UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 8-K
___________________________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 15, 2017
___________________________________________
CARTER VALIDUS MISSION CRITICAL REIT II, INC.
(Exact Name of Registrant as Specified in Its Charter)
___________________________________________
|
|
|
|
|
|
Maryland
|
|
000-55435
|
|
46-1854011
|
(State or other jurisdiction of
incorporation or organization)
|
|
(Commission
File Number)
|
|
(I.R.S. Employer
Identification No.)
|
4890 West Kennedy Blvd.
Suite 650
Tampa, Florida 33609
(Address of principal executive offices)
(813) 287-0101
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
___________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
|
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
|
|
|
|
Emerging growth company
|
|
☒
|
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
|
|
☒
|
Item 1.01
Entry into a Material Definitive Agreement.
The information reported in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On June 15, 2017 (the "Closing Date"), Carter Validus Mission Critical REIT II, Inc. (the “Company”), through DCII-250 Williams Street NW, LLC (the "Subsidiary"), a wholly-owned subsidiary of Carter Validus Operating Partnership II, LP (“CVOP II”), the Company's operating partnership, acquired from an unaffiliated third-party seller a combination of fee simple and leasehold interests in a 995,728 gross rentable square foot data center (the “
250 Williams Atlanta Data Center
”), located in Atlanta, Georgia. On the Closing Date, Carter Validus Properties II, LLC (the "Assignor"), an affiliate of Carter Validus Advisors II, LLC (the "Advisor"), assigned to the Company, through the Subsidiary, all of Assignor's right, title and interest in the Purchase Agreement by and between 250 Williams Street LLC (the "Seller") and the Assignor, dated April 19, 2017 (the "Assignment of Purchase Agreement"), for the purchase of the 250 Williams Atlanta Data Center for a purchase price of $166,000,000, exclusive of closing costs. The acquisition was funded with a combination of (1) a loan in the aggregate principal amount of $116,200,000, which is secured by the
250 Williams Atlanta Data Center
, (2) net proceeds from the Company’s ongoing initial public offering and (3) proceeds from the Company's secured credit facility. On the Closing Date, the Company, through the Subsidiary, assumed all of the Seller's right, title and interest, as landlord, in the leases of the 250 Williams Atlanta Data Center pursuant to the Assignment and Assumption of Leases.
In connection with the acquisition, the Company paid the Advisor an acquisition fee of approximately $3,320,000, or 2% of the purchase price. The Company believes the
250 Williams Atlanta Data Center
is adequately insured.
The
250 Williams Atlanta Data Center
was constructed in 1989 and renovated in 2007. As of June 15, 2017, the
250 Williams Atlanta Data Center
was 87.8% leased to 12 tenants.
The following table shows the material terms of the lease agreements with the major tenants of the
250 Williams Atlanta Data Center
as of June 15 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Major Tenant
(1)
|
|
Square Feet
|
|
Current Annual Base Rent
|
|
Base Rent per Square Foot
|
|
Lease expiration
|
|
Number of Renewal Options
(2)
|
American Cancer Society, Inc.
|
|
273,707
|
|
|
$
|
4,789,872
|
|
(3)
|
$
|
17.50
|
|
|
06/30/2022
|
|
2/5 yr. or 1/10 yr.
|
|
2,964
|
|
|
$
|
41,869
|
|
(4)
|
$
|
14.13
|
|
|
11/30/2018
|
|
None
|
U.S. South Communications, Inc.
|
|
195,805
|
|
|
$
|
3,853,276
|
|
(5)
|
$
|
19.68
|
|
|
12/31/2021
|
|
2/5 yr.
|
Internap Network Services Corporation
|
|
128,020
|
|
|
$
|
3,624,408
|
|
(6)
|
$
|
28.31
|
|
|
04/30/2020
|
|
1/5 yr.
|
Georgia Lottery Corporation
|
|
102,568
|
|
|
$
|
2,006,366
|
|
(7)
|
$
|
19.56
|
|
|
06/30/2023
|
|
1/10 yr.
|
|
|
(1)
|
Major tenants include those tenants that occupy greater than 10% of the rentable square feet of the property.
|
|
|
(2)
|
Represents number of option renewal period/term of each option.
|
|
|
(3)
|
The annual base rent under the lease increases by $2.25 per leased square foot on July 1, 2017, with no escalations thereafter.
|
|
|
(4)
|
The annual base rent under the lease increases by approximately 3.0% of the then-current annual base rent.
|
|
|
(5)
|
The annual base rent associated with 191,709 leased square feet increases by 2.0% of the then-current annual base rent and the annual base rent associated with 4,096 leased square feet has no rental escalations.
|
|
|
(6)
|
The annual base rent associated with 110,797 leased square feet increases by an amount equal to 15 times the percentage increase in the Consumer Price Index of the then-current annual base rent, provided that in no event shall the annual base rent be less than the prior year, and in no event greater than the amounts provided in the lease. The annual base rent associated with 14,866 leased square feet increases by approximately 2.5% of the then-current annual base rent, and the annual base rent associated with 2,357 leased square feet increases by approximately 3.0% of the then-current annual base rent.
|
|
|
(7)
|
The annual base rent associated with 95,905 leased square feet increases by $2.00 per leased square foot on both July 1, 2017 and July 1, 2021 of the then-current annual base rent. The annual base rent associated with 5,900 leased square
|
feet increases by approximately $0.45 per leased square foot on October 1, 2017, and by one cent per leased square foot each year thereafter. The annual base rent associated with 763 leased square feet increases by $2.35 per leased square foot on July 1, 2017, and $2.36 per leased square foot on July 1, 2021.
The following is a schedule of lease expirations of the property for each of the next ten years and thereafter:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Number of Leases Expiring
|
|
Total Square Footage Expiring
|
|
Annualized Contractual Base Rent (in thousands)
(1)
|
|
% of Annual Base Rentals
|
2017
|
|
1
|
|
|
2,026
|
|
|
$
|
11
|
|
|
0.06
|
%
|
2018
|
|
1
|
|
|
2,964
|
|
|
42
|
|
|
0.24
|
%
|
2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
2020
|
|
3
|
|
|
148,525
|
|
|
3,992
|
|
|
22.49
|
%
|
2021
|
|
1
|
|
|
195,805
|
|
|
3,853
|
|
|
21.70
|
%
|
2022
|
|
1
|
|
|
273,707
|
|
|
4,790
|
|
|
26.98
|
%
|
2023
|
|
1
|
|
|
102,568
|
|
|
2,006
|
|
|
11.30
|
%
|
2024
|
|
1
|
|
|
37,406
|
|
|
797
|
|
|
4.48
|
%
|
2025
|
|
2
|
|
|
37,841
|
|
|
868
|
|
|
4.89
|
%
|
2026
|
|
1
|
|
|
5,861
|
|
|
122
|
|
|
0.69
|
%
|
Thereafter
|
|
2
|
|
|
67,554
|
|
|
1,273
|
|
|
7.17
|
%
|
Total
|
|
14
|
|
|
874,257
|
|
|
$
|
17,754
|
|
|
100.00
|
%
|
|
|
(1)
|
Annualized contractual base rent is based on contractual base rent from leases in effect as of June 15, 2017.
|
The following is a schedule of historical five-year occupancy and average effective rent per square foot for the property:
|
|
|
|
|
|
|
Year
|
|
Occupancy Rate
|
|
Average Effective Rents Per Square Foot
|
2012
|
|
82.3
|
%
|
|
$18.74
|
2013
|
|
82.6
|
%
|
|
$19.58
|
2014
|
|
85.2
|
%
|
|
$19.16
|
2015
|
|
86.6
|
%
|
|
$19.98
|
2016
|
|
87.0
|
%
|
|
$20.37
|
In evaluating the
250 Williams Atlanta Data Center
as a potential acquisition and determining the appropriate amount of consideration to be paid for such acquisition, a variety of factors were considered, including the consideration of the property condition and environmental reports, physical condition and curb appeal, age, location, including visibility and access, tenant creditworthiness, lease terms, including rent, rent increases, length of lease term, specific tenant and landlord responsibilities, renewal options, expansion, termination, purchase options, exclusive and permitted use provisions, assignment, sublease and co-tenancy provisions, local market conditions, demographics and population growth patterns, neighboring properties, the potential for new construction in the area and whether there were any anticipated required capital improvements.
For 2016, the
250 Williams Atlanta Data Center
real estate taxes were approximately $2,034,000. For federal income tax purposes, the Company estimates that the depreciable basis in the
250 Williams Atlanta Data Center
will be approximately $145,890,000. For federal income tax purposes, the Company depreciates real estate assets, other than land, based upon an estimated useful life of 3 to 40 years.
The material terms of the agreements described above are qualified in their entirety by the Purchase Agreement, the Assignment of Purchase Agreement and the Assignment and Assumption of Leases attached as Exhibits 10.1 through 10.3, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Loan Agreement
On June 15, 2017, in connection with the acquisition of the
250 Williams Atlanta Data Center
, the Subsidiary entered into a loan agreement (the "Loan Agreement") with KeyBank National Association (the "Lender") to obtain a loan in the amount of $116,200,000. The loan is evidenced by a promissory note in the principal amount of $116,200,000, an environmental
indemnity agreement, a guaranty agreement and an assignment of leases and rents made by CVOP II, and is secured by the
250 Williams Atlanta Data Center
.
The material terms of the Loan Agreement provide for the following: (i) a fixed interest rate of 3.99%; (ii) a default interest rate equal to the lesser of (x) the maximum legal rate, as defined in the Loan Agreement or (y) 5.0% above the interest rate; (iii) a maturity date of July 1, 2027; and (iv) prepayment is generally prohibited, except for certain limited circumstances as stated in the Loan Agreement. The Loan Agreement also contains a requirement to escrow certain funds for capital reserves, taxes, insurance and replacement reserve costs. Subject to certain exceptions, the loan is non-recourse as to DCII-250 Williams and CVOP II, but both entities are liable jointly and severally for customary non-recourse carve-outs. The Loan Agreement also contains various affirmative and negative covenants that are customary for loan agreements and transactions of this type, including limitations on the incurrence of debt by DCII-250 Williams.
The material terms of the Loan Agreement, the Fee and Leasehold Deed to Secure Debt, Assignment of Leases and Rents, Security Agreement and Fixture Filing; the Guaranty Agreement, the Assignment of Leases and Rents, the Environmental Indemnity Agreement, and the Promissory Note are qualified in their entirety by the agreements filed as Exhibits 10.4 through Exhibit 10.9, respectively, hereto and incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
In connection with the acquisition of the
250 Williams Atlanta Data Center
, CVOP II incurred indebtedness under the loan agreement. The information set forth under Item 2.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements.
It is impracticable to provide the financial statements for the acquisition of the real property described in this Current Report on Form 8-K at this time, and no financial statements (audited or unaudited) are available at this time. The Company hereby confirms that such financial statements, to the extent required, will be filed as an amendment to this Current Report on Form 8-K no later than 71 days after the deadline for filing this Current Report on Form 8-K.
(b) Pro Forma Financial Information.
See paragraph (a) above.
(d) Exhibits.
|
|
|
10.1
|
Purchase and Sale Agreement, dated April 19, 2017, between 250 Williams Street LLC and Carter Validus Properties II, LLC
|
10.2
|
Assignment of Purchase Agreement, dated June 15, 2017, between Carter Validus Properties II, LLC, as Assignor, and DCII-250 Williams Street NW, LLC, as Assignee
|
10.3
|
Assignment and Assumption of Leases, dated June 15, 2017, between 250 Williams Street LLC, as Assignor, and DCII-250 Williams Street NW, LLC, as Assignee
|
10.4
|
Loan Agreement, dated June 15, 2017, made by and between DCII-250 Williams Street NW, LLC and KeyBank National Association
|
10.5
|
Fee and Leasehold Deed to Secure Debt, Assignment of Leases and Rents, Security Agreement and Fixture Filing, made by DCII-250 Williams Street NW, LLC for the benefit of KeyBank National Association, dated June 15, 2017
|
10.6
|
Guaranty Agreement made by Carter Validus Operating Partnership II, LP, for the benefit of KeyBank National Association, dated June 15, 2017
|
10.7
|
Assignment of Leases and Rents made by DCII-250 Williams Street NW, LLC for the benefit of KeyBank National Association, dated June 15, 2017
|
10.8
|
Environmental Indemnity Agreement entered into by DCII-250 Williams Street NW, LLC and Carter Validus Operating Partnership II, LP, in favor of KeyBank National Association, dated June 15, 2017
|
10.9
|
Promissory Note entered into by DCII-250 Williams Street NW, LLC in favor of KeyBank National Association, dated June 15, 2017
|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
|
CARTER VALIDUS MISSION CRITICAL REIT II, INC.
|
|
|
|
|
Dated: June 21, 2017
|
|
By:
|
/s/ Todd M. Sakow
|
|
|
Name:
|
Todd M. Sakow
|
|
|
Title:
|
Chief Financial Officer
|
Exhibit 10.1
PURCHASE AND SALE AGREEMENT
AMONG
250 WILLIAMS STREET LLC,
A GEORGIA LIMITED LIABILITY COMPANY,
AS SELLER
AND
CARTER VALIDUS PROPERTIES II, LLC,
a Delaware limited liability company,
AS PURCHASER
As of April 19, 2017
250 Williams Street, Atlanta, Georgia
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT
(this “
Agreement
”), made and entered into this 19th day of April, 2017 (the “
Effective Date
”), by and among 250 Williams Street LLC, a Georgia limited liability company (“
Seller
”), and Carter Validus Properties II, LLC, a Delaware (“
Purchaser
”).
W I T N E S E T H:
WHEREAS, Seller desires to sell its interest in certain improved real property located at 250 Williams Street, Atlanta, Georgia, together with certain related personal and intangible property, and Purchaser desires to purchase all of such real, personal and intangible property; and
WHEREAS, the parties hereto desire to provide for said sale and purchase on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the premises, the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt, adequacy, and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby covenant and agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1
Agreement of Purchase and Sale
.
Subject to the terms and conditions hereinafter set forth, Seller agrees to sell and convey to Purchaser and Purchaser agrees to purchase from Seller Seller’s right, title and interest in and to the following:
(a)
(i) Seller’s fee simple title in and to those certain parcels of land situated in Atlanta, Georgia, more particularly described on
Exhibit A-1
attached hereto and made a part hereof (the “
Fee Property
”), and (ii) Seller’s leasehold estate in and to those certain parcels of land situated in Atlanta, Georgia, more particularly described on
Exhibit A-2
attached hereto and made a part hereof (the “
Leasehold Estate
”), and (iii) all of Seller’s right, title and interest appurtenant to such land, including, without limitation, all of Seller’s right, title and interest, if any, in and to (A) all minerals, oil, gas, and other hydrocarbon substances thereon or thereunder, (B) all adjacent strips, streets, roads, alleys and rights-of-way, public or private, open or proposed pertaining thereto, (C) all easements, privileges, development rights, and hereditaments pertaining thereto, whether or not of record, and (D) all access, air, water, riparian, development, utility, and solar rights pertaining thereto (the property described in this clause (a) of this Section 1.1 being herein referred to collectively as the “
Land
”);
(b)
the buildings, fixtures, garages and all other improvements and structures constructed on the Land, excluding fixtures owned by tenants occupying the Improvements
according to the provisions of any applicable Tenant Lease (the property described in this clause (b) of this Section 1.1 being herein referred to collectively as the “
Improvements
;” the Land and the Improvements are hereinafter sometimes collectively referred to as the “
Real Property
”);
(c)
all of Seller’s right, title and interest in and to that certain Lease Agreement, as evidenced by that certain Memorandum of Lease by and between Mrs. Ruth S. Barrett and Sunshine Parking, Inc., dated September 5, 1968, and recorded in Deed Book 9284, Page 312, Fulton County, Georgia records, as amended and assigned, and as more particularly described in
Exhibit J-1
, attached hereto and made a part hereof (collectively, and as assigned, the “
Ground Lease Documents
”);
(d)
any and all tangible personal property located upon the Land or within the Improvements, including, without limitation, any and all appliances, furniture, art work, planters, canopies, carpeting, draperies and curtains, tools and supplies, inventories, equipment and other items of personal property owned by Seller (excluding cash and software) located on and used exclusively in connection with the operation of the Land and the Improvements (except for any such items owned by tenants occupying the Improvements according to the provisions of any applicable Tenant Lease and except for any such items located in the property manager’s office used by employees of Seller other than in connection with an affiliate of Seller’s role as property manager), (the property described in this clause (d) of this Section 1.1 being herein referred to collectively as the “
Personal Property
”);
(e)
all of Seller’s right, title and interest in and to the leases, licenses and occupancy agreements covering all or any portion of the Land and Improvements, to the extent they are in effect on the Closing Date (as such term is defined in Section 4.1 hereof) (collectively, the “
Tenant Leases
”), together with all rents and other sums due thereunder from and after the Closing Date (collectively, the “
Post-Closing Rents
”) and any and all security deposits relating to the Tenant Leases that have not previously been applied in strict accordance with the respective Tenant Leases prior to the Closing Date (collectively, the “
Security Deposits
”) and any and all letters of credit relating to the Tenant Leases held as of the Closing Date (collectively, the “
Letters of Credit
”) (the property described in this clause (e) of this Section 1.1 being sometimes herein referred to collectively as the “
Tenant Lease Rights
”); and
(f)
all of Seller’s right, title and interest in and to (i) subject to
Section 5.9
below, all assignable contracts and agreements (collectively, the “
Operating Agreements
”) listed and described as of the Effective Date on
Exhibit C-1
attached hereto and made a part hereof (the “
Operating Agreements Schedule
”), relating to the upkeep, repair, maintenance or operation of the Land, Improvements or Personal Property which shall extend beyond the Closing Date (as defined in Section 4.1 hereof), including specifically, without limitation, all assignable equipment leases, (ii) all assignable existing warranties and guaranties, permits, licenses, certificates of occupancy and governmental approvals issued to Seller in connection with the Improvements or the Personal Property, and (iii) tradenames, trademarks, logos, and service marks used exclusively in connection with the Real Property
(including, but not limited to, “250 Williams”) and the domain name for any website used exclusively in connection with the Real Property, and any goodwill related to the Real Property, specifically excluding, however, (A) any rights to or goodwill related to the name “Cousins” or any derivative or form of such name or to any mark associated with such name or any derivative or form thereof; and (B) any software licensed to Seller (including software installed on Seller’s computers) (the property described in this clause (f) of this Section 1.1 being sometimes herein referred to collectively as the “
Intangibles
”).
1.2
Property Defined
.
The Land, the Improvements, the Personal Property, the Ground Lease Documents, the Tenant Lease Rights, and the Intangibles are hereinafter sometimes referred to collectively as the “
Property
.”
1.3
Permitted Exceptions
.
The Property shall be conveyed subject to the matters which are, or are deemed to be, Permitted Exceptions pursuant to Article II (herein referred to collectively as the “
Permitted Exceptions
”).
1.4
Purchase Price
. Seller is to sell and Purchaser is to purchase the Property for a total of ONE HUNDRED SIXTY SIX MILLION AND NO/100 DOLLARS ($166,000,000) (the “Purchase Price”).
1.5
Payment of Purchase Price
.
The Purchase Price, as increased or decreased by prorations and adjustments as herein provided, shall be payable in full at Closing in cash by wire transfer of immediately available federal funds to a bank account designated by Seller in writing to Purchaser prior to the Closing (“
Seller’s Account
”) with all proceeds due to Seller at Closing to be received in Seller’s Account no later than 5:00 P.M. (local time at the Property) on the Closing Date (as defined in Section 4.1 hereof); provided, however, if proceeds due to Seller at Closing are received in Seller’s Account later than 3:00 P.M. (local time at the Property) on the Closing Date and Seller’s payoff lender charges Seller an additional day’s per diem interest, Purchaser shall be responsible to pay for such day’s per diem interest charge.
1.6
Earnest Money
.
On or before 5:00 P.M. local time at the Property on the date that is two (2) business days after the Effective Date, Purchaser shall deposit with First American Title Insurance Company (the “
Escrow Agent
”), having its office at 3031 North Rocky Point Drive West, Suite 550, Tampa, Florida 33607, Attn: Kenneth Rossburg, the sum of
FIVE MILLION
AND NO/100 DOLLARS ($5,000,000)
(the “
Earnest Money
”) in good funds, by certified bank or cashier’s check or by federal wire transfer.
ONE MILLION
AND NO/100 DOLLARS ($1,000,000)
(the “
Inspection Period Non-Refundable Portion
”) of the Earnest Money shall be non-refundable immediately upon deposit, except in the case of a Refundable Condition, described in Section 3.2, or as otherwise set forth in this Agreement. The remaining
FOUR MILLION
AND NO/100 DOLLARS ($4,000,000)
(the “
Inspection Period Refundable Portion
”) of the Earnest Money shall be refundable during the Inspection Period as set forth in Section 3.2. The entire amount of the Earnest Money (including the Inspection Period Non-Refundable Portion and the Inspection Period Refundable Portion) shall be non-refundable upon the expiration of the Inspection Period, except as otherwise set forth in this Agreement. The Escrow Agent shall hold the Earnest Money in an interest-bearing account in accordance with the terms and conditions of an escrow agreement entered into among Seller, Purchaser and Escrow Agent simultaneously with Purchaser’s
deposit of the Earnest Money with Escrow Agent. All interest accruing on such sum shall become a part of the Earnest Money and shall be distributed as Earnest Money in accordance with the terms of this Agreement.
1.7
Independent Consideration
.
In addition to, and not in lieu of the delivery to Escrow Agent of the Earnest Money, Purchaser shall deliver to Seller, concurrently with Purchaser’s execution and delivery of this Agreement, and Seller hereby acknowledges receipt thereof, the amount of One Hundred and No/100 Dollars ($100.00). Seller and Purchaser hereby mutually acknowledge and agree said sum represents adequate bargained for consideration for Seller’s execution and delivery of this Agreement and Purchaser’s right to have inspected the Property pursuant to Article III hereof. Said sum is in addition to and independent of any other consideration or payment provided for in this Agreement and is nonrefundable in all events.
ARTICLE II
TITLE AND SURVEY
2.1
Title Examination; Commitment for Title Insurance
.
Seller has provided to Purchaser Owner’s Title Insurance Commitment Number NCS-816033-ATL dated February 2, 2017 (the “
Title Commitment
”) covering the Property from First American Title Insurance Company (the “
Title Company
”), showing all matters affecting title to the Property and binding the Title Company to issue at Closing an Owner’s Policy of Title Insurance in the full amount of the Purchase Price pursuant to Section 2.4 hereof.
2.2
Survey
.
Seller has provided to Purchaser an ALTA survey of the Property (the “
Survey
”) from Watts & Browning Engineers, Inc. (the “
Surveyor
”) dated April 3, 2017, reflecting the total area of the Property, the location of all Improvements, recorded easements and encroachments, if any, located thereon and all building and set back lines and other matters of record with respect thereto. Purchaser may obtain any revisions or certifications to the Survey at Purchaser’s sole cost and expense.
2.3
Title Objections; Cure of Title Objections
.
Purchaser shall have until the later to occur of (i) five (5) business days after receipt of both the Title Commitment and the Survey and (ii) the expiration of the Inspection Period (the “
Initial Title Objection Period
”) to notify Seller, in writing, of such objections as Purchaser may have to anything contained in the Title Commitment or the Survey. Any item contained in the Title Commitment or any matter shown on the Survey to which Purchaser does not object to prior to the expiration of the Initial Title Objection Period shall be deemed a Permitted Exception. If Purchaser shall notify Seller of objections to title or to matters shown on the Survey to prior to the expiration of the Initial Title Objection Period, Seller shall have the right, but not the obligation (except as to Monetary Objections (as defined below), to cure such objections. Within five (5) business days after receipt of Purchaser’s notice of objections, Seller shall notify Purchaser in writing whether Seller elects to attempt to cure such objections; provided, however, that if Seller fails to give Purchaser such written notice of its election within five (5) business days after receipt of Purchaser’s notice of objections, Seller shall be deemed to have elected not to cure any of Purchaser’s objections and to have so notified Purchaser pursuant to this Section 2.3. If Seller elects to attempt to cure any such matters, and provided that Purchaser shall not have
terminated this Agreement in accordance with Section 3.2 hereof, the original scheduled Closing Date shall be automatically extended by a reasonable additional time to effect such cure, but in no event shall the extension exceed thirty (30) days after the original scheduled Closing Date. If Seller elects (or is deemed to have elected) not to cure one or more of the objections specified in Purchaser’s notice (other than Monetary Objections), or if Seller is unable to effect such a cure prior to the Closing (or any date to which the Closing has been adjourned), Purchaser shall have the following options: (a) to accept a conveyance of the Property subject to the Permitted Exceptions, specifically including any matter objected to by Purchaser which Seller is unwilling or unable to cure (other than Monetary Objections), and without reduction of the Purchase Price; or (b) to terminate this Agreement by sending written notice thereof to Seller, and upon delivery of such notice of termination, this Agreement shall terminate and the Earnest Money shall be returned to Purchaser, and thereafter neither party hereto shall have any further rights, obligations or liabilities hereunder except to the extent that any right, obligation or liability set forth herein expressly survives termination of this Agreement. If Seller notifies (or is deemed to have notified) Purchaser that Seller does not intend to attempt to cure any title objection (other than Monetary Objections), or if, having commenced attempts to cure any objection, Seller later notifies Purchaser that Seller shall be unable to effect a cure thereof (other than Monetary Objections), Purchaser shall, within five (5) business days after such notice has been given (or the date such notice is deemed to have been given), notify Seller in writing whether Purchaser shall elect to accept the conveyance under clause (a) or to terminate this Agreement under clause (b); provided, however, that if Purchaser fails to give Seller such written notice of its election within five (5) business days after receipt of Seller’s notice (or the date such notice is deemed to have been given) giving rise to such election, Purchaser shall be deemed to have elected to accept the conveyance under clause (a) and to have so notified Purchaser pursuant to this Section 2.3. For purposes of this Agreement, “
Monetary Objections
” shall mean (v) any deed of trust or similar security instrument entered into by Seller encumbering all or any part of the Property, (w) any undisputed mechanic’s, materialman’s or similar lien (unless resulting from any act or omission of Purchaser or any of its agents, contractors, representatives or employees or any tenant of the Property), (x) the lien of ad valorem real or personal property taxes, assessments and governmental charges affecting all or any portion of the Property which are delinquent, and (y) any judgment of record against Seller in the county or other applicable jurisdiction in which the Property is located.
2.4
Conveyance of Title
.
At Closing, Seller shall convey and transfer to Purchaser fee simple title to the Fee Property and its leasehold interest in and to the Leasehold Estate, in each case subject to the Permitted Exceptions, and Seller shall cause the Title Company to issue to Purchaser an extended coverage Owner’s Policy of Title Insurance (the “
Title Policy
”), covering the Property, in the full amount of the Purchase Price. Notwithstanding anything contained herein to the contrary, the Property shall be conveyed subject to the following matters, which shall be deemed to be Permitted Exceptions:
(a)
the rights of tenants, as tenants only, under the Tenant Leases and any new Tenant Leases entered into between the Effective Date and Closing and, where required, approved by Purchaser in accordance with the terms of this Agreement;
(b)
the lien of all ad valorem real estate taxes and assessments not yet due and payable as of the Closing Date, subject to adjustment as herein provided;
(c)
local, state and federal laws, ordinances or governmental regulations, including but not limited to, building and zoning laws, ordinances and regulations, now or hereafter in effect relating to the Property; and
(d)
items shown on the Title Commitment or Survey (including any updates thereto) and, in each case, not objected to by Purchaser or waived or deemed waived by Purchaser in accordance with this Article II.
2.5
Pre-Closing “Gap” Title Defects.
Whether or not Purchaser shall have furnished to Seller any notice of title objections pursuant to the foregoing provisions of this Agreement, Purchaser may, at or prior to Closing, notify Seller in writing of any objections to title (which for the avoidance of doubt, may include any new exceptions, new requirements, modifications to any existing exceptions, modification to any requirements or any other new matter) (i) first raised by the Title Company or first arising between the effective date of the Title Commitment and the Closing Date, or (ii) first raised by the Surveyor or first arising between the effective date of the Survey and the Closing Date (each being an “
Additional Objection
”); provided, however, that any Additional Objections delivered by Purchaser pursuant to this Section 2.5 shall be deemed to be a Permitted Exception unless notice of such Additional Objections is delivered to Seller no later than the earlier of (i) the Closing Date or (ii) the fifth (5
th
) business day following the date on which such objection is first disclosed to Purchaser in writing on any update to the Title Commitment or the Survey. With respect to any such Additional Objections, Seller shall have the same option to cure and Purchaser shall have the same options to accept title subject to such Additional Objections or to terminate this Agreement as applicable pursuant to Section 2.3 hereof to any notice of objections made by Purchaser before the expiration of the Initial Title Objection Period. If Seller elects to attempt to cure any such Additional Objections, the original scheduled Closing Date shall be automatically extended by a reasonable additional time to effect such cure, but in no event shall the extension exceed thirty (30) days after the original scheduled Closing Date set forth in Section 4.1 hereof.
ARTICLE III
DELIVERIES & INSPECTION
3.1
Right of Inspection; Access Agreement
.
(a)
Purchaser acknowledges that Seller has delivered or made available to Purchaser in an electronic data room certain information related to the Property, reflected in the index of such data room as of the Effective Date, and such materials shall be deemed the “
Deliveries
” for all purposes hereunder.
(b)
Purchaser hereby acknowledges that during the period beginning upon April 11, 2017 and ending at 5:00 p.m. (local time at the Property) on May 8, 2017 (hereinafter referred to as the “
Inspection Period
”), Purchaser has had and shall have the right pursuant
to that certain Access Agreement between Seller and Purchaser, dated as of April 13, 2017 to make a physical inspection of the Property and to examine at such place or places at the Property, in the offices of the property manager or elsewhere as the same may be located, any operating files maintained by Seller or their property manager in connection with the leasing, maintenance, and/or management of the Property, including, without limitation, the Tenant Leases, lease files, Operating Agreements, insurance policies, bills, invoices, receipts and other general records relating to the income and expenses of the Property (including budgets, accounting and tax records), correspondence, surveys, plans and specifications, warranties for services and materials provided to the Property, engineering reports, environmental audits and similar materials, but excluding materials not directly related to the leasing, maintenance and/or management of the Property such as Seller’s internal memoranda, financial projections, appraisals and similar proprietary, confidential or privileged information, and to interview tenants of the Improvements, and service providers under the Operating Agreements, and to conduct such non-invasive physical engineering and other studies and tests on or of the Real Property as Purchaser deemed appropriate. In no event shall Purchaser be permitted to conduct any invasive physical studies or tests without Seller’s prior written consent, which may be granted or withheld in Seller’s sole and absolute discretion.
3.2
Right of Termination
.
Seller agrees that if Purchaser determines (such determination to be made in Purchaser’s sole discretion) that the Property is not suitable for its purposes, Purchaser shall have the right to terminate this Agreement by giving written notice thereof to Seller prior to the expiration of the Inspection Period. If Purchaser’s termination is based on the occurrence of a Refundable Condition, the termination notice shall include a description of any Refundable Condition, along with reasonable back-up documentation to evidence such Refundable Condition. If Purchaser gives notice of termination within the Inspection Period, this Agreement shall terminate and the Inspection Period Refundable Earnest Money shall be returned to Purchaser and the Inspection Period Non-Refundable Portion shall be retained by Seller, unless the notice of termination is based on the occurrence of a Refundable Condition, in which case the entire amount of the Earnest Money (including the Inspection Period Non-Refundable Portion) shall be returned to Purchaser. A Refundable Condition has occurred if: (i) an updated Title Commitment or Survey reveals liens or encumbrances on the Property not evidenced in the Title Commitment and Survey delivered pursuant to Section 2.1 and Section 2.2, and Seller does not elect to cure such lien or encumbrance prior to Closing, (ii) an updated zoning report reveals a material issue not included in the zoning report provided with the Deliveries, and Seller does not elect to cure such material issue, (iii) an updated Phase One environmental report reveals a material environmental issue not included in the Phase One environmental reports provided with the Deliveries, (iv) a property condition report includes recommendations to address within the first five (5) years following the Closing existing or deferred maintenance items with an estimated cost to repair or replace in excess of NINE MILLION FOUR HUNDRED SIXTY-SIX THOUSAND SIX HUNDRED DOLLARS AND 00/HUNDREDS ($9,466,600) and/or (v) Seller is in default of this Agreement beyond any applicable cure period. Time is of the essence with respect to the provisions of this Section 3.2. If Purchaser fails to give Seller a notice of termination prior to the expiration of the Inspection Period, Purchaser shall no longer have any right to terminate this Agreement under this Section 3.2 and (subject to the provisions of Section 2.5, the satisfaction of each of the conditions precedent to
Purchaser’s obligation to proceed with Closing, and such other express terms and provisions of this Agreement) shall be bound to proceed to Closing and consummate the transaction contemplated hereby pursuant to the terms of this Agreement. PURCHASER ACKNOWLEDGES THAT PURCHASER’S RIGHT OF TERMINATION UNDER THIS SECTION 3.2 RELATES TO THE ENTIRE PROPERTY AND PURCHASER MAY NOT TERMINATE THIS AGREEMENT AS TO ANY INDIVIDUAL PARCEL(S) WHILE ELECTING TO PROCEED WITH THE ACQUISITION OF OTHER PARCELS WITHIN THE PROPERTY.
ARTICLE IV
CLOSING
4.1
Time and Place
.
The consummation of the transaction contemplated hereby (“
Closing
”) shall be held at the offices of Eversheds Sutherland (US) LLP, 999 Peachtree Street, N.E., Atlanta, Georgia 30309 on June 15, 2017 (as may be extended as expressly provided in this Agreement, the “
Closing Date
”). At Closing, Seller and Purchaser shall perform the obligations set forth in, respectively, Section 4.2 and Section 4.3, the performance of which obligations shall be concurrent conditions.
4.2
Seller’s Obligations at Closing
.
At Closing, Seller shall:
(a)
deliver to Purchaser a limited warranty deed in the form attached hereto as
Exhibit F
(the “
Deed
”) in recordable form and duly executed by Seller, conveying Seller’s interest in the Fee Property, subject only to the Permitted Exceptions applicable to the Fee Property; the warranty of title in the Deed shall be only as to claims made by, through or under Seller and not otherwise;
(b)
deliver to Purchaser a counterpart to the Assignment and Assumption of Ground Lease Documents in the form attached hereto as
Exhibit G
(the “
Ground Lease Assignmen
t”) in recordable form and duly executed by Seller, conveying Seller’s interest in the Leasehold Estate, subject only to the Permitted Exceptions applicable to the Leasehold Estate; the warranty of title in the Ground Lease Assignment shall be only as to claims made by, through or under Seller and not otherwise;
(c)
deliver to Purchaser a duly executed Assignment of Landlord’s Interest in Leases in the form attached hereto as
Exhibit H
(the “
Tenant Lease Assignment
”) conveying the Tenant Lease Rights to Purchaser;
(d)
deliver to Purchaser a duly executed Blanket Conveyance, Bill of Sale, and Assignment in the form attached hereto as
Exhibit I
(the “
Bill of Sale
”) conveying the Personal Property and Intangibles with the same limited warranty of title as contained in the Deeds as to those items of Personal Property and Intangibles but without warranty, express or implied, as to merchantability and fitness for any purpose;
(e)
deliver to Purchaser such Tenant Estoppels (as defined in Section 5.4(b) hereof) as are in Seller’s possession;
(f)
join with Purchaser to execute a notice in form and content reasonably satisfactory to Purchaser and Seller which Purchaser shall send to each tenant under each of the Tenant Leases promptly after Closing informing such tenant of the sale of the Property and of the assignment to Purchaser of Seller’s interest in, and obligations under, the Tenant Leases (including, if applicable any Security Deposits) and directing that all Post-Closing Rents under each such Tenant Lease shall be paid as set forth in the notice;
(g)
deliver to Purchaser a certificate, dated as of the Closing Date and executed on behalf of Seller by a duly authorized officer thereof, stating that the representations and warranties of Seller contained in this Agreement are true and correct in all material respects as of the Closing Date with appropriate modifications of those representations and warranties made in Section 5.1 hereof to reflect any changes therein, exclusively (i) resulting from actions under Section 5.4(f) or Section 5.4(g) hereof or (ii) identifying any other immaterial change in the status of a representation or warranty which results in it not, or no longer, being true and correct and explaining the state of facts giving rise to the immaterial change. In no event shall Seller be liable to Purchaser for, or be deemed to be in default hereunder by reason of, any breach of representation or warranty which results from any change that (y) occurs between the Effective Date and the Closing Date and (z) is expressly permitted under the terms of this Agreement or is beyond the reasonable control of Seller to prevent; provided, however, that the occurrence of any change to a representation or warranty in this Agreement which is not expressly permitted under clause (i) or (ii) of this Section 4.2(h) shall constitute the non- fulfillment of the condition precedent to Purchaser’s obligation to Closing set forth in Section 4.6(b); provided, that Seller shall have the right, in its sole discretion, to extend the Closing Date for up to thirty (30) days to cure such breach; if, despite changes or other matters described in such certificate, the Closing occurs, Seller’s representations and warranties set forth in this Agreement shall be deemed to have been modified by all statements made in such certificate; such certificate shall be subject to the limitations set forth in Section 5.3 hereof;
(h)
deliver to Purchaser such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Seller;
(i)
deliver to Purchaser and the Title Company duly executed transfer tax forms as are required by law, if any, including without limitation, if applicable, any Certificate of Exemption, Affidavit of Sellers’ Residence and Affidavit of Gain/Loss, or any of them, to the extent applicable and as may be required with respect to State of Georgia Withholding Tax pursuant to OCGA §48-7-128 confirming either that Seller is exempt from any withholding tax with respect to the sale of the Property or calculating the amount of such withholding, and if withholding is required under OCGA §48-7-128, Purchaser and the Title Company shall withhold 3% of the Purchase Price (or such lesser amount as certified by Seller as due in accordance with OCGA §48-7-128) as required under and in accordance with OCGA §48-7-128;
(j)
deliver to Purchaser and the Title Company a duly executed certification regarding brokers in the form required by the Title Company and, if required by the Title Company, a broker’s lien waiver from all such Sellers’ broker(s);
(k)
deliver such additional documents as shall be reasonably requested by the Title Company or Purchaser or required to consummate the transaction contemplated by this Agreement, including, without limitation, a customary owner’s affidavit; provided, however, that in no event shall Seller be required to indemnify the Title Company, Purchaser, or any other party pursuant to any such documents, except to the extent that the Title Company requires that the Seller provide an indemnification to insure over the “gap” at Closing, or undertake any other material liability not expressly contemplated in this Agreement, unless Seller elects to do so in its sole discretion;
(l)
deliver to Purchaser and the Title Company affidavits duly executed by Seller stating that Seller is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended;
(m)
deliver to Purchaser (or make available to Purchaser for pick up) the Leases, Operating Agreements, items of Personal Property (if applicable), Intangibles (if applicable), and licenses and permits to be conveyed as set forth in this Agreement, if any, together with such leasing and property files and records which are material in connection with the continued operation, leasing and maintenance of the Property, all to the extent in the possession of Seller or Seller’s agents. Purchaser shall cooperate with Seller for a period of two (2) years after Closing in case of Seller’s need in response to any legal requirement, a tax audit, tax return preparation or litigation threatened or brought against Seller, by allowing Seller and its agents or representatives access, upon reasonable advance notice (which notice shall identify the nature of the information sought by Seller), at all reasonable times to examine and make copies of any and all instruments, files and records, which right shall survive the Closing;
(n)
deliver a copy of Seller’s duly executed counterpart to a closing statement in form and substance acceptable to Seller;
(o)
deliver to Purchaser such SNDAs (as defined in Section 5.4(h)) as are in Seller’s possession;
(p)
deliver to Purchaser the Ground Lease Estoppel and Bridge Estoppel, to the extent the same are in Seller’s possession;
(q)
deliver to Purchaser any Seller Estoppels, Seller Ground Lease Estoppel, and any Seller Bridge Estoppel that Seller, in its sole discretion, elects to deliver; and
(r)
deliver to Purchaser possession and occupancy of the Property, subject to the Permitted Exceptions.
4.3
Purchaser’s Obligations at Closing
.
At Closing, Purchaser shall:
(a)
pay to Seller the full amount of the Purchase Price, as increased or decreased by prorations and adjustments as herein provided, prior to 5:00 P.M. (local time at the Property), on the Closing Date, in immediately available federal funds wire transferred to Seller’s Account pursuant to Section 1.5 above, it being agreed that at Closing the Earnest Money shall be delivered to Seller by wire transfer of immediately available funds to Seller’s Account and applied towards payment of the Purchase Price;
(b)
join Seller in execution of the instruments described in Sections 4.2(c), 4.2(d), 4.2(e) and 4.2(g) above, and deliver Purchaser’s original counterparts of same to Seller;
(c)
deliver to Seller a certificate, dated as of the Closing Date and executed on behalf of Purchaser by a duly authorized officer thereof, stating that the representations and warranties of Purchaser contained in this Agreement are true and correct in all material respects as of the Closing Date;
(d)
deliver to Seller such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Purchaser;
(e)
deliver such additional documents as shall be reasonably requested by the Title Company or Seller or required to consummate the transaction contemplated by this Agreement, provided, however, that in no event shall Purchaser be required to undertake any other material liability not expressly contemplated in this Agreement, unless Purchaser elects to do so in its sole discretion; and
(f)
deliver a copy of Purchaser’s duly executed counterpart to a closing statement in form and substance acceptable to Purchaser.
4.4
Credits and Prorations
.
(a)
All income and expenses in connection with the operation of the Property shall be apportioned, as of 12:01 a.m. (local time at the Property) on the Closing Date, as if Purchaser were vested with title to the Property during the entire Closing Date, such that, except as otherwise expressly provided to the contrary in this Agreement, Seller shall have the benefit of income and the burden of expenses for the day preceding the Closing Date and the Purchaser shall have the benefit of the income and burden of expenses for the Closing Date and thereafter. Such prorated items shall include, without limitation, the following:
(i)
rents, if any, as and when collected (the term “
rents
” as used in this Agreement includes all payments due and payable by tenants under the Tenant Leases; provided, however, for purposes of all prorations, only actually collected rents, and not any delinquent rents, shall be prorated);
(ii)
taxes (including personal property taxes on the Personal Property) and assessments levied against the Property;
(iii)
payments under the Operating Agreements being assumed by Purchaser pursuant to
Section 5.9
below, and the Ground Lease Documents (including without limitation, any contributions for insurance or allocable shared costs thereunder);
(iv)
gas, electricity and other utility charges for which Seller is liable, if any, such charges to be apportioned at Closing on the basis of the most recent meter reading occurring prior to Closing; and
(v)
any other operating expenses or other items pertaining to the Property which are customarily prorated between a purchaser and a seller in the county in which the Property is located.
(b)
Notwithstanding anything contained in the foregoing provisions:
(i)
At Closing, (A) Seller shall credit to the account of Purchaser the amount of any Security Deposits (to the extent such Security Deposits have not been applied against delinquent rents or otherwise as provided in the Tenant Leases), (B) Purchaser shall credit to the account of Seller all refundable cash or other deposits posted with utility companies serving the Property, or, at Seller’s option, Seller shall be entitled to receive and retain such refundable cash and deposits, and (C) Seller shall use commercially reasonable efforts to effectuate the transfer of all Letters of Credit to Purchaser promptly following Closing.
(ii)
Any taxes paid at or prior to Closing shall be prorated based upon the amounts actually paid. If taxes and assessments for the current year have not been paid before Closing, Seller shall be charged at Closing an amount equal to that portion of such taxes and assessments which relates to the period before Closing and Purchaser shall pay the taxes and assessments prior to their becoming delinquent. Any such apportionment made with respect to a tax year for which the tax rate or assessed valuation, or both, have not yet been fixed shall be based upon the tax rate and/or assessed valuation last fixed. To the extent that the actual taxes and assessments for the current year, when the tax bill is received, differ from the amount apportioned at Closing, the parties shall make the appropriate adjusting payment between themselves within thirty (30) days after Purchaser presents to Seller a copy of the final tax bill, Purchaser’s calculation of the reproration of the taxes and assessments and appropriate back-up materials related to the calculation. In addition, Seller may inspect Purchaser’s books and records related to the Property to confirm Purchaser’s calculation.
(iii)
Seller shall receive the prorata advantage for Seller’s period of ownership of any discounts for the prepayment by it of any taxes, water rates or sewer rents.
(iv)
As to gas, electricity and other utility charges, Seller may, on notice to Purchaser, elect to pay one or more of all of said items accrued to the date
hereinabove fixed for apportionment directly to the person or entity entitled thereto, and to the extent Seller so elects, such item shall not be apportioned hereunder, and Seller’s obligation to pay such item directly in such case shall survive the Closing.
(v)
Any reimbursements payable by any tenant under the terms of any Tenant Lease affecting the Property as of the Closing Date, which reimbursements pertain to such tenant’s pro rata share of increased operating expenses or common area maintenance costs incurred with respect to the Property at any time prior to the Closing, shall be prorated upon Purchaser’s actual receipt of any such reimbursements, on the basis of the number of days of Seller’s and Purchaser’s respective ownership of the Property during the period in respect of which such reimbursements are payable; and Purchaser agrees to pay to Seller, Seller’s pro rata portion of such reimbursements within fifteen (15) days after Purchaser’s receipt thereof. Conversely, if any tenant under any such Tenant Lease shall become entitled at any time after Closing to a refund of tenant reimbursements actually paid by such tenant prior to Closing, then, Seller shall, within fifteen (15) days following Purchaser’s demand therefor, pay to Purchaser any amount equal to Seller’s pro rata share of such reimbursement refund obligations, said proration to be calculated on the same basis as hereinabove set forth.
(vi)
Purchaser shall be responsible for the payment of (A) all Tenant Inducement Costs (as defined below in this Section 4.4(b)(vi)) and leasing commissions which become due and payable (whether before or after Closing) (1) as a result of any renewals or expansions of existing Tenant Leases, approved or deemed approved in accordance with Section 5.4 hereof between the Effective Date and the Closing Date, and (2) under any new Tenant Leases, approved or deemed approved in accordance with Section 5.4 hereof, entered into between the Effective Date and the Closing Date, (B) any Tenant Inducement Costs which become due and payable (whether before or after Closing) pursuant to a Permitted Lease Action taken before, on or after the Closing Date, and (C) with the exception of those items identified as Seller costs on
Exhibit D
attached hereto (the “
Seller Costs
”), all Tenant Inducement Costs and leasing commissions which become due and payable from and after the Closing Date with respect to all existing Tenant Leases. If, as of the Closing Date, Seller shall have paid any Tenant Inducement Costs or leasing commissions for which Purchaser is responsible pursuant to the foregoing provisions, Purchaser shall reimburse Seller therefor at Closing. At Closing, Purchaser shall receive a credit against the Purchase Price in an amount equal to the amount of any unpaid Seller Costs. For purposes hereof, the term “
Tenant Inducement Costs
” shall mean any out-of- pocket payments required under a Tenant Lease to be paid by the landlord (including reasonable legal fees directly related to the Tenant Lease) thereunder to or for the benefit of the tenant thereunder which is in the nature of a tenant inducement, including, without limitation, tenant improvement costs, tenant improvement reimbursements, required common area improvements, lease buyout costs, and moving, design, refurbishment and club membership or parking allowances and any loss of income resulting from any free
rental period or any waiver or foregoing of any payments or reimbursements otherwise required from any tenant. Notwithstanding anything contained herein to the contrary, Seller shall be permitted from time to time between the Effective Date and the Closing Date to update the Seller Costs (so long as such update does not decrease the amount of Seller Costs) and the credit that Purchaser shall receive against the Purchase Price at Closing shall increase by the amount of any such unpaid Seller Costs, and any such update shall be appropriately reflected on
Exhibit D
and the certificate of Seller to be delivered to Purchaser at Closing in accordance with Section 4.2(h) hereof.
(vii)
Unpaid and delinquent rent collected by Seller and Purchaser after the Closing Date shall be delivered as follows: (A) if Seller collects any unpaid or delinquent rent for the Property, Seller shall, within fifteen (15) days after the receipt thereof, deliver to Purchaser any such rent which Purchaser is entitled to hereunder relating to the Closing Date and any period thereafter, and (B) if Purchaser collects any unpaid or delinquent rent from the Property, Purchaser shall, within fifteen (15) days after the receipt thereof, deliver to Seller any such rent which Seller is entitled to hereunder relating to the period prior to the Closing Date. Seller and Purchaser agree that all rent received by Seller or Purchaser from and after the Closing Date shall be applied first to current rentals and then to delinquent rentals, if any, in inverse order of maturity. Purchaser shall use commercially reasonable efforts after Closing to invoice tenants in the usual course of Purchaser’s operation of the Property; provided, however, Seller shall be prohibited from taking any action to collect any such delinquent amounts and Purchaser shall not be required to institute any litigation to collect such costs. If there shall be any rents or other charges under any Tenant Leases which, although relating to a period prior to Closing, do not become due and payable until after Closing or are paid prior to Closing but are subject to adjustment after Closing (such as year end common area expense reimbursements and the like), then any rents or charges of such type received by Purchaser or its agents or Seller or its agents subsequent to Closing shall, to the extent applicable to a period extending through the Closing, be prorated between Seller and Purchaser as of Closing and Seller’s portion thereof shall be remitted promptly to Seller by Purchaser, or if applicable, and Purchaser’s portion thereof shall be remitted promptly to Purchaser by Seller.
(viii)
The provisions of this Section 4.4 shall survive Closing.
If any of the items described in this Section 4.4 cannot be apportioned at the Closing because of the unavailability of information as to the amounts which are to be apportioned or otherwise, or are incorrectly apportioned at Closing or subsequent thereto, such items shall be apportioned or reapportioned, as the case may be, as soon as practicable after the Closing Date or the date such error is discovered.
4.5
Closing Costs
.
Seller shall pay (a) the cost of any transfer or documentary tax which becomes payable by reason of the transfer of the Property; (b) the fees of any counsel representing
it in connection with this transaction; (c) the fees for recording the Deeds and the Ground Lease Assignment; (d) any and all commissions and fee due to the broker for the transaction contemplated for by this Agreement; (e) one-half (½) of any escrow fee which may be charged by the Escrow Agent or the Title Company; (f) the premium for an extended coverage owners policy of title insurance; and (g) the cost of the Survey. Purchaser shall pay (v) the fees of any counsel representing Purchaser in connection with this transaction; (w) the cost of any title insurance endorsements to the Title Policy, and the cost of any title insurance coverage in excess of the Purchase Price; (x) the cost of updating the Survey; and (y) one-half (½) of any escrow fees charged by the Escrow Agent or the Title Company. All other costs and expenses incident to this transaction and the closing thereof shall be paid by the party incurring same. For the avoidance of doubt, in no event shall Seller be responsible for any costs associated with Purchaser’s financing or lender, including, without limitation, a lender’s policy of title insurance or recording fees associated with Purchaser’s financing documents.
4.6
Conditions Precedent to Obligation of Purchaser
.
The obligation of Purchaser to consummate the transaction hereunder shall be subject to the fulfillment on or before the Closing Date of all of the following conditions, any or all of which may be waived by Purchaser in its sole discretion:
(a)
Seller shall have delivered to Purchaser all of the items required to be delivered to Purchaser pursuant to the terms of this Agreement, including but not limited to, those provided for in Section 4.2.
(b)
All of the representations and warranties of Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date (with such modifications to such representations and warranties as are expressly permitted under clause (i) or (ii) of Section 4.2(h) of this Agreement).
(c)
Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Seller as of the Closing Date.
(d)
No later than three (3) business days prior to the Closing Date, Seller shall have delivered to Purchaser copies of the executed Tenant Estoppels (as defined in Section 5.4(b)) in either the form attached hereto as Exhibit E-1, or such Tenant Lease has another form attached, the form attached to such Tenant Lease, each dated no earlier than thirty (30) days prior to the date of Closing for tenants under the Tenant Leases who comprise seventy-five percent (75%)
of the rentable square footage which is subject to Tenant Leases in the Improvements (the “
Required Estoppels
”), which must include Tenant Estoppels from the American Cancer Society, Inc., Internap, and US South Communications. To the extent that any executed Tenant Estoppel is in form and substance which does not vary materially from the form delivered to such Tenant pursuant to Section 5.4(b) or the form attached to such Tenant’s lease (in each case, unless such variance benefits Purchaser and provided that the insertion of knowledge or materiality qualifiers by a Tenant shall not be deemed a material variance and provided, further, that item 12 in the form of estoppel, regarding the actual use of the Premises, and item 15, regarding Tenant’s notice address, are included for information
and estoppel purposes only, and responses (or lack of response) to such items by a Tenant shall not be deemed a material variance), such Tenant Estoppel shall be deemed acceptable for purposes of satisfying the Required Estoppels threshold pursuant to this Section 4.6(d). To the extent that any executed Tenant Estoppel does not meet the criteria set forth in the immediately preceding sentence, such Tenant Estoppel shall be used for purposes of satisfying the Required Estoppels threshold only if it is approved by Purchaser in its reasonable discretion. If Seller has not been able to obtain the Required Estoppels by the Closing Date, despite having used its reasonable efforts to do so, Seller shall have the right, at its sole option to extend the original scheduled Closing Date for up to thirty (30) days by giving Purchaser notice of such election on the date which is three (3) business days before the original scheduled Closing Date. In addition, if Seller has not been able to obtain the Required Estoppels by the Closing Date (including any extended Closing Date under the immediately preceding sentence), despite having used its reasonable efforts to do so, Seller shall have the right, at its sole option, to satisfy the condition set forth in this Section 4.6(d) by providing an estoppel certificate executed by Seller in the form of
Exhibit E-2
(the “
Seller Tenant Lease Estoppel
”) for Tenant Leases which comprise up to fifteen percent (15%) of the rentable square footage which is subject to Tenant Leases in the Improvements in order to meet the Required Estoppels threshold. If Seller provides one or more Seller Tenant Lease Estoppels covering any Tenant Lease for which a Tenant Estoppel executed by the applicable tenant is subsequently delivered to Purchaser (a “
Superseded Seller Tenant Lease Estoppel
”), effective upon Purchaser’s receipt of such Tenant Estoppel, Seller shall have no further liability under the applicable Superseded Seller Tenant Lease Estoppel. Seller’s liability under any Seller Tenant Lease Estoppel shall be subject to and limited by the provisions of Section 5.3 hereof.
(e)
No later than three (3) business days prior to the Closing Date, Seller shall have delivered to Purchaser, an estoppel executed by the holder of landlord’s interest (“
Ground Lease Owner
”) with respect to
Ground Lease Documents
in substantially the form attached hereto as
Exhibit J-2
(the “
Ground Lease Estoppel
”)
or
, at Seller’s option, an estoppel executed by Seller in substantially the form attached hereto as
Exhibit J-3
(the “
Seller
Ground Lease Estoppel
”). The delivery of either the Ground Lease Estoppel or the Seller Ground Lease Estoppel is a condition to Purchaser's obligation to close, but the inability of Seller to deliver the Ground Lease Estoppel or Seller’s election not to deliver a Seller Ground Lease Estoppel shall not constitute a default by Seller hereunder. Seller shall endeavor to obtain the Ground Lease Estoppel without the knowledge qualifications in section 4 of Exhibit J-2, but the elimination of such knowledge qualifications from the Ground Lease Estoppel will not be a condition precedent to Purchaser's obligation to consummate the Closing. If Seller provides a Seller Ground Lease Estoppel and a Ground Lease Estoppel executed by Ground Lease Owner is subsequently delivered to Purchaser (a “
Superseded Seller Ground Lease Estoppel
”), effective upon Purchaser’s receipt of such Ground Lease Estoppel, Seller shall have no further liability under the applicable Superseded Seller Ground Lease Estoppel. Seller’s liability under any Seller Tenant Lease Estoppel shall be subject to and limited by the provisions of Section 5.3 hereof.
(f)
No later than three (3) business days prior to the Closing Date, Seller shall have delivered to Purchaser, an estoppel executed by the holders of the “Apparel Mart Property” (“
Apparel Mart Owner
”) with respect to that certain Bridge Agreement, by and among the City of Atlanta, a municipal corporation organized and existing pursuant to the laws of the State of Georgia; the Atlanta Apparel Mart, a limited partnership organized and existing pursuant to the laws of the State of Georgia and Inforum, Ltd., a Georgia limited partnership, dated August 31, 1987, filed for record September 8, 1987, and recorded in Deed Book 11051, Page 100, aforesaid records; as re-recorded on October 20, 1987 in Deed Book 11128, Page 89, aforesaid records; and as affected by that certain Agreement Re-Modification of Bridge Agreement by and between AMC, Inc., a Georgia corporation and The Equitable Life Assurance Society of the United States, a New York corporation, dated April 22, 1999, filed for record June 30, 1999, and recorded in Deed Book 26975, Page 81, aforesaid records (collectively, and as assigned, the “
Bridge Agreement
”) in substantially the form attached hereto as
Exhibit L-1
(the “
Bridge Estoppel
”)
or
, at Seller’s option, an estoppel executed by Seller in substantially the form attached hereto as
Exhibit L-2
(the “
Seller
Bridge Estoppel
”). The delivery of either the Bridge Estoppel or the Seller Bridge Estoppel is a condition to Purchaser's obligation to close, but the inability of Seller to deliver the Bridge Estoppel or Seller’s election not to deliver a Seller Bridge Estoppel shall not constitute a default by Seller hereunder. Seller shall endeavor to obtain the Bridge Estoppel without the knowledge qualifications in section 4 of Exhibit L-1, but the elimination of such knowledge qualifications from the Bridge Estoppel will not be a condition precedent to Purchaser's obligation to consummate the Closing. If Seller provides a Seller Bridge Estoppel and a Bridge Estoppel executed by Apparel Mart Owner is subsequently delivered to Purchaser (a “
Superseded Seller Bridge Estoppel
”), effective upon Purchaser’s receipt of such Bridge Estoppel, Seller shall have no further liability under the applicable Superseded Seller Bridge Estoppel. Seller’s liability under any Seller Bridge Estoppel shall be subject to and limited by the provisions of Section 5.3 hereof.
If any of the conditions in this Section 4.6 have not been satisfied (or otherwise waived in writing by Purchaser) prior to or on the Closing Date (as the same may be extended or postponed as provided in this Agreement), Purchaser shall have the right, as its sole remedy for Seller’s failure or inability to satisfy such condition(s), to terminate this Agreement by written notice to Seller given prior to the Closing, whereupon Escrow Agent shall return the Earnest Money to Purchaser, and except for those provisions of this Agreement which by their express terms survive the termination of this Agreement, no party hereto shall have any other or further rights or obligations under this Agreement.
4.7
Conditions Precedent to Obligation of Seller
.
The obligation of Seller to consummate the transaction hereunder shall be subject to the fulfillment on or before the Closing Date of all of the following conditions, any or all of which may be waived by Seller in its sole discretion:
(a)
Title Company shall have received the Purchase Price as adjusted as provided herein with unconditional instructions to disburse same to Seller in accordance with the agreed-upon closing statement simultaneously with Seller's authorization to release
the Deeds and the Ground Lease Assignment for recordation, all pursuant to and payable in the manner provided for in this Agreement.
(b)
Purchaser shall have delivered to Seller all of the items required to be delivered to Seller pursuant to the terms of this Agreement, including but not limited to, those provided for in Section 4.3.
(c)
All of the representations and warranties of Purchaser contained in this Agreement shall be true and correct in all material respects as of the Closing Date.
(d)
Purchaser shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Purchaser as of the Closing Date.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1
Representations and Warranties of Seller
.
Seller hereby makes the following representations and warranties to Purchaser as of the Effective Date:
(a)
Organization and Authority
.
Seller has been duly organized and is validly existing under the laws of the state of its formation and the state in which the Property is located. Seller has the full right, power and authority to enter into this Agreement and to transfer all of the Property to be conveyed by Seller pursuant hereto, carry out its obligations hereunder and to consummate or cause to be consummated the transactions contemplated herein to be made by Seller, and all requisite action necessary to authorize Seller to enter into this Agreement and to carry out its obligations hereunder have been, or by the Closing shall have been, taken. The person or persons signing this Agreement on behalf of Seller is authorized to do so.
(b)
Pending Actions
.
With the exception of those items set forth on
Schedule 5.1(b)
attached hereto, to Seller’s Knowledge, Seller has not received written notice of, nor does Seller have any knowledge of, any action, suit, arbitration, litigation unsatisfied order or judgment, governmental investigation or proceeding pending against the Seller or the Property or the transaction contemplated by this Agreement.
(c)
Tenant Leases
.
Exhibit B-1
contains a true, correct and complete list of the Tenant Leases, and all agreements, amendments, modifications or supplements thereto executed by the parties to such Tenant Leases in effect as of the Effective Date. Except for the Tenant Leases, and all agreements, amendments, modifications or supplements thereto executed by the parties to such Tenant Leases, set forth on
Exhibit
B-1,
there are no material agreements (written or oral), amendments, modifications or supplements thereto pursuant to which anyone has any right to lease, license, use or otherwise occupy the Property, or any part thereof. Seller has made available to Purchaser for review, true and complete copies (including all exhibits thereto) of all Tenant Leases (including all amendments,
modifications, and supplements thereto) set forth on
Exhibit B-1.
To Seller’s Knowledge, each of the Tenant Leases is in full force and effect. To Seller’s Knowledge, Seller has not delivered, nor received, any written notices from or to any of the tenants under the Tenant Leases asserting that either Seller or any such tenant is in default under any of the respective Tenant Leases (other than defaults that have been cured). Except as set forth on
Exhibit D
or as disclosed in any executed Tenant Estoppel delivered to Purchaser, no tenant under any Tenant Leases has paid rent in advance of one month. Except as set forth on
Exhibit D
, there are no security deposits (whether in the form of cash or a Letter of Credit) under any Tenant Leases. Except as set forth on
Exhibit D,
there are no obligations to pay leasing commissions or other fees or compensation or Tenant Inducement Costs under the Tenant Leases for the current terms of the Tenant Leases (expressly excluding obligations in connection with unexercised extensions or renewals for future terms and other than in connection with extensions or renewals that Seller may enter into after the Effective Date under Section 5.4(g)). If any Tenant Estoppel delivered to Purchaser with respect to any Tenant Lease shall contain any statement of fact, information or other matter which is inconsistent with the matters stated in Seller’s representations in this Section 5.1(c), such statement of fact, information or other matter contained in that Tenant Estoppel shall control and if the Closing occurs, Seller shall have no liability for a post-closing breach of a representation in this Section 5.1(c) for any claim based upon a such statement of fact, information or other matter contained in the Tenant Estoppel; provided, however, such statement of fact, information or other matter which is materially inconsistent with the matters stated in Seller’s representations in this Section 5.1(c) shall constitute the non-fulfillment of the condition precedent to Purchaser’s obligation to Closing set forth in Section 4.6(b). Notwithstanding anything to the contrary contained in this Agreement, Seller does not represent or warrant that any particular Tenant Lease shall be in force or effect at Closing or that the tenants under the Tenant Leases shall have performed their obligations thereunder. The termination of any Tenant Lease prior to Closing by reason of the tenant’s default shall not affect the obligations of Purchaser under this Agreement in any manner or entitle Purchaser to an abatement of or credit against the Purchase Price or give rise to any other claim on the part of Purchaser.
(d)
Contracts
. To Seller’s Knowledge, as of the Effective Date, there are no construction, service, equipment, supply, maintenance, repair or concession agreements in effect as of the Effective Date with respect to the Real Property that will be binding on Purchaser from and after Closing except for those set forth on
Exhibit C-1.
(e)
Condemnation
.
As of the Effective Date, to Seller’s Knowledge, Seller has not received written notice of any condemnation or eminent domain proceedings pending, or to Seller’s Knowledge, threatened against the Real Property.
(f)
Compliance
. To Seller’s Knowledge, Seller has not received written notice of any, nor does Seller have any knowledge of any material, violations of any federal, state, county or municipal laws, ordinances, orders, codes, regulations or requirements (including environmental laws) affecting the Property which have not been cured.
(g)
Ground Lease Documents
. To Seller’s Knowledge, and to the extent the same are in Seller’s possession, Seller has made available to Purchaser for review a true, correct and complete copy of the Ground Lease Documents (including all material amendments, modifications, and supplements thereto). To Seller’s Knowledge, the Ground Lease Documents are in full force and effect. Seller has not delivered, nor to Seller’s Knowledge, received, any written notices from or to the Ground Lease Owner asserting that either Seller or Ground Lease Owner is in default under the Ground Lease Documents (other than defaults that have been cured).
(h)
No Purchase Options
. Seller has not entered into any other outstanding contracts for the sale of all or any portion of the Property, nor, to Seller’s Knowledge, do there exist any rights of first offer, first refusal or options to purchase all or any portion of the Property.
(i)
No Employees
. Seller has no employees.
(j)
Foreign Person
.
Seller is not a “foreign person,” “foreign trust” or “foreign corporation” (as those terms are defined in the Internal Revenue Code of 1986, as amended, and related Income Tax Regulations).
(k)
No Bankruptcy
.
No bankruptcy, insolvency, reorganization or similar action or proceeding, whether voluntary or involuntary, is pending, or, to Seller’s Knowledge, has been threatened against Seller. Seller has not caused, suffered or consented to the appointment of a receiver, trustee, administrator, conservator, liquidator, or similar official in any federal, state, or foreign judicial or non-judicial proceeding, to hold, administer and/or liquidate all or substantially all of its assets and has not made an assignment for the benefit of creditors.
(l)
OFAC Compliance
. None of Seller nor any of its executive officers, directors, managers, agents, employees, shareholders, members, partners, and other investors, or any other person that owns or controls Seller or any entity on whose behalf Seller acts (but excepting any owners or holders of common stock in Seller’s parent company and any affiliates, directors, managers, agents, employees, shareholders, members, partners, and other investors of any joint venture partners of Seller or its affiliates), is now or at any time through the Closing Date shall be a person who has been listed on (i) the Specially Designated Nationals and Blocked Persons List contained in Appendix A to 31 C.F.R., Subtitle B, Part V; (ii) the Denied Persons List, the Entity List, and the Unverified Parties List maintained by the United States Department of Commerce; (iii) the List of Terrorists and List of Debarred Parties maintained by the United States Department of State; and/or (iv) any other similar list maintained by any federal or state agency or pursuant to any Executive Order of the President of the United States of America.
5.2
Knowledge Defined
.
References to the knowledge of Seller (“
Seller’s Knowledge
”) shall refer only to the actual knowledge of the Designated Employees (as defined in this Section 5.2 below) of Cousins Properties Incorporated, and shall not be construed, by imputation or otherwise, to refer to the knowledge of any property manager, or to any other officer,
agent, manager, representative or employee of or any affiliate thereof or to impose upon such Designated Employees any duty to investigate the matter to which such actual knowledge, or the absence thereof, pertains. As used herein, the term “
Designated Employees
” shall refer to Colin Connolly, who shall not have any personal liability whatsoever in connection with this Agreement, the representations and warranties contained herein or the instruments to be delivered at closing in connection herewith.
5.3
Survival of Seller’s Representations and Warranties
.
The representations and warranties of Seller set forth in Section 5.1 as updated by the certificate of Seller to be delivered to Purchaser at Closing in accordance with Section 4.2(h) hereof, as well as the Seller Tenant Lease Estoppel, Seller Ground Lease Estoppel, or Seller Bridge Estoppel if the same shall have been delivered pursuant to Section 4.6(d), (e) or (f), respectively, hereof, shall survive Closing for a period of six (6) months from and after the Closing Date. No claim for a breach of any representation or warranty of Seller shall be actionable or payable (a) if the breach in question results from or is based on a condition, state of facts or other matter which was known to Purchaser prior to Closing, (b) unless the valid claims for all such breaches collectively aggregate more than ONE HUNDRED THOUSAND DOLLARS AND 00/HUNDREDS ($100,000.00), in which event the full amount of such valid claims shall be actionable, up to but not exceeding the amount of the Cap (as defined in this Section 5.3 below), and (c) unless written notice (a “
Breach Notice
”) containing a description of the specific nature of such breach shall have been given by Purchaser to Seller prior to the expiration of said six (6) month period and an action shall have been commenced by Purchaser against Seller within nine (9) months of Closing. As used herein, the term “
Cap
” shall mean the total aggregate amount of FOUR MILLION DOLLARS AND 00/HUNDREDS ($4,000,000.00). In no event shall Seller’s aggregate liability to Purchaser under this Agreement or the Closing Documents (as hereinafter defined in Section 9.2) exceed the amount of the Cap.
5.4
Covenants of Seller
.
Seller hereby covenants with Purchaser as follows:
(a)
From the Effective Date hereof until the Closing or earlier termination of this Agreement, Seller shall use reasonable efforts to operate and maintain the Property in a manner generally consistent with the manner in which Seller has operated and maintained the Property prior to the date hereof, which shall include, without limitation, maintain the same insurance that Seller has historically maintained on the Property; provided, however, that Seller shall not be required to incur any capital expenses at the Property pursuant to or in connection with this Agreement, unless the failure to incur such capital expense will result in any default under any Tenant Lease or the Ground Lease Documents.
(b)
No later than fifteen (15) days following the Effective Date, Seller shall submit to Purchaser for Purchaser’s review and comment or approval a completed estoppel certificate for each of the tenants of the Property as of the Effective Date, substantially in the form attached hereto as
Exhibit E-1
and made a part hereof (each, a “
Tenant Estoppel
”). Within five (5) business days of such delivery, Purchaser shall provide comments or approve the estoppel certificates so that Seller may deliver the estoppel certificates to the tenants of the Property. Seller shall then use reasonable efforts (but without obligation to incur any cost or expense) to obtain and deliver to Purchaser prior to Closing, written Tenant Estoppels
signed by each tenant occupying space in the Fee Improvements; provided that delivery of such signed Tenant Estoppels shall be a condition of Closing only to the extent set forth in Section 4.6(d) hereof; and in no event shall the inability or failure of Seller to obtain and deliver to Purchaser any signed Tenant Estoppels be a default of Seller hereunder so long as Seller has used reasonable efforts to obtain same as set forth in this Section 5.4(b). Notwithstanding the foregoing, Seller does covenant and agree to provide any and all responses, comments to the estoppel provided to Tenants and other forms of estoppels received by Tenant to the Purchaser, regardless of whether or not Seller will elect to include such Tenant Estoppels for purposes of satisfying the condition set forth in Section 4.6(d) hereof; provided, however, that in any event such responses, comments and other forms shall be considered a Tenant Estoppel delivered to Purchaser with respect to the relevant Tenant Lease for purposes of Section 5.1(c) above.
(c)
From the Effective Date until the Closing or earlier termination of this Agreement, without Purchaser’s written consent (which shall not be unreasonably withheld, conditioned or delayed), Seller shall not affirmatively place any easement, declaration or encumbrance on the Property or any portion thereof which cannot be released by Seller on or prior to the Closing Date.
(d)
From the Effective Date until the Closing or earlier termination of this Agreement, Seller shall not amend, modify or terminate any Operating Agreement (except as otherwise provided herein) or enter into any new Operating Agreements (each, a “
Operating Agreement Action
”), unless such Operating Agreements are terminable within thirty (30) days without cost, without the prior written consent of Purchaser, such consent not to be unreasonably withheld, conditioned or delayed; provided, however, that Purchaser’s consent shall not be required for Seller to take the Operating Agreement Actions set forth on
Exhibit C-2
(the “
Permitted Operating Agreement Actions
”). Seller shall provide Purchaser of written notice of any proposed Operating Agreement Action along with a copy of the proposed agreement. Purchaser agrees to notify Seller in writing within five (5) business days after its receipt of written notice of a proposed Operating Agreement Action for which Purchaser’s consent is required under this Section 5.4(f) (but in no event later than the Closing Date, if earlier than the expiration of such five (5) business day period) of either its approval or disapproval of such Operating Agreement Action, including in the case of disapproval its reasons for such disapproval. If Purchaser fails to notify Seller in writing of its approval or disapproval within the five (5) day time period (or by the Closing Date, if earlier) for such purpose set forth above, such failure shall be deemed the approval by Purchaser of such Operating Agreement Action. Seller shall cause all non-assignable Operating Agreements to be terminated on or before Closing, at Seller’s sole cost and expense. Seller shall not remove any items of Personal Property from the Property unless removed in the ordinary course of owning and operating the Property and replaced with an item of comparable value.
(e)
A copy of any amendment, renewal or expansion of an existing Tenant Lease or of any new Tenant Lease which Seller wishes to execute between the Effective Date and the Closing Date (a “
Lease Action
”) shall be submitted to Purchaser prior to execution by
the Seller in writing along with a summary of the proposed terms of such Lease Action. Purchaser agrees to notify Seller in writing within five (5) business days after its receipt thereof (but in no event later than the Closing Date, if earlier than the expiration of such five (5) business day period) of either its approval or disapproval of such Lease Action, including all Tenant Inducement Costs, leasing commissions and free rent or rent abatements to be incurred in connection therewith; provided, however, that Purchaser’s consent shall not be required for Seller to take the Lease Actions set forth on
Exhibit B-2
(the “
Permitted Lease Actions
”). If Purchaser fails to notify Seller in writing of its approval or disapproval of a Lease Action within the five (5) day time period (or by the Closing Date, if earlier) for such purpose set forth above, such failure shall be deemed the approval of such Lease Action by Purchaser. If Purchaser notifies Seller that it does not approve a Lease Action for which its approval is required under this Section 5.4(g), then Seller shall not take such Lease Action. At Closing, Purchaser shall reimburse Seller for any Tenant Inducement Costs, leasing commissions or other expenses, including reasonable legal fees, incurred by Seller pursuant to Lease Actions approved (or deemed approved) by Purchaser hereunder.
(f)
At Purchaser’s request, Seller shall cooperate with Purchaser in delivering subordination, non-disturbance and attornment agreements (“
SNDAs
”) in a form reasonably requested by Purchaser’s lender to each of the tenants of the Property so requested by Purchaser at no more than de minimis cost or expense to Seller. After such delivery to the tenants, Seller shall use commercially reasonable efforts to assist Purchaser in obtaining executed SNDAs from each of the tenants prior to Closing; provided, however, in no event shall Seller be required by the foregoing to pay any sums (or incur any liability) to any tenants in connection with its attempts to obtain such SNDAs. Notwithstanding any provision contained in this Agreement to the contrary, it shall not be a condition to Purchaser’s obligations hereunder that any SNDAs are obtained from any of the tenants of the Property.
5.5
Representations and Warranties of Purchaser
.
Purchaser hereby represents and warrants to Seller:
(a)
Organization and Authority
.
Purchaser has been duly organized and is validly existing under the laws of the state of its formation. Purchaser has the full right, power and authority to purchase the Property as provided in this Agreement and to carry out Purchaser’s obligations hereunder, and all requisite action necessary to authorize Purchaser to enter into this Agreement and to carry out its obligations hereunder have been, or by the Closing shall have been, taken. The person signing this Agreement on behalf of Purchaser is authorized to do so.
(b)
Pending Actions
.
There is no action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending against Purchaser which, if adversely determined, would individually or in the aggregate materially interfere with the consummation of the transaction contemplated by this Agreement.
(c)
OFAC Compliance
. None of Purchaser nor any of its executive officers, directors, managers, agents, employees, shareholders, members, partners, and other
investors, or any other person that owns or controls Purchaser or any entity on whose behalf Purchaser acts, is now or at any time through the Closing Date shall be a person who has been listed on (i) the Specially Designated Nationals and Blocked Persons List contained in Appendix A to 31 C.F.R., Subtitle B, Part V; (ii) the Denied Persons List, the Entity List, and the Unverified Parties List maintained by the United States Department of Commerce; (iii) the List of Terrorists and List of Debarred Parties maintained by the United States Department of State; and/or (iv) any other similar list maintained by any federal or state agency or pursuant to any Executive Order of the President of the United States of America.
(d)
Source of Funds
. Purchaser has available to it unrestricted funds which it may use in its sole discretion to pay the full Purchase Price and otherwise comply with the provisions of this Agreement. Purchaser expressly acknowledges and agrees that its obligations under this Agreement are not contingent upon Purchaser obtaining financing for the purchase of the Property.
5.6
Survival of Purchaser’s Representations and Warranties
.
All representations and warranties of Purchaser shall survive Closing for a period of six (6) months from and after the Closing Date.
5.7
Hazardous Materials
.
Purchaser has inspected the Property for the presence of Hazardous Materials (as hereinafter defined in this Section 5.7), and, provided that this Agreement is terminated for any reason other than a default by Seller, upon Seller’s request shall furnish to Seller copies of any reports received by Purchaser in connection with such hazardous materials inspection. Purchaser hereby assumes full responsibility for such inspections and irrevocably waives any claim against Seller arising from the presence of Hazardous Materials on the Property. Purchaser further agrees that, if at any time after the Closing, any third party (including, without limitation, any governmental agency) seeks to hold Purchaser responsible for the presence of, or any loss, cost or damage associated with, Hazardous Materials in, on, above or beneath the Real Property or emanating therefrom, then Purchaser releases and waives any rights it may have against Seller or any of its affiliates in connection therewith including, without limitation, under CERCLA (as hereinafter defined in this Section 5.7), and Purchaser agrees that it shall not (a) implead Seller or any of its affiliates, (b) bring a contribution action or similar action against Seller or any of its affiliates or (c) attempt in any way to hold Seller or any of its affiliates responsible with respect to any such matter. As used herein, “
Hazardous Materials
” shall mean and include, but shall not be limited to, any petroleum product and all hazardous or toxic substances, wastes or substances, any substances which because of their quantitated concentration, chemical, or active, flammable, explosive, infectious or other characteristics, constitute or may reasonably be expected to constitute or contribute to a danger or hazard to public health, safety or welfare or to the environment, including, without limitation, any hazardous or toxic waste or substances which are included under or regulated (whether now existing or hereafter enacted or promulgated, as they may be amended from time to time) including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq. (“
CERCLA
”), the Federal Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., similar state laws and regulations adopted thereunder.
5.8
Operating Agreements
. Prior to the expiration of the Inspection Period, Purchaser shall notify Seller, in writing of those terminable Operating Agreements that Purchaser is electing to be terminated at Closing. All assignable Operating Agreements that Purchaser elects not to terminate at Closing shall be assumed by Seller at or before Closing at the cost and expense of Seller. If Purchaser fails to provide such notice to Seller of the Operating Agreements that Purchaser is electing to be terminated at Closing, Purchaser shall be deemed to have elected to assume all assignable Operating Agreements at Closing.
ARTICLE VI
DEFAULT
6.1
Default by Purchaser
. If the sale of the Property as contemplated hereunder is not consummated due to Purchaser’s default hereunder, Seller shall be entitled, as its sole and exclusive remedy, to terminate this Agreement and receive the Earnest Money as liquidated damages for the failure of Purchaser to close the purchase of the Property as obligated hereunder and not as a penalty, it being agreed between the parties hereto that the actual damages to Seller in the event of such breach are impractical to ascertain and the amount of the Earnest Money is a reasonable estimate thereof, Seller hereby expressly waiving and relinquishing any and all other remedies at law or in equity. The right to retain the Earnest Money as full liquidated damages is Seller’s sole and exclusive remedy in the event of default hereunder by Purchaser, and Seller hereby waives and releases any right to (and hereby covenants that they shall not) sue Purchaser: (a) for specific performance of this Agreement, or (b) to recover actual damages in excess of the Earnest Money. Purchaser hereby waives and releases any right to (and hereby covenants that it shall not) sue Seller or seek or claim a refund of the Earnest Money (or any part thereof) on the grounds it is unreasonable in amount and exceeds Seller’s actual damages or that its retention by Seller constitutes a penalty and not agreed upon and reasonable liquidated damages. This Section 6.1 is subject to Section 6.4 hereof.
6.2
Default by Seller
.
If Seller fails to consummate the sale of the Property as contemplated hereunder for any reason other than Purchaser’s default or the failure of a condition of Seller’s obligation to Closing to be met or the permitted termination of this Agreement by Seller or Purchaser as herein expressly provided, Purchaser shall be entitled, as its sole remedy, either (a) to receive the return of the Earnest Money, which return shall operate to terminate this Agreement and release Seller from any and all liability hereunder, or (b) to enforce specific performance of Seller’s obligation to convey the Property to Purchaser, it being understood and agreed that the remedy of specific performance shall not be available to enforce any other obligation of Seller hereunder. Purchaser shall be deemed to have elected to terminate this Agreement and receive back the Earnest Money if Purchaser fails to file suit for specific performance against Seller in a court having jurisdiction in the county and state in which the Property is located, on or before sixty (60) days following the date upon which Closing was to have occurred. If specific performance would not be an effective remedy as the result of Seller’s default or as a result of a breach of a warranty or representation, Purchaser may, in lieu of specific performance (but not in lieu of the return of
the Earnest Money), have Seller reimburse Purchaser for all of its actual, third-party, documented costs and expenses in (including, without limitation, reasonable legal fees and financing costs and fees) in connection with pursuing, negotiating and performing diligence in connection with this transaction contemplated for in this Agreement, up to Two Hundred Thousand Dollars ($200,000.00) in the aggregate;
provided, that
if specified performance is unavailable because Seller has sold the Property to a third party in violation of this Agreement, Purchaser shall be permitted to sue Seller for direct and actual damages (but not consequential or punitive damages).
6.3
Notice of Default; Opportunity to Cure
. Neither Seller nor Purchaser shall be deemed to be in default hereunder until and unless such party has been given written notice of its failure to comply with the terms hereof and thereafter does not cure such failure within five (5) business days after receipt of such notice;
provided, however,
that this Section 6.3 (i) shall not be applicable to a Purchaser’s failure to deposit the Earnest Money on the date required hereunder or to a party’s failure to make any deliveries required of such party, including the Purchase Price, on the Closing Date and, accordingly, (ii) shall not have the effect of extending the due date of the Earnest Money hereunder or the Closing Date.
6.4
Recoverable Damages
. Notwithstanding Sections 6.1 and 6.2 hereof, in no event shall the provisions of Sections 6.1 and 6.2 limit the damages recoverable by either party against the other party due to the other party’s express obligation to indemnify such party in accordance with Section 8.1 of this Agreement.
ARTICLE VII
RISK OF LOSS
7.1
Minor Damage
.
In the event of loss or damage to the Property or any portion thereof which is not “major” (as defined in Section 7.3 hereof), this Agreement shall remain in full force and effect provided Seller performs any necessary repairs or, at Seller’s option, assigns to Purchaser all of Seller’s assignable right, title and interest to any claims and proceeds Seller may have with respect to any casualty insurance policies or condemnation awards relating to the premises in question. If Seller elects to perform repairs upon the Property, Seller shall use reasonable efforts to complete such repairs promptly and the Closing Date shall be extended by up to thirty (30) days in order to allow for the completion of such repairs. If Seller elects to assign a casualty claim to Purchaser, the Purchase Price shall be reduced by an amount equal to the deductible amount under Seller’s insurance policy(ies). Upon Closing, full risk of loss with respect to the Property shall pass to Purchaser.
7.2
Major Damage
.
In the event of a “major” loss or damage, Purchaser may terminate this Agreement by written notice to Seller, in which event the Earnest Money shall be returned to Purchaser. If Purchaser has not elected to terminate this Agreement within ten (10) days after Seller has sent Purchaser written notice of the occurrence of major loss or damage, then Purchaser shall be deemed to have elected to proceed with Closing, in which event Seller shall, at Seller’s option, either (a) perform any necessary repairs, or (b) assign to Purchaser all of Seller’s assignable right, title and interest to any claims and proceeds Seller may have with respect to any casualty insurance policies or condemnation awards relating to the premises in question. If Seller elects to perform
repairs upon the Property, Seller shall use reasonable efforts to complete such repairs promptly and the Closing Date shall be extended by up to thirty (30) days in order to allow for the completion of such repairs. If Seller elects to assign a casualty claim to Purchaser, the Purchase Price shall be reduced by an amount equal to the deductible amount under Seller’s insurance policy(ies). Upon Closing, full risk of loss with respect to the Property shall pass to Purchaser.
7.3
Definition of “Major” Loss or Damage
.
For purposes of Sections 7.1 and 7.2, “
major
” loss or damage refers to the following: (a) loss or damage to the Property or any portion thereof such that the cost of repairing or restoring the premises in question to a condition substantially identical to that of the premises in question prior to the event of damage would be equal to or greater than Ten Million and No/100 Dollars ($10,000,000.00), (b) loss or damage to the Property or any portion thereof that gives such tenants who occupy, in aggregate, in excess of ten percent (10%) of the rentable square footage of the Property the right to terminate their Tenant Leases, (c) loss or damage to the Property or any portion thereof that gives any party to the Ground Lease Documents the right to terminate the Ground Lease Documents, or (d) any loss due to a condemnation which (i) materially adversely affects access to any portion of the Property, (ii) reduces the parking spaces that constitute any part of the Property to a number below which is required by applicable law, any Tenant Lease or the Ground Lease Documents (whichever is greater), or (iii) materially impairs use of the Property.
ARTICLE VIII
COMMISSIONS
8.1
Brokerage Commissions
. Each of Purchaser and Seller represents and warrants to the other that it has not dealt with any broker or agent in the negotiation of this transaction except Cushman & Wakefield (“
Broker
”) (to which Broker Seller shall pay a commission upon Closing pursuant to a separate agreement). Seller agrees that if any person or entity makes a claim against Purchaser or asserts any lien or any other right against the Property for brokerage commissions or finder’s fees related to the sale of any of the Property by Seller to Purchaser, and such claim is made by, through, or on account of any acts or alleged acts of Seller and/or any of its representatives, Seller shall protect, indemnify, defend, and hold the Purchaser free and harmless from and against any and all loss, liability, cost, damage, and expense (including reasonable attorneys’ fees) in connection therewith. Purchaser agrees that if any person or entity makes a claim against Seller or asserts a lien or any other right against the Property, for brokerage commissions or finder’s fees related to the sale of the Property by Seller to Purchaser, and such claim is made by, through, or on account of any acts or alleged acts of Purchaser and/or any of its representatives, Purchaser shall protect, indemnify, defend and hold Seller free and harmless from and against any and all loss, liability, cost, damage and expense (including reasonable attorneys’ fees) in connection therewith. The provisions of this Section 8.1 shall survive Closing or any termination of this Agreement.
ARTICLE IX
DISCLAIMERS AND WAIVERS
9.1
No Reliance on Documents
.
Except as expressly stated herein, Seller makes no representation or warranty as to the truth, accuracy or completeness of any materials, data or information delivered by Seller to Purchaser in connection with the transaction contemplated hereby. Purchaser acknowledges and agrees that, except as expressly stated herein, all materials, data and information delivered by Seller to Purchaser in connection with the transaction contemplated hereby are provided to Purchaser as a convenience only and that any reliance on or use of such materials, data or information by Purchaser shall be at the sole risk of Purchaser, except as otherwise expressly stated herein. Without limiting the generality of the foregoing provisions, Purchaser acknowledges and agrees that, except as expressly stated herein, (a) any environmental or other report with respect to the Property which is delivered by Seller to Purchaser shall be for general informational purposes only, (b) Purchaser shall not have any right to rely on any such report delivered by Seller to Purchaser, but rather shall rely on its own inspections and investigations of the Property and any reports commissioned by Purchaser with respect thereto, and (c) neither Seller, any affiliate of Seller nor the person or entity which prepared any such report delivered by Seller to Purchaser shall have any liability to Purchaser for any inaccuracy in or omission from any such report. The provisions of this Section 9.1 shall survive Closing or any termination of this Agreement.
9.2
DISCLAIMERS.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE DOCUMENTS TO BE DELIVERED AT CLOSING PURSUANT TO SECTIONS 4.2 AND 4.3 HERETO (THE “
CLOSING DOCUMENTS
”), IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER’S LIMITED WARRANTY OF TITLE TO BE SET FORTH IN THE DEEDS AND THE GROUND LEASE ASSIGNMENT), ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF THE DELIVERIES OR ANY OTHER INFORMATION PROVIDED BY OR ON BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY “
AS IS, WHERE IS, WITH ALL FAULTS,
” EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT AND THE CLOSING DOCUMENTS. PURCHASER HAS NOT RELIED AND SHALL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, THE DELIVERIES) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT OR THE CLOSING DOCUMENTS.
PURCHASER REPRESENTS TO SELLER THAT PURCHASER HAS CONDUCTED, OR SHALL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND SHALL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT OR THE CLOSING DOCUMENTS, UPON CLOSING, PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER’S INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER’S AND ITS PARTNERS’ RESPECTIVE OFFICERS, DIRECTORS, PARTNERS, MEMBERS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER’S AND ITS PARTNERS’ RESPECTIVE OFFICERS, DIRECTORS, PARTNERS, MEMBERS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY.
PURCHASER AGREES THAT SHOULD ANY CLEANUP, REMEDIATION OR REMOVAL OF HAZARDOUS MATERIALS OR OTHER ENVIRONMENTAL CONDITIONS ON THE PROPERTY BE REQUIRED AFTER THE CLOSING DATE, SUCH CLEAN-UP, REMOVAL OR REMEDIATION SHALL BE THE RESPONSIBILITY OF AND SHALL BE PERFORMED AT THE SOLE COST AND EXPENSE OF PURCHASER.
ARTICLE X
MISCELLANEOUS
10.1
Confidentiality
.
Prior to Closing, Purchaser and its representatives shall hold in strictest confidence all data and information obtained with respect to Seller or its business that is not otherwise generally known or available from sources other than the Deliveries, whether obtained before or after the execution and delivery of this Agreement, and shall not disclose the same to others; provided, however, that it is understood and agreed that Purchaser may disclose such data
and information to the employees, consultants, accountants and attorneys of Purchaser, Purchaser’s potential investors and lenders and each of their respective employees, consultants, accountants and attorneys provided that such persons have been advised to treat data and information confidentially. If this Agreement is terminated or Purchaser fails to perform hereunder, Purchaser shall promptly return to Seller or otherwise destroy any statements, documents, schedules, exhibits or other written information obtained from Seller in connection with this Agreement or the transaction contemplated herein. In the event of a breach or threatened breach by Purchaser or its agents or representatives of this Section 10.1, Seller shall be entitled to an injunction restraining Purchaser or its agents or representatives from disclosing, in whole or in part, such confidential information. Nothing herein shall be construed as prohibiting Seller from pursuing any other available remedy at law or in equity for such breach or threatened breach. The provisions of this Section 10.1 shall survive Closing or any termination of this Agreement.
10.2
Public Disclosure
.
Prior to Closing, any release to the public of information with respect to the sale contemplated herein or any matters set forth in this Agreement shall be made only in the form approved by Purchaser and Seller; provided that Seller shall be entitled to make such disclosures as Seller’s legal counsel shall determine are advisable or required by law or consistent with Seller’s previous practices (by way of example and not limitation, 8K or other filings).
10.3
Discharge of Obligations
.
The acceptance of the Deeds and the Ground Lease Assignment by Purchaser shall be deemed to be a full performance and discharge of every representation and warranty made by Seller herein and every agreement and obligation on the part of Seller to be performed pursuant to the provisions of this Agreement, except those which are herein specifically stated to survive Closing.
10.4
Assignment
.
Seller may assign its rights and obligations under this Agreement in connection with and pursuant to any internal transfers affecting the direct or indirect interests in Seller without Purchaser’s consent or approval and upon prior written notice to Purchaser so long as, following the consummation of any such internal transfer, Seller continues to be controlled by Cousins Properties Incorporated and the assignee assumes all obligations of Seller hereunder. Purchaser may not assign its rights under this Agreement to anyone other than a Permitted Assignee (as defined in this Section 10.4 below) without first obtaining Seller’s written approval which may be given or withheld in Seller’s sole discretion. Subject to the conditions set forth in this Section 10.4, Purchaser may assign its rights under this Agreement to a Permitted Assignee without the prior written consent of Seller. If Purchaser desires to assign its rights under this Agreement to a Permitted Assignee, Purchaser shall send written notice to Seller at least five (5) business days prior to the effective date of such assignment stating the name and, if applicable, the constituent persons or entities of the Permitted Assignee. Such assignment shall not become effective until such Permitted Assignee executes an instrument reasonably satisfactory to Seller in form and substance whereby the Permitted Assignee makes each of the representations and warranties made by Purchaser in this Agreement and expressly assumes each of the obligations of Purchaser under this Agreement, including specifically, without limitation, all obligations concerning the Earnest Money. No assignment shall release or otherwise relieve Purchaser from any obligations hereunder, and Purchaser named herein shall remain primarily liable to Seller for the performance of any such
liabilities or obligations notwithstanding any such assignment or transfer. Notwithstanding the foregoing, no assignment or transfer by Purchaser will be permitted, whether to a Permitted Assignee or otherwise, if such assignment or transfer would, in Seller’s opinion, cause the transactions contemplated by this Agreement to violate any provision of applicable law. For purposes of this Section 10.4, the term “
Permitted Assignee
” shall mean a limited liability company which is controlled by or under common co-control with Purchaser and/or Carter Validus Operating Partnership II L.P.
10.5
Notices
.
Any notice pursuant to this Agreement shall be given in writing by (a) personal delivery, or (b) reputable overnight delivery service with proof of delivery, or (c) United States Mail, postage prepaid, registered or certified mail, return receipt requested, or (d) e-mail transmission sent to the intended addressee at the address set forth below, or to such other address or to the attention of such other person as the addressee shall have designated by written notice sent in accordance herewith, and shall be deemed to have been given either at the time of personal delivery, or, in the case of expedited delivery service or mail, as of the date of first attempted delivery at the address and in the manner provided herein, or, in the case of e-mail transmission, as of the date of the e-mail transmission provided that an original of such notice sent by e-mail transmission is also sent to the intended addressee by means described in clauses (a), (b) or (c) above within twenty four (24) hours of the original e-mail transmission. Unless changed in accordance with the preceding sentence, the addresses for notices given pursuant to this Agreement shall be as follows:
If to Seller: c/o Cousins Properties Incorporated
191 Peachtree Street, NE
Suite 500
Atlanta, Georgia 30303
Attn: Colin Connolly and Pamela F. Roper, Esq.
E-mail: ColinConnolly@cousinsproperties.com;
PamRoper@cousinsproperties.com
with a copy to: Eversheds Sutherland (US) LLP
999 Peachtree Street, NE
Atlanta, Georgia 30309
Attn: Kristina Kopf Thomas, Esq.
E-mail: KristinaThomas@eversheds-sutherland.com
If to Purchaser: Carter Validus Properties II, LLC
Delaware limited liability company
4890 W. Kennedy Blvd.
Suite 650
Tampa, FL 33609
Attn: Lisa Collado
Telephone: (813) 316-4244
Facsimile: (813) 287-0397
Email: lcollado@cvreit.com
with a copy to: GrayRobinson, P.A.
401 E. Jackson Street, Suite 2700
Tampa, Florida 33602
Attention: Stephen L. Kussner, Esquire
Telephone: (813) 273-5296
Facsimile: (813) 273-5145
Email: stephen.kussner@gray-robinson.com
10.6
Modifications
.
This Agreement cannot be changed orally, and no executory agreement shall be effective to waive, change, modify or discharge it in whole or in part unless such executory agreement is in writing and is signed by the parties against whom enforcement of any waiver, change, modification or discharge is sought.
10.7
Calculation of Time Periods
.
Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday or legal holiday under the laws of the State in which the Property is located, in which event the period shall run until the end of the next day which is neither a Saturday, Sunday or legal holiday under the laws of the State in which the Property is located. The final day of any such period shall be deemed to end at 5 p.m. (local time at the Property).
10.8
Successors and Assigns
.
Subject to Section 10.4 hereof, the terms and provisions of this Agreement are to apply to and bind the permitted successors and assigns of the parties hereto.
10.9
Entire Agreement
.
This Agreement, including the Exhibits, contains the entire agreement between the parties pertaining to the subject matter hereof and fully supersedes all prior written or oral agreements and understandings between the parties pertaining to such subject matter.
10.10
Counterparts
.
This Agreement may be executed in counterparts, and all such executed counterparts shall constitute the same agreement. It shall be necessary to account for only one such counterpart in proving this Agreement. To facilitate the execution and delivery of this Agreement, the parties may execute and exchange counterparts of the signature pages by facsimile, and the signature page of either party to any counterpart may be appended to any other counterpart.
10.11
Severability
.
If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect.
10.12
Applicable Law
.
This Agreement is performable in the state in which the Property is located and shall in all respects be governed by, and construed in accordance with, the substantive federal laws of the United States and the laws of such state. Purchaser and Seller agrees that the provisions of this Section 10.12 shall survive the Closing of the transaction contemplated by this Agreement.
10.13
No Third Party Beneficiary
.
The provisions of this Agreement and of the documents to be executed and delivered at Closing are and shall be for the benefit of Seller and Purchaser (and any Permitted Assignee) only and are not for the benefit of any third party, and accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing.
10.14
Exhibits and Schedules
.
The following schedules or exhibits attached hereto shall be deemed to be an integral part of this Agreement:
|
|
|
|
(1)
|
Exhibit A-1
|
- Legal Description of the Land (Fee Property)
|
(2)
|
Exhibit A-2
|
- Legal Description of the Land (Leasehold Estate)
|
(4)
|
Exhibit B-1
|
- Schedule of Tenant Leases
|
(5)
|
Exhibit B-2
|
- Permitted Lease Actions
|
(6)
|
Exhibit C-1
|
- Schedule of Operating Agreements
|
(7)
|
Exhibit C-2
|
- Permitted Operating Agreement Actions
|
(8)
|
Exhibit D
|
- Tenant Inducement Costs
|
(9)
|
Exhibit E-1
|
- Form of Tenant Estoppel
|
(10)
|
Exhibit E-2
|
- Form of Seller Tenant Lease Estoppel
|
(11)
|
Exhibit F
|
- Form of Deed
|
(12)
|
Exhibit G
|
- Form of Ground Lease Assignment
|
(13)
|
Exhibit H
|
- Form of Tenant Lease Assignment
|
(14)
|
Exhibit I
|
- Form of Bill of Sale
|
(15)
|
Exhibit J-1
|
- Ground Lease Documents
|
(16)
|
Exhibit J-2
|
- Form of Ground Lease Estoppel
|
(17)
|
Exhibit J-3
|
- Form of Seller Ground Lease Estoppel
|
(18)
|
Exhibits K
|
- Form of SEC Letter
|
(19)
|
Exhibit L-1
|
- Form of Bridge Estoppel
|
(20)
|
Exhibit L-2
|
- Form of Seller Bridge Estoppel
|
(21)
|
Schedule 5.1(b)
|
- Schedule of Pending Actions
|
10.15
Captions
.
The section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent and for any purpose, to limit or define the text of any section or any subsection hereof.
10.16
Construction
.
The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.
10.17
Termination of Agreement
.
It is understood and agreed that if either Purchaser or Seller terminates this Agreement pursuant to a right of termination granted hereunder, such termination shall operate to relieve Seller and Purchaser from all obligations under this Agreement,
except for such obligations as are specifically stated herein to survive the termination of this Agreement.
10.18
Survival
.
The provisions of the following Sections of this Agreement shall survive Closing and shall not be merged into the execution and delivery of the Deeds and the Ground Lease Assignment: 3.1(b); 4.2(n); 4.4; 5.2; 5.3; 5.6; 5.7; 8.1; 9.1; 9.2; and, except for Sections 10.1, 10.2 and 10.19, all the Sections contained in this Article X.
10.19
Exchange
.
Purchaser and Seller each acknowledge that either Seller or Purchaser may elect to structure this transaction as part of an overall transaction intended to be an exchange of like-kind properties (“
Exchange
”) pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, and the regulations and proposed regulations thereunder. The parties hereby agree that if either party (the “
Electing Party
”) wishes to make such election, it must do so prior to Closing by delivering written notice to the other party (the “
Non-Electing Party
”) at least three (3) business days prior to Closing. The Non-Electing Party agrees to reasonably cooperate with the Electing Party at no cost or expense to the Non-Electing Party in connection with the Exchange and shall at Closing acknowledge having received notice of the Electing Party’s transfer of its rights (but not its obligations) under this Agreement to a “qualified intermediary,” but only on the condition that the following terms and conditions are satisfied:
(a)
There shall be no liability to the Non-Electing Party, and the Non-Electing Party shall have no obligation to take title to any property in connection with the Exchange;
(b)
The Electing Party shall in all events be responsible for all costs and expenses related to the Exchange, including those of the Non-Electing Party, and shall fully indemnify, defend and hold the Non-Electing Party harmless from and against any and all liability, claim, damages, expenses (including reasonable attorneys’ fees), proceedings and causes of action of any kind or nature whatsoever arising out of, connected with or in any manner related to the Exchange that would not have been incurred by the Non- Electing Party if the transaction had occurred without structuring it as an Exchange;
(c)
In no way shall the Closing be contingent upon or otherwise subject to or delayed by the consummation of the Exchange, and the Electing Party shall not be relieved of its obligation to timely perform in accordance with the terms of this Agreement notwithstanding any failure, for any reason, of the Exchange to be consummated;
(d)
The Non-Electing Party shall have no responsibility or liability to any third party involved in the Exchange;
(e)
The Non-Electing Party shall not be required to make any representations or warranties nor assume any obligations or liabilities, nor incur any liability, cost or expense whatsoever in connection with the Exchange;
(f)
The Exchange shall not release the Electing Party from any representation, warranty, covenant or obligation of the Electing Party or diminish any right or remedy of the Non-Electing Party with respect to the Electing Party;
(g)
The Exchange shall not adversely affect the Non-Electing Party in any respect or change any of the economic terms and conditions of the transaction with respect to the Non-Electing Party; and
(h)
The Non-Electing Party shall not be responsible for compliance with or be deemed to have made any representation or warranty with respect to the Exchange or its compliance with applicable laws.
10.20
TIME OF ESSENCE
. TIME IS OF THE ESSENCE WITH RESPECT TO EACH AND EVERY PROVISION OF THIS AGREEMENT.
10.21
SEC Information
. Seller acknowledges that Purchaser is, or may elect to assign all of its right, title and interest in and to the Agreement to a company that is subject to the requirements of the Exchange Act and/or the Securities Act (a “
Registered Company
”) promoted by the Purchaser or to an affiliate of a Registered Company (a “
Registered Company Affiliate
”). In the event Purchaser is a Registered Company or Purchaser’s assignee under the Contract is a Registered Company or a Registered Company Affiliate, the Registered Company will be required to make certain filings with the U.S. Securities and Exchange Commission (“
SEC
”) required under SEC Rule 3-14 of Regulation S-X (the “
SEC Filings
”) that relate to previous fiscal years for the Property. To assist the Registered Company with the preparation of the SEC Filings, Seller agrees to, and shall, provide Purchaser and the Registered Company with such reasonably requested financial information regarding the Property and/or the tenants and any subtenants for the years reasonably requested by Purchaser, the Registered Company, and/or Purchaser’s or the Registered Company’s auditors. Such information may include, but is not limited to, bank statements, operating statements, general ledgers, cash receipts schedules, invoices for expenses and capital improvements, insurance documentation, and accounts receivable aging related to the Property and/or the tenants (“
SEC Filing Information
”). To the extent that such SEC Filing Information is in Seller’s possession and control, Seller shall deliver the SEC Filing Information reasonably requested by Purchaser, the Registered Company and/or Purchaser’s or the Registered Company’s auditors prior to the expiration of the Inspection Period, and Seller agrees to reasonably cooperate with Purchaser, the Registered Company and Purchaser’s or the Registered Company’s auditors regarding any inquiries by Purchaser, the Registered Company and Purchaser’s or the Registered Company’s auditors following receipt of such information, including delivery by Seller of an executed representation letter prior to Closing in form and substance requested by Purchaser’s or the Registered Company’s auditors and reasonably acceptable to Seller (“
SEC Filings Letter
”). A sample SEC Filings Letter is attached to the Contract as Exhibit K; however, Purchaser’s and/or the Registered Company’s auditors may request additions and/or revisions to such letter following review of the SEC Filing Information provided by Seller, which shall be subject to Seller’s review. Seller consents to the disclosure of the SEC Filing Information in any SEC Filings by the Registered Company. Seller’s obligations under this Section 10.21 shall survive the Closing and not be merged therein.
10.22
Contracts
. Seller shall not enter into any option or agreement for the sale of the Property to a party other than Purchaser or its assign (including any so-called “back-up” contracts which are expressly prohibited) prior to the termination of this Agreement.
[
signature page follows
]
SELLER:
250 WILLIAMS STREET LLC,
a Georgia limited liability company
By:
/s/ Colin Connolly
Name:
Colin Connolly
Title:
Executive Vice President
PURCHASER:
CARTER VALIDUS PROPERTIES II, LLC,
a Delaware limited liability company
By:
/s/ Lisa Collado
Name:
Lisa Collado
Title:
Vice President
EXHIBIT A-1
LEGAL DESCRIPTION OF THE LAND
(FEE PROPERTY)
All that tract or parcel of land lying and being in Land Lot 78 of the 14th District of Fulton County, Georgia and being more particularly described as follows:
Beginning at the point of intersection of the northern right-of-way line of Harris Street (having a 60-foot right-of-way) with the western right-of-way line of Williams Street (having a 60-foot right-of-way), and running thence North 89 degrees 49 minutes 42 seconds West, along said right-of-way line of Harris Street, a distance of 387.30 feet to the point of intersection of said right-of-way line of Harris Street with the eastern right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive (having a 60-foot right-of-way); thence North 00 degrees 44 minutes 41 seconds East, along said right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive, a distance of 407.09 feet to the point of intersection of right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive with the southern right-of-way line of Baker Street (having a 60-foot right-of-way); thence South 89 degrees 31 minutes 45 seconds East, along said right-of-way line of Baker Street, a distance of 385.21 feet to the point of intersection of said right-of-way line of Baker Street with said right-of-way line of Williams Street; thence South 00 degrees 27 minutes 07 seconds West, along said right-of-way line of Williams Street, a distance of 145.22 feet to a point on said right-of-way line of Williams Street; thence leaving said right-of-way line of Williams Street, and running North 89 degrees 31 minutes 49 seconds West a distance of 115.00 feet to a point; thence South 00 degrees 28 minutes 11 seconds West a distance of 31.34 feet to a point; thence North 89 degrees 31 minutes 49 seconds West a distance of 9.94 feet to a point; thence South 00 degrees 34 minutes 51 seconds West a distance of 33.42 feet to a point; thence South 89 degrees 01 minute 59 seconds East a distance of 125.03 feet to a point on sad right-of-way line of Williams Street; thence South 00 degrees 27 minutes 07 seconds West, along said right-of-way line of Williams Street, a distance of 194.00 feet to the Point of Beginning.
The above-described property is shown as 3.42050 acres on and is described according to plat of survey prepared for JPMorgan Chase Bank, N.A., its successors and assigns, J.P. Morgan Mortgage Capital Inc., 250 Williams Street LLC and Piedmont Title Insurance Agency, Inc. as agent for First American Title Insurance Company, by V.T. Hammond, Georgia Registered Land Surveyor No. 2554, Watts & Browning Engineers, Inc., dated June 15, 1998, last revised August 20, 2007, which said plat of survey is incorporated herein by this reference and made a part of this description.
EASEMENTS AND OTHER INTERESTS IN REAL PROPERTY CONTAINED IN THAT CERTAIN BRIDGE AGREEMENT BETWEEN THE CITY OF ATLANTA, THE ATLANTA APPAREL MART AND INFORUM, LTD., DATED AUGUST 31, 1987, RECORDED IN DEED BOOK 11051. PAGE 100, AFORESAID RECORDS; AS RERECORDED IN DEED BOOK 11128, PAGE 89. AFORESAID RECORDS; AGREEMENT BETWEEN THE ATLANTA APPAREL MART AND INFORUM ASSOCIATES, DATED OCTOBER 20, 1987, RECORDED IN DEED BOOK 11131, PAGE 319. AFORESAID RECORDS; AS MODIFIED BY AGREEMENT RE MODIFICATION OF BRIDGE AGREEMENT BETWEEN AMC. INC. AND EQUITABLE LIFE ASSURANCE OF THE UNITED STATES, DATED APRIL 22, 1999, RECORDED IN DEED BOOK 26975, PAGE 81, AFORESAID RECORDS.
EXHIBIT A-2
LEGAL DESCRIPTION OF THE LAND
(LEASEHOLD ESTATE)
ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN LAND LOT 78 OF THE 14TH DISTRICT OF FULTON COUNTY, GEORGIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT LOCATED ON THE WESTERN RIGHT-OF-WAY LINE OF WILLIAMS STREET (HAVING A 60-FOOT RIGHT-OF-WAY), SAID POINT BEING LOCATED NORTH 00 DEGREES 27 MINUTES 07 SECONDS EAST A DISTANCE OF 194.00 FEET, AS MEASURED ALONG SAID RIGHT-OF-WAY OF WILLIAMS STREET, FROM THE POINT OF INTERSECTION OF SAID RIGHT-OF-WAY LINE OF WILLIAMS STREET WITH THE NORTHERN RIGHT-OF-WAY LINE OF HARRIS STREET (HAVING A 60-FOOT RIGHTOF- WAY); AND RUNNING THENCE NORTH 89 DEGREES 01 MINUTE 59 SECONDS WEST A DISTANCE OF 125.03 FEET TO A POINT; THENCE NORTH 00 DEGREES 34 MINUTES 51 SECONDS EAST A DISTANCE OF 33.42 FEET TO A POINT; THENCE SOUTH 89 DEGREES 31 MINUTES 49 SECONDS EAST A DISTANCE OF 9.94 FEET TO A POINT; THENCE NORTH 00 DEGREES 28 MINUTES 11 SECONDS EAST A DISTANCE
EXHIBIT B-1
SCHEDULE OF TENANT LEASES
American Cancer Society
|
|
•
|
Lease Agreement dated as of August 1, 2006 by and between Cousins Properties Inc. and American Cancer Society, Inc.
|
|
|
•
|
First Amendment to Lease Agreement dated as of February 7, 2007 by and between Cousins Properties Inc., a Georgia corporation and American Cancer Society, Inc., a New York not-for-profit corporation.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of June 6, 2007 by and between Cousins Properties Inc., a Georgia corporation and American Cancer Society, Inc., a New York not-for-profit corporation.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of October 8, 2007 by and between 250 Williams Street LLC, a Georgia limited liability company and American Cancer Society, Inc., a New York not-for-profit corporation.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of December 1, 2007 by and between 250 Williams Street, LLC and American Cancer Society, Inc.
|
|
|
•
|
Fifth Amendment to Lease Agreement dated as of June 15, 2010 by and between 250 Williams Street, LLC and American Cancer Society, Inc.
|
|
|
•
|
Sixth Amendment to Lease Agreement dated as of March 8, 2012 by and between 250 Williams Street, LLC and American Cancer Society, Inc.
|
|
|
•
|
Seventh Amendment to Lease Agreement dated as of November 30, 2012 by and between 250 Williams Street LLC, a Georgia limited liability company and American Cancer Society, Inc., a New York corporation.
|
|
|
•
|
Eighth Amendment to Lease Agreement dated as of October 26, 2015 by and between 250 Williams Street, LLC, a Georgia limited liability company and American Cancer Society, Inc., a New York Corporation.
|
|
|
•
|
Ninth Amendment to Lease Agreement dated as of July 12, 2016 by and between 250 Williams Street, LLC, a Georgia limited liability company and American Cancer Society, Inc., a New York Corporation.
|
CenturyLink fka Savvis fka Cable and Wireless
|
|
•
|
Lease agreement dated as of July 16, 1999 by and between Cousins Properties Incorporated and Cable & Wireless USA, Inc., a District of Columbia corporation
|
|
|
•
|
First Amendment to lease dated as of April 5, 2001 by and between Cousins Properties Incorporated, a Georgia corporation and Cable & Wireless USA, Inc., a District of Columbia corporation
|
|
|
•
|
Second Amendment to lease dated as of October 1, 2004 by and between Cousins Properties Incorporated, a Georgia corporation and SAVVIS, Inc., a Missouri corporation
|
|
|
•
|
Third Amendment to lease dated as of May 5, 2014 by and between 250 Williams Street, LLC, a Georgia corporation and SAVVIS Communications Corporation, a Missouri corporation d/b/a CenturyLink Technology Solutions
|
|
|
•
|
Fourth Amendment to lease dated as of May 5, 2014 by and between 250 Williams Street, LLC, a Georgia corporation and SAVVIS Communications Corporation, a Missouri corporation d/b/a CenturyLink Technology Solutions
|
Georgia Lottery Corporation
|
|
•
|
Lease Agreement dated as of April 15, 1993 by and between Inforum Associates, a Georgia general partnership, and Georgia Lottery Corporation, a body politic and an instrumentality of the State of Georgia.
|
|
|
•
|
First Amendment to Lease Agreement dated as of July 1, 1993 by and between Inforum Associates, a Georgia general partnership and Georgia Lottery Corporation, a body politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of February 26, 2002 by and between Cousins Properties Inc, a Georgia corporation and Georgia Lottery Corporation, a body politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of July 1, 2008 by and between 250 Williams St LLC, and Georgia Lottery Corporation, a body politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of September 18, 2008 by and between 250 Williams St LLC, and Georgia Lottery Corporation, a body politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Fifth Amendment to Lease Agreement dated as of September 3, 2013 by and between 250 Williams Street LLC, a Georgia limited liability company and Georgia Lottery Corporation, a body corporate and politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Sixth Amendment to Lease Agreement dated as of April 3, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company and Georgia Lottery Corporation, a body corporate and politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Seventh Amendment to Lease Agreement dated as of August 21, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company and Georgia Lottery Corporation, a body corporate and politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Eighth Amendment to Lease Agreement dated as of October 15, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company and Georgia Lottery Corporation.
|
Inteliquent Inc fka Neutral Tandem
|
|
•
|
Lease Agreement dated as of March 31, 2005 by and between Cousins Properties Inc, and Neutral Tandem, Inc.
|
|
|
•
|
First Amendment to Lease Agreement dated as of August 4, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company and Inteliquent Inc, a Delaware corporation formerly known as Neutral Tandem, Inc.
|
Internap Network Services
|
|
•
|
Lease Agreement dated as of January 10, 2000 by and between Cousins Properties Inc, a Georgia Corporation, and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
First Amendment to Lease Agreement dated as of May 5, 2000 by and between Cousins Properties Inc, a Georgia corporation and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of October 31, 2002 by and between Cousins Properties Inc, a Georgia corporation and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of June 18, 2004 by and between Cousins Properties Inc, a Georgia corporation and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of October 1, 2004 by and between Cousins Properties Inc, a Georgia corporation and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Fifth Amendment to Lease Agreement dated as of March 28, 2005 by and between Cousins Properties Inc, a Georgia corporation and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Sixth Amendment to Lease Agreement dated as of June 13, 2008 by and between 250 Williams St LLC, a Georgia limited liability company and CO and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Seventh Amendment to Lease Agreement dated as of November 10, 2008 by and between 250 Williams St LLC, a Georgia limited liability company and CO and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Eighth Amendment to Lease Agreement dated as of February 26, 2009 by and between 250 Williams St LLC, a Georgia limited liability company and CO and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Ninth Amendment to Lease Agreement dated as of October 29, 2012 by and between 250 Williams St LLC, a Georgia limited liability company and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Tenth Amendment to Lease Agreement dated as of October 6, 2014 by and between 250 Williams St LLC, a Georgia limited liability company and Internap Network Services Corporation, a Delaware corporation.
|
|
|
•
|
Eleventh Amendment to Lease Agreement dated as of October 26, 2015 by and between 250 Williams St LLC, a Georgia limited liability company and Internap Network Services Corporation, a Delaware corporation.
|
|
|
•
|
Twelfth Amendment to Lease Agreement dated as of July 5, 2016 by and between 250 Williams St LLC, a Georgia limited liability company and Internap Network Services Corporation, a Delaware corporation.
|
Island News Stand
|
|
•
|
Lease Agreement dated as of September 10, 1992 by and between Inforum Associates, a Georgia general partnership and Peachtree New Stand, Inc., a Georgia corporation.
|
|
|
•
|
The assignment of lease and amendment to lease dated as of April 16, 1993 by and between Inforum Associates, a Georgia general partnership, Peachtree News Stand, Inc., a Georgia corporation and Island News Stand, Inc., a Georgia Corporation.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of December 1, 2002 by and between Cousins Properties Incorporated, a Georgia corporation, and Island News Stand Inc, a Georgia corporation.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of January 24, 2006 by and between Cousins Properties Incorporated, a Georgia corporation, and Island News Stand Inc, a Georgia corporation.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of February 20, 2007 by and between Cousins Properties Incorporated, a Georgia corporation, and Island News Stand Inc, a Georgia corporation.
|
|
|
•
|
Fifth Amendment to Lease Agreement dated as of March 20, 2007 by and between Cousins Properties Incorporated, a Georgia corporation, and Island News Stand Inc, a Georgia corporation.
|
|
|
•
|
Sixth Amendment to Lease Agreement dated as of September 21, 2007 by and between 250 Williams Street LLC and Island News Stand, Inc.
|
|
|
•
|
The assignment and assumption of lease and amendment to lease dated as of July 16, 2008 by and among 250 Williams Street LLC, a Georgia limited liability company, Island News Stand, Inc., a Georgia corporation, and Ray P. Lewis and Mariam H. Lewis.
|
|
|
•
|
The assignment and assumption of, and Eighth Amendment to, Lease Agreement dated as of February 22, 2012 by and between 250 Williams Street LLC, Ray P. Lewis and Mariam H. Lewis, and Island News Stand, Inc.
|
|
|
•
|
Ninth Amendment to Lease Agreement dated as of May 14, 2015 by and between 250 Williams Street LLC, a Georgia limited liability company, and Island News Stand Inc, a Georgia corporation.
|
|
|
•
|
Tenth Amendment to Lease Agreement dated as of June 13, 2016 by and between 250 Williams Street LLC, a Georgia limited liability company, and Island News Stand Inc, a Georgia corporation.
|
Level 3 Communications
|
|
•
|
Lease Agreement dated as of June 9, 1995 by and between The Equitable Life Assurance Society of the United States and Allnet Communication Services, Inc.
|
|
|
•
|
First Amendment to Lease Agreement dated as of March 6, 1996 by and between The Equitable Life Assurance Society of the United States and Frontier Communications Services, Inc, a Michigan corporation: formerly known as Allnet Communication Services, Inc.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of January 7, 1996 by and between The Equitable Life Assurance Society of the United States and Frontier Communications Services, Inc, a Michigan corporation: formerly known as Allnet Communication Services, Inc.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of November 3, 1998 by and between The Equitable Life Assurance Society of the United States and Frontier Communications Services, Inc, a Michigan corporation.
|
|
|
•
|
Lease Agreement dated as of November 3, 1998 by and between The Equitable Life Assurance Society of the United States and Level 3 Communications, LLC.
|
|
|
•
|
Lease Agreement dated as of February 5, 1999 by and between The Equitable Life Assurance Society of the United States and Focal Communications Corporation.
|
|
|
•
|
First Amendment to Lease Agreement dated as of May 11, 1999 by and between The Equitable Life Assurance Society of the United States and Focal Communications Corporation.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of June 27, 2003 by and between Cousins Properties Incorporated, a Georgia Corporation and Focal Communications Corporation, a Delaware corporation.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of December 23, 2004 by and between Cousins Properties Incorporated, a Georgia Corporation and Global Crossing Telecommunications, Inc.
|
|
|
•
|
Fifth Amendment to Lease Agreement dated as of August 18, 2005 by and between Cousins Properties Incorporated, a Georgia Corporation and Global Crossing Telecommunications, Inc.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of May 24, 2007 by and between Cousins Properties Incorporated, a Georgia corporation and Level 3 Communications, LLC, a Delaware limited liability company.
|
|
|
•
|
First Amendment to Lease Agreement dated as of November 17, 2008 by and between 250 Williams Street LLC, A Georgia limited liability company, and Level 3 Communications, LLC, a Delaware limited liability company.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of February 18, 2011 by and between 250 Williams Street LLC, A Georgia limited liability company, and Level 3 Communications, LLC, a Delaware limited liability company.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of December 26, 2012 by and between 250 Williams Street LLC, A Georgia limited liability company, and Level 3 Communications, LLC, a Delaware limited liability company.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of December 26, 2012 by and between 250 Williams Street LLC, A Georgia limited liability company, and Level 3 Communications, LLC, a Delaware limited liability company.
|
|
|
•
|
Sixth Amendment to Lease Agreement dated as of December 26, 2012 by and between 250 Williams Street LLC, A Georgia limited liability company, and Level 3 Communications, LLC, a Delaware limited liability company.
|
|
|
•
|
Second Amendment to building access license agreement for communications services dated as of November 13, 2013 by and between 250 Williams Street LLC, a Georgia limited liability company, and Level 3 Communications, LLC, a Delaware limited liability company.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of November 14, 2013 by and between 250 Williams Street LLC, A Georgia limited liability company, and Level 3 Communications, LLC, a Delaware limited liability company.
|
MCI Metro Access
|
|
•
|
Lease dated as of October 31, 1995 by and between The Equitable Life Assurance Society of the US and MCIMetro Access Transmission Services, Inc.
|
|
|
•
|
First Amendment to lease dated as of April 21, 2003 by and between Cousins Properties Incorporated, a Georgia corporation, as successor-in-interest to the Equitable Life Assurance Society of the US and MCIMetro Access Transmission Services LLC, a Delaware limited liability company.
|
|
|
•
|
Second Amendment to lease dated as of July 27, 2005 by and between Cousins Properties Incorporated, a Georgia corporation, as successor-in-interest to the Equitable Life Assurance Society of the US and MCIMetro Access Transmission Services LLC.
|
|
|
•
|
Third Amendment to lease dated as of July 27, 2010 by and between 250 Williams St LLC, a Georgia Limited liability company, and MCIMetro Access Transmission Services LLC, a Delaware limited liability company.
|
|
|
•
|
Fourth Amendment to lease dated as of July 8, 2013 by and between 250 Williams St LLC, a Georgia Limited liability company, and MCIMetro Access Transmission Services LLC, a Delaware limited liability company.
|
|
|
•
|
Fifth Amendment to lease dated as of December 14, 2016 by and between 250 Williams St LLC, a Georgia Limited liability company, and MCI Communications Services, Inc., a Delaware corporation.
|
|
|
•
|
Fifth Amendment to lease dated as of January 5, 2016 by and between 250 Williams St LLC, a Georgia Limited liability company, and MCI Access Transmission Services LLC, a Delaware limited liability company.
|
National Center for Civil and Human Rights
|
|
•
|
Lease dated as of March 5, 2014 by and between 250 Williams St LLC and National Center for Civil and Human Rights, Inc.
|
Parkview Cafe
|
|
•
|
Lease dated as of July 12, 2005 by and between Cousins Properties Incorporated and Su Myong Kim and Kyung Geun Park, doing business as Parkview Café.
|
|
|
•
|
First Amendment to lease dated as of June 30, 2010 by and between 250 Williams St LLC, a Georgia limited liability company and Potomac Cuisinary Services, Inc., a Georgia corporation.
|
|
|
•
|
Second Amendment to lease dated as of November 3, 2015 by and between 250 Williams St LLC, a Georgia limited liability company and Potomac Cuisinary Services, Inc., a Georgia corporation dba Park View Café.
|
TelX Atlanta
|
|
•
|
Lease dated as of June 30, 2016 by and between 250 Williams St LLC, a Georgia limited liability company and TelX Atlanta 2, LLC.
|
US South Communications (InComm)
|
|
•
|
First Amendment to lease dated as of February 23, 1999 by and between Cousins Properties Incorporated and US South Communications, Inc.
|
|
|
•
|
License and Temporary Use Agreement dated as of March 27, 2000 by and between Cousins Properties Incorporated, a Georgia corporation, and US South Communications, Inc., a Georgia Corporation.
|
|
|
•
|
Second Amendment to lease dated as of May 2, 2000 by and between Cousins Properties Incorporated and US South Communications, Inc.
|
|
|
•
|
Third Amendment to lease dated as of February 13, 2002 by and between Cousins Properties Incorporated, a Georgia Corporation, as successor-in-interest to the Equitable Life Assurance Society of the United States and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Fourth Amendment to lease dated as of December 12, 2002 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Fifth Amendment to lease dated as of June 29, 2004 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Sixth Amendment to lease dated as of December 1, 2004 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Seventh Amendment to lease dated as of March 3, 2005 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Eighth Amendment to lease dated as of November 8, 2005 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Ninth Amendment to lease dated as of January 9, 2007 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Tenth Amendment to lease dated as of May 23, 2007 by and between Cousins Properties Incorporated, a Georgia corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Eleventh Amendment to lease dated as of October 8, 2007 by and between 250 Williams Street LLC, a Georgia corporation, and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
License and Temporary Use Agreement dated as of February 14, 2008 by and between 250 Williams Street, LLC, a Georgia corporation, and US South Communications, Inc., a Georgia Corporation.
|
|
|
•
|
License and Temporary Use Agreement dated as of February 27, 2009 by and between 250 Williams Street, LLC, a Georgia limited liability company, and US South Communications, Inc., a Georgia Corporation.
|
|
|
•
|
License and Temporary Use Agreement dated as of August 31, 2009 by and between 250 Williams Street LLC, a Georgia Limited liability company, and US South Communications, Inc., a Georgia Corporation.
|
|
|
•
|
License and Temporary Use Agreement dated as of March 18, 2010 by and between 250 Williams Street LLC, a Georgia Limited liability company, and US South Communications, Inc., a Colorado Corporation.
|
|
|
•
|
License and Temporary Use Agreement dated as of May 26, 2010 by and between 250 Williams Street LLC, a Georgia Limited liability company, and US South Communications, Inc., a Colorado Corporation.
|
|
|
•
|
Twelfth Amendment to lease dated as of August 18, 2010 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
License and temporary use agreement dated as of October 2, 2013 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
First Amendment to license and temporary use agreement dated as of November 28, 2013 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Second Amendment to license and temporary use agreement dated as of June 16, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
First Amendment to license and temporary use agreement dated as of October 16, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
License and temporary use agreement dated as of October 16, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Fourteenth Amendment to lease dated as of April 3, 2015 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
First Amendment to license and temporary use agreement dated as of April 3, 2015 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Third Amendment to license and temporary use agreement dated as of April 3, 2015 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Fifteenth Amendment to lease dated as of October 26, 2015 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Second Amendment to license and temporary use agreement dated as of April 20, 2016 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Sixteenth Amendment to lease dated as of June 30, 2016 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Third Amendment to license and temporary use agreement dated as of September 27, 2016 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
Verizon Wireless (MCI WorldCom)
|
|
•
|
Lease agreement dated as of April 12, 1994 by and between Inforum Associates, a Georgia general partnership and MFS Intelenet of Georgia, Inc., a Delaware corporation.
|
|
|
•
|
First Amendment to lease agreement dated as of July 2, 1996 by and between The Equitable Life Assurance Society of the United States and MFS Intelenet of Georgia, Inc.
|
|
|
•
|
Second Amendment to lease agreement dated as of April 21, 2003 by and between Cousins Properties Incorporated, a Georgia corporation, as successor-in-interest to Inforum Associates, a Georgia general partnership, and MCI Worldcom Communications, Inc, a Delaware corporation.
|
|
|
•
|
Third Amendment to lease agreement dated as of May 5, 2009 by and between Cousins Properties Incorporated, a Georgia corporation, as successor-in-interest to Inforum Associates, a Georgia general partnership, and MCI Worldcom Communications, Inc, a Delaware corporation.
|
|
|
•
|
Fourth Amendment to lease agreement dated as of November 13, 2013 by and between 250 Williams Street LLC, a Georgia limited liability company, and MCI Communications Services, Inc., a Delaware corporation.
|
EXHIBIT B-2
PERMITTED LEASE ACTIONS
None.
EXHIBIT C-1
SCHEDULE OF OPERATING AGREEMENTS
EXHIBIT C-2
PERMITTED OPERATING AGREEMENTS
None.
EXHIBIT D
TENANT INDUCEMENT COSTS
|
|
|
|
|
Tenant
|
Description
|
Seller Cost
|
Buyer Cost
|
TelX Atlanta
|
Base Rent + Reimbursements
|
935,321
|
-
|
|
|
|
|
Total
|
|
935,321
|
-
|
EXHIBIT E-1
FORM OF TENANT ESTOPPEL
[Date]
[PURCHASER]
________________
and
250 Williams Street LLC,
c/o Cousins Properties Incorporated
191 Peachtree Street, NE Suite 500
Atlanta, Georgia 30303
Ladies and Gentlemen:
You have informed us of a pending sale of the project commonly known as 250 Williams Street, Atlanta, Georgia (the “Property”).
For $10.00 and other good and sufficient consideration, receipt of which is hereby acknowledged, and for the purposes of providing information to ________________, a _____________________________ (together with its successors and assigns, “Purchaser”), any of the Purchaser’s potential or prospective investors or lenders and each of their respective successors and/or assigns (collectively, “Lenders”) and to 250 Williams Street LLC, a Georgia limited liability company (together with its successors and assigns, “Seller”), regarding the Property and the leased premises (the “Premises”) in which the undersigned is a tenant under that certain lease agreement (the “Lease”) described on
Exhibit “A”
attached hereto, with (such lessor and its successors and assigns are hereinafter referred to as “Landlord”), for the space identified as Suite _____, covering approximately _____ square feet the undersigned Tenant does hereby certify and agree to Purchaser, Lenders and Seller that:
1.
The Lease is in full force and effect, is valid and enforceable according to its terms against Tenant and has not been modified, amended, supplemented or changed in any respect, either orally or in writing.
2.
Tenant has accepted possession of the Premises, and all improvements, alterations and other work and parking facilities to be performed or constructed by Landlord under the Lease have been completed as of the date hereof and unconditionally accepted by Tenant.
3.
The term of the Lease commenced on and the current term expires on ___________. Tenant has no renewal, extension, right of first offer or right of first refusal, renewal or expansion rights, or purchase options, or any other exclusive rights, except as stated in the Lease.
4.
The current monthly installment of fixed or base rent (excluding Tenant’s pro rata share of operating expenses, taxes or insurance costs) is $__________. All rent (including fixed
or base rent, and all additional rent (including, without limitation, Tenant’s pro rata share of operating expenses, taxes or insurance costs) or monthly installments of estimated additional rent (including, without limitation, Tenant’s pro rata share of operating expenses, taxes or insurance costs) has been paid through ___________________.
5.
The current amount of security deposit held by Landlord is $__________ which is in the form of [insert: cash or letter of credit, as applicable] and Landlord holds no other deposit or letter of credit from Tenant for security or otherwise.
6.
The Tenant (including its guests) is entitled to no parking spaces (whether specified and exclusive or otherwise), except as stated in the Lease.
7.
All rent, charges or other payments due Landlord under the Lease have been paid as of the date of this certification, and there have been no prepayments of rent or other obligations, except for the following
[if left blank, deemed to be NONE].
8.
To the best of Tenant’s knowledge, neither Landlord nor Tenant is in material default under any terms of the Lease nor has any event occurred, which with the passage of time (after notice, if any required by the Lease), would become an event of default under the Lease. No event or condition has occurred, which with the passage of time (after notice, if any, required by the Lease), would give rise to any right or option of Tenant to terminate the Lease or discontinue the operation of business from the Premises.
9.
Tenant under the Lease has no claims, counterclaims, defenses or setoffs against Landlord arising from the Lease, nor is Tenant entitled to any concession, rebate, allowance or free rent for any period after this certification. As of the date hereof, Tenant is not entitled to any partial or total abatement of rent or other amounts due under the Lease.
10.
Tenant is the actual occupant in possession and has not assigned, transferred or sublet all or any part of the Premises, except for assignments or subleases listed on
Exhibit “A,
” if any.
11.
The Tenant is not the subject of any pending bankruptcy, insolvency, debtor’s relief, reorganization, receivership or similar proceedings, nor the subject of a ruling with respect to any of the foregoing.
12.
Tenant is actually using the Premises for the following purposes: ____________ ___________________________________________________________.
13.
Landlord has not granted to Tenant any free rent periods or tenant improvement contributions under the Lease, and Landlord is not reimbursing Tenant or paying Tenant's rent obligations under any other lease, except: ___________________________ [if left blank, deemed to be NONE]
14.
Tenant has no options to expand, or extend the term of the Lease except as set forth in the Lease. Tenant has no option or preferred right or right of first refusal to purchase any
portion of the Property except:__________________________________________________ [if left blank, deemed to be NONE].
[FOR USE WITH ROFO ONLY] Notwithstanding anything to the contrary contained in Paragraph _____ of the Lease, Tenant’s Right of First Offer to Purchase granted in Section _____ of the Lease shall not apply to the execution and delivery of any mortgage, deed of trust or other security instrument on the Premises and/or Property, or any collateral assignment of the ownership interests in Purchaser in connection with any loan made to Purchaser, or any affiliate of Purchaser, or a sale under power of sale or a foreclosure sale created by the holder of such mortgage, deed of trust or other security instrument or Equity Pledge, whether such transfer is the Lenders or any designee or nominee of Lenders, if necessary or appropriate to exercise Lenders' interest in the collateral (each, a “Lender Party”) and whether such transfer occurs by virtue of such holder exercising its rights or remedies under any document evidencing the Purchaser’s Loan collectively, as the same have been or from time to time may be amended, varied, extended, supplemented, consolidated, replaced, renewed, modified or restated, the “Loan Documents”) causing a Lender Party to become the beneficial owner of Purchaser, or if such Lender Party becomes the owner of the Premises and/or Property through foreclosure or any other remedy available to such Lender Party under the Loan Documents or otherwise at law or in equity, or by a deed in lieu of any of the foregoing (each, “Exceptions to ROFR”). For purposes of clarity, the Exceptions to ROFR described above are meant to permit Purchaser’s Lender to exercise its interest in collateral granted to such lender related to the Premises and/or Property or an equity interest in the Purchaser, and in exercising its rights under the procedures permitted or required, Purchaser’s Lender may, where necessary or appropriate, appoint designees or nominees to act on its behalf (for example, trustees under a Deed of Trust, local sheriffs, or similar designees) in exercising those rights. Tenant acknowledges that is has waived its Right of First Offer under the Lease.
15.
Tenant’s current address for notice under the Lease is _____________________ _______________________________.
16.
This certification will be relied upon by the Purchaser, Lenders and Seller and may not be changed, waived or discharged orally, but only by an agreement in writing.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be executed as of the ___ day of
, 2017.
[Tenant]
By:
Name:
Title:
[ADD SIG BLOCK OF GUARANTOR OF ANY GUARANTY OF LEASE.]
By:
Name:
Title:
EXHIBIT E-2
FORM OF SELLER TENANT LEASE ESTOPPEL
[Date]
[PURCHASER]
Ladies and Gentlemen:
The undersigned, 250 Williams Street LLC, a Georgia limited liability company (together with its successors and assigns, “Landlord”), as the owner of the project commonly known as 250 Williams Street, Atlanta, Georgia (the “Property”), has agreed to provide this estoppel certificate pursuant to the terms of
Section 4.6(d)
of the Purchase and Sale Agreement dated as of _____, 2017, among Landlord, as seller, and you, as purchaser.
For $10.00 and other good and sufficient consideration, receipt of which is hereby acknowledged, and for the purposes of providing information to __________________________ a _____________________________________ (together with its successors and assigns, “Purchaser”), and any of the Purchaser’s potential or prospective investors or lenders and each of their respective successors and/or assigns (collectively, “Lenders”) regarding the Property and the leased premises (the “Premises”) in which the is a tenant under that certain lease agreement (the “Lease”) described on
Exhibit “A”
attached hereto, and Landlord is the landlord, for the space identified as Suite _____ , covering approximately _____ square feet, Landlord does hereby certify and agree to Purchaser and Lenders that:
1.
The Lease is in full force and effect, is valid and enforceable according to its terms against Tenant and has not been modified, amended, supplemented or changed in any respect, either orally or in writing.
2.
Tenant has accepted possession of the Premises, and all improvements, alterations and other work and parking facilities to be performed or constructed by Landlord under the Lease have been completed as of the date hereof and unconditionally accepted by Tenant.
3.
The term of the Lease commenced on __________ and the current term expires on __________. Tenant has no renewal, extension, right of first offer or right of first refusal, renewal or expansion rights, or purchase options, or any other exclusive rights, except as stated in the Lease.
4.
The current monthly installment of fixed or base rent (excluding Tenant’s pro rata share of operating expenses, taxes or insurance costs) is $__________. All rent (including fixed or base rent, and all additional rent (including, without limitation, Tenant’s pro rata share of operating expenses, taxes or insurance costs) or monthly installments of estimated additional rent (including,
without limitation, Tenant’s pro rata share of operating expenses, taxes or insurance costs)) has been paid through ____________.
5.
The current amount of security deposit held by Landlord is $ __________, which is in the form of __________ [insert: cash or letter of credit, as applicable] and Landlord holds no other deposit or letter of credit from Tenant for security or otherwise.
6.
The Tenant (including its guests) is entitled to no parking spaces (whether specified and exclusive or otherwise), except as stated in the Lease
7.
All rent, charges or other payments due Landlord under the Lease have been paid as of the date of this certification, and there have been no prepayments of rent or other obligations, except for the following _______________ [if left blank, deemed to be NONE].
8.
To the best of Landlord’s knowledge, neither Landlord nor Tenant is in material default under any terms of the Lease nor has any event occurred, which with the passage of time (after notice, if any required by the Lease), would become an event of default under the Lease. No event or condition has occurred, which with the passage of time (after notice, if any, required by the Lease), would give rise to any right or option of Tenant to terminate the Lease or discontinue the operation of business from the Premises.
9.
To Landlord’s knowledge, Tenant under the Lease has no claims, counterclaims, defenses or setoffs against Landlord arising from the Lease, nor is Tenant entitled to any concession, rebate, allowance or free rent for any period after this certification. As of the date hereof, Tenant is not entitled to any partial or total abatement of rent or other amounts due under the Lease.
10.
To Landlord’s knowledge, Tenant is the actual occupant in possession and has not assigned, transferred or sublet all or any part of the Premises, except for the following assignments or subleases, if any:
.
11.
Landlord has not granted to Tenant any free rent periods or tenant improvement contributions under the Lease, and Landlord is not reimbursing Tenant or paying Tenant's rent obligations under any other lease, except: __________________ .
12.
Tenant has no options to expand, or extend the term of the Lease except as set forth in the Lease. Tenant has no option or preferred right or right of first refusal to purchase any portion of the Property except:_________.
[FOR USE WITH ROFO ONLY] Notwithstanding anything to the contrary contained in Paragraph _____ of the Lease, Tenant’s Right of First Offer to Purchase granted in Section _____ of the Lease shall not apply to the execution and delivery of any mortgage, deed of trust or other security instrument on the Premises and/or Property, or any collateral assignment of the ownership interests in Purchaser in connection with any loan made to Purchaser, or any affiliate of Purchaser, or a sale under power of sale or a foreclosure sale created by the holder of such mortgage, deed of
trust or other security instrument or Equity Pledge, whether such transfer is the Lenders or any designee or nominee of Lenders, if necessary or appropriate to exercise Lenders' interest in the collateral (each, a “Lender Party”) and whether such transfer occurs by virtue of such holder exercising its rights or remedies under any document evidencing the Purchaser’s Loan collectively, as the same have been or from time to time may be amended, varied, extended, supplemented, consolidated, replaced, renewed, modified or restated, the “Loan Documents”) causing a Lender Party to become the beneficial owner of Purchaser, or if such Lender Party becomes the owner of the Premises and/or Property through foreclosure or any other remedy available to such Lender Party under the Loan Documents or otherwise at law or in equity, or by a deed in lieu of any of the foregoing (each, “Exceptions to ROFR”). For purposes of clarity, the Exceptions to ROFR described above are meant to permit Purchaser’s Lender to exercise its interest in collateral granted to such lender related to the Premises and/or Property or an equity interest in the Purchaser, and in exercising its rights under the procedures permitted or required, Purchaser’s Lender may, where necessary or appropriate, appoint designees or nominees to act on its behalf (for example, trustees under a Deed of Trust, local sheriffs, or similar designees) in exercising those rights. Tenant acknowledges that is has waived its Right of First Offer under the Lease.
13.
This certification will be relied upon by Purchaser and Lenders and may not be changed, waived or discharged orally, but only by an agreement in writing.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be executed as of the _____ day of _______________, 2017.
[Landlord]
By:
Name:
Title:
EXHIBIT F
FORM OF DEED
This space reserved for recording information
After recording return to:
[______________________________]
LIMITED WARRANTY DEED
STATE OF GEORGIA )
COUNTY OF FULTON )
THIS INDENTURE
, made as of the __ day of _____, 2017, between ____________, a ___________________ (“
Grantor
”), and _________________, a ___________________ (“
Grantee
”), whose mailing address is ___________________.
That Grantor, for the sum of Ten Dollars ($10.00) and other good and valuable consideration, in hand paid at and before the sealing and delivery of these presents, the receipt and sufficiency of which are hereby acknowledged, has granted, bargained, sold, aliened, conveyed and confirmed and by these presents does grant, bargain, sell, alien, convey and confirm unto Grantee, all of Grantor’s interest in and to that certain property more particularly described on
Exhibit A
attached hereto and made a part hereof, together with the buildings and improvements thereon (collectively, the “
Property
”).
TO HAVE AND TO HOLD
the Property, together with all and singular the rights, members, easements and appurtenances thereof, to the only proper use, benefit and behoof of Grantee, forever,
IN FEE SIMPLE
.
This Deed and the warranty of title contained herein are made expressly subject to each of the matters set forth in
Exhibit B
, attached hereto and incorporated herein by reference, without re-imposing any of the same (collectively, the “
Permitted Exceptions
”).
Except as to any claims arising from or with respect to the Permitted Exceptions, Grantor will warrant and forever defend the right and title to the Property unto Grantee against the lawful claims of all persons owning, holding or claiming by, through or under Grantor, but not otherwise.
(The words “
Grantor” and “
Grantee
” include all genders, plural and singular, and their respective heirs, successors and assigns where the context requires or permits.)
IN WITNESS WHEREOF, Grantor has executed this instrument, to be effective as of this ______ day of ______________, 2017.
|
|
|
Signed, sealed and delivered
in the presence of:
______________________________
Witness
______________________________
Notary Public
My Commission Expires:
______________________________
[NOTARIAL SEAL]
|
GRANTOR
:
____________________, a ______________
By:
Name:
Title:
|
EXHIBIT G
FORM OF GROUND LEASE ASSIGNMENT
SPACE ABOVE THIS LINE FOR RECORDER’S USE
INSTRUMENT PREPARED BY CROSS REFERENCE:
AND AFTER RECORDING RETURN TO: [___________________________]
[_______________________________]
ASSIGNMENT AND ASSUMPTION OF GROUND LEASE
For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1.
___________, a Georgia limited liability company (“
Assignor
”) does hereby assign, transfer, grant, convey and set over to ______________, a _______________ (“
Assignee
”), with a warranty of title for against the lawful claims of all persons owning, holding or claiming by, through or under Assignor, but not otherwise, all of its right, title and interest in and to that certain [__________________] (collectively, and as assigned, the “
Lease
”), covering the leased premises more particularly described in
Exhibit A
, attached hereto and incorporated herein (the “
Property
”), to have and to hold the same for and during the rest, residue and remainder of the term of the Lease (the “
Assignment
”).
2.
Assignor hereby grants, bargains, sells, aliens, conveys and confirms unto Assignee, all of Assignor’s right, title and interest in and to the improvements located on the Property, with a warranty of title for against the lawful claims of all persons owning, holding or claiming by, through or under Assignor, but not otherwise, which improvements are and shall remain real property.
3.
Assignee hereby accepts the foregoing Assignment and assumes and agrees to perform and observe all of the obligations, covenants, conditions and provisions in the Lease to be performed and observed by the “Office Owner” thereunder, including, without limitation, any unperformed obligations which have accrued as of the date hereof.
4.
This Assignment is made expressly subject to each of the matters set forth in Exhibit B, attached hereto and incorporated herein by reference without re-imposing any of the same (collectively, the “
Permitted
Exceptions
”).
5.
This Assignment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
6.
This Assignment shall be governed by and construed in accordance with the laws of the State of Georgia.
7.
This Assignment may be executed in any number of identical counterparts, all or any of which may contain the signatures of fewer than all of the parties, and all of which shall be construed together as a single instrument.
[SIGNATURES ON NEXT PAGE]
Dated as of this ______ day of ______________, 2017.
|
|
|
Signed, sealed and delivered
in the presence of:
______________________________
Witness
______________________________
Notary Public
My Commission Expires:
______________________________
[NOTARIAL SEAL]
|
ASSIGNOR
:
____________________, a ______________
By:
Name:
Title:
|
Signed, sealed and delivered
in the presence of:
______________________________
Witness
______________________________
Notary Public
My Commission Expires:
______________________________
[NOTARIAL SEAL]
|
ASSIGNEE
:
____________________, a ______________
By:
Name:
Title:
|
EXHIBIT H
FORM OF TENANT LEASE ASSIGNMENT
ASSIGNMENT OF LANDLORD’S INTEREST IN LEASES
THIS ASSIGNMENT OF LANDLORD’S INTEREST IN LEASES (“Assignment”) is executed and entered into by and between _________________________, a ________________ (“Assignor”), and ___________________, a ___________________ (“Assignee”).
WITNESSETH:
WHEREAS, Assignor is the owner or ground lessee of certain real property and improvements situated in Fulton County, Georgia, and described more particularly on
Exhibit A
attached hereto (“Property”); and
WHEREAS, simultaneously with the execution and delivery hereof Assignor is executing and delivering to Assignee certain instruments granting and conveying Assignor’s interest in and to the Property to Assignee; and
WHEREAS, Assignor, or Assignor’s predecessors in title, have heretofore entered into various tenant leases encumbering the Property, including, without limitation, the tenant leases described in
Exhibit B
attached hereto and by this reference made a part hereof (“Tenant Leases”); and
WHEREAS, Assignor desires to assign and transfer to Assignee all of the rights and benefits of Assignor in and to the Tenant Leases upon the terms hereinafter set forth.
NOW, THEREFORE, for and in consideration of the sum of TEN DOLLARS ($10) and other good and valuable consideration in hand paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby ASSIGN, TRANSFER, SET OVER, CONVEY and DELIVER unto Assignee, its legal representatives, successors and assigns, all of the rights, powers, privileges and interests of Assignor in and to any and all the Tenant Leases.
By acceptance hereof Assignee assumes and shall become obligated to keep, fulfill, observe, perform and discharge each and every covenant, duty, debt and obligation that may accrue and become performable, due or owing after the effective date hereof by Assignor under the terms, provisions and conditions of the Tenant Leases.
This Assignment is binding upon and shall inure to the benefit of the parties hereto, and their respective heirs, legal representatives, successors and assigns.
EXECUTED the
day of
, 201___.
ASSIGNOR:
,
a
By: Cousins Properties Incorporated,
a Georgia corporation, its sole member
By:
Name:
Title:
ASSIGNEE
:
,
a
By:
Its:
Printed Name:
EXHIBIT I
FORM OF BILL OF SALE
BLANKET CONVEYANCE, BILL OF SALE AND ASSIGNMENT
By certain recordable instruments of even date herewith, ______________________, a ___________________ (“Assignor”), conveyed to ______________________, a ___________________ (“Assignee”), Assignor’s interest in the property (“Real Property”) described on Exhibit A attached hereto and made a part hereof for all purposes, together with all improvements located thereon.
It is the desire of Assignor hereby to assign, transfer and convey to Assignee Assignor’s interest in the Personal Property and the Intangibles, except for the Tenant Leases, which are assigned pursuant to a separate Assignment of Landlord’s Interest in Leases, and the Ground Lease Documents, which are assigned pursuant to a separate Ground Lease Assignment.
NOW, THEREFORE, in consideration of the receipt of Ten Dollars ($10) and other good and valuable consideration, in hand paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged and confessed by Assignor, Assignor does hereby ASSIGN, TRANSFER, SET OVER, CONVEY and DELIVER to Assignee and Assignee’s successors, legal representatives and assigns, all of Assignor’s right, title and interest, if any, in and to the Personal Property and Intangibles.
ASSIGNOR HEREBY EXPRESSLY DISCLAIMS ANY WARRANTIES AS TO MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER WARRANTIES OR REPRESENTATIONS AS TO THE PHYSICAL CONDITION OF THE PERSONAL PROPERTY OR THE INTANGIBLES. BY ITS ACCEPTANCE OF THIS BILL OF SALE, ASSIGNEE ACKNOWLEDGES AND AGREES THAT IT HAS INSPECTED THE PERSONAL PROPERTY AND THE INTANGIBLES AND ACCEPTS SAME IN THEIR PRESENT CONDITION, “AS IS” AND “WITH ALL FAULTS” SUBJECT TO THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THE AGREEMENT (AS DEFINED BELOW).
By acceptance hereof Assignee assumes and will become obligated to keep, fulfill, observe, perform and discharge each and every covenant, duty, debt and obligation that may accrue and become performable, due or owing after the effective date hereof by Assignor under the terms, provisions and conditions of the instruments evidencing the Intangibles.
This Blanket Conveyance, Bill of Sale and Assignment and the provisions herein contained shall be binding upon and inure to the benefit of the Assignee and the Assignor and their respective successors and assigns.
Capitalized terms used but not defined herein shall have the meanings given them in the Purchase and Sale Agreement (the “Agreement”) between Assignor and Assignee dated ________________, 2017.
EXECUTED the
day of
, 201_.
ASSIGNOR:
,
a
By: Cousins Properties Incorporated,
a Georgia corporation, its sole member
By:
Name:
Title:
ASSIGNEE
:
,
a
By:
Its:
Printed Name:
EXHIBIT J-1
GROUND LEASE DOCUMENTS
That certain unrecorded lease as evidenced by Memorandum of Lease by and among Mrs. Ruth S. Barrett, formerly Mrs. Ruth S. Kerlin, of Fulton County, Georgia; Sunshine Parking, Inc., a Tennessee corporation qualified to do business in the State of Georgia and Kellett & Co. Real Estate, Weyman & Co., and C. G. Aycock Realty Co., of Fulton County, Georgia, dated September 5, 1968, filed for record September 9, 1968, and recorded in Deed Book 4953, Page 322, aforesaid records; as assigned by that certain Assignment and Assumption of Leases by and between United Parking, Inc., a Georgia corporation and Capital Central Corporation, a Georgia corporation, dated October 1, 1984, filed for record December 6, 1984, and recorded in Deed Book 9284, Page 312, aforesaid records; as assigned by that certain Assignment and Assumption of Leases by and between Capital Central Corporation, a Georgia corporation and Central Acquisition Associates, Ltd., a Georgia limited partnership, dated December 20, 1984, filed for record December 21, 1984, and recorded in Deed Book 9311, Page 281, aforesaid records; as assigned by that certain Assignment and Assumption of Leases by and between Capital Acquisition Associates, Ltd., a Georgia limited partnership and Inforum, Ltd., a Georgia limited partnership, dated May 28, 1985, filed for record July 30, 1985, and recorded in Deed Book 9633, Page 391, aforesaid records; as amended by that certain First Amendment to Lease Agreement by and between Mrs. Ruth S. Harris, formerly Mrs. Ruth S. Barrett and formerly Mrs. Ruth S. Kerlin, of Fulton County, Georgia and Inforum, Ltd., a Georgia limited partnership, dated June 1, 1986, filed for record June 30, 1986, and recorded in Deed Book 10188, Page 154, aforesaid records; as assigned by that certain Transfer and Assignment of Lease by and between Inforum, Ltd., a Georgia limited partnership and Inforum Associates, a Georgia general partnership in the form of a joint venture composed of Inforum, Ltd. and The Equitable Life Assurance Society of the United States, a New York Corporation, dated October 20, 1987, filed for record October 21, 1987, and recorded in Deed Book 11131, Page 245, aforesaid records; as assigned by that certain Quit-Claim Deed by and between Inforum Associates, a Georgia general partnership in the form of a joint venture in which The Equitable Life Assurance Society of the United States and Equitable JVS, Inc., are the sole venturers and The Equitable Life Assurance Society of the United States, a New York Corporation, dated December 30, 1994, filed for record December 30, 1994, and recorded in Deed Book 19109, Page 220, aforesaid records; as assigned by that certain Assignment of Lease from Trust Company Bank as Executor of the Estate of Mrs. Ruth S. Harris, Deceased to James Arogeti, dated September 30, 1988, filed for record October 4, 1988, and recorded in Deed Book 11937, Page 217, aforesaid records; as assigned by that certain Assignment of Lease from James Arogeti to Jeanette Arogeti, dated September 30, 1988, filed for record December 12, 1988, and recorded in Deed Book 12111, Page 141, aforesaid records; as assigned by that certain Quit-Claim Deed by and between James Arogeti and Jeanette Arogeti and A & A Associates, L.P., a Georgia limited partnership, dated December 31, 1991, filed for record April 6, 1992, and recorded in Deed Book 15193, Page 348, aforesaid records; as assigned by that certain Assignment of Lease by and among A & A Associates, a Georgia limited partnership whose sole general partners are James Arogeti and Jeanette Arogeti and Robert J. Arogeti, Joel S. Arogeti, Jane A. Durham and Barbara Arogeti, not as individuals but as Trustees of the Argo Charitable Lead Trust, dated April 1, 1995, filed for record May 30, 1995, and recorded in Deed Book 19611, Page 133, aforesaid records; as assigned by that certain Agreement of Assignment and Assumption of Ground Lease by and between Equitable Life Assurance Society of the United States, a New York corporation and Cousins Properties Incorporated, a Georgia corporation, dated June 30, 1999, filed for record June 30, 1999, and recorded in Deed Book 26975, Page 85, aforesaid records; as affected by that certain Quitclaim Deed by and between The Equitable Life Assurance Society of the United States, a New York corporation and Cousins Properties Incorporated, a Georgia corporation, dated June 30, 1999, filed for record June 30, 1999, and recorded in Deed Book 26975, Page 93, aforesaid records; as affected by that certain Agreement of Ground Lessor by and among Robert J. Arogeti, Joel S. Arogeti, Jane A. Durham and Barbara J. Arogeti, as Trustees of the Argo Charitable Lead Trust; JPMorgan Chase Bank, N.A., a banking association chartered under the laws of the United States of America and Cousins Properties Incorporated, a Georgia corporation, dated August 31, 2007, filed for record September 4, 2007, and recorded in Deed Book 45629, Page 89, aforesaid records; and as assigned by that certain Agreement of Assignment and Assumption of Ground Lease by and between Cousins Properties Incorporated, a Georgia corporation and 250 Williams Street LLC, a Georgia limited liability company, dated August 31, 2007, filed for record September 4, 2007, and recorded in Deed Book 45629, Page 154, aforesaid records.
EXHIBIT J-2
FORM OF GROUND LEASE ESTOPPEL
[Date]
[PURCHASER]
and
250 Williams Street LLC
c/o Cousins Properties Incorporated
191 Peachtree Street, NE
Suite 500
Atlanta, Georgia 30303
Re: (i) Lease between Argo Charitable Lead Trust, as lessor, as amended by the First Amendment thereto and as assigned and transferred, and Inforum, Ltd. et al., as lessee, respecting property located along Williams Street in Atlanta, Georgia (the “Lease”);
(ii) Assignment of Leasehold Estate created by the Lease from Cousins Properties Incorporated (the “Lessee”) to _________________ or its assigns (the “Purchaser”) pursuant to that certain Purchase and Sale Agreement dated April __, 2017 by and between Lessee and Purchaser (the “Purchase Agreement”).
Ladies and Gentlemen:
The undersigned is/are the Lessor(s) under the Lease and have been advised that Purchaser proposes to purchase the leasehold estate of Lessee under the Lease and to accept from Lessee an assignment by Lessee of its rights as lessee or tenant under the Lease pursuant to the Purchase Agreement. In connection with that transaction, Purchaser and Lessee have, and do hereby, request that the undersigned make certain certifications relative to the Lease.
Therefore, the undersigned hereby certify(ies) to Purchaser and Lessee as follows:
1.
The Lease has not been modified or amended except as set forth herein. A true, correct and complete copy of the Lease is attached hereto as
Exhibit A
and made a part hereof.
2.
The undersigned is/are the present Lessor(s) under the Lease and the owner(s) of the property now demised under the Lease (the “Property”) free and clear of all encumbrances except for the Lease and the title exceptions set forth in the Lease, if any, and any matters of record which are subordinate to the Lease. Lessee is the present Lessee under the Lease
3.
The Lease is in full force and effect and constitutes the complete agreement between the undersigned and Lessee.
4.
To the best knowledge of the undersigned, Lessee, as of the date hereof, has fully performed all of its obligations under the Lease and is not in default thereunder; and no event has occurred which with the giving of notice or passage of time, or both, would constitute a default by Lessee under the Lease.
5.
The term of the Lease commenced on February 1, 1969, and shall expire (unless extended as in the Lease provided) on January 31, 2068.
6.
Lessee is not in default in making any payments of rent and other charges in accordance with the provisions of the Lease. All rental has been paid to and including the period ending _______________.
7.
The undersigned, as Lessor under the Lease or individually, has not assigned or granted to any party, other than Lessee (as lessee thereunder), any interest in the Lease.
8.
The undersigned has/have the full power and authority to execute this Agreement.
9.
The undersigned acknowledge and agree that the Purchaser and Lessee will rely on this certificate in connection with the acquisition by Purchaser of the interest in the Lease from the Lessee.
IN WITNESS WHEREOF, the undersigned each have caused this statement to be duly executed as of the day and year first above written.
EXHIBIT J-3
FORM OF SELLER GROUND LEASE ESTOPPEL
[Date]
[PURCHASER]
Re: (i) Lease between Argo Charitable Lead Trust, as lessor, as amended by the First Amendment thereto and as assigned and transferred, and Inforum, Ltd. et al., as lessee, respecting property located along Williams Street in Atlanta, Georgia (the “Lease”);
(ii) Assignment of Leasehold Estate created by the Lease from Cousins Properties Incorporated (the “Lessee”) to _________________ or its assigns (the “Purchaser”) pursuant to that certain Purchase and Sale Agreement dated April __, 2017 by and between Lessee and Purchaser (the “Purchase Agreement”).
Ladies and Gentlemen:
The undersigned is the Lessee. In connection with the purchase of the leasehold estate of Lessee under the Lease by Purchaser and the assignment by Lessee of its rights as lessee or tenant under the Lease to Purchaser pursuant to the Purchase Agreement, Lessee makes the following certifications relative to the Lease.
Therefore, the undersigned hereby certifies to Purchaser as follows, in each case to the best of Lessee’s knowledge:
|
|
1.
|
The Lease has not been modified or amended except as set forth herein. A true, correct and complete copy of the Lease is attached hereto as
Exhibit A
and made a part hereof.
|
|
|
2.
|
___________ is/are the present Lessee under the Lease and the owner(s) of the property now demised under the Lease (the “Property”) free and clear of all encumbrances except for the Lease and the title exceptions set forth in the Lease, if any, and any matters of record which are subordinate to the Lease.
|
|
|
3.
|
The Lease is in full force and effect and constitutes the complete agreement between the undersigned and Lessor.
|
|
|
4.
|
Lessee, as of the date hereof, has fully performed all of its obligations under the Lease and is not in default thereunder; and no event has occurred which with the giving of notice or passage of time, or both, would constitute a default by Lessee under the Lease.
|
|
|
5.
|
The term of the Lease commenced on February 1, 1969, and shall expire (unless extended as in the Lease provided) on January 31, 2068.
|
|
|
6.
|
Lessee is not in default in making any payments of rent and other charges in accordance with the provisions of the Lease. All rental has been paid to and including the period ending _______________.
|
|
|
7.
|
The undersigned has the full power and authority to execute this Agreement.
|
|
|
8.
|
The undersigned acknowledge and agree that Purchaser will rely on this certificate in connection with the acquisition by Purchaser of the interest in the Lease from the Lessee.
|
The certifications made by Lessee herein shall be subject to the limitations set forth in Section 5.3 of the Purchase Agreement, as if such certifications were representations made in Section 5.2 of the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned have caused this statement to be duly executed as of the day and year first above written.
EXHIBIT K
FORM OF SEC S-X 3-14 LETTER
We are providing this letter in connection with your audit of the historical statement of certain revenues and certain expenses of the American Cancer Society Center, located in Atlanta, Georgia (the “Property”) for the purpose of expressing an opinion as to whether the historical statement presents fairly, in all material respects, certain revenues and certain expenses for the year ended December 31, 2016 of the Property in conformity with accounting principles generally accepted in the United States of America and in accordance with the applicable rules and regulations of the Securities and Exchange Commission for real estate properties acquired.
We confirm, to the best of our knowledge and belief, the following representations made to you during your audit:
i. The detailed trial balance of the Property provided to you and the Buyer as of and for the year ended December 31, 2016 is fairly stated in accordance with the accounting principles and practices of Cousins Properties Incorporated.
ii. We have made available to you all financial records and related data associated with the Property that you and the Buyer have reasonably requested in connection with your audit.
iii. There are no material transactions, agreements or accounts with respect to the Property that have not been properly recorded in the trial balance referred to above.
iv. Cousins Properties Incorporated maintained effective internal control over financial reporting as of December 31, 2016.
_______________________________
(CAO Signature and Title)
EXHIBIT L-1
FORM OF BRIDGE ESTOPPEL
[Date]
[PURCHASER]
and
250 Williams Street LLC
c/o Cousins Properties Incorporated
191 Peachtree Street, NE
Suite 500
Atlanta, Georgia 30303
Re:
Bridge Agreement, by and among the City of Atlanta, a
municipal corporation organized and existing pursuant to the laws of the S
tate of Georgia; the Atlanta Apparel Mart, a limited partnership organized and existing pursuant to the laws of the State of Georgia and Inforum, Ltd., a Georgia limited partnership, dated August 31, 1987, filed for record September 8, 1987, and recorded in Deed Book 11051, Page 100, aforesaid records; as re-recorded on October 20, 1987 in Deed Book 11128, Page 89, aforesaid records; and as affected by that certain Agreement Re-Modification of Bridge Agreement by and between AMC, Inc., a Georgia corporation and The Equitable Life Assurance Society of the United States, a New York corporation, dated April 22, 1999, filed for record June 30, 1999, and recorded in Deed Book 26975, Page 81, aforesaid records (the “Bridge Agreement”).
Ladies and Gentlemen:
The undersigned is the successor to the “Mart” under the Bridge Agreement and the current owner of the “Mart Property” described in the Bridge Agreement and has been advised that ___________ or its assigns (either, the “Purchaser”) proposes to purchase that certain real property described in the Bridge Agreement as the “Inforum” pursuant to that certain Purchase and Sale Agreement dated April __, 2017 by and between 250 Williams Street LLC (“Cousins”) and Purchaser (the “Purchase Agreement”). In connection with that transaction, Cousins and Purchaser have, and do hereby, request that the undersigned make certain certifications relative to the Lease.
Therefore, the undersigned hereby certify(ies) to Purchaser and Cousins as follows:
|
|
1.
|
The Bridge Agreement has not been modified or amended except as set forth herein.
|
|
|
2.
|
The undersigned is/are the present owners of the property described as the “Mart Property” in the Bridge Agreement.
|
|
|
3.
|
The Bridge Agreement is in full force and effect and constitutes the complete agreement between the undersigned and Cousins with respect to the bridge.
|
|
|
4.
|
To the best knowledge of the undersigned, Cousins, as of the date hereof, has fully performed all of its obligations under the Bridge Agreement and is not in default thereunder; and no event has occurred which with the giving of notice or passage of time, or both, would constitute a default by Cousins under the Bridge Agreement.
|
|
|
5.
|
The undersigned has/have the full power and authority to execute this Agreement.
|
|
|
6.
|
The undersigned acknowledge and agree that the Purchaser and Cousins will rely on this certificate in connection with the acquisition by Purchaser of the Inforum Property from the Cousins.
|
IN WITNESS WHEREOF, the undersigned each have caused this statement to be duly executed as of the day and year first above written.
EXHIBIT L-2
FORM OF SELLER BRIDGE ESTOPPEL
[PURCHASER]
Re:
Bridge Agreement, by and among the City of Atlanta, a
municipal corporation organized and existing pursuant to the laws of the S
tate of Georgia; the Atlanta Apparel Mart, a limited partnership organized and existing pursuant to the laws of the State of Georgia and Inforum, Ltd., a Georgia limited partnership, dated August 31, 1987, filed for record September 8, 1987, and recorded in Deed Book 11051, Page 100, aforesaid records; as re-recorded on October 20, 1987 in Deed Book 11128, Page 89, aforesaid records; and as affected by that certain Agreement Re-Modification of Bridge Agreement by and between AMC, Inc., a Georgia corporation and The Equitable Life Assurance Society of the United States, a New York corporation, dated April 22, 1999, filed for record June 30, 1999, and recorded in Deed Book 26975, Page 81, aforesaid records (the “Bridge Agreement”).
Ladies and Gentlemen:
250 Williams Street LLC (“Cousins”) is the successor to the “Inforum” under the Bridge Agreement and the current owner of the “Inforum Property” described in the Bridge Agreement and has entered into that certain Purchase and Sale Agreement dated April __, 2017 (the “Purchase Agreement”) by and between Cousins and ________ (the “Purchaser”) for the sale of the “Inforum Property.”
Cousins hereby certifies to Purchaser as follows, in each case to the best of Cousins’ knowledge:
|
|
1.
|
The Bridge Agreement has not been modified or amended except as set forth herein.
|
|
|
2.
|
___________________ (the “Mart Owners”) is/are the present owners of the property described as the “Mart Property” in the Bridge Agreement.
|
|
|
3.
|
The Bridge Agreement is in full force and effect and constitutes the complete agreement between Cousins and the Mart Owners with respect to the bridge.
|
|
|
4.
|
Cousins, as of the date hereof, has fully performed all of its obligations under the Bridge Agreement and is not in default thereunder; and no event has occurred which with the giving of notice or passage of time, or both, would constitute a default by Cousins under the Bridge Agreement.
|
|
|
5.
|
The undersigned has/have the full power and authority to execute this Agreement.
|
|
|
6.
|
The undersigned acknowledge and agree that the Purchaser will rely on this certificate in connection with the acquisition by Purchaser of the Inforum Property from the Cousins.
|
The certifications made by Cousins herein shall be subject to the limitations set forth in Section 5.3 of the Purchase Agreement, as if such certifications were representations made in Section 5.2 of the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned each have caused this statement to be duly executed as of the day and year first above written.
SCHEDULE 5.1(b)
SCHEDULE OF PENDING ACTIONS
None.
Exhibit 10.2
ASSIGNMENT OF PURCHASE AGREEMENT
THIS ASSIGNMENT OF PURCHASE AGREEMENT
(the “Assignment”) is made and entered into as of June ____, 2017 by and between CARTER VALIDUS PROPERTIES II, LLC, a Delaware limited liability company ("Assignor"), and DCII-250 WILLIAMS STREET NW, LLC, a Delaware limited liability company ("Assignee").
RECITALS
A. Assignor is the Purchaser under that certain Purchase and Sale Agreement made by and between 250 Williams Street LLC, a Georgia limited liability company (“Seller”), and Assignor as Purchaser, having an effective date of April 19, 2017, as may be amended from time to time (collectively, the “Agreement”), relative to certain Land, Improvements, Personal Property, Ground Lease Documents, Tenant Lease Rights, and Intangibles (as defined in the Agreement), located or necessary for the operations of the premises located at 250 Williams Street, Atlanta, Georgia (the “Property”).
B. Assignor wishes to assign to Assignee all of its rights under the Agreement in return for Assignee’s agreement to assume all of Assignor’s obligations under the Agreement.
NOW, THEREFORE,
for valuable consideration to Assignor in hand paid by Assignee, the receipt and sufficiency of which are hereby acknowledged by Assignor, the parties agree as follows:
Assignor does hereby sell, assign, transfer and deliver unto Assignee all of Assignor's right, title, interest, and obligations in, to, and under the Agreement (including, without limitation, the rights and obligations of Assignor with respect to all deposit monies paid by Assignor under the Agreement) regarding and relating to the Property which is the subject of the Agreement. Assignee hereby reaffirms the representations and warranties made by Assignor in the Agreement. Assignor and Assignee hereby represent and warrant that Assignee is controlled by or under common co-control with Assignor and/or Carter Validus Operating Partnership II L.P.
Assignee, by the acceptance hereof, hereby assumes all rights and obligations of Assignor as Purchaser under the Agreement and agrees to be bound by all of the terms and conditions of the Agreement. This Assignment shall not release or otherwise relieve Assignor from any obligations under the Agreement, and Assignor shall remain primarily liable to Seller for the performance of any such liabilities or obligations notwithstanding this Assignment.
[Signature page follows]
IN WITNESS WHEREOF, the parties have executed this Assignment as of the day and year first above written.
|
|
|
WITNESSES:
/s/ Patrice M. Wolfe
Print Name:
Patrice M. Wolfe
/s/ Lisa A. Clarke
Print Name:
Lisa A. Clarke
|
ASSIGNOR:
Carter Validus Properties II, LLC,
a Delaware limited liability company
By:
/s/ Lisa Collado
Name: Lisa Collado
Its: Vice President
|
|
|
WITNESSES:
/s/ Patrice M Wolfe
Print Name:
Patrice M. Wolfe
/s/ Lisa A. Clarke
Print Name:
Lisa A. Clarke
|
ASSIGNEE:
DCII–250 WILLIAMS STREET NW, LLC,
a Delaware limited liability company
By: Carter Validus Operating Partnership II, LP, a Delaware limited partnership, its Sole Member
By: Carter Validus Mission Critical REIT II, Inc., a Maryland corporation, its General Partner
By:
/s/ Lisa Collado
Name: Lisa Collado
Its: Authorized Agent
|
|
|
[Signature Page to Assignment of Purchase Agreement]
Exhibit 10.3
ASSIGNMENT OF LANDLORD’S INTEREST IN LEASES
THIS ASSIGNMENT OF LANDLORD’S INTEREST IN LEASES (“Assignment”) is executed and entered into by and between 250 Williams Street LLC, a Georgia limited liability company (“Assignor”), and DCII-250 Williams Street NW, LLC, a Delaware limited liability company (“Assignee”).
WITNESSETH:
WHEREAS, Assignor is the owner or ground lessee of certain real property and improvements situated in Fulton County, Georgia, and described more particularly on
Exhibit A‑1
and
Exhibit A-2
attached hereto (“Property”); and
WHEREAS, simultaneously with the execution and delivery hereof Assignor is executing and delivering to Assignee certain instruments granting and conveying Assignor’s interest in and to the Property to Assignee; and
WHEREAS, Assignor, or Assignor’s predecessors in title, have heretofore entered into various tenant leases encumbering the Property, including, without limitation, the tenant leases described in
Exhibit B
attached hereto and by this reference made a part hereof (“Tenant Leases”); and
WHEREAS, Assignor desires to assign and transfer to Assignee all of the rights and benefits of Assignor in and to the Tenant Leases upon the terms hereinafter set forth.
NOW, THEREFORE, for and in consideration of the sum of TEN DOLLARS ($10) and other good and valuable consideration in hand paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby ASSIGN, TRANSFER, SET OVER, CONVEY and DELIVER unto Assignee, its legal representatives, successors and assigns, all of the rights, powers, privileges and interests of Assignor in and to any and all the Tenant Leases.
By acceptance hereof Assignee assumes and shall become obligated to keep, fulfill, observe, perform and discharge each and every covenant, duty, debt and obligation that may accrue and become performable, due or owing after the effective date hereof by Assignor under the terms, provisions and conditions of the Tenant Leases.
This Assignment is binding upon and shall inure to the benefit of the parties hereto, and their respective heirs, legal representatives, successors and assigns.
EXECUTED the ___ day of ________, 2017.
ASSIGNOR:
250 Williams Street LLC,
a Georgia limited liability company
By:
/s/ M. Colin Connolly
Name:
M. Colin Connolly
Title:
Executive Vice President
ASSIGNEE
:
DCII–250 WILLIAMS STREET NW, LLC,
a Delaware limited liability company
By: Carter Validus Operating Partnership II, LP, a Delaware limited partnership, its Sole Member
By: Carter Validus Mission Critical REIT II, Inc., a Maryland corporation, its General Partner
By:
/s/ Lisa Collado
Name: Lisa Collado
Its: Authorized Agent
[Signature Page Assignment of Landlord’s Interest in Leases]
EXHIBIT A-1
LEGAL DESCRIPTION OF THE LAND
(FEE PROPERTY)
All that tract or parcel of land lying and being in Land Lot 78 of the 14th District of Fulton County, Georgia and being more particularly described as follows:
Beginning at the point of intersection of the northern right-of-way line of Harris Street (having a 60-foot right-of-way) with the western right-of-way line of Williams Street (having a 60-foot right-of-way), and running thence North 89 degrees 49 minutes 42 seconds West, along said right-of-way line of Harris Street, a distance of 387.30 feet to the point of intersection of said right-of-way line of Harris Street with the eastern right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive (having a 60-foot right-of-way); thence North 00 degrees 44 minutes 41 seconds East, along said right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive, a distance of 407.09 feet to the point of intersection of right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive with the southern right-of-way line of Baker Street (having a 60-foot right-of-way); thence South 89 degrees 31 minutes 45 seconds East, along said right-of-way line of Baker Street, a distance of 385.21 feet to the point of intersection of said right-of-way line of Baker Street with said right-of-way line of Williams Street; thence South 00 degrees 27 minutes 07 seconds West, along said right-of-way line of Williams Street, a distance of 145.22 feet to a point on said right-of-way line of Williams Street; thence leaving said right-of-way line of Williams Street, and running North 89 degrees 31 minutes 49 seconds West a distance of 115.00 feet to a point; thence South 00 degrees 28 minutes 11 seconds West a distance of 31.34 feet to a point; thence North 89 degrees 31 minutes 49 seconds West a distance of 9.94 feet to a point; thence South 00 degrees 34 minutes 51 seconds West a distance of 33.42 feet to a point; thence South 89 degrees 01 minute 59 seconds East a distance of 125.03 feet to a point on sad right-of-way line of Williams Street; thence South 00 degrees 27 minutes 07 seconds West, along said right-of-way line of Williams Street, a distance of 194.00 feet to the Point of Beginning.
The above-described property is shown as 3.42050 acres on and is described according to plat of survey prepared for JPMorgan Chase Bank, N.A., its successors and assigns, J.P. Morgan Mortgage Capital Inc., 250 Williams Street LLC and Piedmont Title Insurance Agency, Inc. as agent for First American Title Insurance Company, by V.T. Hammond, Georgia Registered Land Surveyor No. 2554, Watts & Browning Engineers, Inc., dated June 15, 1998, last revised August 20, 2007, which said plat of survey is incorporated herein by this reference and made a part of this description.
EASEMENTS AND OTHER INTERESTS IN REAL PROPERTY CONTAINED IN THAT CERTAIN BRIDGE AGREEMENT BETWEEN THE CITY OF ATLANTA, THE ATLANTA APPAREL MART AND INFORUM, LTD., DATED AUGUST 31, 1987, RECORDED IN DEED BOOK 11051. PAGE 100, AFORESAID RECORDS; AS RERECORDED IN DEED BOOK 11128, PAGE 89. AFORESAID RECORDS; AGREEMENT BETWEEN THE ATLANTA APPAREL MART AND INFORUM ASSOCIATES, DATED OCTOBER 20, 1987, RECORDED IN DEED BOOK 11131, PAGE 319. AFORESAID RECORDS; AS MODIFIED BY AGREEMENT RE MODIFICATION OF BRIDGE AGREEMENT BETWEEN AMC. INC. AND EQUITABLE LIFE ASSURANCE OF THE UNITED STATES, DATED APRIL 22, 1999, RECORDED IN DEED BOOK 26975, PAGE 81, AFORESAID RECORDS.
EXHIBIT A-2
LEGAL DESCRIPTION OF THE PROPERTY
(LEASEHOLD ESTATE)
ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN LAND LOT 78 OF THE 14TH DISTRICT OF FULTON COUNTY, GEORGIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A POINT LOCATED ON THE WESTERN RIGHT-OF-WAY LINE OF WILLIAMS STREET (HAVING A 60-FOOT RIGHT-OF-WAY), SAID POINT BEING LOCATED NORTH 00 DEGREES 27 MINUTES 07 SECONDS EAST A DISTANCE OF 194.00 FEET, AS MEASURED ALONG SAID RIGHT-OF-WAY OF WILLIAMS STREET, FROM THE POINT OF INTERSECTION OF SAID RIGHT-OF-WAY LINE OF WILLIAMS STREET WITH THE NORTHERN RIGHT-OF-WAY LINE OF HARRIS STREET (HAVING A 60-FOOT RIGHT-OF- WAY); AND RUNNING THENCE NORTH 89 DEGREES 01 MINUTE 59 SECONDS WEST A DISTANCE OF 125.03 FEET TO A POINT; THENCE NORTH 00 DEGREES 34 MINUTES 51 SECONDS EAST A DISTANCE OF 33.42 FEET TO A POINT; THENCE SOUTH 89 DEGREES 31 MINUTES 49 SECONDS EAST A DISTANCE OF 9.94 FEET TO A POINT; THENCE NORTH 00 DEGREES 28 MINUTES 11 SECONDS EAST A DISTANCE OF 31.34 FEET TO A POINT; THENCE SOUTH 89 DEGREES 31 MINUTES 49 SECONDS EAST A DISTANCE OF 115.00 FEET TO A POINT ON SAID RIGHT-OF-WAY LINE OF WILLIAMS STREET; THENCE SOUTH 00 DEGREES 27 MINUTES 07 SECONDS WEST, ALONG SAID RIGHT-OF-WAY LINE OF WILLIAMS STREET, A DISTANCE OF 65.84 FEET TO THE POINT OF BEGINNING.
EXHIBIT B
SCHEDULE OF TENANT LEASES
American Cancer Society
|
|
•
|
Lease Agreement dated as of August 1, 2006 by and between Cousins Properties Inc. and American Cancer Society, Inc.
|
|
|
•
|
First Amendment to Lease Agreement dated as of February 7, 2007 by and between Cousins Properties Inc., a Georgia corporation and American Cancer Society, Inc., a New York not-for-profit corporation.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of June 6, 2007 by and between Cousins Properties Inc., a Georgia corporation and American Cancer Society, Inc., a New York not-for-profit corporation.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of October 8, 2007 by and between 250 Williams Street LLC, a Georgia limited liability company and American Cancer Society, Inc., a New York not-for-profit corporation.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of December 1, 2007 by and between 250 Williams Street, LLC and American Cancer Society, Inc.
|
|
|
•
|
Fifth Amendment to Lease Agreement dated as of June 15, 2010 by and between 250 Williams Street, LLC and American Cancer Society, Inc.
|
|
|
•
|
Sixth Amendment to Lease Agreement dated as of March 8, 2012 by and between 250 Williams Street, LLC and American Cancer Society, Inc.
|
|
|
•
|
Seventh Amendment to Lease Agreement dated as of November 30, 2012 by and between 250 Williams Street LLC, a Georgia limited liability company and American Cancer Society, Inc., a New York corporation.
|
|
|
•
|
Eighth Amendment to Lease Agreement dated as of October 26, 2015 by and between 250 Williams Street, LLC, a Georgia limited liability company and American Cancer Society, Inc., a New York Corporation.
|
|
|
•
|
Ninth Amendment to Lease Agreement dated as of July 12, 2016 by and between 250 Williams Street, LLC, a Georgia limited liability company and American Cancer Society, Inc., a New York Corporation.
|
CenturyLink fka Savvis fka Cable and Wireless
|
|
•
|
Lease agreement dated as of July 16, 1999 by and between Cousins Properties Incorporated and Cable & Wireless USA, Inc., a District of Columbia corporation
|
|
|
•
|
First Amendment to lease dated as of April 5, 2001 by and between Cousins Properties Incorporated, a Georgia corporation and Cable & Wireless USA, Inc., a District of Columbia corporation
|
|
|
•
|
Second Amendment to lease dated as of October 1, 2004 by and between Cousins Properties Incorporated, a Georgia corporation and SAVVIS, Inc., a Missouri corporation
|
|
|
•
|
Third Amendment to lease dated as of May 5, 2014 by and between 250 Williams Street, LLC, a Georgia corporation and SAVVIS Communications Corporation, a Missouri corporation d/b/a CenturyLink Technology Solutions
|
|
|
•
|
Fourth Amendment to lease dated as of May 5, 2014 by and between 250 Williams Street, LLC, a Georgia corporation and SAVVIS Communications Corporation, a Missouri corporation d/b/a CenturyLink Technology Solutions
|
Georgia Lottery Corporation
|
|
•
|
Lease Agreement dated as of April 15, 1993 by and between Inforum Associates, a Georgia general partnership, and Georgia Lottery Corporation, a body politic and an instrumentality of the State of Georgia.
|
|
|
•
|
First Amendment to Lease Agreement dated as of July 1, 1993 by and between Inforum Associates, a Georgia general partnership and Georgia Lottery Corporation, a body politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of February 26, 2002 by and between Cousins Properties Inc, a Georgia corporation and Georgia Lottery Corporation, a body politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of July 1, 2008 by and between 250 Williams St LLC, and Georgia Lottery Corporation, a body politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of September 18, 2008 by and between 250 Williams St LLC, and Georgia Lottery Corporation, a body politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Fifth Amendment to Lease Agreement dated as of September 3, 2013 by and between 250 Williams Street LLC, a Georgia limited liability company and Georgia Lottery Corporation, a body corporate and politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Sixth Amendment to Lease Agreement dated as of April 3, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company and Georgia Lottery Corporation, a body corporate and politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Seventh Amendment to Lease Agreement dated as of August 21, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company and Georgia Lottery Corporation, a body corporate and politic and an instrumentality of the State of Georgia.
|
|
|
•
|
Eighth Amendment to Lease Agreement dated as of October 15, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company and Georgia Lottery Corporation.
|
|
|
•
|
Sublease dated as of October 13, 1993 by and between Georgia Lottery Corporation, a body corporate and politic and an instrumentality of the State of Georgia and GTECH Corporation, a corporation organized under the laws of the State of Delaware.
|
|
|
•
|
First Sublease Modification and Renewal Agreement dated as of June 30, 2003 by and between Georgia Lottery Corporation, a public corporation and an instrumentality of the
|
State of Georgia and GTECH Corporation, a corporation organized under the laws of the State of Delaware.
|
|
•
|
Second Sublease Modification and Renewal Agreement dated as of June 3, 2015 by and between Georgia Lottery Corporation, a public corporation and an instrumentality of the State of Georgia and GTECH Corporation, a corporation organized under the laws of the State of Delaware.
|
Inteliquent Inc fka Neutral Tandem
|
|
•
|
Lease Agreement dated as of March 31, 2005 by and between Cousins Properties Inc, and Neutral Tandem, Inc.
|
|
|
•
|
First Amendment to Lease Agreement dated as of August 4, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company and Inteliquent Inc, a Delaware corporation formerly known as Neutral Tandem, Inc.
|
Internap Network Services
|
|
•
|
Lease Agreement dated as of January 10, 2000 by and between Cousins Properties Inc, a Georgia Corporation, and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
First Amendment to Lease Agreement dated as of May 5, 2000 by and between Cousins Properties Inc, a Georgia corporation and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of October 31, 2002 by and between Cousins Properties Inc, a Georgia corporation and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of June 18, 2004 by and between Cousins Properties Inc, a Georgia corporation and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of October 1, 2004 by and between Cousins Properties Inc, a Georgia corporation and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Fifth Amendment to Lease Agreement dated as of March 28, 2005 by and between Cousins Properties Inc, a Georgia corporation and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Sixth Amendment to Lease Agreement dated as of June 13, 2008 by and between 250 Williams St LLC, a Georgia limited liability company and CO and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Seventh Amendment to Lease Agreement dated as of November 10, 2008 by and between 250 Williams St LLC, a Georgia limited liability company and CO and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Eighth Amendment to Lease Agreement dated as of February 26, 2009 by and between 250 Williams St LLC, a Georgia limited liability company and CO and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Ninth Amendment to Lease Agreement dated as of October 29, 2012 by and between 250 Williams St LLC, a Georgia limited liability company and CO Space Properties, LLC, a Delaware limited liability company.
|
|
|
•
|
Tenth Amendment to Lease Agreement dated as of October 6, 2014 by and between 250 Williams St LLC, a Georgia limited liability company and Internap Network Services Corporation, a Delaware corporation.
|
|
|
•
|
Eleventh Amendment to Lease Agreement dated as of October 26, 2015 by and between 250 Williams St LLC, a Georgia limited liability company and Internap Network Services Corporation, a Delaware corporation.
|
|
|
•
|
Twelfth Amendment to Lease Agreement dated as of July 5, 2016 by and between 250 Williams St LLC, a Georgia limited liability company and Internap Network Services Corporation, a Delaware corporation.
|
Island News Stand
|
|
•
|
Lease Agreement dated as of September 10, 1992 by and between Inforum Associates, a Georgia general partnership and Peachtree New Stand, Inc., a Georgia corporation.
|
|
|
•
|
The assignment of lease and amendment to lease dated as of April 16, 1993 by and between Inforum Associates, a Georgia general partnership, Peachtree News Stand, Inc., a Georgia corporation and Island News Stand, Inc., a Georgia Corporation.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of December 1, 2002 by and between Cousins Properties Incorporated, a Georgia corporation, and Island News Stand Inc, a Georgia corporation.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of January 24, 2006 by and between Cousins Properties Incorporated, a Georgia corporation, and Island News Stand Inc, a Georgia corporation.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of February 20, 2007 by and between Cousins Properties Incorporated, a Georgia corporation, and Island News Stand Inc, a Georgia corporation.
|
|
|
•
|
Fifth Amendment to Lease Agreement dated as of March 20, 2007 by and between Cousins Properties Incorporated, a Georgia corporation, and Island News Stand Inc, a Georgia corporation.
|
|
|
•
|
Sixth Amendment to Lease Agreement dated as of September 21, 2007 by and between 250 Williams Street LLC and Island News Stand, Inc.
|
|
|
•
|
The assignment and assumption of lease and amendment to lease dated as of July 16, 2008 by and among 250 Williams Street LLC, a Georgia limited liability company, Island News Stand, Inc., a Georgia corporation, and Ray P. Lewis and Mariam H. Lewis.
|
|
|
•
|
The assignment and assumption of, and Eighth Amendment to, Lease Agreement dated as of February 22, 2012 by and between 250 Williams Street LLC, Ray P. Lewis and Mariam H. Lewis, and Island News Stand, Inc.
|
|
|
•
|
Ninth Amendment to Lease Agreement dated as of May 14, 2015 by and between 250 Williams Street LLC, a Georgia limited liability company, and Island News Stand Inc, a Georgia corporation.
|
|
|
•
|
Tenth Amendment to Lease Agreement dated as of June 13, 2016 by and between 250 Williams Street LLC, a Georgia limited liability company, and Island News Stand Inc, a Georgia corporation.
|
Level 3 Communications
|
|
•
|
Lease Agreement dated as of February 5, 1999 by and between The Equitable Life Assurance Society of the United States and Focal Communications Corporation.
|
|
|
•
|
First Amendment to Lease Agreement dated as of May 11, 1999 by and between The Equitable Life Assurance Society of the United States and Focal Communications Corporation.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of June 27, 2003 by and between Cousins Properties Incorporated, a Georgia Corporation and Focal Communications Corporation, a Delaware corporation.
|
|
|
•
|
Consent to Assignment dated as of April 20, 2004 by and between Cousins Properties Incorporated, a Georgia Corporation, Focal Communications Corporation, a Delaware corporation, and Corvis Corporation, a Delaware corporation.
|
|
|
•
|
Third Amendment to Lease Agreement dated as of May 24, 2007 by and between Cousins Properties Incorporated, a Georgia corporation and Level 3 Communications, LLC, a Delaware limited liability company.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of December 26, 2012 by and between 250 Williams Street LLC, A Georgia limited liability company, and Level 3 Communications, LLC, a Delaware limited liability company.
|
|
|
•
|
Notice to Exercise Renewal Option dated as of March 28, 2014 by Level 3 Communications, LLC (the “tenant”) to 250 Williams Street, LLC (the “landlord”)
|
|
|
•
|
Lease Agreement dated as of June 9, 1995 by and between The Equitable Life Assurance Society of the United States and Allnet Communication Services, Inc.
|
|
|
•
|
First Amendment to Lease Agreement dated as of March 6, 1996 by and between The Equitable Life Assurance Society of the United States and Frontier Communications Services, Inc, a Michigan corporation: formerly known as Allnet Communication Services, Inc.
|
|
|
•
|
Second Amendment to Lease Agreement dated as of January 7, 1996 by and between The Equitable Life Assurance Society of the United States and Frontier Communications
|
Services, Inc, a Michigan corporation: formerly known as Allnet Communication Services, Inc.
|
|
•
|
Third Amendment to Lease Agreement dated as of November 3, 1998 by and between The Equitable Life Assurance Society of the United States and Frontier Communications Services, Inc, a Michigan corporation.
|
|
|
•
|
Fourth Amendment to Lease Agreement dated as of December 23, 2004 by and between Cousins Properties Incorporated, a Georgia Corporation and Global Crossing Telecommunications, Inc.
|
|
|
•
|
Fifth Amendment to Lease Agreement dated as of August 18, 2005 by and between Cousins Properties Incorporated, a Georgia Corporation and Global Crossing Telecommunications, Inc.
|
|
|
•
|
Sixth Amendment to Lease Agreement dated as of December 26, 2012 by and between 250 Williams Street LLC, A Georgia limited liability company, and Level 3 Communications, LLC, a Delaware limited liability company.
|
MCI Metro Access
|
|
•
|
Lease dated as of October 31, 1995 by and between The Equitable Life Assurance Society of the US and MCIMetro Access Transmission Services, Inc.
|
|
|
•
|
First Amendment to lease dated as of April 21, 2003 by and between Cousins Properties Incorporated, a Georgia corporation, as successor-in-interest to the Equitable Life Assurance Society of the US and MCIMetro Access Transmission Services LLC, a Delaware limited liability company.
|
|
|
•
|
Second Amendment to lease dated as of July 27, 2005 by and between Cousins Properties Incorporated, a Georgia corporation, as successor-in-interest to the Equitable Life Assurance Society of the US and MCIMetro Access Transmission Services LLC.
|
|
|
•
|
Third Amendment to lease dated as of July 27, 2010 by and between 250 Williams St LLC, a Georgia Limited liability company, and MCIMetro Access Transmission Services LLC, a Delaware limited liability company.
|
|
|
•
|
Fourth Amendment to lease dated as of July 8, 2013 by and between 250 Williams St LLC, a Georgia Limited liability company, and MCIMetro Access Transmission Services LLC, a Delaware limited liability company.
|
|
|
•
|
Fifth Amendment to lease dated as of December 14, 2016 by and between 250 Williams St LLC, a Georgia Limited liability company, and MCI Communications Services, Inc., a Delaware corporation.
|
|
|
•
|
Fifth Amendment to lease dated as of January 5, 2016 by and between 250 Williams St LLC, a Georgia Limited liability company, and MCI Access Transmission Services LLC, a Delaware limited liability company.
|
National Center for Civil and Human Rights
|
|
•
|
Lease dated as of March 5, 2014 by and between 250 Williams St LLC and National Center for Civil and Human Rights, Inc.
|
Parkview Cafe
|
|
•
|
Lease dated as of July 12, 2005 by and between Cousins Properties Incorporated and Su Myong Kim and Kyung Geun Park, doing business as Parkview Café.
|
|
|
•
|
First Amendment to lease dated as of June 30, 2010 by and between 250 Williams St LLC, a Georgia limited liability company and Potomac Cuisinary Services, Inc., a Georgia corporation.
|
|
|
•
|
Second Amendment to lease dated as of November 3, 2015 by and between 250 Williams St LLC, a Georgia limited liability company and Potomac Cuisinary Services, Inc., a Georgia corporation dba Park View Café.
|
TelX Atlanta
|
|
•
|
Lease dated as of June 30, 2016 by and between 250 Williams St LLC, a Georgia limited liability company and TelX Atlanta 2, LLC.
|
US South Communications (InComm)
|
|
•
|
Lease Agreement dated as of March 6, 1996 by and between The Equitable Life Assurance Society of the United States and US South Communications, Inc.
|
|
|
•
|
First Amendment to lease dated as of February 23, 1999 by and between The Equitable Life Assurance Society of the United States and US South Communications, Inc.
|
|
|
•
|
License and Temporary Use Agreement dated as of March 27, 2000 by and between Cousins Properties Incorporated, a Georgia corporation, and US South Communications, Inc., a Georgia Corporation.
|
|
|
•
|
Second Amendment to lease dated as of May 2, 2000 by and between Cousins Properties Incorporated and US South Communications, Inc.
|
|
|
•
|
Third Amendment to lease dated as of February 13, 2002 by and between Cousins Properties Incorporated, a Georgia Corporation, as successor-in-interest to the Equitable Life Assurance Society of the United States and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Fourth Amendment to lease dated as of December 12, 2002 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Fifth Amendment to lease dated as of June 29, 2004 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Sixth Amendment to lease dated as of December 1, 2004 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Seventh Amendment to lease dated as of March 3, 2005 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Eighth Amendment to lease dated as of November 8, 2005 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Ninth Amendment to lease dated as of January 29, 2007 by and between Cousins Properties Incorporated, a Georgia Corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
License and Temporary Use Agreement dated as of March 27, 2007 by and between Cousins Properties Incorporated, a Georgia corporation, and US South Communications, Inc., a Georgia Corporation.
|
|
|
•
|
Tenth Amendment to lease dated as of May 23, 2007 by and between Cousins Properties Incorporated, a Georgia corporation and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
Eleventh Amendment to lease dated as of October 8, 2007 by and between 250 Williams Street LLC, a Georgia corporation, and US South Communications, Inc., a Georgia corporation.
|
|
|
•
|
License and Temporary Use Agreement dated as of February 14, 2008 by and between 250 Williams Street, LLC, a Georgia corporation, and US South Communications, Inc., a Georgia Corporation.
|
|
|
•
|
License and Temporary Use Agreement dated as of February 27, 2009 by and between 250 Williams Street, LLC, a Georgia limited liability company, and US South Communications, Inc., a Georgia Corporation.
|
|
|
•
|
License and Temporary Use Agreement dated as of August 31, 2009 by and between 250 Williams Street LLC, a Georgia Limited liability company, and US South Communications, Inc., a Georgia Corporation.
|
|
|
•
|
License and Temporary Use Agreement dated as of March 18, 2010 by and between 250 Williams Street LLC, a Georgia Limited liability company, and US South Communications, Inc., a Colorado Corporation.
|
|
|
•
|
License and Temporary Use Agreement dated as of May 26, 2010 by and between 250 Williams Street LLC, a Georgia Limited liability company, and US South Communications, Inc., a Colorado Corporation.
|
|
|
•
|
Twelfth Amendment to lease dated as of August 18, 2010 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Thirteenth Amendment to lease dated as of January 20, 2012 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
License and temporary use agreement dated as of May 28, 2013 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
License and temporary use agreement dated as of October 2, 2013 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
First Amendment to license and temporary use agreement dated as of November 28, 2013 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Second Amendment to license and temporary use agreement dated as of June 16, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
First Amendment to license and temporary use agreement dated as of October 16, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
License and temporary use agreement dated as of October 16, 2014 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Fourteenth Amendment to lease dated as of April 3, 2015 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
First Amendment to license and temporary use agreement dated as of April 3, 2015 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Third Amendment to license and temporary use agreement dated as of April 3, 2015 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Fifteenth Amendment to lease dated as of October 26, 2015 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Second Amendment to license and temporary use agreement dated as of April 20, 2016 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Sixteenth Amendment to lease dated as of June 30, 2016 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
|
|
•
|
Third Amendment to license and temporary use agreement dated as of September 27, 2016 by and between 250 Williams Street LLC, a Georgia limited liability company, and US South Communications, Inc., a Colorado corporation.
|
Verizon Wireless (MCI WorldCom)
|
|
•
|
Lease agreement dated as of April 12, 1994 by and between Inforum Associates, a Georgia general partnership and MFS Intelenet of Georgia, Inc., a Delaware corporation.
|
|
|
•
|
First Amendment to lease agreement dated as of July 2, 1996 by and between The Equitable Life Assurance Society of the United States and MFS Intelenet of Georgia, Inc.
|
|
|
•
|
Second Amendment to lease agreement dated as of April 21, 2003 by and between Cousins Properties Incorporated, a Georgia corporation, as successor-in-interest to Inforum Associates, a Georgia general partnership, and MCI Worldcom Communications, Inc, a Delaware corporation.
|
|
|
•
|
Third Amendment to lease agreement dated as of May 5, 2009 by and between Cousins Properties Incorporated, a Georgia corporation, as successor-in-interest to Inforum Associates, a Georgia general partnership, and MCI Worldcom Communications, Inc, a Delaware corporation.
|
|
|
•
|
Fourth Amendment to lease agreement dated as of November 13, 2013 by and between 250 Williams Street LLC, a Georgia limited liability company, and MCI Communications Services, Inc., a Delaware corporation.
|
Exhibit 10.4
LOAN AGREEMENT
Dated as of June 15, 2017
Between
DCII-250 WILLIAMS STREET NW, LLC
as Borrower
and
KEYBANK NATIONAL ASSOCIATION
,
as Lender
Loan No. 10171391
TABLE OF CONTENTS
Page
Section 2.1
Loan Commitment; Disbursement to Borrower
37
2.1.1
Agreement to Lend and Borrow
37
2.1.2
Single Disbursement to Borrower
37
2.1.3
The Note, Security Instrument and Loan Documents
37
2.2.2
Interest Calculation
38
2.5.1
Voluntary Defeasance
39
2.5.2
Defeasance Collateral Account
41
2.5.3
Successor Borrower
42
2.6.1
Release of Property
42
2.7.1
Clearing Account
43
2.7.2
Cash Management Account
44
2.7.3
Payments Received under the Cash Management Agreement
45
2.7.4
Setup of the Cash Management Account
45
4.1.8
Full and Accurate Disclosure
48
4.1.11
Financial Information
48
4.1.13
Federal Reserve Regulations
49
4.1.14
Utilities and Public Access
49
4.1.15
Not a Foreign Person
49
4.1.22
Certificate of Occupancy; Licenses
50
4.1.29
Filing and Recording Taxes
51
4.1.30
Special Purpose Entity / Separateness / No Prohibited Entity / Ownership Structure
51
4.1.31
Management Agreement
52
4.1.33
No Change in Facts or Circumstances; Disclosure
52
4.1.34
Investment Company Act
52
4.1.36
Principal Place of Business; State of Organization
53
4.1.37
Environmental Representations and Warranties
53
4.1.38
Cash Management Account
53
5.1.1
Existence; Compliance with Legal Requirements
55
5.1.2
Taxes and Other Charges
55
5.1.4
Access to Property
56
5.1.5
Notice of Default
56
5.1.6
Cooperate in Legal Proceedings
56
5.1.7
Perform Loan Documents
57
5.1.8
Award and Insurance Benefits
57
5.1.9
Further Assurances
57
5.1.10
Principal Place of Business, State of Organization
57
5.1.12
Business and Operations
60
5.1.13
Title to the Property
61
5.1.14
Costs of Enforcement
61
5.1.17
Intentionally Omitted
62
5.1.18
Confirmation of Representations
62
5.1.19
Environmental Covenants
62
5.1.22
Operation of Property
65
5.2.1
Operation of Property
70
5.2.4
Change In Business
71
5.2.5
Debt Cancellation
71
5.2.7
No Joint Assessment
71
5.2.8
Intentionally Omitted
71
7.3.1
Replacement Reserve Fund
86
7.3.2
Disbursements from Replacement Reserve Account
86
7.3.3
Performance of Replacements
88
7.3.4
Failure to Make Replacements
90
7.3.5
Balance in the Replacement Reserve Account
90
7.4.1
Deposits to Rollover Reserve Fund
90
7.4.2
Withdrawal of Rollover Reserve Funds
91
7.5.1
Deposits to Excess Cash Flow Reserve Fund
91
7.5.2
Release of Excess Cash Flow Reserve Funds
91
7.7.1
Deposits to Major Tenant Rollover Reserve Fund
92
7.7.2
Withdrawal of Major Tenant Rollover Reserve Fund
93
7.8.1
Rent Concession Reserve Deposit
93
7.8.2
Release of Rent Concession Reserve Funds
93
9.1.1
Sale of Notes and Securitization
97
9.1.2
Securitization Costs
99
Section 10.16
No Joint Venture or Partnership; No Third Party .Beneficiaries
108
Section 10.27
Modification to Include Taxable REIT Subsidiary
111
SCHEDULES
Schedule I – Rent Roll
Schedule II – Intentionally Omitted
Schedule III – Organizational Chart of Borrower
Schedule IV – Tenant Direction Letter Form
LOAN AGREEMENT
THIS LOAN AGREEMENT
is made as of June 15, 2017 (this “
Agreement
”), between
KEYBANK NATIONAL ASSOCIATION
, a national banking association, having an address at 11501 Outlook, Suite 300, Overland Park, Kansas 66211 (“
Lender
”) and
DCII-250 WILLIAMS STREET NW, LLC,
a Delaware limited liability company,
having its principal place of business at 4890 W. Kennedy Boulevard, Suite 650, Tampa, Florida 33609 (“
Borrower
”).
RECITALS:
A. Borrower desires to obtain the Loan (as hereinafter defined) from Lender.
B. Lender is willing to make the Loan to Borrower, subject to and in accordance with the terms of this Agreement and the other Loan Documents (as hereinafter defined).
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I - DEFINITIONS; PRINCIPLES OF CONSTRUCTION
.
Section 1.1
Definitions
. For all purposes of this Agreement, except as otherwise expressly required or unless the context clearly indicates a contrary intent:
“
Accrual Period
” means the period commencing on and including the first (1st) day of each calendar month during the term of the Loan and ending on and including the final calendar date of such calendar month; however, the initial Accrual Period shall commence on and include the Closing Date and shall end on and include the final calendar date of the calendar month in which the Closing Date occurs.
“
Action
” has the meaning set forth in
Section 10.3
hereof.
“
Additional Insolvency Opinion
” means any subsequent Insolvency Opinion.
“
Additional Permitted Transfer
” has the meaning set forth in
Section 5.2.10(f)
hereof.
“
Affiliate
” means, as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common Control with such Person or is a director or officer of such Person or of an Affiliate of such Person.
“
Affiliated Manager
” means any Manager in which Borrower, or Guarantor has, directly or indirectly, any legal, beneficial or economic interest.
“
Agent
” means KeyBank National Association, or any successor Eligible Institution acting as Agent under the Cash Management Agreement.
“
Amortizing Monthly Payment
”
has the meaning set forth in the Loan Terms Table of the Note.
“
Amortizing Payment Date
” has the meaning set forth in the Loan Terms Table of the Note.
“
Annual Budget
” means an operating budget, including all planned Capital Expenditures, for the Property prepared by Borrower in accordance with
Section 5.1.11(g)
hereof for the applicable Fiscal Year or other period.
“
Approved Annual Budget
” has the meaning set forth in
Section 5.1.11(g)
hereof.
“
Assignment of Management Agreement
” means that certain Assignment of Management Agreement and Subordination of Management Fees, dated as of the date hereof, among Lender, Borrower and Manager, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
“
Availability Threshold
” means the greater of $30,000.00 or 1% of the initial principal balance of the Loan.
“
Award
” means any compensation paid by any Governmental Authority in connection with a Condemnation.
“
Bankruptcy Action
” means with respect to any Person (a) such Person filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (b) the filing of an involuntary petition against such Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (c) such Person filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (d) such Person consenting to or acquiescing in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for such Person or any portion of the Property; (e) such Person making an assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due.
“
Bankruptcy Code
” means Title 11 of the United States Code, 11 U.S.C. §101,
et
seq.
, as the same may be amended from time to time, and any successor statute or statutes and all rules and regulations from time to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights or any other Federal or state bankruptcy or insolvency law.
“
Borrower
” has the meaning set forth in the introductory paragraph hereto, together with its successors and permitted assigns.
“
Business Day
” means a day upon which commercial banks are not authorized or required by law to close in the city designated from time to time as the place for receipt of payments.
“
Capital Expenditures
” means, for any period, the amount expended for items capitalized under GAAP (including expenditures for building improvements or major repairs, leasing commissions and tenant improvements).
“
Cash Management Account
” has the meaning set forth in
Section 2.7.2
hereof.
“
Cash Management Agreement
” means that certain Cash Management Agreement, dated as of the date hereof, by and among Borrower, Lender and Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
“
Cash Sweep Event
” means the occurrence of: (a) an Event of Default; (b) any Bankruptcy Action of Borrower or Manager; (c) a DSCR Trigger Event, or (d) a Major Tenant Trigger Event.
“
Cash Sweep Event Cure
” means (a) if the Cash Sweep Event is caused solely by the occurrence of a DSCR Trigger Event, the achievement of a Debt Service Coverage Ratio of 1.30 to 1.00 or greater for two consecutive quarters based upon the trailing three (3) month period immediately preceding the date of determination, (b) if the Cash Sweep Event is caused by an Event of Default, the acceptance by Lender of a cure of such Event of Default (which cure Lender is not obligated to accept and may reject or accept in its discretion), (c) if the Cash Sweep Event is caused by a Bankruptcy Action of Manager, if Borrower replaces the Manager with a Qualified Manager under a Replacement Management Agreement within sixty (60) days of such Bankruptcy Action, or (d) if the Cash Sweep is caused by the occurrence of a Major Tenant Trigger Event, Borrower’s completion of the applicable Major Tenant Cure Event;
provided
,
however
, that, such Cash Sweep Event Cure set forth in this definition shall be subject to the following conditions, (i) no Event of Default shall have occurred and be continuing under this Agreement or any of the other Loan Documents, (ii) a Cash Sweep Event Cure may occur no more than a total of five (5) times in the aggregate during the term of the Loan, and (iii) Borrower shall have paid all of Lender’s reasonable expenses incurred in connection with such Cash Sweep Event Cure including, reasonable attorney’s fees and expenses. Notwithstanding any provision in this Agreement to the contrary, in no event shall Borrower have the right to cure any Cash Sweep Event caused by a Bankruptcy Action of Borrower.
“
Cash Sweep Period
” means each period commencing on the occurrence of a Cash Sweep Event and continuing until the earlier of (a) the Payment Date next occurring following the related Cash Sweep Event Cure, or (b) until payment in full of all principal and interest on the Loan and all other amounts payable under the Loan Documents or defeasance of the Loan in accordance with the terms and provisions of the Loan Documents.
“
Casualty
” has the meaning set forth in
Section 6.2
hereof.
“
Casualty Consultant
” has the meaning set forth in
Section 6.4(b)(iii)
hereof.
“
Casualty Retainage
” has the meaning set forth in
Section 6.4(b)(iv)
hereof.
“
Clearing Account
” has the meaning set forth in
Section 2.7.1
hereof.
“
Clearing Account Agreement
” means that certain Clearing Account - Deposit Account Control Agreement dated the date hereof among Borrower, Lender and Clearing Bank, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, relating to funds deposited in the Clearing Account.
“
Clearing Bank
” means the clearing bank which establishes, maintains and holds the Clearing Account, which shall be an Eligible Institution acceptable to Lender in its discretion.
“
Closing Date
” means the date of the funding of the Loan.
“
Code
” means the Internal Revenue Code of 1986, as amended, as it may be further amended from time to time, and any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.
“
Condemnation
” means a temporary or permanent taking by any Governmental Authority as the result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or any part of the Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting the Property or any part thereof.
“
Condemnation Proceeds
” has the meaning set forth in
Section 6.4(b)
hereof.
“
Control
” means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. “Controlled” and “Controlling” have correlative meanings.
“
Crowdfunding
” means, any offer or sale of equity or debt securities of Borrower, Principal or Guarantor or any Affiliate of any of them, involving or relating to direct or indirect interests, or any combination of direct or indirect interests, in any of the foregoing Persons, that is conducted or proposed to be conducted via the internet or through the use of other general solicitation or advertising of the investment opportunity to prospective investors by the issuer of such securities or an online or other funding portal in a transaction or series of transactions intended to be exempt from the registration requirements of the Securities Act of 1933, as amended, including but not limited to pursuant to the exemptions provided by Section 4(a)(6) thereof or Rule 506(c) promulgated thereunder, any other similar state securities law, or any similar transaction.
“
Current Owner
” has the meaning set forth in
Section 5.2.10(f)
hereof.
“
Debt
” means the outstanding principal amount of the Loan set forth in, and evidenced by, this Agreement and the Note together with all interest accrued and unpaid thereon and all other sums (including the Defeasance Payment Amount and any Yield Maintenance Premium (as defined in the Note) due to Lender in respect of the Loan under the Note, this Agreement, the Security Instrument or any other Loan Document.
“
Debt Service
” means, with respect to any particular period of time, the scheduled principal and interest payments due under this Agreement and the Note.
“
Debt Service Coverage Ratio
” means a ratio for the applicable period in which:
(a) the numerator is the Net Operating Income (excluding interest on credit accounts and using annualized operating expenses for any recurring expenses not paid monthly (e.g., Taxes and Insurance Premiums)) for such period as set forth in the statements required hereunder, without deduction for (i) actual management fees incurred in connection with the operation of the Property, or (ii) amounts paid to the Reserve Funds, less (A) management fees equal to the greater of (1) assumed management fees of 3.0% of Gross Income from Operations and (2) the actual management fees incurred, (B) annual Replacement Reserve Fund contributions equal to $0.25 per square foot of gross leasable area at the Property, and (C) annual Rollover Reserve Fund contributions equal to $2.30 per square foot of gross leasable area at the Property; and
(b) the denominator is an amount equal to the Amortizing Monthly Payment multiplied by the aggregate number of Payment Dates occurring during such period.
“
Default
” means the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would be an Event of Default.
“
Default Rate
” means, with respect to the Loan, a rate per annum equal to the lesser of (a) the Maximum Legal Rate or (b) five percent (5%) above the Interest Rate.
“
Defeasance Collateral Account
” has the meaning set forth in
Section 2.5.2
hereof.
“
Defeasance Date
” has the meaning set forth in
Section 2.5.1(a)(i)
hereof.
“
Defeasance Deposit
” means an amount equal to the remaining principal amount of the Note, the Defeasance Payment Amount, any costs and expenses incurred or to be incurred in the purchase of U.S. Obligations necessary to meet the Scheduled Defeasance Payments, any revenue, documentary stamp or intangible taxes or any other tax or charge due in connection with the transfer of the Note or otherwise required to accomplish the agreements of
Sections 2.4
and
2.5
hereof (including any fees and expenses of accountants, attorneys and the Rating Agencies incurred in connection therewith), and a defeasance processing fee in an amount determined by Lender in its discretion.
“
Defeasance Event
” has the meaning set forth in
Section 2.5.1(a)
hereof.
“
Defeasance Payment Amount
” means the amount which, when added to the remaining principal amount of the Note, will be sufficient to purchase U.S. Obligations providing the required Scheduled Defeasance Payments.
“
Disclosure Documents
” means, collectively and as applicable, any offering circular, prospectus, prospectus supplement, private placement memorandum or other offering document, in each case, in connection with a Securitization.
“
DSCR Trigger Event
” means, that as of the date of determination, the Debt Service Coverage Ratio based on the trailing three (3) month period immediately preceding the date of such determination is less than 1.25 to 1.00.
“
Eligible Account
” means a separate and identifiable account from all other funds held by the holding institution that is either (a) an account or accounts maintained with a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or (b) a segregated trust account or accounts 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 substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000.00 and subject to supervision or examination by federal and state authority. An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument.
“
Eligible Institution
” means KeyBank National Association or a depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations or commercial paper of which are rated at least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by Fitch in the case of accounts in which funds are held for thirty (30) days or less (or, in the case of accounts in which funds are held for more than thirty (30) days, the long-term unsecured debt obligations of which are rated at least “AA-” by Fitch and S&P and “Aa3” by Moody’s).
“
Embargoed Person
” means any person, entity or government subject to trade restrictions under U.S. law, including The USA PATRIOT Act (including the anti terrorism provisions thereof), the International Emergency Economic Powers Act, 50 U.S.C. §§ 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 including those related to Specially Designated Nationals and Specially Designated Global Terrorists, with the result that the investment in Borrower, or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan made by the Lender is in violation of law.
“
Environmental Indemnity
” means that certain Environmental Indemnity Agreement, dated as of the date hereof, executed by Borrower and Guarantor in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
“
Environmental Law
” means any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, relating to protection of human health or the environment, relating to Hazardous Substances, relating to liability for or costs of Remediation or prevention of Releases of Hazardous Substances or relating to liability for or costs of other actual or threatened danger to human health or the environment. Environmental Law includes the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors
Appropriation Act. Environmental Law also includes any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law: conditioning transfer of property upon a negative declaration or other approval of a governmental authority of the environmental condition of the Property; requiring notification or disclosure of Releases of Hazardous Substances or other environmental condition of the Property to any governmental authority or other Person, whether or not in connection with transfer of title to or interest in property; imposing conditions or requirements in connection with permits or other authorization for lawful activity; relating to nuisance, trespass or other causes of action related to the Property; or relating to wrongful death, personal injury, or property or other damage in connection with any physical condition or use of the Property.
“
Environmental Liens
” has the meaning set forth in
Section 5.1.19
hereof.
“
Environmental Report
” has the meaning set forth in
Section 4.1.37
hereof.
“
ERISA
” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and the rulings issued thereunder.
“
Event of Default
” has the meaning set forth in
Section 8.1(a)
hereof.
“
Excess Cash Flow
” has the meaning set forth in the Cash Management Agreement.
“
Excess Cash Flow Reserve Account
” has the meaning set forth in
Section 7.5
hereof.
“
Excess Cash Flow Reserve Fund
” has the meaning set forth in
Section 7.5
hereof.
“
Extraordinary Expense
” has the meaning set forth in
Section 5.1.11(h)
hereof.
“
Fiscal Year
” means each twelve (12) month period commencing on January 1 and ending on December 31 during each year of the term of the Loan.
“
Fitch
” means Fitch, Inc.
“
Foreclosure Sale
” has the meaning set forth in
Section 9(c)
of the Note.
“
GAAP
” means generally accepted accounting principles in the United States of America as of the date of the applicable financial report.
“
Governing State
” has the meaning set forth is
Section 10.3
hereof.
“
Governmental Authority
” means any court, board, agency, commission, office or other authority of any nature whatsoever for any governmental unit (foreign, federal, state, county, district, municipal, city or otherwise) whether now or hereafter in existence.
“
Gross Income from Operations
” means, during any period, all sustainable income as reported on the financial statements delivered by Borrower in accordance with this Agreement, computed in accordance with GAAP, derived from the ownership and operation of the Property
from whatever source during such period,
including
(i) Rents from Tenants that are in occupancy, open for business and paying full contractual rent without right of offset or credit, (ii) utility charges, (iii) escalations, (iv) forfeited security deposits, (v) interest on credit accounts, (vi) service fees or charges, (vii) license fees, (viii) parking fees, (ix) rent concessions or credits, (x) income from vending machines, (xi) business interruption or other loss of income or rental insurance proceeds, (xii) other required pass-throughs and (xiii) interest on Reserve Funds, if any, but
excluding
(i) Rents from month-to-month Tenants, Tenants during a free-rent period, or Tenants that are included in any Bankruptcy Action, (ii) sales, use and occupancy or other taxes on receipts required to be accounted for by Borrower to any Governmental Authority, (iii) refunds and uncollectible accounts, (iv) sales of furniture, fixtures and equipment, (v) Insurance Proceeds (other than business interruption or other loss of income or rental insurance), (vi) Awards, (vii) unforfeited security deposits, (viii) utility and other similar deposits and (ix) any disbursements to Borrower from the Reserve Funds, if any. Gross income shall not be diminished as a result of the Security Instrument or the creation of any intervening estate or interest in the Property or any part thereof.
“
Ground Lease
” means, collectively, that certain Lease Agreement dated September 5, 1968, between MRS. RUTH S. BARRETT, an individual (“Barrett”), as lessor, SUNSHINE PARKING, INC., a Tennessee corporation (“Sunshine”), as lessee, and KELLETT & CO. REAL ESTATE, C. G. AYCOCK REALTY CO., and WEYMAN & CO., as agent; as memorialized by that certain Memorandum of Lease dated September 5, 1968, and recorded September 9, 1968, in Book 4953, Page 322, of the official records of Fulton County, Georgia (the “Official Records”); as assigned by that certain Assignment and Assumption of Leases from UNITED PARKING, INC., a Georgia corporation (“United”), as assignor, to CAPITAL CENTRAL CORPORATION, a Georgia corporation (“CCC”), as assignee, dated October 1, 1984, and recorded December 6, 1984, in Book 9284, Page 312 of the Official Records; as assigned by that certain Assignment and Assumption of Leases from CCC, as assignor, to Central Acquisition Associates, Ltd., a Georgia limited partnership (“Central”), as assignee, dated December 20, 1984, and recorded December 21, 1984, in Book 9311, Page 281 of the Official Records; as assigned by that certain Assignment and Assumption of Leases from Central, as assignor, to INFORUM, LTD., a Georgia limited partnership (“Inforum Ltd”), as assignee, dated May 28, 1985, and recorded July 30, 1985, in Book 9633, Page 391 of the Official Records; as amended by that certain First Amendment to Lease Agreement dated June 1, 1986, between Barrett and Inforum Ltd; as assigned by that certain Transfer and Assignment of Lease from Inforum Ltd, as assignor, to INFORUM ASSOCIATES, a Georgia general partnership (“Inforum Associates”), in the form of a joint venture composed of Inforum and The Equitable Life Assurance Society of the United States, a New York corporation (“ELA”), as assignee, dated October 20, 1987, and recorded October 21, 1987, in Book 11131, Page 245 of the Official Records; as assigned by that certain Quit-Claim Deed from Inforum Associates, as grantor, to ELA, as grantee, dated December 30, 1994, and recorded December 30, 1994, in Book 19169, Page 220 of the Official Records; as assigned by that certain Assignment of Lease from TRUST COMPANY BANK as executor of the estate of Barrett, deceased, as assignor, to JAMES AROGETI, an individual (“James”), as assignee, dated September 30, 1988, and recorded October 4, 1988, in Book 11937, Page 217 of the Official Records; as partially assigned by that certain Assignment of Lease from JA, as assignor, to JEANETTE AROGETI, an individual (“Jeanette”), as assignee, dated September 30, 1988, and recorded December 12, 1988, in Book 12111, Page 141 of the Official Records; as assigned by that certain Quit-Claim Deed from James and Jeanette, as grantor, to A & A
ASSOCIATES, a Georgia limited partnership (“A&A”), as grantee, dated December 31, 1991, and recorded April 6, 1992, in Book 15193, Page 348 of the Official Records; as assigned by that certain Assignment of Lease from A&A, as assignor, to ROBERT J. AROGETI, an individual, JOEL S. AROGETI, an individual, JANE A. DURHAM, an individual, and BARBARA AROGETI, an individual, as Trustees of the ARGO CHARITABLE LEAD TRUST (“Argo”), as assignee, dated April 1, 1995, and recorded May 30, 1995, in Book 19611, Page 133 of the Official Records; ground lessor’s interest being held by RJJ&B ASSOCIATES, LLLP, a Georgia limited liability limited partnership (“
RJJ
&B”) pursuant to that certain Transfer and Assignment dated January 1, 1999, record notice of which is provided by the Affidavit of Title recorded in the Official Records as of the date hereof; as assigned by that certain Agreement of Assignment and Assumption of Ground Lease from ELA, as assignor, to COUSINS PROPERTIES INCORPORATED, a Georgia corporation (“Cousins”), as assignee, dated June 30, 1999, and recorded June 30, 1999, in Book 26975, Page 085 of the Official Records, and by that certain Quitclaim Deed from ELA, as grantor, to Cousins, as grantee, dated June 30, 1999, and recorded June 30, 1999, in Book 26975, Page 093 of the Official Records; as amended by that certain Agreement of Ground Lessor between Argo, as lessor, JPMORGAN CHASE BANK, N.A., a United States banking association, as lender, and Cousins, as lessee, dated August 31, 2007, and recorded September 4, 2007, in Book 45629, Page 89 of the Official Records; and as assigned by that certain Agreement of Assignment and Assumption of Ground Lease from Cousins, as assignor, to 250 WILLIAMS STREET LLC, a Georgia limited liability company, as assignee, dated August 31, 2007, and recorded September 4, 2007, in Book 45629, Page 154 of the Official Records, as assigned to Borrower.
“
Ground Lease Estoppel
” means the Agreement of Ground Lessor executed by Ground Lessor, Borrower and Lender in connection with the Loan.
“
Ground Lease Property
” and personal property demised to Borrower pursuant to the Ground Lease.
“
Ground Lessor
” means ROBERT J. AROGETI, an individual, JOEL S. AROGETI, an individual, JANE A. DURHAM, an individual, and BARBARA AROGETI, an individual, as trustees of the ARGO CHARITABLE LEAD TRUST.
“
Guarantor
” means Carter Validus Operating Partnership II, LP, Delaware limited partnership.
“
Guaranty
” means that certain Guaranty Agreement, dated as of the date hereof, executed and delivered by Guarantor in connection with the Loan to and for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
“
Hazardous Substances
” means any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment, including petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables, explosives, mold, mycotoxins, microbial matter and airborne pathogens (naturally occurring or
otherwise), but excluding substances of kinds and in amounts ordinarily and customarily used or stored in similar properties for the purpose of cleaning or other maintenance or operations and otherwise in compliance with all Environmental Laws.
“
Immediate Family Member
” has the meaning set forth in
Section 5.2.10(f)
.
“
Improvements
” has the meaning set forth in the granting clause of the Security Instrument.
“
Indebtedness
” of a Person, at a particular date, means the sum (without duplication) at such date of (a) all indebtedness or liability of such Person (including amounts for borrowed money and indebtedness in the form of mezzanine debt or preferred equity); (b) obligations evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations for the deferred purchase price of property or services (including trade obligations); (d) obligations under letters of credit; (e) obligations under acceptance facilities; (f) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, to supply funds, to invest in any Person or entity, or otherwise to assure a creditor against loss; and (g) obligations secured by any Liens, whether or not the obligations have been assumed (other than the Permitted Encumbrances).
“
Indemnified Liabilities
” has the meaning set forth in
Section 10.13(b)
hereof.
“
Indemnified Parties
” means Lender and, its designee, (whether or not it is the Lender), any Affiliate of Lender that has filed any registration statement relating to the Securitization or has acted as the sponsor or depositor in connection with the Securitization, any Affiliate of Lender that acts as an underwriter, placement agent or initial purchaser of Securities issued in the Securitization, any other co-underwriters, co-placement agents or co-initial purchasers of Securities issued in the Securitization, and each of their respective officers, directors, partners, employees, representatives, agents and Affiliates and each Person or entity who Controls any such Person within the meaning of Section 15 of the Securities Act of 1933 as amended or Section 20 of the Security Exchange Act of 1934 as amended, any Person who is or will have been involved in the origination of the Loan, any Person who is or will have been involved in the servicing of the Loan secured hereby, any Person in whose name the encumbrance created by the Security Instrument is or will have been recorded, any Person who may hold or acquire or will have held a full or partial interest in the Loan secured hereby (including investors or prospective investors in the Securities, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan secured hereby for the benefit of third parties) as well as the respective directors, officers, shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing (including any other Person who holds or acquires or will have held a participation or other full or partial interest in the Loan, whether during the term of the Loan or as a part of or following a foreclosure of the Loan and including any successors by merger, consolidation or acquisition of all or a substantial portion of Lender’s assets and business).
“
Independent Director
” means a natural Person who (a) is not at the time of initial appointment, or at any time while serving in such capacity, and is not, and has never been, and shall not while serving as Independent Director be: (i) a stockholder, director (with the exception of
serving as the Independent Director of Borrower), officer, employee, partner, member (other than a “special member” or “springing member”), manager, attorney or counsel of Borrower, equity owners of Borrower or Guarantor or any Affiliate of Borrower or Guarantor; (ii) a customer, supplier or other person who derives any of its purchases or revenues from its activities with Borrower or Guarantor, equity owners of Borrower or Guarantor or any Affiliate of Borrower or Guarantor; (iii) a Person Controlling or under common Control with any such stockholder, director, officer, employee, partner, member, manager, attorney, counsel, equity owner, customer, supplier or other Person; or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, member, manager, attorney, counsel, equity owner, customer, supplier or other Person and (b) has (i) prior experience as an independent director or independent manager for a corporation, a trust or limited liability company whose charter documents required the unanimous consent of all independent directors or independent managers thereof before such corporation, trust or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (ii) at least three years of employment experience with one or more nationally-recognized companies that provides,
inter
alia
, professional independent directors or independent managers in the ordinary course of their respective business to issuers of securitization or structured finance instruments, agreements or securities or lenders originating commercial real estate loans for inclusion in securitization or structured finance instruments, agreements or securities (a “
Professional Independent Director
”) and is at all times during his or her service as an Independent Director of Borrower an employee of such a company or companies. A natural Person who satisfies the foregoing definition except for being (or having been) the independent director or independent manager of a “special purpose entity” affiliated with Borrower (provided such affiliate does not or did not own a direct or indirect equity interest in an Borrower) shall not be disqualified from serving as an Independent Director, provided that such natural Person satisfies all other criteria set forth above and that the fees such individual earns from serving as independent director or independent manager of affiliates of Borrower or in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year. A natural Person who satisfies the foregoing definition other than subparagraph (a)(ii) shall not be disqualified from serving as an Independent Director of Borrower if such individual is a Professional Independent Director and such individual complies with the requirements of the previous sentence.
“Initial Interest Payment Per Diem
” has the meaning set forth in the Loan Terms Table of the Note.
“
Insolvency Opinion
” means that certain non-consolidation opinion letter dated the date hereof delivered by Morris, Manning & Martin, LLP in connection with the Loan.
“
Institutional Controls
” means any legal or physical restrictions or limitations on the use of, or access to, the Property to eliminate or minimize potential exposures to any Hazardous Substance, to prevent activities that could interfere with the effectiveness of any Remediation, or to ensure maintenance of a level of risk to human health or the environment, including physical modifications to the Property such as slurry walls, capping, hydraulic controls for ground water, or point of use water treatment, restrictive covenants, environmental protection easements, or property use limitations.
“
Insurance Premiums
” has the meaning set forth in
Section 6.1(b)
hereof.
“
Insurance Proceeds
” has the meaning set forth in
Section 6.4(b)
hereof.
“
Interest Only Monthly Payment
”
has the meaning set forth in the Loan Terms Table of the Note.
“
Interest Only Payment Date
” has the meaning set forth in the Loan Terms Table of the Note.
“
Interest Rate
” means a rate of three and ninety-nine hundredths percent (3.99%).
“
KeyBank
” has the meaning set forth in
Section 2.5.3
hereof.
“
Land
” has the meaning set forth in the granting clause of the Security Instrument.
“
Lease
” means, with the exception of the Ground Lease, any lease, sublease or subsublease, letting, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in the Property by or on behalf of Borrower, and (a) every modification, amendment or other agreement relating to such lease, sublease, subsublease, or other agreement entered into in connection with such lease, sublease, subsublease, or other agreement and (b) every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto.
“
Legal Requirements
” means, all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting the Property or any part thereof, or 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, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any time in force affecting Borrower, the Property or any part thereof, including any which may (a) require repairs, modifications or alterations in or to the Property or any part thereof, or (b) in any way limit the use and enjoyment thereof.
“
Lender
” has the meaning set forth in the introductory paragraph hereto, together with its successors and assigns.
“
Letter of Credit
” shall mean an irrevocable, unconditional, transferable (without the payment of a transfer fee), clean, evergreen (or not expiring until at least thirty (30) Business Days after the Maturity Date) sight draft letter of credit acceptable to Lender and the Rating Agencies in favor of Lender and entitling Lender to draw thereon in New York, New York based solely on a statement purportedly executed by an officer of Lender stating that it has the right to draw thereon issued by a domestic Eligible Institution or the U.S. agency or branch of a foreign Eligible Institution and with respect to which Borrower has no reimbursement obligation. The evergreen clause of each Letter of Credit shall provide that the expiration date of such Letter of Credit shall automatically
extend (i.e., without requiring a consent, approval, amendment or other modification) for additional periods from the current or each future expiration date unless the issuing bank provides Lender and Servicer with written notice that such Letter of Credit will not be renewed at least sixty (60) days, and not more than ninety (90) days, prior to the date on which the outstanding Letter of Credit is scheduled to expire. Lender shall have the right immediately to draw down any Letter of Credit in full and hold the proceeds of such draw in the same manner as funds deposited in the Reserve Funds (i) if at any time the bank issuing any such Letter of Credit shall cease to be an Eligible Institution, (ii) with respect to an evergreen Letter of Credit, if Lender has received a notice from the issuing bank that the Letter of Credit will not be renewed and a substitute Letter of Credit is not provided at least thirty (30) days prior to the date on which the outstanding Letter of Credit is scheduled to expire, (iii) with respect to any Letter of Credit with a stated expiration date, if Lender has not received a notice from the issuing bank that it has renewed the Letter of Credit at least thirty (30) days prior to the date on which such Letter of Credit is scheduled to expire and a substitute Letter of Credit is not provided at least thirty (30) days prior to the date on which the outstanding Letter of Credit is scheduled to expire, (iv) upon receipt of notice from the issuing bank that the Letter of Credit will be terminated (except if the termination of such Letter of Credit is permitted pursuant to the terms and conditions of this Agreement or a substitute Letter of Credit is provided prior to such termination), or (v) during the continuance of an Event of Default. Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw any Letter of Credit upon the happening of any of the foregoing events and shall not be liable for any losses sustained by Borrower due to the insolvency of the bank issuing the Letter of Credit if Lender has not drawn the Letter of Credit.
“
Lien
” means, any mortgage, deed of trust, deed to secure debt, indemnity deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer of, on or affecting Borrower, the Property, any portion thereof or any interest therein, including 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.
“
Loan
” means the loan in the Original Principal Amount made by Lender to Borrower pursuant to this Agreement.
“
Loan Documents
” means, collectively, this Agreement, the Note, the Security Instrument, the Environmental Indemnity, the Assignment of Management Agreement, the Guaranty, the Clearing Account Agreement, the Cash Management Agreement, and all other documents executed or delivered in connection with the Loan.
“
Loan to Value Ratio
” shall mean, as of the date of its calculation, the ratio of (i) the sum of the outstanding principal amount of the Loan as of the date of such calculation to (ii) the fair market value of the Property, as determined, in Lender’s sole discretion, by any commercially reasonable method permitted to a REMIC Trust.
“
Major Tenant
” means American Cancer Society, Inc., a New York corporation, any successor or assign of such entity as tenant under the Major Tenant Lease, or any subsequent Tenant under any replacement of the Major Tenant Lease.
“
Major Tenant - Approved Sublease
” means one or more subleases of a portion of a Major Tenant Premises which sublease or subleases shall (i) be between the applicable Major Tenant and a Major Tenant - Approved Sublessee, (ii) have been approved by Lender in its discretion, and (iii) be upon such terms and conditions (including, without limitation, rental rate and term) as are acceptable to Lender in its discretion.
“
Major Tenant - Approved Sublessee
” means a sublessee in connection with a Major Tenant - Approved Sublease approved by Lender in its discretion.
“
Major Tenant Cure Event
” shall mean:
(i) if the Cash Sweep Period is caused by a Major Tenant Trigger Event - Bankruptcy, no Default or Event of Default has occurred and no event that would trigger another Cash Sweep Period has occurred, the date,
(A) which is thirty (30) days after the date that the applicable Major Tenant has affirmed its Major Tenant Lease, is no longer the subject of a bankruptcy or similar proceeding, is in occupancy and paying full contractual unabated post-petition rent without right of offset or free rent credit, and has delivered to Lender a tenant estoppel acceptable to Lender,
(B) that Borrower has entered into one or more replacement Leases for the entire applicable Major Tenant Premises in each case with a Tenant or Tenants acceptable to Lender in its discretion, and upon such terms and conditions (including, without limitation, rental rate and term) as are acceptable to Lender in its discretion and (i) such replacement Tenant or Tenants are in occupancy of the entire net leasable area of the applicable Major Tenant Premises, are obligated to pay full contractual rent without right of offset or free rent credit, and have made their first monthly rental payment, (ii) all tenant improvements with respect to each such replacement Lease have been completed in accordance with the terms hereof, (iii) all leasing commissions and any other tenant reimbursement obligations incurred by Borrower with respect to each such replacement Lease have been paid, and (iv) such replacement Tenant or Tenants have delivered to Lender a tenant estoppel acceptable to Lender;
(ii) if the Cash Sweep Event is caused by a Major Tenant Trigger Event - Vacation, no Default or Event of Default has occurred and no event that would trigger another Cash Sweep Period has occurred, the date,
(A) which is thirty (30) days after the date that the applicable Major Tenant has resumed operations at its Major Tenant Premises, is in occupancy and open for business paying full contractual unabated rent without right of offset or free rent credit, has made its next due monthly rental payment, and has delivered to Lender a tenant estoppel acceptable to Lender,
(B) that Borrower has entered into one or more replacement Leases for the entire applicable Major Tenant Premises in each case with a Tenant or Tenants acceptable to Lender in its discretion, and upon such terms and conditions (including, without limitation, rental rate and term) as are acceptable to Lender in its discretion and (i) such replacement Tenant or Tenants are in occupancy of the entire net leasable area of the applicable Major Tenant Premises, are obligated to pay full contractual rent without right of offset or free rent credit, and have made their first monthly rental payment, (ii) all tenant improvements with respect to each such replacement Lease have been completed in accordance with the terms hereof, (iii) all leasing commissions and any other tenant reimbursement obligations incurred by Borrower with respect to each such replacement Lease have been paid, and (iv) such replacement Tenant or Tenants have delivered to Lender a tenant estoppel acceptable to Lender,
(C) that Lender has received one or more fully executed Major Tenant - Approved Subleases for the portion of the applicable Major Tenant Premises not then occupied by the applicable Major Tenant pursuant to (A) above, and (i) all such Major Tenant - Approved Sublessees (a) are in occupancy of their entire net leasable area of the applicable Major Tenant Premises, are obligated to pay full contractual rent without right of offset or free rent credit, and have made their first monthly rental payment, (ii) all tenant improvements with respect to all applicable Major Tenant - Approved Subleases have been completed in accordance with the terms hereof, (iii) all leasing commissions and any other tenant reimbursement obligations incurred by Borrower and/or Major Tenant with respect to all such Major Tenant - Approved Subleases have been paid, (iv) all such Major Tenant - Approved Sublessees have delivered to Lender a tenant estoppel acceptable to Lender, and (v) Major Tenant shall remain fully liable for all of the obligations under the Major Tenant Lease;
(iii) if the Cash Sweep Event is caused by a Major Tenant Trigger Event - Lease Expiration, the date upon which Borrower completes the applicable Major Tenant Lease Expiration Trigger Event Cure.
“
Major Tenant Lease
” means the Lease Agreement between Cousins Properties Incorporated, a Georgia corporation (predecessor to Borrower), as landlord, and Major Tenant, as tenant, dated August 1, 2006, as amended, modified, renewed and/or restated, or, if applicable, replaced in connection with any replacement of the Major Tenant Lease.
“Major Tenant Lease Expiration Trigger Event Cure
” means the date:
(A) that Borrower has provided acceptable evidence to Lender that the Major Tenant has renewed the term of its Major Tenant Lease pursuant to the terms set forth therein, or
(B) that Borrower has entered into one or more replacement Leases for the entire applicable Major Tenant Premises, in each case with a Tenant or Tenants
acceptable to Lender in its discretion, and upon such terms and conditions (including, without limitation, rental rate and term) as are acceptable to Lender in its discretion, and (i) such replacement Tenant or Tenants are in occupancy of the entire net leasable area of the applicable Major Tenant Premises, are obligated to pay full contractual rent without right of offset or free rent credit, and have made their first monthly rental payment, (ii) all tenant improvements with respect to each such replacement Lease have been completed in accordance with the terms hereof, (iii) all leasing commissions and any other tenant reimbursement obligations incurred by Borrower with respect to each such replacement Lease have been paid, and (iv) such replacement Tenant or Tenants have delivered to Lender a tenant estoppel acceptable to Lender.
“
Major Tenant Premises
” means the portion of the Property demised to Major Tenant pursuant to the Major Tenant Lease.
“
Major Tenant Reserve Threshold
” shall only be applicable in connection with a Cash Sweep Period caused by a Major Tenant Trigger Event - Lease Expiration, and shall mean an amount equal to the aggregate rentable square feet of the Major Tenant Premises not then occupied either by Major Tenant pursuant to its Major Tenant Lease or by a Tenant under a replacement Lease satisfying the conditions set forth in Subpart (B) of the definition of Major Tenant Lease Expiration Trigger Event Cure hereinabove, multiplied by $30.00 per square foot, which Major Tenant Reserve Threshold will be adjusted from time to time as such aggregate rentable square feet figure adjusts.
“
Major Tenant Rollover Reserve Account
” has the meaning set forth in
Section 7.7.1
hereof.
“
Major Tenant Rollover Reserve Fund
” has the meaning set forth in
Section 7.7.1
hereof.
“
Major Tenant Trigger Event
” means the occurrence of a (a) Major Tenant Trigger Event – Bankruptcy, (b) Major Tenant Trigger Event – Vacation, or (c) Major Tenant Trigger Event - Lease Expiration.
“
Major Tenant Trigger Event - Bankruptcy
” means any Bankruptcy Action of Major Tenant.
“
Major Tenant Trigger Event - Lease Expiration
” means, unless, prior to such date Borrower has satisfied the requirements of a Major Tenant Lease Expiration Trigger Event Cure with respect to the Major Tenant Lease, the earlier to occur of (a) the date of any termination of a Major Tenant
Lease or (b) the earlier to occur of the date (x) that is twelve (12) months prior to the then applicable expiration date of the applicable Major Tenant Lease (or any renewal or replacement thereof) or (y) on which notice for extension is due under the applicable Major Tenant
Lease.
“
Major Tenant Trigger Event - Vacation
” means the earlier to occur of (a) the date that Major Tenant gives a notice that it intends to cease business operations at its Major Tenant Premises, i.e. to “go dark”, or vacate or abandon such Major Tenant Premises or (b) the date that Major Tenant, for 5 consecutive Business Days (except for temporary closures for repairs, restoration, rehabilitation
or customary force majeure events)
vacates, abandons or surrenders substantially all of its Major Tenant Premises or ceases to conduct its normal business operations thereon (including without limitation, utilizing substantially less than all of its Major Tenant Premises, personnel or equipment utilized as of the closing of the Loan), or otherwise “goes dark” at its Major Tenant Premises.
“
Management Agreement
” means the management agreement entered into by and between Borrower and Manager, pursuant to which Manager is to provide management and other services with respect to the Property, or, if the context requires, a Qualified Manager who is managing the Property in accordance with the terms and provisions of this Agreement pursuant to a Replacement Management Agreement.
“
Manager
” means Carter Validus Real Estate Management Services II, LLC, a Delaware limited liability company, or, if the context requires, a Qualified Manager who is managing the Property in accordance with the terms and provisions of this Agreement pursuant to a Replacement Management Agreement.
“
Material Action
” means to consolidate or merge Borrower with or into any Person, or sell all or substantially all of the assets of Borrower, or to institute proceedings to have Borrower be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against Borrower or file a petition seeking, or consent to, reorganization or relief with respect to Borrower 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 Borrower or a substantial part of its property, or make any assignment for the benefit of creditors of Borrower, or admit in writing Borrower’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 Borrower.
“
Maturity Date
” means July 1, 2027, or such other date on which the final payment of principal of the Note becomes due and payable as therein or herein provided, whether at such stated maturity date, by declaration of acceleration, or otherwise.
“
Maximum Legal Rate
” has the meaning set forth in Section 7 of the Note.
“
Monthly Debt Service Payment Amount
” means individually and collectively, as the context may require, any Interest Only Monthly Payment and any Amortizing Monthly Payment.
“
Moody’s
” means Moody’s Investors Service, Inc.
“
Net Cash Flow
” means, with respect to the Property for any period, the amount obtained by subtracting Operating Expenses and Capital Expenditures for such period from Gross Income from Operations for such period.
“
Net Operating Income
” means the amount obtained by subtracting Operating Expenses from Gross Income from Operations.
“
Net Proceeds
” has the meaning set forth in
Section 6.4(b)
hereof.
“
Net Proceeds Deficiency
” has the meaning set forth in
Section 6.4(b)(vi)
hereof.
“
Note
” means that certain Promissory Note, dated the date hereof, in the principal amount of $116,200,000.00, made by Borrower in favor of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
“
O&M Program
” has the meaning set forth in
Section 5.1.19
hereof.
“
OFAC
” has the meaning set forth in
Section 10.25
hereof.
“
Officer’s Certificate
” means a certificate delivered to Lender by Borrower which is signed by an authorized officer of Borrower or the general partner, managing member or sole member of Borrower, as applicable.
“
Operating Expenses
” means the total of all expenditures, computed in accordance with GAAP, of whatever kind relating to the operation, maintenance and management of the Property that are incurred on a regular monthly or other periodic basis, including, ground rent, bad debt, utilities, ordinary repairs and maintenance, insurance, license fees, property taxes and assessments, advertising expenses, management fees, payroll and related taxes, computer processing charges, operational equipment or other lease payments as approved by Lender, and other similar costs, but excluding depreciation, Debt Service, Capital Expenditures and contributions to the Reserve Funds.
“
Original Principal Amount
” means $116,200,000.00.
“
Other Charges
” means all ground rents, maintenance charges, impositions other than Taxes, and any other charges, including vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Property, now or hereafter levied or assessed or imposed against the Property or any part thereof.
“
Other Obligations
” has the meaning as set forth in the Security Instrument.
“Outstanding Principal Balance
” or “
OPB
” means the portion of the Original Principal Amount that remains outstanding from time to time.
“
Payment Date
” means, as applicable, an Interest Only Payment Date or an Amortizing Payment Date.
“
Permitted Defeasance Date
” means the date that is two (2) years from the “startup day” within the meaning of Section 860G(a)(9) of the Code for the REMIC Trust which holds the portion of the Note last to be securitized.
“
Permitted Encumbrances
” means, with respect to the Property, collectively, (a) the Liens and security interests created by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed in the Title Insurance Policy, (c) Liens, if any, for Taxes imposed by any Governmental Authority not yet due or delinquent, and (d) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s discretion, which Permitted Encumbrances, individually or in the aggregate, do not materially interfere with the value, current use or operation
of the Property or the security intended to be provided by the Security Instrument or with the current ability of the Property to generate Net Cash Flow sufficient to service the Loan or Borrower’s ability to pay its obligations under the Loan Documents when they become due.
“
Permitted Investments
” means any one or more of the following obligations or securities acquired at a purchase price of not greater than par, including those issued by Servicer, the trustee under any Securitization or any of their respective Affiliates, payable on demand or having a maturity date not later than the Business Day immediately prior to the first Payment Date following the date of acquiring such investment and meeting one of the appropriate standards set forth below:
(i) obligations of, or obligations fully guaranteed as to payment of principal and interest by, the United States or any agency or instrumentality thereof provided such obligations are backed by the full faith and credit of the United States of America including obligations of: the U.S. Treasury (all direct or fully guaranteed obligations), the Farmers Home Administration (certificates of beneficial ownership), the General Services Administration (participation certificates), the U.S. Maritime Administration (guaranteed Title XI financing), the Small Business Administration (guaranteed participation certificates and guaranteed pool certificates), the U.S. Department of Housing and Urban Development (local authority bonds) and the Washington Metropolitan Area Transit Authority (guaranteed transit bonds);
provided
,
however
, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;
(ii) Federal Housing Administration debentures;
(iii) obligations of the following United States government sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System (consolidated systemwide bonds and notes), the Federal Home Loan Banks (consolidated debt obligations), the Federal National Mortgage Association (debt obligations), the Financing Corp. (debt obligations), and the Resolution Funding Corp. (debt obligations);
provided
,
however
, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;
(iv) federal funds, unsecured certificates of deposit, time deposits, bankers’ acceptances and repurchase agreements with maturities of not more than 365 days of any bank, the short term obligations of which at all times are rated in the highest short term rating category by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency in the highest short term rating category and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in
and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities);
provided
,
however
, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;
(v) fully Federal Deposit Insurance Corporation-insured 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, the short term obligations of which at all times are rated in the highest short term rating category by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency in the highest short term rating category and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities);
provided
,
however
, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;
(vi) debt obligations with maturities of not more than 365 days and at all times rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities) in its highest long-term unsecured rating category;
provided
,
however
, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;
(vii) commercial paper (including both non interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of issuance thereof) with maturities of not more than 365 days and that at all times is rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities) in its highest short-term unsecured debt rating;
provided
,
however
, that the
investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;
(viii) units of taxable money market funds, which funds are regulated investment companies, seek to maintain a constant net asset value per share and invest solely in obligations backed by the full faith and credit of the United States, which funds have the highest rating available from each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities) for money market funds; and
(ix) any other security, obligation or investment which has been approved as a Permitted Investment in writing by (a) Lender and (b) each Rating Agency, as evidenced by a written confirmation that the designation of such security, obligation or investment as a Permitted Investment will not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities by such Rating Agency;
provided
,
however
, that no obligation or security shall be a Permitted Investment if (A) such obligation or security evidences a right to receive only interest payments or (B) the right to receive principal and interest payments on such obligation or security are derived from an underlying investment that provides a yield to maturity in excess of 120% of the yield to maturity at par of such underlying investment.
“
Permitted Par Prepayment Date
” means January 2, 2027.
“
Permitted Transfer
” means any of the following: (a) any transfer, directly as a result of the death of a natural person, of stock, membership interests, partnership interests or other ownership interests previously held by the decedent in question to the Person or Persons lawfully entitled thereto and (b) any transfer, directly as a result of the legal incapacity of a natural person, of stock, membership interests, partnership interests or other ownership interests previously held by such natural person to the Person or Persons lawfully entitled thereto.
“
Person
” means any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing.
“
Personal Property
” has the meaning set forth in the granting clause of the Security Instrument.
“
Policies
” has the meaning specified in
Section 6.1(b)
hereof.
“
Policy
” has the meaning specified in
Section 6.1(b)
hereof.
“
Prohibited Entity/Ownership Structure
” means any direct or indirect ownership of either the Property or Borrower by (a) a statutory trust organized under 12
Del.C.
§ 3801
et seq.
, or any successor statute thereto, or under any similar other state of federal law, (b) any one or more Persons as tenants in common or any similar ownership structure, or (c) any one or more Persons as a result of any Crowdfunding.
“
Property
” means (a) the Ground Lease Property and (b) each parcel of real property, the Improvements thereon and all personal property now or hereafter owned by Borrower and encumbered by the Security Instrument, together with all rights pertaining to such property and Improvements, as more particularly described in the granting clauses of the Security Instrument and referred to therein as the “Property.”
“
Provided Information
” means any and all financial and other information provided at any time prepared by, or on behalf of, Borrower, Guarantor or Manager.
“
Qualified Manager
” means either (a) Manager; or (b) in the reasonable judgment of Lender, a reputable and experienced management organization (which may be an Affiliate of Borrower) possessing experience in managing properties similar in size, scope, use and value as the Property,
provided
, that, if required by Lender, Borrower shall have obtained (i) prior written confirmation from the applicable Rating Agencies that management of the Property by such entity will not cause a downgrade, withdrawal or qualification of the then current ratings of the Securities or any class thereof and (ii) if such entity is an Affiliate of Borrower, an Additional Insolvency Opinion.
“
Rating Agencies
” means each of S&P, Moody’s, Fitch, and Morningstar Credit Ratings, LLC, or any other nationally recognized statistical rating agency which has been approved by Lender and designated by Lender to assign a rating to the Securities.
“
Rating Agency Sublease Event
” means that one or more of the Rating Agencies determines that the approximately 68,000 square feet of the Major Tenant Premises that Major Tenant is attempting to sublease shall be treated as space not leased to Major Tenant or shall otherwise exclude the rental income from such space from its analysis/rating.
“
Rating Agency Sublease Event
Credit Enhancement
” means such additional collateral or other credit enhancement (which may include, but not be limited to the delivery of a Letter of Credit) required by Lender in its discretion.
“
REIT
” means Carter Validus Mission Critical REIT II, Inc., a Maryland corporation.
“
Related Entities
” has the meaning set forth in
Section 5.2.10(e)
hereof.
“
Release
” means any release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Substances.
“
Remediation
” includes any response, remedial, removal, or corrective action, any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance, any actions to prevent, cure or mitigate any Release of any Hazardous Substance, any action to comply with any Environmental Laws or with any permits issued pursuant thereto, any inspection, investigation, study, monitoring, assessment, audit, sampling and testing, laboratory or other analysis, or evaluation relating to any Hazardous Substances.
“
REMIC Requirements
” shall mean any applicable legal requirements relating to any REMIC Trust (including, without limitation, those relating to the continued treatment of the Loan (or the applicable portion thereof or interest therein) as a “qualified mortgage” held by such REMIC Trust, the continued qualification of such REMIC Trust as such under the Code, the non-imposition of any tax on such REMIC Trust under the Code (including, without limitation, taxes on “prohibited transactions and “contributions”) and any other constraints, rules or other regulations or requirements relating to the servicing, modification or other similar matters with respect to the Loan (or any portion thereof or interest therein) that may now or hereafter exist under applicable legal requirements (including, without limitation under the Code)).
“
REMIC Trust
” means a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code that holds the Note or a portion thereof.
“
Rent Concession Reserve Account
” has the meaning set forth in
Section 7.8.1
hereof.
“
Rent Concession Reserve Deposit
” has the meaning set forth in
Section 7.8.1
hereof.
“
Rent Concession Reserve Fund
” has the meaning set forth in
Section 7.8.1
hereof.
“
Rents
” means, all rents (including percentage rents), rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents, royalties (including all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues, payments (including payments in connection with the exercise of any purchase option or termination rights), deposits (including security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, all other amounts payable as rent under any Lease or other agreement relating to the Property, including charges for electricity, oil, gas, water, steam, heat, ventilation, air-conditioning and any other energy, telecommunication, telephone, utility or similar items or time use charges, HVAC equipment charges, sprinkler charges, escalation charges, license fees, maintenance fees, charges for Taxes, operating expenses or other reimbursables payable to Borrower (or to the Manager for the account of Borrower) under any Lease, and other consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower or its agents or employees from any and all sources arising from or attributable to the Property.
“
Replacement Management Agreement
” means, collectively, (a) either (i) a management agreement with a Qualified Manager substantially in the same form and substance as the
Management Agreement, or (ii) a management agreement with a Qualified Manager, which management agreement shall be reasonably acceptable to Lender in form and substance,
provided
,
however
, with respect to either subclause (i) or (ii) above, that without Lender’s prior consent, in its sole discretion, the management fee for such Qualified Manager shall not exceed the fee provided for in the Management Agreement in effect as of the closing of the Loan, and
provided
,
further
, with respect to subclause (ii) above, Lender, at its option, may require that Borrower shall have obtained prior written confirmation from the applicable Rating Agencies that such management agreement will not cause a downgrade, withdrawal or qualification of the then current rating of the Securities or any class thereof and (b) an assignment of management agreement and subordination of management fees substantially in the form then used by Lender (or of such other form and substance reasonably acceptable to Lender), executed and delivered to Lender by Borrower and such Qualified Manager at Borrower’s expense.
“
Replacement Reserve Account
” has the meaning set forth in
Section 7.3.1
hereof.
“
Replacement Reserve Fund
” has the meaning set forth in
Section 7.3.1
hereof.
“
Replacement Reserve Initial Deposit
” has the meaning set forth in
Section 7.3.1
hereof.
“
Replacement Reserve Monthly Deposit
” has the meaning set forth in
Section 7.3.1
hereof.
“
Replacements
” has the meaning set forth in
Section 7.3.1
hereof.
“
Reserve Funds
” means, collectively, the Tax and Insurance Escrow Fund, the Replacement Reserve Fund, the Rollover Reserve Fund, the Excess Cash Flow Reserve Fund, the Major Tenant Rollover Reserve Fund, and any other escrow fund established by the Loan Documents.
“
Restoration
” means the repair and restoration of the Property after a Casualty or Condemnation as nearly as possible to the condition the Property was in immediately prior to such Casualty or Condemnation, with such alterations as may be reasonably approved by Lender.
“
Restricted Party
” means collectively, (a) Borrower, any Guarantor, and any Affiliated Manager and (b) any shareholder, partner, member, non-member manager, or any direct or indirect legal or beneficial owner of Borrower, any Guarantor, any Affiliated Manager or any non-member manager.
“
Rollover Reserve Account
” has the meaning set forth in
Section 7.4.1
hereof.
“
Rollover Reserve Fund
” has the meaning set forth in
Section 7.4.1
hereof.
“
Rollover Reserve Monthly Deposit
” has the meaning set forth in
Section 7.4.1
hereof.
“
Roof Replacement
” has the meaning set forth in
Section 7.3.1
hereof.
“
S&P
” means Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies.
“
Sale or Pledge
” means a voluntary or involuntary sale, conveyance, assignment, transfer, encumbrance, pledge, grant of option or other transfer or disposal of a legal or beneficial interest, whether direct or indirect.
“
Scheduled Defeasance Payments
” has the meaning set forth in
Section 2.5.1(b)
hereof.
“
Securities
” has the meaning set forth in
Section 9.1
hereof.
“
Securitization
” has the meaning set forth in
Section 9.1
hereof.
“
Security Agreement
” has the meaning set forth in
Section 2.5.1(a)(v)
hereof.
“
Security Instrument
” means, that certain first priority Fee and Leasehold Deed to Secure Debt, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated the date hereof, executed and delivered by Borrower to Lender as security for the Loan and encumbering the Property, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
“
Servicer
” has the meaning set forth in
Section 9.5
hereof.
“
Severed Loan Documents
” has the meaning set forth in
Section 8.2(c)
hereof.
“
Special Purpose Entity
” means a corporation, limited partnership or limited liability company that, since the date of its formation and at all times on and after the date thereof, has complied with and shall at all times comply with the following requirements unless it has received either prior consent to do otherwise from Lender or a permitted administrative agent thereof, or, while the Loan is securitized, confirmation from each of the applicable Rating Agencies that such noncompliance would not result in the requalification, withdrawal, or downgrade of the ratings of any Securities or any class thereof:
(i) is and shall be organized solely for the purpose of acquiring, developing, owning, holding, selling, leasing, transferring, exchanging, managing and operating the Property, entering into and performing its obligations under the Loan Documents with Lender, refinancing the Property in connection with a permitted repayment of the Loan, and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing;
(ii) has not engaged and shall not engage in any business unrelated to the acquisition, development, ownership, management or operation of the Property;
(iii) has not owned and shall not own any real property other than, in the case of Borrower, the Property;
(iv) does not have, shall not have and at no time had any assets other than the Property and personal property necessary or incidental to its ownership and operation of the Property;
(v) has not engaged in, sought, consented to or permitted and shall not engage in, seek, consent to or permit (A) any dissolution, winding up, liquidation, consolidation or merger, or (B) any sale or other transfer of all or substantially all of its assets or any sale of assets outside the ordinary course of its business, except as permitted by the Loan Documents;
(vi) shall not cause, consent to or permit any amendment of its limited partnership agreement, articles of incorporation, articles of organization, certificate of formation, operating agreement or other formation document or organizational document (as applicable) with respect to the matters set forth in this definition;
(vii) intentionally omitted;
(viii) intentionally omitted;
(ix) intentionally omitted;
(x) if such entity is a single-member limited liability company, (A) is and shall be a Delaware limited liability company, (B) has and shall have at least two (2) Independent Directors serving as managers of such company, (C) shall not take any Material Action and shall not cause or permit the members or managers of such entity to take any Material Action, unless two (2) Independent Directors then serving as managers of the company shall have participated consented in writing to such action, and (D) has and shall have either (1) a member which owns no economic interest in the company, has signed the company’s limited liability company agreement and has no obligation to make capital contributions to the company, or (2) two natural persons or one entity that is not a member of the company, that has signed its limited liability company agreement and that, under the terms of such limited liability company agreement becomes a member of the company immediately prior to the withdrawal or dissolution of the last remaining member of the company;
(xi) has not and shall not (and, if such entity is (a) a limited liability company, has and shall have a limited liability agreement or an operating agreement, as applicable, (b) a limited partnership, has a limited partnership agreement, or (c) a corporation, has a certificate of incorporation or articles that, in each case, provide that such entity shall not) (1) dissolve, merge, liquidate, consolidate; (2) sell all or substantially all of its assets; (3) amend its organizational documents with respect to the matters set forth in this definition without the consent of Lender; or (4) without the affirmative vote of two (2) Independent Directors: (A) file or consent to the filing of any bankruptcy, insolvency or reorganization case or proceeding, institute any proceedings under any applicable insolvency law or otherwise seek relief under any laws relating to the relief from debts or the protection of debtors generally, file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings; (B) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the entity or a substantial portion of its property; (C) make an assignment for the benefit of the creditors of the entity; or (D) take any action in furtherance of any of the foregoing;
(xii) has at all times been and shall at all times remain solvent and has paid and shall pay its debts and liabilities (including, a fairly-allocated portion of any personnel and overhead expenses that it shares with any Affiliate) from its assets as the same shall become due, and has maintained and shall 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;
(xiii) holds itself out as a legal entity, separate and apart from any other person or entity, has not failed and shall not fail to correct any known misunderstanding regarding the separate identity of such entity and has not identified and shall not identify itself as a division of any other Person;
(xiv) has maintained and shall maintain its bank accounts, books of account, books and records separate from those of any other Person and, to the extent that it is required to file tax returns under applicable law, has filed and shall file its own tax returns, except to the extent that it is required by law to file consolidated tax returns and, if it is a corporation, has not filed and shall not file a consolidated federal income tax return with any other corporation, except to the extent that it is required by law to file consolidated tax returns;
(xv) has maintained and shall maintain its own records, books, resolutions and agreements;
(xvi) has not commingled and shall not commingle its funds or assets with those of any other Person and has not participated and shall not participate in any cash management system with any other Person;
(xvii) has held and shall hold its assets in its own name;
(xviii) has conducted and shall conduct its business in its name or in a name franchised or licensed to it by an entity other than an Affiliate of itself or of Borrower, except for business conducted on behalf of itself by another Person under a business management services agreement that is on commercially-reasonable terms, so long as the manager, or equivalent thereof, under such business management services agreement holds itself out as an agent of Borrower;
(xix) (A) has maintained and shall maintain its financial statements, accounting records and other entity documents separate from those of any other Person; (B) has shown and shall show, in its financial statements, its asset and liabilities separate and apart from those of any other Person; and (C) has not permitted and shall not permit its assets to be listed as assets on the financial statement of any of its Affiliates except as required by GAAP; provided, however, that any such consolidated financial statement contains a note indicating that the Special Purpose Entity’s separate assets and credit are not available to pay the debts of such Affiliate and that the Special Purpose Entity’s liabilities do not constitute obligations of the consolidated entity;
(xx) has paid and shall pay its own liabilities and expenses, including the salaries of its own employees, out of its own funds and assets, and has maintained and shall maintain a sufficient number of employees in light of its contemplated business operations;
(xxi) has observed and shall observe all partnership, corporate or limited liability company formalities, as applicable;
(xxii) has not incurred any Indebtedness other than (i) acquisition financing with respect to the Property; construction financing with respect to the Improvements and certain off-site improvements required by municipal and other authorities as conditions to the construction of the Improvements; and first mortgage financings secured by the Property; and Indebtedness pursuant to letters of credit, guaranties, interest rate protection agreements and other similar instruments executed and delivered in connection with such financings, (ii) unsecured trade payables and operational debt not evidenced by a note, and (iii) Indebtedness incurred in the financing of equipment and other personal property used on the Property;
(xxiii) shall have no Indebtedness other than (i) the Loan, (ii) liabilities incurred in the ordinary course of business relating to the ownership and operation of the Property and the routine administration of Borrower, in amounts not to exceed 2% of the amount of the Loan which liabilities are not more than sixty (60) days past the date incurred, are not evidenced by a note and are paid when due, and which amounts are normal and reasonable under the circumstances, and (iii) such other liabilities that are permitted pursuant to this Agreement;
(xxiv) has not assumed, guaranteed or become obligated and shall not assume or guarantee or become obligated for the debts of any other Person, has not held out and shall not hold out its credit as being available to satisfy the obligations of any other Person or has not pledged and shall not pledge its assets for the benefit of any other Person, in each case except as permitted pursuant to this Agreement;
(xxv) has not acquired and shall not acquire obligations or securities of its partners, members or shareholders or any other owner or Affiliate;
(xxvi) has allocated and shall allocate fairly and reasonably any overhead expenses that are shared with any of its Affiliates, constituents, or owners, or any guarantors of any of their respective obligations, or any Affiliate of any of the foregoing, including paying for shared office space and for services performed by any employee of an Affiliate;
(xxvii) has maintained and used and shall maintain and use separate stationery, invoices and checks bearing its name and not bearing the name of any other entity unless such entity is clearly designated as being the Special Purpose Entity’s agent;
(xxviii) has not pledged and shall not pledge its assets to or for the benefit of any other Person other than with respect to loans secured by the Property and no such pledge remains outstanding except to Lender to secure the Loan;
(xxix) has held itself out and identified itself and shall hold itself out and identify itself as a separate and distinct entity under its own name or in a name franchised or licensed to it by an entity other than an Affiliate of Borrower and not as a division or part of any other Person;
(xxx) has maintained and shall maintain its assets in such a manner that it shall not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(xxxi) has not made and shall not make loans to any Person and has not held and shall not hold evidence of indebtedness issued by any other Person or entity (other than cash and investment-grade securities issued by an entity that is not an Affiliate of or subject to common ownership with such entity);
(xxxii) has not identified and shall not identify its partners, members or shareholders, or any Affiliate of any of them, as a division or part of it, and has not identified itself and shall not identify itself as a division of any other Person;
(xxxiii) other than capital contributions and distributions permitted under the terms of its organizational documents, has not entered into or been a party to, and shall not 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;
(xxxiv) has not had and shall not have any obligation to, and has not indemnified and shall not 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 Debt and shall not constitute a claim against it if its cash flow is insufficient to pay the Debt;
(xxxv) if such entity is a corporation, has considered and shall consider the interests of its creditors in connection with all corporate actions;
(xxxvi) has not had and shall not have any of its obligations guaranteed by any Affiliate except as provided by the Loan Documents;
(xxxvii) has not formed, acquired or held and shall not form, acquire or hold any subsidiary;
(xxxviii) has complied and shall comply with all of the terms and provisions contained in its organizational documents;
(xxxix) has conducted and shall conduct its business so that each of the assumptions made about it and each of the facts stated about it in the Insolvency Opinion are true; and
(xl) has not permitted and shall not permit any Affiliate or constituent party independent access to its bank accounts.
“
State
” means, the State or Commonwealth in which the Land or any part thereof is located.
“
Successor Borrower
” has the meaning set forth in
Section 2.5.3
hereof.
“
Survey
” means a survey of the Property prepared by a surveyor licensed in the State and satisfactory to Lender and the company or companies issuing the Title Insurance Policy, and containing a certification of such surveyor satisfactory to Lender.
“
Tax and Insurance Escrow Fund
” has the meaning set forth in
Section 7.2
hereof.
“
Taxes
” means all real estate and personal property taxes, assessments, water rates or sewer rents, now or hereafter levied or assessed or imposed against the Property or part thereof.
“
Tenant
” means the lessee of all or a portion of the Property under a Lease.
“
Tenant Direction Letter
” means an instruction letter to Tenants substantially in the form attached hereto as
Schedule IV
.
“
Threshold Amount
” has the meaning set forth in
Section 5.1.21
hereof.
“
Title Insurance Policy
” means the mortgagee title insurance policy issued with respect to the Property and insuring the lien of the Security Instrument.
“
Transfer
” has the meaning set forth in
Section 5.2.10(b)
hereof.
“
Transferee
” has the meaning set forth in
Section 5.2.10(e)
hereof.
“
Transferee’s Principals
” means collectively, (A) Transferee’s managing members, general partners or principal shareholders and (B) such other members, partners or shareholders which directly or indirectly shall own a fifty-one percent (51%) or greater economic and voting interest in Transferee.
“
UCC
” or “
Uniform Commercial Code
” means the Uniform Commercial Code as in effect in the State in which the Property is located.
“
U.S. Obligations
” means non redeemable, non prepayable, non callable securities evidencing an obligation to timely pay principal and/or interest in a full and timely manner that constitute “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, and are (a) direct obligations of the United States of America for the payment of which its full faith and credit is pledged, or (b) to the extent acceptable to the Rating Agencies, other “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended.
Section 1.2
Principles of Construction
. The following rules of construction shall be applicable for all purposes of this Agreement and all documents or instruments supplemental hereto, unless the context otherwise clearly requires:
(a) any pronoun used herein shall be deemed to cover all genders, and words importing the singular number shall mean and include the plural number, and vice versa;
(b) the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”;
(c) an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by Lender;
(d) no inference in favor of or against any party shall be drawn from the fact that such party has drafted any portion hereof or any other Loan Document;
(e) the cover page (if any) of, all recitals set forth in, and all Exhibits to, this Agreement are hereby incorporated herein;
(f) all references to sections and schedules are to sections and schedules in or to this Agreement unless otherwise specified;
(g) all uses of the words “include,” “including” and similar terms shall be construed as if followed by the phrase “without being limited to” unless the context shall indicate otherwise;
(h) unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and
(i) unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined.
ARTICLE II - GENERAL TERMS
Section 2.1
Loan Commitment; Disbursement to Borrower
.
2.1.1
Agreement to Lend and Borrow
. Subject to and upon the terms and conditions set forth herein, Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on the Closing Date.
2.1.2
Single Disbursement to Borrower
. Borrower may request and receive only one (1) borrowing hereunder in respect of the Loan and any amount borrowed and repaid or defeased hereunder in respect of the Loan may not be reborrowed. Borrower acknowledges and agrees that the Loan has been fully funded as of the Closing Date.
2.1.3
The Note, Security Instrument and Loan Documents
. The Loan shall be evidenced by the Note and secured by the Security Instrument and the other Loan Documents.
2.1.4
Use of Proceeds
. Borrower shall use the proceeds of the Loan to (a) acquire the Property or repay and discharge any existing loans relating to the Property, (b) pay all past due
basic carrying costs, if any, with respect to the Property, (c) make deposits into the Reserve Funds on the Closing Date in the amounts provided herein, (d) pay costs and expenses incurred in connection with the closing of the Loan, as approved by Lender, (e) fund any working capital requirements of the Property and (f) distribute the balance, if any, to Borrower.
Section 2.2
Interest Rate
.
2.2.1
Interest Rate
. Interest on the Outstanding Principal Balance of the Loan shall accrue at the Interest Rate or as otherwise set forth in this Agreement or in the Note from (and including) the Closing Date to but excluding the Maturity Date.
2.2.2
Interest Calculation
. Interest on the outstanding principal balance of the Loan shall be calculated by multiplying (a) the actual number of days elapsed in the relevant Accrual Period by (b) a daily rate based on the Interest Rate and a three hundred sixty (360) day year by (c) the outstanding principal balance of the Loan. Borrower acknowledges that the calculation method for interest described herein results in a higher effective interest rate than the numeric Interest Rate and Borrower hereby agrees to this calculation method.
2.2.3
Default Rate
. Upon the occurrence of an Event of Default (including the failure of Borrower to make full payment on the Maturity Date), Lender shall be entitled to receive and Borrower shall pay interest on the Outstanding Principal Balance at the Default Rate. Interest shall accrue and be payable at the Default Rate from the occurrence of an Event of Default until all Events of Default have been waived in writing by Lender in its discretion. Such accrued interest shall be added to the Outstanding Principal Balance, and interest shall accrue thereon at the Default Rate until fully paid. Such accrued interest shall be secured by the Security Instrument and other Loan Documents. Borrower agrees that Lender’s right to collect interest at the Default Rate is given for the purpose of compensating Lender at reasonable amounts for Lender’s added costs and expenses that occur as a result of Borrower’s default and that are difficult to predict in amount, such as increased general overhead, concentration of management resources on problem loans, and increased cost of funds. Lender and Borrower agree that Lender’s collection of interest at the Default Rate is not a fine or penalty, but is intended to be and shall be deemed to be reasonable compensation to Lender for increased costs and expenses that Lender will incur if there occurs an Event of Default hereunder. Collection of interest at the Default Rate shall not be construed as an agreement or privilege to extend the Maturity Date or to limit or impair any rights and remedies of Lender under any Loan Documents. If judgment is entered on the Note, interest shall continue to accrue post-judgment at the greater of (a) the Default Rate or (b) the applicable statutory judgment rate.
2.2.4
Usury Savings
. This Agreement, the Note and the other Loan Documents are subject to the express condition that at no time shall Borrower be obligated or required to pay interest on the principal balance of the Loan at a rate which could subject Lender to either civil or criminal liability as a result of being in excess of the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the Maximum Legal Rate, the Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate of interest from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.
Section 2.3
Loan Payment
. Payments of principal, interest, and Late Charges (as defined in the Note) shall be made as provided in the Note.
Section 2.4
Prepayments
. Except as otherwise provided in Section 9 of the Note, Borrower shall not have the right to prepay the Loan in whole or in part prior to the Maturity Date.
Section 2.5
Defeasance
.
2.5.1
Voluntary Defeasance
. (a) Provided no Event of Default shall then exist, Borrower shall have the right at any time after the Permitted Defeasance Date and prior to the Permitted Par Prepayment Date to voluntarily defease all, but not part, of the Loan by and upon satisfaction of the following conditions (such event being a “
Defeasance Event
”):
(i) Borrower shall provide not less than thirty (30) days prior written notice to Lender specifying the Business Day (the “
Defeasance Date
”) on which the Defeasance Event is to occur;
(ii) Borrower shall pay to Lender all accrued and unpaid interest on the principal balance of the Loan to and including the Defeasance Date. If for any reason the Defeasance Date is not a Payment Date, the Borrower shall also pay interest that would have accrued on the Note through and including the next Payment Date,
provided
,
however
, if the Defeasance Deposit shall include (or if the U.S. Obligations purchased with such Defeasance Deposit shall provide for payment of) all principal and interest computed from the Payment Date prior to the Defeasance Date through the next succeeding Payment Date, Borrower shall not be required to pay such short term interest pursuant to this sentence;
(iii) Borrower shall pay to Lender all other sums, not including scheduled interest or principal payments, then due under the Note, this Agreement, the Security Instrument and the other Loan Documents;
(iv) Borrower shall pay to Lender the required Defeasance Deposit for the Defeasance Event and comply with and satisfy the requirements of
Section 2.5.1(b)
below;
(v) Borrower shall execute and deliver a pledge and security agreement, in form and substance satisfactory to Lender creating a first priority lien on the U.S. Obligations purchased with the Defeasance Deposit in accordance with the provisions of this
Section 2.5
(the “
Security Agreement
”);
(vi) Borrower shall deliver an opinion of counsel for Borrower, delivered by counsel acceptable to Lender, stating, among other things but without substantive
qualification, that (a) Lender has a valid, duly perfected, first priority security interest in the U.S. Obligations purchased with the Defeasance Deposit and that the Security Agreement is enforceable against Borrower in accordance with its terms, (b) the delivery of the U.S. Obligations purchased with the Defeasance Deposit to Lender does not constitute a fraudulent or preferential or other avoidable transfer under Bankruptcy Code Sections 547 and 548, (c) neither the defeasance nor any other transaction that occurs pursuant to the provisions of this
Section 2.5.1(a)
has caused or will cause the Loan (including for this purpose the Loan Documents) to cease to be a “qualified mortgage” within the meaning of Section 860G of the Code, either under the provisions of Treasury Regulation Sections 1.860G-2(a)(8) or 1.860G-2(b) (as such regulations may be amended or superseded from time to time) or under any other provision of the Code or otherwise, and (d) the defeasance or any other transaction that occurs pursuant to the provisions of this
Section 2.5.1(a)
will not cause the failure of any REMIC Trust or any other entity that holds the Note to maintain its tax status. The opinions set forth in clauses (a), (b), (c) and (d) above, or any portion thereof, may, in Lender’s discretion, be rendered by counsel to Lender at Borrower’s sole cost and expense;
(vii) If required by Lender, Borrower shall deliver confirmation in writing from each of the applicable Rating Agencies to the effect that such release will not result in a downgrade, withdrawal or qualification of the respective ratings in effect immediately prior to such Defeasance Event for the Securities issued in connection with the Securitization which are then outstanding;
(viii) Borrower shall deliver an Officer’s Certificate certifying that (a) the requirements set forth in this
Section 2.5.1(a)
have been satisfied, (b) the transactions that are being carried out pursuant to this
Section 2.5.1
(including specifically the release of the lien of the Security Instrument) are being effected to facilitate the disposition of the Property or any other customary commercial transaction and not as part of an arrangement to collateralize a REMIC Trust offering with obligations that are not real estate mortgages, and (c) the amounts of the U.S. Obligations purchased with the Defeasance Deposit comply with all the requirements of this section including the requirement that the U.S. Obligations purchased with the Defeasance Deposit shall generate monthly amounts equal to or greater than the Scheduled Defeasance Payments required to be paid under the Note through the Maturity Date;
(ix) Borrower shall deliver a certificate of Borrower’s independent certified public accountant, acceptable to Lender in its discretion, certifying that (A) the U.S. Obligations purchased with the Defeasance Deposit generate monthly amounts equal to or greater than the Scheduled Defeasance Payments; (B) the revenue from the U.S. Obligations will be applied within four (4) months of receipt towards payments of Debt Service, and (C) the securities that comprise the U.S. Obligations are not subject to prepayment, call or early redemption;
(x) Borrower shall deliver such other certificates, documents or instruments as Lender may reasonably request; and
(xi) Borrower shall pay all costs and expenses of Lender incurred in connection with the Defeasance Event, including (A) any costs and expenses associated with a release of the Lien of the Security Instrument as provided in
Section 2.6
hereof, (B) reasonable attorneys’ fees and expenses incurred in connection with the Defeasance Event, (C) the costs and expenses of the Rating Agencies, (D) any revenue, documentary stamp or intangible taxes or any other tax or charge due in connection with the transfer of the Note, or otherwise required to accomplish the defeasance and (E) the costs and expenses of Servicer and any trustee, including reasonable attorneys’ fees and expenses.
(b) In connection with the Defeasance Event, Borrower shall use the Defeasance Deposit to purchase U.S. Obligations which provide payments on a Business Day or prior to, but as close as possible to, all successive scheduled Payment Dates after the Defeasance Date upon which interest and principal payments are required under this Agreement and the Note, and in amounts equal to or more than the scheduled payments due on such Payment Dates under this Agreement and the Note (including scheduled payments of principal, interest, servicing fees (if any), and any other amounts due under the Loan Documents on such Payment Dates) and assuming the Note is prepaid in full on the Maturity Date (the “
Scheduled Defeasance Payments
”). Notwithstanding the foregoing, at Lender’s option, Lender, acting on Borrower’s behalf, shall have the right to use the Defeasance Deposit to purchase, or cause to be purchased, the above-referenced U.S. Obligations that Borrower is required to purchase pursuant to this
Section 2.5.1(b)
. Borrower, pursuant to the Security Agreement or other appropriate document, shall authorize and direct that the payments received from the U.S. Obligations may be applied to satisfy the Debt Service obligations of Borrower under this Agreement and the Note. Any portion of the Defeasance Deposit in excess of the amount necessary to purchase the U.S. Obligations required by this
Section 2.5
and satisfy Borrower’s other obligations under this
Section 2.5
and
Section 2.6
shall be remitted to Borrower.
(c) If any notice of defeasance is given pursuant to
Section 2.5.1(a)(i)
, Borrower shall be required to defease the Loan on the Defeasance Date (unless such notice is revoked by Borrower prior to the Defeasance Date in which event Borrower shall immediately reimburse Lender for any and all reasonable costs and expenses incurred by Lender in connection with Borrower’s giving of such notice and revocation).
2.5.2
Defeasance Collateral Account
. On or before the date on which Borrower delivers the Defeasance Deposit, Borrower shall open, at an Eligible Institution, the defeasance collateral account (the “
Defeasance Collateral Account
”) which shall at all times be an Eligible Account. The Defeasance Collateral Account shall contain only (i) the U.S. Obligations, and (ii) cash from interest and principal paid on the U.S. Obligations. All cash from interest and principal payments paid on the U.S. Obligations shall be paid over to Lender on each Payment Date and applied first to accrued and unpaid interest and then to principal. Any cash from interest and principal paid on the U.S. Obligations not needed to pay accrued and unpaid interest or principal shall, to the extent permitted by applicable REMIC Requirements, be retained in the Defeasance Collateral Account as additional collateral for the Loan. Borrower shall cause the Eligible Institution at which the U.S. Obligations are deposited to enter into an agreement with Borrower and Lender, satisfactory to Lender in its discretion, pursuant to which such Eligible Institution shall agree to hold and distribute the U.S. Obligations in accordance with this Agreement. Successor Borrower shall be
the owner of the Defeasance Collateral Account and shall report all income accrued on the U.S. Obligations for federal, state and local income tax purposes in its income tax return. Borrower shall prepay all costs and expenses associated with opening and maintaining the Defeasance Collateral Account. Lender shall not in any way be liable by reason of any insufficiency in the Defeasance Collateral Account.
2.5.3
Successor Borrower
. In connection with any Defeasance Event, Lender shall designate a successor entity (the “
Successor Borrower
”), which shall be a special purpose entity, which shall not own any other assets or have any other liabilities or operate other property (except in connection with other defeased loans held in the same securitized loan pool with the Loan). Borrower shall transfer and assign all obligations, rights and duties under and to the Note, together with the pledged U.S. Obligations to such Successor Borrower. Such right to designate or establish the Successor Borrower or to purchase, or cause the purchase of, the U.S. Obligations as provided above, may be exercised by KeyBank National Association (“
KeyBank
”) in its sole discretion and shall be retained by KeyBank (and any successor or assign of KeyBank under a specific assignment of such retained rights separate and apart from a transfer or securitization of the Loan in whole or in part), notwithstanding any transfer or securitization of the Loan in whole or in part. Such Successor Borrower shall assume the obligations under the Note and the Security Agreement and Borrower shall be relieved of its obligations under such documents;
provided, however
, that all references therein to “Property” shall be deemed to refer only to the U.S. Obligations purchased with the Defeasance Deposit delivered to Lender, and upon such transfer and assignment, Borrower shall be relieved of its obligations under such documents, except with respect to any provisions therein which by their terms expressly survive repayment, defeasance or other satisfaction of the Loan or a transfer of the Property in connection with Lender’s exercise of its remedies under this Agreement and the other Loan Documents. As a condition to such assignment and assumption, Borrower shall deliver to Lender (a) an Additional Insolvency Opinion with respect to the Successor Borrower, and (b) an opinion or opinions of counsel in form and substance and delivered by counsel satisfactory to the applicable Rating Agencies and Lender in its discretion stating, among other things, that such assumption agreement is enforceable against Borrower and Successor Borrower in accordance with its terms. Borrower shall pay all costs and expenses incurred by Lender, including Lender’s attorneys’ fees and expenses and any fees and expenses of any Rating Agencies, incurred in connection with such assumption.
Section 2.6
Release of Property
. Except as set forth in this
Section 2.6
, no repayment, prepayment or defeasance of all or any portion of the Loan shall cause, give rise to a right to require, or otherwise result in, the release of the Lien of the Security Instrument on the Property.
2.6.1
Release of Property
. (a) If Borrower has the right to and has elected to prepay in full or defease the Loan in accordance with this Agreement and the Note, upon satisfaction of the requirements of Section 2.4 and Section 9 of the Note (in the case of a prepayment, if then permitted under this Agreement and the Note) or
Section 2.5
(in the case of a full defeasance, if then permitted under this Agreement and the Note), as applicable, and this
Section 2.6
, all of the Property shall be released from the Lien of the Security Instrument.
(b) In connection with the release of the Security Instrument, Borrower shall submit to Lender, not less than thirty (30) days prior to the Defeasance Date a release of Lien (and related Loan Documents) for the Property for execution by Lender. Such release shall be in a form appropriate in the jurisdiction in which the Property is located and that would be satisfactory to a prudent lender and contains standard provisions, if any, protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all Legal Requirements, and (ii) will effect such releases in accordance with the terms of this Agreement. Borrower shall reimburse Lender and Servicer for any costs and expenses Lender and Servicer incur arising from such release (including reasonable attorneys’ fees and expenses) and Borrower shall pay, in connection with such release, (i) all recording charges, filing fees, taxes or other expenses payable in connection therewith, and (ii) to any Servicer, a processing fee in an amount determined by Lender and/or Servicer in its discretion.
Section 2.7
Clearing Account/Cash Management
.
2.7.1
Clearing Account
. (a) During the term of the Loan, Borrower shall establish and maintain an Eligible Account (the “
Clearing Account
”) with Clearing Bank for the benefit of Lender, which Clearing Account shall be under the sole dominion and control of Lender. The Clearing Account shall be entitled in the name of Borrower for the benefit of Lender. Borrower hereby grants to Lender a first-priority security interest in the Clearing Account and all deposits at any time contained therein and the proceeds thereof and shall take all actions necessary to maintain in favor of Lender a perfected first priority security interest in the Clearing Account, including filing UCC-1 Financing Statements and continuations thereof. Lender and Servicer shall have the sole right to make withdrawals from the Clearing Account. All costs and expenses for establishing and maintaining the Clearing Account shall be paid by Borrower. All monies now or hereafter deposited into the Clearing Account shall be deemed additional security for the Debt. The Clearing Account Agreement and Clearing Account shall remain in effect until the Loan has been repaid or defeased in full.
(b) Borrower shall, or shall cause Manager to, (i) on or prior to the Closing Date with respect to Leases in existence on the date hereof and (ii) simultaneously with the execution of any Lease entered into after the date hereof, deliver Tenant Direction Letters to all Tenants to deliver all Rents payable under their respective Leases directly to the Clearing Account. Without the prior written consent of Lender, neither Borrower nor Manager shall (i) terminate, amend, revoke or modify any Tenant Direction Letter in any manner or (ii) direct or cause any Tenant to pay any amount in any manner other than as provided in the Tenant Direction Letter. Borrower shall, and shall cause Manager to, deposit all amounts received by Borrower or Manager constituting Rents into the Clearing Account within one (1) Business Day after receipt thereof. Until so deposited, all Rents received by Borrower or Manager shall be held in trust for the benefit of Lender and shall not be commingled with any other funds or property of Borrower or Manager.
(c) Borrower shall obtain from Clearing Bank its agreement to transfer on each Business Day all amounts on deposit in the Clearing Account at the direction of Borrower unless a Cash
Sweep Period is in effect, in which case such funds shall be transferred to the Cash Management Account.
(d) Upon the occurrence of an Event of Default or any Bankruptcy Action of Borrower or Manager, Lender may, in addition to any and all other rights and remedies available to Lender, apply any sums then present in the Clearing Account to the payment of the Debt in any order in its discretion.
(e) The Clearing Account shall not be commingled with other monies held by Borrower, Manager or Clearing Bank.
(f) Borrower shall not further pledge, assign or grant any security interest in the Clearing Account or the monies deposited therein or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1 Financing Statements, except those naming Lender as the secured party, to be filed with respect thereto.
(g) Borrower shall indemnify Lender and hold Lender harmless from and against any and all actions, suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses (including litigation costs and reasonable attorneys’ fees and expenses) arising from or in any way connected with the Clearing Account or the Clearing Account Agreement (unless arising from the gross negligence or willful misconduct of Lender) or the performance of the obligations for which the Clearing Account was established.
(h) Upon (i) Clearing Bank ceasing to be an Eligible Institution, (ii) the Clearing Account ceasing to be an Eligible Account, (iii) any resignation by Clearing Bank or termination of the Clearing Account Agreement by Clearing Bank or Lender or (iv) the occurrence and continuance of an Event of Default, Borrower shall, within fifteen (15) days of Lender’s written request, (A) terminate the existing Clearing Account Agreement, (B) appoint a new Clearing Bank (which such Clearing Bank shall (I) be an Eligible Institution, (II) other than during the continuance of an Event of Default, be selected by Borrower and approved by Lender and (III) during the continuance of an Event of Default, be selected by Lender), (C) cause such Clearing Bank to open a new Clearing Account (which such account shall be an Eligible Account) and enter into a new Clearing Account Agreement with Lender on substantially the same terms and conditions as the previous Clearing Account Agreement and (D) send any notices required pursuant to the terms hereof relating to such new Clearing Account Agreement and Clearing Account and new Tenant Direction Letters. Borrower constitutes and appoints Lender its true and lawful attorney-in-fact with full power of substitution to complete or undertake any action required of Borrower under this Section 2.7.1 in the name of Borrower in the event Borrower fails to do the same. Such power of attorney shall be deemed to be a power coupled with an interest and cannot be revoked.
2.7.2
Cash Management Account
. (a) Upon the occurrence of a Cash Sweep Event, a segregated Eligible Account (the “
Cash Management Account
”) shall be established and maintained with Agent in Borrower’s name for the benefit of Lender, which Cash Management Account shall be under the sole dominion and control of Lender. Borrower hereby grants to Lender a first priority security interest in the Cash Management Account and all deposits at any time contained therein and the proceeds thereof and shall take all actions necessary to maintain in favor
of Lender a perfected first priority security interest in the Cash Management Account, including filing UCC-1 Financing Statements and continuations thereof. Lender and Servicer shall have the sole right to make withdrawals from the Cash Management Account and all costs and expenses for establishing and maintaining the Cash Management Account shall be paid by Borrower.
(b) The insufficiency of funds on deposit in the Cash Management Account shall not relieve Borrower from the obligation to make any payments, as and when due pursuant to this Agreement and the other Loan Documents, and such obligations shall be separate and independent, and not conditioned on any event or circumstance whatsoever.
(c) All funds on deposit in the Cash Management Account following the occurrence of an Event of Default or any Bankruptcy Action of Borrower or Manager may be applied by Lender in such order and priority as Lender shall determine.
(d) Borrower hereby agrees that Lender may modify the Cash Management Agreement for the purpose of establishing additional sub-accounts in connection with any payments otherwise required under this Agreement and the other Loan Documents and Lender shall provide notice thereof to Borrower.
2.7.3
Payments Received under the Cash Management Agreement
. Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, and provided no Event of Default has occurred and is continuing, Borrower’s obligations with respect to the payment of the Monthly Debt Service Payment Amount and amounts required to be deposited into the Reserve Funds, if any, shall be deemed satisfied to the extent sufficient amounts are deposited in the Cash Management Account to satisfy such obligations pursuant to this Agreement on the dates each such payment is required, regardless of whether any of such amounts are so applied by Lender.
2.7.4
Setup of the Cash Management Account
. Borrower hereby agrees to cooperate with Lender in instituting the cash management system provided for herein, including, without limitation, setting up the Cash Management Account as and when required pursuant to this Agreement and the Cash Management Agreement.
ARTICLE III - CONDITIONS PRECEDENT
Section 3.1
Conditions Precedent to Closing
. The obligation of Lender to make the Loan hereunder is subject to the fulfillment by Borrower or waiver by Lender of all of the conditions precedent to closing set forth in the application or term sheet for the Loan delivered by Borrower to Lender and the commitment or commitment rider, if any, to the application or term sheet for the Loan issued by Lender, together with Lender’s receipt of the executed Ground Lease Estoppel.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
Section 4.1
Borrower Representations
. Borrower represents and warrants as of the date hereof that:
4.1.1
Organization
. Borrower has been duly organized and is validly existing and in good standing with requisite power and authority to own the Property and to transact the businesses in which it is now engaged. Borrower is duly qualified to do business and is in good standing in the jurisdiction in which the Property is located and each other jurisdiction where it is required to be so qualified in connection with its businesses and operations. Borrower possesses all rights, licenses, permits and authorizations, governmental or otherwise, necessary to entitle it to own the Property and to transact the businesses in which it is now engaged, and the sole business of Borrower is the ownership, management and operation of the Property. The direct and indirect ownership interests in Borrower are as set forth on the organizational chart attached hereto as
Schedule III
, and the direct and indirect ownership interests in Borrower or the Property do not include any Prohibited Entity/Ownership Structure.
4.1.2
Proceedings
. Borrower has taken all necessary action to authorize the execution, delivery and performance of this Agreement and the other Loan Documents. This Agreement and such other Loan Documents have been duly executed and delivered by or on behalf of Borrower and constitute legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms, except as such enforcement may be limited by (i) bankruptcy, insolvency, fraudulent transfer, reorganization or other similar laws affecting the enforcement of creditors’ rights generally, and (ii) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).
4.1.3
No Conflicts
. The execution, delivery and performance of this Agreement and the other Loan Documents by Borrower will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance (other than pursuant to the Loan Documents) upon any of the property or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, partnership agreement, management agreement or other agreement or instrument to which Borrower is a party or by which any of the Property or Borrower’s assets is subject, nor will such action result in any violation of the provisions of any statute or any order, rule or regulation of any Governmental Authority having jurisdiction over Borrower or any of Borrower’s properties or assets, and any consent, approval, authorization, order, registration or qualification of or with any court or any such Governmental Authority required for the execution, delivery and performance by Borrower of this Agreement or any other Loan Documents has been obtained and is in full force and effect.
4.1.4
Litigation
. There are no actions, suits or proceedings at law or in equity, arbitrations, or governmental investigations by or before any Governmental Authority or other agency now pending, filed, or, to Borrower’s knowledge, threatened against or affecting Borrower, Guarantor or the Property, which actions, suits or proceedings, or governmental investigations, if determined against Borrower, Guarantor or the Property, might materially adversely affect (a) title to the Property; (b) the validity or enforceability of the Security Instrument; (c) Borrower’s ability to perform under the Loan; (d) Guarantor’s ability to perform under the Guaranty; (e) the use, operation or value of the Property; (f) the principal benefit of the security intended to be provided by the Loan Documents; (g) the current ability of the Property to generate Net Cash Flow sufficient to service the Loan; or (h) the current principal use of the Property.
4.1.5
Agreements
. Borrower is not a party to any agreement or instrument or subject to any restriction which might materially and adversely affect Borrower or the Property, or Borrower’s business, properties or assets, operations or condition, financial or otherwise. Borrower 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 Borrower or the Property is bound. Borrower has no material financial obligation under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Borrower is a party or by which Borrower or the Property is otherwise bound, other than (a) obligations incurred in the ordinary course of the operation of the Property as permitted pursuant to clause (xix) of the definition of “Special Purpose Entity” set forth in
Section 1.1
hereof and (b) obligations under the Loan Documents.
4.1.6
Title
. Borrower has a good, marketable and insurable leasehold estate in and to the Ground Lease Property, good, marketable and insurable fee simple title to the Fee Land (as defined in the Security Instrument) and good title to the balance of the Property, free and clear of all Liens whatsoever except the Permitted Encumbrances, such other Liens as may be expressly permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. The Permitted Encumbrances in the aggregate do not materially and adversely affect the value, operation or use of the Property (as currently used) or Borrower’s ability to repay the Loan. The Security Instrument, when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create (a) a valid, perfected first priority lien on the Property, subject only to Permitted Encumbrances and the Liens created by the Loan Documents and (b) perfected security interests in and to, and perfected collateral assignments of, all personalty (including the Leases), all in accordance with the terms thereof, in each case subject only to any applicable Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. There are no claims for payment for work, labor or materials affecting the Property which are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents.
4.1.7
Solvency
. Borrower has (a) not entered into this transaction or executed the Note, this Agreement or any other Loan Documents with the actual intent to hinder, delay or defraud any creditor and (b) received reasonably equivalent value in exchange for its obligations under such Loan Documents. Giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds and will, immediately following the making of the Loan, exceed Borrower’s total liabilities, including subordinated, unliquidated, disputed and contingent liabilities. The fair saleable value of Borrower’s assets is and will, immediately following the making of the Loan, be greater than Borrower’s probable liabilities, including the maximum amount of its contingent liabilities on its debts as such debts become absolute and matured. Borrower’s assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. Borrower does not intend to, and does not believe that it will, incur debt and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such debt and liabilities as they mature (taking into account the timing and amounts of cash to be received by Borrower and the amounts to be payable on or in respect of obligations of Borrower). No petition in bankruptcy has been filed against Borrower or any constituent Person in the last seven (7) years, and neither Borrower nor any constituent Person in
the last seven (7) years has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of debtors. Neither Borrower 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 Borrower’s assets or property, and Borrower has no knowledge of any Person contemplating the filing of any such petition against it or such constituent Persons.
4.1.8
Full and Accurate Disclosure
. No statement of fact made by Borrower in this Agreement or in any of the other Loan Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading. There is no material fact presently known to Borrower which has not been disclosed to Lender which adversely affects, nor as far as Borrower can foresee, might adversely affect, the Property or the business, operations or condition (financial or otherwise) of Borrower.
4.1.9
No Plan Assets
. Borrower does not sponsor, is not obligated to contribute to, and is not itself an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA or Section 4975 of the Code, and none of the assets of Borrower constitutes or will constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) Borrower is not a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions by or with Borrower are not subject to any state or other statute , regulation or other restriction regulating investments of, or fiduciary obligations with respect to, governmental plans within the meaning of Section 3(32) of ERISA which is similar to the provisions of Section 406 of ERISA or Section 4975 of the Code and which prohibit or otherwise restrict the transactions contemplated by this Agreement, including the exercise by Lender of any of its rights under the Loan Documents.
4.1.10
Compliance
. Borrower and the Property and the use thereof comply in all material respects with all applicable Legal Requirements, including building and zoning ordinances and codes. Borrower is not in default or violation of any order, writ, injunction, decree or demand of any Governmental Authority. There has not been committed by Borrower or any other Person in occupancy of or involved with the operation or use of the Property any act or omission affording the federal government or any other Governmental Authority the right of forfeiture as against the Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents. On the Closing Date, the Improvements at the Property were in material compliance with applicable law.
4.1.11
Financial Information
. All financial data, including the statements of cash flow and income and operating expense, that have been delivered to Lender in connection with the Loan (a) are true, complete and correct in all material respects, (b) accurately represent the financial condition of Borrower and the Property, as applicable, as of the date of such reports, and (c) 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. Except for Permitted Encumbrances, Borrower does not have any contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments that are known to Borrower and reasonably likely to have a material adverse effect
on the Property or the current operation thereof, except as referred to or reflected in said financial statements. Since the date of such financial statements, there has been no material adverse change in the financial condition, operations or business of Borrower from that set forth in said financial statements.
4.1.12
Condemnation
. No Condemnation or other similar proceeding has been commenced or, to Borrower’s best knowledge, is threatened or contemplated with respect to all or any portion of the Property or for the relocation of roadways providing access to the Property.
4.1.13
Federal Reserve Regulations
. No part of the proceeds of the Loan 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 Agreement or the other Loan Documents.
4.1.14
Utilities and Public Access
. The Property has rights of access to public ways and is served by water, sewer, sanitary sewer and storm drain facilities adequate to service the Property for its intended uses. All public utilities necessary or convenient to the full use and enjoyment of the Property are located either in the public right of way abutting the Property (which are connected so as to serve the Property without passing over other property) or in recorded easements serving the Property and such easements are set forth in and insured by the Title Insurance Policy. All roads necessary for the use of the Property for its current purposes have been completed and dedicated to public use and accepted by all Governmental Authorities.
4.1.15
Not a Foreign Person
. Borrower is not a “foreign person” within the meaning of §1445(f)(3) of the Code.
4.1.16
Separate Lots
. The 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 the Property.
4.1.17
Assessments
. There are no pending or proposed special or other assessments for public improvements or otherwise affecting the Property, nor are there any contemplated improvements to the Property that may result in such special or other assessments.
4.1.18
Enforceability
. The Loan Documents are enforceable by Lender (or any subsequent holder thereof) in accordance with their respective terms, subject to principles of equity and bankruptcy, insolvency and other laws generally applicable to creditors’ rights and the enforcement of debtors’ obligations. The Loan Documents are not subject to any right of rescission, set off, counterclaim or defense by Borrower or Guarantor, including the defense of usury, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right thereunder, render the Loan Documents unenforceable (subject to principles of equity and bankruptcy, insolvency and other laws generally affecting creditors’ rights and the enforcement of debtors’ obligations), and neither Borrower nor Guarantor has asserted any right of rescission, set off, counterclaim or defense with respect thereto.
4.1.19
No Prior Assignment
. There are no prior assignments of the Leases or any portion of the Rents due and payable or to become due and payable which are presently outstanding.
4.1.20
Insurance
. Borrower has obtained and has delivered to Lender certified copies of the Policies (or other evidence acceptable to Lender) reflecting the insurance coverages, amounts and other requirements set forth in this Agreement. No claims have been made or are currently pending, outstanding or otherwise remain unsatisfied under any such Policy, and neither Borrower nor any other Person, has done, by act or omission, anything which would impair the coverage of any such Policy.
4.1.21
Use of Property
. The Property is used exclusively for office purposes and other appurtenant and related uses.
4.1.22
Certificate of Occupancy; Licenses
. All certifications, permits, franchises, licenses, consents, authorizations, and approvals, including, certificates of completion and occupancy permits, required for the legal use, occupancy and operation of the Property have been obtained and are in full force and effect. The use being made of the Property is in conformity with the certificate of occupancy issued for the Property.
4.1.23
Flood Zone
. None of the Improvements on the Property are located in an area as identified by the Federal Emergency Management Agency as an area having special flood hazards, or, if so located, the flood insurance required pursuant to
Section 6.1(a)
is in full force and effect with respect to the Property.
4.1.24
Physical Condition
. The Property, including all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, are in good condition, order and repair in all material respects; there exists no structural or other material defects or damages in the Property, whether latent or otherwise, and Borrower has not received notice from any insurance company or bonding company of any defects or inadequacies in the Property, or any part thereof, which would adversely affect the insurability of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond.
4.1.25
Boundaries
. All of the improvements which were included in determining the appraised value of the Property lie wholly within the boundaries and building restriction lines of the Property, and no improvements on adjoining properties encroach upon the Property, and no easements or other encumbrances upon the Property encroach upon any of the Improvements, so as to affect the value or marketability of the Property except those which are insured against by the Title Insurance Policy.
4.1.26
Leases
. The Property is not subject to any leases other than (a) the Ground Lease and (b) the Leases described in the rent roll attached hereto as
Schedule I
and made a part hereof, which rent roll is true, complete and accurate in all respects as of the Closing Date. Borrower is the owner and lessor of landlord’s interest in the Leases. No Person has any possessory interest in
the Property or right to occupy the same except under and pursuant to the provisions of the Leases. The current Leases are in full force and effect and there are no defaults thereunder by either party and there are no conditions that, with the passage of time or the giving of notice, or both, would constitute defaults thereunder. No Rent has been paid more than one (1) month in advance of its due date. All security deposits are held by Borrower in accordance with applicable law. All work to be performed by Borrower under each Lease has been performed as required and 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 Borrower to any Tenant has already been received by such Tenant. There has been no prior sale, transfer or assignment, hypothecation or pledge of any Lease or of the Rents received therein which is outstanding. No Tenant listed on
Schedule I
has assigned its Lease or sublet all or any portion of the premises demised thereby, no such Tenant holds its leased premises under assignment or sublease, nor does anyone except such Tenant and its employees occupy such leased premises. No Tenant under any Lease has a right or option pursuant to such Lease or otherwise to purchase all or any part of the leased premises or the building of which the leased premises are a part. No Tenant under any Lease has any right or option for additional space in the Improvements.
4.1.27
Survey
. The Survey for the Property delivered to Lender in connection with this Agreement does not fail to reflect any material matter affecting the Property or the title thereto.
4.1.28
Inventory
. Borrower is the owner of all of the Equipment, Fixtures and Personal Property (as such terms are defined in the Security Instrument) located on or at the Property and shall not lease any Equipment, Fixtures or Personal Property other than as permitted hereunder. All of the Equipment, Fixtures and Personal Property are sufficient to operate the Property in the manner required hereunder and in the manner in which it is currently operated.
4.1.29
Filing and Recording Taxes
. 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 have been paid. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Person under applicable Legal Requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including the Security Instrument, have been paid.
4.1.30
Special Purpose Entity/Separateness/No Prohibited Entity/Ownership Structure
. (a) Until the Debt has been paid in full, Borrower hereby represents, warrants and covenants that (i) Borrower is, shall be and shall continue to be a Special Purpose Entity, and (ii) no direct or indirect ownership interests in Borrower or the Property shall include any Prohibited Entity/Ownership Structure.
(b) The representations, warranties and covenants set forth in
Section 4.1.30(a)
and
Section 4.1.30(d)
shall survive for so long as any amount remains payable to Lender under this Agreement or any other Loan Document.
(c) Intentionally omitted.
(d) Any and all of the stated facts and assumptions made in any Insolvency Opinion, including any exhibits attached thereto, will have been and shall be true and correct in all respects, and Borrower will have complied and will comply with all of the stated facts and assumptions made with respect to it in any Insolvency Opinion. Each entity other than Borrower with respect to which an assumption is made or a fact stated in any Insolvency Opinion will have complied and shall comply with all of the assumptions made and facts stated with respect to it in any such Insolvency Opinion. Borrower covenants that in connection with any Additional Insolvency Opinion delivered in connection with this Agreement it shall provide an updated certification regarding compliance with the facts and assumptions made therein.
(e) Borrower covenants and agrees that Borrower shall provide Lender with thirty (30) days’ prior written notice prior to the removal of an Independent Director of any of Borrower.
4.1.31
Management Agreement
. The Management Agreement is in full force and effect and there is no default thereunder by any party thereto and no event has occurred that, with the passage of time or the giving of notice would constitute a default thereunder. The Management Agreement was entered into on commercially reasonable terms.
4.1.32
Illegal Activity
. No portion of the Property has been or will be purchased with proceeds of any illegal activity.
4.1.33
No Change in Facts or Circumstances; Disclosure
. All information submitted by and on behalf of Borrower to Lender and in all financial statements, rent rolls (including the rent roll attached hereto as
Schedule I
), reports, certificates and other documents submitted in connection with the Loan or in satisfaction of the terms thereof and all statements of fact made by Borrower in this Agreement or in any other Loan Document, are true, complete and correct in all material respects. There has been no material adverse change in any condition, fact, circumstance or event that would make any such information inaccurate, incomplete or otherwise misleading in any material respect or that otherwise materially and adversely affects or might materially and adversely affect the use, operation or value of the Property or the business operations or the financial condition of Borrower. Borrower has disclosed to Lender all material facts and has not failed to disclose any material fact that could cause any Provided Information or representation or warranty made herein to be materially misleading.
4.1.34
Investment Company Act
. Borrower is not (a) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (b) a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 2005, as amended; or (c) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.
4.1.35
Embargoed Person
. As of the date hereof and at all times throughout the term of the Loan, including after giving effect to any Transfers permitted pursuant to the Loan Documents, (a) none of the funds or other assets of Borrower and Guarantor 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 Borrower or Guarantor, as applicable, with the result that the investment in Borrower or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law; and (c) none of the funds of Borrower or Guarantor, as applicable, have been derived from any unlawful activity with the result that the investment in Borrower or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law.
4.1.36
Principal Place of Business; State of Organization
. Borrower’s principal place of business as of the date hereof is the address set forth in the introductory paragraph of this Agreement. Borrower’s state of organization is as set forth in the introductory paragraph of this Agreement.
4.1.37
Environmental Representations and Warranties
. Except as otherwise disclosed by that certain Phase I environmental report (or Phase II environmental report, if required) delivered to Lender by Borrower in connection with the origination of the Loan (such report is referred to below as the “
Environmental Report
”), (a) there are no Hazardous Substances or underground storage tanks in, on, or under the Property and no Hazardous Substances have been handled, manufactured, generated, stored, processed, or disposed of on or released or discharged from the Property, except those that are (i) in compliance with Environmental Laws and with permits issued pursuant thereto (to the extent such permits are required under Environmental Law), (ii) de-minimis amounts necessary to operate the Property for the purposes set forth in this Agreement which will not result in an environmental condition in, on or under the Property and which are otherwise permitted under and used in compliance with Environmental Law and (iii) fully disclosed to Lender in writing pursuant the Environmental Report; (b) there are no past, present or threatened Releases of Hazardous Substances in, on, under or from the Property which has not been fully remediated in accordance with Environmental Law; (c) there is no threat of any Release of Hazardous Substances migrating to the Property; (d) there is no past or present non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with the Property which has not been fully remediated in accordance with Environmental Law; (e) Borrower does not know of, and has not received, any written or oral notice or other communication from any Person (including a Governmental Authority) relating to Hazardous Substances or Remediation thereof, of possible liability of any Person pursuant to any Environmental Law, other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with any of the foregoing; (f) Borrower has truthfully and fully disclosed to Lender, in writing, any and all information relating to environmental conditions in, on, under or from the Property that is known to Borrower and has provided to Lender all information that is contained in Borrower’s files and records, including any reports relating to Hazardous Substances in, on, under or from the Property or to the environmental condition of the Property; and (g) there are no Institutional Controls on or affecting the Property.
4.1.38
Cash Management Account
. Borrower hereby represents and warrants to Lender that:
(a) This Agreement, together with the other Loan Documents, create a valid and continuing security interest (as defined in the Uniform Commercial Code) in the Clearing Account
and Cash Management Account in favor of Lender, which security interest is prior to all other Liens, other than Permitted Encumbrances, and is enforceable as such against creditors of and purchasers from Borrower. Other than in connection with the Loan Documents and except for Permitted Encumbrances, Borrower has not sold, pledged, transferred or otherwise conveyed the Clearing Account or Cash Management Account;
(b) Each of the Clearing Account and Cash Management Account constitutes a “deposit account” or “securities account” within the meaning of the Uniform Commercial Code);
(c) Pursuant and subject to the terms hereof and the other applicable Loan Documents, the Clearing Bank and Agent have agreed to comply with all instructions originated by Lender, without further consent by Borrower, directing disposition of the Clearing Account and Cash Management Account and all sums at any time held, deposited or invested therein, together with any interest or other earnings thereon, and all proceeds thereof (including proceeds of sales and other dispositions), whether accounts, general intangibles, chattel paper, deposit accounts, instruments, documents or securities;
(d) The Clearing Account and Cash Management Account are not in the name of any Person other than Borrower, as pledgor, or Lender, as pledgee. Borrower has not consented to the Clearing Bank and Agent complying with instructions with respect to the Clearing Account and Cash Management Account from any Person other than Lender; and
(e) The Property is not subject to any cash management system (other than pursuant to the Loan Documents), and any and all existing tenant instruction letters issued in connection with any previous financing have been duly terminated prior to the date hereof.
4.1.39
Ground Lease
. With respect to the Ground Lease and Ground Lease Property:
(a) the Ground Lease is in full force and effect and unmodified and Borrower has good and valid title to the Ground Lease Property;
(b) all rents (including any additional rents and other charges) payable under the Ground Lease have been paid to the extent such rents were due and payable prior to the date hereof; and
(c) no event has occurred which, with the passage of time, the giving of notice, or both, would result in a default or an event of default under the provisions of the Ground Lease or in the performance of any of the terms, covenants, conditions or warranties thereof on the part of the ground lessee or, to the best of Borrower’s knowledge, Ground Lessor to be observed and performed.
Section 4.2
Survival of Representations
. Borrower agrees that all of the representations and warranties of Borrower set forth in
Section 4.1
hereof and elsewhere in this Agreement and in the other Loan Documents shall survive for so long as any amount remains owing to Lender under this Agreement or any of the other Loan Documents by Borrower. All representations, warranties, covenants and agreements made in this Agreement or in the other Loan
Documents by Borrower shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf.
ARTICLE V - BORROWER COVENANTS
Section 5.1
Affirmative Covenants
. From the date hereof and until payment and performance in full of all obligations of Borrower under the Loan Documents or the earlier release of the Lien of the Security Instrument encumbering the Property (and all related obligations) in accordance with the terms of this Agreement and the other Loan Documents, Borrower hereby covenants and agrees with Lender that:
5.1.1
Existence; Compliance with Legal Requirements
. Borrower shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence, rights, licenses, permits, authorizations, and franchises and comply with all Legal Requirements applicable to it and the Property, including all regulations, building and zoning codes and certificates of occupancy. There shall never be committed by Borrower, and Borrower shall never permit any other Person in occupancy of or involved with the operation or use of the Property to commit any act or omission affording the federal government or any state or local government the right of forfeiture against the Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents. Borrower hereby covenants and agrees not to commit, permit or suffer to exist any act or omission affording such right of forfeiture. Borrower shall at all times maintain, preserve and protect all franchises and trade names and preserve all the remainder of its property used or useful in the conduct of its business and shall keep the Property in good working order and repair, and from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto, all as more fully provided in the Loan Documents. Borrower shall keep the Property 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 Agreement. Borrower shall from time to time, upon Lender’s request, provide Lender with evidence reasonably satisfactory to Lender that the Property complies with all Legal Requirements or is exempt from compliance with Legal Requirements. Borrower shall give prompt notice to Lender of the receipt by Borrower of any notice related to a violation of any Legal Requirements and of the commencement of any proceedings or investigations which relate to compliance with Legal Requirements. After prior written notice to Lender, Borrower, at Borrower’s own expense, may contest by appropriate legal proceeding promptly initiated and conducted in good faith and with due diligence, the validity of any Legal Requirement, the applicability of any Legal Requirement to Borrower or the Property or any alleged violation of any Legal Requirement, provided that (i) no Default or Event of Default has occurred and remains uncured; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any instrument to which Borrower 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) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; (iv) Borrower shall promptly upon final determination thereof comply with any such Legal Requirement determined to be valid or applicable or cure any violation of any Legal Requirement; (v) such proceeding shall suspend the enforcement of the contested Legal Requirement against Borrower or the Property; and (vi) Borrower shall
furnish such security as may be required in the proceeding, or as may be requested by Lender, to insure compliance with such Legal Requirement, together with all interest and penalties payable in connection therewith. Lender may apply any such security, as necessary to cause compliance with such Legal Requirement at any time when, in the reasonable judgment of Lender, the validity, applicability or violation of such Legal Requirement is finally established or the Property (or any part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost.
5.1.2
Taxes and Other Charges
. Borrower shall pay all Taxes and Other Charges now or hereafter levied or assessed or imposed against the Property or any part thereof as the same become due and payable; provided, however, Borrower’s obligation to directly pay Taxes shall be suspended for so long as Borrower complies with the terms and provisions of
Section 7.2
hereof. Borrower shall deliver to Lender receipts for payment or other evidence satisfactory to Lender that the Taxes and Other Charges have been so paid or are not then delinquent no later than ten (10) days prior to the date on which the Taxes or Other Charges would otherwise be delinquent if not paid. Borrower shall furnish to Lender receipts for the payment of the Taxes and the Other Charges prior to the date the same shall become delinquent (provided, however, Borrower is not required to furnish such receipts for payment of Taxes if such Taxes have been paid by Lender pursuant to
Section 7.2
hereof and Lender has received receipts from the relevant taxing authority). Borrower shall not suffer and shall promptly cause to be paid and discharged any Lien or charge whatsoever which may be or become a Lien or charge against the Property, and shall promptly pay for all utility services provided to the Property. After prior written notice to Lender, Borrower, at Borrower’s own expense, may 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 Taxes or Other Charges, provided that (i) no Default or Event of Default has occurred and remains uncured; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower 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) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost; (iv) Borrower shall promptly upon final determination thereof pay the amount of any such Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith; (v) such proceeding shall suspend the collection of such contested Taxes or Other Charges from the Property; (vi) Borrower shall have set aside adequate reserves for the payment of the Taxes, together with all interest and penalties thereon, unless Borrower has paid all of the Taxes under protest; and (vii) Borrower shall furnish such security as may be required in the proceeding, or as may be requested by Lender, to insure the payment of any such Taxes or Other Charges, together with all interest and penalties thereon. Lender may pay over any such cash deposit or part thereof held by Lender to the claimant entitled thereto at any time when, in the judgment of Lender, the entitlement of such claimant is established or the Property (or part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost or there shall be any danger of the Lien of the Security Instrument being primed by any related Lien.
5.1.3
Litigation
. Borrower shall give prompt written notice to Lender of any litigation or governmental proceedings pending or threatened against Borrower or Guarantor which might
materially adversely affect Borrower’s or Guarantor’s condition (financial or otherwise) or business or the Property.
5.1.4
Access to Property
. Borrower shall permit agents, representatives and employees of Lender to inspect the Property or any part thereof at reasonable hours upon reasonable advance notice.
5.1.5
Notice of Default
. Borrower shall promptly advise Lender of any material adverse change in Borrower’s or Guarantor’s condition, financial or otherwise, or of the occurrence of any Default or Event of Default of which Borrower has knowledge.
5.1.6
Cooperate in Legal Proceedings
. Borrower shall cooperate fully with Lender with respect to any proceedings before any court, board or other Governmental Authority which may in any way affect the rights of Lender hereunder or any rights obtained by Lender under any of the other Loan Documents and, in connection therewith, permit Lender, at its election, to participate in any such proceedings.
5.1.7
Perform Loan Documents
. Borrower shall observe, perform and satisfy all the terms, provisions, covenants and conditions of, and shall pay when due all costs, fees and expenses to the extent required under the Loan Documents executed and delivered by, or applicable to, Borrower, and shall not enter into or otherwise suffer or permit any amendment, waiver, supplement, termination or other modification of any Loan Document executed and delivered by, or applicable to, Borrower without the prior written consent of Lender.
5.1.8
Award and Insurance Benefits
. Borrower shall cooperate with Lender in obtaining for Lender the benefits of any Awards or Insurance Proceeds lawfully or equitably payable in connection with the Property, and Lender shall be reimbursed for any expenses incurred in connection therewith (including attorneys’ fees and disbursements, and the payment by Borrower of the expense of an appraisal on behalf of Lender in case of Casualty or Condemnation affecting the Property or any part thereof) out of such Insurance Proceeds.
5.1.9
Further Assurances
. Borrower shall, at Borrower’s sole cost and expense:
(a) furnish to Lender all instruments, documents, boundary surveys, footing or foundation surveys, certificates, plans and specifications, appraisals, title and other insurance reports and agreements, and each and every other document, certificate, agreement and instrument required to be furnished by Borrower pursuant to the terms of the Loan Documents or which are reasonably requested by Lender in connection therewith;
(b) execute and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other acts necessary or desirable, to evidence, preserve or protect the collateral at any time securing or intended to secure the obligations of Borrower under the Loan Documents, as Lender may reasonably require; and
(c) do and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying out of the intents and purposes of this Agreement and the other Loan Documents, as Lender shall reasonably require from time to time.
5.1.10
Principal Place of Business, State of Organization
. Borrower shall not cause or permit any change to be made in its name, identity (including its trade name or names), place of organization or formation (as set forth in
Section 4.1.36
hereof) or Borrower’s corporate or partnership or other structure unless Borrower shall have first notified Lender in writing of such change at least thirty (30) days prior to the effective date of such change, and shall have first taken all action required by Lender for the purpose of perfecting or protecting the lien and security interests of Lender pursuant to this Agreement, and the other Loan Documents and, in the case of a change in Borrower’s structure, without first obtaining the prior written consent of Lender, which consent may be given or denied in Lender’s discretion. Upon Lender’s request, Borrower shall, at Borrower’s sole cost and expense, execute and deliver additional security agreements and other instruments which may be necessary to effectively evidence or perfect Lender’s security interest in the Property as a result of such change of principal place of business or place of organization. Borrower’s principal place of business and chief executive office, and the place where Borrower keeps its books and records, including recorded data of any kind or nature, regardless of the medium or recording, including software, writings, plans, specifications and schematics, has been for the preceding four months (or, if less, the entire period of the existence of Borrower) and will continue to be the address of Borrower set forth at the introductory paragraph of this Agreement (unless Borrower notifies Lender in writing at least thirty (30) days prior to the date of such change). Borrower shall promptly notify Lender of any change in its organizational identification number. If Borrower does not now have an organizational identification number and later obtains one, Borrower promptly shall notify Lender of such organizational identification number.
5.1.11
Financial Reporting
. (a) Borrower shall keep and maintain or shall cause to be kept and maintained on a Fiscal Year basis, in accordance with the requirements for a Special Purpose Entity set forth herein and GAAP (or such other accounting basis acceptable to Lender), proper and accurate books, records and accounts reflecting all of the financial affairs of Borrower and all items of income and expense in connection with the operation of the Property. Lender shall have the right from time to time at all times during normal business hours upon reasonable notice to examine such books, records and accounts at the office of Borrower or any other Person maintaining such books, records and accounts and to make such copies or extracts thereof as Lender shall desire. After the occurrence of an Event of Default, Borrower shall pay any costs and expenses incurred by Lender to examine Borrower’s accounting records with respect to the Property, as Lender shall determine to be necessary or appropriate in the protection of Lender’s interest.
(b) Borrower shall furnish to Lender annually, within one hundred twenty (120) days following the end of each Fiscal Year of Borrower, a complete copy of Borrower’s annual financial statements audited by an independent certified public accountant acceptable to Lender in accordance with GAAP (or such other accounting basis acceptable to Lender) covering the Property for such Fiscal Year and containing statements of profit and loss for Borrower and the Property, an annual rent roll and a balance sheet for Borrower (provided that if Borrower consists of more than one entity, said balance sheet shall be an annual combined balance sheet of the Borrower entities (and
no other entities) including a combined statement of members’ capital). Such statements shall set forth the financial condition and the results of operations for the Property for such Fiscal Year, and shall include amounts representing annual net operating income, Net Cash Flow, gross income, and operating expenses.
(c) Borrower shall furnish, or cause to be furnished, to Lender on or before forty five (45) days after the end of each calendar quarter the following items, accompanied by an Officer’s Certificate stating that such items are true, correct, accurate, and complete and fairly present the financial condition and results of the operations of Borrower and the Property (subject to normal year-end adjustments) as applicable, acceptable to Lender and prepared in accordance with GAAP (or such other accounting basis acceptable to Lender): (i) a rent roll for the subject quarter; (ii) quarterly and year-to-date operating statements (including Capital Expenditures) prepared for each calendar quarter, noting net operating income, gross income, and operating expenses (not including any contributions to the Replacement Reserve Fund), and other information necessary and sufficient to fairly represent the financial position and results of operation of the Property during such calendar quarter, and containing a comparison of budgeted income and expenses and the actual income and expenses; and (iii) a calculation reflecting the annual Debt Service Coverage Ratio for the immediately preceding three (3), six (6), and twelve (12) month periods as of the last day of such quarter. In addition, such certificate shall also be accompanied by an Officer’s Certificate stating that the representations and warranties of Borrower set forth in
Section 4.1.30
are true and correct as of the date of such certificate.
(d) Until the earlier of Securitization or twelve (12) months after the date of this Agreement, Borrower shall furnish, or cause to be furnished, to Lender on or before twenty (20) days after the end of each calendar month, all of the following items with respect to the previous calendar month, accompanied by an Officer’s Certificate stating that such items are true, correct, accurate, and complete and fairly present the financial condition and results of the operations of Borrower and the Property (subject to normal year-end adjustments) as applicable: (A) a rent roll for the subject month; (B) monthly operating statement(s) of the Property; and (C) year-to-date operating statement(s) of the Property.
(e) Not later than each March 1 during the term of the Loan upon Lender’s request, Borrower shall furnish to Lender, for Lender’s approval, a report setting forth the minimum economic terms that Borrower proposes for use in connection with the standard lease form for leases of portions of the Property during the twelve month period beginning upon such anniversary date. The terms set forth in the leasing report shall reflect the prevailing market conditions for like properties in the locality of the Property.
(f) Upon request, Borrower and its affiliates shall furnish to Lender:
(i) a property management report for the Property, showing the number of inquiries made and/or rental applications received from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender, in reasonable detail and certified by Borrower to be true and complete, but not more frequently than quarterly; and
(ii) an accounting of all security deposits held in connection with any Lease of any part of the Property, including the name and identification number of the accounts in which such security deposits are held, the name and address of the financial institutions in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to obtain information regarding such accounts directly from such financial institutions.
(g) For the partial year period commencing on the date hereof, and for each Fiscal Year thereafter, Borrower shall submit to Lender an Annual Budget not later than thirty (30) days prior to the commencement of such period or Fiscal Year in form reasonably satisfactory to Lender. The Annual Budget shall be subject to Lender’s written approval (each such Annual Budget, an “
Approved Annual Budget
”). If Lender objects to a proposed Annual Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise such Annual Budget and resubmit the same to Lender. Lender shall advise Borrower of any objections to such revised Annual Budget within ten (10) days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise the same in accordance with the process described in this subsection until Lender approves the Annual Budget. Until such time that Lender approves a proposed Annual Budget, the most recently Approved Annual Budget shall apply; provided that, such Approved Annual Budget shall be adjusted to reflect actual increases in Taxes, Insurance Premiums and Other Charges.
(h) If Borrower must incur an extraordinary operating expense or capital expense not set forth in the Approved Annual Budget (each an “
Extraordinary Expense
”), then Borrower shall promptly deliver to Lender a reasonably detailed explanation of such proposed Extraordinary Expense for Lender’s approval, which may be given or denied in Lender’s discretion.
(i) Borrower shall furnish to Lender, within ten (10) Business Days after request (or as soon thereafter as may be reasonably possible), such further detailed information with respect to the operation of the Property and the financial affairs of Borrower as may be reasonably requested by Lender.
(j) Borrower shall furnish to Lender, within ten (10) Business Days after Lender’s request (or as soon thereafter as may be reasonably possible), financial and sales information from any Tenant designated by Lender (to the extent such financial and sales information is required to be provided under the applicable Lease and same is received by Borrower after request therefor).
(k) Borrower shall cause Guarantor to furnish to Lender annually, within ninety (90) days following the end of each Fiscal Year of Guarantor: (i) if such Guarantor is an entity, financial statements audited by an independent certified public accountant, which shall include an annual balance sheet and profit and loss statement of Guarantor, in the form reasonably required by Lender or (ii) if such Guarantor is an individual, a signed personal financial statement in a form satisfactory to Lender.
(l) Any reports, statements or other information required to be delivered under this Agreement shall be delivered (i) in paper form, (ii) on a diskette, and (iii) if requested by Lender and within the capabilities of Borrower’s data systems without change or modification thereto, in electronic form and prepared using Microsoft Word for Windows files (which files may be prepared using a spreadsheet program and saved as word processing files). Borrower agrees that Lender may disclose information regarding the Property and Borrower that is provided to Lender pursuant to this
Section 5.1.11
in connection with the Securitization to such parties requesting such information in connection with such Securitization.
5.1.12
Business and Operations
. Borrower shall continue to engage in the businesses presently conducted by it as and to the extent the same are necessary for the ownership, maintenance, management and operation of the Property. Borrower shall qualify to do business and shall remain in good standing in the jurisdiction in which the Property is located and the jurisdiction of its formation. Borrower shall at all times during the term of the Loan, continue to own all of Equipment, Fixtures and Personal Property which are necessary to operate the Property in the manner required hereunder and in the manner in which it is currently operated.
5.1.13
Title to the Property
. Borrower shall warrant and defend (a) the title to the Property and every part thereof, subject only to Liens permitted hereunder (including Permitted Encumbrances) and (b) the validity and priority of the Lien of the Security Instrument on the Property, subject only to Liens permitted hereunder (including Permitted Encumbrances), in each case against the claims of all Persons whomsoever. Borrower shall reimburse Lender for any losses, costs, damages or expenses (including reasonable attorneys’ fees and expenses) incurred by Lender if an interest in the Property, other than as permitted hereunder, is claimed by another Person.
5.1.14
Costs of Enforcement
. In the event (a) that the Security Instrument encumbering the Property is foreclosed in whole or in part or that the Security Instrument is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of the foreclosure of any mortgage encumbering the Property prior to or subsequent to the Security Instrument in which proceeding Lender is made a party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of Borrower or any of its constituent Persons or an assignment by Borrower or any of its constituent Persons for the benefit of its creditors, Borrower, its successors or assigns, shall be chargeable with and agrees to pay all costs of collection and defense, including reasonable attorneys’ fees and expenses, incurred by Lender or Borrower in connection therewith and in connection with any appellate proceeding or post judgment action involved therein, together with all required service or use taxes.
5.1.15
Estoppel Statement
. (a) After request by Lender, Borrower shall within ten (10) days furnish Lender or any proposed assignee of the Loan with a statement, duly acknowledged and certified, setting forth (i) the original principal amount of the Note, (ii) the unpaid principal amount of the Note, (iii) the Interest Rate of the Note, (iv) the terms of payment and Maturity Date, (v) the date installments of interest or principal were last paid, (vi) that, except as provided in such statement, there are no Defaults or Events of Default under this Agreement or any of the other Loan Documents, (vii) that the Loan Documents are valid, legal and binding obligations and have not been modified or if modified, giving particulars of such modification, (viii) whether any offsets or
defenses exist against the obligations secured hereby and, if any are alleged to exist, a detailed description thereof, (ix) that all Leases are in full force and effect and (provided the Property is not a residential multifamily property) have not been modified (or if modified, setting forth all modifications), (x) the date to which the Rents thereunder have been paid pursuant to the Leases, (xi) whether or not, to the best knowledge of Borrower, any of the lessees under the Leases are in default under the Leases, and, if any of the lessees are in default, setting forth the specific nature of all such defaults, (xii) the amount of security deposits held by Borrower under each Lease and that such amounts are consistent with the amounts required under each Lease, and (xiii) as to any other matters reasonably requested by Lender and reasonably related to the Leases, the obligations secured hereby, the Property or the Security Instrument.
(b) Borrower shall deliver to Lender upon request, tenant estoppel certificates from each commercial Tenant leasing space at the Property in form and substance reasonably satisfactory to Lender provided that Borrower shall not be required to deliver such certificates more frequently than two (2) times in any calendar year.
5.1.16
Loan Proceeds
. Borrower shall use the proceeds of the Loan received by it on the Closing Date only for the purposes set forth in
Section 2.1.4
hereof.
5.1.17
Intentionally Omitted
.
5.1.18
Confirmation of Representations
. Borrower shall deliver, in connection with any Securitization, (a) one (1) or more Officer’s Certificates certifying as to the accuracy of all representations made by Borrower in the Loan Documents as of the date of the closing of such Securitization in all relevant jurisdictions, and (b) certificates of the relevant Governmental Authorities in all relevant jurisdictions indicating the good standing and qualification of Borrower, and Guarantor as of the date of the Securitization.
5.1.19
Environmental Covenants
. (a) Borrower covenants and agrees that: (i) all uses and operations on or of the Property, whether by Borrower or any other Person, shall be in compliance with all Environmental Laws and permits issued pursuant thereto; (ii) there shall be no Releases of Hazardous Substances in, on, under or from the Property; (iii) there shall be no Hazardous Substances in, on, or under the Property, except those that are (A) in compliance with all Environmental Laws and with permits issued pursuant thereto (to the extent such permits are required by Environmental Law), (B) de-minimis amounts necessary to operate the Property for the purposes set forth in this Agreement which will not result in an environmental condition in, on or under the Property and which are otherwise permitted under and used in compliance with Environmental Law and (C) fully disclosed to Lender in writing; (iv) Borrower shall keep the Property free and clear of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of Borrower or any other Person (the “
Environmental Liens
”); (v) Borrower shall, at its sole cost and expense, fully and expeditiously cooperate in all activities pursuant to
subsection (b)
below, including providing all relevant information and making knowledgeable persons available for interviews; (vi) intentionally omitted; (vii) Borrower shall, at its sole cost and expense, comply with all reasonable written requests of Lender made if Lender has reason to believe that an environmental hazard exists on the Property in order to: (A) reasonably effectuate Remediation of any condition (including a Release of a Hazardous Substance) in, on, under or from the Property; (B) comply with
any Environmental Law; (C) comply with any directive from any Governmental Authority; and (D) take any other reasonable action necessary or appropriate for protection of human health or the environment; (viii) Borrower shall not do or allow any Tenant or other user of the Property to do any act that materially increases the dangers to human health or the environment, poses an unreasonable risk of harm to any Person (whether on or off the Property), impairs or may impair the value of the Property, is contrary to any requirement of any insurer, constitutes a public or private nuisance, constitutes waste, or violates any covenant, condition, agreement or easement applicable to the Property; (ix) Borrower shall immediately notify Lender in writing of (A) any presence or Releases or threatened Releases of Hazardous Substances in, on, under, from or migrating towards the Property; (B) any non-compliance with any Environmental Laws related in any way to the Property; (C) any actual or potential Environmental Lien; (D) any required or proposed Remediation of environmental conditions relating to the Property; and (E) any written or oral notice or other communication of which Borrower becomes aware from any source whatsoever (including a governmental entity) relating in any way to the release or potential release of Hazardous Substances or Remediation thereof, likely to result in liability of any Person pursuant to any Environmental Law, other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with anything referred to in this Section; (x) Borrower shall not install, use, generate, manufacture, store, treat, release or dispose of, nor permit the installation, use, generation, storage, treatment, release or disposal of, any Hazardous Substances (except de-minimis amounts necessary to operate the Property for the purposes set forth in this Agreement which will not result in an environmental condition in, on or under the Property and which are otherwise permitted under and used in compliance with Environmental Law) on, under or about the Property, and all uses and operations on or of the Property, whether by Borrower or any other person or entity, shall be in compliance with all Environmental Laws and permits issued pursuant thereto; (xi) Borrower shall not make any change in the use or condition of the Property which (A) might lead to the presence on, under or about the Property of any Hazardous Substances which is not in accordance with any applicable Environmental Law, or (B) would require, under any applicable Environmental Law, notice be given to or approval be obtained from any governmental agency in the event of a transfer of ownership or control of the Property, in each case without the prior written consent of Lender; (xii) Borrower shall not allow any Institutional Control on or to affect the Property; and (xiii) Borrower shall take all acts necessary to preserve its status, if applicable, as an “innocent landowner,” “contiguous property owner,” or “prospective purchaser” as to the Property and as those terms are defined in CERCLA; provided, however, that this covenant does not limit or modify any of Borrower’s other duties or obligations under this Agreement.
(b) If Lender has reason to believe that an environmental hazard exists on the Property, upon reasonable notice from Lender, Borrower shall, at Borrower’s expense, promptly cause an engineer or consultant satisfactory to Lender to conduct an environmental assessment or audit (the scope of which shall be determined in Lender’s discretion) and take any samples of soil, groundwater or other water, air, or building materials or any other invasive testing requested by Lender and promptly deliver the results of any such assessment, audit, sampling or other testing; provided, however, if such results are not delivered to Lender within a reasonable period or if Lender has reason to believe that an environmental hazard exists on the Property that, in Lender’s sole judgment, endangers any Tenant or other occupant of the Property or their guests or the general public or may materially and adversely affect the value of the Property, upon reasonable notice to Borrower, Lender
and any other Person designated by Lender, including any receiver, any representative of a governmental entity, and any environmental consultant, shall have the right, but not the obligation, to enter upon the Property at all reasonable times to assess any and all aspects of the environmental condition of the Property and its use, including conducting any environmental assessment or audit (the scope of which shall be determined in Lender’s discretion) and taking samples of soil, groundwater or other water, air, or building materials, and reasonably conducting other invasive testing. Borrower shall cooperate with and provide Lender and any such Person designated by Lender with access to the Property.
(c) Intentionally omitted.
(d) Borrower hereby represents and warrants that Borrower has (i) delivered to Lender a true and complete copy of the Operations and Maintenance Program for Asbestos-Containing Materials dated April 20, 2017, related to the Property (“
O&M Program
”), and (ii) as of the date hereof complied in all respects with the O&M Program. Borrower hereby covenants and agrees that, during the term of the Loan, including any extension or renewal thereof, Borrower shall comply in all respects with the terms and conditions of the O&M Program.
(e) Borrower shall promptly perform all necessary remedial work in response to the presence of any Hazardous Substances on the Property, any violation of any Environmental Laws, or any claims or requirements made by any governmental agency or authority. All such work shall be conducted by licensed and reputable contractors pursuant to written plans approved by the agency or authority in question (if applicable), under proper permits and licenses (if applicable) with such insurance coverage as is customarily maintained by prudent property owners in similar situations. If the cost of the work exceeds $100,000, then Lender shall have the right of prior approval over the environmental contractor and plans, which shall not be unreasonably withheld or delayed. All costs and expenses of the remedial work shall be promptly paid by Borrower. In the event Borrower fails to undertake the remedial work, or fails to complete the same within a reasonable time period after the same is undertaken, and if Lender is of the good faith opinion that Lender’s security in the Property is jeopardized thereby, then Lender shall have the right to undertake or complete the remedial work itself. In such event all costs of Lender in doing so, including all fees and expenses of environmental consultants, engineers, attorneys, accountants and other professional advisors, shall become a part of the Loan and shall be due and payable from Borrower upon demand. Such amount shall be secured by the Loan Documents, and failure to pay the same shall be an Event of Default under the Loan Documents. In the event any Hazardous Substances are removed from the Property, either by Borrower or Lender, the number assigned by the United States Environmental Protection Agency to such Hazardous Substances shall be solely in the name of Borrower, and Borrower shall have any and all liability for such removed Hazardous Substances.
5.1.20
Leasing Matters
. Any Leases with respect to the Property written after the date hereof, for more than 50,000 square feet shall be subject to the prior written approval of Lender, which approval shall not be unreasonably withheld, conditioned or delayed. Upon request, Borrower shall furnish Lender with executed copies of all Leases. All renewals of Leases and all proposed Leases shall provide for rental rates comparable to existing local market rates. All proposed Leases shall be on commercially reasonable terms and shall not contain any terms which would materially
affect Lender’s rights under the Loan Documents. All Leases executed after the date hereof shall provide that they are subordinate to the Security Instrument and that the lessee agrees to attorn to Lender or any purchaser at a sale by foreclosure or power of sale. Borrower (i) shall observe and perform the obligations imposed upon the lessor under the Leases in a commercially reasonable manner; (ii) shall enforce and may amend or terminate the terms, covenants and conditions contained in the Leases upon the part of the lessee thereunder to be observed or performed in a commercially reasonable manner and in a manner not to impair the value of the Property involved except that no termination by Borrower or acceptance of surrender by a Tenant of any Leases shall be permitted unless by reason of a tenant default and then only in a commercially reasonable manner to preserve and protect the Property; provided, however, that no such termination or surrender of any Lease covering more than 50,000 square feet will be permitted without the prior written consent of Lender; (iii) shall not collect any of the rents more than one (1) month in advance (other than security deposits); (iv) shall not execute any other assignment of lessor’s interest in the Leases or the Rents (except as contemplated by the Loan Documents); (v) shall not alter, modify or change the terms of the Leases in a manner inconsistent with the provisions of the Loan Documents; and (vi) shall execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Leases as Lender shall from time to time reasonably require. Notwithstanding anything to the contrary contained herein, Borrower shall not enter into a lease of all or substantially all of the Property without Lender’s prior written consent. Notwithstanding anything to the contrary contained herein, all new Leases and all amendments, modifications, extensions, and renewals of existing Leases with Tenants that are Affiliates of Borrower shall be subject to the prior written consent of Lender.
5.1.21
Alterations
. Borrower shall obtain Lender’s prior written consent to any alterations to any Improvements, which consent shall not be unreasonably withheld or delayed except with respect to alterations that may have a material adverse effect on Borrower’s financial condition, the value of the Property or the Property’s Net Operating Income. Notwithstanding the foregoing, Lender’s consent shall not be required in connection with any alterations that will not have a material adverse effect on Borrower’s financial condition, the value of the Property or the Property’s Net Operating Income, provided that such alterations are made in connection with (a) tenant improvement work performed pursuant to the terms of any Lease executed on or before the date hereof, (b) tenant improvement work performed pursuant to the terms and provisions of a Lease and not adversely affecting any structural component of any Improvements, any utility or HVAC system contained in any Improvements or the exterior of any building constituting a part of any Improvements, or (c) alterations performed in connection with the Restoration of the Property after the occurrence of a Casualty or Condemnation in accordance with the terms and provisions of this Agreement. If the total unpaid amounts due and payable with respect to alterations to the Improvements at the Property (other than such amounts to be paid or reimbursed by Tenants under the Leases) shall at any time exceed $1,000,000.00 (the “
Threshold Amount
”), Borrower shall promptly deliver to Lender as security for the payment of such amounts and as additional security for Borrower’s obligations under the Loan Documents any of the following: (A) cash, (B) U.S. Obligations, (C) other securities having a rating acceptable to Lender and that, at Lender’s option, the applicable Rating Agencies have confirmed in writing will not, in and of itself, result in a downgrade, withdrawal or qualification of the initial, or, if higher, then current ratings assigned to any Securities or any class thereof in connection with any Securitization or (D) a completion and
performance bond or an irrevocable letter of credit (payable on sight draft only) issued by a financial institution having a rating by S&P of not less than “A-1+” if the term of such bond or letter of credit is no longer than three (3) months or, if such term is in excess of three (3) months, issued by a financial institution having a rating that is acceptable to Lender and that, at Lender’s option, the applicable Rating Agencies have confirmed in writing will not, in and of itself, result in a downgrade, withdrawal or qualification of the initial, or, if higher, then current ratings assigned to any Securities or class thereof in connection with any Securitization. Such security shall be in an amount equal to the excess of the total unpaid amounts with respect to alterations to the Improvements on the Property (other than such amounts to be paid or reimbursed by Tenants under the Leases) over the Threshold Amount and Lender may apply such security from time to time at the option of Lender to pay for such alterations.
5.1.22
Operation of Property
. (a) Borrower shall cause the Property to be operated, in all material respects, in accordance with the Management Agreement (or Replacement Management Agreement) as applicable. If the Management Agreement expires or is terminated (without limiting any obligation of Borrower to obtain Lender’s consent to any termination or modification of the Management Agreement in accordance with the terms and provisions of this Agreement), Borrower shall promptly enter into a Replacement Management Agreement with Manager or another Qualified Manager, as applicable.
(b) Borrower shall: (i) promptly perform or observe, in all material respects, all of the covenants and agreements required to be performed and observed by it under the Management Agreement and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly notify Lender of any material default under the Management Agreement of which it is aware; (iii) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, notice, report and estimate received by it under the Management Agreement; and (iv) enforce the performance and observance of all of the covenants and agreements required to be performed or observed by Manager under the Management Agreement, in a commercially reasonable manner.
5.1.23
Embargoed Person
. Borrower has performed and shall perform reasonable due diligence to insure that at all times throughout the term of the Loan, including after giving effect to any Transfers permitted pursuant to the Loan Documents, (a) none of the funds or other assets of Borrower and Guarantor 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 Borrower or Guarantor, as applicable, with the result that the investment in Borrower or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law; and (c) none of the funds of Borrower or Guarantor, as applicable, 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 Borrower or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law, or may cause the Property to be subject to forfeiture or seizure.
5.1.24
Rating Agency Sublease Event
. Within ten (10) Business Days of Lender’s notice to Borrower that a Rating Agency Sublease Event has occurred, Borrower shall deliver to Lender
the Rating Agency Sublease Event Credit Enhancement. The Rating Agency Sublease Event Credit Enhancement shall have an initial value of $6,715,000.00, which value may be reduced by $1,343,000.00 on July 1 of each year until the same is reduced to zero.
5.1.25
Ground Lease
. (a) With respect to the Ground Lease, Borrower covenants and agrees as follows: (i) to promptly and faithfully observe, perform and comply with all the terms, covenants and provisions thereof on its part to be observed, performed and complied with, at the times set forth therein, and to do all things necessary to preserve unimpaired its rights thereunder; (ii) not to do, permit, suffer or refrain from doing anything, as a result of which there could be a default under or breach of any of the terms thereof; (iii) not to terminate (pursuant to the terms thereof or otherwise), cancel, surrender, modify, amend or in any way alter or permit the alteration of any of the terms thereof and not to release the Ground Lessor under the Ground Lease from any obligations imposed upon it thereby; (iv) not to assign the Ground Lease in whole or in part nor sublet the premises demised under the Ground Lease in whole except in accordance with the provisions of this Agreement; (v) to give Lender immediate written notice of any default by Borrower or the Ground Lessor under the Ground Lease and to immediately deliver to Lender copies of each notice of default and all other material notices, communications, plans, specifications and other similar instruments received or delivered by Borrower in connection therewith; and (vi) to furnish to Lender such information and evidence as Lender may reasonably require concerning Borrower's due observance, performance and compliance with the terms, covenants and provisions thereof.
(b) In the event of any default by Borrower in the performance of any part of its obligations under the Ground Lease, including, without limitation, any default in the payment of rent, additional rent and other charges and impositions made payable by the tenant thereunder, then, in each and every case, Lender may, at its option and without notice, cause the default or defaults to be remedied and otherwise exercise any and all of the rights of Borrower thereunder in the name of and on behalf of Borrower but no such action by Lender shall release Borrower from any default under this Agreement. Borrower shall, on demand, reimburse Lender for all advances made and expenses incurred by Lender in curing any such default (including, without limitation, reasonable attorneys' fees and disbursements), together with interest thereon at the Default Rate from the date that an advance is made or expense is incurred, to and including the date the same is paid and such monies so expended by Lender with interest thereon shall be secured by this Agreement.
(c) If Borrower acquires the fee title or any other estate, title or interest in the Ground Lease Property, or any part thereof, the lien of the Security Instrument shall attach to, cover and be a lien upon such acquired estate, title or interest and same shall thereupon be and become a part of the Property. Borrower agrees to execute all instruments and documents which Lender may reasonably require to ratify, confirm and further evidence Lender's lien on the acquired estate, title or interest. Furthermore, Borrower hereby appoints Lender its true and lawful attorney-in-fact to execute and deliver all such instruments and documents in the name and on behalf of Borrower. This power, being coupled with an interest, shall be irrevocable as long as the Debt remains unpaid.
(d) If the Ground Lease is canceled or terminated, and if Lender or its nominee shall acquire an interest in any new lease or all or any part of the Ground Lease Property, Borrower shall
have no right, title or interest in or to the new lease or the leasehold estate created by such new lease.
(e) Borrower shall exercise its best efforts to obtain and deliver to Lender from time to time within ten (10) Business Days after written demand by Lender, an estoppel certificate from the Ground Lessor setting forth, with respect to the Ground Lease (i) the name of the tenant thereunder, (ii) that the Ground Lease has not been modified or, if it has been modified, the date of each modification (together with copies of each such modification), (iii) the base rent and additional rent and other charges payable under the Ground Lease, (iv) the date to which all rental charges have been paid by the tenant under the Ground Lease, and (v) whether there are any defaults or alleged defaults of the tenant under the Ground Lease or if there are any events which have occurred which with notice, the passage of time or both, would constitute a default under the Ground Lease, and, if there are, setting forth the nature thereof in reasonable detail.
(f) Notwithstanding anything to the contrary contained herein, this Agreement shall not constitute an assignment of the Ground Lease within the meaning of any provision thereof prohibiting its assignment and Lender shall have no liability or obligation thereunder by reason of its acceptance of this Agreement. Lender shall be liable for the obligations of the tenant arising under the Ground Lease for only that period of time which Lender is in possession of the Ground Lease Property and has acquired, by foreclosure or otherwise, and is holding all of Borrower's right, title and interest therein.
(g) No release or forbearance of any of Borrower's obligations under the Ground Lease, pursuant to the Ground Lease or otherwise, shall release Borrower from any of its obligations under this Agreement or the other Loan Documents.
(h) Borrower shall enforce the obligations of the Ground Lessor under the Ground Lease to the end that Borrower may enjoy all of the rights granted to it under the Ground Lease, and will immediately notify Lender of any default by the Ground Lessor or Borrower in the performance or observance of any of the terms, covenants and conditions of the Ground Lease and Borrower will immediately advise Lender of the occurrence of any of the events of default enumerated in the Ground Lease and of the giving of any notice by the Ground Lessor under the Ground Lease to Borrower of any default by Borrower thereunder and will immediately deliver to Lender a true copy of each such notice. If, pursuant to the Ground Lease, the Ground Lessor shall deliver to Lender a copy of any notice of default given to Borrower, as lessee under the Ground Lease, such notice shall constitute full authority and protection to Lender for any action taken or omitted to be taken by Lender, in good faith and in reliance thereon.
(i) Borrower shall give Lender immediate notice of the commencement of any arbitration or appraisal proceeding under and pursuant to the provisions of the Ground Lease. Lender shall have the right to intervene and participate in any such proceeding and Borrower shall confer with Lender and its attorneys and experts and cooperate with them to the extent that Lender deems reasonably necessary for the protection of Lender.
(j) Upon the request of Lender, Borrower will exercise all rights of arbitration conferred upon it by the Ground Lease. If at any time such proceeding shall be continuing, a default by
Borrower beyond any applicable cure period in the performance or observance of any covenant, condition or other requirement of the Ground Lease or of this Agreement, on the part of Borrower to be performed or observed shall have occurred and be continuing, Lender shall have, and is hereby granted, the sole and exclusive right to designate and appoint on behalf of Borrower, the arbitrator or arbitrators, or appraiser, in such proceeding.
(k) Borrower will, promptly after the execution and delivery of this Agreement or of any instrument or agreement supplemental hereto, notify Ground Lessor in writing of the execution and delivery hereof and deliver to Ground Lessor a copy of each such instrument or agreement.
(l) Borrower hereby unconditionally and irrevocably assigns to Lender (i) any right which Borrower has pursuant of the terms of the Ground Lease to renew and/or extend the term thereof, (ii) any right which Borrower has pursuant to the terms of the Ground Lease to cancel or terminate the Ground Lease, and (iii) any option or right that Borrower has pursuant to the Ground Lease to purchase any or all of the premises demised thereunder; provided, however, that Lender shall not exercise any rights given it under the foregoing items (i) or (iii) in the absence of an existing Event of Default or in the event Lender reasonably determines that such exercise is necessary to protect its interest in the Ground Lease Property.
(m) In the event that it is claimed by any governmental agency, authority or subdivision that any tax or governmental charge or imposition is due, unpaid or payable by Borrower upon or in connection with the Ground Lease, Borrower shall promptly either (i) pay such tax, charge or imposition when due and deliver to Lender reasonably satisfactory proof of payment thereof or (ii) contest such tax in accordance with the applicable provisions of the Loan Documents. If liability for such tax is asserted against Lender, Lender will give to Borrower prompt notice of such claim, and Borrower, upon complying with the provisions of the Loan Documents shall have full right and authority to contest such claim of taxability.
(n) Notwithstanding anything to the contrary contained in this Agreement with respect to the Ground Lease:
(i) If the Ground Lease is terminated for any reason in the event of the rejection or disaffirmance of the Ground Lease by the Ground Lessor pursuant to the Bankruptcy Code, or any other law affecting creditor’s rights, (i) Borrower, immediately after obtaining notice thereof, shall give notice thereof to Lender, (ii) Borrower, without the prior written consent of Lender, shall not elect to treat the Ground Lease as terminated pursuant to Section 365(h) of the Bankruptcy Code or any comparable federal or state statute or law, and any election by Borrower made without such consent shall be void, and (iii) the terms, covenants and conditions of this Loan Agreement and the Loan Documents hereby extends to and covers Borrower’s possessory rights under Section 365(h) of the Bankruptcy Code and to any claim for damages due to the rejection of the Ground Lease or other termination of the Ground Lease. In addition, Borrower hereby assigns irrevocably to Lender Borrower’s rights to treat the Ground Lease as terminated pursuant to Section 365(h) of the Bankruptcy Code and to offset rents under the Ground Lease in the event any case, proceeding or other action is commenced by or against the Ground Lessor under the Bankruptcy Code or any comparable federal or state statute or law. Without Lender’s prior written consent, Borrower shall not seek to offset, pursuant to Subsection 365(h) of the Bankruptcy Code, against the rent reserved
in the Ground Lease, the amount of any damages caused by the nonperformance by the related Ground Lessor of any of its obligations under the Ground Lease after the rejection by Ground Lessor of the Ground Lease under the Bankruptcy Code.
(ii) As security for the Debt, Borrower unconditionally assigns, transfers and sets over to Lender all of Borrower’s (a) right to reject the Ground Lease under Section 365 of the Bankruptcy Code or any comparable federal or state statute or law with respect to any case, proceeding or other action commenced by or against Borrower under the Bankruptcy Code or comparable federal or state statute or law, (b) right to seek an extension of the 60-day period within which Borrower must assume or reject the Ground Lease under Section 365 of the Bankruptcy Code or any comparable federal or state statue or law with respect to any case, proceeding or other action commenced by or against Borrower under the Bankruptcy Code or comparable federal or state statute or law ,and (c) claims and rights to the payment of damages arising from any rejection by Ground Lessor of the Ground Lease under the Bankruptcy Code. Lender shall have the right to proceed in the name of Borrower in respect of any claim, suit, action or proceeding relating to the rejection of the Ground Lease, including, without limitation, the right to file and prosecute any proofs of claim, complaints, motions, applications, notices and other documents in any case in respect of Ground Lessor under the Bankruptcy Code. This assignment constitutes a present, irrevocable and unconditional assignment of the foregoing claims, rights and remedies and shall continue in effect until all of the Debt shall have been satisfied and discharged in full. Any amounts received by Lender or Borrower as damages arising out of the rejection of the Ground Lease as aforesaid shall be applied to all costs and expenses of Lender (including, without limitation, attorneys’ fees and costs) incurred in connection with the exercise of any of its rights or remedies in accordance with the applicable provisions of this Agreement. If the foregoing assignment is not effective under applicable law and Borrower shall desire to so reject the Ground Lease, at Lender’s request, Borrower shall assign its interest in the Ground Lease to Lender in lieu of rejecting the Ground Lease, upon receipt by Borrower of notice from Lender of such request together with Lender’s agreement to cure any existing defaults of Borrower under the Ground Lease.
(iii) If any action, proceeding, motion or notice shall be commenced or filed in respect of Ground Lessor or all or any part of the Ground Lease Property in connection with any case under the Bankruptcy Code, Lender and Borrower shall cooperatively conduct and control any such litigation with counsel agreed upon between Borrower and Lender in connection with such litigation. Borrower shall, upon demand, pay to Lender all costs and expenses (including reasonable attorneys’ fees and costs) actually paid or actually incurred by Lender in connection with the cooperative prosecution or conduct of any such proceedings. All such costs and expenses shall be deemed to be secured by the Loan Documents.
(iv) Borrower shall promptly, after obtaining knowledge of such filing, notify Lender orally of any filing by or against Ground Lessor of a petition under the Bankruptcy Code. Borrower shall thereafter promptly give written notice of such filing to Lender, setting forth any information available to Borrower as to the date of such filing, the court in which such petition was filed, and the relief sought in such filing. Borrower shall promptly deliver to Lender any and all notices, summonses, pleadings, applications and other documents received by Borrower in connection with any such petition and any proceedings relating to such petition.
Section 5.2
Negative Covenants
. From the date hereof until payment and performance in full of all obligations of Borrower under the Loan Documents or the earlier release of the Lien of the Security Instrument and any other collateral in accordance with the terms of this Agreement and the other Loan Documents, Borrower covenants and agrees with Lender that it shall not do, directly or indirectly, any of the following:
5.2.1
Operation of Property
. (a) Borrower shall not, without Lender’s prior written consent (which consent shall not be unreasonably withheld): (i) surrender, terminate, cancel, amend or modify the Management Agreement; provided, that Borrower may, without Lender’s consent, replace the Manager so long as the replacement manager is a Qualified Manager pursuant to a Replacement Management Agreement; (ii) reduce or consent to the reduction of the term of the Management Agreement; (iii) increase or consent to the increase of the amount of any charges under the Management Agreement, or (iv) otherwise modify, change, supplement, alter or amend, or waive or release any of its rights and remedies under, the Management Agreement in any material respect.
(b) Following the occurrence and during the continuance of an Event of Default, Borrower shall not exercise any rights, make any decisions, grant any approvals or otherwise take any action under the Management Agreement without the prior written consent of Lender, which consent may be granted, conditioned or withheld in Lender’s discretion.
(c) If under applicable zoning provisions the use of all or any portion of the Property is or shall become a nonconforming use, Borrower shall not cause or permit the nonconforming use or Improvement to be discontinued or abandoned without the express written consent of Lender.
5.2.2
Liens
. Borrower shall not create, incur, assume or suffer to exist any Lien on any portion of the Property or permit any such action to be taken, except for Permitted Encumbrances.
5.2.3
Dissolution
. Borrower shall not (a) engage in any dissolution, liquidation or consolidation or merger with or into any other business entity, (b) engage in any business activity not related to the ownership and operation of the Property, (c) transfer, lease or sell, in one transaction or any combination of transactions, the assets or all or substantially all of the properties or assets of Borrower except to the extent permitted by the Loan Documents, (d) modify, amend, waive or terminate its organizational documents or its qualification and good standing in any jurisdiction in each case, without obtaining the prior written consent of Lender or Lender’s designee.
5.2.4
Change In Business
. Borrower shall not enter into any line of business other than the ownership and operation of the Property, or make any material change in the scope or nature of its business objectives, purposes or operations, or undertake or participate in activities other than the continuance of its present business. Nothing contained in this
Section 5.2.4
is intended to expand the rights of Borrower contained in
Section 5.2.10(d)
hereof.
5.2.5
Debt Cancellation
. Borrower shall not cancel or otherwise forgive or release any claim or debt (other than termination of Leases in accordance herewith) owed to Borrower by any Person, except for adequate consideration and in the ordinary course of Borrower’s business.
5.2.6
Zoning
. Borrower shall not initiate or consent to any zoning reclassification of any portion of the Property or seek any variance under any existing zoning ordinance or use or permit the use of any portion of the Property in any manner that could result in such use becoming a non conforming use under any zoning ordinance or any other applicable land use law, rule or regulation, without the prior written consent of Lender.
5.2.7
No Joint Assessment
. Borrower shall not suffer, permit or initiate the joint assessment of the Property (a) with any other real property constituting a tax lot separate from the Property, and (b) which constitutes real property with any portion of the Property which may be deemed to constitute personal property, or any other procedure whereby the lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to such real property portion of the Property.
5.2.8
Intentionally Omitted
.
5.2.9
ERISA
. (a) Borrower shall not engage in any transaction which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note, this Agreement or the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA.
(b) Borrower further covenants and agrees to deliver to Lender such certifications or other evidence from time to time throughout the term of the Loan, as requested by Lender in its discretion, that (A) Borrower is not and does not maintain an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA; (B) Borrower is not subject to any state statute regulating investment of, or fiduciary obligations with respect to governmental plans and (C) one or more of the following circumstances is true:
(i) Equity interests in Borrower are publicly offered securities, within the meaning of 29 C.F.R. §2510.3-101(b)(2);
(ii) Less than twenty-five percent (25%) of each outstanding class of equity interests in Borrower are held by “benefit plan investors” within the meaning of 29 C.F.R. §2510.3-101(f)(2); or
(iii) Borrower qualifies as an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).
5.2.10
Transfers
. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment
of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this
Section 5.2.10
, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “
Transfer
”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of
Section 5.1.20
and (B) Permitted Transfers.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with
Section 5.1.22
hereof.
(d) Notwithstanding the provisions of this
Section 5.2.10
, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than forty-nine percent (49%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party;
provided
,
however
, no such Transfer shall result in the change of Control in a Restricted Party, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall, no less than thirty (30) days prior to the effective date of any such Transfer, deliver to Lender an
Additional Insolvency Opinion acceptable to Lender and the Rating Agencies. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) No Transfer of the Property and assumption of the Loan shall occur during the period that is sixty (60) days prior to and sixty (60) days after a Securitization. Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer (including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “
Transferee
”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“
Related Entities
”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in
Sections 4.1.30
,
4.1.35
,
5.1.23
and
5.2.9
of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) If required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Policy issued on the date hereof and the Permitted Encumbrances;
(xiii) The Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement;
(xiv) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation; and
(xv) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender.
(f) Notwithstanding any provision in this
Section 5.2.10
to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in
Section 5.2.10(e)(i)
: (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “
Current Owner
”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “
Immediate Family Member
”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “
Additional Permitted Transfer
”), provided each of the following conditions is satisfied: (A) no Event of
Default has occurred and no event has occurred that with notice or the passage of time, or both, would constitute an Event of Default; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no Indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of
Section 4.1.30
hereof; and (I) upon Lender’s request, delivery of an Additional Insolvency Opinion acceptable to Lender.
(g) Without Lender’s prior written consent thereto, in its sole discretion, any Transfer or Permitted Transfer resulting in any direct or indirect ownership interests in Borrower or the Property being held in any Prohibited Entity/Ownership Structure is prohibited, even if the same would be otherwise allowed pursuant to this
Section 5.2.10
, the definition of a Permitted Transfer or any other provision of any Loan Document.
(h) So long as any conditions set forth below are satisfied, each of the following Transfers may occur at any time and from time-to-time without Lender’s consent:
(i) Any Transfer of direct or indirect interests in the REIT
so long as such Transfer does not result in a change of Control with respect to the REIT, Guarantor or the Borrower; or
(ii) The removal or replacement of any investment advisor to the REIT so long as such removal or replacement does not result in a change of Control with respect to the REIT, Guarantor or the Borrower.
Borrower shall provide to Lender in connection with any Transfer described in items (i) or (ii) above, evidence reasonably satisfactory to Lender of the following: (A) the current direct and indirect ownership of Borrower (including as evidenced by an updated organizational chart providing the same general level of detail as the organizational chart attached hereto as Schedule III), together with copies of all instruments effecting any such Transfer, and (B) evidence reasonably satisfactory to Lender of Borrower’s continued compliance with Sections 4.1.30, 4.1.35, 5.1.23, 5.2.9 and 10.25 hereof. In addition, if after giving effect to any such Transfer, (1) more than forty-nine percent (49%) of the direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) of the direct or indirect interest in Borrower as of the Closing Date, Borrower shall, no less than ten (10) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender, and (2) twenty percent (20%) or more of the direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than twenty percent (20%) of the direct or indirect interest in Borrower
as of the Closing Date, Borrower shall, no less than ten (10) days prior to the effective date of any such Transfer, deliver to Lender customary searches (including without limitation credit, judgment, lien, litigation, bankruptcy, criminal and watch list) reasonably acceptable to Lender with respect to such Person and its Affiliates.
Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
ARTICLE VI - INSURANCE; CASUALTY; CONDEMNATION
Section 6.1
Insurance
. (a) Borrower shall obtain and maintain, or cause to be maintained, insurance for Borrower and the Property providing at least the following coverages:
(i) comprehensive all risk “special form” insurance including loss caused by any type of windstorm, windstorm related perils, “named storms,” or hail on the Improvements and the Personal Property, including contingent liability from Operation of Building Laws, Demolition Costs and Increased Cost of Construction Endorsements, (A) in an amount equal to one hundred percent (100%) of the “Full Replacement Cost,” which for purposes of this Agreement means actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings) with a waiver of depreciation; (B) containing an agreed amount endorsement with respect to the Improvements and Personal Property waiving all co-insurance provisions or to be written on a no co-insurance form; (C) providing for no deductible in excess of 5% of Net Cash Flow of the Property for all such insurance coverage;
provided
however
with respect to windstorm and earthquake coverage, providing for a deductible satisfactory to Lender in its discretion; and (D) if any of the Improvements or the use of the Property shall at any time constitute legal non-conforming structures or uses, coverage for loss due to operation of law in an amount equal to the full Replacement Cost, coverage for demolition costs and coverage for increased costs of construction. In addition, Borrower shall obtain: (y) if any material portion of the Improvements is currently or at any time in the future located in a federally designated “special flood hazard area,” flood hazard insurance in an amount equal to the maximum amount of such insurance available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended, plus excess flood coverage in an amount equal to the “probable maximum loss” for the Improvements, as determined by an engineer satisfactory to Lender, or such greater amount as Lender shall require, and (z) earthquake insurance in amounts and in form and substance satisfactory to Lender (but in any event, in an amount not less than 150% of the “probable maximum loss”) in the event the Property is located in an area with a high degree of seismic activity and the “probable maximum loss” for the Improvements, as determined by an engineer satisfactory to Lender, is 20% or greater (based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance), provided that the insurance pursuant to
clauses (y)
and
(z)
hereof shall be on
terms consistent with the comprehensive all risk insurance policy required under this
subsection (i)
;
(ii) business income or rental loss insurance (A) with loss payable to Lender; (B) covering all risks required to be covered by the insurance provided for in
subsection (i)
above; (C) in an amount equal to one hundred percent (100%) of the projected gross revenues from the operation of the Property (as reduced to reflect expenses not incurred during a period of Restoration) for a period of (1) not less than twelve (12) months from the date of casualty or loss if the amount of the Loan is less than $35,000,000, or (2) not less than eighteen (18) months from the date of casualty or loss if the amount of the Loan is $35,000,000 or more; and (D) if the amount of the Loan is $50,000,000 or more, containing an extended period of indemnity endorsement which provides that after the physical loss to the Improvements and Personal Property has been repaired, the continued loss of income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration of 180 days from the date that the Property is repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period. The amount of such business income or rental loss insurance shall be determined prior to the date hereof and at least once each year thereafter based on Borrower’s reasonable estimate of the gross revenues from the Property for the succeeding twelve (12) month period. Notwithstanding the provisions of
Section 2.7.1
hereof, all proceeds payable to Lender pursuant to this subsection shall be held by Lender and shall be applied to the obligations secured by the Loan Documents from time to time due and payable hereunder and under the Note;
provided
,
however
, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the obligations secured by the Loan Documents on the respective dates of payment provided for in this Agreement and the other Loan Documents except to the extent such amounts are actually paid out of the proceeds of such business income insurance;
(iii) at all times during which structural construction, repairs or alterations are being made with respect to the Improvements, and only if the Property coverage form does not otherwise apply, (A) owner’s contingent or protective liability insurance, otherwise known as Owner Contractor’s Protective Liability, covering claims not covered by or under the terms or provisions of the above mentioned commercial general liability insurance policy and (B) the insurance provided for in
subsection (i)
above written in a so-called builder’s risk completed value form (1) on a non-reporting basis, (2) against all risks insured against pursuant to
subsection (i)
above, (3) including permission to occupy the Property and (4) with an agreed amount endorsement waiving co-insurance provisions;
(iv) comprehensive boiler and machinery insurance, if steam boilers, other pressure-fixed vessels, large air conditioning systems, elevators or other large machinery are in operation, in amounts as shall be reasonably required by Lender on terms consistent with the commercial property insurance policy required under
subsection (i)
above;
(v) commercial general liability insurance against claims for personal injury, bodily injury, death, contractual damage or property damage occurring upon, in or about
the Property, such insurance (A) to be on the so-called “occurrence” form with a combined limit of not less than $2,000,000.00 in the aggregate and $1,000,000.00 per occurrence; (B) to continue at not less than the aforesaid limit until required to be changed by Lender in writing by reason of changed economic conditions making such protection inadequate and (C) to cover at least the following hazards: (1) premises and operations; (2) products and completed operations on an “if any” basis; (3) independent contractors; (4) blanket contractual liability for all written contracts and (5) contractual liability covering the indemnities contained in Article 9 of the Security Instrument to the extent the same is available;
(vi) automobile liability coverage for all owned and non-owned vehicles, including rented and leased vehicles containing minimum limits per occurrence of $1,000,000.00;
(vii) worker’s compensation and employee’s liability subject to the worker’s compensation laws of the applicable state;
(viii) umbrella and excess liability insurance in an amount not less than: (A) $5,000,000.00 per occurrence if the amount of the Loan is less than $35,000,000, or (B) $25,000,000.00 per occurrence, if the amount of the Loan is $35,000,000 or more, on terms consistent with the commercial general liability insurance policy required under
subsection (v)
above, including supplemental coverage for employer liability and automobile liability, which umbrella liability coverage shall apply in excess of the automobile liability coverage in clause (vi) above;
(ix) the insurance required under this
Section 6.1(a)
above shall cover perils of terrorism and acts of terrorism and Borrower shall maintain insurance for loss resulting from perils and acts of terrorism on terms (including amounts) consistent with those required under
Sections 6.1(a)
above at all times during the term of the Loan; and
(x) upon sixty (60) days written notice, such other reasonable insurance, including sinkhole or land subsidence insurance, and in such reasonable amounts as Lender from time to time may reasonably request against such other insurable hazards which at the time are commonly insured against for property similar to the Property located in or around the region in which the Property is located.
(b) All insurance provided for in
Section 6.1(a)
hereof, shall be obtained under valid and enforceable policies (collectively, the “
Policies
” or in the singular, the “
Policy
”), and shall be subject to the approval of Lender as to insurance companies, amounts, deductibles, loss payees and insureds. The Policies shall be issued by financially sound and responsible insurance companies authorized to do business in the State and having a rating of (A) if the amount of the Loan is $35,000,000 or more, “A:VIII” or better in the current Best’s Insurance Reports and a claims paying ability rating of “A-” or better by S&P, and “A3” or better by Moody’s or (B) if the amount of the Loan is less than $35,000,000, “A-:VIII” or better in the current Best’s Insurance Reports and a claims paying ability rating of “A-” or better by S&P, and “A3” or better by Moody’s. Notwithstanding the foregoing, any required earthquake insurance must satisfy the requirements
of subsection (A) hereof regardless of the amount of the Loan. The Policies described in
Section 6.1
hereof (other than those strictly limited to liability protection) shall designate Lender as loss payee. Not less than ten (10) days prior to the expiration dates of the Policies theretofore furnished to Lender, certificates of insurance evidencing the Policies accompanied by evidence satisfactory to Lender of payment of the premiums due thereunder (the “
Insurance Premiums
”), shall be delivered by Borrower to Lender.
(c) Any blanket insurance Policy shall specifically allocate to the Property the amount of coverage from time to time required hereunder and shall otherwise provide the same protection as would a separate Policy insuring only the Property in compliance with the provisions of
Section 6.1(a)
hereof.
(d) All Policies provided for or contemplated by
Section 6.1(a)
hereof, except for the Policy referenced in
Section 6.1(a)(vii)
of this Agreement, shall name Borrower as the insured and Lender as the additional insured, as its interests may appear, and in the case of property damage, boiler and machinery, flood and earthquake insurance, shall contain a so-called New York standard non-contributing mortgagee clause in favor of Lender providing that the loss thereunder shall be payable to Lender.
(e) All Policies shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting for Borrower, or of any Tenant or other occupant, or failure to comply with the provisions of any Policy, which might otherwise result in a forfeiture of the insurance or any part thereof, shall in any way affect the validity or enforceability of the insurance insofar as Lender is concerned;
(ii) the Policy shall not be canceled (A) for nonpayment of a premium without at least ten (10) days written notice to Lender and any other party named therein as an additional insured, and (B) for any reason other than non payment of a premium without at least thirty (30) days written notice to Lender and any other party named therein as an additional insured;
(iii) the issuers thereof shall give written notice to Lender if the Policy has not been renewed thirty (30) days prior to its expiration; and
(iv) Lender shall not be liable for any Insurance Premiums thereon or subject to any assessments thereunder.
(f) If at any time Lender is not in receipt of written evidence that all insurance required hereunder is in full force and effect, Lender shall have the right, without notice to Borrower, to take such action as Lender deems necessary to protect its interest in the Property, including the obtaining of such insurance coverage as Lender in its discretion deems appropriate after three (3) Business Days’ notice to Borrower if prior to the date upon which any such coverage will lapse or at any time Lender deems necessary (regardless of prior notice to Borrower) to avoid the lapse of any such coverage. All premiums incurred by Lender in connection with such action or in obtaining such
insurance and keeping it in effect shall be paid by Borrower to Lender upon demand and, until paid, shall be secured by the Security Instrument and shall bear interest at the Default Rate.
Section 6.2
Casualty
. If the Property shall be damaged or destroyed, in whole or in part, by fire or other casualty (a “
Casualty
”), Borrower shall give prompt written notice of such damage to Lender and shall promptly commence and diligently prosecute the completion of the Restoration of the Property pursuant to
Section 6.4
hereof as nearly as possible to the condition the Property was in immediately prior to such Casualty, with such alterations as may be reasonably approved by Lender and otherwise in accordance with
Section 6.4
hereof. Borrower shall pay all costs of such Restoration whether or not such costs are covered by insurance. Lender may, but shall not be obligated to make proof of loss if not made promptly by Borrower. In addition, Lender may participate in any settlement discussions with any insurance companies (and shall approve the final settlement, which approval shall not be unreasonably withheld or delayed) with respect to any Casualty in which the Net Proceeds or the costs of completing the Restoration are equal to or greater than the Availability Threshold and Borrower shall deliver to Lender all instruments required by Lender to permit such participation.
Section 6.3
Condemnation
. Borrower shall promptly give Lender notice of the actual or threatened commencement of any proceeding for the Condemnation of the Property and shall deliver to Lender copies of any and all papers served in connection with such proceedings. Lender may participate in any such proceedings, and Borrower shall from time to time deliver to Lender all instruments requested by it to permit such participation. Borrower shall, at its expense, diligently prosecute any such proceedings, and shall consult with Lender, its attorneys and experts, and cooperate with them in the carrying on or defense of any such proceedings. Notwithstanding any taking by any public or quasi-public authority through Condemnation or otherwise (including any transfer made in lieu of or in anticipation of the exercise of such taking), Borrower shall continue to pay the Debt at the time and in the manner provided for its payment in the Note and in this Agreement and the Debt shall not be reduced until any Award shall have been actually received and applied by Lender, after the deduction of expenses of collection, to the reduction or discharge of the Debt. Lender shall not be limited to the interest paid on the Award by the condemning authority but shall be entitled to receive out of the Award interest at the rate or rates provided herein or in the Note. If any portion of the Property is taken by a condemning authority, Borrower shall promptly commence and diligently prosecute the Restoration of the Property pursuant to
Section 6.4
hereof and otherwise comply with the provisions of
Section 6.4
hereof. If the Property is sold, through foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender shall have the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive the Award, or a portion thereof sufficient to pay the Debt. Notwithstanding the foregoing provisions of this
Section 6.3
, and
Section 6.4
hereof, if the Loan or any portion thereof is included in a REMIC Trust and, immediately following a release of any portion of the Lien of the Security Instrument in connection with a Condemnation (but taking into account any proposed Restoration on the remaining portion of the Property), the Loan to Value Ratio is greater than 125% (such value to be determined, in Lender’s sole discretion, by any commercially reasonable method permitted to a REMIC Trust and, if the Property is a hospitality property, determination of such value shall exclude personal property and going concern value, if any), the principal balance of the Loan must be paid down in an amount sufficient to satisfy the REMIC Requirements, unless the Lender receives
an opinion of counsel that if such amount is not paid, the Securitization will not fail to maintain its status as a REMIC Trust and that the REMIC Trust will not be subject to tax as a result of the related release of such portion of the Lien of the Security Instrument. In connection with the foregoing, the Net Proceeds shall not be available for Restoration and shall be used to pay down the principal balance of the Loan to the extent set forth above.
Section 6.4
Restoration
. The following provisions shall apply in connection with the Restoration of the Property:
(a) If the Net Proceeds shall be less than the Availability Threshold and the costs of completing the Restoration shall be less than the Availability Threshold, the Net Proceeds shall be disbursed by Lender to Borrower upon receipt, provided that all of the conditions set forth in
Section 6.4(b)(i)
hereof are met and Borrower delivers to Lender a written undertaking to expeditiously commence and to satisfactorily complete with due diligence the Restoration in accordance with the terms of this Agreement.
(b) If the Net Proceeds are equal to or greater than the Availability Threshold or the costs of completing the Restoration are equal to or greater than the Availability Threshold, Lender shall make the Net Proceeds available for the Restoration in accordance with the provisions of this
Section 6.4
. The term “
Net Proceeds
” for purposes of this
Section 6.4
means: (i) the net amount of all insurance proceeds received by Lender pursuant to
Section 6.1(a)(i)
,
(iv)
,
(ix)
and
(x)
as a result of such damage or destruction, after deduction of its reasonable costs and expenses (including reasonable counsel fees), if any, in collecting same (“
Insurance Proceeds
”), or (ii) the net amount of the Award, after deduction of its reasonable costs and expenses (including reasonable counsel fees), if any, in collecting same (“
Condemnation Proceeds
”), whichever the case may be.
(i) The Net Proceeds shall be made available to Borrower for Restoration provided that each of the following conditions are met:
(A) no Default or Event of Default shall have occurred and be continuing;
(B) (1) in the event the Net Proceeds are Insurance Proceeds, less than twenty-five percent (25%) of the total floor area of the Improvements on the Property has been damaged, destroyed or rendered unusable as a result of such Casualty or (2) in the event the Net Proceeds are Condemnation Proceeds, less than ten percent (10%) of the land constituting the Property is taken, and such land is located along the perimeter or periphery of the Property, and no portion of the Improvements is located on such land;
(C) Leases demising in the aggregate a percentage amount equal to or greater than the Rentable Space Percentage of the total rentable space in the Property which has been demised under executed and delivered Leases in effect as of the date of the occurrence of such Casualty or Condemnation, whichever the case may be, shall remain in full force and effect during and after the completion of the Restoration, notwithstanding the occurrence of any such Casualty or Condemnation, whichever the case may be, and Borrower and/or Tenant, as applicable under the respective
Lease, shall make all necessary repairs and restorations thereto at their sole cost and expense. The term “
Rentable Space Percentage
” means (1) in the event the Net Proceeds are Insurance Proceeds, a percentage amount equal to ninety percent (90%) and (2) in the event the Net Proceeds are Condemnation Proceeds, a percentage amount equal to ninety percent (90%);
(D) Borrower shall commence the Restoration as soon as reasonably practicable (but in no event later than sixty (60) days after such Casualty or Condemnation, whichever the case may be, occurs) and shall diligently pursue the same to satisfactory completion;
(E) Lender shall be satisfied that any operating deficits, including all scheduled payments of principal and interest under the Note, which will be incurred with respect to the Property as a result of the occurrence of any such Casualty or Condemnation, whichever the case may be, will be covered out of (1) the Net Proceeds, (2) the insurance coverage referred to in
Section 6.1(a)(ii)
hereof, if applicable, or (3) by other funds of Borrower;
(F) Lender shall be satisfied that the Restoration will be completed on or before the earliest to occur of (1) six (6) months prior to the Maturity Date, (2) the earliest date required for such completion under the terms of any Leases or the Ground Lease, (3) such time as may be required under all applicable Legal Requirements in order to repair and restore the Property to the condition it was in immediately prior to such Casualty or to as nearly as possible the condition it was in immediately prior to such Condemnation, as applicable, or (4) the expiration of the insurance coverage referred to in
Section 6.1(a)(ii)
hereof;
(G) the Property and the use thereof after the Restoration will be in compliance with and permitted under all applicable Legal Requirements;
(H) the Restoration shall be done and completed by Borrower in an expeditious and diligent fashion and in compliance with all applicable Legal Requirements;
(I) such Casualty or Condemnation, as applicable, does not result in the loss of access to the Property or the Improvements;
(J) the Debt Service Coverage Ratio for the Property, after giving effect to the Restoration, shall be equal to or greater than 1.25 to 1.0;
(K) Borrower shall deliver, or cause to be delivered, to Lender a signed detailed budget approved in writing by Borrower’s architect or engineer stating the entire cost of completing the Restoration, which budget shall be subject to Lender’s approval; and
(L) the Net Proceeds together with any cash or cash equivalent deposited by Borrower with Lender are sufficient in Lender’s discretion to cover the cost of the Restoration.
(ii) The Net Proceeds shall be held by Lender in an Eligible Account and, until disbursed in accordance with the provisions of this
Section 6.4(b)
, shall constitute additional security for the Debt and Other Obligations under the Loan Documents. The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower from time to time during the course of the Restoration, upon receipt of evidence satisfactory to Lender that (A) all materials installed and work and labor performed (except to the extent that they are to be paid for out of the requested disbursement) in connection with the Restoration have been paid for in full, and (B) there exist no notices of pendency, stop orders, mechanic’s or materialman’s liens or notices of intention to file same, or any other liens or encumbrances of any nature whatsoever on the Property which have not either been fully bonded to the satisfaction of Lender and discharged of record or in the alternative fully insured to the satisfaction of Lender by the title company issuing the Title Insurance Policy.
(iii) All plans and specifications required in connection with the Restoration shall be subject to prior review and acceptance in all respects by Lender and by an independent consulting engineer selected by Lender (the “
Casualty Consultant
”). Lender shall have the use of the plans and specifications and all permits, licenses and approvals required or obtained in connection with the Restoration. The identity of the contractors, subcontractors and materialmen engaged in the Restoration, as well as the contracts under which they have been engaged, shall be subject to prior review and approval by Lender and the Casualty Consultant. All costs and expenses incurred by Lender in connection with making the Net Proceeds available for the Restoration including reasonable counsel fees and disbursements and the Casualty Consultant’s fees, shall be paid by Borrower.
(iv) In no event shall Lender be obligated to make disbursements of the Net Proceeds in excess of an amount equal to the costs actually incurred from time to time for work in place as part of the Restoration, as certified by the Casualty Consultant, minus the Casualty Retainage. The term “
Casualty Retainage
” means an amount equal to ten percent (10%) of the costs actually incurred for work in place as part of the Restoration, as certified by the Casualty Consultant, until the Restoration has been completed. The Casualty Retainage shall in no event, and notwithstanding anything to the contrary set forth above in this
Section 6.4(b)
, be less than the amount actually held back by Borrower from contractors, subcontractors and materialmen engaged in the Restoration. The Casualty Retainage shall not be released until the Casualty Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this
Section 6.4(b)
and that all approvals necessary for the re-occupancy and use of the Property have been obtained from all appropriate governmental and quasi-governmental authorities, and Lender receives evidence satisfactory to Lender that the costs of the Restoration have been paid in full or will be paid in full out of the Casualty Retainage; provided, however, that Lender shall release the portion of the Casualty Retainage being held with respect to any contractor, subcontractor or materialman engaged in the Restoration as of the date upon which the
Casualty Consultant certifies to Lender that the contractor, subcontractor or materialman has satisfactorily completed all work and has supplied all materials in accordance with the provisions of the contractor’s, subcontractor’s or materialman’s contract, the contractor, subcontractor or materialman delivers the lien waivers and evidence of payment in full of all sums due to the contractor, subcontractor or materialman as may be reasonably requested by Lender or by the title company issuing the Title Insurance Policy, and Lender receives an endorsement to the Title Insurance Policy insuring the continued priority of the lien of the Security Instrument and evidence of payment of any premium payable for such endorsement. If required by Lender, the release of any such portion of the Casualty Retainage shall be approved by the surety company, if any, which has issued a payment or performance bond with respect to the contractor, subcontractor or materialman.
(v) Lender shall not be obligated to make disbursements of the Net Proceeds more frequently than once every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the opinion of Lender in consultation with the Casualty Consultant, be sufficient to pay in full the balance of the costs which are estimated by the Casualty Consultant to be incurred in connection with the completion of the Restoration, Borrower shall deposit the deficiency (the “
Net Proceeds Deficiency
”) with Lender before any further disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall be held by Lender and shall be disbursed for costs actually incurred in connection with the Restoration on the same conditions applicable to the disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 6.4(b)
shall constitute additional security for the Debt and Other Obligations under the Loan Documents.
(vii) Provided no continuing Event of Default shall then exist, after the Casualty Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this
Section 6.4(b)
, and the receipt by Lender of evidence satisfactory to Lender that all costs incurred in connection with the Restoration have been paid in full, the excess, if any, of the Net Proceeds (and the remaining balance, if any, of the Net Proceeds Deficiency) deposited with Lender shall be (1) if a Cash Sweep Period then exists, deposited in the Cash Management Account to be disbursed in accordance with this Agreement, and (2) if no Cash Sweep Period then exists, disbursed to Borrower.
(c) All Net Proceeds not required (i) to be made available for the Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant to
Section 6.4(b)(vii)
hereof may be retained and applied by Lender toward the payment of the Debt in accordance with
Section 9(b)
of the Note, whether or not then due and payable in such order, priority and proportions as Lender in its discretion shall deem proper, or, at the discretion of Lender, the same may be paid, either in whole or in part, to Borrower for such purposes as Lender shall approve, in its discretion.
(d) In the event of foreclosure of the Security Instrument, or other transfer of title to the Property in extinguishment in whole or in part of the Debt all right, title and interest of Borrower in and to the Policies that are not blanket Policies then in force concerning the Property and all
proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Lender or other transferee in the event of such other transfer of title.
ARTICLE VII - RESERVE FUNDS
Section 7.1
Intentionally Omitted
.
Section 7.2
Tax and Insurance Escrow Fund
. Borrower shall pay to Lender (a) on the Closing Date an initial deposit and (b) on each Payment Date thereafter (i) one-twelfth (1/12) of the Taxes and Other Charges that Lender estimates will be payable during the next ensuing twelve (12) months in order to accumulate with Lender sufficient funds to pay all such Taxes and Other Charges at least thirty (30) days prior to their respective due dates, and (ii) one-twelfth (1/12) of the Insurance Premiums that Lender estimates will be payable for the renewal of the coverage afforded by the Policies upon the expiration thereof in order to accumulate with Lender sufficient funds to pay all such Insurance Premiums at least thirty (30) days prior to the expiration of the Policies (said amounts in (a) and (b) above hereinafter called the “
Tax and Insurance Escrow Fund
”). Lender shall apply the Tax and Insurance Escrow Fund to payments of Taxes and Insurance Premiums required to be made by Borrower pursuant to
Section 5.1.2
hereof and under the Security Instrument. In making any payment relating to the Tax and Insurance Escrow Fund, Lender may do so according to any bill, statement or estimate procured from the appropriate public office (with respect to Taxes) or insurer or agent (with respect to Insurance Premiums), without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof. If the amount of the Tax and Insurance Escrow Fund shall exceed the amounts due for Taxes, Other Charges and Insurance Premiums pursuant to
Section 5.1.2
hereof, Lender shall, in its discretion, return any excess to Borrower or credit such excess against future payments to be made to the Tax and Insurance Escrow Fund. If at any time Lender reasonably determines that the Tax and Insurance Escrow Fund is not or will not be sufficient to pay Taxes, Other Charges and Insurance Premiums by the dates set forth in (a) and (b) above, Lender shall notify Borrower of such determination and Borrower shall increase its monthly payments to Lender by the amount that Lender estimates is sufficient to make up the deficiency at least thirty (30) days prior to the due date of the Taxes and Other Charges or thirty (30) days prior to expiration of the Policies, as the case may be.
Section 7.3
Replacements and Replacement Reserve
.
7.3.1
Replacement Reserve Fund
. Borrower shall pay to Lender (a) on the Closing Date an initial deposit of $2,000,000.00 (the “
Replacement Reserve Initial Deposit
”) and (b) on each Payment Date thereafter $20,511.00 (the “
Replacement Reserve Monthly Deposit
”) which amounts are reasonably estimated by Lender in its discretion to be due for replacements and repairs required to be made to the Property during the calendar year (collectively, the “
Replacements
”). Amounts so deposited shall hereinafter be referred to as Borrower’s “
Replacement Reserve Fund
” and the account in which such amounts are held shall hereinafter be referred to as Borrower’s “
Replacement Reserve Account
.” Notwithstanding the preceding sentence, the amount of Replacement Reserve Funds on deposit in the Replacement Reserve Account (excluding any portion of the Replacement Reserve Initial Deposit held in the Replacement Reserve Account at any time prior to Borrower’s completion of the replacement of the roof of the building at the Property in
accordance with the terms hereof (the “
Roof Replacement
”)) at any given time shall not exceed $738,396.00 in the aggregate (the “
Replacement Reserve Cap
”) and, accordingly, to the extent a Replacement Reserve Monthly Deposit would result in the aggregate amount of Replacement Reserve Funds in the Replacement Reserve Account to exceed the Replacement Reserve Cap, such Replacement Reserve Monthly Deposit shall be decreased by an amount equal to such excess. Until the Roof Replacement has been fully completed and paid for, the Reserve Initial Deposit shall (1) only be disbursed by Lender in connection with the Roof Replacement, and not for any other Replacements, and (2) not be included in determining whether the Replacement Reserve Cap has been reached. Lender may reassess its estimate of the amount necessary for the Replacement Reserve Fund from time to time, and may increase the monthly amounts required to be deposited into the Replacement Reserve Fund upon thirty (30) days’ notice to Borrower if Lender determines in its discretion that an increase is necessary to maintain the proper maintenance and operation of the Property.
7.3.2
Disbursements from Replacement Reserve Account
. (a) Lender shall make disbursements from the Replacement Reserve Account to pay Borrower only for the costs of the Replacements. Lender shall not be obligated to make disbursements from the Replacement Reserve Account to reimburse Borrower for the costs of routine maintenance to the Property, replacements of inventory or for costs which are to be reimbursed from the Rollover Reserve Fund or Major Tenant Rollover Reserve Fund.
(b) Lender shall, upon written request from Borrower and satisfaction of the requirements set forth in this
Section 7.3.2
, disburse to Borrower amounts from the Replacement Reserve Account necessary to pay for the actual approved costs of Replacements or to reimburse Borrower therefor, upon completion of such Replacements (or, upon partial completion in the case of Replacements made pursuant to
Section 7.3.2(e)
hereof) as determined by Lender. In no event shall Lender be obligated to disburse funds from the Replacement Reserve Account if a Default or an Event of Default exists.
(c) Each request for disbursement from the Replacement Reserve Account shall be in a form specified or approved by Lender and shall specify (i) the specific Replacements for which the disbursement is requested, (ii) the quantity and price of each item purchased, if the Replacement includes the purchase or replacement of specific items, (iii) the price of all materials (grouped by type or category) used in any Replacement other than the purchase or replacement of specific items, and (iv) the cost of all contracted labor or other services applicable to each Replacement for which such request for disbursement is made. With each request Borrower shall certify that all Replacements have been made in accordance with all applicable Legal Requirements of any Governmental Authority having jurisdiction over the Property. Each request for disbursement shall include copies of invoices for all items or materials purchased and all contracted labor or services provided and, unless Lender has agreed to issue joint checks as described below in connection with a particular Replacement, each request shall include evidence satisfactory to Lender of payment of all such amounts. Except as provided in
Section 7.3.2(e)
hereof, each request for disbursement from the Replacement Reserve Account shall be made only after completion of the Replacement for which disbursement is requested. Borrower shall provide Lender evidence of completion of the subject Replacement satisfactory to Lender in its reasonable judgment.
(d) Borrower shall pay all invoices in connection with the Replacements with respect to which a disbursement is requested prior to submitting such request for disbursement from the Replacement Reserve Account or, at the request of Borrower, Lender shall issue joint checks, payable to Borrower and the contractor, supplier, materialman, mechanic, subcontractor or other party to whom payment is due in connection with a Replacement. In the case of payments made by joint check, Lender may require a waiver of lien from each Person receiving payment prior to Lender’s disbursement from the Replacement Reserve Account. In addition, as a condition to any disbursement, Lender may require Borrower to obtain lien waivers from each contractor, supplier, materialman, mechanic or subcontractor who receives payment in an amount equal to or greater than $25,000.00 for completion of its work or delivery of its materials. Any lien waiver delivered hereunder shall conform to the requirements of applicable law and shall cover all work performed and materials supplied (including equipment and fixtures) for the Property by that contractor, supplier, subcontractor, mechanic or materialman through the date covered by the current reimbursement request (or, if payment to such contractor, supplier, subcontractor, mechanic or materialmen is to be made by a joint check, the release of lien shall be effective through the date covered by the previous release of funds request).
(e) If (i) the cost of a Replacement exceeds $25,000.00, (ii) the contractor performing such Replacement requires periodic payments pursuant to terms of a written contract, and (iii) Lender has approved in writing in advance such periodic payments, a request for reimbursement from the Replacement Reserve Account may be made after completion of a portion of the work under such contract, provided (A) such contract requires payment upon completion of such portion of the work, (B) the materials for which the request is made are on site at the Property and are properly secured or have been installed in the Property, (C) all other conditions in this Agreement for disbursement have been satisfied, (D) funds remaining in the Replacement Reserve Account are, in Lender’s judgment, sufficient to complete such Replacement and other Replacements when required, and (E) if required by Lender, each contractor or subcontractor receiving payments under such contract shall provide a waiver of lien with respect to amounts which have been paid to that contractor or subcontractor.
(f) Borrower shall not make a request for disbursement from the Replacement Reserve Account more frequently than once in any calendar month and (except in connection with the final disbursement) the total cost of all Replacements in any request shall not be less than $25,000.00.
7.3.3
Performance of Replacements
. (a) Borrower shall make Replacements when required in order to keep the Property in condition and repair consistent with other comparable properties in the same market segment in the metropolitan area in which the Property is located, and to keep the Property or any portion thereof from deteriorating. Borrower shall complete all Replacements in a good and workmanlike manner as soon as practicable following the commencement of making each such Replacement.
(b) Lender reserves the right, at its option, to approve all contracts or work orders with materialmen, mechanics, suppliers, subcontractors, contractors or other parties providing labor or materials in connection with the Replacements. Upon Lender’s request, Borrower shall assign any contract or subcontract to Lender.
(c) In the event Lender determines in its discretion that any Replacement is not being performed in a workmanlike or timely manner or that any Replacement has not been completed in a workmanlike or timely manner, Lender shall have the option to withhold disbursement for such unsatisfactory Replacement and to proceed under existing contracts or to contract with third parties to complete such Replacement and to apply the Replacement Reserve Fund toward the labor and materials necessary to complete such Replacement, without providing any prior notice to Borrower and to exercise any and all other remedies available to Lender upon an Event of Default hereunder.
(d) In order to facilitate Lender’s completion or making of such Replacements pursuant to
Section 7.3.3(c)
above, Borrower grants Lender the right to enter onto the Property and perform any and all work and labor necessary to complete or make such Replacements and/or employ watchmen to protect the Property from damage. All sums so expended by Lender, to the extent not from the Replacement Reserve Fund, shall be deemed to have been advanced under the Loan to Borrower and secured by the Security Instrument. For this purpose Borrower constitutes and appoints Lender its true and lawful attorney in fact with full power of substitution to complete or undertake such Replacements in the name of Borrower. Such power of attorney shall be deemed to be a power coupled with an interest and cannot be revoked. Borrower empowers said attorney in fact as follows: (i) to use any funds in the Replacement Reserve Account for the purpose of making or completing such Replacements; (ii) to make such additions, changes and corrections to such Replacements as shall be necessary or desirable to complete such Replacements; (iii) to employ such contractors, subcontractors, agents, architects and inspectors as shall be required for such purposes; (iv) to pay, settle or compromise all existing bills and claims which are or may become Liens against the Property, or as may be necessary or desirable for the completion of such Replacements, or for clearance of title; (v) to execute all applications and certificates in the name of Borrower which may be required by any of the contract documents; (vi) to prosecute and defend all actions or proceedings in connection with the Property or the rehabilitation and repair of the Property; and (vii) to do any and every act which Borrower might do in its own behalf to fulfill the terms of this Agreement.
(e) Nothing in this
Section 7.3.3
shall: (i) make Lender responsible for making or completing any Replacements; (ii) require Lender to expend funds in addition to the Replacement Reserve Fund to make or complete any Replacement; (iii) obligate Lender to proceed with any Replacements; or (iv) obligate Lender to demand from Borrower additional sums to make or complete any Replacement.
(f) Borrower shall permit Lender and Lender’s agents and representatives (including Lender’s engineer, architect, or inspector) or third parties making Replacements pursuant to this
Section 7.3.3
to enter onto the Property during normal business hours (subject to the rights of Tenants under their Leases) to inspect the progress of any Replacements and all materials being used in connection therewith, to examine all plans and shop drawings relating to such Replacements which are or may be kept at the Property, and to complete any Replacements made pursuant to this
Section 7.3.3
. Borrower shall cause all contractors and subcontractors to cooperate with Lender or Lender’s representatives or such other persons described above in connection with inspections described in this
Section 7.3.3(f)
or the completion of Replacements pursuant to this
Section 7.3.3
.
(g) Lender may require an inspection of the Property at Borrower’s expense prior to making a monthly disbursement from the Replacement Reserve Account in order to verify completion of the Replacements for which reimbursement is sought. Lender may require that such inspection be conducted by an appropriate independent qualified professional selected by Lender and/or may require a copy of a certificate of completion by an independent qualified professional acceptable to Lender prior to the disbursement of any amounts from the Replacement Reserve Account. Borrower shall pay the expense of the inspection as required hereunder, whether such inspection is conducted by Lender or by an independent qualified professional.
(h) The Replacements and all materials, equipment, fixtures, or any other item comprising a part of any Replacement shall be constructed, installed or completed, as applicable, free and clear of all mechanic’s, materialmen’s or other liens (except for those Liens existing on the date of this Agreement which have been approved in writing by Lender).
(i) Before each disbursement from the Replacement Reserve Account, Lender may require Borrower to provide Lender with a search of title to the Property effective to the date of the disbursement, which search shows that no mechanic’s or materialmen’s liens or other liens of any nature have been placed against the Property since the date of recordation of the related Security Instrument and that title to the Property is free and clear of all Liens (other than the lien of the related Security Instrument and any other Liens previously approved in writing by Lender, if any).
(j) All Replacements shall comply with all applicable Legal Requirements of all Governmental Authorities having jurisdiction over the Property and applicable insurance requirements including applicable building codes, special use permits, environmental regulations, and requirements of insurance underwriters.
(k) In addition to any insurance required under the Loan Documents, Borrower shall provide or cause to be provided workmen’s compensation insurance, builder’s risk, and public liability insurance and other insurance to the extent required under applicable law in connection with a particular Replacement. All such policies shall be in form and amount reasonably satisfactory to Lender. All such policies which can be endorsed with standard mortgagee clauses making loss payable to Lender or its assigns shall be so endorsed. Certified copies of such policies shall be delivered to Lender.
7.3.4
Failure to Make Replacements
. (a) It shall be an Event of Default under this Agreement if Borrower fails to comply with any provision of this
Section 7.3
and such failure is not cured within thirty (30) days after notice from Lender. Upon the occurrence of such an Event of Default, Lender may use the Replacement Reserve Fund (or any portion thereof) for any purpose, including completion of the Replacements as provided in
Section 7.3.3
, or for any other repair or replacement to the Property or toward payment of the Debt in such order, proportion and priority as Lender may determine in its discretion. Lender’s right to withdraw and apply the Replacement Reserve Fund shall be in addition to all other rights and remedies provided to Lender under this Agreement and the other Loan Documents.
(b) Nothing in this Agreement shall obligate Lender to apply all or any portion of the Replacement Reserve Fund on account of an Event of Default to payment of the Debt or in any specific order or priority.
7.3.5
Balance in the Replacement Reserve Account
. The insufficiency of any balance in the Replacement Reserve Account shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents.
Section 7.4
Rollover Reserve
.
7.4.1
Deposits to Rollover Reserve Fund
. Borrower shall pay to Lender (a) on the Closing Date an initial deposit of $2,000,000.00 and (b) on each Payment Date thereafter $61,534.00 (the “
Rollover Reserve Monthly Deposit
”), which amounts shall be deposited with and held by Lender for tenant improvement and leasing commission obligations incurred following the date hereof. Amounts so deposited shall hereinafter be referred to as the “
Rollover Reserve Fund
” and the account to which such amounts are held shall hereinafter be referred to as the “
Rollover Reserve Account
.” Borrower shall also pay to Lender, for deposit into the Rollover Reserve Account, all fees and other payments made to Borrower in connection with or relating to the rejection, buy-out, termination, surrender or cancellation of any Lease. Notwithstanding the aforementioned, the aggregate amount of the Rollover Reserve Fund shall not exceed $3,692,040.00 in the aggregate (the “
Rollover Reserve Cap
”) on any Payment Date (after giving effect to the payment of the Rollover Reserve Monthly Deposit) and accordingly, to the extent a Rollover Reserve Monthly Deposit would result in the aggregate amount of Rollover Reserve Funds in the Rollover Reserve Account to exceed the Rollover Reserve Cap, such Rollover Reserve Monthly Deposit shall be decreased by an amount equal to such excess.
7.4.2
Withdrawal of Rollover Reserve Funds
. Provided no Default or an Event of Default hereunder exists, Lender shall make disbursements from the Rollover Escrow Fund for tenant improvement and leasing commission obligations incurred by Borrower. All such expenses shall be approved by Lender in its discretion. Lender shall make disbursements as requested by Borrower on a monthly basis in increments of no less than $5,000.00 upon delivery by Borrower of Lender’s standard form of draw request accompanied by copies of paid invoices for the amounts requested and, if required by Lender, lien waivers and releases from all parties furnishing materials or services in connection with the requested payment. Lender may require an inspection of the Property at Borrower’s expense prior to making a monthly disbursement in order to verify completion of improvements for which reimbursement is sought.
Section 7.5
Excess Cash Flow Reserve Fund
.
7.5.1
Deposits to Excess Cash Flow Reserve Account
. During a Cash Sweep Period caused by either (i) a DSCR Trigger Event or (ii) Major Tenant Trigger Event if the Major Tenant Reserve Threshold has been achieved, Borrower shall deposit with Lender all Excess Cash Flow in the Cash Management Account, which shall be held by Lender as additional security for the Loan and amounts so held shall be hereinafter referred to as the “
Excess Cash Flow Reserve Fund
” and the account to which such amounts are held shall hereinafter be referred to as the “
Excess Cash Flow Reserve Account
.”
7.5.2
Release of Excess Cash Flow Reserve Funds
. Upon the occurrence of a Cash Sweep Event Cure, so long as no Event of Default or other uncured Cash Sweep Event then exists, all Excess Cash Flow Reserve Funds shall be deposited into the Cash Management Account to be disbursed to Borrower in accordance with the Cash Management Agreement. Any Excess Cash Flow Reserve Funds remaining after the Debt has been paid or defeased in full shall be paid to Borrower.
Section 7.6
Reserve Funds, Generally
. (a) Borrower grants to Lender a first-priority perfected security interest in each of the Reserve Funds and any and all monies now or hereafter deposited in each Reserve Fund as additional security for payment of the Debt. Until expended or applied in accordance herewith, the Reserve Funds shall constitute additional security for the Debt.
(b) Upon the occurrence of an Event of Default, Lender may, in addition to any and all other rights and remedies available to Lender, apply any sums then present in any or all of the Reserve Funds to the payment of the Debt in any order in its discretion.
(c) The Reserve Funds shall not constitute trust funds and may be commingled with other monies held by Lender. The Reserve Funds shall be held in an Eligible Account in Permitted Investments as directed by Lender or Lender’s Servicer. Unless expressly provided for in this
Article VII
, all interest on a Reserve Fund shall not be added to or become a part thereof and shall be the sole property of and shall be paid to Lender. Borrower shall be responsible for payment of any federal, state or local income or other tax applicable to the interest earned on the Reserve Funds credited or paid to Borrower.
(d) Borrower shall not, without obtaining the prior written consent of Lender, further pledge, assign or grant any security interest in any Reserve Fund or the monies deposited therein or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1 Financing Statements, except those naming Lender as the secured party, to be filed with respect thereto.
(e) Lender and Servicer shall not be liable for any loss sustained on the investment of any funds constituting the Reserve Funds. Borrower shall indemnify Lender and Servicer and hold Lender and Servicer harmless from and against any and all actions, suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses (including litigation costs and reasonable attorneys’ fees and expenses) arising from or in any way connected with the Reserve Funds or the performance of the obligations for which the Reserve Funds were established. Borrower shall assign to Lender all rights and claims Borrower may have against all persons or entities supplying labor, materials or other services which are to be paid from or secured by the Reserve Funds; provided, however, that Lender may not pursue any such right or claim unless an Event of Default has occurred and remains uncured.
(f) The required monthly deposits into the Reserve Funds and the Monthly Debt Service Payment Amount, shall be added together and shall be paid as an aggregate sum by Borrower to Lender.
(g) Any amount remaining in the Reserve Funds after the Debt has been paid in full or defeased in full shall be returned to Borrower.
Section 7.7
Major Tenant Rollover Reserve
.
7.7.1
Deposits to Major Tenant Rollover Reserve Fund
. During a Cash Sweep Period caused by a Major Tenant Trigger Event, Borrower shall deposit with Lender all Excess Cash Flow, which amounts shall be deposited with and held by Lender for tenant improvement and leasing commission obligations incurred following the date hereof in connection with the leasing of any or all of the Major Tenant Premises. Amounts so deposited shall hereinafter be referred to as the “
Major Tenant Rollover Reserve Fund
” and the account to which such amounts are held shall hereinafter be referred to as the “
Major Tenant Rollover Reserve Account
”. Borrower shall also pay to Lender, for deposit into the Major Tenant Rollover Reserve Account, all fees and other payments made to Borrower in connection with or relating to the rejection, buy-out, termination, surrender or cancellation of any Major Tenant Lease. Notwithstanding the aforementioned, during any Cash Sweep Period caused solely by a Major Tenant Trigger Event – Lease Expiration when the aggregate amount of Major Tenant Rollover Reserve Funds in the Major Tenant Rollover Reserve Account equals or exceeds the then applicable Major Tenant Reserve Threshold, any Excess Cash Flow shall be deposited into the Excess Cash Flow Reserve Account (and not the Major Tenant Rollover Reserve Account).
7.7.2
Withdrawal of Major Tenant Rollover Reserve Fund
. Provided no Event of Default hereunder exists and is then continuing, Lender shall make disbursements from the Major Tenant Rollover Reserve Fund for tenant improvement and leasing commission obligations incurred by Borrower incurred in connection with the leasing of any or all of the Major Tenant Premises. All such expenses shall be approved by Lender in its discretion. Lender shall make disbursements as requested by Borrower on a monthly basis in increments of no less than $5,000.00 upon delivery by Borrower of Lender’s standard form of draw request accompanied by copies of paid invoices for the amounts requested and, if required by Lender, lien waivers and releases from all parties furnishing materials or services in connection with the requested payment. Lender may require an inspection of the Property at Borrower’s expense prior to making any disbursement in order to verify completion of improvements for which reimbursement is sought.
Section 7.8
Rent Concession Reserve Fund
7.8.1
Rent Concession Reserve Deposit
. Borrower shall pay to Lender on the Closing Date a deposit of $935,390.00, the aggregate amount of rent abatement/rent concession owed by Borrower to Digital Realty with respect to its Lease (the “
Rent Concession Reserve Deposit
”), which amount shall be held by Lender as additional security for the Loan. Amounts so held shall be hereinafter referred to as the “
Rent Concession Reserve Fund
” and the account in which such amounts are held shall hereinafter be referred to as the “
Rent Concession Reserve Account
”.
7.8.2
Release of Rent Concession Reserve Funds
. Provided no Default or Event of Default then exists, on each Payment Date Lender shall disburse from the Rent Concession Reserve Fund the amounts specified as payable on such Payment Date below. Within thirty (30) days following the last of such disbursements, Borrower shall deliver to Lender evidence, in form
and substance satisfactory to Lender (including a tenant estoppel), confirming that Digital Realty has begun paying full, unabated rent pursuant to its Lease of space at the Property in existence as of the closing of the Loan. On each Payment Date from and including July 1, 2017 through and including December 1, 2017, Lender shall disburse $61,433.00. On each Payment Date from and including January 1, 2018 through and including August 1, 2018, Lender shall disburse $62,977.00. On the September 1, 2018 Payment Date, Lender shall disburse the full remaining amount of the Rent Concession Reserve Funds.
ARTICLE VIII - DEFAULTS
Section 8.1
Event of Default
. (a) Each of the following events shall constitute an event of default hereunder (an “
Event of Default
”):
(i) if any portion of the Debt is not paid when due;
(ii) if any of the Taxes or Other Charges are not paid when the same are due and payable;
(iii) if the Policies are not kept in full force and effect, or if certified copies of the Policies are not delivered to Lender upon request;
(iv) if Borrower Transfers or otherwise encumbers any portion of the Property without Lender’s prior written consent in violation of the provisions of this Agreement and Article 6 of the Security Instrument;
(v) if any representation or warranty made by Borrower herein or in any other Loan Document, or in any report, certificate, financial statement or other instrument, agreement or document furnished to Lender shall have been false or misleading in any material respect as of the date the representation or warranty was made;
(vi) if Borrower shall make an assignment for the benefit of creditors;
(vii) if (A) Borrower, Guarantor or any other guarantor or indemnitor under any guarantee issued in connection with the Loan shall commence any case, proceeding or other action (I) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (II) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Borrower, Guarantor or any other guarantor or indemnitor shall make a general assignment for the benefit of its creditors; or (B) there shall be commenced against Borrower, Guarantor or any other guarantor or indemnitor any case, proceeding or other action of a nature referred to in clause (A) above that is not dismissed within thirty (30) days of filing; or (C) there shall be commenced against the Borrower, Guarantor or any other guarantor or indemnitor any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets; or (D) the Borrower, Guarantor or any other guarantor or indemnitor shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (A), (B), or (C) above; or (E) the Borrower, Guarantor or any other guarantor or indemnitor shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;
(viii) if Borrower attempts to assign its rights under this Agreement or any of the other Loan Documents or any interest herein or therein in contravention of the Loan Documents;
(ix) if Borrower breaches any covenant contained in
Section 4.1.30
hereof or any negative covenant contained in
Section 5.2
hereof;
(x) with respect to any term, covenant or provision set forth herein which specifically contains a notice requirement or grace period, if Borrower shall be in default under such term, covenant or condition after the giving of such notice or the expiration of such grace period;
(xi) if any of the assumptions contained in the Insolvency Opinion delivered to Lender in connection with the Loan, or in any Additional Insolvency Opinion delivered subsequent to the closing of the Loan, is or shall become untrue in any material respect;
(xii) if a material default has occurred and continues beyond any applicable cure period under the Management Agreement (or any Replacement Management Agreement) and if such default permits the Manager thereunder to terminate or cancel the Management Agreement (or any Replacement Management Agreement);
(xiii) if Borrower shall continue to be in Default under any of the terms, covenants or conditions of
Section 9.1
hereof, or fails to cooperate with Lender in connection with a Securitization pursuant to the provisions of
Section 9.1
hereof, for three (3) days after notice to Borrower from Lender;
(xiv) if Borrower shall continue to be in Default under any of the other terms, covenants or conditions of this Agreement not specified in
subsections (i)
to
(xiii)
above, for ten (10) days after notice to Borrower from Lender, in the case of any Default which can be cured by the payment of a sum of money, or for thirty (30) days after notice from Lender in the case of any other Default; provided, however, that if Lender determines that such non monetary Default is susceptible of cure but cannot reasonably be cured within such thirty (30) day period and provided further that Borrower shall have commenced to cure such Default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for such time as is reasonably necessary for Borrower in the exercise of due diligence to cure such Default, such additional period not to exceed sixty (60) days;
(xv) if there shall be default under any of the other Loan Documents beyond any applicable cure periods contained in such documents, whether as to Borrower or the Property, or if any other such event shall occur or condition shall exist, if the effect of such default, event or condition is to accelerate the maturity of any portion of the Debt or to permit Lender to accelerate the maturity of all or any portion of the Debt;
(xvi) Borrower shall be in default under any other deed of trust, mortgage or security agreement covering any part of the Property whether it be superior or junior in priority to the Security Instrument (it not being implied by this clause that any such encumbrance will be permitted);
(xvii) if (A) a breach or default by Borrower under any condition or obligation contained in the Ground Lease is not cured within any applicable cure period provided therein, (B) there occurs any event or condition that gives Ground Lessor a right to terminate or cancel the Ground Lease, or (C) the Ground Lease Property shall be surrendered or the Ground Lease shall be terminated or cancelled for any reason or under any circumstances whatsoever, or (D) any of the terms, covenants or conditions of the Ground Lease shall be modified, changed, supplemented, altered, or amended without Lender’s prior written consent; or
(xviii) Borrower shall default in its obligations under
Section 2.7.4
hereof.
(b) Upon the occurrence of an Event of Default (other than an Event of Default described in clauses (vi), (vii) or (viii) above) and at any time thereafter, in addition to any other rights or remedies available to it pursuant to this Agreement and the other Loan Documents or at law or in equity, Lender may take such action, without notice or demand, that Lender deems advisable to protect and enforce its rights against Borrower and the Property, including declaring the Debt to be immediately due and payable, and Lender may enforce or avail itself of any or all rights or remedies provided in the Loan Documents against Borrower and any or all of the Property, including all rights or remedies available at law or in equity; and upon any Event of Default described in clauses (vi), (vii) or (viii) above, the Debt and Other Obligations of Borrower hereunder and under the other Loan Documents shall immediately and automatically become due and payable, without notice or demand, and Borrower hereby expressly waives any such notice or demand, anything contained herein or in any other Loan Document to the contrary notwithstanding.
Section 8.2
Remedies
. (a) Upon the occurrence of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to Lender against Borrower under this Agreement or any of the other Loan Documents executed and delivered by, or applicable to, Borrower or at law or in equity may be exercised by Lender at any time and from time to time, whether or not all or any of the Debt shall be declared due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under any of the Loan Documents with respect to all or any part of the Property. Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singularly, successively, together or otherwise, at such time and in such order as Lender may determine in its discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of Lender permitted by law, equity or contract or as set forth
herein or in the other Loan Documents. Without limiting the generality of the foregoing, Borrower agrees that if an Event of Default is continuing (i) Lender is not subject to any “one action” or “election of remedies” law or rule, and (ii) all liens and other rights, remedies or privileges provided to Lender shall remain in full force and effect until Lender has exhausted all of its remedies against the Property and the Security Instrument has been foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or the Debt has been paid in full.
(b) With respect to Borrower and the Property, nothing contained herein or in any other Loan Document shall be construed as requiring Lender to resort to the Property for the satisfaction of any of the Debt in any preference or priority, and Lender may seek satisfaction out of the Property, or any part thereof, in its discretion in respect of the Debt. In addition, Lender shall have the right from time to time to partially foreclose the Security Instrument in any manner and for any amounts secured by the Security Instrument then due and payable as determined by Lender in its discretion including the following circumstances: (i) in the event Borrower defaults beyond any applicable grace period in the payment of one or more scheduled payments of principal and interest, Lender may foreclose the Security Instrument to recover such delinquent payments or (ii) in the event Lender elects to accelerate less than the entire outstanding principal balance of the Loan, Lender may foreclose the Security Instrument to recover so much of the principal balance of the Loan as Lender may accelerate and such other sums secured by the Security Instrument as Lender may elect. Notwithstanding one or more partial foreclosures, the Property shall remain subject to the Security Instrument to secure payment of sums secured by the Security Instrument and not previously recovered.
(c) Lender shall have the right from time to time to sever the Note and the other Loan Documents into one or more separate notes, mortgages and other security documents (the “
Severed Loan Documents
”) in such denominations as Lender shall determine in its discretion for purposes of evidencing and enforcing its rights and remedies provided hereunder. Borrower shall execute and deliver to Lender from time to time, promptly after the request of Lender, a severance agreement and such other documents as Lender shall request in order to effect the severance described in the preceding sentence, all in form and substance reasonably satisfactory to Lender. Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect the aforesaid severance, Borrower ratifying all that its said attorney shall do by virtue thereof; provided, however, Lender shall not make or execute any such documents under such power until three (3) days after notice has been given to Borrower by Lender of Lender’s intent to exercise its rights under such power. Borrower shall be obligated to pay any costs or expenses incurred in connection with the preparation, execution, recording or filing of the Severed Loan Documents and the Severed Loan Documents shall not contain any representations, warranties or covenants not contained in the Loan Documents and any such representations and warranties contained in the Severed Loan Documents will be given by Borrower only as of the Closing Date.
(d) As used in this
Section 8.2
, a “foreclosure” shall include, without limitation, any sale by power of sale.
Section 8.3
Remedies Cumulative; Waivers
. The rights, powers and remedies of Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to this Agreement or the other Loan Documents, or existing at law or in equity or otherwise. Lender’s rights, powers and remedies may be pursued singularly, concurrently or otherwise, at such time and in such order as Lender may determine in Lender’s discretion. No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient. A waiver of one Default or Event of Default with respect to Borrower shall not be construed to be a waiver of any subsequent Default or Event of Default by Borrower or to impair any remedy, right or power consequent thereon.
ARTICLE IX - SPECIAL PROVISIONS
Section 9.1
Securitization
.
9.1.1
Sale of Notes and Securitization
. (a) Borrower acknowledges and agrees that Lender may sell all or any portion of the Loan and the Loan Documents, or issue one or more participations therein, or consummate one or more private or public securitizations of rated single- or multi-class securities (the “
Securities
”) secured by or evidencing ownership interests in all or any portion of the Loan and the Loan Documents or a pool of assets that include the Loan and the Loan Documents (such sales, participations or securitizations, collectively, a “
Securitization
”).
(b) At the request of Lender, and to the extent not already required to be provided by or on behalf of Borrower under this Agreement, Borrower shall use reasonable efforts to provide information not in the possession of Lender or which may be reasonably required by Lender or take other actions reasonably required by Lender, in each case in order to satisfy the market standards to which Lender customarily adheres and/or which may be reasonably required by prospective investors or the Rating Agencies in connection with any such Securitization. Lender shall have the right to provide to prospective investors and the Rating Agencies any information in its possession, including financial statements relating to Borrower, Guarantor, if any, the Property and any Tenant of the Improvements. Borrower acknowledges that certain information regarding the Loan and the parties thereto and the Property may be included in a private placement memorandum, prospectus or other disclosure documents. Borrower agrees that each of Borrower, Guarantor and their respective officers and representatives, shall, at Lender’s request, cooperate with Lender’s efforts to arrange for a Securitization in accordance with the market standards to which Lender customarily adheres and/or which may be required by prospective investors or the Rating Agencies in connection with any such Securitization. Borrower, and Guarantor agree to review, at Lender’s request in connection with the Securitization, the Disclosure Documents as such Disclosure Documents relate to Borrower, Principal, Guarantor, the Property and the Loan, including, the sections entitled “Risk Factors,” “Special Considerations,” “Description of the Security Instrument,” “Description of the Mortgage Loan and Mortgaged Property,” “The Manager,” “The Borrower,” and “Certain Legal Aspects of the Mortgage Loan,” and shall confirm that the factual statements and representations contained in such sections and such other information in the Disclosure Documents (to the extent such information relates to, or is based on, or includes any information regarding the Property,
Borrower, Guarantor, Manager or the Loan) do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.
(c) Borrower agrees to make upon Lender’s written request, without limitation, all structural or other changes to the Loan (including delivery of one or more new component notes to replace the original note or modify the original note to reflect multiple components of the Loan and such new notes or modified note may have different interest rates and amortization schedules), modifications to any documents evidencing or securing the Loan, creation of one or more mezzanine loans (including amending Borrower’s organizational structure to provide for one or more mezzanine borrowers), delivery of opinions of counsel acceptable to the Rating Agencies or potential investors and addressing such matters as the Rating Agencies or potential investors may require; provided, however, that in creating such new notes or modified notes or mezzanine notes Borrower shall not be required to modify (i) the initial weighted average interest rate payable under the Note, (ii) the stated maturity of the Note, (iii) the aggregate amortization of principal of the Note, (iv) any other material economic term of the Loan, or (v) decrease the time periods during which Borrower is permitted to perform its obligations under the Loan Documents. In connection with the foregoing, Borrower covenants and agrees to modify the Cash Management Agreement to reflect the newly created components or mezzanine loans.
(d) If requested by Lender, Borrower shall provide Lender, promptly upon request, with any financial statements, or financial, statistical or operating information, as Lender shall determine to be required pursuant to Regulation AB under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), or any amendment, modification or replacement thereto or other legal requirements in connection with any private placement memorandum, prospectus or other disclosure documents or any filing pursuant to the Exchange Act in connection with the Securitization or as shall otherwise be reasonably requested by Lender.
(e) Borrower hereby appoints Lender its attorney-in-fact with full power of substitution (which appointment shall be deemed to be coupled with an interest and to be irrevocable until the Loan is paid and the Security Instrument is discharged of record, with Borrower hereby ratifying all that its said attorney shall do by virtue thereof) to execute and deliver all documents and do all other acts and things necessary or desirable to effect any Securitization authorized hereunder; provided, however, that unless an Event of Default exists, Lender shall not execute or deliver any such documents or do any such acts or things under such power until five (5) days after written notice has been given to Borrower by Lender of Lender’s intent to exercise its rights under such power. Borrower’s failure to deliver any document or to take any other action Borrower is obligated to take hereunder with respect to any Securitization for a period of ten (10) Business Days after such notice by Lender shall, at Lender’s option, constitute an Event of Default hereunder.
9.1.2
Securitization Costs
. All reasonable third party costs and expenses incurred by Borrower and Guarantor in connection with Borrower’s compliance with this
Section 9.1
(including the fees and expenses of the Rating Agencies) shall be paid or reimbursed by Borrower.
Section 9.2
Right To Release Information
. Following the occurrence of any Event of Default, Lender may forward to any broker, prospective purchaser of the Property or the Loan, or other person or entity all documents and information which Lender now has or may hereafter acquire relating to the Debt, Borrower, any Guarantor, any indemnitor, the Property and any other matter in connection with the Loan, whether furnished by Borrower, any Guarantor, any indemnitor or otherwise, as Lender determines necessary or desirable. Borrower irrevocably waives any and all rights it may have to limit or prevent such disclosure, including any right of privacy or any claims arising therefrom.
Section 9.3
Exculpation
. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the obligations contained in the Note, this Agreement, the Security Instrument or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against Borrower, except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Security Instrument and the other Loan Documents, or in the Property, the Rents, or any other collateral given to Lender pursuant to the Loan Documents;
provided
,
however
, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Security Instrument and the other Loan Documents, agrees that it shall not sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Security Instrument or the other Loan Documents. The provisions of this Section shall not, however, (i) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (ii) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Security Instrument; (iii) affect the validity or enforceability of any guaranty, indemnity or similar agreement or undertaking made in connection with the Loan or any of the rights and remedies of Lender thereunder; (iv) impair the right of Lender to obtain the appointment of a receiver; (v) impair the enforcement of any assignment of leases contained in the Security Instrument and any other Loan Documents; or (vi) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by the Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against the Property.
(b) Nothing contained herein shall in any manner or way release, affect or impair the right of Lender to recover, and Borrower shall be fully and personally liable and subject to legal action, for any loss, cost, expense, damage, claim or other obligation (including reasonable attorneys' fees and court costs) incurred or suffered by Lender arising out of or in connection with the following:
(i) fraud or willful misrepresentation by Borrower or any of its affiliates or Guarantor or any agent, employee or other person with actual or apparent authority to make statements or representations on behalf of Borrower, any affiliate of Borrower or Guarantor in connection with the Loan (“apparent authority” meaning such authority as the principal
knowingly or negligently permits the agent to assume, or which he holds the agent out as possessing);
(ii) the gross negligence or willful misconduct of Borrower or Guarantor, or any affiliate, agent, or employee of the foregoing;
(iii) material physical waste of the Property;
(iv) the removal or disposal of any portion of the Property in violation of the terms of the Loan Documents;
(v) the misapplication, misappropriation, or conversion by Borrower, any of its affiliates or Guarantor of (A) any Insurance Proceeds paid by reason of any loss, damage or destruction to the Property, (B) any Awards received in connection with a Condemnation of all or a portion of the Property, (C) any Rents or other Property income or collateral proceeds, or (D) any Rents paid more than one month in advance (including security deposits);
(vi) following the occurrence of an Event of Default, the failure to either apply rents or other Property income, whether collected before or after such Event of Default, to the ordinary, customary, and necessary expenses of operating the Property or, upon demand, to deliver such rents or other Property income to Lender;
(vii) failure to maintain insurance or to pay taxes and assessments, or to pay charges for labor or materials or other charges or judgments that can create Liens on any portion of the Property (unless Lender is escrowing funds therefor and fails to make such payments or has taken possession of the Property following an Event of Default, has received all Rents from the Property applicable to the period for which such insurance, taxes or other items are due, and thereafter fails to make such payments);
(viii) any security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender upon a foreclosure of the Property or action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof;
(ix) the breach of the representation by Borrower that on the Closing Date, the Property and all Improvements at the Property were in material compliance with applicable laws; or
(x) any failure by Borrower to comply with any of the representations, warranties or covenants set forth in
Sections 4.1.37
or
5.1.19
hereof; or
(xi) any failure by Borrower to cooperate with Lender in instituting the cash management system provided for in the Loan Documents, including, without limitation, setting up the Cash Management Account as and when required pursuant to this Agreement.
(c) Notwithstanding anything to the contrary in this Agreement, the Note or any of the other Loan Documents,
(i) Borrower and any general partner of Borrower shall be personally liable for the Debt if (A) Borrower fails to obtain Lender’s prior written consent to any Transfer as required by this Agreement or the Security Instrument; (B) Borrower fails to obtain Lender’s prior written consent to any Indebtedness or voluntary Lien encumbering the Property; (C) Borrower shall at any time hereafter make an assignment for the benefit of its creditors; (D) Borrower fails to permit on-site inspections of the Property, fails to maintain its status as a Special Purpose Entity or comply with any representation, warranty or covenant set forth in
Section 4.1.30
hereof or fails to appoint a new property manager upon the request of Lender as permitted under this Agreement, each as required by, and in accordance with, the terms and provisions of this Agreement or the Security Instrument; (E) Borrower admits, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due; (F) Borrower fails to make the first full monthly payment of principal and interest on or before the first Payment Date; (G) Borrower files, consents to, or acquiesces in a petition for bankruptcy, insolvency, dissolution or liquidation under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or there is a filing of an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law in which Borrower or Guarantor colludes with, or otherwise assists any party in connection with such filing, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower from any party; or (H) the Property or any part thereof shall at any time hereafter become property of the estate or an asset in (1) a voluntary bankruptcy, insolvency, receivership, liquidation, winding up, or other similar type of proceeding, or (2) an involuntary bankruptcy or insolvency proceeding (other than one filed by Lender) that is not dismissed within sixty (60) days of filing.
(d) Nothing herein shall be deemed to constitute a waiver by Lender of any right Lender may have under Sections 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt.
Section 9.4
Matters Concerning Manager
. If (a) an Event of Default hereunder has occurred and remains uncured, (b) Manager shall become subject to a Bankruptcy Action, (c) a default occurs under the Management Agreement, or (d) a DSCR Trigger Event occurs, Borrower shall, at the request of Lender, terminate the Management Agreement and replace the Manager with a Qualified Manager pursuant to a Replacement Management Agreement.
Section 9.5
Servicer
. At the option of Lender, the Loan may be serviced by a master servicer, primary servicer, special servicer or trustee (any such master servicer, primary servicer, special servicer, and trustee, together with its agents, nominees or designees, are collectively referred to as “
Servicer
”) selected by Lender and Lender may delegate all or any portion of its responsibilities under this Agreement and the other Loan Documents to Servicer pursuant to a pooling and servicing agreement, servicing agreement, special servicing agreement or other agreement providing for the servicing of one or more mortgage loans (collectively, the “
Servicing Agreement
”) between Lender
and Servicer. Borrower shall be responsible for any set up fees or any other initial costs relating to or arising under the Servicing Agreement, but Borrower shall not be responsible for payment of the regular monthly master servicing fee or trustee fee due to Servicer under the Servicing Agreement or any fees or expenses required to be borne by, and not reimbursable to, Servicer. Notwithstanding the foregoing, Borrower shall promptly reimburse Lender on demand for the following costs and expenses payable by Lender to Servicer as a result of the Loan becoming specially serviced: (i) any liquidation fees that are due and payable to Servicer under the Servicing Agreement in connection with the exercise of any or all remedies permitted under this Agreement, (ii) any workout fees and special servicing fees that are due and payable to Servicer under the Servicing Agreement, which fees may be due and payable under the Servicing Agreement on a periodic or continuing basis, and which may be payable to a special servicer, in an amount as great as one percent of the outstanding principal balance of the Loan, upon return of the Loan by the special servicer to the master servicer, and (iii) the costs of all amounts owed to any third-party contractor in connection with the Servicer obtaining any third-party report, including any property inspections or appraisals of the Properties (or any updates to any existing inspection or appraisal) that Servicer determines to obtain or may be required to obtain (other than the cost of regular annual inspections required to be borne by Servicer under the Servicing Agreement).
ARTICLE X - MISCELLANEOUS
Section 10.1
Survival
. This Agreement and all covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by Lender of the Loan and the execution and delivery to Lender of the Note, and shall continue in full force and effect so long as all or any of the Debt is outstanding and unpaid unless a longer period is expressly set forth herein or in the other Loan Documents. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the legal representatives, successors and assigns of such party. All covenants, promises and agreements in this Agreement, by or on behalf of Borrower, shall inure to the benefit of the legal representatives, successors and assigns of Lender.
Section 10.2
Lender’s Discretion
. Whenever pursuant to this Agreement, Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically herein provided) be in the sole and absolute discretion of Lender and shall be final and conclusive.
Section 10.3
Governing Law
.
(a)
LENDER HAS OFFICES IN THE STATE OF NEW YORK AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK (“GOVERNING STATE”), WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(b)
ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS (“ACTION”) MAY AT LENDER’S OPTION BE INSTITUTED IN (AND IF ANY ACTION IS ORIGINALLY BROUGHT IN ANOTHER VENUE, THE ACTION SHALL AT THE ELECTION OF LENDER BE TRANSFERRED TO) ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE OR FORUM NON CONVENIENS OF ANY SUCH ACTION, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY ACTION. BORROWER DOES HEREBY DESIGNATE AND APPOINT:
Corporation Service Company
1180 Avenue of the Americas, Suite 210
New York, NY 10036-8401
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH ACTION IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
Section 10.4
Modification, Waiver in Writing
. No modification, amendment, extension, discharge, termination or waiver of any provision of this Agreement, or of the Note, or of any other Loan Document, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to, or demand on Borrower, shall entitle Borrower to any other or future notice or demand in the same, similar or other circumstances.
Section 10.5
Delay Not a Waiver
. Neither any failure nor any delay on the part of Lender in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder, or under the Note or under any other Loan Document, or any other instrument given as security therefor, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power, remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under this Agreement, the Note or any other Loan Document, Lender shall not be deemed to have waived any right either to require prompt payment when due of all other amounts due under this Agreement, the Note or the other Loan Documents, or to declare a default for failure to effect prompt payment of any such other amount.
Section 10.6
Notices
. All notices, consents, approvals and requests required or permitted hereunder or under any other Loan Document shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) certified or registered United States mail, postage prepaid, return receipt requested or (b) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of attempted delivery, or (c) by telecopier (with answer back acknowledged) and with a second copy to be sent to the intended recipient by any other means permitted under this Section, addressed as follows (or at such other address and Person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Section):
|
|
If to Lender:
|
KeyBank National Association
|
11501 Outlook, Suite 300
Overland Park, Kansas 66211
Facsimile No.: 877-379-1625
Attention: Loan Servicing
|
|
with a copy to:
|
Dan Flanigan
|
POLSINELLI
900 West 48
th
Place, Suite 900
Kansas City, Missouri 64112
Facsimile No.: 816-753-1536
|
|
If to Borrower:
|
DCII-250 Williams Street NW, LLC
|
4890 W. Kennedy Boulevard, Suite 650
Tampa, Florida 33609
Attention: Lisa Drummond
Facsimile No.: 813-287-0397
|
|
with a copy to:
|
GrayRobinson, P.A.
|
401 East Jackson Street, Suite 2700
Tampa, Florida 33602
Attention: Stephen Kussner
Facsimile No.: 813-273-5145
A notice shall be deemed to have been given: in the case of hand delivery, at the time of delivery; in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day; or in the case of expedited prepaid delivery, upon the first attempted delivery on a Business Day; or in the case of telecopy, upon sender’s receipt of a machine-generated confirmation of successful transmission after advice by telephone to recipient that a telecopy notice is forthcoming.
Section 10.7
Trial by Jury
.
TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
Section 10.8
Headings
. The Article or Section headings and the Table of Contents in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
Section 10.9
Severability
. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
Section 10.10
Preferences
. Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by Borrower to any portion of the obligations of Borrower hereunder. To the extent Borrower makes a payment or payments to Lender, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds received, the obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by Lender.
Section 10.11
Waiver of Notice
. Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with respect to matters for which this Agreement or the other Loan Documents specifically and expressly provide for the giving of notice by Lender to Borrower and except with respect to matters for which Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice. Borrower hereby expressly waives the right to receive any notice from Lender with respect to any matter for which this Agreement or the other Loan Documents do not specifically and expressly provide for the giving of notice by Lender to Borrower.
Section 10.12
Remedies of Borrower
. If a claim or adjudication is made that Lender or its agents have acted unreasonably or unreasonably delayed acting in any case where by law or under this Agreement or the other Loan Documents, Lender or such agent, as the case may be, has an obligation to act reasonably or promptly, Borrower agrees that neither Lender nor its agents shall be liable for any monetary damages, and Borrower’s sole remedies shall be limited to commencing an action seeking injunctive relief or declaratory judgment. The parties hereto agree that any action or proceeding to determine whether Lender has acted reasonably shall be determined by an action seeking declaratory judgment.
Section 10.13
Expenses; Indemnity
. (a) Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender upon receipt of written notice from Lender for all costs and expenses (including attorneys’ fees and expenses) incurred by Lender in connection with (i) the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents and the consummation of the transactions contemplated hereby and thereby and all the costs of furnishing all opinions by counsel for Borrower (including any opinions requested by Lender as to any legal matters arising under this Agreement or the other Loan Documents with respect to the Property); (ii) Borrower’s ongoing performance of and compliance with Borrower’s respective agreements and covenants contained in this Agreement and the other Loan Documents on its part to be performed or complied with after the Closing Date, including confirming compliance with environmental and insurance requirements; (iii) Lender’s ongoing performance and compliance with all agreements and conditions contained in this Agreement and the other Loan Documents on its part to be performed or complied with after the Closing Date; (iv) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents and any other documents or matters requested by Lender; (v) securing Borrower’s compliance with any requests made pursuant to the provisions of this Agreement; (vi) the filing and recording fees and expenses, title insurance and fees and expenses of counsel for providing to Lender all required legal opinions, and other similar expenses incurred in creating and perfecting the Lien in favor of Lender pursuant to this Agreement and the other Loan Documents; (vii) enforcing or preserving any rights, in response to third party claims or the prosecuting or defending of any action or proceeding or other litigation, in each case against, under or affecting Borrower, this Agreement, the other Loan Documents, the Property, or any other security given for the Loan; and (viii) enforcing any obligations of or collecting any payments due from Borrower under this Agreement, the other Loan Documents or with respect to the Property (including any fees incurred by Servicer in connection with the transfer of the Loan to a special servicer prior to a Default or Event of Default) or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work out” or of any insolvency or bankruptcy proceedings; provided, however, that Borrower shall not be liable for the payment of any such costs and expenses to the extent the same arise by reason of the gross negligence, illegal acts, fraud or willful misconduct of Lender. Any cost and expenses due and payable to Lender may be paid from any amounts in the Clearing Account or Cash Management Account, as applicable.
(b) Borrower shall indemnify, defend and hold harmless the Indemnified Parties from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not an Indemnified Party shall be designated a party thereto), that may be imposed on, incurred by, or asserted against any Indemnified Party in any manner relating to or arising out of (i) any breach by Borrower of its obligations under, or any material misrepresentation by Borrower contained in, this Agreement or the other Loan Documents, or (ii) the use or intended use of the proceeds of the Loan (collectively, the “
Indemnified Liabilities
”); provided, however, that Borrower shall not have any obligation to any Indemnified Party hereunder to the extent that such Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or willful misconduct of such Indemnified Party. To the extent that the undertaking to indemnify, defend and hold harmless set forth in the preceding sentence may be unenforceable because it violates any law or public policy, Borrower shall pay the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by the Indemnified Parties.
(c) Borrower covenants and agrees to pay for or, if Borrower fails to pay, to reimburse Lender for, any fees and expenses incurred by any Rating Agency in connection with any Rating Agency review of the Loan, the Loan Documents or any transaction contemplated thereby or any consent, approval, waiver or confirmation obtained from such Rating Agency pursuant to the terms and conditions of this Agreement or any other Loan Document and Lender shall be entitled to require payment of such fees and expenses as a condition precedent to the obtaining of any such consent, approval, waiver or confirmation.
Section 10.14
Schedules Incorporated
. The Schedules annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.
Section 10.15
Offsets, Counterclaims and Defenses
. Any assignee of Lender’s interest in and to this Agreement, the Note and the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to such documents which Borrower may otherwise have against any assignor of such documents, and no such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower.
Section 10.16
No Joint Venture or Partnership; No Third Party Beneficiaries
. (a) Borrower and Lender intend that the relationships created hereunder and under the other Loan Documents be solely that of borrower and lender. Nothing herein or therein is intended to create a joint venture, partnership, tenancy in common, or joint tenancy relationship between Borrower and Lender nor to grant Lender any interest in the Property other than that of mortgagee, beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for the benefit of Lender and Borrower and nothing contained in this Agreement or the other Loan Documents shall be deemed to confer upon anyone other than Lender and Borrower any right to insist upon or to enforce the performance or observance of any of the obligations contained herein or therein. All conditions to the obligations of Lender to make the Loan hereunder are imposed solely and exclusively for the benefit of Lender and no other Person shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that Lender will refuse to make the Loan in the absence of strict compliance with any or all thereof and no other Person shall under any circumstances be deemed to be a beneficiary of such conditions, any or all of which may be freely waived in whole or in part by Lender if, in Lender’s discretion, Lender deems it advisable or desirable to do so.
Section 10.17
Publicity
. All news releases, publicity or advertising by Borrower or its Affiliates through any media intended to reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, to Lender, KeyBank National Association or any of their Affiliates shall be subject to the prior written approval of Lender and KeyBank National Association in their discretion.
Section 10.18
Waiver of Marshalling of Assets
. To the fullest extent permitted by law, Borrower, for itself and its successors and assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s partners and others with interests in Borrower, and of the Property, and agrees not to assert any right under any laws pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduce or affect the right of Lender under the Loan Documents to a sale of the Property for the collection of the Debt without any prior or different resort for collection or of the right of Lender to the payment of the Debt out of the net proceeds of the Property in preference to every other claimant whatsoever.
Section 10.19
Waiver of Counterclaim
. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or its agents.
Section 10.20
Conflict; Construction of Documents; Reliance
. In the event of any conflict between the provisions of this Agreement and any of the other Loan Documents, the provisions of this Agreement shall control. The parties hereto acknowledge that they were represented by competent counsel in connection with the negotiation, drafting and execution of the Loan Documents and that such Loan Documents shall not be subject to the principle of construing their meaning against the party which drafted same. Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely on its own judgment and advisors in entering into the Loan without relying in any manner on any statements, representations or recommendations of Lender or any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available to it under any of the Loan Documents or any other agreements or instruments which govern the Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them may acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take any action on the basis of the foregoing with respect to Lender’s exercise of any such rights or remedies. Borrower acknowledges that Lender engages in the business of real estate financings and other real estate transactions and investments which may be viewed as adverse to or competitive with the business of Borrower or its Affiliates.
Section 10.21
Brokers and Financial Advisors
. Borrower hereby represents that it has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement other than Cushman & Wakefield. Borrower hereby agrees to indemnify, defend and hold Lender harmless from and against any and all claims, liabilities, costs and expenses of any kind (including Lender’s attorneys’ fees and expenses) in any way relating to or arising from a claim by any Person (including Cushman & Wakefield) that such Person acted on behalf of Borrower or Lender in connection with the transactions contemplated herein. The provisions of this
Section 10.21
shall survive the expiration and termination of this Agreement and the payment of the Debt.
Section 10.22
Prior Agreements
. This Agreement and the other Loan Documents contain the entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among or between such parties, whether oral or written, between Borrower and Lender are superseded by the terms of this Agreement and the other Loan Documents.
Section 10.23
Liability
. If Borrower consists of more than one (1) Person the obligations and liabilities of each Person shall be joint and several. Under no circumstances whatsoever shall Lender have any liability for punitive, special, consequential or incidental damages in connection with, arising out of, or in any way related to or under this Loan Agreement or any other Loan Document or in any way related to the transactions contemplated or any relationship established by this Agreement or any other Loan Document or any act, omission or event occurring in connection herewith or therewith, and, to the extent not expressly prohibited by applicable laws, Borrower for itself and its Guarantor and indemnitors waives all claims for punitive, special, consequential or incidental damages. Lender shall have no duties or responsibilities except those expressly set forth in this Agreement, the Security Instrument and the other Loan Documents. Neither Lender nor any of its officers, directors, employees or agents shall be liable for any action taken or omitted by them as such hereunder or in connection herewith, unless caused by their gross
negligence or willful misconduct. This Agreement shall be binding upon and inure to the benefit of Borrower and Lender and their respective successors and assigns forever.
Section 10.24
Certain Additional Rights of Lender (VCOC)
. Notwithstanding anything to the contrary contained in this Agreement, Lender shall have:
(a) the right to routinely consult with and advise Borrower’s management regarding the significant business activities and business and financial developments of Borrower;
provided
,
however
, that such consultations shall not include discussions of environmental compliance programs or disposal of hazardous substances. Consultation meetings should occur on a regular basis (no less frequently than quarterly) with Lender having the right to call special meetings at any reasonable times and upon reasonable advance notice;
(b) the right, in accordance with the terms of this Agreement, to examine the books and records of Borrower at any reasonable times upon reasonable notice;
(c) the right, in accordance with the terms of this Agreement, including
Section 5.1.11
hereof, to receive monthly, quarterly and year end financial reports, including balance sheets, statements of income, shareholder’s equity and cash flow, a management report and schedules of outstanding indebtedness; and
(d) the right, without restricting any other rights of Lender under this Agreement (including any similar right), to approve any acquisition by Borrower of any other significant property (other than personal property required for the day to day operation of the Property).
The rights described above in this
Section 10.24
may be exercised by any entity which owns and controls, directly or indirectly, substantially all of the interests in Lender.
Section 10.25
OFAC
. Borrower hereby represents, warrants and covenants that neither Borrower nor any Guarantor is (or will be) a person with whom Lender is restricted from doing business under regulations of the Office of Foreign Asset Control (“
OFAC
”) of the Department of the Treasury of the United States of America (including, those Persons named on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order (including, the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and shall not engage in any dealings or transactions or otherwise be associated with such persons. In addition, Borrower hereby covenants to provide Lender with any additional information that Lender deems necessary from time to time in order to ensure compliance with all applicable laws concerning money laundering and similar activities.
Section 10.26
Duplicate Originals; Counterparts
. This Agreement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Agreement may be executed in several counterparts, each of which counterpart shall be deemed an original instrument and all of which together shall constitute a single Agreement. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.
Section 10.27
Modification to Include Taxable REIT Subsidiary
. If at any time Borrower’s receipt of Rents from the Park View Café Lease and/or the News Stand Lease could reasonably be expected to cause the REIT to no longer qualify as a real estate investment trust under
section 856 of the Code or become subject to taxes under sections 857 or 4981 of the Code (through a determination that such Rents to not constitute “rents from real property” within the meaning of section 856(d)(1) of the Code or otherwise), then Borrower and Lender agree to modify the Loan to cause the REIT to maintain its status as such a real estate investment trust and to not be subject to such taxation. Such modification shall be structured and completed in a manner acceptable to both Lender and Borrower and may, without limitation, involve Borrower assigning such Rents to a “taxable REIT subsidiary” as defined in section 856(l)(1) of the Code, adding such taxable REIT subsidiary as an a co-borrower for the Loan and having such taxable REIT subsidiary pledge its interests in such Rents as additional collateral for the Loan, Borrower assigning the Park View Café Lease and/or the News Stand Lease to a taxable REIT subsidiary and entering into a separate Lease with such taxable REIT subsidiary for the space covered by the Park View Café Lease and/or the News Stand Lease, or any other manner acceptable to both Lender and Borrower. Lender shall have the right to condition any such modification upon the satisfaction of the following conditions:
(i) Borrower shall pay any and all costs and expenses of Lender, the Rating Agencies, Servicer and any trustee in connection with such modification (including counsel fees and disbursements, recording fees, title insurance premiums and any applicable revenue, documentary stamp, mortgage or intangible taxes or other similar taxes or fees);
(ii) Borrower shall deliver one or more opinions of counsel, delivered by counsel acceptable to Lender and in form and content acceptable to Lender, (a) covering matters normally covered by legal opinions in modifications of the form of the proposed modification, (b) such modification will not cause the Loan (including for this purpose the Loan Documents) to cease to be a “qualified mortgage” within the meaning of Section 860G of the Code, either under the provisions of Treasury Regulation Sections 1.860G-2(a)(8) or 1.860G-2(b) (as such regulations may be amended or superseded from time to time) or under any other provision of the Code or otherwise, and (c) such modification will not cause the failure of any REMIC Trust or any other entity that holds the Note to maintain its tax status;
(iii) If required by Lender, Borrower shall deliver confirmation in writing from each of the applicable Rating Agencies to the effect that such modification will not result in a downgrade, withdrawal or qualification of the respective ratings in effect immediately prior to such modification for the Securities issued in connection with the Securitization which are then outstanding;
(iv) No uncured Event of Default shall exist as of the effective date of such modification;
(v) Lender shall receive such credit checks and bankruptcy, litigation, judgment lien and other comparable searches reasonably required by Lender which would be reasonably acceptable to a prudent lender in connection with a modifications of the form of the proposed modification;
(vi) Following such modification, Borrower and such taxable REIT subsidiary must each be able to satisfy all the representations and covenants set forth in
Sections 4.1.30
,
4.1.35
,
5.1.23
and
5.2.9
of this Agreement; and
(vii) Borrower and such taxable REIT subsidiary shall deliver (A) all organizational documentation requested by Lender, which shall be reasonably satisfactory
to Lender, (B) all certificates, documents or instruments as reasonably required by Lender in connection with such modification, and (C) an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender; and (D) an acceptable endorsement to the Title Insurance Policy.
ARTICLE XI – LOCAL LAW PROVISIONS
Section 11.1
Inconsistencies
. In the event of any inconsistencies between the terms and conditions of this
Article XI
and the other provisions of this Agreement, the terms and conditions of this
Article XI
shall control and be binding.
NONE
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.
BORROWER:
DCII-250 WILLIAMS STREET NW, LLC,
a Delaware limited liability company
By: Carter Validus Operating Partnership II, LP,
a Delaware limited partnership,
its Sole Member
By: Carter Validus Mission Critical REIT II, Inc.,
a Maryland corporation,
its General Partner
By:
/s/ Lisa Collado
Name:
Lisa Collado
Title:
Authorized Agent
SIGNATURE PAGE TO LOAN AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.
LENDER:
KEYBANK NATIONAL ASSOCIATION
,
a national banking association
By:
/s/ Mary Ann Gripka
Name: Mary Ann Gripka
Title: Vice President
SIGNATURE PAGE TO LOAN AGREEMENT
SCHEDULE I
(RENT ROLL)
SCHEDULE II
(INTENTIONALLY OMITTED)
SCHEDULE III
(ORGANIZATIONAL CHART OF BORROWER)
SCHEDULE IV
FORM OF TENANT DIRECTION LETTER
[BORROWER LETTERHEAD]
__________, 20__
[Tenants under Leases]
|
|
Re:
|
Lease dated ________ between _______________, as Landlord, and __________________, as Tenant, concerning premises known as _____________
|
Gentlemen:
This letter shall constitute notice to you that the undersigned has granted a lien and security interest in the captioned lease and all rents, additional rent and all other monetary obligations to landlord thereunder (collectively, “Rent”) in favor of KeyBank National Association, its successors and assigns, as lender (“Lender”), to secure certain of the undersigned’s obligations to Lender. The undersigned hereby irrevocably instructs and authorizes you to disregard any and all previous notices sent to you in connection with Rent and hereafter to deliver all Rent to the following address:
KeyBank National Association
Account Name: DCII-250 Williams Street NW LLC LB FBO KeyBank National Association, successors and assigns as Lender
Account No.: 329681262930
ABA# 021300077
Lockbox Mailing Address
DCII-250 Williams Street NW LLC
PO BOX 714689
Cincinnati, OH 45271-4689
Lockbox Overnight Address (Only)
Attn: Wholesale Lockbox # (714689)
DCII-250 Williams Street NW LLC
895 Central Ave, Suite 600
Cincinnati, OH 45202
The instructions set forth herein are irrevocable and are not subject to modification in any manner, except that Lender, or any successor lender so identified by Lender, may by written notice to you rescind the instructions contained herein.
PREPARED BY AND UPON RECORDATION RETURN TO:
KEYBANK NATIONAL ASSOCIATION
11501 Outlook, Suite 300
Overland Park, Kansas 66211
Attention: Closing Department/Manager
Loan No. 10171391
THIS DOCUMENT SERVES AS A FIXTURE FILING UNDER THE GEORGIA UNIFORM COMMERCIAL CODE PURSUANT TO O.C.G.A. § 11-9-502. LENDER DESIRES THIS FIXTURE FILING TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE DESCRIBED HEREIN.
DCII-250 WILLIAMS STREET NW, LLC,
as grantor
(
Borrower
)
to
KEYBANK NATIONAL ASSOCIATION
, as grantee
(
Lender
)
______________________________________________________________
FEE AND LEASEHOLD DEED TO SECURE DEBT, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING
______________________________________________________________
Dated: As of June 15, 2017
|
|
Location:
|
250 Williams Street, Atlanta, Georgia
|
County: Fulton
Note to Clerk of the Superior Court: This instrument secures a loan in the original principal amount of $116,200,000.00, with a scheduled maturity date of July1, 2027.
FEE AND LEASEHOLD DEED TO SECURE DEBT, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING
THIS FEE AND LEASEHOLD DEED TO SECURE DEBT, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “
Security Instrument
”) is made as of June 15, 2017, by
DCII-250 WILLIAMS STREET NW, LLC
, a Delaware limited liability company, having its principal place of business at 4890 W. Kennedy Boulevard, Suite 650, Tampa, Florida 33609, as grantor (“
Borrower
”) to
KEYBANK NATIONAL ASSOCIATION
, a national banking association, having an address at 11501 Outlook, Suite 300, Overland Park, Kansas 66211, as grantee (together with its successors and assigns, “
Lender
”).
W
I
T
N
E
S
S
E
T
H
:
WHEREAS, this Security Instrument is given to secure a loan (the “
Loan
”) in the principal sum of One Hundred Sixteen Million Two Hundred Thousand and No/100 Dollars ($116,200,000.00) advanced pursuant to that certain Loan Agreement, dated as of the date hereof, between Borrower and Lender (as the same may hereafter be amended, restated, replaced, supplemented, renewed, extended or otherwise modified from time to time, the “
Loan Agreement
”) and evidenced by that certain Promissory Note, dated the date hereof, made by Borrower in favor of Lender (as the same may hereafter be amended, restated, replaced, supplemented, renewed, extended or otherwise modified from time to time, the “
Note
”);
WHEREAS, Borrower desires to secure the payment of the Debt (as defined in the Loan Agreement) and the performance of all of its obligations under the Note, the Loan Agreement and the other Loan Documents (as herein defined); and
WHEREAS, this Security Instrument is given pursuant to the Loan Agreement, and payment, fulfillment, and performance by Borrower of its obligations thereunder and under the other Loan Documents are secured hereby, and each and every term and provision of the Loan Agreement, and the Note, including the rights, remedies, obligations, covenants, conditions, agreements, indemnities, representations and warranties of the parties therein, are hereby incorporated by reference herein as though set forth in full and shall be considered a part of this Security Instrument (the Loan Agreement, the Note, this Security Instrument and all other documents evidencing or securing the Debt (including all additional mortgages, deeds to secure debt and assignments of leases and rents) or executed or delivered in connection therewith, are hereinafter referred to collectively as the “
Loan Documents
”).
NOW THEREFORE, in consideration of the making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in this Security Instrument:
ARTICLE I - GRANTS OF SECURITY
Section 1.1
Property Conveyed
. Borrower does hereby irrevocably grant, bargain, sell, pledge, assign, warrant, transfer and convey to Lender and its successors and assigns the following property, rights, interests and estates now owned, or hereafter acquired by Borrower (collectively, the “
Property
”):
(a)
Land
. The real property described as Parcel One in
Exhibit A
attached hereto and made a part hereof (the “
Fee Land
”), together with the easements and other rights described as Parcel Three in
Exhibit A
, together with
all of Borrower’s estate, right, title and interest in, to and under the Ground Lease (hereinafter defined) and the leasehold estate of Borrower (the “
Leasehold Estate
”) in and to the real property described as Parcel Two in
Exhibit A
(the “
Leased Land
,” and together with the Fee Land, the “
Land
”), including, but not limited to (A) extension, renewal, modification and option rights, and all of the estate and right of Borrower of, in, and to the Land under and by virtue of the Ground Lease, (B) all credits to and deposits of Borrower under the Ground Lease and all other options, privileges and rights granted and demised to Borrower under the Ground Lease and (C) all right or privilege of Borrower to terminate, cancel, surrender or merge the Ground Lease. The term “
Ground Lease
” shall mean, collectively, that certain Lease Agreement dated September 5, 1968, between
MRS. RUTH S. BARRETT
, an individual (“
Barrett
”), as lessor,
SUNSHINE PARKING, INC.
, a Tennessee corporation (“
Sunshine
”), as lessee, and
KELLETT & CO. REAL ESTATE
,
C. G. AYCOCK REALTY CO.
, and
WEYMAN & CO.
, as agent; as memorialized by that certain Memorandum of Lease dated September 5, 1968, and recorded September 9, 1968, in Book 4953, Page 322, of the official records of Fulton County, Georgia (the “
Official Records
”); as assigned by that certain Assignment and Assumption of Leases from
UNITED PARKING, INC.
, a Georgia corporation (“
United
”), as assignor, to
CAPITAL CENTRAL CORPORATION
, a Georgia corporation (“
CCC
”), as assignee, dated October 1, 1984, and recorded December 6, 1984, in Book 9284, Page 312 of the Official Records; as assigned by that certain Assignment and Assumption of Leases from CCC, as assignor, to Central Acquisition Associates, Ltd., a Georgia limited partnership (“
Central
”), as assignee, dated December 20, 1984, and recorded December 21, 1984, in Book 9311, Page 281 of the Official Records; as assigned by that certain Assignment and Assumption of Leases from Central, as assignor, to
INFORUM, LTD.
, a Georgia limited partnership (“
Inforum Ltd
”), as assignee, dated May 28, 1985, and recorded July 30, 1985, in Book 9633, Page 391 of the Official Records; as amended by that certain First Amendment to Lease Agreement dated June 1, 1986, between Barrett and Inforum Ltd; as assigned by that certain Transfer and Assignment of Lease from Inforum Ltd, as assignor, to
INFORUM ASSOCIATES
, a Georgia general partnership (“
Inforum Associates
”), in the form of a joint venture composed of Inforum and The Equitable Life Assurance Society of the United States, a New York corporation (“
ELA
”), as assignee, dated October 20, 1987, and recorded October 21, 1987, in Book 11131, Page 245 of the Official Records; as assigned by that certain Quit-Claim Deed from Inforum Associates, as grantor, to ELA, as grantee, dated December 30, 1994, and recorded December 30, 1994, in Book 19169, Page 220 of the Official Records; as assigned by that certain Assignment of Lease from
TRUST COMPANY BANK
as executor of the estate of Barrett, deceased, as assignor, to
JAMES AROGETI
, an individual (“
James
”), as assignee, dated September 30, 1988, and recorded October 4, 1988, in Book 11937, Page 217 of the Official Records; as partially assigned by that certain Assignment of Lease from JA, as assignor, to
JEANETTE AROGETI
, an individual (“
Jeanette
”), as assignee, dated September 30, 1988, and recorded December 12, 1988, in Book 12111, Page 141 of the Official Records; as assigned by that certain Quit-Claim Deed from James and Jeanette, as grantor, to
A & A ASSOCIATES
, a Georgia limited partnership (“
A&A
”), as grantee, dated December 31, 1991, and recorded April 6, 1992, in Book 15193, Page 348 of the Official Records; as assigned by that certain Assignment of Lease from A&A, as assignor, to
ROBERT J. AROGETI
, an individual,
JOEL S. AROGETI
, an individual,
JANE A. DURHAM
, an individual, and
BARBARA AROGETI
, an individual, as Trustees of the
ARGO CHARITABLE LEAD TRUST
(“
Argo
”), as assignee, dated April 1, 1995, and recorded May 30, 1995, in Book 19611, Page 133 of the Official Records; ground lessor’s interest being held by
RJJ&B ASSOCIATES, LLLP
, a Georgia limited liability limited partnership (“
RJJ&B
”) pursuant to that certain Transfer and Assignment dated January 1, 1999, record notice of which is provided by the Affidavit of Title recorded in the Official Records as of the date hereof; as assigned by that certain Agreement of Assignment and Assumption of Ground Lease from ELA, as assignor, to
COUSINS PROPERTIES INCORPORATED
, a Georgia corporation (“
Cousins
”), as assignee, dated June 30, 1999, and recorded June 30, 1999, in Book 26975, Page 085 of the Official Records, and by that certain Quitclaim Deed from ELA, as grantor, to Cousins, as grantee, dated June 30, 1999, and recorded June 30, 1999, in Book 26975, Page 093 of the Official Records; as amended by that certain Agreement of Ground Lessor between Argo, as lessor,
JPMORGAN CHASE BANK, N.A.
, a United States banking association, as lender, and Cousins, as lessee, dated August 31, 2007, and recorded September 4, 2007, in Book 45629, Page 89 of the Official Records; and as assigned by that certain Agreement of Assignment and Assumption of Ground Lease from Cousins, as assignor, to
250 WILLIAMS STREET LLC
, a Georgia limited liability company, as assignee, dated August 31, 2007, and recorded September 4, 2007, in Book 45629, Page 154 of the Official Records.
(b)
Additional Land
. All additional lands, estates and development rights hereafter acquired by Borrower for use in connection with the Land and the development of the Land and all additional lands and estates therein which may, from time to time, be expressly made subject to the lien of this Security Instrument;
(c)
Improvements
. The buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on the Land (collectively, the “
Improvements
”);
(d)
Easements
. All easements, rights-of-way or use, rights, strips and gores of land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and development rights, and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the Land and the Improvements and the reversion and reversions and remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all the estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy, property, possession, claim and demand whatsoever, both at law and in equity, of Borrower of, in and to the Land and the Improvements and every part and parcel thereof, with the appurtenances thereto;
(e)
Equipment
. All “goods” and “equipment,” as such terms are defined in Article 9 of the Uniform Commercial Code (as hereinafter defined), now owned or hereafter acquired by Borrower, which is used at or in connection with the Improvements or the Land or is located thereon or therein (including all machinery, equipment, furnishings, and electronic data-processing and other office equipment now owned or hereafter acquired by Borrower and any and all additions, substitutions and replacements of any of the foregoing), together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto (collectively, the
“
Equipment
”). Notwithstanding the foregoing, Equipment shall not include any property belonging to tenants under leases except to the extent that Borrower shall have any right or interest therein;
(f)
Fixtures
. All Equipment now owned, or the ownership of which is hereafter acquired, by Borrower which is so related to the Land and Improvements forming part of the Property that it is deemed fixtures or real property under the law of the particular state in which the Equipment is located, including all building or construction materials intended for construction, reconstruction, alteration or repair of or installation on the Property, construction equipment, appliances, machinery, plant equipment, fittings, apparatuses, fixtures and other items now or hereafter attached to, installed in or used in connection with (temporarily or permanently) any of the Improvements or the Land, including engines, devices for the operation of pumps, pipes, plumbing, cleaning, call and sprinkler systems, fire extinguishing apparatuses and equipment, heating, ventilating, laundry, incinerating, electrical, air conditioning and air cooling equipment and systems, gas and electric machinery, appurtenances and equipment, pollution control equipment, security systems, disposals, dishwashers, refrigerators and ranges, recreational equipment and facilities of all kinds, and water, gas, electrical, storm and sanitary sewer facilities, utility lines and equipment (whether owned individually or jointly with others, and, if owned jointly, to the extent of Borrower’s interest therein) and all other utilities whether or not situated in easements, all water tanks, water supply, water power sites, fuel stations, fuel tanks, fuel supply, and all other structures, together with all accessions, appurtenances, additions, replacements, betterments and substitutions for any of the foregoing and the proceeds thereof (collectively, the “
Fixtures
”). Notwithstanding the foregoing, “Fixtures” shall not include any property which tenants are entitled to remove pursuant to leases except to the extent that Borrower shall have any right or interest therein;
(g)
Personal Property
. All furniture, furnishings, objects of art, machinery, goods, tools, supplies, appliances, general intangibles, contract rights, accounts, accounts receivable, franchises, licenses, certificates and permits, and all other personal property of any kind or character whatsoever as defined in and subject to the provisions of the Uniform Commercial Code, other than Fixtures, which are now or hereafter owned by Borrower and which are located within or about the Land and the Improvements, together with all accessories, replacements and substitutions thereto or therefor and the proceeds thereof (collectively, the “
Personal Property
”), and the right, title and interest of Borrower in and to any of the Personal Property which may be subject to any security interests, as defined in the Uniform Commercial Code, as adopted and enacted by the state or states where any of the Property is located (the “
Uniform Commercial Code
”), superior in lien to the lien of this Security Instrument and all proceeds and products of the above;
(h)
Leases and Rents
. All leases, subleases or subsubleases, lettings, licenses, concessions or other agreements (whether written or oral) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of the Land and the Improvements, and every modification, amendment or other agreement relating to such leases, subleases, subsubleases, or other agreements entered into in connection with such leases, subleases, subsubleases, or other agreements and every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto, heretofore or hereafter entered into (collectively, the “
Leases
”), whether before or after the filing by or against Borrower of any petition for relief under the Bankruptcy Code and all right, title and
interest of Borrower, its successors and assigns therein and thereunder, including cash or securities deposited thereunder to secure the performance by the lessees of their obligations thereunder and all rents, additional rents, revenues, issues and profits and other benefits, royalties (including all oil and gas or other mineral royalties and bonuses), licenses, income, receipts, charges, accounts receivable, payments (including payments pursuant to the exercise of any purchase option by any tenant under any Lease) and fees (including those in connection with or relating to the rejection, buy-out, termination, surrender or cancellation of any Lease) from the Land and the Improvements whether paid or accruing before or after the filing by or against Borrower of any petition for relief under the Bankruptcy Code (collectively, the “
Rents
”) and all proceeds from the sale or other disposition of the Leases and the right to receive and apply the Rents to the payment of the Debt;
(i)
Condemnation Awards
. All awards or payments, including interest thereon, which may heretofore and hereafter be made with respect to the Property, whether from the exercise of the right of eminent domain (including any transfer made in lieu of or in anticipation of the exercise of the right), or for a change of grade, or for any other injury to or decrease in the value of the Property;
(j)
Insurance Proceeds
. All proceeds in respect of the Property under any insurance policies covering the Property, including the right to receive and apply the proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to the Property;
(k)
Tax Certiorari
. All refunds, rebates or credits in connection with reduction in real estate taxes and assessments charged against the Property as a result of tax certiorari or any applications or proceedings for reduction;
(l)
Conversion
. All proceeds of the conversion, voluntary or involuntary, of any of the foregoing including proceeds of insurance and condemnation awards, into cash or liquidation claims;
(m)
Rights
. The right, in the name and on behalf of Borrower, to appear in and defend any action or proceeding brought with respect to the Property and to commence any action or proceeding to protect the interest of Lender in the Property;
(n)
Agreements
. All agreements, contracts, certificates, instruments, franchises, permits, licenses, plans, specifications and other documents, now or hereafter entered into, and all rights therein and thereto, respecting or pertaining to the use, occupation, construction, management or operation of the Land and any part thereof and any Improvements or respecting or pertaining to any business or activity conducted on the Land and any part thereof and all right, title and interest of Borrower therein and thereunder, including the right, upon the happening of any default hereunder, to receive and collect any sums payable to Borrower thereunder;
(o)
Trademarks
. All tradenames, trademarks, servicemarks, logos, copyrights, goodwill, books and records and all other general intangibles relating to or used in connection with the operation of the Property;
(p)
Accounts
. All reserves, escrows and deposit accounts maintained by Borrower with respect to the Property, including the Clearing Account and the Cash Management Account, together with all deposits or wire transfers made to such accounts, all cash, checks, drafts, certificates, securities, investment property, financial assets, instruments and other property held therein from time to time and all proceeds, products, distributions or dividends or substitutions thereon and thereof;
(q)
Letter of Credit
. All letter-of-credit rights (whether or not the letter of credit is evidenced by a writing) Borrower now has or hereafter acquires relating to the properties, rights, titles and interests referred to in this
Section 1.1
;
(r)
Tort Claims
. All commercial tort claims Borrower now has or hereafter acquires relating to the properties, rights, titles and interests referred to in this
Section 1.1
; and
(s)
Other Rights
. Any and all other rights of Borrower in and to the items set forth in
Subsections (a)
through
(r)
above.
AND without limiting any of the other provisions of this Security Instrument, to the extent permitted by applicable law, Borrower expressly grants to Lender as secured party, a security interest in the portion of the Property which is or may be subject to the provisions of the Uniform Commercial Code which are applicable to secured transactions; it being understood and agreed that the Improvements and Fixtures are part and parcel of the Land (the Land, the Improvements and the Fixtures collectively referred to as the “
Real Property
”) appropriated to the use thereof and, whether affixed or annexed to the Real Property or not, shall for the purposes of this Security Instrument be deemed conclusively to be real estate and conveyed hereby.
Section 1.2
Assignment of Rents
. Borrower hereby absolutely and unconditionally assigns to Lender all of Borrower’s right, title and interest in and to all current and future Leases and Rents; it being intended by Borrower that this assignment constitutes a present, absolute assignment and not an assignment for additional security only. Nevertheless, subject to the terms of the Cash Management Agreement, the Assignment of Leases and Rents and
Section 7.1(h)
of this Security Instrument, Lender grants to Borrower a license revocable upon the occurrence of an Event of Default to collect, receive, use and enjoy the Rents and Borrower shall hold the Rents, or a portion thereof sufficient to discharge all current sums due on the Debt, for use in the payment of such sums.
Section 1.3
Security Agreement
. This Security Instrument is made pursuant to O.C.G.A. § 44-14-60 et seq., and amendatory acts thereof as a conveyance to secure debt and shall also be considered a security agreement under the Uniform Commercial Code. This Security Instrument is both a deed to secure debt and a “security agreement” within the meaning of the Uniform Commercial Code. The Property includes both real and personal property and all other rights and interests, whether tangible or intangible in nature, of Borrower in the Property. By executing and delivering this Security Instrument, Borrower hereby grants to Lender, as security for the Obligations (hereinafter defined), a security interest in the Fixtures, the Equipment and the Personal Property and other property constituting the Property, whether now owned or hereafter acquired, to the full extent that the Fixtures, the Equipment and the Personal Property and such other property may be
subject to the Uniform Commercial Code (said portion of the Property so subject to the Uniform Commercial Code being called the “
Collateral
”). If an Event of Default shall occur and be continuing, Lender, in addition to any other rights and remedies which it may have, shall have and may exercise immediately and without demand, any and all rights and remedies granted to a secured party upon default under the Uniform Commercial Code, including the right to take possession of the Collateral or any part thereof, and to take such other measures as Lender may deem necessary for the care, protection and preservation of the Collateral. Upon request or demand of Lender after the occurrence and during the continuance of an Event of Default, Borrower shall, at its expense, assemble the Collateral and make it available to Lender at a convenient place (at the Land if tangible property) reasonably acceptable to Lender. Borrower shall pay to Lender on demand any and all expenses, including reasonable legal expenses and attorneys’ fees, incurred or paid by Lender in protecting its interest in the Collateral and in enforcing its rights hereunder with respect to the Collateral after the occurrence and during the continuance of an Event of Default. Any notice of sale, disposition or other intended action by Lender with respect to the Collateral sent to Borrower in accordance with the provisions hereof at least ten (10) business days prior to such action, shall, except as otherwise provided by applicable law, constitute reasonable notice to Borrower. The proceeds of any disposition of the Collateral, or any part thereof, may, except as otherwise required by applicable law, be applied by Lender to the payment of the Debt in such priority and proportions as Lender in its discretion shall deem proper. Borrower’s (debtor’s) principal place of business is as set forth on page one hereof and the address of Lender (secured party) is as set forth on page one hereof.
Borrower shall promptly notify Lender of the existence of any commercial tort claim now or hereafter existing for the benefit of Borrower or the Property, and shall execute, acknowledge and deliver a security agreement or other documentation as Lender shall from time to time require to acquire and perfect a valid and binding security interest in such commercial tort claim.
This instrument is a deed conveying title to the Property, is not a mortgage creating a lien only, is made under the provisions of the existing laws of the State of Georgia relating to deeds to secure debt, and is intended to constitute a security agreement under the Uniform Commercial Code. All references in this instrument to the lien hereof shall be deemed to refer to the security title hereby conveyed and all security interests and liens created hereby.
Section 1.4
Fixture Filing
. From the date of its recording, this Security Instrument shall be effective as a “fixture filing” for the purposes of O.C.G.A. § 11-9-502 with respect to all of the Property which is or is to become fixtures (within the meaning of the Uniform Commercial Code). The addresses of Borrower (Debtor) and Lender (Secured Party) are set forth below. This Security Instrument is to be filed for recording with the Clerk of Superior Court of any county or counties where the Land (including such fixtures) is located. For this purpose, the following information is set forth:
Name and Address of Debtor:
DCII-250 WILLIAMS STREET NW, LLC
a Delaware limited liability company
4890 W. Kennedy Boulevard, Suite 650
Tampa, Florida 33609
Name and Address of Secured Party:
KeyBank National Association
11501 Outlook, Suite 300
Overland Park, Kansas 66211
This Security Instrument covers any portion of the Property that now is or later may become a fixture attached to the Land.
Debtor is the record owner of the Property.
Section 1.5
Pledges of Monies Held
. Borrower hereby pledges to Lender any and all monies now or hereafter held by Lender or on behalf of Lender, including any sums deposited in the Clearing Account, the Cash Management Account, the Reserve Funds and Net Proceeds, as additional security for the Obligations until expended or applied as provided in this Security Instrument or the Loan Agreement.
Section 1.6
Common Law Pledge/Assignment
. To the extent that the Uniform Commercial Code does not apply to any item of the Personal Property, it is the intention of this Security Instrument that Lender have a common law pledge and/or collateral assignment of such item of Personal Property.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property in fee simple unto and to the use and benefit of Lender, and its successors and assigns, forever;
PROVIDED, HOWEVER, these presents are upon the express condition that, if Borrower shall well and truly pay to Lender the Debt at the time and in the manner provided in the Note, the Loan Agreement and this Security Instrument, shall well and truly perform the Other Obligations as set forth in this Security Instrument and shall well and truly abide by and comply with each and every covenant and condition set forth herein and in the Note, the Loan Agreement and the other Loan Documents, these presents and the estate hereby granted shall cease, terminate and be void; provided, however, that Borrower’s obligation to indemnify and hold harmless Lender pursuant to the provisions hereof shall survive any such payment or release.
ARTICLE II - DEBT AND OBLIGATIONS SECURED
Section 2.1
Debt
. This Security Instrument and the grants, assignments and transfers made in
Article I
are given for the purpose of securing the Debt.
Section 2.2
Other Obligations
. This Security Instrument and the grants, assignments and transfers made in
Article I
are also given for the purpose of securing the following (the “
Other Obligations
”):
(a) the performance of all other obligations of Borrower contained herein;
(b) the performance of each obligation of Borrower contained in the Loan Agreement and any other Loan Document; and
(c) the performance of each obligation of Borrower contained in any renewal, extension, amendment, modification, consolidation, change of, or substitution or replacement for, all or any part of the Note, the Loan Agreement or any other Loan Document.
Section 2.3
Debt and Other Obligations
. Borrower’s obligations for the payment of the Debt and the performance of the Other Obligations shall be referred to collectively herein as the “Obligations.”
ARTICLE III - BORROWER COVENANTS
Borrower covenants and agrees that:
Section 3.1
Payment of Debt
. Borrower shall pay the Debt at the time and in the manner provided in the Loan Agreement, the Note and this Security Instrument.
Section 3.2
Incorporation by Reference
. All the covenants, conditions and agreements contained in (a) the Loan Agreement, (b) the Note and (c) all and any of the other Loan Documents, are hereby made a part of this Security Instrument to the same extent and with the same force as if fully set forth herein.
Section 3.3
Insurance
. Borrower shall obtain and maintain, or cause to be maintained, in full force and effect at all times insurance with respect to Borrower and the Property as required pursuant to the Loan Agreement.
Section 3.4
Maintenance of Property
. Borrower shall cause the Property to be maintained in accordance with the provisions of the Loan Agreement.
Section 3.5
Waste
. Borrower shall not commit or suffer any waste of the Property (“waste” meaning the diminution in the Property’s value resulting from Borrower’s negligent or willful failure to manage, maintain, repair and otherwise operate the Property in a commercially reasonable manner) or make any change in the use of the Property which will in any way materially increase the risk of fire or other hazard arising out of the operation of the Property, or take any action that might invalidate or allow the cancellation of any Policy, or do or permit to be done thereon anything that may in any way materially impair the value of the Property or the security of this Security Instrument. Borrower shall not, without the prior written consent of Lender, permit any drilling or exploration for or extraction, removal, or production of any minerals from the surface or the subsurface of the Land, regardless of the depth thereof or the method of mining or extraction thereof.
Section 3.6
Payment for Labor and Materials
. (a) Borrower shall promptly pay when due all bills and costs for labor, materials, and specifically fabricated materials (“
Labor and Material Costs
”) incurred in connection with the Property and never permit to exist beyond the due date thereof in respect of the Property or any part thereof any lien or security interest, even though inferior to the liens and the security interests hereof, and in any event never permit to be created or exist in respect of the Property or any part thereof any other or additional lien or security interest other than the liens or security interests hereof except for the Permitted Encumbrances.
(b) After prior written notice to Lender, Borrower, at its own expense, may 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 of the Labor and Material Costs, provided that (i) no Event of Default has occurred and is continuing under the Loan Agreement, the Note, this Security Instrument or any of the other Loan Documents, (ii) Borrower is permitted to do so under the provisions of any other mortgage, Security Instrument or deed to secure debt affecting the Property, (iii) such proceeding shall suspend the collection of the Labor and Material Costs from Borrower and from the Property or Borrower shall have paid all of the Labor and Material Costs under protest, (iv) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower is subject and shall not constitute a default thereunder, (v) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, canceled or lost, (vi) Borrower shall have furnished the security as may be required in the proceeding, or as may be reasonably requested by Lender to insure the payment of any contested Labor and Material Costs, together with all interest and penalties thereon, (vii) Borrower shall have furnished to Lender all other items reasonably requested by Lender, including title insurance coverage or bonding over such lien, and (viii) Lender shall have determined that Borrower is likely to prevail in such contest
Section 3.7
Performance of Other Agreements
. Borrower shall observe and perform each and every term, covenant and provision to be observed or performed by Borrower pursuant to the Loan Agreement, any other Loan Document and any other agreement or recorded instrument affecting or pertaining to the Property and any amendments, modifications or changes thereto.
Section 3.8
Change of Name, Identity or Structure
. Borrower shall not change Borrower’s name, identity (including its trade name or names) or, if not an individual, Borrower’s corporate, partnership or other structure, without notifying Lender of such change in writing at least thirty (30) days prior to the effective date of such change and without first obtaining the prior written consent of Lender. Borrower hereby authorizes Lender to file, prior to or contemporaneously with the effective date of any such change, any financing statement or financing statement change required by Lender to establish or maintain the validity, perfection and priority of the security interest granted herein. At the request of Lender, Borrower shall execute a certificate in form satisfactory to Lender listing the trade names under which Borrower intends to operate the Property, and representing and warranting that Borrower does business under no other trade name with respect to the Property.
Section 3.9
Title
. Borrower has good, marketable and insurable fee simple title to the Fee Land, a good, marketable and insurable leasehold estate in and to the Leased Land, and good title to the balance of the Property, free and clear of all Liens (as defined in the Loan Agreement)
whatsoever except the Permitted Encumbrances (as defined in the Loan Agreement), such other Liens as may be expressly permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. The Permitted Encumbrances in the aggregate do not materially and adversely affect the value, operation or use of the Property or Borrower’s ability to repay the Loan. This Security Instrument, when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create (a) a valid, perfected first priority lien on the Property, subject only to Permitted Encumbrances and the Liens created by the Loan Documents and (b) perfected security interests in and to, and perfected collateral assignments of, all personalty (including the Leases), all in accordance with the terms thereof, in each case subject only to any applicable Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. There are no claims for payment for work, labor or materials affecting the Property which are past due and are or may become a lien prior to, or of equal priority with, the Liens created by the Loan Documents unless such claims for payments are being contested in accordance with the terms and conditions of this Security Instrument.
Section 3.10
Letter of Credit Rights
. If Borrower is at any time a beneficiary under a letter of credit relating to the properties, rights, titles and interests referenced in
Section 1.1
of this Security Instrument now or hereafter issued in favor of Borrower, Borrower shall promptly notify Lender thereof and, at the request and option of Lender, Borrower shall, pursuant to an agreement in form and substance satisfactory to Lender, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to Lender of the proceeds of any drawing under the letter of credit or (ii) arrange for Lender to become the transferee beneficiary of the letter of credit, with Lender agreeing, in each case that the proceeds of any drawing under the letter of credit are to be applied as provided in
Section 7.2
of this Security Instrument.
Section 3.11
Ground Lease
. Borrower covenants and agrees to satisfy and fulfill the covenants, conditions and requirements applicable to the Ground Lease as set forth in the Loan Agreement. Without limiting the forgoing, Borrower shall (a) pay all rents, additional rents and other sums required to be paid by Borrower under and pursuant to the provisions of the Ground Lease as and when such rent or other charge is payable, (b) perform and observe all of the terms, covenants and conditions of the Ground Lease to be performed and observed by it thereunder prior to the expiration of any applicable grace period therein provided, (c) promptly notify (and promptly thereafter deliver to Lender a true copy thereof) of any notice by the Ground Lessor to Borrower of any default by Borrower in the performance or observance of any of the terms, covenants or conditions of the Ground Lease to be performed or observed by it thereunder, and (d) not, without the prior consent of Lender, (i) surrender the leasehold estate created by the Ground Lease, (ii) terminate or cancel the Ground Lease, or (iii) modify, change, supplement, alter or amend the Ground Lease in any respect, either orally or in writing. Borrower hereby assigns to Lender, as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument and the Loan Agreement, all of the rights, privileges and prerogatives of Borrower, which rights, privileges and prerogatives may be exercised by Lender upon and during the continuation of an Event of Default, to surrender the leasehold estate created by the Ground Lease or to terminate, cancel, modify, change, supplement, alter or amend the Ground Lease, and any such surrender of a leasehold estate created or termination, cancellation,
modification, change, supplement, alteration or amendment of the Ground Lease without the prior consent of Lender shall be void and of no force and effect. If Borrower shall default in the performance or observance of any term, covenant or condition of the Ground Lease to be performed or observed by it thereunder, and such default shall remain uncured after the expiration of any applicable cure or grace period, then, without limiting the generality of the other provisions of this Security Instrument and the Loan Agreement, and without waiving or releasing Borrower from any of its obligations hereunder or thereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Ground Lease to be performed or observed by Borrower or to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under the Ground Lease shall be kept unimpaired and free from default. If Lender shall make any payment or perform any act or take action in accordance with the preceding sentence, Lender will notify Borrower of the making of any such payment, the performance of any such act, or the taking of any such action. In any such event, subject to the rights of the Ground Lessor and other occupants under the Leases, Lender and any person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time after such default by Borrower, which remains uncured after the expiration of any applicable cure or grace period, for the purpose of taking any such action. Lender may pay and expend such sums of money as Lender deems reasonably necessary for any such purpose and upon so doing shall be subrogated to any and all rights of the Ground Lessor. Borrower hereby agrees to pay to Lender immediately upon demand therefor, all such sums so paid and expended by Lender, together with interest thereon from the day of such demand at the Default Rate. All sums so paid and expended by Lender and the interest thereon shall be secured by this Mortgage. If Ground Lessor shall deliver to Lender a copy of any notice of default sent by Ground Lessor to Borrower under the Ground Lease, such notice shall constitute full protection to Lender for any action taken or omitted to be taken by Lender, in good faith, in reliance thereon. Borrower will not subordinate or consent to the subordination of the Ground Lease to any mortgage, security deed, lease or other interest on or in the Ground Lessor’s interest in all or any part of the Property, unless, in each such case, the written consent of Lender shall have been first had and obtained.
Section 3.12
No Merger of Fee and Leasehold Estates
. So long as any portion of the Debt shall remain unpaid, unless Lender shall otherwise consent, the fee title to any of the Property and the leasehold estate therein created pursuant to the provisions of the Ground Lease shall not merge but shall always be kept separate and distinct, notwithstanding the union of such estates in Borrower, Lender or in any other person by purchase, operation of law or otherwise. Lender reserves the right, at any time, to release portions of the Property, including, but not limited to, the leasehold estate created by the Ground Lease, with or without consideration, at Lender’s election, without waiving or affecting any of its rights hereunder or under the Note or the other Loan Documents and any such release shall not affect Lender’s rights in connection with the portion of the Property not so released.
Section 3.13
Rejection of the Ground Lease
. Notice is hereby given that Borrower’s rights with respect to the handling and treatment of the Ground Lease pursuant to the Bankruptcy Code, or any other law affecting creditor’s rights, including its rejection, disaffirmance or termination have been limited and assigned pursuant to Section 5.1.24(n) of the Loan Agreement.
Section 3.14
Notice of Ground Lease Estoppel
. Notice is hereby given that Ground Lessor and Lender have executed an estoppel with respect to the Ground Lease which sets forth certain rights and obligations of Ground Lessor and Lender with respect thereto, and which modifies certain provisions of the Ground Lease as it related to Lender.
ARTICLE IV - OBLIGATIONS AND RELIANCES
Section 4.1
Relationship of Borrower and Lender
. The relationship between Borrower and Lender is solely that of debtor and creditor, and Lender has no fiduciary or other special relationship with Borrower, and no term or condition of any of the Loan Agreement, the Note, this Security Instrument and the other Loan Documents shall be construed so as to deem the relationship between Borrower and Lender to be other than that of debtor and creditor.
Section 4.2
No Reliance on Lender
. The general partners, members, principals and (if Borrower is a trust) beneficial owners of Borrower are experienced in the ownership and operation of properties similar to the Property, and Borrower and Lender are relying solely upon such expertise and business plan in connection with the ownership and operation of the Property. Borrower is not relying on Lender’s expertise, business acumen or advice in connection with the Property.
Section 4.3
No Lender Obligations
. (a) Notwithstanding the provisions of
Subsections 1.1(h)
and
(n)
or
Section 1.2
, Lender is not undertaking the performance of (i) any obligations under the Leases; or (ii) any obligations with respect to such agreements, contracts, certificates, instruments, franchises, permits, trademarks, licenses and other documents.
(b) By accepting or approving anything required to be observed, performed or fulfilled or to be given to Lender pursuant to this Security Instrument, the Loan Agreement, the Note or the other Loan Documents, including any officer’s certificate, balance sheet, statement of profit and loss or other financial statement, survey, appraisal, or insurance policy, Lender shall not be deemed to have warranted, consented to, or affirmed the sufficiency, the legality or effectiveness of same, and such acceptance or approval thereof shall not constitute any warranty or affirmation with respect thereto by Lender.
Section 4.4
Reliance
. Borrower recognizes and acknowledges that in accepting the Loan Agreement, the Note, this Security Instrument and the other Loan Documents, Lender is expressly and primarily relying on the truth and accuracy of the warranties and representations set forth in Section 4.1 of the Loan Agreement without any obligation to investigate the Property and notwithstanding any investigation of the Property by Lender; that such reliance existed on the part of Lender prior to the date hereof, that the warranties and representations are a material inducement to Lender in making the Loan; and that Lender would not be willing to make the Loan and accept this Security Instrument in the absence of the warranties and representations as set forth in Section 4.1 of the Loan Agreement.
ARTICLE V - FURTHER ASSURANCES
Section 5.1
Recording of Security Instrument, etc
. Borrower forthwith upon the execution and delivery of this Security Instrument and thereafter, from time to time, shall cause this
Security Instrument and any of the other Loan Documents creating a lien or security interest or evidencing the lien hereof upon the Property and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or future law in order to publish notice of and fully to protect and perfect the lien or security interest hereof upon, and the interest of Lender in, the Property. Borrower shall pay all taxes, filing, registration or recording fees, and all expenses incident to the preparation, execution, acknowledgment and/or recording of the Note, this Security Instrument, the other Loan Documents, any note, deed of trust or mortgage supplemental hereto, any security instrument with respect to the Property and any instrument of further assurance, and any modification or amendment of the foregoing documents, and all federal, state, county and municipal taxes, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of this Security Instrument, any deed of trust or mortgage supplemental hereto, any other security instrument with respect to the Property or any instrument of further assurance, and any modification or amendment of the foregoing documents, except where prohibited by law so to do.
Section 5.2
Further Acts, Etc
. Borrower will, at the cost of Borrower, and without expense to Lender, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, deeds of trust, mortgages, assignments, notices of assignments, transfers and assurances as Lender shall, from time to time, reasonably require, for the better assuring, conveying, assigning, transferring, and confirming unto Lender the property and rights hereby mortgaged, deeded, granted, bargained, sold, conveyed, confirmed, pledged, assigned, warranted and transferred or intended now or hereafter so to be, or which Borrower may be or may hereafter become bound to convey or assign to Lender, or for carrying out the intention or facilitating the performance of the terms of this Security Instrument or for filing, registering or recording this Security Instrument, or for complying with all Legal Requirements. The Borrower hereby irrevocably authorizes the Lender, its counsel or its representative, at any time and from time to time, to file financing statements and amendments as the Lender may deem necessary, including financing statements and amendments that describe the collateral covered by such financing statements as “all assets of Borrower” or “all personal property of Borrower” or words of similar effect, in order to perfect the security title and interests granted by Borrower under this Security Instrument. Borrower grants to Lender an irrevocable power of attorney coupled with an interest for the purpose of exercising and perfecting any and all rights and remedies available to Lender at law and in equity, including without limitation such rights and remedies available to Lender pursuant to this
Section 5.2
.
Section 5.3
Changes in Tax, Debt, Credit and Documentary Stamp Laws
. (a) If any law is enacted or adopted or amended after the date of this Security Instrument which deducts the Debt from the value of the Property for the purpose of taxation or which imposes a tax, either directly or indirectly, on the Debt or Lender’s interest in the Property, Borrower shall pay the tax, with interest and penalties thereon, if any. If Lender is advised by counsel chosen by it that the payment of tax by Borrower would be unlawful or taxable to Lender or unenforceable or provide the basis for a defense of usury, then Lender shall have the option by written notice of not less than one hundred twenty (120) days to declare the Debt immediately due and payable.
(b) Borrower shall not claim or demand or be entitled to any credit or credits on account of the Debt for any part of the Taxes or Other Charges assessed against the Property, or any
part thereof, and no deduction shall otherwise be made or claimed from the assessed value of the Property, or any part thereof, for real estate tax purposes by reason of this Security Instrument or the Debt. If such claim, credit or deduction shall be required by law, Lender shall have the option, by written notice of not less than one hundred twenty (120) days, to declare the Debt immediately due and payable.
(c) If at any time the United States of America, any State thereof or any subdivision of any such State shall require revenue or other stamps to be affixed to the Note, this Security Instrument, or any of the other Loan Documents or impose any other tax or charge on the same, Borrower shall pay for the same, with interest and penalties thereon, if any.
Section 5.4
Severing of Security Instrument
. The provisions of Section 8.2(c) of the Loan Agreement are hereby incorporated by reference herein.
Section 5.5
Replacement Documents
. Upon receipt of an affidavit of an officer of Lender as to the loss, theft, destruction or mutilation of the Note or any other Loan Document which is not of public record, and, in the case of any such mutilation, upon surrender and cancellation of such Note or other Loan Document, Borrower shall issue, in lieu thereof, a replacement Note or other Loan Document, dated the date of such lost, stolen, destroyed or mutilated Note or other Loan Document in the same principal amount thereof and otherwise of like tenor.
ARTICLE VI - DUE ON SALE/ENCUMBRANCE
Section 6.1
Lender Reliance
. Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its general partners, members, principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
Section 6.2
No Sale/Encumbrance
. Neither Borrower nor any Restricted Party shall Transfer the Property or any part thereof or any interest therein or permit or suffer the Property or any part thereof or any interest therein to be Transferred other than as expressly permitted pursuant to the terms of the Loan Agreement.
ARTICLE VII - RIGHTS AND REMEDIES UPON DEFAULT
Section 7.1
Remedies
. Upon the occurrence and during the continuance of any Event of Default (as defined in the Loan Agreement), Borrower agrees that Lender may take such action, without notice or demand, as it deems advisable to protect and enforce its rights against Borrower and in and to the Property, including the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order as Lender may determine, in its discretion, without impairing or otherwise affecting the other rights and remedies of Lender:
(a) declare the entire unpaid Debt to be immediately due and payable;
(b) institute proceedings, judicial or otherwise, for the complete foreclosure of this Security Instrument under any applicable provision of law, in which case the Property or any interest therein may be sold for cash or upon credit in one or more parcels or in several interests or portions and in any order or manner. In addition to and not in limitation of the foregoing, Lender may sell the Property, or any part thereof or any interest therein separately, at Lender’s discretion, with or without taking possession thereof, at public sale before the courthouse door of the county in which the Property, or a part thereof, is located, to the highest bidder for cash, after first giving notice of the time, place and terms of such sale by advertisement published once a week for four weeks (without regard for the number of days) in a newspaper in which advertisements of sheriff’s sales are published in such county. The advertisement so published shall be notice to Borrower, and Borrower hereby waives all other notices. Lender may bid and purchase at any such sale, and Lender may execute and deliver to the purchaser or purchasers at any such sale a sufficient conveyance of the Property, or the part thereof or interest therein sold. Lender’s conveyance may contain recitals as to the occurrence of any Event of Default under this Security Instrument, which recitals shall be presumptive evidence that all preliminary acts prerequisite to such sale and conveyance were in all things duly complied with. The recitals made by Lender shall be binding and conclusive upon Borrower, and the sale and conveyance made by Lender shall divest Borrower of all right, title, interest and equity that Borrower may have had in, to and under the Property, or the part thereof or interest therein sold, and shall vest the same in the purchaser or purchasers at such sale. Lender may hold one or more sales hereunder until the Debt has been satisfied in full. Borrower hereby constitutes and appoints Lender as Borrower’s agent and attorney-in-fact to make such sale, to execute and deliver such conveyance and to make such recitals, and Borrower hereby ratifies and confirms all of the acts and doings of Lender as Borrower’s agent and attorney-in-fact hereunder. Lender’s agency and power as attorney-in-fact hereunder are coupled with an interest, cannot be revoked by insolvency, incompetence, death or otherwise, and shall not be exhausted until the Debt has been satisfied in full. The proceeds of each sale by Lender hereunder shall be applied first to the costs and expenses of the sale and of all proceedings in connection therewith, including attorney’s fees if applicable, then to the payment of the Debt, and the remainder, if any, shall be paid to Borrower. If the proceeds of any sale are not sufficient to pay the Debt in full, Lender shall determine, at Lender’s option and in Lender’s discretion, the portions of the Debt to which the proceeds (after deducting therefrom the costs and expenses of the sale and all proceedings in connection therewith) shall be applied and in what order the proceeds shall be so applied. Borrower covenants and agrees that, in the event of any sale pursuant to the agency and power herein granted, Borrower shall be and become a tenant holding over and shall deliver possession of the Property, or the part thereof or interest therein sold, to the purchaser or purchasers at the sale or be summarily dispossessed in accordance with the provisions of law applicable to tenants holding over. Upon any such sale or sales, Lender may bid for and acquire the Property and, in lieu of paying cash therefor, may make settlement for the purchase price by crediting against the Debt the amount of the bid made therefor, after deducting therefrom the expenses of the sale, the cost of any enforcement proceeding hereunder and any other sums that Lender is authorized to charge to Borrower under the terms of the Note, this Security Instrument, or any other Loan Document to the extent necessary to satisfy such bid. Any sale may be postponed or adjourned by public announcement at the time and place appointed for such sale or such postponed or adjourned sale without further notice. The
power of sale hereunder or with respect hereto shall not be exhausted by any sale as to any part or parcel of the Property which is not sold, unless and until the Debt shall have been paid in full, and shall not be exhausted or impaired by any sale which is not completed or is defective. A sale may be as a whole or in part or parcels and Borrower hereby waives its right to direct the order in which the Property or any part or parcel thereof is sold;
(c) with or without entry, to the extent permitted and pursuant to the procedures provided by applicable law, institute proceedings for the partial foreclosure of this Security Instrument for the portion of the Debt then due and payable, subject to the continuing lien and security interest of this Security Instrument for the balance of the Debt not then due, unimpaired and without loss of priority;
(d) sell for cash or upon credit the Property or any part thereof and all estate, claim, demand, right, title and interest of Borrower therein and rights of redemption thereof, pursuant to power of sale or otherwise, at one or more sales, as an entirety or in parcels, at such time and place, upon such terms and after such notice thereof as may be required or permitted by law;
(e) institute an action, suit or proceeding in equity for the specific performance of any covenant, condition or agreement contained herein, in the Note, the Loan Agreement or in the other Loan Documents;
(f) recover judgment on the Note either before, during or after any proceedings for the enforcement of this Security Instrument or the other Loan Documents;
(g) apply for and obtain the appointment, on an
ex parte
basis“, and Borrower does hereby irrevocably consent to such appointment, waives any and all notices of and defenses to such appointment and agrees not to oppose any application therefor by Lender, and without regard for the adequacy of the security for the Debt and without regard for the solvency of Borrower, any guarantor, indemnitor or of any Person liable for the payment of the Debt, of a receiver, trustee, liquidator or conservator of the Property to do all of the actions set forth in subparagraph (h) below and to, with the consent of Lender, dispose (by lease, sale or otherwise) of some or all of the Property in the course of the proceeding in which such receiver, trustee, liquidator or conservator is appointed;
(h) the license granted to Borrower under
Section 1.2
hereof shall automatically be revoked and Lender may enter into or upon the Property, either personally or by its agents, nominees or attorneys and dispossess Borrower and its agents and servants therefrom, without liability for trespass, damages or otherwise and exclude Borrower and its agents or servants wholly therefrom, and take possession of all books, records and accounts relating thereto and Borrower agrees to surrender possession of the Property and of such books, records and accounts to Lender upon demand, and thereupon Lender may (i) use, operate, manage, control, insure, maintain, repair, restore and otherwise deal with all and every part of the Property and conduct the business thereat; (ii) complete any construction on the Property in such manner and form as Lender deems advisable; (iii) make alterations, additions, renewals, replacements and improvements to or on the Property; (iv) exercise all rights and powers of Borrower with respect to the Property, whether in the name of Borrower or otherwise, including the right to make, cancel, enforce or modify Leases, obtain and evict tenants, and demand, sue for, collect and receive all Rents of the Property and every part
thereof; (v) require Borrower to pay monthly in advance to Lender, or any receiver appointed to collect the Rents, the fair and reasonable rental value for the use and occupation of such part of the Property as may be occupied by Borrower; (vi) require Borrower to vacate and surrender possession of the Property to Lender or to such receiver and, in default thereof, Borrower may be evicted by summary proceedings or otherwise; and (vii) apply the receipts from the Property to the payment of the Debt, in such order, priority and proportions as Lender shall deem appropriate in its discretion after deducting therefrom all expenses (including reasonable attorneys’ fees) incurred in connection with the aforesaid operations and all amounts necessary to pay the Taxes, Other Charges, insurance and other expenses in connection with the Property, as well as just and reasonable compensation for the services of Lender, its counsel, agents and employees;
(i) exercise any and all rights and remedies granted to a secured party upon default under the Uniform Commercial Code, including: (i) the right to take possession of the Fixtures, the Equipment, the Personal Property or any part thereof, and to take such other measures as Lender may deem necessary for the care, protection and preservation of the Fixtures, the Equipment, the Personal Property, and (ii) request Borrower at its expense to assemble the Fixtures, the Equipment, the Personal Property and make it available to Lender at a convenient place acceptable to Lender. Any notice of sale, disposition or other intended action by Lender with respect to the Fixtures, the Equipment, the Personal Property sent to Borrower in accordance with the provisions hereof at least five (5) days prior to such action, shall constitute commercially reasonable notice to Borrower;
(j) apply any sums then deposited or held in escrow or otherwise by or on behalf of Lender in accordance with the terms of the Loan Agreement, this Security Instrument or any other Loan Document to the payment of the following items in any order in its discretion: (i) Taxes and Other Charges; (ii) Insurance Premiums; (iii) interest on the unpaid principal balance of the Note; (iv) amortization of the unpaid principal balance of the Note; and (v) all other sums payable pursuant to the Note, the Loan Agreement, this Security Instrument and the other Loan Documents, including advances made by Lender pursuant to the terms of this Security Instrument;
(k) surrender the Policies maintained pursuant to the Loan Agreement, collect the unearned Insurance Premiums and apply such sums as a credit on the Debt in such priority and proportion as Lender shall deem proper, and in connection therewith, Borrower hereby appoints Lender as agent and attorney-in-fact (which is coupled with an interest and is therefore irrevocable) for Borrower to collect such Insurance Premiums;
(l) prohibit Borrower and anyone claiming for or through Borrower from making use of or withdrawing any sums from any lockbox, escrow or similar account;
(m) pursue such other remedies as Lender may have under applicable law; or
(n) apply the undisbursed balance of any Net Proceeds Deficiency deposit, together with interest thereon, to the payment of the Debt in such order, priority and proportions in accordance with the terms of the Loan Agreement.
In the event of a sale, by foreclosure, power of sale or otherwise, of less than all of the Property, this Security Instrument shall continue as a lien and security interest on the remaining portion of the Property unimpaired and without loss of priority.
Section 7.2
Application of Proceeds
. The purchase money, proceeds and avails of any disposition of the Property, and or any part thereof, or any other sums collected by Lender pursuant to the Note, this Security Instrument or the other Loan Documents, may be applied by Lender to the payment of the Debt in such priority and proportions as Lender in its discretion shall deem proper.
Section 7.3
Right to Cure Defaults
. Upon the occurrence and during the continuance of any Event of Default, or if Borrower fails to make any payment or to do any act as herein provided, Lender may, but without any obligation to do so and without notice to or demand on Borrower and without releasing Borrower from any obligation hereunder, make any payment or do any act required of Borrower hereunder in such manner and to such extent as Lender may deem necessary to protect the security hereof. Lender is authorized to enter upon the Property for such purposes, or appear in, defend, or bring any action or proceeding to protect its interest in the Property or to foreclose this Security Instrument or collect the Debt, and the cost and expense thereof (including reasonable attorneys’ fees to the extent permitted by law), with interest as provided in this
Section 7.3
, shall constitute a portion of the Debt and shall be due and payable to Lender upon demand. All such costs and expenses incurred by Lender in remedying such Event of Default or such failed payment or act or in appearing in, defending, or bringing any such action or proceeding shall bear interest at the Default Rate (as defined in the Note), for the period after notice from Lender that such cost or expense was incurred to the date of payment to Lender. All such costs and expenses incurred by Lender together with interest thereon calculated at the Default Rate shall be deemed to constitute a portion of the Debt and be secured by this Security Instrument and the other Loan Documents and shall be immediately due and payable upon demand by Lender therefor.
Section 7.4
Actions and Proceedings
. Lender has the right to appear in and defend any action or proceeding brought with respect to the Property and to bring any action or proceeding, in the name and on behalf of Borrower, which Lender, in its discretion, decides should be brought to protect its interest in the Property.
Section 7.5
Recovery of Sums Required To Be Paid
. Lender shall have the right from time to time to take action to recover any sum or sums which constitute a part of the Debt as the same become due, without regard to whether or not the balance of the Debt shall be due, and without prejudice to the right of Lender thereafter to bring an action of foreclosure, or any other action, for a default or defaults by Borrower existing at the time such earlier action was commenced.
Section 7.6
Examination of Books and Records
. At reasonable times and upon reasonable notice, Lender, its agents, accountants and attorneys shall have the right to examine the records, books, management and other papers of Borrower which reflect upon their financial condition, at the Property or at any office regularly maintained by Borrower where the books and records are located. Lender and its agents shall have the right to make copies and extracts from the foregoing records and other papers. In addition, at reasonable times and upon reasonable notice, Lender, its agents, accountants and attorneys shall have the right to examine and audit the books
and records of Borrower pertaining to the income, expenses and operation of the Property during reasonable business hours at any office of Borrower where the books and records are located. This
Section 7.6
shall apply throughout the term of the Note and without regard to whether an Event of Default has occurred or is continuing.
Section 7.7
Other Rights, etc
. (a) The failure of Lender to insist upon strict performance of any term hereof shall not be deemed to be a waiver of any term of this Security Instrument. Borrower shall not be relieved of Borrower’s obligations hereunder by reason of (i) the failure of Lender to comply with any request of Borrower or any guarantor or any indemnitor with respect to the Loan to take any action to foreclose this Security Instrument or otherwise enforce any of the provisions hereof or of the Note or the other Loan Documents, (ii) the release, regardless of consideration, of the whole or any part of the Property, or of any person liable for the Debt or any portion thereof, or (iii) any agreement or stipulation by Lender extending the time of payment or otherwise modifying or supplementing the terms of the Note, this Security Instrument or the other Loan Documents.
(b) It is agreed that the risk of loss or damage to the Property is on Borrower, and Lender shall have no liability whatsoever for decline in value of the Property, for failure to maintain the Policies, or for failure to determine whether insurance in force is adequate as to the amount of risks insured. Possession by Lender shall not be deemed an election of judicial relief if any such possession is requested or obtained with respect to any Property or collateral not in Lender’s possession.
(c) Lender may resort for the payment of the Debt to any other security held by Lender in such order and manner as Lender, in its discretion, may elect. Lender may take action to recover the Debt, or any portion thereof, or to enforce any covenant hereof without prejudice to the right of Lender thereafter to foreclose this Security Instrument. The rights of Lender under this Security Instrument shall be separate, distinct and cumulative and none shall be given effect to the exclusion of the others. No act of Lender shall be construed as an election to proceed under any one provision herein to the exclusion of any other provision. Lender shall not be limited exclusively to the rights and remedies herein stated but shall be entitled to every right and remedy now or hereafter afforded at law or in equity.
Section 7.8
Right to Release Any Portion of the Property
. Lender may release any portion of the Property for such consideration as Lender may require without, as to the remainder of the Property, in any way impairing or affecting the lien or priority of this Security Instrument, or improving the position of any subordinate lienholder with respect thereto, except to the extent that the obligations hereunder shall have been reduced by the actual monetary consideration, if any, received by Lender for such release, and may accept by assignment, pledge or otherwise any other property in place thereof as Lender may require without being accountable for so doing to any other lienholder. This Security Instrument shall continue as a lien and security interest in the remaining portion of the Property.
Section 7.9
Violation of Laws
. If the Property is not in material compliance with Legal Requirements, Lender may impose additional requirements upon Borrower in connection herewith including monetary reserves or financial equivalents.
Section 7.10
Recourse and Choice of Remedies
. Notwithstanding any other provision of this Security Instrument or the Loan Agreement, including Section 9.3 of the Loan Agreement, to the fullest extent permitted by applicable law, Lender and other Indemnified Parties are entitled to enforce the obligations of Borrower contained in
Sections 9.1, 9.2 and 9.3
herein and Section 9.3 of the Loan Agreement without first resorting to or exhausting any security or collateral and without first having recourse to the Note or any of the Property, through foreclosure or acceptance of a deed in lieu of foreclosure or otherwise, and in the event Lender commences a foreclosure action against the Property, Lender is entitled to pursue a deficiency judgment with respect to such obligations against Borrower. The provisions of
Sections 9.1, 9.2 and 9.3
herein and Section 9.3 of the Loan Agreement are exceptions to any non-recourse or exculpation provisions in the Loan Agreement, the Note, this Security Instrument or the other Loan Documents, and Borrower is fully and personally liable for the obligations pursuant to
Sections 9.1, 9.2 and 9.3
herein and Section 9.3 of the Loan Agreement. The liability of Borrower pursuant to
Sections 9.1, 9.2 and 9.3
herein and Section 9.3 of the Loan Agreement is not limited to the original principal amount of the Note. Notwithstanding the foregoing, nothing herein shall inhibit or prevent Lender from foreclosing or exercising any other rights and remedies pursuant to the Loan Agreement, the Note, this Security Instrument and the other Loan Documents, whether simultaneously with foreclosure proceedings or in any other sequence. A separate action or actions may be brought and prosecuted against Borrower pursuant to
Sections 9.1, 9.2 and 9.3
herein and Section 9.3 of the Loan Agreement whether or not action is brought against any other Person or whether or not any other Person is joined in the action or actions. In addition, Lender shall have the right but not the obligation to join and participate in, as a party if it so elects, any administrative or judicial proceedings or actions initiated in connection with any matter addressed in
Article IX
herein.
Section 7.11
Right of Entry
. Upon reasonable notice to Borrower, Lender and its agents shall have the right to enter and inspect the Property at all reasonable times.
Section 7.12
Rights Pertaining To Sales
. The following provisions shall, to the extent permitted by law, apply to any sale or sales of all or any portion of the Property under or by virtue of this Security Instrument, whether under any power of sale herein granted or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale:
(a) The power of sale shall not be exhausted by any one or more of such sales as to any part of the Property that has not been sold or by any sale that is not completed or is defective until the Debt has been paid in full.
(b) Any sale may be postponed or adjourned by public announcement at the time and place appointed for such sale or for such postponed or adjourned sale, and such sale may be completed at the time and place so announced without further notice.
(c) Lender is hereby appointed the true and lawful attorney-in-fact of Borrower, which appointment is irrevocable and shall be deemed to be coupled with an interest, in Borrower’s name and stead, to make all necessary conveyances, assignments, transfers and deliveries of the Property and rights so sold, and for that purpose Lender may execute all necessary instruments to accomplish the same, and may substitute one or more persons with like power, and Borrower hereby ratifies and confirms all that said attorney or such substitute or
substitutes shall lawfully do by virtue thereof. Nevertheless, Borrower, if requested by Lender, shall ratify and confirm any such sale or sales by executing and delivering to Lender or such purchaser or purchasers, as applicable, all such instruments as may be advisable, in Lender’s judgment, for the purposes designated in such request.
(d) Any and all statements of fact or other recitals made in any of the instruments referred to in
Section 7.12(c)
given by Lender concerning nonpayment of the Debt, occurrence of any Event of Default, any declaration by Lender that all or any of the Debt is due and payable, any request to sell, any representation that notice of time, place and terms of sale and property or rights to be sold was duly given, or that any other act or thing was duly done by Lender, shall be taken as prima facie evidence of the truth of the facts so stated and recited.
(e) Intentionally deleted.
(f) Any such sale or sales shall operate to divest all of the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of Borrower in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against Borrower and any and all persons claiming or who may claim the same, or any part thereof, by, through or under Borrower to the fullest extent permitted by applicable law.
(g) Upon any such sale or sales, Lender may bid for and acquire the Property and, in lieu of paying cash therefor, may make settlement for the purchase price by crediting against the Debt the amount of the bid made therefor, after deducting therefrom the expenses of the sale, the cost of any enforcement proceeding hereunder and any other sums that Lender is authorized to charge to Borrower under the terms of the Note, this Security Instrument, or any other Loan Document to the extent necessary to satisfy such bid.
(h) If Borrower, or any person claiming by, through or under Borrower, shall transfer or refuse or fail to surrender possession of the Property after any sale thereof, then Borrower or such person shall be deemed a tenant at sufferance of the purchaser at such sale, subject to eviction by means of unlawful detainer proceedings or other appropriate proceedings, and to any other right or remedy available hereunder or under applicable law.
(i) Lender may pursue its rights and remedies against any guarantor or other party liable for any of the obligations in such a suit for foreclosure or by separate suit, whether or not the trustee is also pursuing a sale under the terms hereof.
ARTICLE VIII - PREPAYMENT
Section 8.1
Prepayment
. The Debt may not be prepaid in whole or in part except in accordance with the express terms and conditions of the Loan Agreement and the Note.
ARTICLE IX - INDEMNIFICATION
Section 9.1
General Indemnification
. Borrower shall, at its sole cost and expense, protect (with legal counsel reasonably acceptable to Lender), defend, indemnify, release and hold
harmless the Indemnified Parties from and against any and all claims, suits, liabilities (including strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs, expenses, diminutions in value, fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in settlement, punitive damages, foreseeable and unforeseeable consequential damages, of whatever kind or nature (including reasonable attorneys’ fees and other costs of defense) (collectively, the “
Losses
”) imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following: (a) ownership of this Security Instrument, the Property or any interest therein or receipt of any Rents; (b) any amendment to, or restructuring of, the Debt, the Note, the Loan Agreement, this Security Instrument, or any other Loan Documents; (c) any and all lawful action that may be taken by Lender in connection with the enforcement of the provisions of this Security Instrument, the Loan Agreement, the Note or any of the other Loan Documents, whether or not suit is filed in connection with same, or in connection with Borrower, any guarantor or any indemnitor Person and/or any partner, joint venturer or shareholder thereof becoming a party to a voluntary or involuntary federal or state bankruptcy, insolvency or similar proceeding; (d) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (e) any use, nonuse or condition in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (f) any failure on the part of Borrower to perform or be in compliance with any of the terms of this Security Instrument, the Note, the Loan Agreement or any of the other Loan Documents; (g) performance of any labor or services or the furnishing of any materials or other property in respect of the Property or any part thereof; (h) the failure of any person to file timely with the Internal Revenue Service an accurate Form 1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and Barter Exchange Transactions, which may be required in connection with this Security Instrument, or to supply a copy thereof in a timely fashion to the recipient of the proceeds of the transaction in connection with which this Security Instrument is made; (i) any failure of the Property to be in compliance with any Legal Requirements; (j) the enforcement by any Indemnified Party of the provisions of this
Article 9
; (k) any and all claims and demands whatsoever which may be asserted against Lender by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained in any Lease; (l) any and all claims (including lender liability claims) or demands by Borrower or any third parties, including any guarantor or indemnitor; (m) the payment of any commission, charge or brokerage fee to anyone claiming through Borrower which may be payable in connection with the funding of the Loan; or (n) any misrepresentation made by Borrower in this Security Instrument or any other Loan Document. Any amounts payable to Lender by reason of the application of this
Section 9.1
shall become immediately due and payable and shall bear interest at the Default Rate from the date loss or damage is sustained by Lender until paid.
Section 9.2
Mortgage and/or Intangible Tax
. Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any tax on the making and/or recording of this Security Instrument, the Note or any of the other Loan Documents, but excluding any income, franchise or other similar taxes. Borrower hereby agrees that, in the event that it is determined that any documentary stamp taxes or intangible personal property taxes are due hereon
or on any mortgage or promissory note executed in connection herewith (including the Note), Borrower shall indemnify and hold harmless the Indemnified Parties for all such documentary stamp and/or intangible taxes, including all penalties and interest assessed or charged in connection therewith.
Section 9.3
ERISA Indemnification
. Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses (including reasonable attorneys’ fees and costs incurred in the investigation, defense, and settlement of Losses incurred in correcting any prohibited transaction or in the sale of a prohibited loan, and in obtaining any individual prohibited transaction exemption under ERISA that may be required, in Lender’s discretion) that Lender may incur, directly or indirectly, as a result of a breach of any of the representations made under Section 4.1.9 of the Loan Agreement or a breach of any negative covenants contained in Section 5.2.9 of the Loan Agreement.
Section 9.4
Duty to Defend; Attorneys’ Fees and Other Fees and Expenses
. Upon written request by any Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals approved by the Indemnified Parties. Notwithstanding the foregoing, if the defendants in any such claim or proceeding include both Borrower and any Indemnified Party and Borrower and such Indemnified Party shall have reasonably concluded that there are any legal defenses available to it and/or other Indemnified Parties that are different from or additional to those available to Borrower, such Indemnified Party shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such Indemnified Party, provided that no compromise or settlement shall be entered without Borrower’s consent, which consent shall not be unreasonably withheld. Upon demand, Borrower shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith.
Section 9.5
Environmental Indemnity
. Simultaneously with this Security Instrument, Borrower and Guarantor have executed that certain Environmental Indemnity. The obligations of Borrower and Guarantor under the Environmental Indemnity are not part of the Debt and are not secured by this Security Instrument.
ARTICLE X - WAIVERS
Section 10.1
Waiver of Counterclaim
. To the extent permitted by applicable law, Borrower hereby waives the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against it by Lender arising out of or in any way connected with this Security Instrument, the Loan Agreement, the Note, any of the other Loan Documents, or the Obligations.
Section 10.2
Marshalling and Other Matters
. To the extent permitted by applicable law, Borrower hereby waives the benefit of all homestead, appraisement, valuation, stay, extension, reinstatement and redemption laws now or hereafter in force and all rights of marshalling in the event of any sale hereunder of the Property or any part thereof or any interest therein. Further,
Borrower hereby expressly waives any and all rights of redemption from sale under any order or decree of foreclosure of this Security Instrument on behalf of Borrower, and on behalf of each and every person acquiring any interest in or title to the Property subsequent to the date of this Security Instrument and on behalf of all persons to the extent permitted by applicable law, and hereby waives any defense Borrower might assert or have by reason of Lender’s failure to make any tenant or lessee of the Property a party defendant in any foreclosure proceeding or action instituted by Lender.
Section 10.3
Waiver of Notice
. To the extent permitted by applicable law, Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with respect to matters for which this Security Instrument specifically and expressly provides for the giving of notice by Lender to Borrower and except with respect to matters for which Lender is required by applicable law to give notice, and Borrower hereby expressly waives the right to receive any notice from Lender with respect to any matter for which this Security Instrument does not specifically and expressly provide for the giving of notice by Lender to Borrower.
Section 10.4
Waiver of Statute of Limitations
. To the extent permitted by applicable law, Borrower hereby expressly waives and releases to the fullest extent permitted by law, the pleading of any statute of limitations as a defense to payment of the Debt or performance of its Other Obligations.
Section 10.5
Survival
. The indemnifications made pursuant to
Sections 9.1, 9.2
and
9.3
herein shall continue indefinitely in full force and effect and shall survive and shall in no way be impaired by any of the following: any satisfaction or other termination of this Security Instrument, any assignment or other transfer of all or any portion of this Security Instrument or Lender’s interest in the Property (but, in such case, shall benefit both Indemnified Parties and any assignee or transferee), any exercise of Lender’s rights and remedies pursuant hereto including foreclosure or acceptance of a deed in lieu of foreclosure, any exercise of any rights and remedies pursuant to the Loan Agreement, the Note or any of the other Loan Documents, any transfer of all or any portion of the Property (whether by Borrower or by Lender following foreclosure or acceptance of a deed in lieu of foreclosure or at any other time), any amendment to this Security Instrument, the Loan Agreement, the Note or the other Loan Documents, and any act or omission that might otherwise be construed as a release or discharge of Borrower from the obligations pursuant hereto.
Section 10.6
Trial by Jury
.
TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW,
BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
ARTICLE XI - EXCULPATION
The provisions of Section 9.3 of the Loan Agreement are hereby incorporated by reference into this Security Instrument to the same extent and with the same force as if fully set forth herein.
ARTICLE XII - NOTICES
All notices or other written communications hereunder shall be delivered in accordance with Section 10.6 of the Loan Agreement.
ARTICLE XIII - APPLICABLE LAW
Section 13.1
Governing Law
. This Security Instrument shall be governed in accordance with the terms and provisions of Section 10.3 of the Loan Agreement.
Section 13.2
Usury Laws
. Notwithstanding anything to the contrary, (a) all agreements and communications between Borrower and Lender are hereby and shall automatically be limited so that, after taking into account all amounts deemed interest, the interest contracted for, charged or received by Lender shall never exceed the maximum lawful rate or amount, (b) in calculating whether any interest exceeds the lawful maximum, all such interest shall be amortized, prorated, allocated and spread over the full amount and term of all principal indebtedness of Borrower to Lender, and (c) if through any contingency or event, Lender receives or is deemed to receive interest in excess of the lawful maximum, any such excess shall be deemed to have been applied toward payment of the principal of any and all then outstanding indebtedness of Borrower to Lender, or if there is no such indebtedness, shall immediately be returned to Borrower.
Section 13.3
Provisions Subject to Applicable Law
. All rights, powers and remedies provided in this Security Instrument may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of law and are intended to be limited to the extent necessary so that they will not render this Security Instrument invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any applicable law. If any term of this Security Instrument or any application thereof shall be invalid or unenforceable, the remainder of this Security Instrument and any other application of the term shall not be affected thereby.
ARTICLE XIV - DEFINITIONS
All capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, words used in this Security Instrument may be used interchangeably in singular or plural form and the word “
Borrower
” shall mean “each Borrower and any subsequent owner or owners of the Property or any part thereof or any interest therein,” the word “
Lender
” shall mean “Lender and any subsequent holder of the Note,” the word “
Note
” shall mean “the Note and any other evidence of indebtedness secured by this Security Instrument,” the word “
Property
” shall include any portion of the Property and any interest therein, and the phrases “
attorneys’ fees
,” “
legal fees
” and “
counsel fees
” shall include any and all attorneys’, paralegal and law clerk fees and disbursements, including fees and disbursements at the pre-trial, trial and appellate levels
incurred or paid by Lender in protecting its interest in the Property, the Leases and the Rents and enforcing its rights hereunder.
ARTICLE XV - MISCELLANEOUS PROVISIONS
Section 15.1
No Oral Change
. This Security Instrument, and any provisions hereof, including the provisions of this Section, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Borrower or Lender, 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 the parties hereby: (a) expressly agree that it shall not be reasonable for any of them to rely on any alleged, non-written amendment to this Security Instrument; (b) irrevocably waive any and all right to enforce any alleged, non-written amendment to this Security Instrument; and (c) expressly agree that it shall be beyond the scope of authority (apparent or otherwise) for any of their respective agents to agree to any non-written modification of this Security Instrument.
Section 15.2
Successors and Assigns
. This Security Instrument shall be binding upon and inure to the benefit of Borrower and Lender and their respective successors and assigns forever.
Section 15.3
Inapplicable Provisions
. If any term, covenant or condition of the Loan Agreement, the Note or this Security Instrument is held to be invalid, illegal or unenforceable in any respect, the Loan Agreement, the Note and this Security Instrument shall be construed without such provision.
Section 15.4
Headings, Etc
. The headings and captions of various Sections of this Security Instrument are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof.
Section 15.5
Number and Gender
. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa.
Section 15.6
Subrogation
. If any or all of the proceeds of the Note have been used to extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the extent of the funds so used, Lender shall be subrogated to all of the rights, claims, liens, titles, and interests existing against the Property heretofore held by, or in favor of, the holder of such indebtedness and such former rights, claims, liens, titles, and interests, if any, are not waived but rather are continued in full force and effect in favor of Lender and are merged with the lien and security interest created herein as cumulative security for the repayment of the Debt, the performance and discharge of Borrower’s obligations hereunder, under the Loan Agreement, the Note and the other Loan Documents and the performance and discharge of the Other Obligations.
Section 15.7
Entire Agreement
. The Note, the Loan Agreement, this Security Instrument and the other Loan Documents constitute the entire understanding and agreement between Borrower and Lender with respect to the transactions arising in connection with the Debt and supersede all prior written or oral understandings and agreements between Borrower and Lender with respect
thereto. Borrower hereby acknowledges that, except as incorporated in writing in the Note, the Loan Agreement, this Security Instrument and the other Loan Documents, there are not, and were not, and no persons are or were authorized by Lender to make, any representations, understandings, stipulations, agreements or promises, oral or written, with respect to the transaction which is the subject of the Note, the Loan Agreement, this Security Instrument and the other Loan Documents.
Section 15.8
Limitation on Lender’s Responsibility
. No provision of this Security Instrument shall operate to place any obligation or liability for the control, care, management or repair of the Property upon Lender, nor shall it operate to make Lender responsible or liable for any waste committed on the Property by the tenants or any other Person, or for any dangerous or defective condition of the Property, or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any tenant, licensee, employee or stranger. Nothing herein contained shall be construed as constituting Lender a “mortgagee in possession.”
Section 15.9
Rules of Construction
. The following rules of construction shall be applicable for all purposes of this Security Instrument and all documents or instruments supplemental hereto, unless the context otherwise clearly requires:
(a) The terms “include,” “including” and similar terms shall be construed as if followed by the phrase “without being limited to”;
(b) any pronoun used herein shall be deemed to cover all genders, and words importing the singular number shall mean and include the plural number, and vice versa;
(c) all captions to the Sections hereof are used for convenience and reference only and in no way define, limit or describe the scope or intent of, or in any way affect, this Security Instrument;
(d) the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”;
(e) the words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Security Instrument refer to this Security Instrument as a whole and not to any particular provision or section of this Security Instrument;
(f) an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by Lender;
(g) No inference in favor of or against any party shall be drawn from the fact that such party has drafted any portion hereof or any other Loan Document;
(h) The cover page (if any) of, all recitals set forth in, and all Exhibits to, this Security Instrument are hereby incorporated herein; and
(i) Wherever Lender’s judgment, consent, approval or discretion is required under this Security Instrument or any other Loan Document for any matter or thing or Lender shall have an option, election, or right of determination or any other power to decide any matter
relating to the terms and conditions of this Security Instrument, including any right to determine that something is satisfactory or not (“
Decision Power
”), such Decision Power shall be exercised in the sole and absolute discretion of Lender unless otherwise expressly stated to be reasonably exercised. Such Decision Power and each other power granted to Lender upon this Security Instrument or any other Loan Document may be exercised by Lender or by any authorized agent of Lender (including any servicer and/or attorney-in-fact), and Borrower hereby expressly agrees to recognize the exercise of such Decision Power by such authorized agent. Without limiting the generality of the foregoing, any authorized agent of Lender (including any servicer and/or attorney-in-fact) is hereby specifically authorized to remove a trustee and select and appoint a successor trustee.
Section 15.10
Duplicate Originals; Counterparts
. This Security Instrument may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Security Instrument may be executed in several counterparts, each of which counterpart shall be deemed an original instrument and all of which together shall constitute a single Security Instrument. The failure of any party hereto to execute this Security Instrument, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.
Section 15.11
Lender’s Right to Subordinate
. Lender may, at its election, subordinate the lien of this Security Instrument and any or all of Lender’s rights, titles or interests hereunder to any lien, leasehold interest, easement, plat, covenant, restriction, dedication, encumbrance or other matter affecting the Property or any part thereof by recording a written declaration of such subordination in the office of the register or recorder of deeds or similar filing officer for the county in which the Land is located. If foreclosure sale occurs hereunder after the recording of any such declaration, the title received by the purchaser at such sale shall be subject to the matters specified in such declaration, but such declaration shall not otherwise affect the validity or terms of this Security Instrument or any other Loan Document or the priority of any lien or security interest created hereunder or under any other Loan Document. Without limitation of the foregoing, Lender shall have the right to unilaterally modify any Loan Document to release any lien on any portion of the Property.
ARTICLE XVI –- STATE-SPECIFIC PROVISIONS
Section 16.1
Principles of Construction
. In the event of any inconsistencies between the terms and conditions of this
Article XVI
and the terms and conditions of this Security Instrument, the terms and conditions of this
Article XVI
shall control and be binding.
Section 16.2
Seal
. This Security Instrument is made under Seal.
Section 16.3
Maturity Date
. The maturity date of the Note secured by this Security Instrument is July 1, 2027.
Section 16.4
ADDITIONAL WAIVERS
. BORROWER EXPRESSLY WAIVES THE FOLLOWING: (A) NOTICE AND HEARING: ANY RIGHT BORROWER MAY HAVE UNDER THE CONSTITUTION OF THE STATE OF GEORGIA OR THE CONSTITUTION OF THE UNITED STATES OF AMERICA TO NOTICE OR TO A JUDICIAL HEARING PRIOR TO THE
EXERCISE OF ANY RIGHT OR REMEDY PROVIDED TO LENDER BY THIS SECURITY INSTRUMENT, AND BORROWER WAIVES BORROWER’S RIGHTS, IF ANY, TO SET ASIDE OR INVALIDATE ANY SALE UNDER POWER DULY CONSUMMATED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECURITY INSTRUMENT ON THE GROUND (IF SUCH BE THE CASE) THAT THE SALE WAS CONSUMMATED WITHOUT PRIOR NOTICE OR JUDICIAL HEARING OR BOTH; AND (B) ALL HOMESTEAD EXEMPTION RIGHTS, IF ANY, WHICH BORROWER OR BORROWER’S FAMILY MAY HAVE PURSUANT TO THE CONSTITUTION AND LAWS OF THE UNITED STATES, THE STATE OF GEORGIA OR ANY OTHER STATE OF THE UNITED STATES, IN AND TO THE PROPERTY AS AGAINST THE COLLECTION OF THE DEBT, OR ANY PART THEREOF. ALL WAIVERS BY BORROWER IN THIS PARAGRAPH HAVE BEEN MADE VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY BY BORROWER, AFTER BORROWER HAS BEEN AFFORDED AN OPPORTUNITY TO BE INFORMED BY COUNSEL OF BORROWER’S CHOICE AS TO POSSIBLE ALTERNATIVE RIGHTS. BORROWER’S EXECUTION OF THIS SECURITY INSTRUMENT SHALL BE CONCLUSIVE EVIDENCE OF THE MAKING OF SUCH WAIVERS AND THAT SUCH WAIVERS HAVE BEEN INVOLUNTARILY, INTELLIGENTLY AND KNOWINGLY MADE.
Section 16.5
Construction
. Notwithstanding anything to the contrary herein, the term “mortgage” shall mean “to convey” or “deed to secure debt” as the context indicates. Each and every reference herein to the “lien of this Security Instrument” or words of similar effect, shall be deemed to refer to security title conveyed by this instrument.
Section 16.6
Time is of the Essenc
e
. Time is of the essence with respect to each and every covenant, agreement and obligation of the Borrower under this Security Instrument, the Note and any and all other Loan Documents.
Section 16.7
Severability
. If any provisions of this Security Instrument or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, then (a) the remainder of this Security Instrument and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law, and (b) the provision or provisions hereof held to be invalid or unenforceable shall be reformed to the extent necessary to become valid and enforceable, consistent with the purpose and intent of Borrower and Lender with respect thereto.
Section 16.8
Attorney Fees
. Notwithstanding anything contained herein or in any of the other Loan Documents to the contrary, (i) “reasonable attorneys' fees,” “reasonable counsel's fees,” “attorneys’ fees” and other words of similar import, are not, and shall not be statutory attorneys' fees under the Official Code of Georgia (“
O.C.G.A.
”) Section 13-1-11, (ii) if, under any circumstances Borrower is required hereunder to pay any or all Lender’s attorneys' fees and expenses, howsoever described or referenced, Borrower shall be responsible only for reasonable legal fees and out of pocket expenses actually incurred by Lender at customary hourly rates actually charged to Lender for the work done, and (iii) Borrower shall not be liable under any circumstances for additional attorneys’ fees or expenses, howsoever described or referenced, under O.C.G.A. Section 13-1-11.
[NO FURTHER TEXT ON THIS PAGE]
IN WITNESS WHEREOF, this Security Instrument has been executed under seal by Borrower as of the day and year first above written.
DCII-250 WILLIAMS STREET NW, LLC,
a Delaware limited liability company
By: Carter Validus Operating Partnership II, LP,
a Delaware limited partnership,
its Sole Member
By: Carter Validus Mission Critical REIT II, Inc.,
a Maryland corporation,
its General Partner
By:
/s/ Lisa Collado [SEAL]
Name:
Lisa Collado
Title:
Authorized Agent
|
|
Signed sealed and delivered in the presence of:
/s/ Patrice M. Wolfe
Unofficial Witness
/s/ Lisa A. Clarke
Notary Public
(affix Notary Commission and Expiration Date of Seal)
|
SIGNATURE PAGE TO DEED TO SECURE DEBT
EXHIBIT A
LEGAL DESCRIPTION
Parcel One:
All that tract or parcel of land lying and being in Land Lot 78 of the 14th District of Fulton County, Georgia and being more particularly described as follows:
Beginning at the point of intersection of the northern right-of-way line of Harris Street (having a 60-foot right-of-way) with the western right-of-way line of Williams Street (having a 60-foot right-of-way), and running thence North 89 degrees 49 minutes 42 seconds West, along said right-of-way line of Harris Street, a distance of 387.30 feet to the point of intersection of said right-of-way line of Harris Street with the eastern right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive (having a 60-foot right-of-way); thence North 00 degrees 44 minutes 41 seconds East, along said right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive, a distance of 407.09 feet to the point of intersection of right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive with the southern right-of-way line of Baker Street (having a 60-foot right-of-way); thence South 89 degrees 31 minutes 45 seconds East, along said right-of-way line of Baker Street, a distance of 385.21 feet to the point of intersection of said right-of-way line of Baker Street with said right-of-way line of Williams Street; thence South 00 degrees 27 minutes 07 seconds West, along said right-of-way line of Williams Street, a distance of 145.22 feet to a point on said right-of-way line of Williams Street; thence leaving said right-of-way line of Williams Street, and running North 89 degrees 31 minutes 49 seconds West a distance of 115.00 feet to a point; thence South 00 degrees 28 minutes 11 seconds West a distance of 31.34 feet to a point; thence North 89 degrees 31 minutes 49 seconds West a distance of 9.94 feet to a point; thence South 00 degrees 34 minutes 51 seconds West a distance of 33.42 feet to a point; thence South 89 degrees 01 minute 59 seconds East a distance of 125.03 feet to a point on sad right-of-way line of Williams Street; thence South 00 degrees 27 minutes 07 seconds West, along said right-of-way line of Williams Street, a distance of 194.00 feet to the Point of Beginning.
The above-described property is shown as 3.42050 acres on and is described according to plat of survey prepared for JPMorgan Chase Bank, N.A., its successors and assigns, J.P. Morgan Mortgage Capital Inc., 250 Williams Street LLC and Piedmont Title Insurance Agency, Inc. as agent for First American Title Insurance Company, by V.T. Hammond, Georgia Registered Land Surveyor No. 2554, Watts & Browning Engineers, Inc., dated June 15, 1998, last revised August 20, 2007, which said plat of survey is incorporated herein by this reference and made a part of this description.
Parcel Two: Ground Lease
ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN LAND LOT 78 OF THE 14TH DISTRICT OF FULTON COUNTY, GEORGIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT LOCATED ON THE WESTERN RIGHT-OF-WAY LINE OF WILLIAMS STREET (HAVING A 60-FOOT RIGHT-OF-WAY), SAID POINT BEING LOCATED NORTH 00 DEGREES 27 MINUTES 07 SECONDS EAST A DISTANCE OF 194.00 FEET, AS MEASURED ALONG SAID RIGHT-OF-WAY OF WILLIAMS STREET, FROM THE POINT OF INTERSECTION OF SAID RIGHT-OF-WAY LINE OF WILLIAMS STREET WITH THE NORTHERN RIGHT-OF-WAY LINE OF HARRIS STREET (HAVING A 60-FOOT RIGHT-OF-WAY); AND RUNNING THENCE NORTH 89 DEGREES 01 MINUTE 59 SECONDS WEST A DISTANCE OF 125.03 FEET TO A POINT; THENCE NORTH 00 DEGREES 34 MINUTES 51 SECONDS EAST A DISTANCE OF 33.42 FEET TO A POINT; THENCE SOUTH 89 DEGREES 31 MINUTES 49 SECONDS EAST A DISTANCE OF 9.94 FEET TO A POINT; THENCE NORTH 00 DEGREES 28 MINUTES 11 SECONDS EAST A DISTANCE OF 31.34 FEET TO A POINT; THENCE SOUTH 89 DEGREES 31 MINUTES 49 SECONDS EAST A DISTANCE OF 115.00 FEET TO A POINT ON SAID RIGHT-OF-WAY LINE OF WILLIAMS STREET; THENCE SOUTH 00 DEGREES 27 MINUTES 07 SECONDS WEST, ALONG SAID RIGHT-OF-WAY LINE OF WILLIAMS STREET, A DISTANCE OF 65.84 FEET TO THE POINT OF BEGINNING.
Parcel Three:
EASEMENTS AND OTHER INTERESTS IN REAL PROPERTY CONTAINED IN THAT CERTAIN BRIDGE AGREEMENT BETWEEN THE CITY OF ATLANTA, THE ATLANTA APPAREL MART AND INFORUM, LTD., DATED AUGUST 31, 1987, RECORDED IN DEED BOOK 11051. PAGE 100, AFORESAID RECORDS; AS RE-RECORDED IN DEED BOOK 11128, PAGE 89. AFORESAID RECORDS; AGREEMENT BETWEEN THE ATLANTA APPAREL MART AND INFORUM ASSOCIATES, DATED OCTOBER 20, 1987, RECORDED IN DEED BOOK 11131, PAGE 319. AFORESAID RECORDS; AS MODIFIED BY AGREEMENT RE MODIFICATION OF BRIDGE AGREEMENT BETWEEN AMC. INC. AND EQUITABLE LIFE ASSURANCE OF THE UNITED STATES, DATED APRIL 22, 1999, RECORDED IN DEED BOOK 26975, PAGE 81, AFORESAID RECORDS.
Exhibit 10.6
Loan No. 10171391
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT
(this “
Guaranty
”) is made as of June 15, 2017, by
CARTER VALIDUS OPERATING PARTNERSHIP II, LP,
a Delaware limited partnership, having an address at 4890 W. Kennedy Boulevard, Suite 650, Tampa, Florida 33609 (“
Guarantor
”) in favor of
KEYBANK NATIONAL ASSOCIATION
, a national banking association, having an address at 11501 Outlook, Suite 300, Overland Park, Kansas 66211 (together with its successors and assigns, “
Lender
”).
Recitals
The following recitals are a material part of this Guaranty:
A. Lender is making a loan in the principal sum of $116,200,000.00 (the “
Loan
”) to DCII-250 Williams Street NW, LLC, a Delaware limited liability company (“
Borrower
”), on or about the date of this Guaranty. Guarantor has a significant financial interest in Lender’s making of the Loan to Borrower, and will realize significant financial benefit from the Loan. The Loan is evidenced by a Loan Agreement of even date herewith between Borrower and Lender (the “
Loan Agreement
”) and a Promissory Note (the “
Note
”) of even date herewith in the principal amount of the Loan from Borrower to Lender and is secured in part by one or more mortgages/deeds of trust/deeds to secure debt (individually and collectively, the “
Security Instrument
”) encumbering Borrower’s interest in certain property which is commonly known as The American Cancer Society Center located at 250 Williams Street, Atlanta, Fulton County, Georgia (the real estate, together with all improvements thereon and personal property associated therewith, is hereinafter collectively called the “
Property
”). The Loan Agreement, Note, Security Instrument, and all other documents and instruments existing now or after the date hereof that evidence, secure or otherwise relate to the Loan, including this Guaranty, any assignments of leases and rents, other assignments, security agreements, financing statements, other guaranties, indemnity agreements (including environmental indemnity agreements), letters of credit, or escrow/holdback or similar agreements or arrangements, together with all amendments, modifications, substitutions or replacements thereof, are sometimes herein collectively referred to as the “
Loan Documents
” or individually as a “
Loan Document
.” The Loan Documents are hereby incorporated by this reference as if fully set forth in this Guaranty.
B. Lender has required that Guarantor guaranty to Lender the payment of Borrower’s liabilities pursuant to Section 9.3 of the Loan Agreement (the “
Recourse Liabilities
”).
C. Lender is unwilling to make the Loan to Borrower absent this Guaranty.
Agreement
In consideration of Lender’s agreement to make the Loan to Borrower and other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged, Guarantor hereby states and agrees as follows:
1.
Request to Make Loan
. Guarantor hereby requests that Lender make the Loan to Borrower and that Lender extend credit and give financial accommodations to Borrower, as Borrower may desire and as Lender may grant, from time to time, whether to the Borrower alone or to the Borrower and others, and specifically to make the Loan described in the Loan Documents.
2.
Guaranty of Liabilities.
2.1 Guarantor hereby absolutely and unconditionally guarantees full and punctual payment and performance when due of the following (collectively, the “
Liabilities
”): (i) the Recourse Liabilities (whether arising under the original Loan or any extension, modification, future advance, increase, amendment or modification thereof); (ii) interest due on amounts owing under any such Recourse Liabilities at the Default Rate, and (iii) all expenses, including reasonable attorneys’ fees, incurred by Lender in connection with the enforcement of any of Lender’s rights under this Guaranty. Notwithstanding anything to the contrary contained in this Guaranty or the other Loan Documents, if Lender converts any portion of the Loan to subordinate financing (including B-notes, junior participation interests and one or more tranches of mezzanine debt), Guarantor shall have no liability under this Guaranty resulting solely from actions taken by the holder of such subordinate financing (and any Affiliate thereof) following foreclosure on the subordinate financing by such respective holder of such subordinate financing.
2.2 Upon the request of Lender, Guarantor shall immediately pay or perform the Liabilities when they or any of them become due or are to be paid or performed under the term of any of the Loan Documents. Any amounts received by Lender from any sources and applied by Lender towards the payment of the Liabilities shall be applied in such order of application as Lender may from time to time elect. All Liabilities shall conclusively be presumed to have been created, extended, contracted, or incurred by Lender in reliance upon this Guaranty and all dealings between Borrower and Lender shall likewise be presumed to be in reliance upon this Guaranty.
2.3 For the purpose of this Guaranty, “
Administration and Enforcement Expenses
” shall mean all fees and expenses incurred at any time or from time to time by Lender, including legal (whether for the purpose of advice, negotiation, documentation, defense, enforcement or otherwise), accounting, financial advisory, auditing, rating agency, appraisal, valuation, title or title insurance, engineering, environmental, collection agency, or other expert or consulting or similar services, in connection with: (a) the origination of the Loan, including the negotiation and preparation of the Loan Documents and any amendments or modifications of the Loan or the Loan Documents, whether or not consummated; (b) the administration, servicing or enforcement of the Loan or the Loan Documents, including any request for interpretation or modification of the Loan Documents or any matter related to the Loan or the servicing thereof (which shall include the consideration of any requests for consents, waivers, modifications, approvals, lease reviews or similar matters and any proposed transfer of the Property or any interest
therein), (c) any litigation, contest, dispute, suit, arbitration, mediation, proceeding or action (whether instituted by or against Lender, including actions brought by or on behalf of Borrower or Borrower’s bankruptcy estate or any indemnitor or guarantor of the Loan or any other person) in any way relating to the Loan or the Loan Documents including in connection with any bankruptcy, reorganization, insolvency, or receivership proceeding; (d) any attempt to enforce any rights of Lender against Borrower or any other person that may be obligated to Lender by virtue of any Loan Document or otherwise whether or not litigation is commenced in pursuance of such rights; and (e) protection, enforcement against, or liquidation of the Property or any other collateral for the Loan, including any attempt to inspect, verify, preserve, restore, collect, sell, liquidate or otherwise dispose of or realize upon the Loan, the Property or any other collateral for the Loan. Provided no Event of Default has occurred, fees and expenses related solely to origination and administration of the Loan shall be limited to reasonable fees and expenses, but charges of rating agencies, governmental entities or other third parties that are outside of the control of Lender shall not be subject to the reasonableness standard.
3.
Additional Advances, Renewals, Extensions and Releases
. Guarantor hereby agrees and consents that, without notice to or further consent by Guarantor, Lender may make additional advances with respect to the Loan or the Property, and the obligations of Borrower or any other party in connection with the Loan may be renewed, extended, modified, accelerated or released by Lender as Lender may deem advisable, and any collateral the Lender may hold or in which the Lender may have an interest may be exchanged, sold, released or surrendered by it, as it may deem advisable, without impairing or affecting the obligations of Guarantor hereunder in any way whatsoever.
4.
Waivers.
4.1 Guarantor hereby waives each of the following: (a) any and all notice of the acceptance of this Guaranty or of the creation, renewal or accrual of any Liabilities or the Debt, present or future (including any additional advances made by Lender under the Loan Documents); (b) the reliance of Lender upon this Guaranty; (c) notice of the existence or creation of any Loan Document or of any of the Liabilities or the Debt; (d) protest, presentment, demand for payment, notice of default or nonpayment, notice of dishonor to or upon Guarantor, Borrower or any other party liable for any of the Liabilities or the Debt; (e) any and all other notices or formalities to which Guarantor may otherwise be entitled, including notice of Lender’s granting the Borrower any indulgences or extensions of time on the payment of any Liabilities or the Debt; and (f) promptness in making any claim or demand hereunder.
4.2 No delay or failure on the part of Lender in the exercise of any right or remedy against either Borrower or Guarantor shall operate as a waiver thereof, and no single or partial exercise by Lender of any right or remedy herein shall preclude other or further exercise thereof or of any other right or remedy whether contained herein or in the Note or any of the other Loan Documents. No action of Lender permitted hereunder shall in any way impair or affect this Guaranty.
4.3 Guarantor acknowledges and agrees that Guarantor shall be and remain absolutely and unconditionally liable for the full amount of all Liabilities notwithstanding any of the following, and Guarantor waives any defense or counterclaims to which Guarantor may be
entitled, based upon any of the following, in any proceeding (without prejudice to assert the same in a separate cause of action at a later time):
(a) Any or all of the Liabilities being or hereafter becoming invalid or otherwise unenforceable for any reason whatsoever or being or hereafter becoming released or discharged, in whole or in part, whether pursuant to a proceeding under any bankruptcy or insolvency laws or otherwise; or
(b) Lender failing or delaying to properly perfect or continue the perfection of any security interest or lien on any property which secures any of the Liabilities, or to protect the property covered by such security interest or enforce its rights respecting such property or security interest; or
(c) Lender failing to give notice of any disposition of any property serving as collateral for any Liabilities or failing to dispose of such collateral in a commercially reasonable manner; or
(d) Any other circumstance that might otherwise constitute a defense other than payment in full of the Liabilities.
5.
Guaranty of Payment
. Guarantor agrees that Guarantor’s liability hereunder is primary, absolute and unconditional without regard to the liability of any other party. This Guaranty shall be construed as an absolute, irrevocable and unconditional guaranty of payment and performance (and not a guaranty of collection), without regard to the validity, regularity or enforceability of any of the Liabilities.
6.
Guaranty Effective Regardless of Collateral
. This Guaranty is made and shall continue as to any and all Liabilities without regard to any liens or security interests in any collateral, the validity, effectiveness or enforceability of such liens or security interests, or the existence or validity of any other guaranties or rights of Lender against any other obligors. Any and all such collateral, security, guaranties and rights against other obligors, if any, may from time to time without notice to or consent of Guarantor, be granted, sold, released, surrendered, exchanged, settled, compromised, waived, subordinated or modified, with or without consideration, on such terms or conditions as may be acceptable to Lender, without in any manner affecting or impairing the liabilities of Guarantor. Without limiting the generality of the foregoing, it is acknowledged that Guarantor’s liability hereunder shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release of record of the Security Instrument.
7.
Additional Credit
. Credit or financial accommodation may be granted or continued from time to time by Lender to Borrower regardless of Borrower’s financial or other condition at the time of any such grant or continuation, without notice to or the consent of Guarantor and without affecting Guarantor’s obligations hereunder. Lender shall have no obligation to disclose or discuss with Guarantor its assessment of the financial condition of Borrower.
8.
Rescission of Payments
. If at any time payment of any of the Liabilities or any part thereof is rescinded or must otherwise be restored or returned by Lender upon the insolvency,
bankruptcy or reorganization of Borrower or under any other circumstances whatsoever, this Guaranty shall, upon such rescission, restoration or return, continue to be effective or shall (if previously terminated) be reinstated, as the case may be, as if such payment had not been made.
9.
Additional Waivers
. So long as any portion of the Liabilities or Debt remains unpaid or any portion of the Liabilities or Debt (or any security therefor) that has been paid to Lender remains subject to invalidation, reversal or avoidance as a preference, fraudulent transfer or for any other reason whatsoever (whether under bankruptcy or non-bankruptcy law) to being set aside or required to be repaid to Borrower as a debtor in possession or to any trustee in bankruptcy, Guarantor irrevocably waives (a) any rights which it may acquire against Borrower by way of subrogation under this Guaranty or by virtue of any payment made hereunder (whether contractual, under the Bankruptcy Code or similar state or federal statute, under common law, or otherwise), (b) all contractual, common law, statutory or other rights of reimbursement, contribution, exoneration or indemnity (or any similar right) from or against Borrower that may have arisen in connection with this Guaranty, (c) any right to participate in any way in the Loan Documents or in the right, title and interest in any collateral securing the payment of Borrower’s obligations to Lender, and (d) all rights, remedies and claims relating to any of the foregoing. If any amount is paid to Guarantor on account of subrogation rights or otherwise, such amount shall be held in trust for its benefit and shall forthwith be paid to Lender to be applied to the Debt, whether matured or unmatured, in such order as Lender shall determine.
10.
Independent Obligations
. The obligations of Guarantor are independent of the obligations of Borrower, and a separate action or actions for payment, damages or performance may be brought and prosecuted against Guarantor, whether or not an action is brought against Borrower or the security for Borrower’s obligations, and whether or not Borrower is joined in any such action or actions. Guarantor expressly waives any requirement that Lender institute suit against Borrower or any other persons, or exercise or exhaust its remedies or rights against Borrower or against any other person, other guarantor, or other collateral securing all or any part of the Liabilities, prior to enforcing any rights Lender has under this Guaranty or otherwise. Lender may pursue all or any such remedies at one or more different times without in any way impairing its rights or remedies hereunder. Guarantor hereby further waives the benefit of any statute of limitations affecting its liability hereunder or the enforcement hereof. If there shall be more than one guarantor with respect to any of the Liabilities, then the obligations of each such guarantor shall be joint and several.
11.
Subordination of Indebtedness of Borrower to Guarantor
. Any indebtedness of Borrower to Guarantor now or hereafter existing is hereby subordinated to the prior payment in full of the Liabilities. Guarantor agrees that following the occurrence and during the continuance of an Event of Default, until the Liabilities and Debt have been paid in full, Guarantor will not seek, accept or retain for Guarantor’s own account, any payment (whether for principal, interest, or otherwise) from Borrower for or on account of such subordinated debt. Following the occurrence and during the continuance of an Event of Default, any payments to Guarantor on account of such subordinated debt shall be collected and received by Guarantor in trust for Lender and shall be paid over to Lender on account of the Liabilities or Debt, as Lender determines in its discretion, without impairing or releasing the obligations of Guarantor hereunder. Guarantor hereby unconditionally
and irrevocably agrees that (a) Guarantor will not at any time while the Liabilities remain unpaid, assert against Borrower (or Borrower’s estate in the event that Borrower becomes the subject of any case or proceeding under any federal or state bankruptcy or insolvency laws) any right or claim to indemnification, reimbursement, contribution or payment for or with respect to any and all amounts Guarantor may pay or be obligated to pay Lender, including the Liabilities, and any and all obligations which Guarantor may perform, satisfy or discharge, under or with respect to the Guaranty, and (b) Guarantor subordinates to the Debt all such rights and claims to indemnification, reimbursement, contribution or payment that Guarantor may have now or at any time against Borrower (or Borrower’s estate in the event that Borrower becomes the subject of any case or proceeding under any federal or state bankruptcy or insolvency laws).
12.
Claims in Bankruptcy
. Guarantor shall file all claims against Borrower in any bankruptcy or other proceeding in which the filing of claims is required by law upon any indebtedness of Borrower to Guarantor and will assign to Lender all right of Guarantor thereunder. Guarantor hereby irrevocably appoints Lender its attorney-in-fact, which appointment is coupled with an interest, to file any such claim that Guarantor may fail to file, in the name of Guarantor or, in Lender’s discretion, to assign the claim and to cause proof of claim to be filed in the name of Lender’s nominee. In all such cases, whether in administration, bankruptcy or otherwise, the person or persons authorized to pay such claim shall pay to Lender the full amount thereof and, to the full extent necessary for that purpose, Guarantor hereby assigns to Lender all of Guarantor’s rights to any such payments or distributions to which Guarantor would otherwise be entitled.
13.
Guarantor’s Representations and Warranties
. Guarantor represents, warrants and covenants to and with Lender that:
13.1 There is no action or proceeding pending or, to the knowledge of Guarantor, threatened against Guarantor before any court or administrative agency which might result in any material adverse change in the business or financial condition of Guarantor or in the property of Guarantor;
13.2 Guarantor has filed all Federal and state income tax returns which Guarantor has been required to file, and has paid all taxes as shown on said returns and on all assessments received by Guarantor to the extent that such taxes have become due;
13.3 Neither the execution nor delivery of this Guaranty nor fulfillment of nor compliance with the terms and provisions hereof will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in the creation of any lien, charge or encumbrance upon any property or assets of Guarantor under any agreement or instrument to which Guarantor is now a party or by which Guarantor may be bound;
13.4 This Guaranty is a valid and legally binding agreement of Guarantor and is enforceable against Guarantor in accordance with its terms;
13.5 Guarantor has either (i) examined the Loan Documents or (ii) has had an opportunity to examine the Loan Documents and has waived the right to examine them; and
13.6 Guarantor has the full power, authority, and legal right to execute and deliver this Guaranty. If Guarantor is not an individual, (i) Guarantor is duly organized, validly existing and in good standing under the laws of the state of its formation, and (ii) the execution, delivery and performance of this Guaranty by Guarantor has been duly and validly authorized and the person(s) signing this Guaranty on Guarantor’s behalf has been validly authorized and directed to sign this Guaranty.
14.
Notice of Litigation
. Guarantor shall promptly give Lender notice of all litigation or proceedings before any court or Governmental Authority affecting Guarantor or its property, except litigation or proceedings which, if adversely determined, would not have a material adverse effect on the financial condition or operations of Guarantor or its ability to perform any of its obligations hereunder.
15.
Access to Records
. Guarantor shall give Lender and its representatives access to, and permit Lender and such representatives to examine, copy or make extracts from, any and all books, records and documents in the possession of Guarantor relating to the performance of Guarantor’s obligations hereunder and under any of the Loan Documents, all at such times and as often as Lender may reasonably request. If Guarantor is not an individual, Guarantor shall continuously maintain its existence and shall not dissolve or permit its dissolution.
16.
Assignment by Lender
. In connection with any sale, assignment or transfer of the Loan, Lender may sell, assign or transfer this Guaranty and all or any of its rights, privileges, interests and remedies hereunder to any other person or entity whatsoever without notice to or consent by Guarantor, and in such event the assignee shall be entitled to the benefits of this Guaranty and to exercise all rights, interests and remedies as fully as Lender.
17.
Termination
. This Guaranty shall terminate only when all of the Liabilities and the Debt have been paid in full, including all interest thereon, late charges and other charges and fees included within the Liabilities and the Debt. When the conditions described above have been fully met, Lender will, upon request, furnish to Guarantor a written cancellation of this Guaranty.
18.
Notices
. All notices, consents, approvals and requests required or permitted hereunder shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) certified or registered United States mail, postage prepaid, return receipt requested or (b) expedited prepaid delivery service, either commercial or United States Postal Service, with proof of attempted delivery, or (c) by telecopier (with answer back acknowledged), addressed as follows (or at such other address and Person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the manner provided for in this Section):
|
|
If to Lender:
|
KeyBank National Association
|
11501 Outlook, Suite 300
Overland Park, Kansas 66211
Facsimile No.: 877-379-1625
Attention: Loan Servicing
|
|
with a copy to:
|
Dan Flanigan
|
POLSINELLI
900 West 48
th
Place, Suite 900
Kansas City, Missouri 64112
Facsimile No.: 816-753-1536
|
|
If to Guarantor:
|
Carter Validus Operating Partnership II, LP
|
4890 W. Kennedy Boulevard, Suite 650
Tampa, Florida 33609
Attention: Lisa Drummond
Facsimile No.: 813-287-0397
|
|
with a copy to:
|
GrayRobinson, P.A.
|
401 East Jackson Street, Suite 2700
Tampa, Florida 33602
Attention: Stephen Kussner
Facsimile No.: 813-273-5145
A notice shall be deemed to have been given: in the case of hand delivery, at the time of delivery; in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day; or in the case of expedited prepaid delivery, upon the first attempted delivery on a Business Day; or in the case of telecopy, upon sender’s receipt of a machine-generated confirmation of successful transmission after advice by telephone to recipient that a telecopy notice is forthcoming.
19.
Waiver of Jury Trial.
TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, GUARANTOR HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE NOTE, THE SECURITY INSTRUMENT OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY GUARANTOR, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH RIGHT TO TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR.
20.
Miscellaneous
. This Guaranty shall be a continuing guaranty. This Guaranty shall bind the heirs, successors and assigns of Guarantor (except that Guarantor may not assign his, her, or its liabilities under this Guaranty without the prior written consent of Lender, which consent Lender may in its discretion withhold), and shall inure to the benefit of Lender, its successors, transferees and assigns. Each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under applicable law. Neither this Guaranty nor any of the terms hereof, including the provisions of this Section, may be terminated, amended, supplemented, waived or
modified orally, but only by an instrument in writing executed by the party against which enforcement of the termination, amendment, supplement, waiver or modification is sought, and the parties hereby: (a) expressly agree that it shall not be reasonable for any of them to rely on any alleged, non-written amendment to this Guaranty; (b) irrevocably waive any and all right to enforce any alleged, non-written amendment to this Guaranty; and (c) expressly agree that it shall be beyond the scope of authority (apparent or otherwise) for any of their respective agents to agree to any non-written modification of this Guaranty. This Guaranty may be executed in several counterparts, each of which counterpart shall be deemed an original instrument and all of which together shall constitute a single Guaranty. The failure of any party hereto to execute this Guaranty, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder. As used in this Guaranty, (i) the terms “include,” “including” and similar terms shall be construed as if followed by the phrase “without being limited to,” (ii) any pronoun used herein shall be deemed to cover all genders, and words importing the singular number shall mean and include the plural number, and vice versa, (iii) all captions to the Sections hereof are used for convenience and reference only and in no way define, limit or describe the scope or intent of, or in any way affect, this Guaranty, (iv) no inference in favor of, or against, Lender or Guarantor shall be drawn from the fact that such party has drafted any portion hereof or any other Loan Document, (v) the term “Borrower” shall mean individually and collectively, jointly and severally, each Borrower (if more than one) and shall include the successors (including any subsequent owner or owners of the Property or any part thereof or any interest therein and Borrower in its capacity as debtor-in-possession after the commencement of any bankruptcy proceeding), assigns, heirs, personal representatives, executors and administrators of Borrower, (vi) the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or,” (vii) the words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Guaranty refer to this Guaranty as a whole and not to any particular provision or section of this Guaranty, and (viii) an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by Lender. Wherever Lender’s judgment, consent, approval or discretion is required under this Guaranty or Lender shall have an option, election, or right of determination or any other power to decide any matter relating to the terms of this Guaranty, including any right to determine that something is satisfactory or not (“
Decision Power
”), such Decision Power shall be exercised in the sole and absolute discretion of Lender except as may be otherwise expressly and specifically provided herein. Such Decision Power and each other power granted to Lender upon this Guaranty or any other Loan Document may be exercised by Lender or by any authorized agent of Lender (including any servicer or attorney-in-fact), and Guarantor hereby expressly agrees to recognize the exercise of such Decision Power by such authorized agent. If any provision of this Guaranty is held invalid or unenforceable by final and unappealable judgment of the court having jurisdiction over the matter and persons, such provisions shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision, its application in other circumstances, or the remaining provisions of this Guaranty. Any capitalized terms used in this Guaranty and not otherwise defined herein shall have the meaning set forth in the Loan Agreement.
21.
Applicable Law; Jurisdiction and Venue
.
(a) LENDER HAS OFFICES IN THE STATE OF NEW YORK AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE
OF NEW YORK (“
GOVERNING STATE
”), WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS GUARANTY, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED PURSUANT TO THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, GUARANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS GUARANTY, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS GUARANTY, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE OTHER LOAN DOCUMENTS (“
ACTION
”) MAY AT LENDER’S OPTION BE INSTITUTED IN (AND IF ANY ACTION IS ORIGINALLY BROUGHT IN ANOTHER VENUE, THE ACTION SHALL AT THE ELECTION OF LENDER BE TRANSFERRED TO) ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND GUARANTOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE OR FORUM NON CONVENIENS OF ANY SUCH ACTION, AND GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY ACTION. GUARANTOR DOES HEREBY DESIGNATE AND APPOINT:
Corporation Service Company
1180 Avenue of the Americas, Suite 210
New York, NY 10036-8401
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE
OF SAID SERVICE MAILED OR DELIVERED TO GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON GUARANTOR IN ANY SUCH ACTION IN THE STATE OF NEW YORK. GUARANTOR (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
22.
OFAC.
Guarantor hereby represents, warrants and covenants that Guarantor is not (nor will be) a person with whom Lender is restricted from doing business under regulations of the Office of Foreign Asset Control (“
OFAC
”) of the Department of the Treasury of the United States of America (including, those Persons named on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order (including, the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and shall not engage in any dealings or transactions or otherwise be associated with such persons. In addition, Guarantor hereby covenants to provide Lender with any additional information that Lender deems necessary from time to time in order to ensure compliance with all applicable laws concerning money laundering and similar activities.
23.
Local Law Provisions.
In the event of any inconsistencies between the terms and conditions of this Section and any other terms and conditions of this Guaranty, the terms and conditions of this Section shall be binding.
23.1
Interest.
Any amounts payable to Lender under this Guaranty shall become immediately due and payable on demand and, if not paid within ten (10) days of such demand therefor, shall bear interest at the lesser of (a) the Default Rate or (b) the Maximum Legal Rate which Guarantor may by law pay or Lender may charge and collect, from the date payment was due, provided that the foregoing shall be subject to the provisions of Article 10 of the Note.
23.2
No Other Party Beneficiary
. This Guaranty is for the sole benefit of the Lender, and is not for the benefit of any other party. Nothing contained in this Guaranty shall be deemed to confer upon anyone other than the Lender any right to insist upon or to enforce the performance or observance of any of the obligations contained herein.
23.3
Time of the Essence
. Time is of the essence with respect to the provisions of this Guaranty. By accepting payment of any sums due hereunder after its due date, Lender does not waive its right to require prompt payment when due of all other sums or to declare a default for failure so to pay.
[NO FURTHER TEXT ON THIS PAGE]
IN WITNESS WHEREOF, Guarantor has executed or caused this Guaranty to be executed as of the day and year first above written.
GUARANTOR:
CARTER VALIDUS OPERATING PARTNERSHIP II, LP,
a Delaware limited partnership,
By: Carter Validus Mission Critical REIT II, Inc.,
a Maryland corporation,
its General Partner
By:
/s/ Lisa Collado
Name:
Lisa Collado
Title:
Authorized Agent
SIGNATURE PAGE TO GUARANTY AGREEMENT
Exhibit 10.7
PREPARED BY AND UPON RECORDATION RETURN TO:
KEYBANK NATIONAL ASSOCIATION
11501 Outlook, Suite 300
Overland Park, Kansas 66211
Attention: Closing Department/Manager
Loan No. 10171391
DCII-250 WILLIAMS STREET NW, LLC
(
Borrower
)
to
KEYBANK NATIONAL ASSOCIATION
(
Lender
)
______________________________________________________________
ASSIGNMENT OF LEASES AND RENTS
______________________________________________________________
Dated: As of June 15, 2017
|
|
Location:
|
250 Williams Street, Atlanta, Georgia
|
County: Fulton
ASSIGNMENT OF LEASES AND RENTS
THIS ASSIGNMENT OF LEASES AND RENTS
(this “
Assignment
”) is made as of June 15, 2017, by and between
DCII-250 WILLIAMS STREET NW, LLC,
a Delaware limited liability company, having an address at 4890 W. Kennedy Boulevard, Suite 650, Tampa, Florida 33609 (“
Borrower
”) and
KEYBANK NATIONAL ASSOCIATION
, a national banking association, having an address at 11501 Outlook, Suite 300, Overland Park, Kansas 66211 (together with its successors and assigns, “
Lender
”).
Recitals
The following recitals are a material part of this Assignment:
A. Borrower is the owner of the property legally described on “
Exhibit A
” attached hereto and made a part hereof (the real estate, together with all improvements thereon and personal property associated therewith, is hereinafter called the “
Property
”).
B. Lender is prepared to make a loan (the “
Loan
”) to Borrower in the principal amount of $116,200,000.00 pursuant to a Loan Agreement of even date herewith between Lender and Borrower (the “
Loan Agreement
”), which Loan shall be evidenced by that certain Promissory Note of even date herewith given by Borrower in favor of Lender (the “
Note
”) and secured by, among other things, one or more mortgages/deeds of trust/deeds to secure debt, dated as of the date hereof given by Borrower to Lender and encumbering the Property (individually and collectively, the “
Security Instrument
”), and the Loan Agreement, the Note, the Security Instrument, this Assignment and all other documents evidencing or securing the Loan (including all additional mortgages, deeds to secure debt and security instruments) or executed or delivered in connection therewith, are hereinafter referred to collectively as the “
Loan Documents
”). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Loan Agreement.
C. Borrower desires to assign to Lender the rents, leases and profits of and from the Property and the proceeds therefrom, as primary and not as secondary security for the payment of the Note and the Debt, and for the performance of the obligations in the Loan Agreement, Security Instrument and the other Loan Documents
.
Agreement
For good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:
1.
Assignment.
Borrower absolutely and unconditionally assigns, transfers, sets over and conveys to Lender the following, absolutely and not as additional security:
(a)
Leases and Other Agreements
. All existing and future written and oral leases, subleases, tenancies, subtenancies, licenses, contracts, contract rights, and occupancy and all other agreements, whether or not in writing, affecting the use, enjoyment or occupancy of the Property, now or hereafter made, whether before or after the filing by or against Borrower of any petition for
relief under 11 U.S.C. § 101
et seq.
, as the same may be amended from time to time (the “
Bankruptcy Code
”), together with any extension, renewal or replacement of the same (collectively the “
Leases
”); this Assignment of all such present and future leases and present and future agreements being effective without further or supplemental assignment.
(b)
Rents
. All rents, additional rents, revenues, payments (including payments in connection with the exercise of any purchase option or termination rights), income, issues and profits (including all oil and gas or other mineral royalties and bonuses), deposits, accounts and other benefits arising from the Leases or otherwise from the use, enjoyment and occupancy of the Property and any cash or security deposited in connection therewith, whether paid or accruing before or after the filing by or against Borrower of any petition for relief under the Bankruptcy Code (collectively, the “
Rents
”).
(c)
Bankruptcy Claims
. All claims and rights to the payment of damages and other claims arising from any rejection by a lessee of any Lease under the Bankruptcy Code (the “
Bankruptcy Claims
”).
(d)
Lease Guaranties
. All claims and rights under any and all lease guaranties, letters of credit and any other credit support (individually, a “
Lease Guaranty
,” and collectively, the “
Lease Guaranties
”) given to Borrower by any guarantor in connection with any of the Leases (individually, a “
Lease Guarantor
,” and collectively, the “
Lease Guarantors
”).
(e)
Proceeds
. All proceeds from any sale or other disposition of the Leases, the Rents, the Lease Guaranties and the Bankruptcy Claims.
(f)
Other Rights of Lessor
. All rights, powers, privileges, options and other benefits of Borrower as lessor under the Leases and beneficiary under the Lease Guaranties, including the immediate and continuing right to make claim for, receive, collect and apply all Rents payable or receivable under the Leases and all sums payable under the Lease Guaranties or pursuant thereto (and to apply the same to the payment of the Debt), and to do all other things which Borrower or any lessor is or may become entitled to do under the Leases or the Lease Guaranties.
(g)
Entry and Possession
. The right, at Lender's option, upon revocation of the license granted herein, to enter upon the Property in person, by agent or by court-appointed receiver, to collect the Rents and enforce the Leases.
(h)
Power of Attorney
. Borrower's irrevocable power of attorney, coupled with an interest, to take any and all of the actions set forth in this Assignment and any or all other actions designated by Lender for the proper management and preservation of the Property.
(i)
Other Rights and Agreements
. Any and all other rights of Borrower in and to the items set forth in subsections (a) through (h) above, and all amendments, modifications, replacements, renewals, extensions, supplements, restatements and substitutions thereof.
2.
Debt.
This Assignment secures the Debt. Nothing herein shall be construed to obligate Lender to make any renewals or additional loans or advances, including increasing the amount of the Note.
3.
Term.
This Assignment shall remain in effect until the Debt and all other obligations evidenced by the Note or advanced under the Loan Documents are paid in full, or this Assignment is voluntarily released by Lender. Upon payment in full of the Debt and the delivery and recording of a satisfaction or discharge of Security Instrument duly executed by Lender, this Assignment shall become null and void and shall be of no further force and effect.
4.
Events of Default.
The occurrence of any of the following shall constitute an “
Event of Default
” under this Assignment: (a) the failure of Borrower to perform or to observe any agreement, covenant, or condition required under this Assignment, which failure is not cured within twenty (20) days after written notice from Lender to Borrower (provided that Borrower shall not be entitled to a cure period hereunder if such breach or default is not capable of being cured as determined by Lender); (b) the breach by Borrower of any representation or warranty given or made hereunder by Borrower or in any writing furnished or to be furnished by Borrower under this Assignment; or (c) the occurrence of an Event of Default under any of the Loan Documents.
5.
License to Borrower Prior to Default.
Notwithstanding that this Assignment is an absolute assignment of the Leases and Rents and not merely the collateral assignment of, or the grant of a lien or security interest in the Leases and Rents, Lender hereby grants to Borrower an exclusive license revocable upon occurrence of an Event of Default to possess, use and enjoy the Property and to collect and retain the Rents of and from the Property, unless and until an Event of Default occurs. Even prior to the occurrence of an Event of Default, no Rents or other payment in excess of one month in advance shall be collected or accepted by Borrower without the prior written consent of Lender.
6.
Lender’s Remedies Upon Default.
Upon the occurrence of an Event of Default, Borrower’s license to collect and retain the Rents under
Section 5
above shall immediately terminate. Lender will have the right at its option to enforce and to exercise any or all of its rights under this Assignment or otherwise, but Borrower expressly agrees that Lender’s exercise of any rights hereunder or Lender’s affirmative act to collect the Rents or other income or to acquire possession of the Property shall not be a prerequisite or precondition to the full enforceability of Lender’s rights hereunder.
6.1 Upon the occurrence of an Event of Default, and upon Lender’s election, Borrower shall deliver to Lender all of the original Leases, and all modifications, extensions, renewals, amendments, and other agreements relating thereto and to the Property. Any oral Leases shall be described in a writing delivered by Borrower to Lender.
6.2 Upon the occurrence of an Event of Default, Lender, at its option, and without any notice whatsoever to Borrower, shall have the right and is hereby authorized to: (a) take possession and control of the Property; (b) manage and operate the Property; (c) preserve and maintain the Property; (d) make repairs and improvements to the Property which Lender at its discretion deems necessary; (e) collect all Rents from the Property; (f) enforce the Leases; (g) eject
tenants or repossess personal property, as provided by law, for breaches of the conditions of the Leases; (h) in the name of either Borrower or Lender enter into real or personal property leases, subleases or tenancy agreements, or other contracts or agreements, with such third parties as Lender may at its discretion select, and upon such terms and conditions as Lender in its discretion may determine; (i) sue for unpaid rents, payments or proceeds in the name of Borrower or Lender; (j) maintain actions for possession of property or for rent; (k) compromise or give acquittance for rents, payments or proceeds that may become due; (l) maintain suits on contracts and agreements; (m) delegate any and all rights and powers given to Lender by this Assignment; and (n) use such measures, legal or equitable, as in its discretion may carry out and effectuate the provisions of this Assignment.
In addition, upon the occurrence of an Event of Default, Lender may, at its option, and without any notice whatsoever to Borrower, and without regard to the value of the Property or the adequacy of the Property (together with any other property securing the Debt) to secure repayment of the Debt, have a receiver appointed to do all of the actions set forth in the immediately preceding paragraph and to, with the consent of Lender, dispose (by lease, sale or otherwise) of some or all of the Property in the course of the proceeding in which such receiver is appointed.
All such actions shall be taken at the expense of the Borrower, who agrees to reimburse Lender for all amounts expended, together with interest thereon from the date of expenditure at the Default Rate stated in the Note, upon demand.
7.
Appointment.
Borrower irrevocably appoints Lender its true and lawful attorney-in-fact, which appointment is coupled with an interest, exercisable following the occurrence of an Event of Default, to execute any or all of the rights or powers described in this Assignment, with the same force and effect as if executed by the Borrower, and Borrower ratifies and confirms any and all acts done or omitted to be done by Lender, its agents, servants, employees or attorneys under the authority of such power of attorney.
8.
Instructions to Lessees.
This Assignment constitutes an irrevocable direction to and full authority from Borrower to any lessee, tenant, subtenant, occupant of premises, or other contracting party to pay directly to Lender, upon Lender’s request, all Rents and other amounts which may be or become due to Borrower. No proof of the occurrence of an Event of Default shall be required. Any lessee, tenant, subtenant or other contracting party is hereby irrevocably authorized by Borrower to rely upon and comply with any notice or demand by the Lender for the payment to the Lender of any rental or other amounts which may be or become due under its Lease, or for the performance of any obligations under such Lease. Borrower irrevocably agrees that the lessee, tenant, subtenant, or other contracting party following such instructions from Lender shall not be liable to Borrower or any person claiming under Borrower, for making any payment or rendering any performance to Lender. The lessee, tenant, subtenant or other party to any Lease shall have no obligation or right to inquire whether any Event of Default has actually occurred or is then existing. By its execution of this Assignment, Borrower irrevocably makes and delivers the aforementioned instructions.
9.
Application of Income.
The Rents, payments, proceeds and income collected by Lender may be applied as follows, in whatever order Lender in its discretion may determine:
(a) To the payment of the operating expenses of the Property, including costs of management (which shall include reasonable compensation to the Lender and its agent or agents, if management be delegated to an agent or agents); improvements, alterations, replacements and repairs to the Property; placing the Property in such condition as will, in the judgment of Lender, make it readily rentable; premiums on fire, flood, tornado, casualty, liability or other insurance if Lender deems such insurance necessary; and any claims for damages arising out of the ownership or management of the Property.
(b) To the payment of the actual costs and expenses incurred by Lender in collecting such Rents, payments, proceeds and income, including commissions paid to secure tenants or lessees; attorneys’ fees incurred in recovering the Property or any personal property from any lessee or other contracting party for any cause whatsoever and in the collection of unpaid Rents, payments, income or proceeds; and attorneys’ fees incurred by Lender in connection with the enforcement of this Assignment or in protecting Lender or its interest in any of the collateral securing the Loan (including attorney’s fees and litigation expenses related to or arising out of any lawsuit or proceeding brought by or against Lender in any court or other forum, including actions or proceedings brought by or on behalf of Borrower’s bankruptcy estate or any guarantor or indemnitor).
(c) To the payment of taxes, special assessments and insurance premiums which become due and delinquent on the Property; all obligations contained in the Loan Documents; and any liens or encumbrances on the Property or any personal property of Borrower.
(d) To the payment of bills for reasonable and necessary repairs and improvements on the Property.
(e) To the payment of the Debt and any and all indebtedness, together with interest, evidenced by the Loan Documents, or any deficiency which may result from any foreclosure sale, in such amount and manner as Lender shall determine in its discretion.
10.
Lien on Property.
If the Rents, payments, income and proceeds from the Property are insufficient to reimburse Lender for any expenses incurred by Lender pursuant to this Assignment, any unpaid disbursements shall be a lien on the Property with priority equal to the lien of the Security Instrument.
11.
Lender as Agent.
Lender is acting solely as agent of Borrower in taking any actions in connection with the Property. Lender assumes no liability in any other capacity. Lender shall not be obligated to perform any obligation or duty, or discharge any liability under any of the Leases under or by reason of this Assignment.
12.
Bankruptcy.
12.1 If Lender determines at any time and from time to time that it is necessary or desirable to protect Lender’s interest in the Loan and the Property, Lender shall have the right to proceed in its own name or in the name of Borrower in respect of any claim, suit, action or proceeding relating to the rejection of any Lease, including the right to file and prosecute, to the
exclusion of Borrower, any proofs of claim, complaints, motions, applications, notices and other documents, in any case in respect of the lessee under such Lease under the Bankruptcy Code. Borrower shall give Lender notice promptly upon Borrower learning that a petition under the Bankruptcy Code has been filed by or against Tenant.
12.2 If there shall be filed by or against Borrower a petition under the Bankruptcy Code, and Borrower, as lessor under any Lease, shall determine to reject such Lease pursuant to Section 365(a) of the Bankruptcy Code, then Borrower shall give Lender not less than ten (10) days' prior notice of the date on which Borrower shall apply to the bankruptcy court for authority to reject the Lease. Lender shall have the right, but not the obligation, to serve upon Borrower within such ten (10) day period a notice stating that (i) Lender demands that Borrower assume and assign the Lease to Lender pursuant to Section 365 of the Bankruptcy Code, and (ii) Lender covenants to cure or provide adequate assurance of future performance under the Lease. If Lender serves upon Borrower the notice described in the preceding sentence, Borrower shall not seek to reject the Lease and shall comply with the demand provided for in clause (i) of the preceding sentence within thirty (30) days after the notice shall have been given, subject to the performance by Lender of the covenant provided for in clause (ii) of the preceding sentence.
13.
No Liability of Lender; Indemnification of Lender.
13.1 Lender shall not in any way be liable to Borrower for any action or inaction of Lender, its employees or agents with respect to Lender’s exercise of the powers granted Lender by this Assignment, including any liability relating to the renting or leasing of the Property after an Event of Default by Borrower, or damage to the Property (unless caused by the willful misconduct or gross negligence of Lender). Borrower expressly waives and releases Lender from all such liability.
13.2 Lender shall not be responsible for any failure to perform any covenants in any of the Leases, either before or after the exercise of any assignments or remedies contained in this Assignment. Lender shall not be responsible for the condition or operation of the Property or for any damage or harm to the Property or any additions, improvements, or fixtures to the Property. This Assignment shall not operate to place upon Lender any obligation for the control, care, management or repair of the Property, or for the discovery of or correction of any dangerous or defective condition on the Property, including any environmental matters described in the separate Environmental Indemnity Agreement, or any negligence in the management, upkeep, repair or control of the Property. Lender also shall not be liable to any person or entity for any accidents or other occurrences occurring on or with respect to any part of the Property, except for any such accidents or other occurrences resulting from the willful misconduct or grossly negligent actions of Lender.
13.3 Borrower shall save, defend, indemnify and hold Lender and its agents, employees, contractors, and managers harmless from and against any and all costs, expenses, liability, damages, claims or assertions that may be incurred by or made against Lender or any such persons or entities arising from or related to the Leases or Rents, or by reason of this Assignment, including any claims by reason of any alleged obligations and undertakings on Lender’s part to perform or discharge any of the terms, covenants or agreements contained in the Leases, or any
right to maintain, inspect, manage or otherwise exercise any control or supervision over the Property or the condition thereof, or any claims described in the preceding subsection of this Assignment, except for any claims resulting from the willful misconduct or grossly negligent actions of Lender. Should Lender incur any such liability, loss or damage, Borrower shall on demand pay to Lender any and all cost, expense, liability, or damage arising therefrom plus costs, expenses and attorneys’ fees and expenses, with interest from the date the cost or loss is incurred, at the Default Rate stated in the Note, and all of the foregoing shall be secured by this Assignment and by the other Loan Documents.
14.
Remedies Cumulative.
The remedies provided in this Assignment and in the other Loan Documents are cumulative and not mutually exclusive. The remedies can be exercised successively or concurrently, as many times as and as often as the occurrence of an occasion for which Lender is entitled to a remedy under the Loan Documents or applicable law, and the exercise of any one or more remedies shall not be a waiver of or preclude the exercise of any one or more remedies at the same or any later time for the same or any later default.
15.
Continuing Effect.
No judgment or decree which may be entered on any Debt secured or intended to be secured by the Security Instrument
or any other Loan Documents shall lessen the effect of this instrument, but this Assignment shall continue in full effect until the full payment and discharge of (a) the Debt secured by the Security Instrument
or any other Loan Documents, and (b) all expenses incurred by Lender relating to the Property. This Assignment shall remain in full effect during the pendency of any foreclosure proceedings under any of the other Loan Documents, both before and after sale, until the issuance of a deed to the foreclosure sale purchaser.
16.
Further Assurances; Receivership and Other Proceedings.
16.1 Upon Lender’s request, Borrower shall execute any documents or instruments Lender may request, for the purpose of providing further evidence of this Assignment, to carry out the intent and terms of this Assignment, to evidence other amounts that may become payable from Borrower to Lender as referred to in this Assignment, or to accomplish any other purpose deemed appropriate by Lender.
16.2 Borrower consents and authorizes any court of competent jurisdiction to issue,
ex parte
and without any notice to Borrower or its counsel (which notice is hereby waived), any orders that may be appropriate, in Lender’s discretion, to enforce the terms of this Assignment or to grant Lender such powers and authority as Lender may need to enforce this Assignment, including the appointment of a receiver for the Property. No bond shall be required of Lender. The parties recognize and agree that time will be of the essence in any such proceeding. Such receiver shall be entitled without notice to take possession of and protect the Property, operate the same, collect the Rents therefrom, and otherwise exercise any rights or authority granted to Borrower in this Assignment or any other Loan Documents. Lender’s right to the appointment of a receiver shall continue regardless of the value of the Property as security for the Debt or the solvency of any person or corporation liable for the payment of such amount. Notwithstanding the appointment of any receiver, liquidator or trustee for Borrower, or of any of its property, or of the Property, Lender
shall be entitled to retain possession and control of all Property now or hereafter held under this Assignment and any other Loan Documents, including the Rents.
17.
[Intentionally Deleted].
18.
Legal Challenges.
Borrower shall appear for itself (and for Lender, if Lender so requests) in any action or proceeding affecting the Property, the Leases, the Rents or this Assignment, and shall at its own cost vigorously defend title to the Property and the enforceability of the Leases and this Assignment against all legal challenges. Where necessary or where requested by Lender, Borrower shall at its own cost institute any legal actions respecting the same.
19.
Set-Off.
Upon default by Borrower under this Assignment, Lender (or the holder or owner of any Debt secured by this Assignment) shall immediately have the right, without further notice to Borrower, to set off against the Note and any other debts secured by this Assignment all debts of Lender (or such holder or owner) to Borrower, whether or not then due.
20.
Notices.
All notices or other written communications hereunder shall be delivered in accordance with Section 10.6 of the Loan Agreement.
21.
Miscellaneous.
The following provisions are additional terms of this Assignment:
21.1 Lender may take or release other security for the payment of the Debt, may release any party primarily or secondarily liable therefor, and may apply any other security held by it to the reduction or satisfaction of the Debt, without prejudice to any of its rights under this Assignment.
21.2 No waiver by Lender of any default shall operate as a waiver of any other default or of the same default on a future occasion.
21.3 All rights and remedies of Lender are cumulative and may be exercised successively or concurrently, and shall inure to the benefit of Lender’s successors and assigns.
21.4 Nothing herein shall be interpreted to make Lender a “mortgagee in possession” in the absence of Lender’s taking of actual possession of the Property. Borrower hereby waives any claims against Lender by reason of Lender’s exercise of any remedies hereunder.
21.5 All obligations of Borrower shall bind its heirs, executors, administrators,
trustees, custodians, successors and assigns.
21.6 In case of any conflict between the terms of this Assignment and the terms of the Security Instrument or Loan Agreement, the terms of the Security Instrument or Loan Agreement shall prevail.
21.7 This Assignment, including this Section, may only be modified or amended by written documents and no oral amendment, waiver, extension or other modification hereof shall be enforceable, and the parties hereby: (a) expressly agree that it shall not be reasonable for any of them to rely on any alleged, non-written amendment to this Assignment; (b) irrevocably waive
any and all right to enforce any alleged, non-written amendment to this Assignment; and (c) expressly agree that it shall be beyond the scope of authority (apparent or otherwise) for any of their respective agents to agree to any non-written modification of this Assignment.
21.8 This Assignment shall be governed in accordance with the governing law and related terms and provisions of Section 10.3 of the Loan Agreement.
21.9 If any provision of this Assignment is held invalid or unenforceable, the holding shall affect only the provision in question and all other provisions of this Assignment shall remain in full force and effect.
21.10 This Assignment may be executed in several counterparts, each of which counterpart shall be deemed an original instrument and all of which together shall constitute a single Assignment.
22.
Definitions; Rules of Construction.
22.1 Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, words used in this Assignment may be used interchangeably in singular or plural form and the word “Borrower” shall mean individually and collectively, jointly and severally, each Borrower (if more than one) and any subsequent owner or owners of the Property or any part thereof or any interest therein and Borrower in its capacity as debtor-in-possession after the commencement of a proceeding under the Bankruptcy Code; “Lender” shall mean “Lender and any subsequent holder of the Note,” the word “Note” shall mean “the Note and any other evidence of indebtedness secured by this Assignment,” the word “person” shall include an individual, corporation, limited liability company, partnership, trust, unincorporated association, government, governmental authority, and any other entity, the word “Property” shall include any portion of the Property and any interest therein, and the phrases “attorneys’ fees” and “counsel fees” shall include any and all attorneys’, paralegal and law clerk fees and disbursements, including fees and disbursements at the pre-trial, trial and appellate levels incurred or paid by Lender (a) in protecting its interest in the Property, the Leases and the Rents, (b) relating to or arising out of any lawsuit or proceeding brought by or against Lender in any court or other forum (including actions or proceedings brought by or on behalf of Borrower’s bankruptcy estate or any guarantor or indemnitor), or (c) in enforcing its rights under this Assignment.
22.2 The following rules of construction shall be applicable for all purposes of this Assignment and all documents or instruments supplemental hereto, unless the context otherwise clearly requires:
(a)
the terms “include,” “including” and similar terms shall be construed as if followed by the phrase “without being limited to”;
(b)
any pronoun used herein shall be deemed to cover all genders, and words importing the singular number shall mean and include the plural number, and vice versa;
(c)
all captions to the Sections hereof are used for convenience and reference only and in no way define, limit or describe the scope or intent of, or in any way affect, this Assignment;
(d)
the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”;
(e)
the words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Assignment refer to this Assignment as a whole and not to any particular provision or section of this Assignment;
(f)
an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by Lender;
(g)
no inference in favor of or against any party shall be drawn from the fact that such party has drafted any portion hereof or any other Loan Document; and
(h)
wherever Lender’s judgment, consent, approval or discretion is required under this Assignment for any matter or thing or Lender shall have an option, election, or right of determination or any other power to decide any matter relating to the terms and conditions of this Assignment, including any right to determine that something is satisfactory or not (“
Decision Power
”), such Decision Power shall be exercised in the sole and absolute discretion of Lender unless otherwise expressly stated to be reasonably exercised. Such Decision Power and each other power granted to Lender upon this Assignment or any other Loan Document may be exercised by Lender or by any authorized agent of Lender (including any servicer or attorney-in-fact), and Borrower hereby expressly agrees to recognize the exercise of such Decision Power by such authorized agent.
23.
Waiver of Trial by Jury.
TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS ASSIGNMENT, THE SECURITY INSTRUMENT, THE LOAN AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH RIGHT TO TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
24.
Local Law Provisions.
In the event of any inconsistencies between the terms and conditions of this Section and any other terms and conditions of this Assignment, the terms and conditions of this Section shall be binding.
24.1
Seal.
This Assignment is made under seal.
24.2
ADDITIONAL WAIVERS.
BORROWER EXPRESSLY WAIVES THE FOLLOWING: (A) NOTICE AND HEARING: ANY RIGHT BORROWER MAY HAVE UNDER THE CONSTITUTION OF THE STATE OF GEORGIA OR THE CONSTITUTION OF THE UNITED STATES OF AMERICA TO NOTICE OR TO A JUDICIAL HEARING PRIOR TO THE EXERCISE OF ANY RIGHT OR REMEDY PROVIDED TO LENDER BY THIS ASSIGNMENT. THE WAIVERS BY BORROWER IN THIS ASSIGNMENT HAVE BEEN MADE VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY BY BORROWER, AFTER BORROWER HAS BEEN AFFORDED AN OPPORTUNITY TO BE INFORMED BY COUNSEL OF BORROWER’S CHOICE AS TO POSSIBLE ALTERNATIVE RIGHTS. BORROWER’S EXECUTION OF THIS ASSIGNMENT SHALL BE CONCLUSIVE EVIDENCE OF THE MAKING OF SUCH WAIVERS AND THAT SUCH WAIVERS HAVE BEEN INVOLUNTARILY, INTELLIGENTLY AND KNOWINGLY MADE.
24.3
Time is of the Essence
. Time is of the essence with respect to each and every covenant, agreement and obligation of the Borrower under this Assignment.
24.4
Further Assurance; Receivership and Other Proceedings
. The first sentence of Section 16.2 is hereby modified by adding the following to the end thereof: “, and Borrower does hereby irrevocably consent to such appointment, waives any and all notices of and defenses to such appointment and agrees not to oppose any application therefor by Lender”.
24.5
Inapplicable Provisions
. If any provision of this Assignment is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Assignment, such provision shall be fully severable and this Assignment shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Assignment, and the remaining provisions of this Assignment shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Assignment, unless such continued effectiveness of this Assignment, as modified, would be contrary to the basic understandings and intentions of the parties as expressed herein.
24.6
Attorney Fees
. Notwithstanding anything contained herein or in any of the other Loan Documents to the contrary, (i) “reasonable attorneys' fees,” “reasonable counsel's fees,” “attorneys’ fees” and other words of similar import, are not, and shall not be statutory attorneys' fees under the Official Code of Georgia (“
O.C.G.A.
”) Section 13-1-11, (ii) if, under any circumstances Borrower is required hereunder to pay any or all Lender’s attorneys' fees and expenses, howsoever described or referenced, Borrower shall be responsible only for reasonable legal fees and out of pocket expenses actually incurred by Lender at customary hourly rates actually charged to Lender for the work done, and (iii) Borrower shall not be liable under any circumstances for additional attorneys’ fees or expenses, howsoever described or referenced, under O.C.G.A. Section 13-1-11.
[NO FURTHER TEXT ON THIS PAGE]
IN WITNESS WHEREOF, this Assignment of Leases and Rents has been executed under seal by Borrower as of the day and year first above written.
DCII-250 WILLIAMS STREET NW, LLC,
a Delaware limited liability company
By: Carter Validus Operating Partnership II, LP,
a Delaware limited partnership,
its Sole Member
By: Carter Validus Mission Critical REIT II, Inc.,
a Maryland corporation,
its General Partner
By:
/s/ Lisa Collado [SEAL]
Name:
Lisa Collado
Title:
Authorized Agent
|
|
Signed sealed and delivered in the presence of:
/s/ Patrice M. Wolfe
Unofficial Witness
/s/ Lisa A. Clarke
Notary Public
(affix Notary Commission and Expiration Date of Seal)
|
SIGNATURE PAGE TO ASSIGNMENT OF LEASES AND RENTS
EXHIBIT “A”
LEGAL DESCRIPTION
Parcel One:
All that tract or parcel of land lying and being in Land Lot 78 of the 14th District of Fulton County, Georgia and being more particularly described as follows:
Beginning at the point of intersection of the northern right-of-way line of Harris Street (having a 60-foot right-of-way) with the western right-of-way line of Williams Street (having a 60-foot right-of-way), and running thence North 89 degrees 49 minutes 42 seconds West, along said right-of-way line of Harris Street, a distance of 387.30 feet to the point of intersection of said right-of-way line of Harris Street with the eastern right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive (having a 60-foot right-of-way); thence North 00 degrees 44 minutes 41 seconds East, along said right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive, a distance of 407.09 feet to the point of intersection of right-of-way line of Centennial Olympic Park Drive f/k/a Techwood Drive with the southern right-of-way line of Baker Street (having a 60-foot right-of-way); thence South 89 degrees 31 minutes 45 seconds East, along said right-of-way line of Baker Street, a distance of 385.21 feet to the point of intersection of said right-of-way line of Baker Street with said right-of-way line of Williams Street; thence South 00 degrees 27 minutes 07 seconds West, along said right-of-way line of Williams Street, a distance of 145.22 feet to a point on said right-of-way line of Williams Street; thence leaving said right-of-way line of Williams Street, and running North 89 degrees 31 minutes 49 seconds West a distance of 115.00 feet to a point; thence South 00 degrees 28 minutes 11 seconds West a distance of 31.34 feet to a point; thence North 89 degrees 31 minutes 49 seconds West a distance of 9.94 feet to a point; thence South 00 degrees 34 minutes 51 seconds West a distance of 33.42 feet to a point; thence South 89 degrees 01 minute 59 seconds East a distance of 125.03 feet to a point on sad right-of-way line of Williams Street; thence South 00 degrees 27 minutes 07 seconds West, along said right-of-way line of Williams Street, a distance of 194.00 feet to the Point of Beginning.
The above-described property is shown as 3.42050 acres on and is described according to plat of survey prepared for JPMorgan Chase Bank, N.A., its successors and assigns, J.P. Morgan Mortgage Capital Inc., 250 Williams Street LLC and Piedmont Title Insurance Agency, Inc. as agent for First American Title Insurance Company, by V.T. Hammond, Georgia Registered Land Surveyor No. 2554, Watts & Browning Engineers, Inc., dated June 15, 1998, last revised August 20, 2007, which said plat of survey is incorporated herein by this reference and made a part of this description.
Parcel Two: Ground Lease
ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN LAND LOT 78 OF THE 14TH DISTRICT OF FULTON COUNTY, GEORGIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT LOCATED ON THE WESTERN RIGHT-OF-WAY LINE OF WILLIAMS STREET (HAVING A 60-FOOT RIGHT-OF-WAY), SAID POINT BEING LOCATED NORTH 00 DEGREES 27 MINUTES 07 SECONDS EAST A DISTANCE OF 194.00 FEET, AS MEASURED ALONG SAID RIGHT-OF-WAY OF WILLIAMS STREET, FROM THE POINT OF INTERSECTION OF SAID RIGHT-OF-WAY LINE OF WILLIAMS STREET WITH THE NORTHERN RIGHT-OF-WAY LINE OF HARRIS STREET (HAVING A 60-FOOT RIGHT-OF-WAY); AND RUNNING THENCE NORTH 89 DEGREES 01 MINUTE 59 SECONDS WEST A DISTANCE OF 125.03 FEET TO A POINT; THENCE NORTH 00 DEGREES 34 MINUTES 51 SECONDS EAST A DISTANCE OF 33.42 FEET TO A POINT; THENCE SOUTH 89 DEGREES 31 MINUTES 49 SECONDS EAST A DISTANCE OF 9.94 FEET TO A POINT; THENCE NORTH 00 DEGREES 28 MINUTES 11 SECONDS EAST A DISTANCE OF 31.34 FEET TO A POINT; THENCE SOUTH 89 DEGREES 31 MINUTES 49 SECONDS EAST A DISTANCE OF 115.00 FEET TO A POINT ON SAID RIGHT-OF-WAY LINE OF WILLIAMS STREET; THENCE SOUTH 00 DEGREES 27 MINUTES 07 SECONDS WEST, ALONG SAID RIGHT-OF-WAY LINE OF WILLIAMS STREET, A DISTANCE OF 65.84 FEET TO THE POINT OF BEGINNING.
Parcel Three:
EASEMENTS AND OTHER INTERESTS IN REAL PROPERTY CONTAINED IN THAT CERTAIN BRIDGE AGREEMENT BETWEEN THE CITY OF ATLANTA, THE ATLANTA APPAREL MART AND INFORUM, LTD., DATED AUGUST 31, 1987, RECORDED IN DEED BOOK 11051. PAGE 100, AFORESAID RECORDS; AS RE-RECORDED IN DEED BOOK 11128, PAGE 89. AFORESAID RECORDS; AGREEMENT BETWEEN THE ATLANTA APPAREL MART AND INFORUM ASSOCIATES, DATED OCTOBER 20, 1987, RECORDED IN DEED BOOK 11131, PAGE 319. AFORESAID RECORDS; AS MODIFIED BY AGREEMENT RE MODIFICATION OF BRIDGE AGREEMENT BETWEEN AMC. INC. AND EQUITABLE LIFE ASSURANCE OF THE UNITED STATES, DATED APRIL 22, 1999, RECORDED IN DEED BOOK 26975, PAGE 81, AFORESAID RECORDS.
Exhibit 10.8
Loan No. 10171391
ENVIRONMENTAL INDEMNITY AGREEMENT
THIS ENVIRONMENTAL INDEMNITY AGREEMENT
(this “
Agreement
”) is made as of June 15, 2017, by
DCII-250 WILLIAMS STREET NW, LLC,
a Delaware limited liability company having an address at 4890 W. Kennedy Boulevard, Suite 650, Tampa, Florida 33609 (“
Borrower
”) and
CARTER VALIDUS OPERATING PARTNERSHIP II, LP,
a Delaware limited partnership having an address at 4890 W. Kennedy Boulevard, Suite 650, Tampa, Florida 33609 (“
Guarantor
”); Borrower and Guarantor hereinafter referred to, individually and collectively, as the context may require, as “
Indemnitor
”), in favor of
KEYBANK NATIONAL ASSOCIATION
, a national banking association, having an address at 11501 Outlook, Suite 300, Overland Park, Kansas 66211 (together with its successors and assigns, “
Indemnitee
”) and the other Indemnified Parties (as defined in the Loan Agreement).
RECITALS:
The following recitals are a material part of this Agreement.
A. Borrower is the owner of the Property.
B. Indemnitee is prepared to make a loan (the “
Loan
”) to Borrower in the principal amount of $116,200,000.00 pursuant to a Loan Agreement of even date herewith between Indemnitee and Borrower (the “
Loan Agreement
”), which Loan shall be evidenced by that certain Promissory Note of even date herewith given by Borrower in favor of Indemnitee (the “
Note
”) and secured by, among other things one or more mortgages/deeds of trust/deeds to secure debt, dated as of the date hereof, given by Borrower to Indemnitee and encumbering the Property (individually and collectively, the “
Security Instrument
”). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Loan Agreement.
C. Indemnitee is unwilling to make the Loan unless Indemnitor agrees to provide the indemnification, representations, warranties, covenants and other matters described in this Agreement for the benefit of the Indemnified Parties.
D. Indemnitor is entering into this Agreement to induce Indemnitee to make the Loan.
AGREEMENT:
NOW THEREFORE
, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitor hereby agrees for the benefit of the Indemnified Parties as follows:
1.
Indemnification
. Indemnitor covenants and agrees, at its sole cost and expense, to protect, defend, indemnify, release and hold the Indemnified Parties harmless from and against any
and all Losses (defined below) imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following: (a) any presence of any Hazardous Substances in, on, above, or under the Property; (b) any past, present or threatened Release of Hazardous Substances in, on, above, under or from the Property; (c) any activity by Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user of the Property in connection with any actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other Release, generation, production, manufacturing, processing, refining, control, management, abatement, removal, handling, transfer or transportation to or from the Property of any Hazardous Substances at any time located in, under, on or above the Property; (d) any activity by Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user of the Property in connection with any actual or proposed Remediation of any Hazardous Substances at any time located in, under, on or above the Property, whether or not such Remediation is voluntary or pursuant to court or administrative order, including any removal, remedial or corrective action; (e) any past, present or threatened non-compliance or violations of any Environmental Laws (or permits issued pursuant to any Environmental Law) in connection with the Property or operations thereon, including any failure by Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user of the Property to comply with any order of any Governmental Authority in connection with any Environmental Laws; (f) the imposition, recording or filing or the threatened imposition, recording or filing of any Environmental Lien encumbering the Property; (g) any administrative processes or proceedings or judicial proceedings in any way connected with the environmental condition of the Property; (h) any past, present or threatened injury to, destruction of or loss of natural resources in any way connected with the Property, including costs to investigate and assess such injury, destruction or loss; (i) any acts of Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user of the Property in arranging for disposal or treatment, or arranging with a transporter for transport for disposal or treatment, of Hazardous Substances at any facility or incineration vessel containing such or similar Hazardous Substances; (j) any acts of Indemnitor, any Person affiliated with any Indemnitor, and any tenant or other user of the Property in accepting any Hazardous Substances for transport to disposal or treatment facilities, incineration vessels or sites from which there is a Release, or a threatened Release of any Hazardous Substance which causes the incurrence of costs for Remediation; and (k) any misrepresentation or inaccuracy in any representation or warranty relating to the environmental condition of the Property or material breach or failure to perform any covenants or other obligations relating to the environmental condition of the Property pursuant to this Agreement, the Loan Agreement or the Security Instrument.
2.
Duty to Defend and Attorneys and Other Fees and Expenses
. Upon written request by any Indemnified Party, Indemnitor shall defend same (if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals approved by the Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may, in their sole and absolute discretion, engage their own attorneys and other professionals to defend or assist them, and, at the option of such Indemnified Parties, their attorneys shall control the resolution of any claim or proceeding, providing that no compromise or settlement shall be entered without Indemnitor’s consent, which consent shall not be unreasonably withheld. Upon demand, Indemnitor shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse, the Indemnified
Parties for the payment of fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith.
3.
Definitions
. Capitalized terms used herein and not specifically defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement. As used in this Agreement, the following terms shall have the following meanings:
The term “
Legal Action
” means any claim, suit or proceeding, whether administrative or judicial in nature.
The term “
Losses
” includes any losses, damages, costs, fees, expenses, claims, suits, judgments, awards, liabilities (including strict liabilities), obligations, debts, diminutions in value, fines, penalties, charges, costs of Remediation (whether or not performed voluntarily), amounts paid in settlement, foreseeable and unforeseeable consequential damages, litigation costs, attorneys’ fees, engineers’ fees, environmental consultants’ fees, and investigation costs (including costs for sampling, testing and analysis of soil, water, air, building materials, and other materials and substances whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred in connection with any judicial or administrative proceedings, actions, claims, suits, judgments or awards.
4.
Unimpaired Liability
. The liability of Indemnitor under this Agreement shall in no way be limited or impaired by, and Indemnitor hereby consents to and agrees to be bound by, any amendment or modification of the provisions of the Note, the Loan Agreement, the Security Instrument or any other Loan Document to or with Indemnitee by Indemnitor or any Person who succeeds Indemnitor or any Person as owner of the Property. In addition, the liability of Indemnitor under this Agreement shall in no way be limited or impaired by (i) any extensions of time for performance required by the Note, the Loan Agreement, the Security Instrument or any of the other Loan Documents, (ii) any sale or transfer of all or part of the Property, (iii) except as provided herein, any exculpatory provision in the Note, the Loan Agreement, the Security Instrument, or any of the other Loan Documents limiting Indemnitee’s recourse to the Property or to any other security for the Note, or limiting Indemnitee’s rights to a deficiency judgment against Indemnitor, (iv) the accuracy or inaccuracy of the representations and warranties made by Indemnitor under the Note, the Loan Agreement, the Security Instrument or any of the other Loan Documents or herein, (v) the release of Indemnitor or any other Person from performance or observance of any of the agreements, covenants, terms or conditions contained in any of the other Loan Documents by operation of law, Indemnitee’s voluntary act, or otherwise, (vi) the release or substitution in whole or in part of any security for the Loan, or (vii) Indemnitee’s failure to record the Security Instrument or file any UCC financing statements (or Indemnitee’s improper recording or filing of any thereof) or to otherwise perfect, protect, secure or insure any security interest or lien given as security for the Loan; and, in any such case, whether with or without notice to Indemnitor and with or without consideration.
5.
Enforcement
. The Indemnified Parties may enforce the obligations of Indemnitor without first resorting to or exhausting any security or collateral or without first having recourse to the Note, the Loan Agreement, the Security Instrument, or any other Loan Documents or any of the Property, through foreclosure proceedings or otherwise, provided, however, that nothing herein
shall inhibit or prevent Indemnitee from suing on the Note, foreclosing, or exercising any power of sale under, the Security Instrument, or exercising any other rights and remedies thereunder. This Agreement is not collateral or security for the Debt, unless Indemnitee expressly elects in writing to make this Agreement additional collateral or security for the Debt, which Indemnitee is entitled to do in its discretion. It is not necessary for an Event of Default to have occurred for the Indemnified Parties to exercise their rights pursuant to this Agreement. Notwithstanding any provision of the Loan Agreement, the obligations pursuant to this Agreement are exceptions to any non-recourse or exculpation provision of the Loan Agreement; Indemnitor is fully and personally liable for such obligations, and such liability is not limited to the original or amortized principal balance of the Loan or the value of the Property.
6.
Survival
. The obligations and liabilities of Indemnitor under this Agreement shall fully survive indefinitely notwithstanding any termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of foreclosure of the Security Instrument. Notwithstanding the provisions of this Agreement to the contrary, the liabilities and obligations of Indemnitor hereunder shall not apply to the extent that Indemnitor can prove that such liabilities and obligations arose solely from Hazardous Substances that: (a) were not present on or a threat to the Property prior to the date that Indemnitee or its nominee acquired title to the Property, whether by foreclosure, exercise of power of sale or otherwise and (b) were not the result of any act or negligence of Indemnitor or any of Indemnitor’s affiliates, agents or contractors.
7.
Interest
. Any amounts payable to any Indemnified Parties under this Agreement shall become immediately due and payable on demand and, if not paid within thirty (30) days of such demand therefor, shall bear interest at the lesser of (a) the Default Rate or (b) the maximum interest rate which Indemnitor may by law pay or the Indemnified Parties may charge and collect, from the date payment was due, provided that the foregoing shall be subject to the provisions of Section 10 of the Note.
8.
Waivers
. (a) Indemnitor hereby waives (i) any right or claim of right to cause a marshaling of Indemnitor’s assets or to cause Indemnitee or other Indemnified Parties to proceed against any of the security for the Loan before proceeding under this Agreement against Indemnitor; (ii) and relinquishes all rights and remedies accorded by applicable law to indemnitors or guarantors, except any rights of subrogation which Indemnitor may have, provided that the indemnity provided for hereunder shall neither be contingent upon the existence of any such rights of subrogation nor subject to any claims or defenses whatsoever which may be asserted in connection with the enforcement or attempted enforcement of such subrogation rights including any claim that such subrogation rights were abrogated by any acts of Indemnitee or other Indemnified Parties; (iii) the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against or by Indemnitee or other Indemnified Parties; (iv) notice of acceptance hereof and of any action taken or omitted in reliance hereon; (v) presentment for payment, demand of payment, protest or notice of nonpayment or failure to perform or observe, or other proof, or notice or demand; and (vi) all homestead exemption rights against the obligations hereunder and the benefits of any statutes of limitations or repose. Notwithstanding anything to the contrary
contained herein, Indemnitor hereby agrees to postpone the exercise of any rights of subrogation with respect to any collateral securing the Loan until the Loan shall have been paid in full.
(b) Indemnitor hereby waives, to the fullest extent permitted by law, the right to trial by jury in any action, proceeding or counterclaim, whether in contract, tort or otherwise, relating to this Agreement or the other Loan Documents or any acts or omissions of any Indemnified Parties in connection therewith.
9.
Subrogation
. Indemnitor shall take any and all reasonable actions, including institution of Legal Action against third parties, necessary or appropriate to obtain reimbursement, payment or compensation from such Person responsible for the presence of any Hazardous Substances at, in, on, under or near the Property or otherwise obligated by law to bear the cost. The Indemnified Parties shall be and hereby are subrogated to all of Indemnitor’s rights now or hereafter in such claims.
10.
Indemnitor’s Representations and Warranties
. Indemnitor represents and warrants that:
(a) if Indemnitor is a corporation, a limited liability company, a trust or partnership, it has the full corporate/ limited liability company/ partnership/ trust power and authority to execute and deliver this Agreement and to perform its obligations hereunder; the execution, delivery and performance of this Agreement by Indemnitor has been duly and validly authorized; and all requisite corporate/ limited liability company/ partnership/ trust action has been taken by Indemnitor to make this Agreement valid and binding upon Indemnitor, enforceable in accordance with its terms;
(b) if Indemnitor is a corporation, a limited liability company, a trust or partnership, its execution of, and compliance with, this Agreement is in the ordinary course of business of Indemnitor and will not result in the breach of any term or provision of the charter, by-laws, partnership, operating or trust agreement, or other governing instrument of Indemnitor or result in the breach of any term or provision of, or conflict with or constitute a default under, or result in the acceleration of any obligation under, any agreement, indenture or loan or credit agreement or other instrument to which Indemnitor or the Property is subject, or result in the violation of any law, rule, regulation, order, judgment or decree to which Indemnitor or the Property is subject;
(c) to the best of Indemnitor’s knowledge, there is no action, suit, proceeding or investigation pending or threatened against it which, either in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of Indemnitor, or in any material impairment of the right or ability of Indemnitor to carry on its business substantially as now conducted, or in any material liability on the part of Indemnitor, or which would draw into question the validity of this Agreement or of any action taken or to be taken in connection with the obligations of Indemnitor contemplated herein, or which would be likely to impair materially the ability of Indemnitor to perform under the terms of this Agreement;
(d) it does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;
(e) to the best of Indemnitor’s knowledge, no approval, authorization, order, license or consent of, or registration or filing with, any governmental authority or other person, and no approval, authorization or consent of any other party is required in connection with this Agreement; and
(f) this Agreement constitutes a valid, legal and binding obligation of Indemnitor, enforceable against it in accordance with the terms hereof.
11.
No Waiver
. No delay by any Indemnified Party in exercising any right, power or privilege under this Agreement shall operate as a waiver of any such privilege, power or right.
12.
Notice of Legal Actions
. Each party hereto shall, within five (5) business days of receipt thereof, give written notice to the other party hereto of (i) any notice, advice or other communication from any Governmental Authority or any source whatsoever with respect to Hazardous Substances on, from or affecting the Property, and (ii) any Legal Action brought against such party or related to the Property, with respect to which Indemnitor may have liability under this Agreement. Such notice shall comply with the provisions of
Section 14
hereof.
13.
Examination of Books and Records
. At reasonable times and upon reasonable notice, the Indemnified Parties and their accountants shall have the right to examine the records, books, management and other papers of Indemnitor pertaining to its financial condition or the income, expenses and operation of the Property, at the Property or at the office regularly maintained by Indemnitor where the books and records are located. The Indemnified Parties and their accountants shall have the right to make copies and extracts from the foregoing records and other papers.
14.
Notices
. All notices or other written communications hereunder shall be made in accordance with (a) Section 10.6 of the Loan Agreement in the case of Lender and Borrower, and (b) the respective Guaranty Agreement executed by any Indemnitor other than Borrower in the case of any such Indemnitor.
15.
Counterparts
. This Agreement may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all of which together shall constitute a single Agreement.
16.
No Oral Change
. This Agreement, 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 Indemnitor or any Indemnified Party, 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.
17.
Headings, Etc
. The headings and captions of various paragraphs of this Agreement are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof.
18.
Number and Gender/Successors and Assigns
. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity
of the Person referred to may require. Without limiting the effect of specific references in any provision of this Agreement, the term “
Indemnitor
” shall be deemed to refer to each and every Person comprising an Indemnitor from time to time, as the sense of a particular provision may require, and to include the heirs, executors, administrators, legal representatives, successors and assigns of Indemnitor, all of whom shall be bound by the provisions of this Agreement, provided that no obligation of Indemnitor may be assigned except with the written consent of Indemnitee. Each reference herein to Indemnitee shall be deemed to include its successors and assigns. This Agreement shall inure to the benefit of the Indemnified Parties and their respective successors and assigns.
19.
Release of Liability
. Any one or more parties liable upon or in respect of this Agreement may be released without affecting the liability of any party not so released.
20.
Rights Cumulative
. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies which Indemnitee has under the Note, the Security Instrument, the Loan Agreement or the other Loan Documents or would otherwise have at law or in equity.
21.
Inapplicable Provisions
. If any term, condition or covenant of this Agreement shall be held to be invalid, illegal or unenforceable in any respect, this Agreement shall be construed without such provision.
22.
Governing Law
. The governing law and related provisions set forth in Section 10.3 of the Loan Agreement (including, any authorized agent provisions thereof) are hereby incorporated by reference as if fully set forth herein (with Indemnitor substituted in all places where Borrower appears thereunder) and shall be deemed fully applicable to Indemnitor hereunder. Indemnitor hereby certifies that it has received and reviewed the Loan Agreement (including, Section 10.3 thereof).
23.
Miscellaneous
. (a) Wherever pursuant to this Agreement (i) Indemnitee exercises any right given to it to approve or disapprove, (ii) any arrangement or term is to be satisfactory to Indemnitee, or (iii) any other decision or determination is to be made by Indemnitee, the decision of Indemnitee to approve or disapprove, all decisions that arrangements or terms are satisfactory or not satisfactory and all other decisions and determinations made by Indemnitee, shall be in the sole and absolute discretion of Indemnitee and shall be final and conclusive, except as may be otherwise expressly and specifically provided herein.
(b) Wherever pursuant to this Agreement it is provided that Indemnitor pay any costs and expenses, such costs and expenses shall include legal fees and disbursements of Indemnitee, whether retained firms, the reimbursements for the expenses of the in-house staff or otherwise.
(c) If Indemnitor consists of more than one person or party, the obligations and liabilities of each such person or party hereunder shall be joint and several.
(d) The following rules of construction shall be applicable for all purposes of this Agreement and all documents or instruments supplemental hereto, unless the context otherwise clearly requires:
|
|
(i)
|
The terms “include,” “including” and similar terms shall be construed as if followed by the phrase “without being limited to”;
|
|
|
(ii)
|
The term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”;
|
|
|
(iii)
|
The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision or section of this Agreement;
|
|
|
(iv)
|
An Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by Lender; and
|
|
|
(v)
|
No inference in favor of or against any party shall be drawn from the fact that such party has drafted any portion hereof or any other Loan Document.
|
24.
State Specific Provisions
. In the event of any inconsistencies between the other terms and conditions of this Agreement and this Section, the terms and conditions of this Section shall control and be binding.
24.1
No Other Party Beneficiary
. This Agreement is for the sole benefit of the Indemnified Parties, and is not for the benefit of any other party. Nothing contained in this Agreement shall be deemed to confer upon anyone other than the Indemnified Parties any right to insist upon or to enforce the performance or observance of any of the obligations contained herein.
24.2
Time of the Essence
. Time is of the essence with respect to the provisions of this Agreement. By accepting payment of any sums due hereunder after its due date, none of the Indemnified Parties waives its right to require prompt payment when due of all other sums or to declare a default for failure so to pay.
[NO FURTHER TEXT ON THIS PAGE]
IN WITNESS WHEREOF, this Agreement has been executed by Indemnitor as of the day and year first above written.
INDEMNITOR:
DCII-250 WILLIAMS STREET NW, LLC,
a Delaware limited liability company
By: Carter Validus Operating Partnership II, LP,
a Delaware limited partnership,
its Sole Member
By: Carter Validus Mission Critical REIT II, Inc.,
a Maryland corporation,
its General Partner
By:
/s/ Lisa Collado
Name:
Lisa Collado
Title:
Authorized Agent
INDEMNITOR:
CARTER VALIDUS OPERATING PARTNERSHIP II, LP,
a Delaware limited partnership,
By: Carter Validus Mission Critical REIT II, Inc.,
a Maryland corporation,
its General Partner
By:
/s/ Lisa Collado
Name:
Lisa Collado
Title:
Authorized Agent
SIGNATURE PAGE TO ENVIRONMENTAL INDEMNITY AGREEMENT
Exhibit 10.9
PROMISSORY NOTE
|
|
LOAN TERMS TABLE
Lender
: KeyBank National Association, a national banking association, its successors and assigns
Loan No
.: 10171391
Lender’s Address
: 11501 Outlook, Suite 300, Overland Park, Kansas 66211
Borrower
: DCII-250 Williams Street NW, LLC, a Delaware limited liability company
Borrower’s Address
: 4890 W. Kennedy Boulevard, Suite 650, Tampa, Florida 33609
Property
: Real property located at 250 Williams Street, Atlanta, Fulton County, Georgia, certain personal property, and including Borrower’s leasehold interest pursuant to the Ground Lease (as defined in the Loan Agreement)
Closing Date
: June 15, 2017
Original Principal Amount
: $116,200,000.00
Maturity Date
: July 1, 2027
Interest Rate
: three and ninety-nine hundredths percent (3.99%)
Initial Interest Payment Per Diem
: $12,878.83
Interest Only Monthly Payment
: See Section 2(b)
Interest Only Payment Date
: August 1, 2017 and on the first day of each successive month thereafter until and including July 1, 2022
Amortizing Monthly Payment
: $554,086.87
Amortizing Payment Date
: August 1, 2022 and on the first day of each successive month thereafter
Monthly Debt Service Payment Amount
: individually and collectively, as the context may require, any Interest Only Monthly Payment and any Amortizing Monthly Payment
Payment Date
: individually and collectively, as the context may require, any Interest Only Payment Date and any Amortizing Payment Date
Permitted Par Prepayment Date
: January 2, 2027
Permitted Release Date:
the 4th anniversary of the first Payment Date
|
1.
Loan Amount and Rate.
FOR VALUE RECEIVED, Borrower promises to pay to the order of Lender, the Original Principal Amount (or so much thereof as is outstanding from time to time, which is referred to herein as the “
Outstanding Principal Balance
” or “
OPB
”), with interest on the unpaid OPB from the date of disbursement of the Loan (as hereinafter defined) evidenced by this Promissory Note (“
Note
”) at the Interest Rate. Interest on the outstanding principal balance of the Loan shall be calculated by multiplying (a) the actual number of days elapsed in the relevant Accrual Period (hereinafter defined) by (b) a daily rate based on the Interest Rate and a three hundred sixty (360) day year by (c) the outstanding principal balance of the Loan. Borrower acknowledges that the calculation method for interest described herein results in a higher effective interest rate than the numeric Interest Rate and Borrower hereby agrees to this calculation method. The loan evidenced by this Note will sometimes hereinafter be called the “
Loan
.” The above Loan Terms Table (hereinafter referred to as the “
Table
”) is a part of the Note and all terms used in this Note that are defined in the Table shall have the meanings set forth therein. “
Accrual Period
” means the period commencing on and including the first (1st) day of each calendar month during the term of the Loan and ending on and including the final calendar date of such calendar month;
however, the initial Accrual Period shall commence on and include the Closing Date and shall end on and include the final calendar date of the calendar month in which the Closing Date occurs.
2.
Principal and Interest Payments.
Payments of principal and interest shall be made as follows:
(a) On the date of disbursement of the Loan proceeds, an interest payment calculated by multiplying (i) the Initial Interest Payment Per Diem by (ii) the number of days from (and including) the date of the disbursement of the Loan proceeds through the last day of the calendar month in which the disbursement was made;
(b) On each Payment Date until the Maturity Date, (i) an interest only payment at the Interest Rate on the Outstanding Principal Balance shall be payable in arrears on each Interest Only Payment Date (“
Interest Only Monthly Payment
”), and (ii) the Amortizing Monthly Payment shall be payable on each Amortizing Payment Date, each of such payments to be applied: (A) to the payment of interest computed at the Interest Rate; and (B) the balance applied toward the reduction of the Outstanding Principal Balance; and
(c) If not sooner paid, the Outstanding Principal Balance, all unpaid interest thereon, and all other amounts owed to Lender pursuant to this Note or any other Loan Document (as hereinafter defined) or otherwise in connection with the Loan or the security for the Loan shall be due and payable on the Maturity Date.
3.
Security for Note
. This Note is secured by one or more deeds of trust, mortgages, or deeds to secure debt (which are herein individually and collectively called the “
Security Instrument
”) encumbering the Property. This Note, the Security Instrument, that certain Loan Agreement between Borrower and Lender of even date herewith (the “
Loan Agreement
”) and all other documents and instruments existing now or after the date hereof that evidence, secure or otherwise relate to the Loan, including any assignments of leases and rents, other assignments, security agreements, financing statements, guaranties, indemnity agreements (including environmental indemnity agreements), letters of credit, or escrow/holdback or similar agreements or arrangements, together with all amendments, modifications, substitutions or replacements thereof, are sometimes herein collectively referred to as the “
Loan Documents
” or individually as a “
Loan Document
.” All amounts that are now or in the future become due and payable under this Note, the Security Instrument, or any other Loan Document, including any Yield Maintenance Premium (hereinafter defined) and all applicable expenses, costs, charges, and fees, will be referred to herein as the “
Debt
.” The remedies of Lender as provided in this Note, any other Loan Document, or under applicable law shall be cumulative and concurrent, may be pursued singularly, successively, or together at the discretion of Lender, and may be exercised as often as the occurrence of an occasion for which Lender is entitled to a remedy under the Loan Documents or applicable law. The failure to exercise any right or remedy shall not be construed as a waiver or release of the right or remedy respecting the same or any subsequent default.
4.
Intentionally Omitted.
5.
Payments.
All amounts payable hereunder shall be payable in lawful money of the United States of America to Lender at Lender’s Address or such other place as the holder hereof may designate in writing, which may include at Lender’s option a requirement that payment be made by (a) wire transfer of immediately available funds in accordance with wire transfer instructions provided by Lender or (b) by pre-authorized debit from Borrower’s operating account on each Payment Date through an automated clearing house electronic funds transfer. Each payment made hereunder shall be made in immediately available funds and must state the Borrower’s Loan Number. If any payment of principal or interest on this Note is due on a day other than a Business Day (as hereinafter defined), such payment shall be made on the next succeeding Business Day. Any payment on this Note received after 2:00 o’clock p.m. local time at the place then designated as the place for receipt of payments hereunder shall be deemed to have been made on the next succeeding Business Day. All amounts due under this Note shall be payable without set off, counterclaim, or any other deduction whatsoever. All payments from Borrower to Lender following the occurrence of an Event of Default shall be applied in such order and manner as Lender elects in reduction of costs, expenses, charges, disbursements and fees payable by Borrower hereunder or under any other Loan Document, in reduction of interest due on the Outstanding Principal Balance, or in reduction of the Outstanding Principal Balance. Lender may, without notice to Borrower or any other person, accept one or more partial payments of any sums due or past due hereunder from time to time while an Event of Default exists hereunder, after Lender accelerates the indebtedness evidenced hereby, or after Lender commences enforcement of its remedies under any Loan Document or applicable law, without thereby waiving any Event of Default, rescinding any acceleration, or waiving, delaying, or forbearing in the pursuit of any remedies under the Loan Documents. Lender may endorse and deposit any check or other instrument tendered in connection with such a partial payment without thereby giving effect to or being bound by any language purporting to make acceptance of such instrument an accord and satisfaction of the indebtedness evidenced hereby. As used herein, the term “
Business Day
” shall mean a day upon which commercial banks are not authorized or required by law to close in the city designated from time to time as the place for receipt of payments hereunder.
6.
Late Charge.
If any sum payable under this Note or any other Loan Document is not received by Lender by close of business on the date on which it was due, Borrower shall pay to Lender an amount (the “
Late Charge
”) equal to the lesser of (a) five percent (5%) of the full amount of such sum or (b) the maximum amount permitted by applicable law in order to help defray the expenses incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment. Any such Late Charge shall be secured by the Security Instrument and other Loan Documents. The collection of any Late Charge shall be in addition to, and shall not constitute a waiver of or limitation of, a default or Event of Default hereunder or a waiver of or limitation of any other rights or remedies that Lender may be entitled to under any Loan Document or applicable law.
7.
Default Rate.
Upon the occurrence of an Event of Default (including the failure of Borrower to make full payment on the Maturity Date), Lender shall be entitled to receive and Borrower shall pay interest on the Outstanding Principal Balance at the rate of five percent (5%) per annum above the Interest Rate (“
Default Rate
”) but in no event greater than the Maximum Legal Rate (as hereinafter defined). Interest shall accrue and be payable at the Default Rate from
the occurrence of an Event of Default until all Events of Default have been waived in writing by Lender in its discretion. Such accrued interest shall be added to the Outstanding Principal Balance, and interest shall accrue thereon at the Default Rate until fully paid. Such accrued interest shall be secured by the Security Instrument and other Loan Documents. Borrower agrees that Lender’s right to collect interest at the Default Rate is given for the purpose of compensating Lender at reasonable amounts for Lender’s added costs and expenses that occur as a result of Borrower’s default and that are difficult to predict in amount, such as increased general overhead, concentration of management resources on problem loans, and increased cost of funds. Lender and Borrower agree that Lender’s collection of interest at the Default Rate is not a fine or penalty, but is intended to be and shall be deemed to be reasonable compensation to Lender for increased costs and expenses that Lender will incur if there occurs an Event of Default hereunder. Collection of interest at the Default Rate shall not be construed as an agreement or privilege to extend the Maturity Date or to limit or impair any rights and remedies of Lender under any Loan Documents. If judgment is entered on this Note, interest shall continue to accrue post-judgment at the greater of (a) the Default Rate or (b) the applicable statutory judgment rate. As used herein, the term “
Maximum Legal Rate
” shall mean the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by the Note and as provided for herein or the other Loan Documents, under the laws of such state or states whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Loan.
8.
Origination, Administration, Enforcement, and Defense Expenses
. Borrower shall pay Lender, on demand, all Administration and Enforcement Expenses (as hereinafter defined) now or hereafter incurred by Lender, together with interest thereon at the Default Rate, from the date paid or incurred by Lender until such fees and expenses are paid by Borrower, whether or not an Event of Default or Default then exists. Provided no Event of Default has occurred, fees and expenses related solely to origination and administration of the Loan shall be limited to reasonable fees and expenses, but charges of rating agencies, governmental entities or other third parties that are outside of the control of Lender shall not be subject to the reasonableness standard. For the purpose of this Note, “
Administration and Enforcement Expenses
” shall mean all fees and expenses incurred at any time or from time to time by Lender, including legal (whether for the purpose of advice, negotiation, documentation, defense, enforcement or otherwise), accounting, financial advisory, auditing, rating agency, appraisal, valuation, title or title insurance, engineering, environmental, collection agency, or other expert or consulting or similar services, in connection with: (a) the origination of the Loan, including the negotiation and preparation of the Loan Documents and any amendments or modifications of the Loan or the Loan Documents, whether or not consummated; (b) the administration, servicing or enforcement of the Loan or the Loan Documents, including any request for interpretation or modification of the Loan Documents or any matter related to the Loan or the servicing thereof (which shall include the consideration of any requests for consents, waivers, modifications, approvals, lease reviews or similar matters and any proposed transfer of the Property or any interest therein), (c) any litigation, contest, dispute, suit, arbitration, mediation, proceeding or action (whether instituted by or against Lender, including actions brought by or on behalf of Borrower or Borrower’s bankruptcy estate or any indemnitor or guarantor of the Loan or any other person) in any way relating to the Loan or the Loan Documents including in connection with any bankruptcy, reorganization, insolvency, or receivership proceeding; (d) any attempt to enforce any rights of Lender against Borrower or any other person
that may be obligated to Lender by virtue of any Loan Document or otherwise whether or not litigation is commenced in pursuance of such rights; and (e) protection, enforcement against, or liquidation of the Property or any other collateral for the Loan, including any attempt to inspect, verify, preserve, restore, collect, sell, liquidate or otherwise dispose of or realize upon the Loan, the Property or any other collateral for the Loan. All Administration and Enforcement Expenses shall be additional Debt hereunder secured by the Property, and may be funded, if Lender so elects, by Lender paying the same to the appropriate persons and thus making an advance on Borrower’s behalf.
9.
Prepayment.
(a) Voluntary Prepayments.
(i) Except as otherwise expressly provided in this
Section 9
, Borrower shall not have the right to prepay the Loan in whole or in part prior to the Maturity Date.
(ii) Provided no Event of Default has occurred and is continuing, on the Permitted Par Prepayment Date, and on any Business Day thereafter through the Maturity Date, Borrower may, at its option, prepay the Debt in full (but not in part) without payment of any yield maintenance or other premium;
provided
,
however
, if for any reason such prepayment is not paid on a regularly scheduled Payment Date, the Debt shall include interest for the full Accrual Period during which the prepayment occurs. Borrower’s right to prepay the principal balance of the Loan in full pursuant to this subsection shall be subject to (I) Borrower’s submission of a notice to Lender setting forth the projected date of prepayment, which date shall be no less than thirty (30) days from the date of such notice, and (II) Borrower’s actual payment to Lender of the full amount of the Debt, including interest for the full Accrual Period during which the prepayment occurs.
(b)
Mandatory Prepayments.
On the next occurring Payment Date following the date on which Lender actually receives any Net Proceeds (as defined in the Loan Agreement), if Lender is not obligated to make such Net Proceeds available to Borrower for the Restoration (as defined in the Loan Agreement) of the Property or any part thereof or otherwise remit such Net Proceeds to Borrower pursuant to Section 6.4 of the Loan Agreement, Borrower authorizes Lender, at Lender’s option, to apply Net Proceeds as a prepayment of all or a portion of the outstanding principal balance of the Loan together with accrued interest on the portion of the principal balance of the Loan prepaid and any other sums due hereunder in an amount equal to one hundred percent (100%) of such Net Proceeds;
provided
,
however
, if an Event of Default has occurred and is continuing, Lender may apply such Net Proceeds to the Debt (until paid in full) in any order or priority in its discretion. Other than following an Event of Default, no Yield Maintenance Premium or other premium shall be due in connection with any prepayment made pursuant to this
Section 9(b)
.
(c)
Prepayments After Default.
If payment of all or any part of the Debt is tendered by Borrower or otherwise recovered by Lender following an Event of Default under any circumstances including a prepayment in connection with (A) reinstatement of the Security Instrument provided by statute under foreclosure proceedings or exercise of power of sale, (B) any statutory right of redemption exercised by Borrower or any other party having a statutory right to
redeem or prevent foreclosure or power of sale, (C) any sale in foreclosure or under exercise of a power of sale or otherwise (including pursuant to a credit bid made by Lender in connection with such sale), (D) any other collection action by Lender, or (E) exercise by any governmental authority of any civil or criminal forfeiture action with respect to any of the collateral for the Loan, such tender or recovery shall be (I) made on the next occurring Payment Date together with the Monthly Debt Service Payment Amount and (II) deemed a voluntary prepayment by Borrower in violation of the prohibition against prepayment set forth in
Section 9(a)(i)
hereof, and Borrower shall pay, in addition to the Debt, an amount equal to the Yield Maintenance Premium which can be applied by Lender in such order and priority as Lender shall determine in its discretion. The Yield Maintenance Premium shall also become immediately due and owing in the event of any acceleration of the Loan. The Yield Maintenance Premium shall be secured by all security and collateral for the Loan and shall, after it becomes due and payable, be treated as if it were added to the Debt for all purposes including accrual of interest, judgment on the Note, foreclosure (whether through power of sale, judicial proceeding, or otherwise) (“
Foreclosure Sale
”), redemption, and bankruptcy (including pursuant to Section 506 of the United States Bankruptcy Code (“
Bankruptcy Code
”) or any successor provision); without limiting the generality of the foregoing, it is understood and agreed that the Yield Maintenance Premium may be added to Lender’s bid at any Foreclosure Sale. If a Yield Maintenance Premium is due hereunder, Lender shall deliver to Borrower a statement setting forth the amount and determination of the Yield Maintenance Premium, and, provided that Lender shall have in good faith applied the formula described in the definition of “Yield Maintenance Premium,” Borrower shall not have the right to challenge the calculation or the method of calculation set forth in any such statement in the absence of manifest error, which calculation may be made by Lender on any day during the thirty (30) day period preceding the date of such prepayment. Exchange of the Note for a different instrument or modification of the terms of the Note, including classification and treatment of Lender’s claim (other than non-impairment under Section 1124 of the Bankruptcy Code or any successor provision) pursuant to a plan of reorganization in bankruptcy shall also be deemed to be a prepayment following an Event of Default hereunder.
(d)
Prepayment Prior to Permitted Defeasance Date.
Provided no Event of Default shall then exist, Borrower shall have the right at any time during the period, if any, following the occurrence of the Permitted Release Date until the Permitted Defeasance Date (hereinafter defined), to prepay the Debt in whole (but not in part) upon not less than thirty (30) days and not more than ninety (90) days prior written notice to Lender specifying the projected date of prepayment and upon payment of an amount equal to the Yield Maintenance Premium. Upon the occurrence of the Permitted Defeasance Date, Borrower’s right to prepay under this Section 9(d) shall terminate. The “
Yield
Maintenance Premium
” shall be an amount equal to the greater of (A) one percent (1%) of the Outstanding Principal Balance to be prepaid or satisfied, or accelerated and then due and owing, and (B) the excess, if any, of (I) the sum of the present values of all then-scheduled payments of principal and interest under the Note assuming that all scheduled payments are made timely and that the remaining outstanding principal and interest on the Loan is paid on the Maturity Date (with each such payment and assumed payment discounted to its present value at the date of prepayment at the rate which, when compounded monthly, is equivalent to the bond equivalent yield (in the secondary market) on the United States Treasury Security that as of the date which is five (5) Business Days prior to the date that such prepayment shall be applied in accordance with the terms and provisions of
Section 9(a)
hereof or, in the case of an acceleration of the Loan, the date of such
acceleration (the “
Prepayment Rate Determination Date
”) has a remaining term to maturity closest to, but not exceeding, the remaining term to the Maturity Date as most recently published in “Statistical Release H.15 (519), Selected Interest Rates,” or any successor publication, published by the Board of Governors of the Federal Reserve System, or on the basis of such other publication or statistical guide as Lender may reasonably select (the “
Prepayment Rate
”) when compounded semi-annually and deducting from the sum of such present values any short-term interest paid from the date of prepayment to the next succeeding Payment Date in the event such payment is not made on a Payment Date), over (II) the principal amount being prepaid or the entire Outstanding Principal Balance in the case of an acceleration of the Loan. Lender shall notify Borrower of the amount and the basis of determination of the required Yield Maintenance Premium. If any notice of prepayment is given, the Debt shall be due and payable on the projected date of prepayment. Lender shall not be obligated to accept any prepayment of the Debt unless it is accompanied by the Yield Maintenance Premium due in connection therewith. If for any reason Borrower prepays the Loan on a date other than a Payment Date, Borrower shall pay Lender, in addition to the Debt, interest for the full Accrual Period during which the prepayment occurs. “
Permitted Defeasance Date
” means the date that is two (2) years from the “startup day” within the meaning of Section 860G(a)(9) of the Code for the REMIC Trust which holds the portion of the Note last to be securitized.
(e)
General.
(i) Borrower acknowledges that: (A) Lender has made the Loan to Borrower in reliance on, and the Loan has been originated for the purpose of selling the Loan in the secondary market to investors who will purchase the Loan or direct or indirect interests therein in reliance on, the actual receipt over time of the stream of payments of principal and interest agreed to by Borrower herein; and (B) Lender or any subsequent investor in the Loan will incur substantial additional costs and expenses in the event of a prepayment of the Loan; and (C) the Yield Maintenance Premium is reasonable and is a bargained for consideration and not a penalty and the terms of the Loan are in various respects more favorable to Borrower than they would have been absent Borrower’s agreement to pay the Yield Maintenance Premium as provided herein. Borrower agrees that Lender shall not, as a condition to receiving the Yield Maintenance Premium, be obligated to actually reinvest the amount prepaid in any treasury obligation or in any other manner whatsoever. Nothing contained herein shall be deemed to be a waiver by Lender of any right it may have to require specific performance of any obligation of Borrower hereunder.
(ii) In addition to the Yield Maintenance Premium, Borrower shall pay all hedging and breakage costs of any kind and in any amount incurred by Lender due to any prepayment (including a prepayment following an Event of Default).
10.
Maximum Rate Permitted by Law.
All agreements in this Note and all other Loan Documents are expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of maturity of the indebtedness evidenced hereby or otherwise, shall the amount agreed to be paid hereunder for the use, forbearance, or detention of money exceed the Maximum Legal Rate. If, from any circumstance whatsoever, fulfillment of any provision of this Note or any other Loan Document at the time performance of such provision shall be due shall involve exceeding the Maximum Legal Rate, then,
ipso facto
, the obligations to be fulfilled shall be reduced to allow compliance with the Maximum Legal Rate, and if, from any circumstance whatsoever, Lender shall
ever receive as interest an amount that would exceed the Maximum Legal Rate, the receipt of such excess shall be deemed a mistake and shall be canceled automatically or, if theretofore paid, such excess shall be credited against the principal amount of the indebtedness evidenced hereby to which the same may lawfully be credited, and any portion of such excess not capable of being so credited shall be refunded immediately to Borrower.
11.
Events of Default; Acceleration of Amount Due.
Lender may in its discretion, without notice to Borrower, declare the entire Debt, including the Outstanding Principal Balance, all accrued interest, all costs, expenses, charges and fees payable under any Loan Document, and Yield Maintenance Premium immediately due and payable, and Lender shall have all remedies available to it at law or equity for collection of the amounts due, if any of the following (the “
Events of Default
”) occurs:
(a) Borrower fails to pay any portion of the Debt when due; or
(b) an “Event of Default” (as defined in the Loan Agreement or in any other Loan Document) occurs under the Loan Agreement or any other Loan Document that has continued beyond any applicable cure period therefor.
12.
Time of Essence.
Time is of the essence with regard to each provision contained in this Note.
13.
Transfer and Assignment.
This Note may be freely transferred and assigned by Lender. Borrower’s right to transfer its rights and obligations with respect to the Debt, and to be released from liability under this Note, shall be governed by the Loan Agreement.
14.
Authority of Persons Executing Note.
Borrower warrants and represents that the persons or officers who are executing this Note and the other Loan Documents on behalf of Borrower have full right, power and authority to do so, and that this Note and the other Loan Documents constitute valid and binding documents, enforceable against Borrower in accordance with their terms, and that no other person, entity, or party is required to sign, approve, or consent to, this Note.
15.
Severability.
The terms of this Note are severable, and should any provision be declared by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions shall, at the option of Lender, remain in full force and effect and shall in no way be impaired.
16.
Borrower’s Waivers.
Borrower and all others liable hereon hereby waive presentation for payment, demand, notice of dishonor, protest, and notice of protest, notice of intent to accelerate, and notice of acceleration, stay of execution and all other suretyship defenses to payment generally. No release of any security held for the payment of this Note, or extension of any time periods for any payments due hereunder, or release of collateral that may be granted by Lender from time to time, and no alteration, amendment or waiver of any provision of this Note or of any of the other Loan Documents, shall modify, waive, extend, change, discharge, terminate or affect the liability of Borrower and any others that may at any time be liable for the payment of this Note or the performance of any covenants contained in any of the Loan Documents.
17.
Governing Law; Venue.
The governing law and related provisions set forth in Section 10.3 of the Loan Agreement (including, any authorized agent provisions thereof) are hereby incorporated by reference as if fully set forth herein and shall be deemed fully applicable to Borrower hereunder.
18.
Intentionally Omitted
.
19.
Notices.
All notices or other communications required or permitted to be given pursuant hereto shall be given in the manner specified in the Loan Agreement directed to the parties at their respective addresses as provided therein.
20.
Avoidance of Debt Payments.
To the extent that any payment to Lender or any payment or proceeds of any collateral received by Lender in reduction of the Debt is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, to Borrower (or Borrower’s successor) as a debtor in possession, or to a receiver, creditor, or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then the portion of the Debt intended to have been satisfied by such payment or proceeds shall remain due and payable hereunder, be evidenced by this Note, and shall continue in full force and effect as if such payment or proceeds had never been received by Lender whether or not this Note has been marked “paid” or otherwise cancelled or satisfied or has been delivered to Borrower, and in such event Borrower shall be immediately obligated to return the original Note to Lender and any marking of “paid” or other similar marking shall be of no force and effect.
21.
Nonrecourse.
It is expressly agreed that recourse against Borrower for failure to perform and observe its obligations contained in this Note shall be limited as and to the extent provided in Section 9.3 of the Loan Agreement
22.
Miscellaneous.
Neither this Note nor any of the terms hereof, including the provisions of this Section, may be terminated, amended, supplemented, waived or modified orally, but only by an instrument in writing executed by the party against which enforcement of the termination, amendment, supplement, waiver or modification is sought, and the parties hereby: (a) expressly agree that it shall not be reasonable for any of them to rely on any alleged, non-written amendment to this Note; (b) irrevocably waive any and all right to enforce any alleged, non-written amendment to this Note; and (c) expressly agree that it shall be beyond the scope of authority (apparent or otherwise) for any of their respective agents to agree to any non-written modification of this Note. This Note may be executed in several counterparts, each of which counterpart shall be deemed an original instrument and all of which together shall constitute a single Note. The failure of any party hereto to execute this Note, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder. If Borrower consists of more than one person or entity, then the obligations and liabilities of each person or entity shall be joint and several and in such case, the term “Borrower” shall mean individually and collectively, jointly and severally, each Borrower. As used in this Note, (i) the terms “include,” “including” and similar terms shall be construed as if followed by the phrase “without being limited to,” (ii) any pronoun used herein shall be deemed to cover all genders, and words importing the singular number shall mean and include the plural number, and vice versa, (iii) all captions to the Sections hereof are used for convenience and reference only and in no way define, limit or describe the scope or intent of, or in any way affect, this Note, (iv) no inference in favor of, or against, Lender or Borrower shall be drawn from the fact that such party has drafted any portion hereof or any other Loan Document, (v) the words “Lender” and “Borrower” shall include their respective successors (including, in the case of Borrower, any subsequent owner or owners of the Property or any part thereof or any interest therein and Borrower in its capacity as debtor-in-possession after the commencement of any bankruptcy proceeding), assigns, heirs, personal representatives, executors and administrators, (vi) the term
“or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or,” (vii) the words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Note refer to this Note as a whole and not to any particular provision or section of this Note, (viii) an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by Lender, and (ix) in the computation of periods of time from a specified date to a later date, the word “from and including” and the words “to” and “until” each means “to but excluding.” Wherever Lender’s judgment, consent, approval or discretion is required under this Note or Lender shall have an option, election, or right of determination or any other power to decide any other matter relating to the terms of this Note, including any right to determine that something is satisfactory or not (“
Decision Power
”), such Decision Power shall be exercised in the sole and absolute discretion of Lender except as may be otherwise expressly and specifically provided herein. Such Decision Power and each other power granted to Lender upon this Note or any other Loan Document may be exercised by Lender or by any authorized agent of Lender (including any servicer or attorney-in-fact), and Borrower hereby expressly agrees to recognize the exercise of such Decision Power by such authorized agent. In the event of a conflict between or among the terms, covenants, conditions or provisions of the Loan Documents, the term(s), covenant(s), condition(s) or provision(s) that Lender may elect to enforce from time to time so as to enlarge the interest of Lender in its security, afford Lender the maximum financial benefits or security for the Debt, or provide Lender the maximum assurance of payment of the Debt in full shall control. BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS BEEN PROVIDED WITH SUFFICIENT AND NECESSARY TIME AND OPPORTUNITY TO REVIEW THE TERMS OF THIS NOTE, THE SECURITY INSTRUMENT, AND EACH OF THE LOAN DOCUMENTS, WITH ANY AND ALL COUNSEL IT DEEMS APPROPRIATE, AND THAT NO INFERENCE IN FAVOR OF, OR AGAINST, LENDER OR BORROWER SHALL BE DRAWN FROM THE FACT THAT EITHER SUCH PARTY HAS DRAFTED ANY PORTION HEREOF, OR THE SECURITY INSTRUMENT, OR ANY OF THE LOAN DOCUMENTS.
23.
Waiver of Counterclaim and Jury Trial.
BORROWER HEREBY KNOWINGLY WAIVES THE RIGHT TO ASSERT ANY COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY ACTION OR PROCEEDING BROUGHT AGAINST BORROWER BY LENDER OR ITS AGENTS. ADDITIONALLY, TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THE LOAN OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THE LOAN, THIS NOTE, THE SECURITY INSTRUMENT, OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN), OR ACTION OF BORROWER OR LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER’S MAKING OF THE LOAN.
[NO FURTHER TEXT ON THIS PAGE]
Intending to be fully bound, Borrower has executed this Note effective as of the day and year first above written.
BORROWER:
DCII-250 WILLIAMS STREET NW, LLC,
a Delaware limited liability company
By: Carter Validus Operating Partnership II, LP,
a Delaware limited partnership,
its Sole Member
By: Carter Validus Mission Critical REIT II, Inc.,
a Maryland corporation,
its General Partner
By:
/s/ Lisa Collado
Name:
Lisa Collado
Title:
Authorized Agent
SIGNATURE PAGE TO PROMISSORY NOTE