agreement. Earned but unpaid Issuer Management Fees shall be distributable monthly on the Payment Date by the Indenture Trustee from the Available Amount pursuant to Section 2.11(b) of the Indenture.
(f)The Property Manager, Issuer Manager, Back-Up Manager and the Special Servicer shall each be required to pay all ordinary expenses incurred by it in connection with its servicing activities under this Agreement, including fees of any subservicers retained by it; provided, however, that Property Manager and Special Servicer shall be permitted to engage third party valuation experts and other consultants to conduct appraisals at the cost of the Issuer. As and to the extent permitted by Section 2.11(b) of the Indenture, the Issuer Manager, Back-up Manager, and the Indenture Trustee shall each be entitled to receive interest at the Reimbursement Rate in effect from time to time, accrued on the amount of each Advance and unreimbursed Extraordinary Expenses made by it for so long as such Advance is outstanding.
(g)As compensation for its activities hereunder, the Back-Up Manager shall be entitled to receive the monthly Back-Up Management Fee with respect to each Property included in the Collateral Pool. The right to receive the monthly Back-Up Management Fee may not be transferred in whole or in part except in connection with the transfer of all of the Back-Up Manager’s responsibilities and obligations under this Agreement. Earned but unpaid Back-Up Management Fees shall be payable monthly pursuant to Section 2.11(b) of the Indenture.
Section 17.Property Inspections: Collection of Financial Statements: Delivery of Certain Reports.
(a)The Property Manager will be required to obtain a physical inspection with respect to each Property with respect to which the Property Manager has received notice from the Tenant or has actual knowledge that the Tenant is a non-renewal or termination risk, within a reasonable amount of time from receipt of such notice or knowledge. The Special Servicer will be required to obtain a physical inspection of each Property specially serviced by it within six (6) months after it becomes a Specially Managed Unit. The Special Servicer will be required to prepare a written report of each such inspection performed by it that describes the condition of the related Property and that specifies the existence with respect thereto of any sale, transfer or abandonment or any material change in its condition or value. The Special Servicer shall be entitled to receive reimbursement for reasonable out-of-pocket expenses related to any such inspection as a Property Protection Advance and such inspection need not be performed if such Property Protection Advance would constitute a Nonrecoverable Advance.
(b)The Special Servicer, in the case of any Specially Managed Unit specially serviced by it, and the Property Manager, in the case of all other Leases, shall use reasonable efforts to collect and review the annual and quarterly financial statements of the related Lease Parties required to be provided under the related Lease.
Section 18.Management of Properties Relating to Defaulted Assets.
(a)The Special Servicer and the Property Manager, as applicable, shall exercise reasonable efforts, to the extent consistent with the Servicing Standard, to enforce a Defaulted Asset, including, without limitation, the commencement and prosecution of any eviction or foreclosure proceedings, as to which no satisfactory arrangements can be made for collection of delinquent payments. In the event any Property becomes a Terminated Lease Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to (i) with respect to such Terminated Lease Property, attempt to induce another Tenant to assume the obligations under the existing Lease, with or without modification, (ii) cause the lease of the Terminated Lease Property under a new Lease on economically desirable terms or (iii) dispose of the Property. The decision to enter into a lease assumption or re-lease the Terminated Lease Property shall be made by the Special Servicer in accordance with the Servicing Standard. The Special Servicer shall pay all costs and expenses (other than costs or expenses that would, if incurred, constitute a Nonrecoverable Advance) incurred by it in connection with the foregoing as a Property Protection Advance, and shall be entitled to reimbursement therefor as provided herein. If the Special Servicer is successful in re-leasing the Terminated Lease Property, a new Appraised Value will be obtained by the Special Servicer for the Terminated Lease Property in the Special Servicer’s discretion, and the costs of any such appraisal shall be a Property Protection Advance. If the Special Servicer causes the re-lease of any Terminated Lease Property, the Property Manager shall deliver to the applicable Rating Agency, the Indenture Trustee and the Issuer an amended Lease Schedule reflecting the addition of such Lease to the Collateral Pool. Monthly Lease Payments on the modified or new Lease will be applied pursuant to the Indenture.
(b)If the Lease has not been assumed or the Terminated Lease Property has not been leased to a new tenant and the Terminated Lease Property has not been released from the lien of the Mortgage pursuant to Section 18(h) below within twenty-four (24) months of becoming a Terminated Lease Property, the Special Servicer may offer to sell the Terminated Lease Property pursuant to this Section 18, for a fair price, free and clear of the lien of the related Mortgage, if and when the Special Servicer determines, consistent with the Servicing Standard, that such a sale would be in the best interests of the Noteholders. No Interested Person shall be obligated to submit a bid to purchase any such Terminated Lease Property. The Liquidation Proceeds shall be deposited into the Collection Account and applied as set forth herein.
(c)If and when the Special Servicer deems it necessary and prudent for purposes of establishing a fair price for any Terminated Lease Property for purposes of conducting a sale of such Terminated Lease Property pursuant to subsection (b) above, the Special Servicer is authorized to have an appraisal conducted by an Independent MAI-designated appraiser or other expert (the cost of which appraisal shall constitute a Property Protection Advance).
(d)Whether any cash bid constitutes a fair price for any Terminated Lease Property for purposes of Section 18(c) shall be determined by the Special Servicer or, if such cash bid is from an Interested Person, by the Indenture Trustee or, if the expected Liquidation Proceeds with respect to such Terminated Lease Property would be insufficient to provide reimbursement for all unreimbursed Advances made with respect to the subject Terminated Lease Property, together with any related Advance Interest thereon, by the Property Manager. In determining whether any bid received from an Interested Person represents a fair price for any Terminated Lease Property, the Indenture Trustee shall be supplied with and may conclusively rely on the most recent appraisal conducted in accordance with Section 18(e).
(e) within the preceding 12-month period or, in the absence of any such appraisal, on a narrative appraisal prepared by an Independent MAI-designated appraiser or other expert retained by the Special Servicer, at Issuer’s cost or as a Property Protection Advance. Such appraiser shall be selected by the Special Servicer if the Special Servicer is not bidding with respect to a Terminated Lease Property and shall be selected by the Property Manager if the Special Servicer is bidding, provided that if the Property Manager and the Special Servicer are the same Person and such Person is bidding, then such appraiser shall be selected by the Indenture Trustee. In determining whether any bid constitutes a fair price for any such Terminated Lease Property, the Special Servicer, the Indenture Trustee (if applicable) or the Property Manager, as applicable, shall take into account, among other factors, the occupancy status and physical condition of the Terminated Lease Property, the state of the local economy, and, with respect to Terminated Lease Properties, the period and amount of any delinquency on the effected Lease. In connection therewith, the Special Servicer may charge prospective bidders fees that approximate the Special Servicer’s actual costs in the preparation and delivery of information pertaining to such sales or evaluating bids without obligation to deposit such amounts into the Collection Account.
(f)The Special Servicer shall act on behalf of the Issuer and the Indenture Trustee in negotiating and taking any other action necessary or appropriate in connection with the sale of
any Terminated Lease Property and the collection of all amounts payable in connection therewith. Any sale of a Terminated Lease Property shall be free and clear of the lien of the Indenture and shall be final and without recourse to the Issuer or the Indenture Trustee. If such sale is consummated in accordance with the terms of this Agreement, none of the Property Manager, the Special Servicer or the Indenture Trustee shall have any liability to the Issuer or any Noteholder with respect to the purchase price therefor accepted by the Property Manager, the Special Servicer or the Indenture Trustee, as the case may be.
(g)The Special Servicer shall accept the first (and, if multiple bids are received contemporaneously, highest) cash bid received from any Person that constitutes a fair price for such Terminated Lease Property. Notwithstanding the foregoing, the Special Servicer shall not be obligated to accept the highest cash bid if the Special Servicer determines, in accordance with the Servicing Standard, that rejection of such bid would be in the best interests of the Noteholders, and the Special Servicer may accept a lower cash bid if it determines, in accordance with the Servicing Standard, that acceptance of such bid would be in the best interests of the Noteholders (for example, if the prospective buyer making the lower bid is more likely to perform its obligations or the terms offered by the prospective buyer making the lower bid are more favorable).
(h)At any time that a Terminated Lease Property has not already been sold or leased pursuant to the terms hereof, the related Issuer may at its option (i) release the lien of the Indenture and the related Mortgage from such Terminated Lease Property pursuant to Section 29 or (ii) exchange one or more Qualified Substitute Properties for the subject Terminated Lease Property.
(i)The Special Servicer shall, and is hereby authorized and empowered by the Issuer and the Indenture Trustee to, prepare, execute and deliver in its own name, on behalf of the Issuer and the Indenture Trustee or any of them, the endorsements, assignments and other documents necessary to effectuate a sale of a Terminated Lease Property pursuant to this Section 18, and the Issuer shall execute and deliver any limited powers of attorney substantially in the form of Exhibit B necessary to permit the Special Servicer to do so; provided, however, that none of the Property Owners, the Issuer or the Indenture Trustee shall be held liable for any misuse of any such power or power of attorney by the Special Servicer and the Special Servicer hereby agrees to indemnify the Property Owners, the Issuer and the Indenture Trustee against, and hold the Property Owners, the Issuer and the Indenture Trustee harmless from, any loss or liability arising from any misuse in the exercise of such power or power of attorney.
(j)The Special Servicer shall give the Issuer, the Issuer Manager, the Indenture Trustee and the Property Manager not less than five (5) business days prior written notice of its intention to sell any Terminated Lease Property.
(k)If the Special Servicer determines that a lease assumption with modification, or re-lease, of a Defaulted Asset would maximize revenue received by the Issuer, and the terms of such new lease will produce rent that is 60% or less than the rent from the Defaulted Asset, then the Special Servicer may enter into any such lease for no more than 10 years, so long as the
Special Servicer determines that entering into such reduced lease term would be in accordance with the Servicing Standard and in the best interests of the Noteholders. In connection with the issuance of Related Series Notes, the Property Management Agreement may impose additional limitations on the Special Servicer with respect to the modification or re-leasing of leases that would result in reduced rent production in similar circumstances to the above, or may change the above limitations, in each case requiring the Special Servicer to act in accordance with the Servicing Standard and in the best interests of the Noteholders.
Section 19.Renewals, Modifications, Waivers, Amendments; Consents and Other Matters.
(a)The Issuer and the Property Manager may enter into renewals of Leases and new Leases that provide for rental rates comparable to existing local market rates and are on commercially reasonable terms. All new Leases executed after the Series Closing Date shall provide that they are subordinate to the Mortgage encumbering the applicable Property and that the lessee agrees to attorn to the Indenture Trustee or any purchaser at a sale by foreclosure or power of sale. The Property Manager and the Issuer Manager shall observe and perform the obligations imposed upon the lessor under the Leases in accordance with the Servicing Standard. The Issuer shall execute and deliver, or cause to be executed and delivered, at the request of any party hereto all such further assurances, confirmations and assignments in connection with the Leases as may be required by such party.
(b)Except as set forth herein, the Property Manager shall: (i) not (A) cause the amendment or modification, in any material respect, or termination of (other than in connection with a bona fide default by the Tenant thereunder beyond any applicable notice or grace period or with respect to the Lease Transfer Properties) any Lease; provided, however, that a reduction in rent with respect to a Lease will not be deemed to be a material modification if (1) the Monthly Lease Payment following such reduction is consistent with market prices for similar leases including offers of discounted lease rates in connection with extensions of the Lease term, (2) such reduction is in exchange for an extended lease term and (3) the Property Manager reasonably determines that such modification will not materially and adversely affect the interests of the applicable Property Owner, the Issuer or the Noteholders, (B) unless permitted by the related Lease and remitted and initiated thereunder by the related Tenant, collect rents more than one (1) month in advance (other than security deposits), or (C) execute any other Tenant assignment; and (ii) execute and deliver all such further assurances, confirmations and assignments as the Indenture Trustee shall reasonably require
(c)Notwithstanding the foregoing, the Issuer, the Property Owners, the Property Manager, the Issuer Manager and the Special Servicer may, consistent with the Servicing Standard, agree to any modification, waiver or amendment of any term of, forgive any Lease payment on, and permit the release of any related Tenant or any Lease Guarantor (and approve of a Lease Amendment without the consent of any person; provided, that (i) such Lease Amendment is entered into for a commercially reasonable purpose in an arm’s-length transaction on market terms; (ii) unless such Lease Amendment is approved by the Property Manager in accordance with the Servicing Standard, such Lease Amendment shall not cause the Monthly
DSCR to be reduced below 1.25x and (iii) in the reasonable judgment of the party agreeing to the amendment, such Lease Amendment is in the best interest of the Noteholders and (other than in connection with a Tenant default or with respect to Lease Transfer Properties) will not have an adverse effect on the Collateral Value of such Property; provided, that any such Lease Amendment (x) in connection with a Delinquent Asset or Defaulted Asset, (y) that is required by the terms of the applicable Lease or (z) with respect to which the Rating Condition is satisfied, shall not be subject to the foregoing restrictions set forth above.
(d)Any Lease Amendment (x) in connection with a bona fide default by the Tenant, (y) that is required by the terms of any Lease or is solely within any Tenant’s control, or (z) with respect to which the Rating Condition is satisfied, shall not be subject to the foregoing restrictions. The Property Manager or Special Servicer shall endeavor to cause the costs related to requesting and receiving any such Rating Condition to be paid by the Tenant; provided, that if the Property Manager or the Special Servicer is unable to cause the Tenant to pay such expenses, such expenses shall constitute an Extraordinary Expense of the Issuer. Regardless of whether any Lease Amendment is material, the Property Manager will give the Indenture Trustee prompt written notice thereof and shall indicate whether such action is being taken pursuant to the preceding sentence and upon request will deliver a copy of any documents executed in connection therewith to the Rating Agency.
(e)All modifications, waivers, amendments and other actions entered into or taken in respect of the Lease are required to be in writing. Each of the Property Manager and the Special Servicer is required to notify the other such party and the Issuer, the Issuer Manager and the Indenture Trustee, in writing, of any modification, waiver, amendment or other action entered into or taken in respect of any Lease as described above and the date thereof, and is required to deliver to the Custodian for deposit in the related Lease File an original counterpart of the agreements relating to such modification, waiver, amendment or other action promptly following the execution thereof.
(d) None of the Issuer Manager, the Property Manager or the Special Servicer shall have any liability to the Issuer, the Indenture Trustee, the Noteholders or to any other Person if its analysis and determination that an amendment or other action contemplated by this Section 19 would not materially reduce the likelihood of timely payment of amounts due thereon, or that such Amendment or other action is reasonably likely to produce a greater recovery to the related Issuer on a present value basis than would liquidation, should prove to be wrong or incorrect, so long as the analysis and determination were made on a reasonable basis in accordance with the Servicing Standard in good faith by the Issuer, the Issuer Manager, the Property Manager or the Special Servicer, as the case may be.
(f)The Property Manager and the Special Servicer each may, as a condition to its granting any request by a Tenant for a consent, modification, waiver or indulgence, require such Tenant, to the extent permitted by the applicable Lease, or, if not so permitted, the Issuer shall pay to the Property Manager or the Special Servicer, as applicable, as Additional Servicing Compensation, a reasonable or customary fee for additional services performed in connection with such request.
(g) From time to time, subject to the Servicing Standard, the Property Manager or Special Servicer, as applicable, shall be entitled (on behalf of the Issuer and the Indenture Trustee) to release an immaterial portion of any Property that it is then administering from the lien of the Indenture and the Mortgage (and simultaneously release the Issuer’s interest in such portion of such Property) or consent to, or make, an immaterial modification with respect to any Property that it is then administering; provided, that, such Property Manager or Special Servicer shall have delivered an Officer’s Certificate to the Indenture Trustee (upon which the Indenture Trustee shall be entitled to conclusively rely with no obligation to verify, confirm or otherwise review and with no liability therefor) that it reasonably believes that such release or modification (both individually and collectively with any other similar releases or modifications with respect to such Property) will not materially adversely affect (i) the Appraised Value of such Property or (ii) the Noteholders’ interests in such Property. Following the Indenture Trustee’s receipt of such Officer’s Certificate, the Indenture Trustee shall execute and deliver such instruments of release, transfer or assignment, in each case without recourse, as shall be provided to it and are reasonably necessary to effect such release or modification.
Section 20.Transfer of Servicing Between Property Manager and Special Servicer; Record Keeping.
(a)Upon determining that a Servicing Transfer Event has occurred with respect to any Lease and if the Property Manager is not also the Special Servicer, the Property Manager shall immediately give notice thereof, and shall deliver the related Servicing File, to the Special Servicer, the Indenture Trustee and the Back-Up Manager and shall provide the Special Servicer with all information, documents (or copies thereof) and records (including records stored electronically on computer tapes, magnetic discs and the like) relating to such Lease and reasonably requested by the Special Servicer to the extent in Property Manager’s possession, to enable it to assume its functions hereunder with respect thereto without acting through a Sub-Manager. The Property Manager shall use its commercially reasonable efforts to comply with the preceding sentence within five (5) Business Days of its receipt of Special Servicer’s request following the occurrence of each related Servicing Transfer Event.
(b)Upon determining that a Specially Managed Unit has become a Corrected Unit and if the Property Manager is not also the Special Servicer, the Special Servicer shall immediately give notice thereof, and shall return the related Servicing File, to the Property Manager and, upon giving such notice and returning such Servicing File, to the Property Manager, (i) the Special Servicer’s obligation to service such Lease, shall terminate (ii) the Special Servicer’s right to receive the Special Servicing Fee with respect to such Lease , shall terminate and (iii) the obligations of the Property Manager to service and administer such Lease shall resume, in each case, effective as of the first day of the following calendar month.
(c)In servicing any Specially Managed Unit, the Special Servicer shall provide to the Custodian, for the benefit of the Indenture Trustee, originals of documents included within the definition of “Lease File”, if any, for inclusion in the related Lease File (with a copy of each such original to the Property Manager), and copies of any additional related Lease information, including correspondence with the related Tenant.
(d)Notwithstanding anything in this Agreement to the contrary, in the event that the Property Manager and the Special Servicer are the same Person, all notices, certificates, information and consents required to be given by the Property Manager to the Special Servicer or vice versa shall be deemed to be given without the necessity of any action on such Person’s part.
Section 21.Sub-Management Agreements.
(a)The Property Manager, the Issuer Manager and the Special Servicer may delegate their respective management and servicing obligations in respect of the Leases and the Properties managed and serviced thereby pursuant to this Agreement to one or more Sub-Managers; provided, that each of the Property Manager, the Issuer Manager and the Special Servicer will remain liable for its servicing obligations under the Property Management Agreement as if the Property Manager or the Special Servicer, as applicable, were servicing, administering or special servicing, as applicable, such Properties and the Leases directly. Each Sub-Management Agreement must provide that, if for any reason the Property Manager, Issuer Manager or Special Servicer is no longer acting in such capacity, the Back-Up Manager, the Indenture Trustee or any successor property manager or special servicer may assume such party’s rights and obligations under such Sub-Management Agreement (arising after the date of assumption) or terminate such Sub-Management Agreement without payment of a penalty or a fee. If KeyBank assumes the role of Property Manager, KeyBank will also become the Special Servicer. If KeyBank assumes the role of the Property Manager, the Issuer Manager and the Special Servicer and is subsequently terminated as Special Servicer, KeyBank will also be terminated as Property Manager. If KeyBank assumes the role of Property Manager, the Issuer Manager and Special Servicer and is subsequently terminated as Property Manager, KeyBank will also be terminated as Special Servicer.
(b)The Property Manager, the Issuer Manager or Special Servicer will be solely liable for all fees owed by it to any Sub-Manager, irrespective of whether its compensation pursuant to this Agreement is sufficient to pay such fees. Each Sub-Manager retained hereby will be reimbursed by the Property Manager, the Issuer Manager or Special Servicer, as the case may be, for Advances that it makes, as though the Property Manager, the Issuer Manager or Special Servicer had made such Advances and to the same extent the Property Manager, the Issuer Manager or Special Servicer would be reimbursed under the Property Management Agreement.
(c) The Property Manager and the Special Servicer, for the benefit of the Issuer, shall (at no expense to the Issuer or the Indenture Trustee) monitor the performance and enforce the obligations of their respective Sub-Managers under the related Sub-Management Agreements. Such enforcement, including the legal prosecution of claims, termination of Sub-Management Agreements in accordance with their respective terms and the pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at such time as the Property Manager or the Special Servicer, as applicable, in its good faith and reasonable judgment, would require were it the owner of the Properties. Subject to the terms of the related Sub-Management Agreement, the Property Manager and the Special Servicer shall each have the right to (in its sole
discretion and without the consent of any other person) remove a Sub-Manager retained by it at any time it considers such removal to be in the best interests of the Issuer.
Section 22.Casualty and Condemnation.
(a)If any Property is materially damaged by casualty (an “Insured Casualty”), or if the Issuer or the applicable Property Owner receives notice of any condemnation or eminent domain proceeding (a “Condemnation”), the Issuer will give prompt notice to the Indenture Trustee, the Property Manager and the Issuer Manager and will deliver any and all related documentation to both parties.
(b)Following the occurrence of an Insured Casualty, the Issuer Manager will, in its sole discretion and in accordance with the Servicing Standard, either (i) make available or direct the Indenture Trustee to make available all proceeds received under the related property insurance policy to the related Property Owner for the purposes of restoring, repairing, replacing or rebuilding such Property to the extent required by the related Lease Documents, or (ii) deposit such proceeds into the Collection Accounts to be applied in accordance with the Indenture; provided, that Excess Proceeds will be deposited into the Release Account (the amounts specified in this clause (ii), the “Insurance Proceeds”).
(c)Following the occurrence of a Condemnation, the Issuer Manager will, in its sole discretion and in accordance with the Servicing Standard, either (i) make available or direct the Indenture Trustee to make available all proceeds received in connection with such Condemnation to the related Property Owner for the purposes of restoring, repairing, replacing or rebuilding such Property or portion thereof subject to Condemnation in accordance with the Property Management Agreement, or (ii) deposit such amounts into the Collection Accounts to be applied in accordance with the Indenture provided, that Excess Proceeds will instead be deposited into the Release Account (the amounts specified in this clause (ii), the “Condemnation Proceeds” and, together with Insurance Proceeds, the “Proceeds”, as the context may require).
(d)If the Issuer Manager directs the Indenture Trustee to make Proceeds available to the Issuer or a Property Owner, the Issuer may make available to the related Tenant or the Issuer Manager such Proceeds for the purposes of restoring, repairing, replacing or rebuilding such Property or portion thereof subject to Insured Casualty or Condemnation.
Section 23.Environmental Matters.
So long as a Property Owner owns or is in possession of each, each such Property Owner shall, or shall cause the Property Manager to, promptly notify the Indenture Trustee in writing if such Property Owner or the Property Manager receives actual notice of any Hazardous Substances other than Permitted Materials on or near each Property or if such Property Owner or the Property Manager shall receive actual notice of that any such Property is in direct violation of any Environmental Laws or if such Property Owner or the Property Manager shall receive actual notice of any condition on any such Property which violates any Environmental Laws, such Property Owner shall, or shall cause the Property Manager to, use commercially reasonable efforts to cause the cure of such violations and the removal of any Hazardous Substances that
pose a threat to the health, safety or welfare of humans, as shall be reasonably required by the Property Manager in accordance with reasonable commercial lending standards and practices, at the Issuer’s sole expense. Notwithstanding anything to the contrary in this paragraph, each such Property Owner and its related Tenants may use and store Hazardous Substances at each Property if such use or storage is in connection with the ordinary operation, cleaning and maintenance of each Property so long as such use and storage is in compliance with the terms of such Lease. Nothing herein shall prevent the Issuer from recovering such expenses from any other party that may be liable for such removal or cure.
Section 24.Reports to the Issuer and the Indenture Trustee.
(a)Not later than 3:00 p.m. (New York City time), three (3) Business Days prior to each Payment Date, the Issuer Manager shall deliver to the Issuer, the Indenture Trustee and each Rating Agency a report containing the information specified on Exhibit A hereto, and such other information with respect to the Leases and Properties as the Indenture Trustee may reasonably request (such report, the “Determination Date Report”) in a mutually agreeable electronic format, reflecting as of the close of business on the last day of the related Collection Period, the information required for purposes of making the payments required by Section 2.11(b) of the Indenture and the calculations and reports referred to in Section 6.01 of the Indenture, including, but not limited to, the maturity date and the required monthly rent or loan payment of each Lease. The Special Servicer shall from time to time (and, in any event, as may be reasonably required by the Issuer Manager) provide the Issuer Manager with such information regarding the Specially Managed Units as may be necessary for the Issuer Manager to prepare each Determination Date Report and any supplemental information to be provided by the Issuer Manager to the Issuer or the Indenture Trustee. In addition, with respect to the first Payment Date with respect to any Series following the related Series Closing Date, the Determination Date Report shall include the information required for compliance with the U.S. Credit Risk Retention Rules.
(b)Not later than 3:00 p.m. (New York City time) three (3) Business Days prior to each Payment Date, the Special Servicer shall deliver to the Property Manager, the Indenture Trustee and each Rating Agency a report containing such information relating to the Specially Managed Units and in such form as is reasonably acceptable to the Special Servicer and the Indenture Trustee (such report, the “Special Servicer Report”) reflecting information as of the close of business on the last day of the immediately preceding Collection Period.
(c)Not later than the 45th day following the end of each calendar quarter, commencing with the quarter ended September 30, 2021 the Special Servicer shall deliver to the Indenture Trustee, the Rating Agencies and the Property Manager with respect to each Specially Managed Unit (A) a report containing such information and in such form as reasonably acceptable to the Special Servicer and the Indenture Trustee (such report, a “Modified Collateral Detail and Realized Loss Report”) with respect to all renewals, modifications, waivers, security deposits paid or rental concessions made pursuant to Section 19 as of such calendar quarter and (B) subject to Section 6.03 of the Indenture, upon the reasonable request of the Indenture Trustee, the Rating Agencies or the Property Manager, operating statements and other financial
information collected or otherwise obtained by the Special Servicer during such calendar quarter (together with copies of the operating statements and other financial information on which it is based) to the extent such information is not prohibited from being disclosed or restricted by confidentiality under the terms of the applicable Lease Documents.
(d)Each of the Property Manager, the Issuer Manager and the Special Servicer (other than KeyBank National Association to the extent it has become the successor Property Manager, the Issuer Manager or Special Servicer) shall deliver to the Issuer and the Indenture Trustee, within sixty (60) days after the end of each of the first three calendar quarters of each year (beginning September 2021) and 120 days after the end of each calendar year (including 2021), a certification signed by one of its officers generally relating to the performance by the Property Manager, the Issuer Manager or Special Servicer of its obligations under the Property Management Agreement, or if there was a default in the fulfillment of any such obligation in any material respect, such certificate will specify such default and the nature and status thereof.
(e)To the extent KeyBank National Association has become the successor Property Manager, the Issuer Manager or Special Servicer, it shall provide an annual certification relating to the foregoing to be delivered by April 30th of each calendar year.
(f)In addition, on or before April 30th of each year, beginning April 30, 2022, each of the Property Manager, the Issuer Manager and the Special Servicer, at its expense, are required to cause a firm of independent public accountants to furnish a report to the Issuer and the Indenture Trustee containing such firm’s opinion that, on the basis of an examination conducted by such firm substantially in accordance with standards established by the American Institute of Certified Public Accountants, certain aspects of such annual certificates are fairly stated in all material respects, subject to such exceptions and other qualifications that, in the opinion of such firm, such institute’s standards require it to report.
(a)The Indenture Trustee shall have no obligations or duties (i) to monitor the Sponsor’s compliance with the U.S. Risk Retention Agreement or (ii) to verify, recalculate or confirm any of the information contained in the Determination Date Report with respect to the U.S. Risk Retention Agreement.
Section 25.Exchange of Properties.
(a)The Issuer may remove Released Assets and Exchanged Properties from the Collateral Pool in exchange for the addition of one or more Qualified Substitute Properties, to the Collateral Pool subject to the terms and provisions set forth herein and in the Indenture. No Property will constitute a Qualified Substitute Property unless, after giving effect to the transfer of such Property via the acquisition of a Qualified Substitute Property Owner Interest to the related Issuer, either (i) a Maximum Property Concentration is not exceeded, or (ii) if, prior to such substitution, an existing Maximum Property Concentration is already exceeded, the addition of such Qualified Substitute Property Owner Interest will reduce the Maximum Property Concentration or such Maximum Property Concentration will remain unchanged after giving effect to such substitution.
(b)In the event that the Issuer elects to substitute one or more Qualified Substitute Properties pursuant to this Section 25, the Property Manager shall require the Issuer to deliver to the Custodian all documents as specified in the definition of “Lease File” with respect to each Qualified Substitute Property. Monthly Lease Payments due with respect to Qualified Substitute Properties in the month of substitution shall not be part of the Collateral and will be retained by the Property Manager and remitted by the Property Manager to the Issuer on the next succeeding Payment Date. For the month of substitution, the Available Amount shall include the Monthly Lease Payment due on the Lease for the Removed Property for such month and, thereafter, the applicable Issuer designee shall be entitled to retain all amounts received in respect of such Lease. On or prior to the effective date of any such substitution, the Property Manager shall deliver to the Custodian and the Issuer an amended Lease Schedule reflecting the addition to the Collateral of each new Qualified Substitute Property and related Lease and the removal from the Collateral of each Removed Property and related Lease. Upon such substitution, each Qualified Substitute Property shall be subject to the terms of this Agreement in all respects, and the Issuer shall be deemed to have made the representations and warranties contained in Section 2.20 of the Indenture with respect to each Qualified Substitute Property.
(c)The Issuer shall effect such substitution by having each Qualified Substitute Property, which may include Replacement Properties acquired by the Issuer pursuant to a Master Exchange Agreement, by distributing or otherwise transferring the Removed Property to its members and delivering to and depositing with the Custodian (i) the deed and any other transfer documents transferring such Qualified Substitute Property, (ii) the deed and any other transfer documents transferring such Removed Property to the Issuer’s members, or the entity purchasing the Removed Property, (iii) the Lease Files for such Qualified Substitute Properties together with Opinions of Counsel, all of which shall meet the Lease File requirements for such Qualified Substitute Property, and (iv) an Officer’s Certificate certifying that all of the taxes (including transfer taxes with respect to Qualified Substitute Property) in connection with the acquisition of the Qualified Substitute Property, and the transfer of the Removed Property have been paid.
(d)Upon receipt of an Officer’s Certificate from the Property Manager or the Issuer to the effect that all requirements with respect to any substitution pursuant to the foregoing terms of this Section 25 have been satisfied, which Officer’s Certificate shall be furnished by the Property Manager upon becoming appropriate, and upon which the Indenture Trustee shall be permitted to fully rely and shall have no liability for so relying without any obligation to confirm or verify, (i) the Indenture Trustee shall release or cause to be released to the Issuer’s designee the related Lease File for the Removed Property and (ii) each of the Indenture Trustee, and the Issuer shall execute and deliver such instruments of release, transfer or assignment, in each case without recourse, as shall be provided to it and are reasonably necessary to vest in the Issuer’s designee the ownership of the Removed Property and the related Lease and to release any Mortgage or other lien or security interest in such Removed Property or the related Lease. In connection with any such release or transfer, the Special Servicer shall deliver the related Servicing File to the Issuer’s designee. Simultaneously with any substitution made pursuant to this Section 25, the Issuer shall distribute the Removed Property and Lease to its members or transfer the Removed Property and Lease to a third party purchaser.
(e)Any Release Price received by the Issuer in connection with the release of a Released Property or related Property Owner Membership Interest pursuant to this Section 25 or the other terms and provisions of this Agreement shall first be deposited into the Release Account and, after payment of any unreimbursed Extraordinary Expenses, Advances (plus Advance Interest thereon) and Emergency Property Expenses related to such Released Property and the expenses related to such release, shall either (i) be applied by the Issuer to acquire a Qualified Substitute Property, within twelve months following the related release or (ii) be deposited as Unscheduled Proceeds into the Collection Account to be paid as Unscheduled Principal Payments on the related Payment Date. Any amounts remaining in the Release Account related to such a Release and following such twelve month period will be transferred as Unscheduled Proceeds into the Collection Account and applied as Unscheduled Principal Payments on the following Payment Date. Notwithstanding the foregoing, during the continuance of an Early Amortization Period, all amounts on deposit in the Release Account will be transferred as Unscheduled Proceeds into the Collection Account and applied as Unscheduled Principal Payments, after payment of Collateral Pool Expenses in accordance with Section 2.11(b) of the Indenture, on the Payment Date following the occurrence of such Early Amortization Period.
(f)No exchange or release of a Property may occur if an Early Amortization Period would commence as a result of such exchange or release.
(g)In certain cases, a Qualified Substitute Property may be added to the Collateral Pool prior to the removal of the related Exchanged Asset. In addition, a Qualified Substitute Property may be added to the Collateral Pool prior to the payment of the related Release Price, so long as all of the requirements set forth in this Section 25 are completed.
(h)The Issuer shall (i) no later than one hundred twenty (120) days after the Series Closing Date, cause the Property owned by ARCP SS North Kingstown RI, LLC to be removed from the Collateral Pool by the Issuer Manager or an Affiliate thereof and (ii) within twelve (12) months of following the removal described in clause (i) above and deposit of the Release Price in the Release Account, in accordance with Section 25(e)(i), cause a Qualified Substitute Property to be added to the Collateral Pool and the Property Owner with respect to such Qualified Substitute Property to join the Property Owner Guaranty with respect to such Property, the failure of which shall cause application of such Release Price in accordance with Section 25(e)(ii). Upon deposit of the Release Price in the Release Account following the removal described in clause (i) above, the lien of the related Mortgage shall be released and such Mortgage discharged, such Property Owner shall be released from the Property Owner Guaranty and such Property shall be deemed to be a Released Property.
Section 26.Sale Pursuant to Third Party Purchase Option.
(a)If any Person shall exercise its Third Party Purchase Option prior to the Rated Final Payment Date, the Issuer shall, simultaneously with the transfer of the applicable Property pursuant to the Third Party Purchase Option, deposit the Third Party Option Price into the Release Account, and upon receipt of an Officer’s Certificate from the Issuer Manager or the
Issuer to the effect that such deposit has been made (which the Issuer Manager shall deliver to the Indenture Trustee and the Issuer promptly upon such deposit being made and upon which Officer’s Certificate the Indenture Trustee shall be permitted to fully rely and shall have no liability for so relying without any obligation to confirm or verify), the Indenture Trustee shall release to the Issuer or its designee the related Lease File and execute and deliver such instruments of release, transfer or assignment, in each case without recourse, that shall be provided by the Issuer or the Property Manager and reasonably necessary to release the subject Mortgage and the other liens and security interests in such Property and the related Lease.
(b)After such release, the released Property shall not be deemed to be a Property (except for the purposes of obligations under the Transaction Documents that are expressly provided to survive repayment in full of the Notes and satisfaction of the Mortgage).
Section 27.Transfer of Lease to New Property. In the event a Tenant under a Lease requests that such Lease be modified to apply to a different Property (the “Lease Transfer Property”) owned by such Tenant or substituted for a Lease on a different Property owned by such Tenant, the related Property Owner may, with the approval of the Property Manager or the Special Servicer, as applicable, to the extent permitted under the subject Lease or imposed by the Property Manager, approve such transfer. Each of the Property Manager, the Special Servicer and the applicable Property Owner has covenanted that it will not give its consent to a transfer unless: (i) the substituted property is a Qualified Substitute Property or the substituted Property Owner Membership Interest is a Qualified Substitute Property Ownership Interest; (ii) all Advances, Extraordinary Expenses and Emergency Property Expenses related to the Property being transferred are reimbursed; (iii) such Lease will not be treated as a new Lease but instead will be treated as a modification of the original Lease; and (iv) the conditions under which consent is granted comply with the original Lease. Such Qualified Substitute Property will be included in the Collateral Pool and pledged to the Indenture Trustee to secure the Notes. Upon the Indenture Trustee’s receipt of an Officer’s Certificate from the Property Manager or the Special Servicer to the effect that such modification or substitution has been completed in accordance with the terms hereof (which shall include a certification that such Property Owner has executed and delivered a Mortgage with respect thereto to the Indenture Trustee) (upon which Officer’s Certificate the Indenture Trustee shall be permitted to fully rely and shall have no liability for so relying without any obligation to confirm or verify) the Indenture Trustee shall execute and deliver such instruments of release, transfer or assignment, in each case without recourse, as shall be provided to it by the Issuer and are reasonably necessary to release any lien or security interest in the original Property and related Lease, whereupon such original Property shall be free and clear of the lien of the Indenture and any Mortgage and the other Transaction Documents. Any proceeds of such sale, transfer or other disposition shall not constitute part of the Collateral and shall not be deposited in the Collection Account or the Release Account.
Section 28.Release of Property by a Property Owner.
(a)The applicable Property Owner shall have the right to have released from the lien of the related Mortgage and the Indenture any Property and related Leases (following such release, a “Released Property”) by depositing in the Release Account an amount equal to the
Release Price in immediately available funds for the Released Property. Upon the Indenture Trustee’s receipt of an Officer’s Certificate by the applicable Property Owner or Property Manager certifying that all conditions set forth herein have been satisfied have been satisfied, the Indenture Trustee shall release to such Property Owner or its designee the related Lease File and execute and deliver such instruments of release, transfer or assignment, in each case without recourse, that shall be provided to it by the Issuer and are reasonably necessary to release any Mortgage or other lien or security interest in such Property and the related Lease.
(b)No sale of a Property to a third party may occur if an Early Amortization Period would occur as a result of such purchase.
Section 29.Terminated Lease Property. The Issuer may remove a Terminated Lease Property from the Collateral Pool in exchange for the applicable Release Price or one or more Qualified Substitute Properties or have the Property Owner Membership Interests with respect to a related Terminated Lease Property released by the Issuer in exchange for the applicable Release Price or one or more Qualified Substitute Property Owner Interests pursuant to the provisions of Section 25.
Section 30.Risk-Based Substitution. The Issuer or any Co-Issuer may cause a Property Owner to with respect to a Lease, remove a Property Owner Membership Interest from the Issuer Collateral Pool, or cause the Property Owner to remove a Property from the Collateral Pool in exchange for the addition of one or more Qualified Substitute Property Owner Interests to the Issuer Collateral Pool or Qualified Substitute Properties to the Collateral Pool; provided, that: (i) the remaining term to maturity of the related Lease is less than three (3) years from the date of the proposed substitution and the Property Manager, in accordance with the Servicing Standard, determines that there is a reasonable risk of non-renewal of such Lease (“Non-Renewal Risk”); (ii) based on written communications from the Tenant under such Lease, the Property Manager, in accordance with the Servicing Standard, determines that there is a Non-Renewal Risk; (iii) the applicable Property Owner has received from the Tenant under the related Lease for such Property written notice of the non-renewal of such Lease; or (iv) the Property Manager, in accordance with the Servicing Standard, determines that there is a reasonable risk of monetary default by the Tenant under such Lease (any substitution related to clauses (i), (ii), (iii) or (iv) herein, a “Risk-Based Substitution”).
Section 31.Disposition Period. During the Disposition Period, the Property Manager will be required to utilize efforts consistent with the Servicing Standard to cause all of the Properties and related Leases to be released from the Collateral Pool or Property Owner Membership Interests released from the Issuer Collateral Pool prior to the Rated Final Payment Date by receiving payment of the Release Price for such Properties and related Leases through the sale of such Properties and related Leases.
Section 32.Qualified Deleveraging Event. In connection with an Early Refinancing Prepayment as permitted pursuant to the terms of any applicable Series Supplement, the Issuer may release Properties with an aggregate Allocated Loan Amount not to exceed the Qualified Release Amount; provided, however, that the maximum Early Refinancing Prepayments
permitted to be made is an amount equal to (A) thirty-five percent (35%) of the Initial Principal Balance of the Notes, minus (B) the aggregate amount of Early Refinancing Prepayments and Unscheduled Principal Payments made on the Notes from Allocated Release Amounts since the Series Closing Date.
Section 33.Series Collateral Release.
(a)Subject to any additional requirements set forth in any applicable Series Supplement, the Issuer may remove a Property from the Collateral Pool in connection with a Series Collateral Release. Any Series Collateral Release Price received in connection with a Series Collateral Release will be deposited into the Collection Account and applied by the Indenture Trustee on the date of such Series Collateral Release, to prepay in full one or more Series of notes as designated by the Issuer in accordance with Section 7.01 of Indenture and the related Series Supplement. Any excess proceeds remaining after prepaying such Series will be remitted to the Release Account as a Release Price.
(b)After such release, the released Property shall not be deemed to be a Property (except for the purposes of obligations under the Transaction Documents that are expressly provided to survive repayment in full of the Notes and satisfaction of the Mortgage).
(c)No Series Collateral Release shall occur unless the release of such Released Properties (i) shall not trigger an Indenture Event of Default or Early Amortization Period (including but not limited to the Issuer’s obligations to maintain the 3-month Average DSCR), (ii) shall result in the Rating Condition being satisfied and (iii) shall not cause a Maximum Property Concentration to be exceeded (or if, prior to such release, an existing Maximum Property Concentration is already exceeded, the release of such Released Properties will reduce the Maximum Property Concentration or such Maximum Property Concentration will remain unchanged after giving effect to such release).
(d)Any Series Collateral Release Prices that are required to be transferred from the Collection Account to the Release Account pursuant to the Indenture shall be treated as “Release Price” and applied in accordance with Section 25(e).
(e)In connection with a release of Properties pursuant to Section 33(a), upon the Indenture Trustee’s receipt of an Officer’s Certificate by the Issuer or Property Manager, upon which the Indenture Trustee shall be permitted to fully rely and shall have no liability for so relying without any obligation to confirm or verify, certifying that all conditions set forth herein have been satisfied, upon which the Indenture Trustee shall be permitted to fully rely and shall have no liability for so relying without any obligation to confirm or verify, the Indenture Trustee shall release to the Issuer or its designee the related Lease File and execute and deliver such instruments of release, transfer or assignment, in each case without recourse, that shall be provided to it by the Issuer and are reasonably necessary to release any Mortgage or other lien or security interest in such Property and the related Lease from the lien of the Indenture.
Section 34.Like-Kind Exchange. In accordance with the terms of the applicable Master Exchange Agreement, the following restrictions shall apply:
(a)Property Manager shall instruct the Indenture Trustee to, and the Indenture Trustee shall, establish and maintain the Exchange Account, in the name of the Qualified Intermediary that shall be administered and operated as provided in the Master Exchange Agreement and the Escrow Agreement. The Exchange Account shall be an Eligible Account. If the Exchange Account is not maintained in accordance with this Section 34, and the Indenture Trustee has received written notice thereof pursuant to the Escrow Agreement, then the Indenture Trustee and the Qualified Intermediary shall establish a new Exchange Account that complies with this Section 34 and transfer into the new Exchange Account all funds from the non-qualifying Exchange Account. The funds held in the Exchange Account may be held as cash or invested in Permitted Investments in accordance with the Escrow Agreement.
(b)Subject to the limitations set forth in Section 28, the Issuer shall have the right to have released from the lien of the related Mortgage and the Indenture a Released Property for the purposes of consummating an Exchange in accordance with the terms of the Master Exchange Agreement. In connection with a release of Properties pursuant to this Section 34, upon the Indenture Trustee’s receipt of an Officer’s Certificate by the Issuer or the Property Manager certifying that all conditions set forth herein have been satisfied, upon which the Indenture Trustee shall be permitted to fully rely and shall have no liability for so relying without any obligation to confirm or verify, the Indenture Trustee shall release to the Issuer or its designee, which may include the Qualified Intermediary, the related Lease File and execute and deliver such instruments of release, transfer or assignment, in each case without recourse, that shall be provided to it by the Issuer and are reasonably necessary to release any Mortgage or other lien or security interest in such Property and the related Lease from the lien of the Indenture.
(c)Any Replacement Property acquired by a Property Owner pursuant to the Master Exchange Agreement, or any related Property Owner Membership Interest acquired by the Issuer, shall satisfy the criteria set forth in the definition of “Qualified Substitute Property”.
(d)No Property Owner may transfer a Released Property to the Qualified Intermediary pursuant to this Section and the Master Exchange Agreement unless:
(i)the Escrow Agreement is in effect;
(ii)no Early Amortization Period or DSCR Sweep Period has occurred and is continuing or would result from the making of such transfer;
(iii) such transfer is permitted pursuant to the terms of the Property Management Agreement, including, but not limited to, the satisfaction of criteria related to Qualified Substitute Properties and Released Properties; and
(iv)the representations and warranties of the Qualified Intermediary (or any parent thereof party to the Master Exchange Agreement, if applicable) in the Master Exchange Agreement are true and correct on and as of such date.
(e)The Relinquished Property Proceeds deposited into the Exchange Account in connection with the sale or disposition of a Relinquished Property shall be an amount equal to or greater than the Fair Market Value of such Relinquished Property.
(f)Relinquished Property Proceeds transferred from the Exchange Account to the Release Account pursuant to the Escrow Agreement shall be applied in accordance with Section 13(b).
(g)Any Replacement Property acquired by a Property Owner pursuant to the Master Exchange Agreement shall constitute Collateral and become subject to the lien of the Indenture in accordance with the terms thereof.
(h)To the extent that the Master Exchange Agreement or the Escrow Agreement requires the Property Manager or the Issuer to provide written instruction to the Escrow Agent directing the transfer of Relinquished Property Proceeds from the Exchange Account to the Release Account, the Property Manager or the Issuer, as applicable, shall promptly deliver such written instruction in accordance with the terms of the Master Exchange Agreement and the Escrow Agreement; provided, that in no event shall Additional Subsidies be transferred from the Exchange Account to the Release Account.
Section 35.Exchange Reserve Account.
(a)In connection with any Exchange Program established pursuant to a Master Exchange Agreement, the Issuer Manager shall instruct the Indenture Trustee to, and the Indenture Trustee shall, establish and maintain an Exchange Reserve Account. The Exchange Reserve Account shall be an Eligible Account. Initially, the Exchange Reserve Account bank shall be Citibank, N.A. If the Exchange Reserve Account is not maintained in accordance with this Section 35, then the Property Manager shall, within five (5) Business Days of obtaining knowledge of such fact, provide written notice to the Indenture Trustee, and, upon receipt of such notice, the Indenture Trustee shall establish a new Exchange Reserve Account that complies with this Section 35 and transfer into the new Exchange Reserve Account all funds from the non-qualifying Exchange Reserve Account. With respect to each such Exchange, the Issuer Manager shall deposit or cause to be deposited into the Exchange Reserve Account, Exchange Cash Collateral in accordance with this Section 35.
(b)To the extent the Issuer Manager deposits any proceeds into the Exchange Account, the Issuer will only be required to deposit Excess Exchange Amounts into the Exchange Reserve Account. Any such funds deposited in the Exchange Reserve Account shall be an obligation of the Issuer and shall not constitute an Advance by the Issuer Manager. In the event Release Proceeds are deposited into the Exchange Account in connection with the Exchange Program, the Issuer Manager will be required to deposit into the Exchange Reserve Account only an amount in excess of the Exchange Threshold (any such amount deposited into the Exchange Reserve Account, the “Exchange Cash Collateral”)
(c)At any time that the Excess Exchange Amounts are below the Exchange Threshold, the Indenture Trustee shall transfer all of the Exchange Cash Collateral to the Issuer
Manager; provided, that the Issuer Manager has delivered an Officer’s Certificate to the Indenture Trustee, upon which the Indenture Trustee shall be permitted to fully rely and shall have no liability for so relying without any obligation to confirm or verify, certifying that the Excess Exchange Amounts have been reduced below the Exchange Threshold; provided, further that if an Early Amortization Period is in effect, all amounts on deposit in the Exchange Reserve Account shall be immediately transferred as Unscheduled Proceeds to the Collection Account and applied as Unscheduled Principal Payments on the Payment Date following the commencement of such Early Amortization Period.
Section 36.Termination. The respective obligations and responsibilities under this Agreement of the Property Manager, the Issuer Manager, the Special Servicer, the Back-Up Manager and the Issuer shall terminate upon the satisfaction of the indebtedness evidenced by the Notes, whereupon the Indenture Trustee shall execute and deliver to the Issuer such instruments of release, transfer or assignment, in each case without recourse, as shall be provided to it by the Issuer and reasonably necessary to release any lien or security interest in the subject Properties and Leases.
Section 37.Servicer Replacement Events. (a) “Servicer Replacement Event” wherever used herein with respect to the Property Manager, the Issuer Manager or Special Servicer, means any one of the following events:
(i)any failure by any of the Property Manager, the Issuer Manager or the Special Servicer to remit to Collection Account, the Release Account or the Payment Account (or to the Indenture Trustee for deposit into the Payment Account) any amount as and when required to be so remitted pursuant to the terms of this Agreement or the Indenture, which failure remains unremedied for two (2) business days after the earlier of (x) the date on which notice of such failure, requiring the same to be remedied, is given to the Property Manager, the Issuer Manager or Special Servicer, as applicable, by the Indenture Trustee or (y) actual knowledge of such failure by the Property Manager, the Issuer Manager or Special Servicer, as applicable;
(ii)the Agreement two (2) Payment Dates in a row or a total of four (4) times since the initial Series Closing Date;
(iii)the Issuer Manager fails to make any Property Protection Advance as required by the Indenture or this Agreement, which failure remains unremedied for four (4) Business Days following the date on which the Issuer Manager receives of notice of (or obtains actual knowledge of) any such failure (2) Payment Dates in a row or a total of four (4) times since the initial Series Closing Date;
(iv)any Sponsor fails to make any P&I Advance as required by the Indenture or this failure on the part of the Property Manager, the Issuer Manager or the Special Servicer to observe or perform in any material respect any other of the covenants or agreements on the part of the Property Manager, the Issuer Manager or the Special Servicer, as the case may be, contained in this Agreement, which failure continues
unremedied for a period of thirty (30) days (or such longer period as is reasonably required to cure the subject matter provided that (A) the Property Manager or the Special Servicer shall diligently prosecute such cure, (B) such extended cure period does not have a material adverse effect on the Issuer, the Noteholders or the Properties and (C) such longer period shall not exceed sixty (60) days) after the date on which written notice of such failure requiring the same to be remedied, shall have been given to the Property Manager, the Issuer Manager and the Special Servicer by any other party to this Agreement or the Property Manager, the Issuer Manager or the Special Servicer otherwise has notice of such failure;
(v)any breach on the part of the Property Manager, the Issuer Manager or the Special Servicer of any representation or warranty contained in this Agreement that materially and adversely affects the interests of the Issuer, which remains unremedied for five (5) days after the earlier of the date on which written notice of such breach, requiring the same to be remedied, shall have been given to the Property Manager, the Issuer Manager and the Special Servicer by any other party hereto or the Property Manager or Special Servicer becomes aware of any such breach; provided, however, that if the breach is capable of being cured and the Property Manager, the Issuer Manager or Special Servicer is diligently pursuing such cure, the five (5) day period will be extended for fifteen (15) days;
(vi)there shall have been commenced before a court or agency or supervisory authority having jurisdiction an involuntary proceeding against the Property Manager, the Issuer Manager or the Special Servicer under any present or future federal or state bankruptcy, insolvency or similar law for the appointment of a conservator, receiver, liquidator, trustee or similar official in any bankruptcy, insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, which action shall not have been dismissed for a period of ninety (90) days; provided, that if any decree or order cannot be discharged, dismissed or stayed within the 90-day period, the Property Manager, the Issuer Manager or Special Servicer will have an additional thirty (30) days to effect the discharge, so long as it commenced proceedings to have the decree or order dismissed within the initial 90-day period and it is continuing to pursue the discharge;
(vii)either the Property Manager, the Issuer Manager or the Special Servicer shall consent to the appointment of a conservator, receiver, liquidator, trustee or similar official in any bankruptcy, insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to it or of or relating to all or substantially all of its property;
(viii)either the Property Manager, the Issuer Manager or the Special Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable bankruptcy, insolvency or reorganization statute, make an assignment for the benefit of its creditors;
(ix)either the Property Manager, the Issuer Manager or the Special Servicer assigns any of its obligations hereunder to any third party other than as permitted under this Agreement or any other Transaction Document and does not remedy such breach within five (5) days of such assignment;
(x)any of the Property Manager, the Issuer Manager or the Special Servicer fails to observe reporting requirements, which failure remains unremedied for five (5) days after the date on which written notice of such breach, requiring the same to be remedied, shall have been given to the Property Manager, the Issuer Manager and the Special Servicer; provided, that with respect to the delivery of the Determination Date report, such period shall be for one (1) day after such notice;
(xi)CIM Group, LLC or an affiliate thereof shall (x) cease to control the Property Manager without the consent of the Requisite Global Majority or (y) shall cease to manage the assets of Sponsor;
(xii)an Indenture Event of Default under clauses (a), (b), (c), (f), (g) or (j) of such definition shall have occurred;
(xiii)any other Indenture Event of Default, other than an Indenture Event of Default under clauses (a), (b), (c), (f), (g) or (j) of such definition, shall have occurred and the Indenture Trustee shall have accelerated the Notes; or
(xiv)the Monthly DSCR shall be less than 1.10x for three (3) consecutive Payment Dates and such reduction in Monthly DSCR is reasonably determined by the Back-Up Manager (unless the Back-Up Manager is then serving as Property Manager, Issuer Manager or Special Servicer) or the Requisite Global Majority to be primarily attributable to acts or omissions of the Property Manager, provided, however, no more than one time since the initial Series Closing Date, to the extent that such act or omission occurred as a consequence of extraordinary events outside the control of the Property Manager, such acts or omissions shall be deemed not to be a Servicer Replacement Event as described in this clause (xiv).
(b)When a single entity acts as Property Manager and Special Servicer, a Servicer Replacement Event in one capacity shall constitute a Servicer Replacement Event in each capacity; provided, however, that, subject to this Section 37, the Issuer, the Indenture Trustee and the holders of the Notes may at their option elect to terminate the Property Manager or the Special Servicer in one or the other capacity rather than both such capacities. A Servicer Replacement Event with respect to either the Property Manager or the Issuer Manager, respectively, shall constitute a Servicer Replacement Event for the Issuer Manager or the Property Manager, respectively. Each of the Property Manager, the Issuer Manager and the Special Servicer will notify the Indenture Trustee and the Back-Up Manager in writing of the occurrence of a Servicer Replacement Event or an event that, with the giving of notice or the expiration of any cure period, or both, would constitute a Servicer Replacement Event promptly upon obtaining knowledge thereof.
Section 38.Appointment of Successor Servicer. (a) Upon the occurrence and continuance of a Servicer Replacement Event (other than under clauses (ii) or (iii) of the definition thereof) with respect to the initial Property Manager, the initial Issuer Manager or the initial Special Servicer (in either case, the “Defaulting Party”), the Indenture Trustee will deliver a notice in writing to the Noteholders (with a copy of such notice to the Defaulting Party) advising the Noteholders of their right to approve the removal of the Defaulting Party in accordance with the Property Management Agreement and the Indenture or to waive such Servicer Replacement Event. In the event that the Noteholders representing the Requisite Global Majority have either approved of the removal of the Defaulting Party in accordance with the Property Management Agreement and the Indenture or not waived the occurrence of such Servicer Replacement Event within thirty (30) days of such notice, the Indenture Trustee will cause such Defaulting Party to be immediately replaced with the Back-Up Manager and terminate all of the rights and obligations of the Defaulting Party. Upon the occurrence of a Servicer Replacement Event under clause (ii) or (iii) of the definition thereof, with respect to a Defaulting Party, the Indenture Trustee shall immediately terminate such Defaulting Party and replace it with the Back-Up Manager. When a single entity acts as Property Manager, the Issuer Manager and Special Servicer, a Servicer Replacement Event in one capacity shall constitute a Servicer Replacement Event in each capacity; provided, however, that, the Indenture Trustee shall upon direction from the Requisite Global Majority elect to terminate the Property Manager, the Issuer Manager or the Special Servicer in one or the other capacity rather than all such capacities.
Except as provided in the immediately preceding paragraph, upon the occurrence of a Servicer Replacement Event with respect to the Property Manager, the Issuer Manager or the Special Servicer, the Indenture Trustee (i) may (with the consent of the Requisite Global Majority) and (ii) shall at the direction of the Requisite Global Majority cause the Property Manager, the Issuer Manager or the Special Servicer to be replaced with a successor Property Manager (the “Successor Property Manager”), a successor Issuer Manager (the “Successor Issuer Manager”) or a successor Special Servicer (the “Successor Special Servicer”).
(b)From and after the receipt by the Defaulting Party of such written notice, all authority and power of the Defaulting Party under this Agreement, whether with respect to the Issuer (other than as a holder of any Note or Property Owner Membership Interest) or the Leases or Properties or otherwise, shall pass to and be vested in the Back-Up Manager pursuant to and under this Section 38, and, without limitation, the Back-Up Manager is hereby authorized and empowered to execute and deliver, on behalf of and at the expense of the Defaulting Party, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Leases, Properties and related documents, or otherwise.
(c)The appointment of a Successor Property Manager, Successor Issuer Manager or Successor Special Servicer will be subject to, among other things, (i) the satisfaction of the Rating Condition and (ii) the written agreement of the Successor Property Manager, Successor Issuer Manager or Successor Special Servicer to be bound by the terms and conditions of this
Agreement, together with an Opinion of Counsel regarding the enforceability of such agreement. Subject to the foregoing, any person, including any holder of Notes or Property Owner Membership Interests or any Affiliate thereof, may be appointed as the Successor Property Manager, Successor Issuer Manager or Successor Special Servicer.
(d)In the event that a Successor Property Manager, Successor Issuer Manager or Successor Special Servicer has failed to assume the responsibilities of the Property Manager, Issuer Manager or Special Servicer as provided in this Agreement within thirty (30) days of written notice of termination of the Property Manager, Issuer Manager or Special Servicer, as applicable, the Back-Up Manager will be all of the Property Manager, the Issuer Manager and the Special Servicer, under this Agreement; provided, however, that the Issuer will have the right to replace the Back-Up Manager acting as Property Manager, Issuer Manager or Special Servicer without cause upon thirty (30) days’ written notice. If KeyBank is terminated as the Property Manager, Issuer Manager or Special Servicer under this Agreement, such termination shall be deemed to automatically terminate KeyBank as the Property Manager, the Issuer Manager, the Special Servicer and the Back-Up Manager, as applicable. In addition, if the Back-Up Manager, as Property Manager, Issuer Manager or Special Servicer makes any Advances or incurs any other expenses in accordance with the terms and provisions of this Agreement, any Successor Property Manager will be required to reimburse the Back-Up Manager, as predecessor Property Manager, predecessor Issuer Manager or predecessor Special Servicer, for such Advances and other expenses incurred in accordance with the terms and provisions of this Agreement as a condition to its appointment as successor Property Manager.
(e)Each of the Property Manager, the Issuer Manager and the Special Servicer agrees that, if it is terminated pursuant to this Section 38, it shall promptly (and in any event not later than ten (10) days subsequent to its receipt of the notice of termination) provide the Indenture Trustee and Back-Up Manager with all documents and records in its possession requested thereby to enable the Back-Up Manager (or such other applicable successor) to assume the Property Manager or Special Servicer’s, as the case may be, functions hereunder, and shall cooperate with the Back-Up Manager (or such other applicable successor) in effecting the termination of the Property Manager’s, Issuer Manager’s or Special Servicer’s, as the case may be, responsibilities and rights hereunder, including the transfer within two (2) Business Days to the Back-Up Manager (or such other applicable successor) for administration by it of all cash amounts that shall at the time be or should have been credited by the Property Manager, the Issuer Manager or the Special Servicer to the Collection Account or thereafter be received by or on behalf of it with respect to any Lease or Property (provided, however, that the Property Manager, the Issuer Manager and the Special Servicer each shall, if terminated pursuant to this Section 38, continue to be obligated for or entitled to pay or receive all costs in connection with such transfer and all amounts accrued or owing by or to it under this Agreement on or prior to the date of such termination, whether in respect of Advances or otherwise). In the event any Advances made by the Issuer Manager shall at any time be outstanding, or any amounts of interest thereon shall be accrued and unpaid, all amounts available to repay Advances and interest hereunder shall be applied first entirely to Advances made by the Indenture Trustee (and the accrued and unpaid interest thereon) until such Advances made by the Indenture Trustee (and the accrued and unpaid interest thereon) shall have been repaid in full, then to Advances made by
the Back-up Manager (and the accrued and unpaid interest thereon) until such Advances made by the Back-up Manager (and the accrued and unpaid interest thereon) shall be been repaid in full, and then the Issuer Manager (and the accrued and unpaid interest thereon). Any costs or expenses in connection with any actions to be taken by the Property Manager, Issuer Manager or Special Servicer pursuant to this paragraph shall be borne by the Property Manager, Issuer Manager or Special Servicer, as the case may be, and to the extent not paid by such defaulting party, such expense shall be borne by the Issuer and paid from amounts distributed pursuant to Section 2.11(b) of the Indenture. In the event that the Back-Up Manager cannot serve, the Indenture Trustee may designate a Person to serve as Back-Up Manager hereunder to replace any Property Manager, Issuer Manager or Special Servicer that has resigned or otherwise ceased to serve as Property Manager, Issuer Manager or Special Servicer. The Indenture Trustee shall so designate a Person to so serve by the delivery to the Issuer, the Property Manager, Issuer Manager and the existing Special Servicer of a written notice stating such designation.
Section 39.Back-Up Manager.
(a)The Back-Up Manager shall maintain current servicing records and systems concerning the Properties and the Leases in order to enable it to timely and efficiently assume the responsibilities of the Property Manager, Issuer Manager or Special Servicer in accordance with the Servicing Standard and otherwise in accordance with the terms and conditions of this Agreement.
(b)Subject to Section 38, following a Servicer Replacement Event, the Property Manager shall arrange for the delivery to the Back-Up Manager of all of the Servicing Files, which Servicing Files shall contain sufficient data to permit the Back-Up Manager to assume the duties of the Property Manager, Issuer Manager or Special Servicer hereunder without delay. Subject to Section 38, following the Servicer Replacement Event with respect to the Special Servicer, the Special Servicer shall arrange for the delivery to the Back-Up Manager of each of the Servicing Files for any Specially Managed Unit, which Servicing Files shall contain sufficient data to permit the Back-Up Manager to assume the duties of the Special Servicer hereunder without delay. If KeyBank is the Back-Up Manager, (i) any appointment of Back-Up Manager as Property Manager, Issuer Manager or Special Servicer shall be deemed to be an appointment of Back-Up Manager as each of Property Manager, Issuer Manager and Special Servicer and (ii) in the event KeyBank is terminated as Property Manager, Issuer Manager or Special Servicer, KeyBank shall automatically be terminated as Property Manager, Issuer Manager and Special Servicer. In the event KeyBank is terminated as Sub-Manager under the Sub-Management Agreement, it shall automatically be terminated as Property Manager, Issuer Manager, Special Servicer and Back-Up Manager, as applicable.
(c)Subject to Section 38, following a Servicer Replacement Event, the Back-Up Manager shall use reasonable efforts to diligently complete the physical transfer of servicing from the terminated Property Manager, Issuer Manager or Special Servicer with the cooperation of such Defaulting Party. From and after the date physical transfer of servicing is completed (the “Back-Up Servicing Transfer Date”), the Back-Up Manager shall service or specially service the Properties and the Leases in accordance with the provisions of this Agreement with all the rights
and obligations of the Property Manager, Issuer Manager and the Special Servicer and shall have no liability or responsibility with respect to any obligations of each Defaulting Party, arising or accruing prior to the Back-Up Servicing Transfer Date. The Issuer, if it determines in its reasonable discretion that enforcement rights or remedies are available to the Noteholders against the terminated Property Manager, Issuer Manager or Special Servicer and it is prudent under the circumstances to enforce such rights, agree to enforce their rights under this Agreement against the terminated Property Manager, Issuer Manager or Special Servicer, including any rights they have to enforce each Defaulting Party’s obligation to fully cooperate in the orderly transfer and transition of servicing and otherwise comply with the terms of this Agreement. In the event that the Back-Up Manager discovers or becomes aware of any errors in any records or data of each Defaulting Party which impairs its ability to perform its duties hereunder, the Back-Up Manager shall notify the Issuer and the Indenture Trustee in writing of such errors and shall, at each Defaulting Party’s expense (or, if not paid by such party, as a Property Protection Advance) and upon the Issuer’s direction, undertake to correct or reconstruct such records or data.
(d)From and after the date of this Agreement until the Back-Up Servicing Transfer Date, the Property Manager shall provide or cause to be provided to the Back-Up Manager on or before the 20th day of each month, in electronic form, a complete data tape of the Lease Schedule and such other information as the Issuer may reasonably deem necessary, including all information necessary to determine the Release Price, and shall make available to the Back-Up Manager a copy of each Determination Date Report. In addition, the Property Manager shall provide all other documents and materials as are reasonably requested by the Back-Up Manager. The Back-Up Manager will perform an initial comprehensive data integrity review and a monthly review of this information to determine whether it provides adequate information to enable the Back-Up Manager to perform its obligations hereunder as the Back-Up Manager. To the extent that the Back-Up Manager determines within ten (10) calendar days of its receipt of such information that such information is inadequate for the Back-Up Manager to perform its obligations as the Back-Up Manager, the Back-Up Manager will provide prompt written notice to the Issuer, the Indenture Trustee and the Property Manager identifying any deficiencies in such information that do not enable the Back-Up Manager to perform its obligations as the Back-Up Manager. The Property Manager shall use its best efforts to provide any such deficient information to the Back-Up Manager within ten (10) calendar days of receipt of such notice from the Back-Up Manager.
(e)Within ten (10) Business Days of the date of receipt from the Property Manager, the Back-Up Manager shall, in order to understand the purpose of each data field (and the interrelationships among such data fields), review the form of Determination Date Report in the form agreed to by the Issuer Manager, the Indenture Trustee and the Back-Up Manager. Provided the data in the Determination Date Report is in a format readable by the Back-Up Manager, the Back-Up Manager shall create a set of conversion routines and database mapping programs, as necessary, that will enable the Back-Up Manager to (i) receive such data from the Property Manager on a monthly basis and to ensure that the data is readable, and (ii) independently generate such Determination Date Reports following the Back-Up Servicing Transfer Date; provided, however, that the Back-Up Manager shall have no obligations with
respect to the information contained in the Determination Date Report with respect to the U.S. Risk Retention Agreement.
(f)On a monthly basis, the Back-Up Manager shall (x) verify receipt of the Determination Date Report required to be delivered by the Issuer Manager, and (y) verify that such records and data are in a readable format.
(g)The Back-Up Manager may resign from its obligations under this Agreement (i) pursuant to the terms and provisions of Section 44, and (ii) other than in connection with a resignation under the last paragraph of Section 44, if the Back-Up Manager identifies a successor back-up manager who agrees to undertake the obligations of the Back-Up Manager under this Agreement and provides the Indenture Trustee with written confirmation of satisfaction of the Rating Condition.
Section 40.Additional Remedies of the Issuer and the Indenture Trustee upon a Servicer Replacement Event. During the continuance of any Servicer Replacement Event, so long as such Servicer Replacement Event shall not have been remedied, in addition to the rights specified in Section 37, the Issuer shall have the right, and the Indenture Trustee shall have the right, in its own name and as trustee of an express trust, to take all actions now or hereafter existing at law, in equity or by statute to enforce its rights and remedies and to protect the interests, and enforce the rights and remedies of the holders of the Property Owner Membership Interests and the Notes (including the institution and prosecution of all judicial, administrative and other proceedings and the filings of proofs of claim and debt in connection therewith). Except as otherwise expressly provided in this Agreement, no remedy provided for by this Agreement shall be exclusive of any other remedy, and each and every remedy shall be cumulative and in addition to any other remedy, and no delay or omission to exercise any right or remedy shall impair any such right or remedy or shall be deemed to be a waiver of any Servicer Replacement Event.
Section 41.Term of Service; Property Manager and Special Servicer Not to Resign.
(a)The Issuer may, upon written consent by the Indenture Trustee acting at the direction of the Requisite Global Majority, and written notice (without any requirement of consent) to the Property Manager, the Issuer Manager and the Special Servicer, transfer the servicing duties and obligations of the Property Manager, the Issuer Manager and the Special Servicer to a new servicer; provided, that if the Indenture Trustee shall not have received the consent of the Requisite Global Majority within four (4) months after the making of such request, such consent shall be deemed granted unless the consent is not approved by the Requisite Global Majority. The Indenture Trustee’s written consent to any such transfer shall be contingent upon receipt by the Indenture Trustee, upon not less than fifteen (15) Business Days’ notice by the Issuer to the Rating Agency, of written confirmation from: (1) the Rating Agency that such appointment will not adversely affect the higher of (A) the then current rating of any Class of the Notes and (B) the rating of any Class of Notes on the related Issuance Date of such Notes; (2) the replacement Property Manager and Special Servicer of its acceptance of its appointment; and (3) consent by the Requisite Global Majority. The written consent or
confirmation may be made by facsimile confirmed in a written notice delivered to the Indenture Trustee by first class mail, postage prepaid, personal delivery or certified mail. The Issuer and the replacement Property Manager, Issuer Manager and Special Servicer shall execute and deliver a transfer agreement (the “Servicing Transfer Agreement”) mutually agreed upon in advance and effective on the transfer date (the “Servicing Transfer Date”), whereby the replacement Property Manager and the Special Servicer will agree to perform all of the duties and obligations of the Property Manager and the Special Servicer under this Agreement. The replacement Property Manager, Issuer Manager and Special Servicer shall be entitled to payment of a prorated portion (which shall be based on actual days of service and a year of 365/366 days) of the Property Management Fee, Issuer Management Fee and the Special Servicing Fee during its term of service. Each Servicing Transfer Agreement shall include any additional terms and provisions that the parties to this Agreement reasonably determine are necessary or appropriate and which additional terms and provisions shall be approved by all the parties to the Servicing Transfer Agreement, which approvals shall not be unreasonably withheld. The Servicing Transfer Agreement shall contain a provision stating that the former Property Manager, Issuer Manager and Special Servicer is relieved from all liability under this Agreement for acts or omissions occurring after the Servicing Transfer Date.
(b)None of the Property Manager, the Issuer Manager, the Back-Up Manager or the Special Servicer shall resign from the obligations and duties hereby imposed on it, except upon determination that its duties hereunder are no longer permissible under applicable law or are in material conflict by reason of applicable law with any other activities carried on by it, the other activities of the Property Manager, the Issuer Manager, the Back-Up Manager or the Special Servicer, as the case may be, so causing such a conflict being of a type and nature carried on by the Property Manager, the Issuer Manager, the Back-Up Manager or the Special Servicer, as the case may be, at the date of this Agreement. Any such determination permitting the resignation of the Property Manager, the Issuer Manager, the Special Servicer or the Back-Up Manager, as applicable, shall be evidenced by an Opinion of Counsel to such effect that shall be delivered to the Issuer and the Indenture Trustee. No such resignation shall become effective until the Back-Up Manager or another successor shall have assumed the responsibilities and obligations of the resigning party hereunder. Notwithstanding the foregoing, each of the Property Manager, the Issuer Manager, the Back-Up Manager and the Special Servicer may cause all of the obligations and duties imposed on it by this Agreement to be assumed by, and may assign its rights, benefits or privileges hereunder to, with the prior written approval of the Issuer, which approval shall not be unreasonably withheld, conditioned or delayed, an Affiliate or a servicer that is not an Affiliate, in each case, upon satisfaction of the Rating Condition, and the assumption by the assignee of all of the obligations and duties of the Property Manager, the Issuer Manager, the Back-Up Manager or the Special Servicer, as applicable. Upon any such assignment and assumption by the assignee of all of the obligations of the Property Manager, the Issuer Manager, the Back-Up Manager and/or the Special Servicer, the assignor shall be relieved from all liability hereunder for acts or omissions of the Property Manager, the Issuer Manager or the Special Servicer, as applicable, occurring after the date of the assignment and assumption.
(c)Except as expressly provided herein, none of the Property Manager, the Issuer Manager or the Special Servicer shall assign or transfer any of its rights, benefits or privileges
hereunder to any other Person or delegate to or subcontract with, or authorize or appoint, any other Person to perform any of the duties, covenants or obligations to be performed by it hereunder, or cause any other Person to assume such duties, covenants or obligations. If, pursuant to any provision hereof, the duties of the Property Manager, the Issuer Manager or the Special Servicer are transferred by an assignment and assumption to a successor thereto, the entire amount of compensation payable to the Property Manager, the Issuer Manager or the Special Servicer, as the case may be, that accrues pursuant hereto from and after the date of such transfer shall be payable to such successor.
(d)Notwithstanding anything to the contrary herein, KeyBank may resign as the Back-Up Manager, Property Manager, Issuer Manager and Special Servicer (provided that upon such resignation, KeyBank shall be deemed to have resigned from all such duties) upon the issuance of any Series of Notes after the initial Issuance Date, and upon such resignation a successor Property Manager, Issuer Manager, Special Servicer or Back-Up Manager, as the case may be, shall be appointed in connection with the issuance of any such Series and otherwise in accordance with the terms of this Agreement.
Section 42.Rights of Certain Persons in Respect of the Property Manager, the Issuer Manager and the Special Servicer. Each of the Property Manager, the Issuer Manager and the Special Servicer shall afford to the other and, also, to the Issuer, the Indenture Trustee and the Back-Up Manager, upon reasonable notice, during normal business hours (a) access to all records maintained by it relating to the Properties and Leases included in the Collateral Pool and in respect of its rights and obligations hereunder, to the extent not prohibited by confidentiality (including attorney-client privilege), contract or applicable law, and (b) access to such of its officers as are responsible for such obligations. Upon reasonable request, the Property Manager, the Issuer Manager and the Special Servicer shall each furnish the Issuer and the Indenture Trustee with its most recent financial statements and such other information as it possesses, and which it is not prohibited by confidentiality (including attorney-client privilege), applicable law or contract from disclosing, regarding its business, affairs, property and condition, financial or otherwise. The Issuer may, but is not obligated to, enforce the obligations of the Property Manager and the Special Servicer hereunder and may, but is not obligated to, perform, or cause a designee to perform, any defaulted obligation of the Property Manager, the Issuer Manager or the Special Servicer hereunder, or exercise the rights of the Property Manager, the Issuer Manager or the Special Servicer hereunder; provided, however, that none of the Property Manager, the Issuer Manager or the Special Servicer shall be relieved of any of its obligations hereunder by virtue of such performance by any the Issuer or its designee. The Issuer shall not have any responsibility or liability for any action or failure to act by or with respect to the Property Manager, the Issuer Manager or the Special Servicer.
Section 43.Property Manager, Issuer Manager or Special Servicer as Owner of Notes.
(a)The Property Manager, the Issuer Manager, the Special Servicer or an Affiliate of the Property Manager, the Issuer Manager or the Special Servicer or an Affiliate of the Back-Up Manager or its Affiliates, may become the holder of any Notes or the Issuer Interests with the same rights as it would have if it were not the Property Manager, the Special Servicer or any
such Affiliate. Subject to Section 20, if, at any time during which the Property Manager, the Issuer Manager, the Special Servicer or any of their respective Affiliates is the holder of any Note or Issuer Interests, the Property Manager, the Issuer Manager or the Special Servicer proposes to take or omit to take action (i) which action or omission is not expressly prohibited by the terms hereof and would not, in the Property Manager, the Issuer Manager or the Special Servicer’s good faith judgment, violate the Servicing Standard, and (ii) which action, if taken, or omission, if made, might nonetheless, in the Property Manager’s, the Issuer Manager’s or the Special Servicer’s good faith judgment, be considered by other Persons to violate the Servicing Standard, the Property Manager, the Issuer Manager or the Special Servicer may, but need not, seek the approval of the Noteholders and the holders of the Issuer Interests to such action or omission by delivering to the Issuer and the Indenture Trustee a written notice that (a) states that it is delivered pursuant to this Section 43, (b) identifies the portion of Notes and Issuer Interests beneficially owned by the Property Manager, the Issuer Manager or the Special Servicer or an Affiliate of the Property Manager, the Issuer Manager or the Special Servicer, as applicable, and (c) describes in reasonable detail the action that the Property Manager, the Issuer Manager or the Special Servicer, as the case may be, proposes to take. Upon receipt of such notice, the Issuer shall forward such notice to the applicable holders of the Issuer Interests. If, at any time, the holders of Issuer Interests representing greater than 50% of the Issuer Interests and a Requisite Global Majority (calculated without regard to the Notes or Issuer Interests beneficially owned by the Property Manager, the Issuer Manager, the Special Servicer or their respective Affiliates, as applicable) separately consent in writing to the proposal described in the related notices, and if the Property Manager, the Issuer Manager or the Special Servicer shall act as proposed in the written notice, and if the Property Manager, the Issuer Manager or the Special Servicer, as the case may be, takes action or omits to take action as proposed in such notices, such action or omission will be deemed to comply with the Servicing Standard. It is not the intent of the foregoing provision that the Property Manager, the Issuer Manager or the Special Servicer be permitted to invoke the procedure set forth herein with respect to routine servicing matters arising hereunder, but rather in the case of unusual circumstances.
Section 44.Indemnities.
(a)Each of the Property Owners agrees to, jointly and severally, indemnify, defend and hold each of the Property Manager, the Issuer Manager, the Special Servicer (including any replacement Property Manager, Issuer Manager or Special Servicer), the Indenture Trustee and the Back-up Manager harmless from and against any and all suits, liabilities, damages, or claims for damages (including any reasonable attorneys’ fees and other reasonable costs and expenses relating to any such suits, liabilities or claims), in any way relating to the Properties, the Manager’s performance of the Services hereunder, or the exercise by the Manager of the powers or authorities herein or hereafter granted to Property Manager, the Issuer Manager, the Special Servicer, the Indenture Trustee or the Back-up Manager, except for those actions, omissions and breaches of Manager in relation to which each of the Property Manager, the Issuer Manager and the Special Servicer has agreed to indemnify the Property Owners pursuant to Section 44(b).
(b)Each of the Property Manager, the Issuer Manager and the Special Servicer agrees to indemnify, defend and hold the Property Owners harmless from and against any and all suits,
liabilities, damages, or claims for damages (including any reasonable attorneys’ fees and other reasonable costs and expenses relating to any such suits, liabilities or claims), in any way relating to (i) any acts or omissions of the Property Manager, the Issuer Manager and the Special Servicer, as applicable, or their respective agents, officers or employees in the performance of their duties hereunder constituting fraud, negligence or willful misconduct or (ii) any material breach of any representation or warranty made by the Property Manager, the Issuer Manager and the Special Servicer, as applicable, hereunder.
(c)If any action or proceeding is brought against an Indemnified Party with respect to which indemnity may be sought under this Section 44, the Indemnitor, upon written notice from the Indemnified Party, shall assume the investigation and defense thereof, including the employment of counsel and payment of all expenses. The Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and to participate in the defense thereof, but the Indemnitor shall not be required to pay the fees and expenses of such separate counsel unless such separate counsel is employed with the written approval and consent of the Indemnitor, which shall not be unreasonably withheld or refused.
(d)The indemnities in this Section 44 shall survive the expiration or termination of the Agreement.
(e)The indemnities payable under this Section 44 by the Property Owners shall be subject to the availability of funds for such purpose in accordance with Section 5.04 of the Indenture.
Section 45.Miscellaneous.
(a)Amendments. No amendment, supplement, waiver or other modification of this Agreement shall be effective unless in writing and executed and delivered by the Property Manager, the Issuer Manager, the Special Servicer and the Property Owner sought to be bound thereby; provided that, until the Indenture has been terminated in accordance with its terms and all obligations due and owing thereunder and under the other Transaction Documents have been fully satisfied, any material amendment, supplement, waiver or other modification of this Agreement shall also require the consent of the Indenture Trustee and satisfaction of the Rating Condition (it being understood that none of the foregoing shall require the consent of any Noteholder) and be subject to the terms and provisions of the Indenture governing amendments, supplements and other modifications. No failure by any party hereto to insist on the strict performance of any obligation, covenant, agreement, term or condition of this Agreement, or to exercise any right or remedy available upon a breach of this Agreement, shall constitute a waiver of any of the terms of this Agreement. None of the Property Manager, the Issuer Manager or the Special Servicer shall be bound by any amendment, supplement, or other modification to any other Transaction Document which is materially adverse to the Property Manager, the Issuer Manager or the Special Servicer, as applicable, unless the Property Manager, the Issuer Manager' or the Special Servicer, as applicable, has consented thereto; however the Property Manager’s, the Issuer Manager’s or the Special Servicer’s consent shall not otherwise be required as a condition for any such amendment, supplement, or other modification to be effective for all other
purposes. No amendment, supplement, waiver or other modification of this Agreement which is or may reasonably be expected to be materially adverse to the Back-Up Manager shall be effective unless the Back-Up Manager has consented thereto; provided, however, that the Back-Up Manager’s consent shall not otherwise be required as a condition for any such amendment, supplement, or other modification to be effective for all other purposes. In addition, the parties hereto agree that no modifications or amendments will be made to the definition of “Lease File” herein without the written consent of the Custodian.
(b)Notices. Any notice or other communication required or permitted hereunder shall be in writing and may be delivered personally or by commercial overnight carrier, telecopied or mailed (postage prepaid via the US postal service) to the applicable party at the following address (or at such other address as the party may designate in writing from time to time); provided, however, any such notice or communication shall be deemed to be delivered only when actually received by the party to whom it is addressed:
(1)To any Property Owner: c/o CMFT Net Lease Master Issuer LLC
2398 Camelback Road, 4th Floor
Phoenix, Arizona 85016
Attention: Nate DeBacker; Legal Counsel
(2)To the Property Manager: CREI Advisors, LLC
2398 Camelback Road, 4th Floor
Phoenix, Arizona 85016
Attention: Christina Mayo
(3)To the Special Servicer: CREI Advisors, LLC
2398 Camelback Road, 4th Floor
Phoenix, Arizona 85016
Attention: Christina Mayo
(4)To the Issuer Manager: CIM REAL Estate Finance Operating Partnership, LP
2398 Camelback Road, 4th Floor
Phoenix, Arizona 85016
Attention: Nate DeBacker; Legal Counsel
(5)To the Issuer: CMFT Net Lease Master Issuer LLC
2398 Camelback Road, 4th Floor
Phoenix, Arizona 85016
Attention: Nate DeBacker; Legal Counsel
(6)To the Back-Up Manager: KeyBank National Association
KeyBank National Association
11501 Outlook Street, Suite 300
Overland Park, Kansas 66211
Attention: Todd Reynolds
With a copy to:
Polsinelli
900 W. 48th Place, Suite 900
Kansas City, Missouri 64112
Attention: Kraig Kohring
Email: kkohring@polsinelli.com
(7)To the Indenture Trustee: Citibank, N.A.
388 Greenwich Street Trading, 4th Floor
New York, New York 10013
Attention: Agency & Trust - CMFT Net Lease Master Issuer LLC
(c)Entire Agreement; Severability. This Agreement constitutes the entire agreement between the parties hereto, and no oral statements or prior written matter not specifically incorporated herein shall be of any force or effect. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby.
(d)Limitations on Liability.
(i)Notwithstanding anything herein to the contrary, none of the Property Manager, the Issuer Manager, the Back-up Manager, the Special Servicer, or any director, officer, employee or agent of the Property Manager, the Issuer Manager, the Back-up Manager, or the Special Servicer shall be under any liability to the Property Owners or any other Person for any action taken, or not taken, in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Property Manager, the Issuer Manager or the Special Servicer against any liability to the Property Owners or the Indenture Trustee against any liability which would otherwise be imposed on the Property Manager, the Issuer Manager or the Special Servicer, as applicable, solely attributable to the Property Manager’s, the Issuer Manager’s or the Special Servicer’s, as applicable, fraud, negligence or willful misconduct in the performance of its obligations and duties hereunder.
(ii)No party will be liable to any other for special, indirect, incidental, exemplary, consequential or punitive damages, or loss of profits, arising from the relationship of the parties or the conduct of business under, or breach of, this Agreement.
(iii)No officer, director, employee, agent, shareholder, member or Affiliate of any Property Owner, the Property Manager, the Back-up Manager, the Issuer Manager or the Special Servicer (except, in the case of a Property Owner, for Affiliates that are also Property Owners hereunder) shall in any manner be personally or individually liable for the obligations of any Property Owner, the Property Manager, the Back-up Manager, the Issuer Manager or the Special Servicer hereunder or for any claim in any way related to this Agreement or the performance of such party’s duties and obligations hereunder.
(iv)The provisions of this Section 45(d) shall survive the expiration or earlier termination of this Agreement (whether in whole or in part).
(e)Merger, Consolidation or Conversion of the Property Manager, the Issuer Manager the Special Servicer and the Back-Up Manager. Subject to the following paragraph, the Property Manager, the Issuer Manager, the Special Servicer and the Back-Up Manager shall each keep in full effect its existence, rights and franchises as a limited partnership, limited liability company, bank or association under the laws of the jurisdiction of its formation, and each will obtain and preserve its qualification to do business as a foreign partnership, corporation, bank or association in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement or any of the Leases and to perform its respective duties under this Agreement.
Each of the Property Manager, the Issuer Manager, the Special Servicer and the Back-Up Manager may be merged or consolidated with or into any Person, or may transfer all or substantially all of its assets to any Person, in which case any Person resulting from any merger or consolidation to which the Property Manager, the Issuer Manager, the Special Servicer or the Back-Up Manager is a party, or any Person succeeding to the business of the Property Manager, the Issuer Manager, the Special Servicer or the Back-Up Manager, will be the successor Property Manager, the successor Issuer Manager, the successor Special Servicer or the successor Back-Up Manager, as the case may be, hereunder, and each of the Property Manager, the Issuer Manager, the Special Servicer and the Back-Up Manager may transfer its rights and obligations under this Agreement to an Affiliate or non-Affiliate; provided, however, that no such successor, surviving Person or transferee will succeed to the rights of the Property Manager, the Issuer Manager or the Special Servicer unless it shall have furnished to the Issuer and the Indenture Trustee evidence that the Rating Condition is satisfied.
(f)Governing Law; Submission to Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
EACH PARTY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE UNITED STATES FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK OR, IF SUCH FEDERAL COURTS DO NOT HAVE SUBJECT
MATTER OR DIVERSITY JURISDICTION FOR A PARTICULAR PROCEEDING, IN THE STATE COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR IN RELATION TO THIS AGREEMENT.
(g)Confidentiality. Each party hereto agrees to keep confidential (and (a) to cause its respective officers, directors and employees to keep confidential and (b) to use its best efforts to cause its respective agents and representatives to keep confidential) the Information (as defined below) and all copies thereof, extracts therefrom and analyses or other materials based thereon, except that the parties hereto shall be permitted to disclose Information (i) to the extent required by the Transaction Documents, (ii) as requested by the Rating Agency, (iii) to the extent the Property Manager, the Issuer Manager or the Special Servicer reasonably determines disclosure is necessary or advisable to perform services contemplated by this Agreement, (iv) to the extent provided in any offering memorandum, (v) to the parties to the Indenture who are subject to the confidentiality provisions contained therein, (vi) to actual or prospective Tenants, (vii) if it is required to do so pursuant to any applicable statute, law, rule or regulation, or in working with any taxing authorities or other governmental agencies, (viii) to any government agency or regulatory body having or claiming authority to regulate or oversee any aspects of the Property Manager’s, the Issuer Manager’s or the Special Servicer’s business or that of its Affiliates, (ix) pursuant to any subpoena, civil investigative demand or similar demand or request of any court, regulatory authority, arbitrator or arbitration to which the Property Manager, the Issuer Manager or the Special Servicer or an Affiliate or an officer, director, employer or shareholder thereof is a party, (x) to any Affiliate, independent or internal auditor, agent, employee or attorney of the Property Manager, the Issuer Manager or the Special Servicer provided that the Property Manager, the Issuer Manager or the Special Servicer, as applicable, advises such recipient of the confidential nature of the Information being disclosed and obtains confirmation in such form as may be acceptable to the Property Manager, the Issuer Manager or the Special Servicer, as applicable, to the effect that such Person will keep such Information confidential and (xi) any other disclosure authorized by the Property Manager, the Issuer Manager or the Special Servicer, as applicable. For the purposes of this paragraph (g), the term “Information” shall mean the terms and provisions of this Agreement and all financial statements, certificates, reports, records, agreements and information (including the Leases and all analyses, compilations and studies based on any of the foregoing) that relate to the Properties or the duties and obligations of the Property Manager, the Issuer Manager or the Special Servicer hereunder, other than any of the foregoing that are or become publicly available other than by a breach of the confidentiality provisions contained herein.
(h)No Petition. Prior to the date that is one year and one day after the date on which the Indenture has been terminated in accordance with its terms, all Obligations under the Indenture and under the other Transaction Documents have been fully satisfied, none of the Property Manager, the Issuer Manager, the Special Servicer or the Backup Servicer shall institute, or join any other Person in instituting, or authorize a trustee or other Person acting on its behalf or on behalf of others to institute, any bankruptcy, reorganization, arrangement, insolvency, liquidation or receivership proceedings under the laws of the United States of America or any state thereof against the Issuer or any Property Owner.
(i)Headings. Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to effect the construction of, or to be taken into consideration in interpreting, this Agreement.
(j)Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall constitute an original, but all of which when taken together shall constitute one contract. Delivery of an executed counterpart of this Agreement by facsimile or other electronic transmission (including via Portable Document Format or “PDF”) shall be effective as delivery of a manually executed counterpart of this Agreement.
(k) Waiver of Jury Trial. EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(l) Notices to the Rating Agencies and Others. The Property Manager or the Issuer Manager shall promptly provide notice to the applicable Rating Agency with respect to each of the following of which it has actual knowledge:
(i)the resignation or removal of the Indenture Trustee and the appointment of a successor;
(A)any change in the location of the Collection Account;
(B)any change in the identity of a Tenant; and
(C)any addition or removal of a Property from the Collateral.
(ii)Each of the Issuer Manager, the Property Manager and the Special Servicer, as the case may be, shall furnish the applicable Rating Agency such information with respect to the Property Owners, Leases and Properties as such Rating Agency shall reasonably request and that the Property Manager or the Special Servicer, as the case may be, can reasonably provide.
(iii)Any Officer’s Certificate, Opinion of Counsel, report, notice, request or other material communication prepared by the Property Manager, the Special Servicer, the Issuer Manager, the Issuer or the Indenture Trustee, or caused to be so prepared, for dissemination to any of the parties to this Agreement or any holder of Notes shall also be concurrently forwarded by such Person to the Issuer and the Initial Purchasers to the extent not otherwise required to be so forwarded. Any Officer’s Certificate delivered under this Agreement or any other Transaction Document shall be deemed to have been delivered by the Person which is a party to this Agreement with respect to which the same was delivered, and under no circumstances shall the officer or other person
executing the same have any personal liability under or in connection with any Officer’s Certificate executed by it.
(m) No Proceedings. The Property Manager, the Special Servicer, the Issuer (with respect to any other Issuer) and the Back-Up Manager hereby covenant and agree that, prior to the date which is one year and one day after the payment in full of the latest maturing Note, it will not institute against, or join with, encourage or cooperate with any other Person in instituting, against the Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any federal or state bankruptcy or similar law; provided, however, that nothing in this Section 45(m) shall constitute a waiver of any right to indemnification, reimbursement or other payment from the Issuer pursuant to the Indenture. In the event that any such Person takes action in violation of this Section 45(m), the Issuer shall file or cause to be filed an answer with the bankruptcy court or otherwise properly contesting the filing of such a petition by any such Person against the Issuer or the commencement of such action and raising the defense that such Person has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as its counsel advises that it may assert. The provisions of this Section 45(p) shall survive the termination of this Agreement, and the resignation or removal of any party hereto. Nothing contained herein shall preclude participation by any Person in the assertion or defense of its claims in any such proceeding involving the Issuer.
(n) No Recourse. The obligations of the Issuer under this Agreement are solely the obligations of such Issuer. No recourse shall be had for the payment of any amount owing in respect of any fee hereunder or any other obligation or claim arising out of or based upon this Agreement against any member, employee, officer or director of such Issuer. Fees, expenses, costs or other obligations payable by the Issuer hereunder shall be payable by such Issuer solely to the extent that funds are then available or thereafter become available for such purpose pursuant to Section 2.11 of the Indenture. In the event that sufficient funds are not available for their payment pursuant to Section 2.11 of the Indenture, the excess unpaid amount of such fees, expenses, costs or other obligations shall in no event constitute a claim (as defined in Section 101 of the Bankruptcy Code) against, or corporate obligation of, such Issuer.
(o) Cooperation. Each party hereto hereby agrees to act diligently in responding to a request made by any other party to this Agreement and agrees to reasonably cooperate with the requesting party in connection with the subject matter.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.
Property Manager and Special Servicer:
CREI ADVISORS, LLC
By: /s/ Christina G. Mayo
Name: Christina G. Mayo
Title: Manager
Issuer Manager:
CIM REAL ESTATE FINANCE OPERATING PARTNERSHIP, LP
By: /s/ Nathan DeBacker
Name: Nathan DeBacker
Title: Chief Financial Officer and Treasurer
Back-Up Manager:
KEYBANK NATIONAL ASSOCIATION
By: /s/ Michelle Engle
Name: Michelle Engle
Title: Vice President
Indenture Trustee:
CITIBANK, N.A., not in its individual capacity, but solely as Indenture Trustee
By: /s/ Dragana Boskovic
Name: Dragana Boskovic
Title: Senior Trust Officer
Issuer:
CMFT NET LEASE MASTER ISSUER LLC
By: /s/ Nathan DeBacker
Name: Nathan DeBacker
Title: Vice President, Chief Financial Officer and Treasurer
[Signature Page to Management Agreement]
Property Owners:
[PROPERTY OWNERS]
By: CMFT NET LEASE MASTER ISSUER LLC, as Member
By: /s/ Nathan DeBacker
Name: Nathan DeBacker
Title: Vice President, Chief Financial Officer and Treasurer
[Signature Page to Management Agreement]