*** Portions hereof have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
EXHIBIT 10.1
LOAN AND SECURITY AGREEMENT
Dated as of June 9, 2006
between
The Borrowers Signatory Hereto,
as Borrower,
ABP MD (BALTIMORE) LLC,
as Maryland Loan Guarantor
and
GERMAN AMERICAN CAPITAL CORPORATION,
on behalf of the holders of the Notes,
as Lender

 

 

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TABLE OF CONTENTS

              Page  
 
       
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
    1  
 
       
1.1 Definitions
    1  
1.2 Principles of Construction
    26  
 
       
II. GENERAL TERMS
    26  
 
       
2.1 Loan; Disbursement to Borrower
    26  
2.1.1 The Loan
    26  
2.1.2 Disbursement to Borrower
    26  
2.1.3 The Notes, Security Instrument and Loan Documents
    27  
2.1.4 Use of Proceeds
    27  
 
       
2.2 Interest; Loan Payments; Late Payment Charge
    27  
2.2.1 Payment of Principal and Interest
    27  
2.2.2 Method and Place of Payment
    27  
2.2.3 Late Payment Charge
    28  
2.2.4 Usury Savings
    28  
 
       
2.3 Prepayments
    28  
2.3.1 Prepayments
    28  
2.3.2 Prepayments After Event of Default; Application of Amounts Paid
    28  
2.3.3 Release of Property upon Repayment or Defeasance of Loan in Full
    29  
2.3.4 Release of Individual Properties
    29  
2.3.5 Defeasance
    30  
2.3.6 Substitution of Properties
    34  
2.3.7 Release of Outparcels
    39  
2.3.8 Excess Account Collateral
    39  
2.3.9 Reserve Requirements
    40  
 
       
2.4 Regulatory Change; Taxes
    40  
2.4.1 Increased Costs
    40  
2.4.2 Special Taxes
    40  
2.4.3 Other Taxes
    41  
2.4.4 Indemnity
    41  
2.4.5 Change of Office
    41  
2.4.6 Survival
    41  

 

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              Page  
 
       
2.5 Conditions Precedent to Closing
    41  
2.5.1 Representations and Warranties; Compliance with Conditions
    41  
2.5.2 Delivery of Loan Documents; Title Policy; Reports; Leases
    41  
2.5.3 Related Documents
    43  
2.5.4 Delivery of Organizational Documents
    43  
2.5.5 Counsel Opinions
    43  
2.5.6 Annual Budget
    43  
2.5.7 Completion of Proceedings
    44  
2.5.8 Payments
    44  
2.5.9 Account Agreement
    44  
2.5.10 Master Lease SNDA
    44  
2.5.11 Reserved
    44  
2.5.12 Reserved
    44  
2.5.13 Independent Manager/Member Certificate
    44  
2.5.14 Transaction Costs
    44  
2.5.15 Material Adverse Effect
    44  
2.5.16 Insolvency
    44  
2.5.17 Leases
    44  
2.5.18 Master Lease; Master Lease SNDA
    44  
2.5.19 Tax Lot
    44  
2.5.20 Physical Conditions Reports
    45  
2.5.21 Appraisals
    45  
2.5.22 Financial Statements
    45  
2.5.23 Flood Certifications
    45  
2.5.24 Intercreditor Agreement
    45  
 
       
III. CASH MANAGEMENT
    45  
 
       
3.1 Cash Management
    45  
3.1.1 Establishment of Accounts
    45  
3.1.2 Pledge of Account Collateral
    46  
3.1.3 Maintenance of Collateral Accounts
    47  
3.1.4 Eligible Accounts
    47  
3.1.5 Deposits into Sub-Accounts
    48  
3.1.6 Monthly Funding of Sub-Accounts; Master Lease Rent Shortfalls; Master
Lease Variable Additional Rent Reserve; Sub-Account Shortfalls
    48  
3.1.7 Required Payments from Sub-Accounts
    50  
3.1.8 Cash Management Bank
    50  
3.1.9 Borrower’s and Maryland Loan Guarantor’s Account Representations,
Warranties and Covenants
    51  
3.1.10 Account Collateral and Remedies
    51  
3.1.11 Transfers and Other Liens
    52  
3.1.12 Reasonable Care
    52  
3.1.13 Lender’s Liability
    52  
3.1.14 Continuing Security Interest
    53  

 

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              Page  
 
       
IV. REPRESENTATIONS AND WARRANTIES
    53  
 
       
4.1 Borrower Representations
    53  
4.1.1 Organization
    53  
4.1.2 Proceedings
    54  
4.1.3 No Conflicts
    54  
4.1.4 Litigation
    54  
4.1.5 Agreements
    55  
4.1.6 Title
    55  
4.1.7 No Bankruptcy Filing
    55  
4.1.8 Full and Accurate Disclosure
    56  
4.1.9 All Property
    56  
4.1.10 No Plan Assets
    56  
4.1.11 Compliance
    57  
4.1.12 Financial Information
    57  
4.1.13 Condemnation
    57  
4.1.14 Federal Reserve Regulations
    57  
4.1.15 Utilities and Public Access
    57  
4.1.16 Not a Foreign Person
    58  
4.1.17 Separate Lots
    58  
4.1.18 Subdivision
    58  
4.1.19 Enforceability
    58  
4.1.20 Assessments
    58  
4.1.21 Insurance
    58  
4.1.22 Use of Property
    58  
4.1.23 Certificate of Occupancy; Licenses
    58  
4.1.24 Flood Zone
    59  
4.1.25 Physical Condition
    59  
4.1.26 Boundaries
    59  
4.1.27 Leases and Subleases
    59  
4.1.28 Filing and Recording Taxes
    60  
4.1.29 Single Purpose Entity/Separateness
    60  
4.1.30 Illegal Activity
    60  
4.1.31 No Change in Facts or Circumstances; Disclosure
    60  
4.1.32 Tax Filings
    61  
4.1.33 Solvency/Fraudulent Conveyance
    61  
4.1.34 Investment Company Act
    61  
4.1.35 Labor
    61  
4.1.36 Brokers
    62  
4.1.37 No Other Debt
    62  
4.1.38 Taxpayer Identification Number
    62  
4.1.39 Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws
    62  
4.1.40 Rights of First Refusal or First Offer to Lease or Purchase
    62  

 

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              Page  
 
       
4.2 Survival of Representations
    63  
 
       
4.3 Borrower’s or Maryland Loan Guarantor’s Knowledge
    63  
 
       
V. BORROWER AND MARYLAND LOAN GUARANTOR COVENANTS
    63  
 
       
5.1 Affirmative Covenants
    63  
5.1.1 Performance by Borrower and Maryland Loan Guarantor
    63  
5.1.2 Existence; Compliance with Legal Requirements; Insurance
    64  
5.1.3 Litigation
    64  
5.1.4 Single Purpose Entity
    64  
5.1.5 Consents
    65  
5.1.6 Access to Property
    66  
5.1.7 Notice of Default
    66  
5.1.8 Cooperate in Legal Proceedings
    66  
5.1.9 Insurance
    66  
5.1.10 Further Assurances; Severance of Notes and Mezzanine Loan
    66  
5.1.11 Mortgage Taxes
    68  
5.1.12 Business and Operations
    68  
5.1.13 Title to the Property
    68  
5.1.14 Costs of Enforcement
    69  
5.1.15 Estoppel Statements
    69  
5.1.16 Loan Proceeds
    69  
5.1.17 No Joint Assessment
    69  
5.1.18 No Further Encumbrances
    70  
5.1.19 Leases and Material Subleases
    70  
5.1.20 Management
    70  
5.1.21 Master Lease
    70  
 
       
5.2 Negative Covenants
    72  
5.2.1 Incur Debt
    72  
5.2.2 Encumbrances
    72  
5.2.3 Engage in Different Business
    72  
5.2.4 Make Advances
    72  
5.2.5 Partition
    72  
5.2.6 Commingle
    72  
5.2.7 Guarantee Obligations
    73  
5.2.8 Transfer Assets
    73  
5.2.9 Amend Organizational Documents
    73  
5.2.10 Dissolve
    73  
5.2.11 Bankruptcy
    73  
5.2.12 ERISA
    73  
5.2.13 Distributions
    73  
5.2.14 Management
    73  
5.2.15 Reserved
    74  
5.2.16 Modify Account Agreement
    74  
5.2.17 Zoning Reclassification
    74  
5.2.18 Change of Principal Place of Business
    74  
5.2.19 Debt Cancellation
    74  
5.2.20 Misapplication of Funds
    74  
5.2.21 Single Purpose Entity
    75  

 

iv

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              Page  
 
       
VI. INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
    75  
 
       
6.1 Insurance Coverage Requirements
    75  
6.1.1 Property Insurance
    75  
6.1.2 Liability Insurance
    75  
6.1.3 Workers’ Compensation Insurance
    75  
6.1.4 Business Interruption Insurance
    76  
6.1.5 Builder’s All-Risk Insurance
    76  
6.1.6 Boiler and Machinery Insurance
    76  
6.1.7 Flood Insurance and Earthquake Insurance
    76  
6.1.8 Terrorism Insurance
    77  
6.1.9 Storage Tank System Third Party Liability and Cleanup Insurance
    78  
6.1.10 Other Insurance
    78  
6.1.11 Ratings of Insurers
    78  
6.1.12 Form of Insurance Policies; Endorsements
    78  
6.1.13 Evidence of Insurance
    79  
6.1.14 Separate Insurance
    79  
6.1.15 Blanket Policies
    79  
 
       
6.2 Condemnation and Insurance Proceeds
    79  
6.2.1 Notification
    79  
6.2.2 Proceeds
    80  
6.2.3 Lender to Take Proceeds
    81  
6.2.4 Borrower to Restore
    82  
6.2.5 Disbursement of Proceeds
    83  
 
       
VII. IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS
    84  
 
       
7.1 Borrower or Maryland Loan Guarantor to Pay Impositions and Other Charges
    84  
 
       
7.2 No Liens
    84  
 
       
7.3 Contest
    85  
 
       
VIII. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS
    85  
 
       
8.1 General Restriction on Transfers and Debt
    85  
 
       
8.2 Sale of Building Equipment
    86  
 
       
8.3 Immaterial Transfers and Easements, etc.
    86  
 
       
8.4 Permitted Equity Transfers
    87  

 

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              Page  
 
       
8.5 Deliveries to Lender
    88  
 
       
8.6 Loan Assumption
    88  
 
       
8.7 Leases and Subleases
    89  
8.7.1 Leasing Conditions
    89  
8.7.2 Delivery of New Sublease or Sublease Modification
    89  
8.7.3 Security Deposits
    89  
8.7.4 No Default Under Subleases
    89  
8.7.5 Subordination
    89  
8.7.6 Attornment
    90  
8.7.7 Non-Disturbance Agreements
    90  
 
       
IX. RESERVED
    90  
 
       
X. MAINTENANCE OF PROPERTY; ALTERATIONS
    90  
10.1 Maintenance of Property
    90  
10.2 Conditions to Alteration
    91  
10.3 Costs of Alteration
    91  
 
       
XI. BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION
    93  
 
       
11.1 Books and Records
    93  
11.2 Financial Statements
    93  
11.2.1 Quarterly Reports
    93  
11.2.2 Annual Reports
    94  
11.2.3 Capital Expenditures Summaries
    94  
11.2.4 Master Lease
    94  
11.2.5 Annual Budget
    94  
11.2.6 Other Information
    94  
 
       
XII. ENVIRONMENTAL MATTERS
    95  
 
       
12.1 Representations
    95  
12.2 Covenants
    95  
12.2.1 Compliance with Environmental Laws
    95  
12.3 Environmental Reports
    96  
12.4 Environmental Indemnification
    96  
12.5 Recourse Nature of Certain Indemnifications
    97  

 

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              Page  
 
       
XIII. RESERVED
    97  
 
       
XIV. SECURITIZATION
    97  
 
       
14.1 Sale of Notes and Securitization
    97  
14.2 Securitization Financial Statements
    98  
14.3 Securitization Indemnification
    98  
14.3.1 Disclosure Documents
    98  
14.3.2 Indemnification Certificate
    99  
 
       
XV. ASSIGNMENTS AND PARTICIPATIONS
    101  
15.1 Assignment and Acceptance
    101  
15.2 Effect of Assignment and Acceptance
    101  
15.3 Content
    101  
15.4 Register
    102  
15.5 Substitute Notes
    102  
15.6 Participations
    103  
15.7 Disclosure of Information
    103  
15.8 Security Interest in Favor of Federal Reserve Bank
    103  
 
       
XVI. RESERVE ACCOUNTS
    103  
 
       
16.1 Tax Reserve Account
    103  
16.2 Insurance Reserve Account
    104  
16.3 Structural Repair Reserve Account
    105  
16.4 Immediate Repair and Remediation Reserve Account
    106  
16.5 Master Lease Variable Additional Rent Reserve Account and LCR Deterioration
Reserve Account
    107  
 
       
XVII. DEFAULTS
    108  
 
       
17.1 Event of Default
    108  
17.2 Remedies
    111  
17.3 Remedies Cumulative; Waivers
    112  
17.4 Costs of Collection
    113  
 
       
XVIII. SPECIAL PROVISIONS
    113  
 
       
18.1 Exculpation
    113  
18.1.1 Exculpated Parties
    113  
18.1.2 Carveouts From Non-Recourse Limitations
    114  

 

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              Page  
 
       
XIX. MISCELLANEOUS
    116  
 
       
19.1 Survival
    116  
19.2 Lender’s Discretion
    116  
19.3 Governing Law
    116  
19.4 Modification, Waiver in Writing
    117  
19.5 Delay Not a Waiver
    117  
19.6 Notices
    118  
19.7 TRIAL BY JURY
    119  
19.8 Headings
    119  
19.9 Severability
    119  
19.10 Preferences
    119  
19.11 Waiver of Notice
    120  
19.12 Expenses; Indemnity
    120  
19.13 Exhibits and Schedules Incorporated
    122  
19.14 Offsets, Counterclaims and Defenses
    122  
19.15 Liability of Assignees of Lender
    122  
19.16 No Joint Venture or Partnership; No Third Party Beneficiaries
    122  
19.17 Publicity
    123  
19.18 Waiver of Marshalling of Assets
    123  
19.19 Waiver of Counterclaim and other Actions
    123  
19.20 Conflict; Construction of Documents; Reliance
    123  
19.21 Prior Agreements
    124  
19.22 Counterparts
    124  

 

viii

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EXHIBITS AND SCHEDULES

     
EXHIBIT A
  TITLE INSURANCE REQUIREMENTS, ENDORSEMENTS AND AFFIRMATIVE COVERAGES
EXHIBIT B
  SURVEY REQUIREMENTS
EXHIBIT C
  SINGLE PURPOSE ENTITY PROVISIONS
EXHIBIT D
  ENFORCEABILITY OPINION REQUIREMENTS
EXHIBIT E
  INTENTIONALLY DELETED
EXHIBIT F
  INTENTIONALLY DELETED
EXHIBIT G
  INTENTIONALLY DELETED
EXHIBIT H
  INTENTIONALLY DELETED
EXHIBIT I
  INTENTIONALLY DELETED
EXHIBIT J
  INTENTIONALLY DELETED
EXHIBIT K
  BORROWER ORGANIZATIONAL STRUCTURE
EXHIBIT L
  INTENTIONALLY DELETED
EXHIBIT M
  FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
EXHIBIT N
  FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
EXHIBIT O
  INTENTIONALLY DELETED
EXHIBIT P
  FORM OF MASTER LEASE RENT PAYMENT DIRECTION LETTER
EXHIBIT Q
  INTENTIONALLY DELETED
EXHIBIT R
  INTENTIONALLY DELETED
EXHIBIT S
  INTENTIONALLY DELETED
EXHIBIT T
  FORM OF INDEPENDENT MANAGER/MEMBER CERTIFICATE
 
   
SCHEDULE I
  ALLOCATED LOAN AMOUNTS
SCHEDULE II
  GEOGRAPHIC QUADRANTS
SCHEDULE III
  IMMEDIATE REPAIRS AND REMEDIATION
SCHEDULE IV
  LEASES
SCHEDULE V
  INTENTIONALLY DELETED
SCHEDULE VI
  LITIGATION SCHEDULE
SCHEDULE VII
  OUTPARCEL LEGAL DESCRIPTIONS
SCHEDULE VIII
  BORROWER TAXPAYER IDENTIFICATION NUMBERS

 

ix

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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT, dated as of June 9, 2006 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
“Agreement”), by and among ABP MD (BALTIMORE) LLC, a Delaware limited liability
company (“Maryland Loan Guarantor”), the borrowers signatory hereto (each an
“Individual Borrower” and collectively, “Borrower”) having an office c/o
BlueLinx Holdings Inc., 4300 Wildwood Parkway, Atlanta, Georgia 30339, and
GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, on behalf of the
holders of the Notes, having an address at 60 Wall Street, New York, New York
10005 (together with its successors and assigns, “Lender”).
RECITALS:
WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from
Lender;
WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms of this Agreement and the other Loan Documents (as
hereinafter defined).
NOW, THEREFORE, in consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
1.1 Definitions. For all purposes of this Agreement, except as otherwise
expressly required or unless the context clearly indicates a contrary intent:
“Account Agreement” shall mean the Account and Control Agreement, dated the date
hereof, among Lender, Borrower (other than Maryland Borrower), Maryland Loan
Guarantor and Cash Management Bank.
“Account Collateral” shall have the meaning set forth in Section 3.1.2.
“Additional Non-Consolidation Opinion” shall have the meaning set forth in
Section 4.1.29(b).
“Affiliate” shall mean, with respect to any specified Person, any other Person
that (i) directly or indirectly Controls, is Controlled by or under direct or
indirect Common Control with such specified Person, (ii) is a general partner or
managing member of such specified Person, or (iii) is an officer or director of
such specified Person.

 

 

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“Aggregate Appraised Value” shall mean the sum of (a) the aggregate Appraised
Values (as indicated in the Appraisals delivered by Borrower pursuant to
Section 2.5.21) of all Individual Properties which were subject to the Lien of
the Security Instrument on the Closing Date and remain subject to the Lien of
the Security Instrument on the date such determination is made and (b) the
aggregate Appraised Value of the Substitute Properties, as reflected in the
Appraisals delivered in accordance with Section 2.3.6(c).
“Agreement” shall mean this Agreement, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
“Allocated Loan Amount” shall mean with respect to each Individual Property, the
designated allocated portion of the Loan applicable to such Individual Property
that is set forth on Schedule I attached hereto. For the avoidance of doubt, no
portion of the Loan shall be allocated to any of the Outparcels.
“ALTA” shall mean American Land Title Association, or any successor thereto.
“Alteration” shall have the meaning set forth in Section 10.2.
“Annual Budget” shall mean the operating budget for the Property prepared by or
on behalf of Borrower for the applicable Fiscal Year or other period setting
forth, in reasonable detail, Borrower’s or Guarantor’s good faith estimates of
the anticipated results of operation of the Property, including, but not limited
to, revenue from all sources, Master Lease Variable Additional Rent, Master
Lease Recurrent Additional Rent and Capital Expenditures.
“Appraisals” shall mean FIRREA appraisals conducted by CB Richard Ellis (or
another Independent appraiser reasonably acceptable to Lender) which establish
the Appraised Value of each Individual Property (or, as applicable, each
Substitute Property).
“Appraised Value” shall mean, for an Individual Property or, as applicable, a
Substitute Property, the value of such Individual Property or Substitute
Property as determined by the Appraisal for such Individual Property or
Substitute Property.
“Approved Bank” shall have the meaning provided in the Account Agreement.
“Architect” shall mean an architect, engineer or construction consultant
selected by Borrower, licensed to practice in the relevant State, having at
least five (5) years of architectural experience and which is selected by an
Individual Borrower and reasonably acceptable to Lender.
“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by Lender and an assignee, and accepted by Lender in accordance with Article XV
and in substantially the form of Exhibit M or such other form customarily used
by Lender in connection with the participation or syndication of mortgage loans
at the time of such assignment.
“Assignment of Leases” shall mean, with respect to each Individual Property,
that certain first priority Assignment of Master Lease, Leases, Rents and
Security Deposits, dated as of the date hereof, from each Individual Borrower
(or in the case of the Maryland Property, the Maryland Loan Guarantor), as
assignor, to Lender, as assignee, assigning to Lender all of such Individual
Borrower’s (or Maryland Loan Guarantor’s) interest in and to the Master Lease,
the Leases and the Rents of such Individual Property, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

2

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“Bankruptcy Code” shall mean Title 11, U.S.C.A., as amended from time to time
and any successor statute thereto.
“Blanket Policy” shall have the meaning provided in Section 6.1.14.
“Borrower” shall have the meaning set forth in the first paragraph of this
Agreement.
“Borrower’s Account” shall mean an account or accounts maintained by Borrower
for its own account at such bank and with such account number as may be
designated in writing by Borrower to Lender and Cash Management Bank from time
to time.
“Broker” shall mean CB Richard Ellis/L.J. Melody.
“Building Equipment” shall have the meaning set forth in the Security
Instrument.
“Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which national banks in New York are not open for business.
“Capital Expenditures” shall mean, for any period, the amount expended for items
capitalized under GAAP, including expenditures for building improvements or
major repairs, leasing commissions and tenant improvements.
“Cash” shall mean the legal tender of the United States of America.
“Cash and Cash Equivalents” shall mean any one or a combination of the
following: (i) Cash, and (ii) U.S. Government Obligations.
“Cash Management Bank” shall mean Wachovia Bank, National Association or any
successor Approved Bank acting as Cash Management Bank under the Account
Agreement or other financial institution approved by the Lender and, if a
Securitization has occurred, the Rating Agencies.
“Casualty Amount” shall mean ten percent (10%) of the Allocated Loan Amount of
the affected Individual Property.
“Casualty/Condemnation Property Release” shall mean any Property Release
obtained in connection with a Proceeds Prepayment or other principal prepayment
made pursuant to Section 6.2.3 or Section 4(b) of the Note.
“Close Affiliate” shall mean, with respect to any Person (the “First Person”),
any other Person (each, a “Second Person”) which is an Affiliate of the First
Person and in respect of which any of the following are true: (a) the Second
Person owns, directly or indirectly, at least seventy-five percent (75%) of all
of the legal, beneficial and/or equitable interest in such First Person, (b) the
First Person owns, directly or indirectly, at least seventy-five percent (75%)
of all of the legal, beneficial and/or equitable interest in such Second Person,
or (c) a third (3rd) Person owns, directly or indirectly, at least seventy-five
percent (75%) of all of the legal, beneficial and/or equitable interest in both
the First Person and the Second Person.

 

3

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“Closing Date” shall mean the date of this Agreement set forth in the first
paragraph hereof.
“Closing Date LCR Ratio” shall mean 5.18x.
“Closing Date LTV Ratio” shall mean 79.22%.
“Code” shall mean the Internal Revenue Code of 1986, as amended, as it may be
further amended from time to time, and any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
“Collateral Accounts” shall have the meaning set forth in Section 3.1.1.
“Completion” shall have the meaning set forth in Section 16.4.
“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise, and
the terms “Controlled,” “Controlling” and “Common Control” shall have
correlative meanings.
“Cut-Off Date” shall have the meaning set forth in Section 6.2.3(a).
“DBS” shall have the meaning set forth in Section 14.3.2(b).
“Debt” shall mean, with respect to any Person at any time, (a) indebtedness or
liability of such Person for borrowed money whether or not evidenced by bonds,
debentures, notes or other instruments, or for the deferred purchase price of
property or services; (b) obligations of such Person as lessee under leases
which should have been or should be, in accordance with GAAP, recorded as
capital leases; (c) obligations issued for, or liabilities incurred on the
account of, such Person; (d) obligations or liabilities of such Person arising
under letters of credit, credit facilities or other acceptance facilities;
(e) obligations of such Person under any guarantees or other agreement to become
secondarily liable for any obligation of any other Person, endorsements (other
than for collection or deposit in the ordinary course of business) and other
contingent obligations to provide funds for payment, to supply funds to invest
in any Person or otherwise to assure a creditor against loss; (f) subject to
Section 7.3, obligations of such Person secured by any Lien on any property of
such Person; or (g) obligations of such Person under any interest rate or
currency exchange agreement.
“Debt Service” shall mean, with respect to any particular period of time,
scheduled interest and/or principal payments under the Notes.
“Debt Service Reserve Account” shall have the meaning set forth in Section
3.1.1.

 

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“Default” shall mean the occurrence of any event hereunder or under any other
Loan Document which, but for the giving of notice or passage of time, or both,
would be an Event of Default.
“Default Rate” shall have the meaning set forth in the Note.
“Defeasance Collateral” shall mean obligations or securities that (a) are not
subject to prepayment, call or early redemption, (b) provide for interest at a
fixed rate, (c) have a principal amount due at maturity that cannot vary or
change, (d) are rated “AAA” or better by S&P and Aaa or better by Moody’s (or,
if not rated by S&P, are eligible under S&P’s published criteria in paragraphs
1, 2 or 3 of its Eligible Investment Criteria for “AAA” Rated Structured
Transactions), and (e) constitute “government securities” as defined in
Section 2(a)(16) of the Investment Company Act of 1940 as amended (15 U.S.C.
80a-1).
“Defeasance Date” shall have the meaning set forth in Section 2.3.5(a).
“Defeasance Deposit” shall mean an amount equal to the Release Price for the
applicable Individual Property or Individual Properties subject to the
Defeasance Event plus any costs and expenses incurred or to be incurred in the
purchase of Defeasance Collateral necessary to meet the Scheduled Defeasance
Payments.
“Defeasance Event” shall have the meaning set forth in Section 2.3.5(a).
“Defeasance Lockout Period” shall have the meaning set forth in the Note.
“Deficiency” shall have the meaning set forth in Section 6.2.4(b).
“Disclosure Documents” shall have the meaning set forth in Section 14.3.1.
“Disqualified Transferee” shall mean any proposed transferee that, (i) has
(within the past ten (10) years) defaulted, or is now in default, beyond any
applicable cure period, of its material obligations, under any written agreement
with Lender, any affiliate of Lender or any financial institution; (ii) has a
principal that has been convicted in a criminal proceeding for a felony or a
crime involving moral turpitude or that is an organized crime figure or is
reputed (as determined by Lender in its sole discretion) to have substantial
business or other affiliations with an organized crime figure; (iii) has at any
time filed a voluntary petition under the Bankruptcy Code or any other federal
or state bankruptcy or insolvency law; (iv) as to which an involuntary petition
has at any time been filed under the Bankruptcy Code or any other federal or
state bankruptcy or insolvency law; (v) has at any time filed an answer
consenting to or acquiescing in any involuntary petition filed against it by any
other person under the Bankruptcy Code or any other federal or state bankruptcy
or insolvency law; (vi) has at any time consented to or acquiesced in or joined
in an application for the appointment of a custodian, receiver, trustee or
examiner for itself or any of its property; (vii) has at any time made an
assignment for the benefit of creditors, or has at any time admitted its
insolvency or inability to pay its debts as they become due; or (viii) has been
found by a court of competent jurisdiction or other governmental authority in a
comparable proceeding to have violated any federal or state securities laws or
regulations promulgated thereunder.

 

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“EBITDAR” shall mean earnings from operations before interest expense/income,
federal, state and local income taxes, depreciation and amortization, any rental
expense on real property, restructuring costs, unusual severance costs, debt
issuance or stock offering costs, legal loss reserve, casualty losses and/or
related reserves, stock option expense and merger and acquisition related
expenses.
“Eligible Account” shall mean (i) a segregated trust account or accounts
maintained with the corporate trust department of a federal depository
institution or state-chartered depository institution subject to regulations
regarding fiduciary funds on deposit such as or similar to Title 12 of the Code
of Federal Regulations Section 9.10(b) which, in either case, has corporate
trust powers, acting in its fiduciary capacity or (ii) a segregated account
maintained at an Approved Bank. An Eligible Account will not be evidenced by a
certificate of deposit, passbook or other instrument.
“Environmental Certificate” shall have the meaning set forth in Section 12.2.1.
“Environmental Claim” shall mean any claim, action, cause of action,
investigation or written notice by any Person alleging potential liability
(including potential liability for investigatory costs, cleanup costs, natural
resource damages, property damages, personal injuries or penalties) arising out
of, based upon or resulting from (a) the presence or release into the
environment of any Hazardous Materials from or at the Property, or (b) the
violation, or alleged violation, of any Environmental Law relating to the
Property.
“Environmental Event” shall have the meaning set forth in Section 12.2.1.
“Environmental Indemnity” shall mean the Environmental Indemnity, dated the date
hereof, made by Guarantor in favor of Lender.
“Environmental Insurance Policy” shall mean any environmental insurance policy
maintained by or for the benefit of Borrower with respect to the Property on the
date hereof and any environmental insurance policy hereafter obtained and
maintained with respect to the Property and acceptable to Lender.
“Environmental Law” shall have the meaning provided in the Environmental
Indemnity.
“Environmental Reports” shall have the meaning set forth in Section 12.1.
“ERISA” shall mean the United States Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder.
“Event of Default” shall have the meaning set forth in Section 17.1(a).
“Excess Account Collateral” shall have the meaning set forth in Section 2.3.8.
“Excess Cash Flow” shall have the meaning set forth in Section 3.1.6.

 

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“Exchange Act” shall have the meaning set forth in Section 14.3.1.
“Excluded Personal Property” shall mean all personal property of the Master
Lessee or any other Tenants under Leases; provided, however, that Excluded
Personal Property shall not include walls or ceilings or any items that
constitute fixtures (specifically including, but not limited to plumbing and
electrical fixtures, heating, ventilation and air conditioning, wall and floor
coverings, elevators and escalators). Excluded Personal Property shall include,
without limitation, any equipment attached to or installed at an Individual
Property which is unique to and used to further the business of Master Lessee or
such Tenants at such Individual Property, including, but not limited to, steel
racking, dust collection systems, generators, order pickers and other similar
items. For purposes of this definition, the terms “equipment” and “fixtures”
shall have the meaning set forth in the Uniform Commercial Code in effect in the
State of New York.
“Exculpated Parties” shall have the meaning set forth in Section 18.1.1.
“Excusable Delay” shall mean a delay solely due to acts of God, governmental
restrictions, regulations or controls, stays, judgments, orders, decrees, enemy
or hostile governmental actions, terrorist acts, civil commotion, fire,
casualty, strikes, work stoppages, shortages of labor or materials or other
causes beyond the reasonable control of Borrower, but Borrower’s lack of funds
in and of itself shall not be deemed a cause beyond the control of Borrower.
“Fiscal Year” shall mean the fifty-two (52) or fifty-three (53) week period
ending on the Saturday immediately preceding the last day of each calendar year
of the term of the Loan or the portion of any such period falling within the
term of the Loan in the event that such a period occurs partially before or
after, or partially during, the term of the Loan.
“Fiscal Quarter” shall mean each quarter within a Fiscal Year in accordance with
GAAP.
“Fitch” shall mean Fitch Ratings Inc.
“GAAP” shall mean the generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such entity as may be in general use by significant segments
of the U.S. accounting profession, to the extent such principles are applicable
to the facts and circumstances on the date of determination.
“General Release Conditions” shall have the meaning set forth in Section 2.3.4.
“Geographic Quadrant” shall mean any geographic quadrant identified on Schedule
II attached hereto.
“Governmental Authority” shall mean any court, board, agency, commission, office
or other authority of any nature whatsoever for any governmental unit (federal,
state, county, district, municipal, city or otherwise) whether now or hereafter
in existence.

 

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“Guarantor” shall mean BlueLinx Holdings Inc., a Delaware corporation.
“Hazardous Materials” shall have the meaning provided in the Environmental
Indemnity.
“Holding Account” shall have the meaning set forth in Section 3.1.1.
“Immediate Repairs and Remediation Completion Deadline” shall have the meaning
set forth in Section 16.4.
“Immediate Repair and Remediation Reserve Account” shall have the meaning set
forth in Section 3.1.1.
“Immediate Repairs and Remediation” shall mean, collectively, the immediate
repairs and environmental remediation required to be made to the Property (other
than immediate repairs required to be made to the portion of the Improvements
that constitutes shed space) described in Schedule III attached hereto.
“Impositions” shall mean all taxes (including all ad valorem, sales (including
those imposed on lease rentals), use, single business, gross receipts, value
added, intangible transaction, privilege or license or similar taxes),
governmental assessments (including all assessments for public improvements or
benefits, whether or not commenced or completed prior to the date hereof and
whether or not commenced or completed within the term of this Agreement), water,
sewer or other rents and charges, excises, levies, fees (including license,
permit, inspection, authorization and similar fees), and all other governmental
charges, in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the Property and/or any
Rents (including all interest and penalties thereon), which at any time prior
to, during or in respect of the term hereof may be assessed or imposed on or in
respect of or be a Lien upon (a) Borrower or Maryland Loan Guarantor (including
all franchise or other taxes imposed on Borrower or Maryland Loan Guarantor for
the privilege of doing business in the jurisdiction in which the Property is
located), (b) the Property, or any other collateral delivered or pledged to
Lender in connection with the Loan, or any part thereof, or any Rents therefrom
or any estate, right, title or interest therein, or (c) any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Property or the leasing or use of all or any part thereof by
Borrower or Maryland Loan Guarantor. Nothing contained in this Agreement shall
be construed to require Borrower or Maryland Loan Guarantor to pay any tax,
assessment, levy or charge imposed on (i) any Tenant occupying any portion of
the Property or (ii) Lender in the nature of a capital levy, estate,
inheritance, succession, income or net revenue tax.
“Improvements” shall have the meaning set forth in the Security Instrument.
“Increased Costs” shall have the meaning set forth in Section 2.4.1.
“Indebtedness” shall mean, at any given time, the Principal Amount, together
with all accrued and unpaid interest thereon and all other obligations and
liabilities due or to become due to Lender pursuant hereto, under the Notes or
in accordance with the other Loan Documents and all other amounts, sums and
expenses paid by or payable to Lender hereunder or pursuant to the Notes or the
other Loan Documents.

 

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“Indemnified Parties” shall have the meaning set forth in Section 19.12(b).
“Independent” shall mean, when used with respect to any Person, a Person who:
(i) does not have any direct financial interest or any material indirect
financial interest in any Borrower or in any Affiliate of any Borrower, (ii) is
not connected with any Borrower or any Affiliate of any Borrower as an officer,
employee, promoter, underwriter, trustee, partner, member, manager, creditor,
director, supplier, customer or person performing similar functions and (iii) is
not a member of the immediate family of a Person defined in clause (i) or
(ii) above.
“Independent Accountant” shall mean a firm of nationally recognized, certified
public accountants which is Independent and which is selected by Borrower and
reasonably acceptable to Lender. Lender acknowledges that Ernst & Young LLP
constitutes an approved Independent Accountant.
“Independent Architect” shall mean an architect, engineer or construction
consultant selected by Borrower which is Independent, licensed to practice in
the State (if an architect), has at least five (5) years of applicable
experience and which is reasonably acceptable to Lender. Lender acknowledges
that, for purposes of the Physical Condition Reports, ATC Associates, Inc. and
Land America Assessment Corp. are each an approved Independent Architect.
“Independent Director,” “Independent Manager,” or “Independent Member” shall
mean a Person who is not and will not be while serving and has never been (i) a
member (other than an Independent Member), manager (other than an Independent
Manager), director, (other than an Independent Director), employee, attorney, or
counsel of Borrower or its Affiliates, (ii) a customer, supplier or other Person
who derives more than one percent (1%) of its purchases or revenues from its
activities with Borrower or its Affiliates, (iii) a direct or indirect legal or
beneficial owner in any entity referred to in clause (i) or (ii) above or any of
its Affiliates, (iv) a member of the immediate family of any member, manager,
employee, attorney, customer, supplier or other Person referred to in clause
(i), (ii) or (iii) above, or (v) a person Controlling or under the common
Control of anyone listed in clauses (i) through (iv) above. A Person that
otherwise satisfies the foregoing shall not be disqualified from serving as an
Independent Director or Independent Manager or Independent Member if such
individual is at the time of initial appointment, or at any time while serving
as such, is an Independent Director or Independent Manager or Independent
Member, as applicable, of a Single Purpose Entity affiliated with Borrower.
“Individual Parcel” shall have the meaning set forth in the Security Instrument.
“Individual Borrower” shall have the meaning set forth in the first paragraph of
this Agreement.
“Individual Property” shall have the meaning set forth in the Security
Instrument.

 

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“Insurance Requirements” shall mean, collectively, (i) all material terms of any
insurance policy required pursuant to this Agreement and (ii) all material
regulations and then-current standards applicable to or affecting the Property
or any part thereof or any use or condition thereof.
“Insurance Reserve Account” shall have the meaning set forth in Section 3.1.1.
“Insurance Reserve Amount” shall have the meaning set forth in Section 16.2.
“Intangible” shall have the meaning set forth in the Security Instrument.
“Intercreditor Agreement” shall mean that certain Mortgagee Agreement between
Wachovia, as agent for the lenders under the Revolving Loan, and Lender and
Wachovia, as holders of the Notes.
“Interest Period” shall have the meaning set forth in the Notes.
“Interest Rate” shall have the meaning set forth in the Notes.
“Key Properties” shall mean, collectively, (i) any Individual Property which
contains greater than 200,000 square feet of main distribution building space
and (ii) the Individual Property located in Englewood, Colorado and containing
68,721 square feet of space, which Individual Property is used by the Borrower
for office purposes.
“Land” shall have the meaning set forth in the Security Instrument.
“Late Payment Charge” shall have the meaning set forth in Section 2.2.3.
“Lease” shall mean any lease (including the Master Lease), sublease or
subsublease, letting, license, concession or other agreement (whether written or
oral and whether now or hereafter in effect), pursuant to which any Person is
granted a possessory interest in, or right to use or occupy all or any portion
of any space in any Individual Property, and every modification, amendment or
other agreement relating to such lease, sublease, subsublease, or other
agreement entered into in connection with such lease, sublease, subsublease, or
other agreement and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party thereto. Notwithstanding the foregoing, the term “Lease” shall exclude all
of the Subleases at all times prior to a termination of the Master Lease.
“LCR” shall mean a ratio, as determined by Lender, in which: (i) the numerator
is Master Lessee’s EBITDAR, applied consistently, as stated on Master Lessee’s
four (4) most recent quarterly financial statements delivered to Lender by
Borrower or Master Lessee pursuant to Section 11.2.1, for the trailing twelve
(12) month period immediately prior to the applicable calculation date; and
(ii) the denominator is Master Lease Base Rent for the trailing twelve
(12) month period immediately prior to the applicable calculation date (and, in
the event that the calculation date occurs prior to the first anniversary of the
date of the Master Lease, Master Lease Base Rent applicable to any month prior
to the date of the Master Lease shall be deemed to be equal to one-twelfth
(1/12) of the Master Lease Base Rent payable during the first year of the term
of the Master Lease).

 

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“LCR Deterioration Reserve Account” shall have the meaning set forth in Section
3.1.1.
“LCR Test” shall mean the test performed by Lender on a trailing four (4) Fiscal
Quarter basis pursuant to the terms of Section 16.5 hereof following the end of
each Fiscal Quarter after the Closing Date to determine whether a Low LCR Cash
Sweep Period has occurred and is continuing.
“Legal Requirements” shall mean all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations and
requirements, and irrespective of the nature of the work to be done, of every
Governmental Authority including, without limitation, Environmental Laws and all
covenants, restrictions and conditions now or hereafter of record which may be
applicable to Borrower, Maryland Loan Guarantor or to the Property and the
Improvements and the Building Equipment thereon, or to the use, manner of use,
occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of the Property and the Improvements and the Building Equipment
thereon, including, without limitation, building and zoning codes and ordinances
and laws relating to handicapped accessibility.
“Lender” shall have the meaning set forth in the first paragraph of this
Agreement.
“Lender’s Consultant” shall mean an environmental and engineering consulting
firm selected by Lender and reasonably acceptable to Borrower having experience
(i) conducting environmental and engineering assessments for properties similar
to the Property and (ii) preparing and supervising remediation plans for
properties similar to the Property.
“Lender Group” shall have the meaning set forth in Section 14.3.2(b).
“Letter of Credit” shall mean an irrevocable, unconditional, transferable, clean
sight draft letter of credit (either an evergreen letter of credit or one which
does not expire until at least sixty (60) days after the Maturity Date (the “LC
Expiration Date”)), in favor of Lender and entitling Lender to draw thereon in
New York, New York, based solely on delivery or a sight draft containing a
statement executed by an officer or authorized signatory of Lender and issued by
an Approved Bank. If at any time (a) the institution issuing any such Letter of
Credit shall cease to be an Approved Bank or (b) the Letter of Credit is due to
expire prior to the LC Expiration Date, Lender shall have the right immediately
to draw down the same in full and hold the proceeds thereof in accordance with
the provisions of this Agreement, unless Borrower shall deliver a replacement
Letter of Credit from an Approved Bank within (i) as to (a) above, thirty
(30) days after Lender delivers written notice to Borrower that the institution
issuing the Letter of Credit has ceased to be an Approved Bank or (ii) as to
(b) above, at least ten (10) Business Days prior to the expiration date of said
Letter of Credit.
“Liabilities” shall have the meaning set forth in Section 14.3.2(b).
“License” shall have the meaning set forth in Section 4.1.23.

 

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“Lien” shall mean any mortgage, deed of trust, lien, pledge, hypothecation,
assignment, security interest, or any other encumbrance or charge on or
affecting Borrower, Maryland Loan Guarantor, the Property, any portion thereof
or any interest therein, including, without limitation, any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, the filing of any financing
statement, and the filing of mechanic’s, materialmen’s and other similar liens
and encumbrances, excluding any such items solely affecting the Excluded
Personal Property.
“Loan” shall mean the loan in the amount of the Loan Amount made by Lender to
Borrower pursuant to this Agreement.
“Loan Amount” shall mean the original principal amount of the Loan equal to
$295,000,000.
“Loan Documents” shall mean, collectively, this Agreement, the Notes, the
Security Instrument, the Assignment of Leases, the Environmental Indemnity, the
Master Lease, the Master Lease SNDA, the Account Agreement, the Recourse
Guaranty, the Maryland Loan Guaranty and all other documents executed and/or
delivered by Borrower, Maryland Loan Guarantor, Master Lessee or Guarantor, as
applicable, to Lender in connection with the Loan or in connection with any
Substitution, including any opinion certificates or other certifications or
representations delivered by or on behalf of Borrower or any Affiliate of
Borrower to Lender.
“Low LCR Cash Sweep Period” shall mean any period (a) commencing on the Payment
Date following the conclusion of any two (2) consecutive Fiscal Quarters for
which the LCR is less than 2.50:1.00, as determined by an LCR Test in accordance
with Section 16.5 hereof, and (ii) ending on the day immediately preceding the
Payment Date following the conclusion of any two (2) consecutive Fiscal Quarters
for which the LCR equals or exceeds 2.50:1.00, as determined by an LCR Test in
accordance with Section 16.5 hereof.
“LTV Ratio” shall mean the ratio, expressed as a percentage, of the Principal
Amount, as of the date of determination, to the Aggregate Appraised Value, as of
the date of determination.
“Maryland Borrower” shall mean ABP MD (Baltimore) Subsidiary LLC, a Delaware
limited liability company and a wholly owned subsidiary of the Maryland Loan
Guarantor.
“Maryland Loan Guarantor” shall have the meaning provided in the first paragraph
hereof.
“Maryland Loan Guaranty” shall mean that certain guaranty delivered by Maryland
Loan Guarantor in favor of Lender.
“Maryland Property” shall mean the Individual Property located in Maryland.
“Master Lease” shall mean that certain Amended and Restated Master Lease
Agreement for the Individual Properties by and between each Individual Borrower
(or in the case of the Maryland Property, the Maryland Loan Guarantor), as
lessor, and Master Lessee, as lessee, dated as of the date hereof, as more
particularly described in Section 5.1.23.

 

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“Master Lease Base Rent” shall mean monthly payments under the Master Lease of
scheduled base rent.
“Master Lease Recurrent Additional Rent” shall mean monthly payments under the
Master Lease of additional rent for scheduled pass-through expenses, including,
without limitation, taxes and insurance.
“Master Lease Rent” shall mean, collectively, the Master Lease Scheduled Rent
and the Master Lease Variable Additional Rent.
“Master Lease Rent Payment Direction Letter” shall mean a letter in the form of
Exhibit P pursuant to which Borrower (or in the case of the Maryland Property,
the Maryland Loan Guarantor) instructs Master Lessee to make payments of Master
Lease Scheduled Rent and, during the continuance of an Event of Default and
during a Low LCR Cash Sweep Period, Master Lease Variable Additional Rent
directly to the Holding Account as more particularly set forth in Section
3.1.9(a).
“Master Lease Rent Shortfall” shall mean a shortfall in the Holding Account with
respect to all or any portion of the Master Lease Rent required to be deposited
therein by Master Lessee pursuant to the Master Lease Rent Payment Direction
Letter.
“Master Lease Scheduled Rent” shall mean, collectively, the Master Lease Base
Rent and the Master Lease Recurrent Additional Rent.
“Master Lease SNDA” shall mean that certain Subordination, Non-Disturbance and
Attornment agreement among Borrower (or in the case of the Maryland Property,
the Maryland Loan Guarantor), Master Lessee and Lender dated of even date
herewith.
“Master Lease Variable Additional Rent” shall mean with respect to any month,
payments payable by the Master Lessee under the Master Lease of variable
operating and occupancy expenses in such month, including, without limitation,
common area maintenance expenses, but excluding Master Lease Recurrent
Additional Rent.
“Master Lessee” shall mean BlueLinx Corporation, a Georgia corporation.
“Master Lessee Officer’s Certificate” shall mean a certificate executed by an
authorized signatory of Master Lessee that is familiar with the financial
condition of Master Lessee and the operation of the Property.
“Material Adverse Effect” shall mean any event or condition that has a material
adverse effect on (i) the Property taken as a whole, (ii) the use, operation, or
value of any Key Property or the use, operation or value of the Property taken
as a whole, (iii) the business, profits, operations or financial condition of
Borrower or the Maryland Loan Guarantor, (iv) the ability of Maryland Loan
Guarantor to satisfy any of Maryland Loan Guarantor’s obligations under the Loan
Documents or (v) the ability of Borrower to repay the principal and/or interest
of the Loan as it becomes due or to satisfy any of Borrower’s obligations under
the Loan Documents.

 

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“Material Alteration” shall mean any Alteration which, when aggregated with all
related Alterations (other than decorative work such as painting, wall papering
and carpeting and the replacement of fixtures, furnishings and equipment to the
extent being of a routine and recurring nature and performed in the ordinary
course of business) constituting a single project, is estimated to cost in
excess of forty percent (40%) of the Allocated Loan Amount for the Individual
Property to which such Alteration is to be made; provided, however, that the
term “Material Alteration” shall not include Alterations being undertaken at the
sole cost and expense of (a) the Master Lessee pursuant to the Master Lease so
long as any security required for any such material alteration under the Master
Lease is deposited with Lender (or any related guaranty permitted hereunder in
lieu of such deposit runs to the benefit of Lender and is delivered to Lender)
or (b) a Tenant pursuant to a Lease.
“Material Sublease” shall mean, during any Low LCR Cash Sweep Period, any
Sublease to a single Tenant covering more than 50,000 rentable square feet at
any Individual Property.
“Maturity Date” shall have the meaning set forth in the Notes.
“Maturity Date Payment” shall have the meaning set forth in the Notes.
“Maximum Legal Rate” shall mean the maximum non-usurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by the Notes and as provided
for herein or the other Loan Documents, under the laws of such state or states
whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.
“Mezzanine Borrower” shall have the meaning set forth in Section 5.1.11.
“Mezzanine Loan” shall have the meaning set forth in Section 5.1.11.
“Mezzanine Loan Documents” shall have the meaning set forth in Section 5.1.11.
“Monetary Default” shall mean a Default (i) that can be cured with the payment
of money or (ii) arising pursuant to Section 17.1(a)(vi) or (vii).
“Monthly Debt Service Payment Amount” shall have the meaning set forth in the
Notes.
“Monthly Insurance Reserve Amount” shall have the meaning set forth in Section
16.2.
“Monthly Structural Repair Reserve Amount” shall mean an amount determined by
Lender equal to one-twelfth (1/12) of the product of (i) $0.05 and (ii) the
aggregate square footage of the portion of the Improvements that constitutes
distribution center space that is subject to a Sublease; provided, however, that
in the event that, at the time of determination, less than ten percent (10%) the
aggregate net rentable square footage of the Improvements is subject to
Subleases, the Monthly Structural Repair Reserve Amount shall be $0.00.

 

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“Monthly Tax Reserve Amount” shall have the meaning set forth in Section 16.1.
“Moody’s” shall mean Moody’s Investors Service, Inc.
“Mortgage Tax States” shall mean, collectively, Alabama, Florida, Kansas,
Georgia, Minnesota, New York, Oklahoma, Tennessee, Virginia and any other State
in which an Individual Property or any Substitute Property may be located which
imposes a mortgage recording or other mortgage tax.
“New Sublease” shall have the meaning set forth in Section 8.7.1.
“Non-Consolidation Opinion” shall have the meaning provided in Section 2.5.5.
“Non-Disqualification Opinion” shall mean an opinion of outside tax counsel
reasonably acceptable to the Lender or the Rating Agencies to whom such opinion
is addressed that a contemplated action will neither cause any trust formed as a
REMIC pursuant to a Securitization to fail to qualify as a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code at any time
that any “regular interests” in the REMIC are outstanding nor cause a
“prohibited transaction” tax (within the meaning of Section 860F(a)(2) of the
Code) or “prohibited contribution” tax (within the meaning of Section 860G(d) of
the Code) to be imposed on any such REMIC.
“Non-Disturbance Agreement” shall have the meaning set forth in Section 8.7.7.
“Notes” shall mean, collectively, (a) that certain Amended, Restated and
Consolidated Note A-1, dated the date hereof, made by Borrower, as maker, in
favor of Lender, as payee, in the principal amount of $147,500,000 and (b) that
certain Amended, Restated and Consolidated Note A-2, dated the date hereof, made
by Borrower, as maker, in favor of Lender, as payee, in the principal amount of
$147,500,000, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
“Obligations” shall have meaning set forth in the recitals of the Security
Instrument.
“OFAC” List means the list of specially designated nationals and blocked persons
subject to financial sanctions that is maintained by the U.S. Treasury
Department, Office of Foreign Assets Control and accessible through the internet
website www.treas.gov/ofac/t11sdn.pdf.
“Officer’s Certificate” shall mean a certificate executed by an authorized
signatory of Borrower that is familiar with the financial condition of Borrower
and the operation of the Property, provided that the Officer’s Certificate
required under Article XI shall be executed by the Chief Financial Officer of
Borrower.

 

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“Opinion of Counsel” shall mean an opinion of counsel of a law firm selected by
Borrower and reasonably acceptable to Lender.
“Other Charges” shall mean, collectively, (i) all sums, charges, fees, costs,
expenses, common area maintenance charges and other charges or assessments
reserved in or payable under any reciprocal easement agreements, if any, and
(ii) maintenance charges, impositions other than Impositions, and any other
charges, including, without limitation, vault charges and license fees for the
use of vaults, chutes and similar areas adjoining the Property, now or hereafter
levied or assessed or imposed against the Property or any part thereof by any
Governmental Authority, other than those required to be paid by Master Lessee or
any other Tenant pursuant to its Lease.
“Other Taxes” shall have the meaning set forth in Section 2.4.3.
“Outparcel” shall mean each parcel of Land legally described in Schedule VII
attached hereto.
“Outparcel Release Instruments” shall have the meaning set forth in Section
2.3.7.
“Payment Date” shall have the meaning set forth in the Notes.
“Permitted Debt” shall mean collectively, (a) the Notes and the other
obligations, indebtedness and liabilities specifically provided for in any Loan
Document and secured by this Agreement, the Security Instrument and the other
Loan Documents and (b) trade payables incurred in the ordinary course of
Borrower’s (or in the case of the Maryland Property, Maryland Loan Guarantor’s)
business, not secured by Liens on the Property (other than Permitted
Encumbrances and other than liens being properly contested in accordance with
the provisions of this Agreement or the Security Instrument), not to exceed two
percent (2%) of the aggregate Principal Amount for the Property at any one time
outstanding, payable by or on behalf of Borrower (or Maryland Loan Guarantor, as
applicable) for or in respect of the operation of the Property in the ordinary
course of operating Borrower’s (or Maryland Loan Guarantor, as applicable)
business, provided that (but subject to the remaining terms of this definition)
each such amount shall be paid within sixty (60) days following the date on
which each such amount is incurred. Nothing contained herein shall be deemed to
require Borrower or Maryland Loan Guarantor to pay any amount, so long as
Borrower (or Maryland Loan Guarantor, as applicable) is in good faith, and by
proper legal proceedings, diligently contesting the validity, amount or
application thereof, provided that in each case, at the time of the commencement
of any such action or proceeding, and during the pendency of such action or
proceeding (i) no Event of Default shall exist and be continuing hereunder, (ii)
adequate reserves with respect thereto are maintained on the books of Borrower
(or Maryland Loan Guarantor, as applicable) in accordance with GAAP (as
determined by Borrower (or Maryland Loan Guarantor, as applicable) or, at its
option, an Independent Accountant), and (iii) such contest operates to suspend
collection or enforcement, as the case may be, of the contested amount and such
contest is maintained and prosecuted continuously and with diligence.
Notwithstanding anything set forth herein, in no event shall Borrower or
Maryland Loan Guarantor be permitted under this provision to enter into a note
(other than the Notes and the other Loan Documents) or other instrument for
borrowed money.

 

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“Permitted Encumbrances” shall mean collectively, (a) the Liens and security
interests created or permitted by the Loan Documents, (b) all Liens,
encumbrances and other matters disclosed in the Title Policy or the Survey
relating to such Individual Property or any part thereof, (c) Liens, if any, for
Impositions imposed by any Governmental Authority not yet due or delinquent (d)
Liens arising after the date hereof which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted in
accordance with Section 7.3 hereof, (e) easements and encumbrances permitted
pursuant to Section 8.3(ii) and (f) such other Liens as Lender may approve in
writing in Lender’s sole discretion.
“Permitted Fund Manager” means any Person that on the date of determination is
(i) a nationally-recognized manager of investment funds investing in debt or
equity interests (including debt and equity interests relating to commercial
real estate) and (ii) not subject to a bankruptcy proceeding.
“Permitted Investments” shall have the meaning set forth in the Account
Agreement.
“Person” shall mean any individual, corporation, partnership, joint venture,
limited liability company, estate, trust, unincorporated association, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
“Personal Property” shall have the meaning set forth in the Security Instrument.
“Physical Conditions Reports” shall mean the structural engineering reports with
respect to the Individual Properties (i) prepared by an Independent Architect,
(ii) addressed to Lender, (iii) prepared based on a scope of work determined by
Lender in Lender’s reasonable discretion, and (iv) in form and content
acceptable to Lender, in Lender’s reasonable discretion, together with any
amendments or supplements thereto. The Physical Conditions Reports may consist
of updates to the existing structural engineering reports, provided that
(A) such updated reports are in form and content acceptable to Lender in
Lender’s reasonable discretion and (B) the Independent Architect preparing such
updated reports shall provide to Lender a reliance letter satisfactory to
Lender.
“Plan” shall have the meaning set forth in Section 4.1.10.
“Principal Amount” shall mean, collectively, the aggregate “Principal Amount”
under each of the Notes, as such term is defined in each of the Notes.
“Prohibited Person” means any Person identified on the OFAC List or any other
Person with whom a U.S. Person may not conduct business or transactions by
prohibition of Federal law or Executive Order of the President of the United
States or America.
“Proceeds” shall have the meaning set forth in Section 6.2.2.
“Proceeds Prepayments” shall mean Proceeds applied by Lender as a prepayment of
principal in accordance with Section 6.2.3 hereof.

 

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“Proceeds Reserve Account” shall have the meaning set forth in Section 3.1.1.
“Project” shall have the meaning set forth in Section 16.3.
“Property” shall have the meaning set forth in the Security Instrument.
“Property Release” shall have the meaning set forth in Section 2.3.4.
“Property Release Notice” shall have the meaning set forth in Section 2.3.4.
“Provided Information” shall have the meaning set forth in Section 14.1.
“PZR” shall mean The Planning Zoning Resource Corporation.
“Qualified Transferee” shall mean any entity (a) that together with its Close
Affiliates (i) has a net worth of at least $250,000,000 (calculated exclusive of
the Property) as of a date no more than six (6) months prior to the date of the
transfer and (ii) manages or owns at the time of the transfer assets of at least
$600,000,000 (calculated exclusive of the Property); provided, however, that if
such transferee has experience in operating warehouse or distribution
facilities, properties (excluding the Property) containing not fewer than
4,000,000 rentable square feet of warehouse space in the aggregate, then such
transferee shall meet the requirements of this clause (a) if it, together with
its Close Affiliates (1) has a net worth of at least $150,000,000 (calculated
exclusive of the Property) as of a date no more than six (6) months prior to the
date of the transfer and (2) manages or owns at the time of the transfer assets
of at least $400,000,000 (calculated exclusive of the Property), and (b) that is
not a Disqualified Transferee.
“Rating Agencies” shall mean (a) prior to a Securitization, each of S&P, Moody’s
and Fitch and any other nationally-recognized statistical rating agency which
has been approved by Lender and (b) after a Securitization has occurred, each
such Rating Agency which has rated the Securities in the Securitization.
“Rating Agency Confirmation” shall mean, collectively, a written affirmation
from each of the Rating Agencies that the credit rating of the Securities given
by such Rating Agency immediately prior to the occurrence of the event with
respect to which such Rating Agency Confirmation is sought will not be
qualified, downgraded or withdrawn as a result of the occurrence of such event,
which affirmation may be granted or withheld in such Rating Agency’s sole and
absolute discretion. In the event that, at any given time, no such Securities
shall have been issued and are then outstanding, then the term Rating Agency
Confirmation shall be deemed instead to require the written approval of Lender
based on its good faith determination of whether the Rating Agencies would issue
a Rating Agency Confirmation if any such Securities were outstanding.
“Recourse Guaranty” shall mean that certain Guaranty of Recourse Obligations of
Borrower, dated as of the date hereof, by Guarantor in favor of Lender, as the
same may be amended, supplemented, restated or otherwise modified from time to
time.
“Register” shall have the meaning set forth in Section 15.4.

 

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“Regulatory Change” shall mean any change after the date of this Agreement in
federal, state or foreign laws or regulations or the adoption or the making,
after such date, of any interpretations, directives or requests applying to
Lender, or any Person Controlling Lender or to a class of banks or companies
Controlling banks of or under any federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or Governmental Authority
or monetary authority charged with the interpretation or administration thereof.
“Related Remaining Property” shall have the meaning set forth in Section 2.3.7.
“Release Date” shall have the meaning provided in Section 2.3.4(a).
“Release Instruments” shall have the meaning provided in Section 2.3.4(c).
“Release Price” shall mean the product of (a) the Allocated Loan Amount for the
Release Property and (b) either (1) with respect to any Release Property that is
a Key Property, one hundred twenty-five percent (125%) or (2) with respect to
any Release Property that is not a Key Property, the applicable Release Price
Percentage. The amount of any Proceeds Prepayments with respect to an Individual
Property shall (after calculating such Release Price based upon the original
Allocated Loan Amount for such Property without deduction, for purposes of such
calculation, for any such prepayments) be deducted from the Release Price for
such Property.
“Release Price Percentage” shall mean, as of any Release Date, (i) if the
Principal Amount that would be outstanding immediately following the release of
the applicable Release Property is from $295,000,000 to and including
$265,500,000, one hundred percent (100%) or (ii) if the Principal Amount that
would be outstanding immediately following the release of the applicable Release
Property is less than $265,500,000, one hundred ten percent (110%), provided
that, in the case of each of clause (i) and clause (ii), any prior reductions in
the Principal Amount outstanding as a result of payments of Release Prices in
respect of Key Properties and any mandatory prepayment made pursuant to the
provisions of Section 6.2.3 and Section 4(b) of the Note shall be disregarded in
determining the Principal Amount that would be outstanding immediately following
the release of the applicable Release Property.
“Release Property” shall have the meaning provided in Section 2.3.4.
“Rents” shall mean all rents, rent equivalents, moneys payable as damages or in
lieu of rent or rent equivalents, royalties (including, without limitation, all
oil and gas or other mineral royalties and bonuses), income, receivables,
receipts, revenues, deposits (including, without limitation, security, utility
and other deposits), accounts, cash, issues, profits, charges for services
rendered, and other consideration of whatever form or nature received by or paid
to or for the account of or benefit of Borrower or Maryland Loan Guarantor from
any and all sources arising from or attributable to the Property, including, but
not limited to the Master Lease and the Leases, and Proceeds, if any, from
business interruption or other loss of income insurance. Notwithstanding the
foregoing, Rents shall not include any sums payable under (i) the Oil, Gas and
Mineral Lease, dated as of June 17, 2003, between Georgia-Pacific Corporation,
as landlord, and Eagle Oil & Gas Co., as tenant, as amended by that certain
Amendment to Oil, Gas and Mineral Lease, dated as of May 31, 2005, by and
between ABP TX (FORT WORTH) LLC, as landlord, and Antero Resources I, LP and
Eagle Oil & Gas Co., as tenant and (ii) the Oil and Gas Lease, dated November 7,
1988, between Georgia-Pacific Corporation, as landlord, and GonzOil, Inc.,
successor by assignment to Weinsz Oil & Gas, as successor by assignment to
Spenser Petroleum Corporation.

 

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“Replaced Property” shall have the meaning provided in Section 2.3.6.
“Revolving Loan” shall mean the loan made by Wachovia pursuant to the Revolving
Loan Agreement (as such term is defined in the Intercreditor Agreement).
“S&P” shall mean Standard & Poor’s Ratings Services, a division of The
McGraw-Hill.
“Scheduled Defeasance Payments” shall have the meaning provided in Section
2.3.5(b).
“Securities” shall have the meaning set forth in Section 14.1.
“Securities Act” shall have the meaning set forth in Section 14.3.1.
“Securitization” shall have the meaning set forth in Section 14.1.
“Security Agreement” shall have the meaning set forth in Section 2.3.5(a).
“Security Deposits” shall have the meaning provided in the Assignment of Leases.
“Security Instrument” shall mean that, collectively, those certain Amended,
Restated and Consolidated Mortgages, Security Agreements, Financing Statements,
Fixture Filings and Assignments of Master Lease, Leases, Rents and Security
Deposits or similarly entitled instruments, dated the date hereof, executed and
delivered by the applicable Borrower (or in the case of the Maryland Property,
the Maryland Loan Guarantor) to Lender (or to a trustee for the benefit of
lender, as applicable) and encumbering, in each case, its Individual Property,
as any of the foregoing may be amended, restated, replaced, supplemented or
otherwise modified from time to time.
“Servicer” shall mean such Person designated in writing with an address for such
Person by Lender, in its sole discretion, to act as Lender’s agent hereunder
with such powers as are specifically delegated to the Servicer by Lender,
whether pursuant to the terms of this Agreement, the Account Agreement or
otherwise, together with such other powers as are reasonably incidental thereto.
“Single Purpose Entity” shall mean a Person, other than an individual, which
(i) is formed or organized solely for the purpose of (1) owning, holding,
developing, using, operating and financing an ownership interest in the Property
or its Individual Property, entering into this Agreement with the Lender,
refinancing its Individual Property in connection with a permitted repayment of
the Loan or portion thereof, and transacting lawful business that is incident,
necessary and appropriate to accomplish the foregoing, or (2) acting as a
general partner of a limited partnership that owns the Property or an Individual
Property or the sole or managing member of a limited liability company that owns
the Property or an Individual Property, as applicable;

 

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(ii) does not engage in any business unrelated to (1) the Property or its
Individual Property and the ownership, development, use, operation and financing
thereof, or (2) acting as general partner of a limited partnership that owns the
Property or an Individual Property or the sole or managing member of a limited
liability company that owns the Property or an Individual Property, as
applicable;
(iii) has not and will not have (1) any material assets other than the Property
or its Individual Property and personal property necessary or incidental to its
interest in the Property or its Individual Property, or the operation,
management and financing thereof, or its partnership interest in a limited
partnership, or the member interest in a limited liability company that owns the
Property or an Individual Property, or acts as the general partner or managing
member thereof (or, in the case of Maryland Borrower, acts as the Subsidiary of
Maryland Loan Guarantor), as applicable; or (2) any indebtedness other than the
Permitted Debt;
(iv) maintains its own separate books and records and its own accounts, in each
case which are separate and apart from the books and records and accounts of any
other Person;
(v) holds itself out as being a Person, separate and apart from any other
Person;
(vi) does not and will not commingle its funds or assets with those of any other
Person;
(vii) conducts its own business in its own name;
(viii) maintains separate financial statements and will not permit its assets to
be listed as assets on the financial statement of any other Person; provided,
however, that any such consolidated financial statement shall contain a note
indicating that its separate assets and liabilities are neither available to pay
the debts of the consolidated entity nor constitute obligations of the
consolidated entity;
(ix) pays its own liabilities out of its own funds;
(x) observes in all material respects all partnership, corporate or limited
liability company formalities, as applicable;
(xi) pays the salaries of its own employees, if any, and maintains a sufficient
number of employees, if any, in light of its contemplated business operations;
(xii) except pursuant to the Loan Documents, does not guarantee or otherwise
obligate itself with respect to the debts of any other Person or hold out its
credit as being available to satisfy the obligations of any other Person;

 

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(xiii) does not acquire obligations or securities of its partners, members or
shareholders;
(xiv) allocates fairly and reasonably shared expenses, including, without
limitation, any overhead for shared office space, if any;
(xv) uses separate stationary, invoices, and checks;
(xvi) maintains an arms-length relationship with its Affiliates;
(xvii) except pursuant to the Loan Documents, does not and will not pledge its
assets for the benefit of any other Person or make any loans or advances to any
other Person;
(xviii) does and will continue to use commercially reasonable efforts to correct
any known misunderstanding regarding its separate identity;
(xix) maintains adequate capital in light of its contemplated business
operations; and
(xx) has not and will not engage in, seek, or consent to the dissolution,
winding up, liquidation, consolidation or merger and except as otherwise
permitted in this Agreement, has not and will not engage in, seek or consent to
any asset sale, transfer of its partnership, membership or shareholder interests
(if such entity is a general partner in a limited partnership or the managing
member in a limited liability company), or amendments of its partnership or
operating agreement, certificate of incorporation, articles of organization or
other organizational document. In addition, if such Person is a partnership,
(1) all general partners of such Person shall be Single Purpose Entities; and
(2) if such Person has more than one general partner, then the organizational
documents shall provide that such Person shall continue (and not dissolve) for
so long as a solvent general partner exists. In addition, if such Person is a
corporation, then, at all times: (a) such Person shall have at least two
(2) Independent Directors and (b) the board of directors of such Person may not
take any action requiring the unanimous affirmative vote of one hundred percent
(100%) of the members of the board of directors unless all of the directors,
including the Independent Directors, shall have participated in such vote. In
addition, if such Person is a limited liability company, (a) with only one
(1) member, then, such Person shall be organized in the State of Delaware, have
as its only member a non-managing member, and be managed by a board of managers,
(b) shall have at least two (2) Independent Managers or Independent Members,
(c) if such Person is managed by a board of managers, the board of managers of
such Person may not take any action requiring the unanimous affirmative vote of
one hundred percent (100%) of the members of the board of managers unless all of
the managers, including the Independent Managers, shall have participated in
such vote, (c) if such Person is not managed by a board of managers, the members
of such Person may not take any action requiring the affirmative vote of one
hundred percent (100%) of the members of such Person unless all of the members,
including the Independent Members, shall have participated in such vote,
(d) with more than one member, each managing member shall be a Single Purpose
Entity, and (e) its articles of organization, certificate of formation and/or
operating agreement, as applicable, shall provide that until all of the
Indebtedness and Obligations are paid in full such entity will not dissolve. In
addition, the organizational documents of such Person shall

 

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provide that such Person (1) without the unanimous consent of all of the
partners, directors or members, as applicable, shall not with respect to itself
or to any other Person in which it has a direct or indirect legal or beneficial
interest (a) seek or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, custodian or other similar official for the
benefit of the creditors of such Person or all or any portion of such Person’s
properties, or (b) take any action that might cause such Person to become
insolvent, petition or otherwise institute insolvency proceedings or otherwise
seek any relief under any laws relating to the relief from debts or the
protection of debtors generally, (2) has and will maintain its books, records,
resolutions and agreements as official records, (3) has held and will hold its
assets in its own name, (4) has and will maintain its financial statements,
accounting records and other organizational documents, books and records
separate and apart from any other Person, and will not permit its assets to be
listed as assets on the financial statement of any other Person; provided,
however, that any such consolidated financial statement shall contain a note
indicating that its separate assets and liabilities are neither available to pay
the debts of the consolidated entity nor constitute obligations of the
consolidated entity, (5) will file its own tax returns to the extent required by
applicable law, (6) has not and will not identify its partners, members or
shareholders, or any affiliates of any of them as a division or part of it,
(7) has and will maintain an arms-length relationship with its Affiliates, and
(8) has not and will not enter into or be a party to any transaction with its
partners, members, shareholders, or its Affiliates except in the ordinary course
of business and on terms which are intrinsically fair and are no less favorable
to it than would be obtained in a comparable arms-length transaction with a
third party.
“Special Taxes” shall mean any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, or any liabilities with respect thereto,
including those arising after the date hereof as result of the adoption of or
any change in law, treaty, rule, regulation, guideline or determination of a
Governmental Authority or any change in the interpretation or application
thereof by a Governmental Authority but excluding, in the case of Lender, such
taxes (including income taxes, franchise taxes and branch profit taxes) as are
imposed on or measured by Lender’s net income by the United States of America or
any Governmental Authority of the jurisdiction under the laws under which Lender
is organized or maintains a lending office.
“SPE Entity” shall mean Borrower, Maryland Loan Guarantor and any other Person
which is required by this Agreement to be, as long as the Loan is outstanding, a
Single Purpose Entity.
“State” shall mean, with respect to each Individual Property, the State in which
such Individual Property or any part thereof is located.
“Structural Repair Reserve Account” shall have the meaning set forth in Section
3.1.1.
“Structural Repairs” shall mean structural repairs and replacements with respect
to the Improvements approved by Lender or for which disbursement is otherwise
permitted in accordance with Section 16.3.
“Sub-Account(s)” shall have the meaning set forth in Section 3.1.1.

 

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“Sublease” shall mean any lease (other than the Master Lease), sublease or
subsublease, letting, license, concession or other agreement (whether written or
oral and whether now or hereafter in effect), pursuant to which any Person is
granted by Master Lessee a possessory interest in, or right to use or occupy all
or any portion of any space in any Individual Property, and every modification,
amendment or other agreement relating to such lease, sublease, subsublease, or
other agreement entered into in connection with such lease, sublease,
subsublease, or other agreement and every guarantee of the performance and
observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto.
“Sublease Modification” shall have the meaning set forth in Section 8.7.1.
“Substitute Property” shall have the meaning provided in Section 2.3.6(a).
“Substitute Property Mortgage Spreader Agreement” shall have the meaning
provided in Section 2.3.6(a).
“Substitution” shall have the meaning provided in Section 2.3.6(a).
“Substitution Date” shall have the meaning provided in Section 2.3.6(c).
“Substitution Due Diligence Package” shall have the meaning provided in Section
2.3.6(c).
“Substitution Notice” shall have the meaning provided in Section 2.3.6(c).
“Successor Borrower” shall have the meaning set forth in Section 2.3.5(d).
“Survey” shall mean a survey of each parcel of each Individual Property prepared
by a surveyor licensed in the State selected by Borrower and reasonably
satisfactory to Lender and the Title Company, and containing a certification of
such surveyor satisfactory to Lender.
“Taking” shall mean a temporary or permanent taking by any Governmental
Authority as the result or in lieu or in anticipation of the exercise of the
right of condemnation or eminent domain, of all or any part of the Property, or
any interest therein or right accruing thereto, including any right of access
thereto or any change of grade affecting the Property or any part thereof.
“Tax Reserve Account” shall have the meaning set forth in Section 3.1.1.
“Tax Reserve Amount” shall have the meaning set forth in Section 16.1.
“Tenant” shall mean any Person other than the Master Lessee leasing, subleasing
or otherwise occupying any portion of any Individual Property, and its permitted
successors and assigns.
“Terrorism Insurance” shall have the meaning set forth in Section 6.1.8.
“Threshold Amount” shall mean two percent (2%) of the Loan Amount.

 

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“Title Company” shall mean, collectively, Fidelity National Title Insurance
Company (as to fifty-five percent (55%) of coverage) and Lawyers Title Insurance
Corporation (as to forty-five percent (45%) of coverage), or, with respect to
Substitutions from and after the date hereof, any one of the foregoing subject
to delivery of co-insurance endorsements from the other Title Companies and, in
states where available, tie-in endorsements from all of the Title Companies with
respect to such coverage.
“Title Policy” shall mean an ALTA mortgagee title insurance policy or policies
in a form acceptable to Lender (or, if an Individual Property is in a State
which does not permit the issuance of such ALTA policy, such form as shall be
permitted in such State and acceptable to Lender) issued by the Title Company
with respect to the Property and insuring the Lien of the Security Instrument.
“Total Loss” shall mean, with respect to each Individual Property, (i) a
casualty, damage or destruction of an Individual Property which, in the
reasonable judgment of Lender, (A) involves an actual or constructive loss of
more than fifty percent (50%) (or, in the case of a Key Property, twenty-five
percent (25%)) of the Allocated Loan Amount for such Individual Property, or
(B) results in the cancellation of the Master Lease or of Leases comprising more
than forty percent (40%) of the rentable area of such Individual Property, and
in either case with respect to which the Master Lease and the Leases do not
require Proceeds to be applied to the restoration of such Individual Property or
(ii) a permanent Taking which, in the reasonable judgment of Lender, (A)
involves an actual or constructive loss of more than thirty-five percent (35%)
(or, in the case of a Key Property, fifteen percent (15%)) of the Allocated Loan
Amount for an Individual Property, or (B) renders untenantable either more than
thirty-five percent (35%) (or, in the case of a Key Property, fifteen percent
(15%)) of the rentable area of such Individual Property, or (iii) a casualty,
damage, destruction or Taking that affects so much of an Individual Property
such that it would be impracticable, in Lender’s reasonable discretion, even
after restoration, to operate such Individual Property as an economically viable
whole. Notwithstanding the foregoing, in no event shall a Total Loss with
respect to a particular Individual Property exist pursuant to clauses (i) or
(ii) above unless the aggregate Allocated Loan Amounts of Individual Properties
then currently impacted by a casualty, damage, destruction or Taking is greater
than 10% of the Principal Amount.
“Transfer” shall mean to, directly or indirectly, sell, assign, convey,
mortgage, transfer, pledge, hypothecate, encumber, grant a security interest in,
exchange or otherwise dispose of any beneficial interest or grant any option or
warrant with respect to, or where used as a noun, a direct or indirect sale,
assignment, conveyance, transfer, pledge or other disposition of any beneficial
interest by any means whatsoever whether voluntary, involuntary, by operation of
law or otherwise.
“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in the State.
“Underwriter Group” shall have the meaning set forth in Section 14.3.2(b).

 

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“U.S. Government Obligations” shall mean any direct obligations of, or
obligations guaranteed as to principal and interest by, the United States
Government or any agency or instrumentality thereof, provided that such
obligations are backed by the full faith and credit of the United States. Any
such obligation must be limited to instruments that have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change. If any
such obligation is rated by S&P, it shall not have an “r” highlighter affixed to
its rating. Interest must be fixed or tied to a single interest rate index plus
a single fixed spread (if any), and move proportionately with said index. U.S.
Government Obligations include, but are not limited to: U.S. Treasury direct or
fully guaranteed obligations, Farmers Home Administration certificates of
beneficial ownership, General Services Administration participation
certificates, U.S. Maritime Administration guaranteed Title XI financing, Small
Business Administration guaranteed participation certificates or guaranteed pool
certificates, U.S. Department of Housing and Urban Development local authority
bonds, and Washington Metropolitan Area Transit Authority guaranteed transit
bonds. In no event shall any such obligation have a maturity in excess of
365 days.
“Wachovia” shall have the meaning set forth in Section 14.3.2(b).
“Work” shall have the meaning provided in Section 6.2.4(a).
“Yield Maintenance Premium” shall have the meaning set forth in the Notes.
“Yield Maintenance Premium Release Date” shall have the meaning set forth in the
Notes.
1.2 Principles of Construction. All references to sections and schedules are to
sections and schedules in or to this Agreement unless otherwise specified. All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP. When used herein, the term “financial statements” shall
include the notes and schedules thereto. Unless otherwise specified herein or
therein, all terms defined in this Agreement shall have the definitions given
them in this Agreement when used in any other Loan Document or in any
certificate or other document made or delivered pursuant thereto. All uses of
the word “including” shall mean including, without limitation unless the context
shall indicate otherwise. Unless otherwise specified, the words hereof, herein
and hereunder and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined.
II. GENERAL TERMS
2.1 Loan; Disbursement to Borrower.
2.1.1 The Loan. Subject to and upon the terms and conditions set forth herein,
Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on
the Closing Date.
2.1.2 Disbursement to Borrower. Borrower may request and receive only one
borrowing hereunder in respect of the Loan and any amount borrowed and repaid
hereunder in respect of the Loan may not be reborrowed. Borrower acknowledges
and agrees that the full proceeds of the Loan have been disbursed by Lender to
Borrower on the Closing Date.

 

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2.1.3 The Notes, Security Instrument and Loan Documents. The Loan shall be
evidenced by the Notes and secured by the Security Instrument, the Assignment of
Leases, this Agreement and the other Loan Documents.
2.1.4 Use of Proceeds. Borrower shall use the proceeds of the Loan (a) to
(i) repay and discharge any existing mortgage loans secured by the Property,
(ii) make initial deposits into the Sub-Accounts as required hereunder, and
(iii) pay costs and expenses incurred in connection with the closing of the
Loan, and (b) as otherwise set forth on the closing statement executed by Lender
and Borrower in connection with the closing of the Loan.
2.2 Interest; Loan Payments; Late Payment Charge.
2.2.1 Payment of Principal and Interest.
(i) Except as set forth in Section 2.2.1(ii), interest shall accrue on the
Principal Amount as set forth in the Notes.
(ii) Upon the occurrence and during the continuance of an Event of Default, and
from and after the Maturity Date if the entire Principal Amount is not repaid on
the Maturity Date, interest on the outstanding principal balance of the Loan
and, to the extent permitted by law, overdue interest and other amounts due in
respect of the Loan shall accrue at the Default Rate calculated from the date
such payment was due without regard to any grace or cure periods contained
herein. Interest at the Default Rate shall be computed from the occurrence of
the Event of Default until the actual receipt and collection of the Indebtedness
(or that portion thereof that is then due). This paragraph shall not be
construed as an agreement or privilege to extend the date of the payment of the
Indebtedness, nor as a waiver of any other right or remedy accruing to Lender by
reason of the occurrence of any Event of Default, and Lender retains its rights
under the Notes to accelerate and to continue to demand payment of the
Indebtedness upon the happening of any Event of Default in accordance with the
terms hereof.
2.2.2 Method and Place of Payment.
(a) On each Payment Date, Borrower shall pay to Lender interest accruing
pursuant to the Notes for the entire Interest Period preceding such Payment
Date.
(b) All amounts advanced by Lender pursuant to the applicable provisions of the
Loan Documents, other than the Principal Amount, together with any interest at
the Default Rate or other charges as provided therein, shall be due and payable
hereunder as provided in the Loan Documents. In the event any such advance or
charge is not so repaid by Borrower, Lender may, at its option, first apply any
payments received under the Notes to repay such advances, together with any
interest thereon, or other charges as provided in the Loan Documents, and the
balance, if any, shall be applied in payment of any installment of interest or
principal then due and payable.

 

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(c) The Maturity Date Payment shall be due and payable in full on the Maturity
Date.
2.2.3 Late Payment Charge. If any principal, interest or any other sums due
under the Loan Documents (other than the outstanding Principal Amount due and
payable on the Maturity Date) is not paid by Borrower on or prior to the date
which is five (5) days after the date on which it is due (or if such fifth (5th)
day is not a Business Day, then the Business Day immediately preceding such
fifth (5th) day), Borrower shall pay to Lender upon demand an amount equal to
the lesser of five percent (5%) of such unpaid sum or the Maximum Legal Rate
(the “Late Payment Charge”) in order to defray the expense incurred by Lender in
handling and processing such delinquent payment and to compensate Lender for the
loss of the use of such delinquent payment. Any such amount shall be secured by
this Agreement, the Security Instrument and the other Loan Documents to the
extent permitted by applicable law.
2.2.4 Usury Savings. This Agreement and the Notes are subject to the express
condition that at no time shall Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the
principal balance due under the Notes at a rate in excess of the Maximum Legal
Rate, then the Interest Rate or the Default Rate, as the case may be, shall be
deemed to be immediately reduced to the Maximum Legal Rate and all previous
payments in excess of the Maximum Legal Rate shall be deemed to have been
payments in reduction of principal and not on account of the interest due under
the Notes. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.
2.3 Prepayments.
2.3.1 Prepayments. No prepayments of the Indebtedness shall be permitted except
as set forth in Section 4 of the Notes and as set forth herein.
2.3.2 Prepayments After Event of Default; Application of Amounts Paid. If after
the occurrence and during the continuance of an Event of Default, Borrower
tenders payment of all or any part of the Indebtedness, or if all or any portion
of the Indebtedness is recovered by Lender after such Event of Default
(including through application of any reserves held by Lender pursuant to the
terms hereof), (a) on any date other than a Payment Date, then such payment
shall include interest that would have accrued on such amounts through the end
of the Interest Period during which such payment is made, and such amounts shall
be held by Lender as collateral security for the Loan in an interest bearing
account at an Eligible Institution, with interest accruing on such amounts to
the benefit of Borrower, and applied to the Loan on the next occurring Payment
Date, (b) such payment shall be deemed a voluntary prepayment by Borrower, and
(c) Borrower shall pay, in addition to the Indebtedness, an amount equal to the
Yield Maintenance Premium and all other fees and sums payable hereunder or under
the Loan Documents, including without limitation, interest that has accrued at
the Default Rate and any Late Payment Charges.

 

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2.3.3 Release of Property upon Repayment or Defeasance of Loan in Full. Lender
shall, upon the written request and at the expense of Borrower, upon (a) payment
in full of the Principal Amount and interest on the Loan and all other amounts
due and payable under the Loan Documents in accordance with the terms and
provisions of the Notes and this Agreement or (b) a Defeasance Event with
respect to the Loan in whole, release the Lien of (i) this Agreement upon the
Account Collateral and (ii) the Security Instrument and Assignment of Leases on
the Property (or, at Borrower’s request, assign it (together with the Notes), in
whole or in part, to a new lender without representation, warranty or recourse).
In such event, Borrower shall submit to Lender, not less than ten (10) Business
Days prior to the date of such release or assignment, a release of lien or
assignment of lien, as applicable, for such property for execution by Lender.
Such release or assignment, as applicable, shall be in a form appropriate in
each jurisdiction in which the Property is located and satisfactory to Lender in
its reasonable discretion. In addition, Borrower shall provide all other
documentation Lender reasonably requires to be delivered by Borrower in
connection with such release or assignment, as applicable.
2.3.4 Release of Individual Properties. Subject to satisfaction of each of the
conditions set forth below (collectively, the “General Release Conditions”) with
respect to any Individual Property or Individual Properties (other than the
portion of any Individual Property that that is an Outparcel, the release of
which Outparcels is governed by Section 2.3.7 below), Lender shall (i) release
such Individual Property or Individual Properties (each a “Release Property”)
from the Lien of the Security Instrument and related Loan Documents (or a deed
of partial reconveyance, as the case may be) and the release of Borrower’s (and
in the case of the Maryland Property, the Maryland Loan Guarantor’s) obligations
under the Loan Documents with respect to the Released Property, other than those
expressly stated herein or in such other Loan Documents to survive (or to the
extent so requested by Borrower, assign the Lien of the Security Instrument to a
new lender without representation, warranty or recourse) (each release under
this Section 2.3.4 or Section 2.3.6 or in connection with a partial defeasance
of the Loan pursuant to Section 2.3.5, a “Property Release”), (ii) instruct the
Cash Management Bank to return to Borrower any Excess Account Collateral subject
to and in accordance with Section 2.3.8 except to the extent otherwise provided
in such Section 2.3.8, (iii) comply with Section 2.3.9 with regard to adjusting
the ongoing reserve requirements hereunder and (iv) adjust the Monthly Debt
Service Payment Amount in accordance with Section 4(b)(ii) of the Notes:
(a) Borrower delivers a written notice (a “Property Release Notice”) to Lender
of its desire to effect such Property Release, no later than fifteen
(15) Business Days prior to the date of such desired Property Release, and
setting forth the Business Day (the “Release Date”) on which Borrower (or in the
case of the Maryland Property, Maryland Loan Guarantor) desires that Lender
release its interest in such Release Property.
(b) Borrower shall have paid to Lender (i) the Release Price, (ii) the
applicable Yield Maintenance Premium, if any, and (iii) all other sums due under
the Notes in connection with such prepayment. If the Release Date is not a
Payment Date, then the Release Price shall include interest that would have
accrued on the Allocated Loan Amount for the Release Property through the end of
the Interest Period during which such payment is made, and the Release Price,
and the applicable Yield Maintenance Premium, if any, shall be held by Lender as
collateral security for the Loan in an interest bearing account at an Eligible
Institution, with interest accruing on such amounts to the benefit of Borrower,
and applied to the Loan on the next occurring Payment Date.

 

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(c) Borrower shall submit to Lender not less than ten (10) Business Days prior
to the Release Date (which must be on a Business Day), a release of Liens (and
related Loan Documents) for each applicable Release Property (for execution by
Lender) in a form appropriate in the applicable State and otherwise satisfactory
to Lender, in its reasonable discretion, and all other documentation Lender
reasonably requires to be delivered by Borrower in connection with such Property
Release (collectively, “Release Instruments”), together with an Officer’s
Certificate certifying that the requirement described in paragraph (d) below is
satisfied in connection with such Property Release (together with calculations
and supporting documentation demonstrating the same in reasonable detail) and,
simultaneously with the Release, Guarantor withdraws and is replaced as the
managing member of the applicable Borrower (or Maryland Loan Guarantor, as
applicable) that is the owner of the Release Property or such Borrower (or
Maryland Loan Guarantor) is dissolved in connection with the release.
(d) With respect to any Property Release, after giving effect to such Property
Release, the LCR as of the Release Date (calculated with reference to all of the
Individual Properties then remaining subject to the Liens of the Security
Instrument) shall not be less than the greater of (A) ninety percent (90%) of
the Closing Date LCR and (B) seventy-five percent (75%) of the LCR for all of
the Individual Properties subject to the Lien of the Security Instrument
immediately prior to the Release Date.
(e) No Event of Default shall have occurred and then be continuing on the
Release Date.
(f) The Release Property is simultaneously transferred to a party other than
Borrower or Maryland Loan Guarantor or any SPE Entity.
(g) Each of Borrower and Maryland Loan Guarantor executes and delivers such
other instruments, certificates, opinions of counsel and documentation as Lender
and, if the Release Date occurs following a Securitization, the Rating Agencies
shall reasonably request in order to preserve, confirm or secure the Liens and
security granted to Lender by the Loan Documents, including any amendments,
modifications or supplements to any of the Loan Documents and partial release
endorsements to the existing Title Policy.
(h) Borrower shall pay for any and all out-of-pocket costs and expenses incurred
by Lender in connection with any proposed Property Release, including Lender’s
reasonable attorneys’ fees and disbursements and all title insurance premiums
for any customary endorsements to any existing Title Policies required by Lender
in connection with such proposed release.
Notwithstanding the foregoing, clauses (b)(ii) and (d) above shall not apply to
Casualty/Condemnation Property Releases.
2.3.5 Defeasance.
(a) Generally. Borrower shall have the right, at any time following the
expiration of the Defeasance Lockout Period but prior to the Yield Maintenance
Premium Release Date to voluntarily defease the Loan in whole and obtain the
release of the Property, or solely in connection with a Property Release, in
part, and obtain the release of the applicable Individual Property or Individual
Properties, by and upon satisfaction of the following conditions (such event
being a “Defeasance Event”):

 

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(i) Borrower shall provide not less than thirty (30) days prior written notice
to Lender specifying the date (the “Defeasance Date”) on which the Defeasance
Event shall occur; provided that Borrower shall have the right to revoke such
notice upon written notice given to Lender not Less than three (3 Business Days
prior to the then scheduled Defeasance Date provided Borrower reimburses Lender
for any actual out-of-pocket costs incurred by Lender in connection with such
revocation;
(ii) Borrower shall pay to Lender all accrued and unpaid interest on the portion
of the outstanding Principal Amount of the Loan then being defeased to and
including the Defeasance Date;
(iii) Borrower shall pay to Lender all other sums, not including scheduled
interest or principal payments, then due and payable under the Note, this
Agreement, the Security Instrument and the other Loan Documents;
(iv) No Event of Default shall have occurred and then be continuing on the
Defeasance Date;
(v) If the Loan is defeased in whole, Borrower shall comply with the conditions
set forth in Section 2.3.3, and if the Loan is defeased only in part, Borrower
shall also comply with the conditions set forth in Section 2.3.4(c) with respect
to the release of the applicable Individual Property or Individual Properties;
(vi) Borrower shall deliver to Lender, at Borrower’s option, either (A) the
Defeasance Deposit or (B) the Defeasance Collateral (such Defeasance Collateral
to be in an amount equal to or greater than that which could otherwise be
purchased with the Defeasance Deposit had the required Defeasance Deposit been
delivered by Borrower);
(vii) Borrower (and/or, if requested by Lender in the case of the Maryland
Property, the Maryland Loan Guarantor) shall execute and deliver a pledge and
security agreement, in form and substance that would be reasonably satisfactory
to a prudent lender, creating a first priority lien on the Defeasance
Collateral, in accordance with the provisions of this Section 2.3.5 (the
“Security Agreement”);
(viii) Borrower shall (A) deliver an Opinion of Counsel for Borrower that is
standard in commercial lending transactions and subject only to customary
qualifications, assumptions and exceptions opining, among other things, that
(1) Lender has a perfected first priority security interest in the Defeasance
Collateral delivered by Borrower or the Maryland Loan Guarantor, as applicable
and (2), if applicable, Borrower (and/or Maryland Loan Guarantor, as applicable,
in the case of the Maryland Property), has duly and validly transferred and
assigned to the Successor Borrower the Defeasance Collateral and all
obligations, rights and duties under and to the Notes (or each Undefeased Note,
as hereinafter defined) that are attributable to the Property, and (B) if the
Defeasance Event occurs after a Securitization, pay all reasonable costs of
Lender obtaining a Non-Disqualification Opinion with respect to such Defeasance
Event;

 

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(ix) With respect to any Defeasance Event occurring after a Securitization,
Borrower shall obtain a Rating Agency Confirmation to the effect that the
Defeasance Collateral to be purchased qualifies and is sufficient so that the
substitution of such Defeasance Collateral for the Property or the Individual
Property or Individual Properties being released, as applicable, will not result
in a downgrade, withdrawal or qualification of the respective ratings in effect
immediately prior to such Defeasance Event for the Securities issued in
connection with the Securitization which are then outstanding. If required by
the applicable Rating Agencies, Borrower shall also deliver or cause to be
delivered a Non-Consolidation Opinion with respect to any Successor Borrower in
form and substance (i) reasonably satisfactory to a prudent lender and
(ii) satisfactory to the applicable Rating Agencies;
(x) Borrower shall deliver a certificate (in form reasonably acceptable to
Lender) of an Independent Accountant engaged by Borrower certifying that the
Defeasance Collateral shall generate monthly amounts equal to or greater than
the Scheduled Defeasance Payments;
(xi) In the case of a defeasance of the Loan in part, Borrower shall execute and
deliver all documents required by the Lender to amend and restate each of the
Notes with two (2) substitute Notes, (A) one Note having a principal balance
equal to all sums required to be paid hereunder with respect to such Release and
Defeasance Event (the “Defeased Note”), and (B) one Note having a principal
balance equal to the outstanding principal balance of the Note immediately prior
to the Defeasance Event minus the all sums required to be paid hereunder with
respect to such Release and Defeasance Event (the “Undefeased Note”). Each
Undefeased Note may be the subject of one or more further Defeasance Events in
accordance with the provisions of this Section 2.3.5. From and after the
Defeasance of the Loan in part, all references to the Note in this Agreement and
the other Loan Documents shall be deemed to refer to the Undefeased Note; and
(xii) Borrower shall pay all costs and expenses of Lender incurred in connection
with the Defeasance Event, including (A) any out-of-pocket costs and expenses
associated with a release (in full or in part, as applicable) of the Lien of the
Security Instrument as provided in Section 2.3.3 or Section 2.3.4, as applicable
(including, in the case of a release of an Individual Property or Individual
Properties, all title insurance premiums for any endorsements to any existing
Title Policies reasonably required by Lender in connection with such proposed
release), (B) reasonable attorneys’ fees and expenses incurred in connection
with the Defeasance Event, (C) the costs and expenses of the Rating Agencies, if
the Defeasance Event occurs after a Securitization, and (D) any revenue,
documentary stamp or intangible taxes or any other tax or charge due in
connection with the transfer of the Notes, or otherwise required to accomplish
the defeasance.

 

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(b) Scheduled Defeasance Payments. In connection with any Defeasance Event,
Borrower shall purchase Defeasance Collateral (or Lender shall use the
Defeasance Deposit to purchase such Defeasance Collateral) which provide
payments on or prior to, but as close as possible to, all successive scheduled
Payment Dates after the Defeasance Date but prior to the Yield Maintenance
Premium Release Date, in amounts equal to the scheduled payments of principal,
interest, and any other amounts due on each such Payment Date under the Loan
Documents (or, in the case, of a partial defeasance, the portions of such
scheduled payments due on each such Payment Date under this Agreement and the
Defeased Note) but assuming, for purposes hereof, that the Maturity Date Payment
shall be paid on the Yield Maintenance Premium Release Date (the aforedescribed
payments, the “Scheduled Defeasance Payments”). Borrower (and/or Maryland Loan
Guarantor, as applicable, in the case of the Maryland Property) pursuant to the
Security Agreement or other appropriate document, shall authorize and direct
that the payments received from the Defeasance Collateral may be made directly
to the Holding Account (unless otherwise directed by Lender) and applied to
satisfy the obligations of Borrower (and/or Maryland Loan Guarantor, as
applicable in the case of the Maryland Property) or Successor Borrower, if
applicable, under this Agreement and the Notes (or each Defeased Note, in the
case of the defeasance of the Loan in part). Any portion of the Defeasance
Deposit in excess of the amount necessary to purchase the Defeasance Collateral
required by this Section 2.3.5 and to satisfy Borrower’s other obligations
hereunder shall be remitted to Borrower. Following the payment in full of the
Notes (and each Defeased Note in the case of a defeasance of the Loan in part)
and all other Obligations on the Maturity Date, any amounts remaining in the
Defeasance Deposit, if any, shall be remitted to Borrower.
(c) Defeasance Collateral. The Defeasance Collateral shall be duly endorsed by
the holder thereof as directed by Lender or accompanied by a written instrument
of transfer in form and substance that would be reasonably satisfactory to a
prudent lender and that does not require Borrower or Maryland Loan Guarantor, as
applicable, to incur any additional obligations or liabilities, (including,
without limitation, such instruments as may be reasonably required by the
depository institution holding such securities or by the issuer thereof, as the
case may be, to effectuate book-entry transfers and pledges through the
book-entry facilities of such institution) in order to perfect, upon the
delivery of the Defeasance Collateral, a first priority security interest
therein in favor of the Lender in conformity with all applicable state and
federal laws governing the granting of such security interests.
(d) Successor Borrower. If the Defeasance Event occurs after a Securitization,
Borrower (and/or Maryland Loan Guarantor, as applicable, in the case of the
Maryland Property) may, at its option, or if so required by the applicable
Rating Agencies, shall, establish or designate a successor entity (the
“Successor Borrower”) which shall be a single purpose bankruptcy remote entity
approved by the Rating Agencies with one (1) Independent Director, and Borrower
(and/or Maryland Loan Guarantor, as applicable, in the case of the Maryland
Property) shall transfer and assign all obligations, rights and duties under and
to the Notes (or each Defeased Note in the case of a defeasance of the Loan in
part), together with the pledged Defeasance Collateral to such Successor
Borrower. Such Successor Borrower shall assume the obligations under the Notes
(or each Defeased Note in the case of a defeasance of the Loan in part) and the
Security Agreement and Borrower (and/or Maryland Loan Guarantor, as applicable,
in the case of the Maryland Property) shall be relieved of its obligations under
such documents. Borrower shall pay $1,000 to any such Successor Borrower as
consideration for assuming the obligations under the Notes and the Security
Agreement. Notwithstanding anything in this Agreement to the contrary, no other
assumption fee shall be payable upon a transfer of the Note in accordance with
this Section 2.3.5(d), but Borrower shall pay all costs and expenses incurred by
Lenders, including Lenders’ reasonable attorneys’ fees and expenses and, if the
Defeasance Event occurs after a Securitization, any fees and expenses of any
Rating Agencies, incurred in connection therewith. Any Successor Borrower may be
an Affiliate of Borrower or a defeasance consultant or similar service provider.

 

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(e) Release of Defeased Property. If Borrower has elected to defease the Loan or
any allocated portion thereof, and the requirements set forth in this
Section 2.3.5 have been satisfied, the Property or the applicable Individual
Property or Individual Properties shall be released from the Lien of the
Security Instrument and the Defeasance Collateral pledged pursuant to the
Security Agreement shall be the substitute sole source of collateral securing
such amounts due under the Notes (or a substitute source of collateral securing
such amounts under each Defeased Note in the case of a defeasance of the Loan in
part). Further, the pledge of the related Account Collateral and other property
pledged under this Agreement and the other Loan Documents and all other
obligations of Borrower (and Maryland Loan Guarantor in the case of the Maryland
Property) created hereunder in respect of such Property, Individual Property or
Individual Properties, as applicable, shall be discharged, other than those
expressly stated to survive.
2.3.6 Substitution of Properties.
(a) Generally. An Individual Borrower may, subject to the conditions in this
Section 2.3.6, substitute one or more warehouse or distribution facility
properties (each a “Substitute Property”) for an existing Individual Property
(each a “Replaced Property”) and obtain the release of the Replaced Property
from the Lien of the Security Instrument and related Loan Documents (or a deed
of partial reconveyance, as the case may be) and the release of Borrower’s (and,
in the case of the Maryland Property, Maryland Loan Guarantor’s) obligations
under the Loan Documents with respect to the Replaced Property, other than those
expressly stated to survive (each such release and substitution, a
“Substitution”); provided, however, such right of Substitution shall be limited
to Individual Properties whose aggregate Allocated Loan Amounts represent not
greater than thirty percent (30%) of the Loan Amount. From and after the
Substitution of a Substitute Property in accordance herewith, such Substitute
Property shall thereafter be deemed a Property, and shall have the Allocated
Loan Amount applicable to the Replaced Property. Concurrently with the
completion of all steps necessary to effect a Substitution as provided in this
Section 2.3.6, Lender shall release such Replaced Property from the Lien of the
Security Instrument and related Loan Documents. In the event of a Substitution,
the Notes shall remain in full force and effect, and the Lien of the Security
Instrument shall be spread to encumber the Substitute Property (each a
“Substitute Property Mortgage Spreader Agreement”).
(b) Certain Requirements. All Substitute Properties shall comply with this
Section 2.3.6. To qualify as a Substitute Property, a property must, as of the
Substitution Date (in addition to the other criteria set forth in this
Section 2.3.6):
(i) be subject to the Master Lease;
(ii) be a property as to which the applicable Individual Borrower (or, in the
case of the Maryland Property, Maryland Loan Guarantor) will hold insurable fee
title free and clear of any Lien or other encumbrance except for exceptions not
materially impairing the value of such property, and have an Appraised Value at
least equal to the Appraised Value of the Replaced Property;
(iii) be (A) free and clear, as evidenced by the environmental report referred
to in paragraph (c) below, of Hazardous Substances requiring remediation or
other action under any Environmental Law and/or the presence of which violates
Environmental Laws and (B) in material compliance with all Environmental Laws;

 

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(iv) be in good repair and condition, as evidenced by the engineering report
referred to in clause (c) below; and
(v) be in compliance, in all material respects, with Legal Requirements and
Insurance Requirements, as evidenced by diligence items required to be provided
in paragraph (c) below.
(c) Diligence Process. The Borrower shall submit to the Lender written notice (a
“Substitution Notice”) setting forth the Business Day no earlier than forty-five
(45) days after the date of such Substitution Notice on which Borrower desires
to effect such Substitution (the “Substitution Date”), together with the
following materials (the “Substitution Due Diligence Package”) relating to the
proposed Substitute Property: (i) a description of the proposed Substitute
Property sufficient to obtain the Title Policy, (ii) two (2) years of historical
cash flow operating statements, if available, (iii) true, complete and correct
copies of any Leases affecting the proposed Substitute Property, (iv) a map and
site plan, including an existing Survey of the property dated not more than six
(6) months prior to such submission, (v) a copy of the proposed amendment to the
Master Lease and Master Lease SNDA to include the Substitute Property,
(vi) copies of all permits, licenses and approvals required with respect to
operation of the Substitute Property, (vii) an environmental report issued by a
recognized environmental consultant, (viii) copies of all reciprocal easement
agreements, if any, affecting the Substitute Property, (ix) an engineer’s
inspection report, (x) estoppel certificates from parties to any reciprocal
easement agreements and tenants under any Material Subleases, in each case in
form reasonably acceptable to Lender, together with any governmental consents
required in order to subject the Substitute Property to the Lien of the Security
Instrument, (xi) a commitment from the Title Company with respect to the
issuance of a Title Policy, together with copies of all exceptions referenced
therein, (xii) upon the reasonable request of the Lender, a “Probable Maximum
Loss” study, (xiii) an Appraisal, (xiv) if such Substitute Property is not then
owned by Borrower (or in the case of property located in Maryland, Maryland
Guarantor) or its Affiliate, a duly executed copy of the purchase and sale
agreement for such Substitute Property and copies of all proposed documentation
transferring title to the Substitute Property to Borrower (or, in the case of
property located in Maryland, the Maryland Guarantor), including any interim
transfers to its Affiliates, (xv) a copy of the flood certification,
(xvi) either (A) a letter or other evidence with respect to the proposed
Substitute Property from the appropriate Governmental Authorities concerning
compliance with applicable zoning and building laws, (B) an ALTA 3.1 zoning
endorsement for the Title Policy or (C) a zoning report prepared by PZR or other
similar company indicating that the Substitute Property is in material
compliance with applicable zoning and building laws, (xvii) a copy of the valid
permanent certificate of occupancy (if required by applicable law),
(xviii) calculations of the LTV Ratio and the LCR both before and after the
proposed Substitution and (xix) pro formas of the insurance certificates
required under Article VI with respect to such Substitute Property, and not
revealing any Liens other than Permitted Encumbrances. In addition, subject to
the consent of the owner of the Substitute Property, Lender shall be permitted
to make an inspection of such Substitute Property as a condition to such
substitution.

 

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(d) Additional Conditions Precedent. In addition to the conditions in paragraphs
(a), (b) and (c) above, each Substitution shall be subject to the satisfaction
of the following conditions precedent:
(i) Rating Agency Confirmation; Rating Agency Requirements. For any Substitution
made after a Securitization, Lender’s receipt of a Rating Agency Confirmation
and Borrower’s satisfaction of such other conditions as may be required by the
Rating Agencies;
(ii) Release Conditions. Borrower’s compliance with the conditions set forth in
Section 2.3.4(c), (f) and (g) with respect to the release of the Replaced
Property;
(iii) Financial and Other Tests.
(1) LCR. After giving effect to such Substitution, the LCR as of the
Substitution Date (calculated with reference to all of the Individual Properties
then remaining subject to the Liens of the Security Instrument; i.e., including
the Substitute Property and excluding the Replaced Property) shall not be less
than the greater of (A) ninety percent (90%) of the Closing Date LCR and
(B) seventy-five percent (75%) of the LCR for all of the Individual Properties
subject to the Lien of the Security Instrument immediately prior to the
Substitution Date.
(2) LTV Ratio. After giving effect to such Substitution, as of the Substitution
Date, the LTV Ratio (as calculated by including the Substitute Property, but
excluding the Replaced Property), shall not be less than the Closing Date LTV
Ratio.
(3) Geographic Diversity. The proposed Substitution does not cause the aggregate
Allocated Loan Amounts with respect to Individual Properties located in any
single Geographic Quadrant to exceed fifty percent (50%) of the Principal
Amount.
(iv) Lender’s Costs and Expenses. Borrower shall pay for any and all costs and
expenses of Lender incurred in connection with any proposed Substitution,
including Lender’s reasonable attorneys’ fees and disbursements, all title
insurance premiums for any endorsements to any existing Title Policies
reasonably required by Lender in connection with such proposed Substitution,
title premiums, mortgage recording taxes, transfer taxes and recording fees.
(v) Intentionally Omitted.
(vi) Opinions of Counsel. Borrower shall deliver to Lender the following
favorable original Opinions of Counsel or updates thereto in connection with the
Substitute Property similar in form and substance to the opinions which were
delivered on the Closing Date in connection with the Replaced Property,
reasonably satisfactory to Lender (and satisfactory to the Rating Agencies, if
applicable) and addressed to the Lender on behalf of the holders of the Notes:
(a) if requested by the Rating Agencies following or in connection with a
Securitization, a non-consolidation opinion, (b) a local counsel enforceability
opinion, (c) an enforceability opinion under New York law, (d) an opinion to the
effect that each of Borrower, Maryland Loan Guarantor, Master Lessee and
Guarantor is duly organized and validly existing under the laws of the state of
its formation and is qualified or licensed to do business in each jurisdiction
where the nature of its business in which it is engaged makes such qualification
or licensing necessary and (e) an opinion to the effect that the Loan Documents
or amendments thereto have been duly authorized, executed and delivered by
Borrower, Maryland Loan Guarantor, Master Lessee and Guarantor and are the valid
and binding obligations and agreements of such party, enforceable in accordance
with their terms, in each case with the same exceptions as made on Closing Date;

 

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(vii) No Event of Default. No Event of Default shall have occurred and then be
continuing on the Substitution Date;
(viii) Accuracy of Representations and Warranties. The representations and
warranties set forth in the Loan Documents shall be true and correct as to the
Substitute Property on the Substitution Date in all material respects;
(ix) Officer’s Certificate. Delivery to Lender of an Officer’s Certificate
certifying to the truth and accuracy of the statements in clause (viii);
(x) Non-Disqualification Opinion. If the Substitution Date occurs after a
Securitization, delivery of a Non-Disqualification Opinion;
(xi) Organizational Documents. Delivery to Lender of (A) if required by the
Rating Agencies, copies of organizational documents of Borrower, Maryland Loan
Guarantor, Master Lessee and Guarantor, including, but not limited to a current
certificate of good standing, (B) if the Substitute Property is located in a
state not previously covered by the Security Instrument, evidence of Borrower’s
(or, in the case of property located in Maryland, the Maryland Loan Guarantor’s)
qualification to do business in the state where the Substitute Property is
located if and to the extent such qualification is required in the applicable
jurisdiction and (C) appropriate evidence of the authorization of the Borrower,
Maryland Loan Guarantor, Master Lessee and Guarantor approving the execution,
delivery and performance of the Loan Documents or amendments thereto being
executed and delivered in connection with the Substitution, duly adopted by the
Borrower, Maryland Loan Guarantor, Master Lessee and Guarantor, as applicable,
and accompanied by an Officer’s Certificate stating that such authorizations
have not been altered or repealed and are in full force and effect, and
certifying as to the names of the Persons authorized to sign on behalf of such
parties, together with the true signatures of each such Person;
(xii) Insurance Certificates. Delivery of the insurance certificates with
respect to the Substitute Property required under Article VI; and
(xiii) Loan Documents. Delivery to Lender of originals of the following Loan
Documents or amendments thereto:
(1) a Substitute Property Mortgage Spreader Agreement, duly executed and
acknowledged by Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor);
(2) a first priority Assignment of Master Lease, Leases, Rents and Security
Deposits, from Borrower (or in the case of property located in Maryland,
Maryland Loan Guarantor), as assignor, to Lender, as assignee, assigning to
Lender all of Borrower’s (or Maryland Loan Guarantor’s, as applicable) interest
in and to the Master Lease, the Leases, Rents and Security Deposits as security
for the Loan with respect to the Substitute Property, or a counterpart original
of the Assignment of Leases, modified as necessary, duly executed and
acknowledged by Borrower or Maryland Loan Guarantor, as applicable;

 

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(3) UCC financing statements (Form UCC-1) (or other forms required in any
jurisdiction), covering all fixtures and Building Equipment and other Personal
Property (other than the Excluded Personal Property), and all proceeds thereof,
naming Borrower (or in the case of property located in Maryland, Maryland Loan
Guarantor) as debtor and Lender as secured party;
(4) the Title Policy or endorsements to the Title Policy, as applicable, issued
by the Title Company in an amount equal to the amount of coverage that had been
provided for the Replaced Property (or, if such Substitute Property is located
in a Mortgage Tax State and the Replaced Property is not, an amount equal to
125% of the amount of coverage that had been provided for the Replaced
Property), reflecting the addition of such Substitute Property and containing
such affirmative coverage similar in form and substance to the affirmative
coverage provided in connection with the Replaced Property, insuring that the
Substitute Property Mortgage Spreader Agreement creates a valid first lien on
Borrower’s (or in the case of property located in Maryland, Maryland Loan
Guarantor’s) fee title in the Substitute Property, subject to the Permitted
Encumbrances, and insuring the perfected first priority interest of Lender
pursuant to the Substitute Property Mortgage Spreader Agreement, together with
any title insurance premiums, fees or charges due in connection therewith, and
the Borrower shall cooperate with the Lender and execute such further
instruments and documents and perform such further acts as the Lender or the
Title Company shall reasonably request to carry out the creation and perfection
of the liens and security interests contemplated by the documents described in
clauses (i), (ii) and (iii) and the release, discharge and removal of any
encumbrances required for the issuance of the Title Policy;
(5) an amendment to the Master Lease and to the Master Lease SNDA incorporating
the Substitute Property and eliminating the Replaced Property;
(6) updates to any Exhibits and Schedules to the Loan Documents, as applicable,
without disclosing matters inconsistent with the requirements of this
Section 2.3.6; and
(7) a Confirmation of Guaranty and Indemnity in customary form duly executed and
delivered by Guarantor, adding the Substitute Property to, and affirming its
obligations under, the Recourse Guaranty and the Environmental Indemnity.
(e) Additional Deliveries. Lender shall have received such other deliveries
reasonably requested by Lender, provided such requests are customary and are
consistent with the deliveries required with respect to the Property on the
Closing Date.

 

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2.3.7 Release of Outparcels. Provided no Event of Default has occurred and is
continuing, Borrower may request that Lender release an Outparcel from the Lien
of the Security Instrument in accordance with the terms of this Section 2.3.7.
Lender shall have no obligation to release any Outparcel from the Lien of the
Security Instrument until Borrower shall have satisfied the following
conditions, as reasonably determined by Lender: (1) the Outparcel to be released
shall constitute a separate conveyable legal parcel in accordance with the
subdivision map act or the equivalent thereof in the jurisdiction of such
Outparcel or other relevant granted government approvals in such jurisdiction;
(2) to the extent any easements or restrictive covenants benefiting or burdening
such Outparcel are necessary or appropriate for the use or operation of or
preservation of value with respect to any remaining Individual Property that is
in the vicinity of, or otherwise related to, the Outparcel (a “Related Remaining
Property”), such easements shall have been granted or reserved prior to or at
the time of the release or reconveyance of such Outparcel and shall have been
approved by Lender, which approval shall not be unreasonably withheld or
delayed; (3) each Related Remaining Property shall remain a legal parcel (or
parcels) in compliance in all material respects with all Legal Requirements,
zoning, subdivision, land use and other applicable laws and regulations; (4) at
the time of, but not prior to, any such release or reconveyance, such Outparcel
shall be transferred to a person or entity that does not result in a breach of
Borrower’s or Maryland Loan Guarantor’s obligation to be a Single Purpose
Entity; (5) Lender shall have received satisfactory evidence that any tax, bond
or assessment that constitutes a lien against such Outparcel has (i) prior to
such release, been properly allocated between the Outparcel and any Related
Remaining Property and (ii) after such release, will be properly assessed
against the Outparcel and such Related Remaining Property separately; (6) Lender
shall have received such endorsements to the Title Policy (or substantially
equivalent assurance) as Lender may reasonably require confirming continuing
title insurance and that (A) the Security Instrument constitutes a first
priority lien on any Related Remaining Property after the release of the
Outparcel, (B) such Related Remaining Property constitutes a separate tax lot or
tax lots and (C) such release shall not result in such Related Remaining
Property ceasing to comply in all material respects with all applicable Legal
Requirements, zoning, land use and subdivision laws; (7) Borrower (and in the
case of Outparcels located in Maryland, Maryland Loan Guarantor) shall have
executed and delivered such documents (including amendments to the Loan
Documents) as Lender may reasonably require to reflect such release;
(8) Borrower shall pay to Lender all costs and expenses incurred by Lender
(including, without limitation, reasonable attorneys fees and any applicable
costs and expenses of the Rating Agencies) in connection with each such release;
(9) Borrower shall have provided Lender at least fifteen (15) Business Days
prior written notice of such requested release; and (10) Borrower shall submit
to Lender, not less than fifteen (15) days prior to the date of such proposed
release (which must be on a Business Day), a release of Liens (and related Loan
Documents) for such Outparcel, in a form appropriate in the applicable State and
otherwise satisfactory to Lender in its reasonable discretion, and all other
documentation Lender reasonably requires to be delivered by Borrower in
connection with such release (collectively, “Outparcel Release Instruments”).
2.3.8 Excess Account Collateral. Upon the occurrence of any Property Release,
provided no Low LCR Cash Sweep Period exists and no Event of Default has
occurred and is continuing, Lender shall promptly perform an analysis of the
Account Collateral in order to reasonably determine the amount of the Account
Collateral (including, but not limited to, Proceeds) attributable to the Release
Property (the “Excess Account Collateral”), and shall promptly instruct Cash
Management Bank to return to Borrower the Excess Account Collateral, if any,
except to the extent that Lender reasonably determines that a shortfall exists
in such Sub-Account with respect to the Property other than the Release
Property.

 

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2.3.9 Reserve Requirements. Upon the occurrence of a Property Release, provided
no Low LCR Cash Flow Sweep Period exists and no Event of Default has occurred
and is continuing, Lender shall promptly prepare a revised estimate of
Impositions and Other Charges and insurance premiums with respect to the
remaining Individual Properties in accordance with Sections 16.1 and 16.2, as
applicable, and shall promptly provide Borrower and Cash Management Bank with
notice of the revised Monthly Tax Reserve Amount and Monthly Insurance Reserve
Amount.
2.4 Regulatory Change; Taxes.
2.4.1 Increased Costs. If as a result of any Regulatory Change or compliance of
Lender therewith, the basis of taxation of payments to Lender or any company
Controlling Lender of the principal of or interest on the Loan is changed or
Lender or the company Controlling Lender shall be subject to (i) any tax, duty,
charge or withholding of any kind with respect to this Agreement (excluding
federal taxation of the overall net income of Lender or the company Controlling
Lender); or (ii) any reserve, special deposit or similar requirements relating
to any extensions of credit or other assets of, or any deposits with or other
liabilities, of Lender or any company Controlling Lender is imposed, modified or
deemed applicable; or (iii) any other condition affecting loans to borrowers
subject to fixed interest rates is imposed on Lender or any company Controlling
Lender and Lender determines that, by reason thereof, the cost to Lender or any
company Controlling Lender of making, maintaining or extending the Loan to
Borrower is increased, or any amount receivable by Lender or any company
Controlling Lender hereunder in respect of any portion of the Loan to Borrower
is reduced, in each case by an amount deemed by Lender in good faith to be
material (such increases in cost and reductions in amounts receivable being
herein called “Increased Costs”), then Lender shall provide notice thereof to
Borrower and Borrower agrees that it will pay to Lender upon Lender’s written
request such additional amount or amounts as will compensate Lender or any
company Controlling Lender for such Increased Costs to the extent Lender
reasonably determines that such Increased Costs are allocable to the Loan. If
Lender requests compensation under this Section 2.4.1, Borrower may, by notice
to Lender, require that Lender furnish to Borrower a statement setting forth the
basis for requesting such compensation and the method for determining the amount
thereof.
2.4.2 Special Taxes. Borrower shall make all payments hereunder free and clear
of and without deduction for Special Taxes. If Borrower shall be required by law
to deduct any Special Taxes from or in respect of any sum payable hereunder or
under any other Loan Document to Lender, (i) the sum payable shall be increased
as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.4.2)
Lender receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions, and
(iii) Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law. Notwithstanding anything to the
contrary contained in this Section 2.4.2, Borrower shall not be liable for any
amounts as a result of withholding for Special Taxes or additional costs
incurred as a result of the assignment of all or any portion of the Loan by
Lender to any Person that is subject to Special Taxes and which is organized
under or has its principal place of business outside of the United States of
America or any political subdivision thereof.

 

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2.4.3 Other Taxes. In addition, Borrower agrees to pay any present or future
stamp or documentary taxes or other excise or property taxes, charges, or
similar levies which arise from any payment made hereunder, or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the other Loan Documents or the Loan (hereinafter referred to as
“Other Taxes”).
2.4.4 Indemnity. Borrower shall indemnify Lender for the full amount of Special
Taxes and Other Taxes (including any Special Taxes or Other Taxes imposed by any
Governmental Authority on amounts payable under this Section 2.4.4) paid by
Lender and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within
thirty (30) days after the date Lender makes written demand therefor.
2.4.5 Change of Office. To the extent that changing the jurisdiction of Lender’s
applicable office would have the effect of minimizing Special Taxes, Other Taxes
or Increased Costs, Lender shall use reasonable efforts to make such a change.
2.4.6 Survival. Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in this
Section 2.4 shall survive the payment in full of principal and interest
hereunder, and the termination of this Agreement.
2.5 Conditions Precedent to Closing. The obligation of Lender to make the Loan
hereunder is subject to the fulfillment by, or on behalf of, Borrower or waiver
by Lender of the following conditions precedent no later than the Closing Date;
provided, however, that unless a condition precedent shall expressly survive the
Closing Date pursuant to a separate agreement, by funding the Loan, Lender shall
be deemed to have waived any such conditions not theretofore fulfilled or
satisfied.
2.5.1 Representations and Warranties; Compliance with Conditions. The
representations and warranties of Borrower and Maryland Loan Guarantor contained
in this Agreement and the other Loan Documents shall be true and correct in all
material respects on and as of the Closing Date with the same effect as if made
on and as of such date, and no Default or Event of Default shall have occurred
and be continuing; and Borrower and Maryland Loan Guarantor shall be in
compliance in all material respects with all terms and conditions set forth in
this Agreement and in each other Loan Document on its part to be observed or
performed.
2.5.2 Delivery of Loan Documents; Title Policy; Reports; Leases.
(a) Loan Documents. Lender shall have received an original copy of this
Agreement, the Notes and all of the other Loan Documents, in each case, duly
executed (and to the extent required, acknowledged) and delivered on behalf of
Borrower and any other parties thereto.
(b) Security Instrument, Assignment of Leases. Lender shall have received
evidence that original counterparts of the Security Instrument and Assignment of
Leases, in proper form for recordation, have been delivered to the Title Company
for recording, so as effectively to create, in the reasonable judgment of
Lender, upon such recording valid and enforceable first priority Liens upon the
Property, in favor of Lender (or such other trustee as may be required or
desired under local law), subject only to the Permitted Encumbrances and such
other Liens as are permitted pursuant to the Loan Documents.

 

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(c) UCC Financing Statements. Lender shall have received evidence that the UCC
financing statements relating to the Security Instrument and this Agreement have
been delivered to the Title Company for filing in the applicable jurisdictions.
(d) Title Insurance. Lender shall have received a Title Policy issued by the
Title Company and dated as of the Closing Date. Such Title Policy shall
(i) provide coverage in an amount equal to one hundred percent (100%) of the
Loan (or in the case of the Individual Properties in the Mortgage Tax States,
one hundred twenty-five percent (125%) of the Allocated Loan Amount),
(ii) insure Lender that the Security Instrument creates a valid, first priority
Lien on the Property, free and clear of all exceptions from coverage other than
Permitted Encumbrances and standard exceptions and exclusions from coverage (as
modified by the terms of any endorsements), (iii) contain the endorsements and
affirmative coverages set forth on Exhibit A and such additional endorsements
and affirmative coverages as Lender may reasonably request to the extent
available in the applicable State, and (iv) name Lender as the insured. Lender
also shall have received evidence that all premiums in respect of such Title
Policy have been paid and that all appropriate releases or discharges of
encumbrances necessary for the delivery of the Title Policy have been delivered
for recording.
(e) Surveys. With respect to each of the Individual Properties, Lender shall
have received (i) a current Survey containing the survey certification
substantially in the form attached hereto as Exhibit B or (ii) copies of
existing Surveys prepared in connection with the financing being repaid with
proceeds of the Loan, together with so called “no change affidavits” executed by
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor),
each in form sufficient to enable the Title Company to omit the standard survey
exception to title coverage and to issue the endorsements to the Title Policy
required by Lender (to the extent available in the applicable State), including,
but not limited to, contiguity, comprehensive, subdivision, land same as survey
and access endorsements. Each such Survey shall reflect the same legal
description contained in the Title Policy referred to in paragraph (d) above and
shall include, among other things, a metes and bounds description (or such other
description as is required by Title Company) of the applicable Individual
Property, any such description to be reasonably satisfactory to Lender. The
surveyor’s seal shall be affixed to each Survey.
(f) Insurance. Lender shall have received valid certificates of insurance for
the policies of insurance required hereunder, satisfactory to Lender in its sole
discretion, and evidence of the payment of all insurance premiums currently due
and payable for the existing policy period.
(g) Environmental Reports. Lender shall have received the Environmental Reports
in respect of the Individual Properties satisfactory to Lender (and Lender
agrees and acknowledges that the Environmental Reports may consist of updates to
the existing environmental reports, provided that (A) such updated reports are
in form and content acceptable to Lender in Lender’s reasonable discretion and
(B) the environmental consultant preparing such updated reports shall provide to
Lender a reliance letter satisfactory to Lender).

 

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(h) Zoning. Lender shall have received with respect to each Individual Property
one of the following: (i) letters or other evidence with respect to the Property
from the appropriate municipal authorities (or other Persons) concerning
compliance with applicable zoning and building laws acceptable to Lender,
(ii) an ALTA 3.1 zoning endorsement for the Title Policy or (iii) a zoning
report reasonably acceptable to Lender prepared by PZR or another nationally
recognized zoning due diligence firm acceptable to Lender.
(i) Certificate of Occupancy. Lender shall have received a copy of the valid
permanent certificate of occupancy for each Individual Property located in a
jurisdiction that requires certificates of occupancy under applicable law, in
each case acceptable to Lender.
(j) Encumbrances. Borrower shall have taken or caused to be taken such actions
in such a manner so that Lender has a valid and perfected first Lien as of the
Closing Date on the Property, subject only to Permitted Encumbrances and such
other Liens as are permitted pursuant to the Loan Documents, and Lender shall
have received satisfactory evidence thereof.
2.5.3 Related Documents. Each additional document not specifically referenced
herein, but relating to the transactions contemplated herein, shall have been
duly authorized, executed and delivered by all parties thereto and Lender shall
have received and approved certified copies thereof.
2.5.4 Delivery of Organizational Documents. On or before the Closing Date,
Borrower shall deliver, or cause to be delivered, to Lender copies, certified by
an Officer’s Certificate, of all organizational documentation related to
Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity and
Guarantor as have been requested by Lender and/or the formation, structure,
existence, good standing and/or qualification to do business of Borrower,
Maryland Loan Guarantor, any other SPE Entity and Guarantor as Lender may
request in its sole discretion, including, without limitation, good standing
certificates, qualifications to do business in the appropriate jurisdictions,
resolutions authorizing the entering into of the Loan and incumbency
certificates as may be requested by Lender. Each of the organizational documents
of any SPE Entity shall contain single purpose entity provisions having a
substantive effect materially similar to that of the language set forth in
Exhibit C.
2.5.5 Counsel Opinions.
(a) Lender shall have received a Non-Consolidation Opinion in a form approved by
Lender (the “Non-Consolidation Opinion”).
(b) Lender shall have received the Opinion of Counsel substantially in
compliance with the requirements set forth in Exhibit D (and including a
non-contravention opinion with respect to the Revolving Loan) or in such other
form approved by the Lender (provided that Lender shall not unreasonably
withhold its approval of the general form of any Opinion of Counsel that was
used by the applicable counsel in connection with the financing being repaid
with proceeds of the Loan).
2.5.6 Annual Budget. Borrower shall have delivered the Annual Budget for the
current Fiscal Year, which Annual Budget shall be acceptable to Lender and shall
be certified by an Officer’s Certificate.

 

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2.5.7 Completion of Proceedings. All corporate and other proceedings taken or to
be taken in connection with the transactions contemplated by this Agreement and
other Loan Documents and all documents incidental thereto shall be satisfactory
in form and substance to Lender, and Lender shall have received all such
counterpart originals or certified copies of such documents as Lender may
reasonably request.
2.5.8 Payments. All payments, deposits or escrows, if any, required to be made
or established by Borrower under this Agreement, the Notes and the other Loan
Documents on or before the Closing Date shall have been paid.
2.5.9 Account Agreement. Lender shall have received the original of the Account
Agreement executed by each of Cash Management Bank, Borrower (other than
Maryland Borrower) and Maryland Loan Guarantor.
2.5.10 Master Lease SNDA. Borrower shall have, prior to Closing, delivered to
Lender the Master Lease SNDA executed by Master Lessee with respect to the
Master Lease.
2.5.11 Reserved.
2.5.12 Reserved.
2.5.13 Independent Manager/Member Certificate. Lender shall have received an
executed Independent Manager/Member certificate substantially in the form
attached as Exhibit T.
2.5.14 Transaction Costs. Borrower shall have paid or reimbursed Lender for all
title insurance premiums, recording and filing fees, costs of Environmental
Reports, Physical Condition Reports, seismic reports, zoning reports, searches,
flood certifications, appraisals and other reports, the reasonable fees and
costs of Lender’s counsel and all other third party out-of-pocket expenses
incurred in connection with the origination of the Loan.
2.5.15 Material Adverse Effect. No change, circumstance, event or effect shall
have occurred since the date of Borrower’s most recent financial statements
delivered to Lender which has, or could reasonably be expected to, have a
Material Adverse Effect.
2.5.16 Insolvency. None of Borrower, Master Lease Guarantor or Guarantor shall
be the subject of any bankruptcy, reorganization, or insolvency proceeding.
2.5.17 Leases. Lender shall have received copies of all Leases.
2.5.18 Master Lease; Master Lease SNDA. Lender shall have received a certified
copy of the Master Lease and shall have received the duly executed Master Lease
SNDA in form and substance reasonably acceptable to Lender.
2.5.19 Tax Lot. Lender shall have received a tax lot endorsement to the Title
Policy or other evidence that each Individual Property constitutes one (1) or
more separate tax lots, which endorsement or other evidence shall be reasonably
satisfactory in form and substance to Lender.

 

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2.5.20 Physical Conditions Reports. Lender shall have received the Physical
Conditions Reports with respect to the Individual Properties, which shall be
satisfactory in form and substance to Lender.
2.5.21 Appraisals. Lender shall have received an Appraisal of each Individual
Property, which shall be satisfactory in form and substance to Lender.
2.5.22 Financial Statements. Lender shall have confirmed the accuracy of all
financial statements and other financial information with respect to the
Property delivered by Borrower to Lender.
2.5.23 Flood Certifications. Lender shall have received a flood zone
certification with respect to each Individual Property.
2.5.24 Intercreditor Agreement. Lender shall have received the Intercreditor
Agreement as well as certified copies of the loan documents evidencing the
Revolving Loan (including any amendments thereto).
III. CASH MANAGEMENT
3.1 Cash Management.
3.1.1 Establishment of Accounts. Borrower hereby confirms that, simultaneously
with the execution of this Agreement and pursuant to the Account Agreement,
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) has
established with Cash Management Bank, in the name of Borrower (or in the case
of the Maryland Property, Maryland Loan Guarantor) for the benefit of Lender, as
secured party, the holding account (the “Holding Account”), which has been
established as a securities account. The Holding Account and each sub-account of
such account and the funds deposited therein and securities and other assets
credited thereto shall serve as additional security for the Loan. Pursuant to
the Account Agreement, Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall irrevocably instruct and authorize Cash
Management Bank to disregard any and all orders for withdrawal from the
Collateral Accounts made by, or at the direction of, Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor). Borrower agrees that, prior to
the payment in full of the Indebtedness, the terms and conditions of the Account
Agreement shall not be amended or modified without the prior written consent of
Lender (which consent Lender may grant or withhold in its sole discretion), and
if a Securitization has occurred, the delivery by Borrower of a Rating Agency
Confirmation. In recognition of Lender’s security interest in the funds
deposited into the Collateral Accounts, the Holding Account shall be named as
follows: “BlueLinx Portfolio Holding Account f/b/o German American Capital
Corporation, as secured party, (Account Number 5000000140431).” Borrower
confirms that it has established with Cash Management Bank the following
sub-accounts of the Holding Account (each, a “Sub-Account” and, collectively,
the “Sub-Accounts” and together with the Holding Account, the “Collateral
Accounts”), which (i) may be ledger or book entry sub-accounts and need not be
actual sub-accounts, (ii) shall each be linked to the Holding Account,
(iii) shall each be a “Securities Account” pursuant to Article 8 of the UCC and
(iv) shall each be an Eligible Account to which certain funds shall be allocated
and from which disbursements shall be made pursuant to the terms of this
Agreement:

 

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(a) a sub-account for the retention of Account Collateral in respect of
Impositions and Other Charges for the Property (the “Tax Reserve Account”);
(b) a sub-account for the retention of Account Collateral in respect of
insurance premiums for the Property (the “Insurance Reserve Account”);
(c) a sub-account for the retention of Account Collateral in respect of Debt
Service on the Loan (the “Debt Service Reserve Account”);
(d) a sub-account for the retention of Account Collateral in respect of reserves
relating to Master Lease Variable Additional Rent (the “Master Lease Variable
Additional Rent Reserve Account”);
(e) a sub-account for the retention of Account Collateral in respect of reserves
for the Immediate Repair Conditions and the Environmental Remediation Conditions
(the “Immediate Repair and Remediation Reserve Account”);
(f) a sub-account for the retention of Account Collateral in respect of reserves
for Structural Maintenance Items (the “Structural Repair Reserve Account”);
(g) a sub-account for the retention of Account Collateral in respect of certain
Proceeds, as more fully set forth in Section 6.2 (the “Proceeds Reserve
Account”); and
(h) a sub-account for the retention of Account Collateral in respect of reserves
of Excess Cash Flow required during a Low LCR Cash Sweep Period pursuant to
Section 16.5(c) (the “LCR Deterioration Reserve Account”).
3.1.2 Pledge of Account Collateral. To secure the full and punctual payment and
performance of the Obligations, Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) hereby collaterally assigns, grants a
security interest in and pledges to Lender, to the extent not prohibited by
applicable law, a first priority continuing security interest in and to the
following property of Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor), whether now owned or existing or hereafter acquired or
arising and regardless of where located (all of the same, collectively, the
“Account Collateral”):
(a) the Collateral Accounts and all cash, checks, drafts, securities
entitlements, certificates, instruments and other property, including, without
limitation, all deposits and/or wire transfers from time to time deposited or
held in, credited to or made to Collateral Accounts;
(b) any and all amounts invested in Permitted Investments;
(c) subject to the provisions of Section 3.1.4, all interest, dividends, cash,
instruments, securities entitlements and other property from time to time
received, receivable or otherwise payable in respect of, or in exchange for, any
or all of the foregoing or purchased with funds from the Collateral Accounts;
and

 

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(d) to the extent not covered by clauses (a), (b) or (c) above, all proceeds (as
defined under the UCC) of any or all of the foregoing.
In addition to the rights and remedies herein set forth, Lender shall have all
of the rights and remedies with respect to the Account Collateral available to a
secured party at law or in equity, including, without limitation, the rights of
a secured party under the UCC, as if such rights and remedies were fully set
forth herein.
This Agreement shall constitute a security agreement for purposes of the Uniform
Commercial Code and other applicable law.
3.1.3 Maintenance of Collateral Accounts. Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) agrees that each of the Collateral
Accounts is and shall be maintained (i) as a “securities account” (as such term
is defined in Section 8-501(a) of the UCC), (ii) in such a manner that Lender
shall have control (within the meaning of Section 8-106(d)(2) of the UCC) over
the Collateral Accounts, (iii) such that no Person other than Lender shall have
any right of withdrawal from the Collateral Accounts and, except as provided
herein, no Account Collateral shall be released to the Borrower or any Affiliate
of Borrower from the Collateral Accounts, (iv) in such a manner that the Cash
Management Bank shall agree to treat all property credited to the Collateral
Accounts as “financial assets” and (v) such that all securities or other
property underlying any financial assets credited to the Collateral Accounts
shall be registered in the name of Cash Management Bank, indorsed to Cash
Management Bank or in blank or credited to another securities account maintained
in the name of Cash Management Bank and in no case will any financial asset
credited to any of the Collateral Accounts be registered in the name of
Borrower, payable to the order of Borrower or specially indorsed to Borrower,
except to the extent the foregoing have been specially indorsed to Cash
Management Bank or in blank. Without limiting Borrower’s obligations under the
immediately preceding sentence, Borrower shall only establish and maintain the
Collateral Accounts with a financial institution that has executed an agreement
substantially in the form of the Account Agreement or in such other form
acceptable to Lender in its sole discretion.
3.1.4 Eligible Accounts. The Collateral Accounts shall be Eligible Accounts. The
Collateral Accounts shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other banking or governmental authority, as may now or hereafter be
in effect. Income and interest accruing on the Collateral Accounts or any
investments held in such accounts for the benefit of Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) shall be added to the principal
amount of such account on a daily basis (or with such frequency as the Cash
Management Bank can accommodate) and shall be held, disbursed and applied in
accordance with the provisions of this Agreement and the Account Agreement.
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
shall be the beneficial owner of the Collateral Accounts for federal income tax
purposes and shall report all income on the Collateral Accounts.

 

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3.1.5 Deposits into Sub-Accounts. On the date hereof, Borrower has deposited the
following amounts into the Sub-Accounts:

  (i)  
$1,252,579.76 into the Tax Reserve Account;
    (ii)  
$1,193,316.37 into the Insurance Reserve Account;
    (iii)  
$0.00 into the Debt Service Reserve Account;
    (iv)  
$0.00 into the Master Lease Variable Additional Rent Reserve Account;
    (v)  
$0.00 into the Structural Repair Reserve Account;
    (vi)  
$404,310 into the Immediate Repair and Remediation Reserve Account; and
    (vii)  
$0.00 into the Proceeds Reserve Account; and
    (viii)  
$0.00 into the LCR Deterioration Reserve Account.

3.1.6 Monthly Funding of Sub-Accounts; Master Lease Rent Shortfalls; Master
Lease Variable Additional Rent Reserve; Sub-Account Shortfalls.
(a) Monthly Funding of Sub-Accounts. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) hereby irrevocably authorizes Lender to
transfer (and, pursuant to the Account Agreement shall irrevocably authorize
Cash Management Bank to execute any corresponding instructions of Lender), and
Lender shall transfer, from the Holding Account by 11:00 a.m. New York time on
the date on which each payment of Master Lease Rent under the Master Lease is
made to the Holding Account, or as soon thereafter as sufficient funds are in
the Holding Account to make the applicable transfers, commencing on the date of
the first payment of Master Lease Rent under the Master Lease following the date
of this Agreement, funds in the following amounts and in the following order of
priority:
(i) funds in an amount equal to the Monthly Tax Reserve Amount and any other
amounts required pursuant to Section 16.1 for the month in which the transfer
from the Holding Account is made to the Tax Reserve Account;
(ii) funds in an amount equal to the Monthly Insurance Reserve Amount and any
other amounts required pursuant to Section 16.2 for the month in which the
transfer from the Holding Account is made to the Insurance Reserve Account;
(iii) funds in an amount equal to the amount of Debt Service due on the Payment
Date immediately following the date the transfer from the Holding Account is
made to the Debt Service Reserve Account;
(iv) funds in an amount equal to the Monthly Structural Repair Reserve Amount
for the month in which the transfer from the Holding Account is made to the
Structural Repair Reserve Account;
(v) during the continuance of an Event of Default and during any Low LCR Cash
Sweep Period, funds in an amount equal to the Master Lease Variable Additional
Rent payable under the Master Lease for the month following the month in which
the transfer from the Holding Account is made to the Master Lease Variable
Additional Rent Reserve Account;

 

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(vi) during the continuance of an Event of Default or a Low LCR Cash Sweep
Period, funds in an amount equal to the balance (if any) remaining or deposited
in the Holding Account after the foregoing transfers (such remainder being
hereinafter referred to as “Excess Cash Flow”) to the LCR Deterioration Reserve
Account; and
(vii) provided no Low LCR Cash Sweep Period or Event of Default is then
continuing, the Excess Cash Flow to the Borrower’s Account.
(b) Master Lease Rent Shortfalls. If there is a Master Lease Rent Shortfall,
subject to the provisions of Section 3.1.6(c) below, Lender shall have the
right, at its election, to direct the Cash Management Bank to transfer (but
shall not be obligated to so direct the Cash Management Bank to transfer) from
the LCR Deterioration Reserve Account to the Holding Account, without notice to
Borrower, an amount equal to such Master Lease Rent Shortfall.
(c) Master Lease Variable Additional Rent Reserve. In the event that no Low LCR
Cash Sweep Period or Event of Default is then continuing, Lender shall direct
the Cash Management Bank to transfer the funds in the Master Lease Variable
Additional Rent Reserve Account to Borrower (or, if directed by Borrower, to
Master Lessee). During the continuance of any Low LCR Cash Sweep Period or Event
of Default, Lender shall pay or direct the Cash Management Bank to pay from the
Master Lease Variable Additional Rent Reserve Account, monthly payments of
Master Lease Variable Additional Rent directly to the Person having the right to
receive such funds on the respective due dates therefor and shall promptly
notify Borrower and Master Lessee of any such payment.
(d) Sub-Account Shortfalls. If Lender shall reasonably determine that there will
be insufficient amounts in the Holding Account to make any of the transfers
required pursuant to this Section 3.1.6, Lender shall provide notice to Borrower
of such insufficiency (it being understood that in no event shall Lender be
required to notify Borrower of any deficiency in the Debt Service Reserve
Account, such deficiency on the fifth (5th) day of any month (or, if such fifth
(5th) day is not a Business Day then the immediately preceding Business Day)
being an Event of Default) and, within five (5) days after receipt of said
notice and prior to the expiration of any grace period applicable to such
payment, Borrower shall deposit into the Holding Account an amount equal to the
shortfall of available funds in the Holding Account taking into account any
funds which accumulate in the Holding Account during such five (5) day period.
Notwithstanding anything to the contrary contained in this Agreement or in the
other Loan Documents, Borrower shall not be deemed to be in default hereunder or
thereunder in the event funds sufficient for a required transfer are held in an
appropriate Sub-Account and Lender or Cash Management Bank fails to timely make
any transfer from such Sub-Account, as contemplated by this Agreement, unless
due to the negligence or willful misconduct of Borrower.
(e) Notwithstanding anything to the contrary contained herein or in the Security
Instrument, Lender shall have the right, upon five (5) Business Days prior
written notice thereof to Borrower, to withdraw from the Holding Account an
amount equal to any mortgage recording tax, costs, expenses or other amounts
pursuant to Section 19.12 of this Agreement then due and owing and pay such
amounts to the Person(s) entitled thereto.

 

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3.1.7 Required Payments from Sub-Accounts. Borrower irrevocably authorizes
Lender to make and, provided no Event of Default shall have occurred and be
continuing, Lender hereby agrees to make or to direct the Cash Management Bank
to make, the following payments from the Sub-Accounts to the extent of the
monies on deposit therefor:
(i) funds from the Tax Reserve Account to Lender sufficient to permit Lender to
pay (A) Impositions and (B) Other Charges, on the respective due dates therefor,
and Lender shall so pay such funds to the Governmental Authority having the
right to receive such funds;
(ii) funds from the Insurance Reserve Account to Lender sufficient to permit
Lender to pay insurance premiums for the insurance required to be maintained
pursuant to the terms of this Agreement and the Security Instrument, on the
respective due dates therefor, and Lender shall so pay such funds to the
insurance company having the right to receive such funds;
(iii) funds from the Debt Service Reserve Account to Lender sufficient to pay
Debt Service on each Payment Date, and Lender, on each Payment Date, shall apply
such funds to the payment of the Debt Service payable on such Payment Date;
(iv) as provided in Section 16.3, funds from the Structural Repair Reserve
Account to the Borrower’s Account to pay for Structural Repairs;
(v) as provided in Section 16.4, funds from the Immediate Repair and Remediation
Reserve Account to the Borrower’s Account to reimburse Borrower for, or to pay,
the cost of the Immediate Repairs and Remediation;
(vi) as applicable, funds from the Master Lease Variable Additional Rent Reserve
Account in accordance with Section 3.1.6(c) and Section 16.5(b), and Lender
shall so pay such funds to the Person having the right to receive such funds;
and
(vii) as applicable, funds from the LCR Deterioration Reserve Account in
accordance with Section 16.5(c).
3.1.8 Cash Management Bank.
(a) Lender shall have the right at Borrower’s sole cost and expense to replace
the Cash Management Bank with a financial institution reasonably satisfactory to
Borrower in the event that (i) the Cash Management Bank fails, in any material
respect, to comply with the Account Agreement, (ii) the Cash Management Bank
named herein is no longer the Cash Management Bank or (iii) the Cash Management
Bank is no longer an Approved Bank. Upon the occurrence and during the
continuance of an Event of Default, Lender shall have the right at Borrower’s
sole cost and expense to replace Cash Management Bank at any time, upon prior
written notice to Borrower. Borrower shall cooperate with Lender in connection
with the appointment of any replacement Cash Management Bank and the execution
by the Cash Management Bank and the Borrower of an Account Agreement and
delivery of same to Lender.
(b) So long as no Event of Default shall have occurred and be continuing,
Borrower shall have the right at its sole cost and expense to replace the Cash
Management Bank with a financial institution that is an Approved Bank provided
that such financial institution and Borrower shall execute and deliver to Lender
an Account Agreement substantially similar to the Account Agreement executed as
of the Closing Date, or in such other form reasonably required by Lender or
required by the Rating Agencies, with such changes therein as shall be
reasonably acceptable to Lender.

 

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3.1.9 Borrower’s and Maryland Loan Guarantor’s Account Representations,
Warranties and Covenants.
(a) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
represents, warrants and covenants that as of the date hereof, Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) has irrevocably
directed the Master Lessee, pursuant to a letter substantially in the form of
the Master Lease Rent Payment Direction Letter, to (i) make all payments of
Master Lease Scheduled Rent directly to the Holding Account at all times during
the term of the Loan and (ii) make all payment of Master Lease Variable
Additional Rent directly to the Holding Account at all times during the
continuance of a Low LCR Cash Sweep Period or an Event of Default.
(b) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
further represents, warrants and covenants that (i) it shall cause Master Lessee
to deposit all amounts payable to it pursuant to the Master Lease directly into
the Holding Account, (ii) it shall pay or cause to be paid all Rents, Cash and
Cash Equivalents or other items of operating income not covered by the preceding
subsection (a) within one Business Day after receipt thereof by Borrower or its
Affiliates directly into the Holding Account and, until so deposited, any such
amounts held by Borrower or its Affiliates shall be deemed to be Account
Collateral and shall be held in trust by it for the benefit, and as the
property, of Lender and shall not be commingled with any other funds or property
of Borrower or its Affiliates, (iii) there are no accounts other than the
Collateral Accounts maintained by Borrower or any other Person with respect to
the Property or the collection of Rents and (vii) so long as the Loan shall be
outstanding, neither Borrower nor any other Person shall open any other
operating accounts with respect to the Property or the collection of Rents,
except for the Collateral Accounts; provided that Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) shall not be prohibited from
utilizing one or more separate accounts for the disbursement or retention of
funds that have been transferred to the Borrower’s Account pursuant to
Section 3.1.6.
3.1.10 Account Collateral and Remedies.
(a) Upon the occurrence and during the continuance of an Event of Default,
without additional notice from Lender to Borrower, (i) Lender may, in addition
to and not in limitation of Lender’s other rights, make any and all withdrawals
from, and transfers between and among, the Collateral Accounts as Lender shall
determine in its sole and absolute discretion to pay any Obligations, operating
expenses and/or Capital Expenditures for the Property, (ii) all Excess Cash Flow
shall be retained in the Holding Account or applicable Sub-Accounts and
(iii) Lender may liquidate and transfer any amounts then invested in Permitted
Investments to the Collateral Accounts to which they relate or reinvest such
amounts in other Permitted Investments as Lender may reasonably determine is
necessary to perfect or protect any security interest granted or purported to be
granted hereby or to enable Lender to exercise and enforce Lender’s rights and
remedies hereunder with respect to any Account Collateral or to preserve the
value of the Account Collateral.

 

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(b) Borrower (and in the case of the Maryland Property, Maryland Loan Guarantor)
hereby expressly waives, to the fullest extent permitted by law, presentment,
demand, protest or any notice of any kind in connection with this Agreement or
the Account Collateral. Borrower (and in the case of the Maryland Property,
Maryland Loan Guarantor) acknowledges and agrees that twenty (20) days’ prior
written notice of the time and place of any public sale of the Account
Collateral or any other intended disposition thereof shall be reasonable and
sufficient notice within the meaning of the UCC.
3.1.11 Transfers and Other Liens. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) agrees that it will not (i) sell or otherwise
dispose of any of the Account Collateral or (ii) create or permit to exist any
Lien upon or with respect to all or any of the Account Collateral, except for
the Lien granted to Lender under this Agreement.
3.1.12 Reasonable Care. Beyond the exercise of reasonable care in the custody
thereof, Lender shall have no duty as to any Account Collateral in its
possession or control as agent therefor or bailee thereof or any income thereon
or the preservation of rights against any person or otherwise with respect
thereto. Lender shall be deemed to have exercised reasonable care in the custody
and preservation of the Account Collateral in its possession if the Account
Collateral is accorded treatment substantially equal to that which Lender
accords its own property, it being understood that Lender shall not be liable or
responsible for any loss or damage to any of the Account Collateral, or for any
diminution in value thereof, by reason of the act or omission of Lender, its
Affiliates, agents, employees or bailees, except to the extent that such loss or
damage results from Lender’s gross negligence or willful misconduct. In no event
shall Lender be liable either directly or indirectly for losses or delays
resulting from any event which may be the basis of an Excusable Delay, computer
malfunctions, interruption of communication facilities, labor difficulties or
other causes beyond Lender’s reasonable control or for indirect, special or
consequential damages except to the extent of Lender’s gross negligence or
willful misconduct. Notwithstanding the foregoing, Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) acknowledges and agrees that
(i) Lender does not have custody of the Account Collateral, (ii) Cash Management
Bank has custody of the Account Collateral, (iii) the initial Cash Management
Bank was chosen by Borrower and (iv) Lender has no obligation or duty to
supervise Cash Management Bank or to see to the safe custody of the Account
Collateral.
3.1.13 Lender’s Liability.
(a) Lender shall be responsible for the performance only of such duties with
respect to the Account Collateral as are specifically set forth in this
Section 3.1 or elsewhere in the Loan Documents, and no other duty shall be
implied from any provision hereof. Lender shall not be under any obligation or
duty to perform any act with respect to the Account Collateral which would cause
it to incur any expense or liability or to institute or defend any suit in
respect hereof, or to advance any of its own monies. Borrower (and in the case
of the Maryland Property, Maryland Loan Guarantor) shall indemnify and hold
harmless Lender, its employees and officers, from and against any loss, cost or
damage (including, without limitation, reasonable attorneys’ fees and
disbursements) incurred by Lender in connection with the transactions
contemplated hereby with respect to the Account Collateral except as such may be
caused by the gross negligence or willful misconduct of Lender, its employees,
officers or agents.

 

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(b) Lender shall be protected in acting upon any notice, resolution, request,
consent, order, certificate, report, opinion, bond or other paper, document or
signature believed by it in good faith to be genuine, and, in so acting, it may
be assumed that any person purporting to give any of the foregoing in connection
with the provisions hereof has been duly authorized to do so. Lender may consult
with counsel, and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered by it
hereunder and in good faith in accordance therewith.
3.1.14 Continuing Security Interest. This Agreement shall create a continuing
security interest in the Account Collateral and shall remain in full force and
effect until payment in full of the Indebtedness. Upon payment in full of the
Indebtedness, this security interest shall automatically terminate without
further notice from any party and Borrower shall be entitled to the return of
such of the Account Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof, and Lender shall execute such instruments and
documents as may be reasonably requested by Borrower to evidence such
termination and the release and return of the Account Collateral to Borrower.
IV. REPRESENTATIONS AND WARRANTIES
4.1 Borrower Representations. Borrower (and in the case of the Maryland
Property, Maryland Loan Guarantor) represents and warrants as of the Closing
Date that:
4.1.1 Organization. Each Borrower and Maryland Loan Guarantor is a limited
liability company and has been duly organized and is validly existing and in
good standing pursuant to the laws of the State of Delaware with requisite power
and authority to own its properties and to transact the businesses in which it
is now engaged. Guarantor is a corporation and has been duly organized and is
validly existing and in good standing pursuant to the laws of the State of
Delaware with requisite power and authority to own its properties and to
transact the businesses in which it is now engaged. Master Lessee is a
corporation and has been duly organized and is validly existing and in good
standing pursuant to the laws of the State of Georgia with requisite power and
authority to own its properties and to transact the businesses in which it is
now engaged. Each Borrower, Maryland Loan Guarantor, Guarantor and Master Lessee
has duly qualified to do business and is in good standing in each jurisdiction
where it is required to be so qualified in connection with its properties,
businesses and operations. Each of Borrower, Maryland Loan Guarantor and
Guarantor possesses all material rights, licenses, permits and authorizations,
governmental or otherwise, necessary to entitle it to own its properties and to
transact the businesses in which it is now engaged, and the sole business of
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) is
the ownership of the Property. The organizational structure of Borrower is
accurately depicted by the schematic diagram attached hereto as Exhibit K.
Neither Borrower nor Maryland Loan Guarantor shall not change its name,
identity, corporate form or structure or jurisdiction of organization unless it
shall have given Lender thirty (30) days prior written notice of any such change
and shall have taken all steps reasonably requested by Lender to grant, perfect,
protect and/or preserve the liens and security interest granted to Lender under
the Loan Documents.

 

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4.1.2 Proceedings. Each of Borrower, Maryland Loan Guarantor, Guarantor and
Master Lessee has full power, and has taken all necessary action, to authorize
the execution, delivery and performance of the Loan Documents to which it is a
party. The Loan Documents to which such Person is a party have been duly
executed and delivered by, or on behalf of, Borrower, Maryland Loan Guarantor,
Guarantor and Master Lessee, as applicable, and constitute legal, valid and
binding obligations of such Persons, as applicable, enforceable against such
Persons, as applicable, in accordance with their respective terms, subject only
to applicable bankruptcy, insolvency and similar laws affecting rights of
creditors generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
4.1.3 No Conflicts. The execution, delivery and performance of this Agreement
and the other Loan Documents by Borrower, Maryland Loan Guarantor, Guarantor and
Master Lessee, as applicable, will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance (other than
pursuant to the Loan Documents) upon any of the property or assets of any such
Person pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement, partnership agreement or other agreement or instrument to which any
such Person is a party or by which any of such Person’s property or assets is
subject (unless consents from all applicable parties thereto have been
obtained), nor will such action result in any violation of the provisions of any
statute or any order, rule or regulation of any Governmental Authority, and any
material consent, approval, authorization, order, registration or qualification
of or with any Governmental Authority required for the execution, delivery and
performance by Borrower, Maryland Loan Guarantor and Guarantor of this
Agreement, except for any violation that would not individually or in the
aggregate reasonably be expected to result in a Material Adverse Effect, or any
other Loan Documents has been obtained and is in full force and effect.
4.1.4 Litigation. Except as set forth on Schedule VI attached hereto, there are
no arbitration proceedings, governmental investigations, actions, suits or
proceedings at law or in equity by or before any Governmental Authority now
pending or, to Borrower’s knowledge, threatened against or affecting Borrower,
Maryland Loan Guarantor, Guarantor, Master Lessee or any Individual Property
(other than (a) claims for nonpayment brought by Borrower, Maryland Loan
Guarantor, Guarantor or Master Lessee as plaintiff, and (b) claims (i) which are
being covered by insurance, (ii) which are being defended by the relevant
insurance company and (iii) as to which Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) has not received a notice from such insurance
company that the claim exceeds the total amount of insurance coverage with
respect to such claim, provided that none of such unscheduled claims could
reasonably be expected to individually or in the aggregate to have a Material
Adverse Effect if adversely determined). The actions, suits or proceedings
identified on Schedule VI, if determined against Borrower, Maryland Loan
Guarantor, Guarantor, Master Lessee or the applicable Individual Property or
Individual Properties, would not materially and adversely affect the condition
(financial or otherwise) or business of any such Person or the condition or
operation of any Individual Property.

 

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4.1.5 Agreements. The Master Lease and the Subleases constitute all of the
agreements to which Borrower or any of its Affiliates are party or are bound
which are material to the ownership and operation of any Individual Property
other than the Master Lease. Neither Borrower nor Maryland Loan Guarantor is a
party to any agreement or instrument or subject to any restriction which is
reasonably likely to materially and adversely affect it or its business,
properties or assets, operations or condition, financial or otherwise. Neither
Borrower nor Maryland Loan Guarantor is in default in any material respect in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument to which it is a party or
by which Borrower, Maryland Loan Guarantor or the Property is bound. Neither
Borrower nor Maryland Loan Guarantor has any material financial obligation
(contingent or otherwise) under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it
or the Property is otherwise bound, other than (a) obligations constituting
Permitted Debt which are incurred in the ordinary course of the ownership and
operation of the Property and (b) obligations under the Loan Documents and the
Master Lease. There are no prior sales, transfers or assignments of the Master
Lease or any portion of the Rents due and payable or to become due and payable
which are presently outstanding following the funding of the Loan, other than
those being terminated or assigned to Lender concurrently herewith.
4.1.6 Title. Borrower (or in the case of the Maryland Property, the Maryland
Loan Guarantor) has good, marketable and insurable fee simple title to the Land
and the Improvements, free and clear of all Liens whatsoever except the
Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents. Borrower (or in the case
of the Maryland Property, the Maryland Loan Guarantor) has good and marketable
title to the remainder of the Property, free and clear of all Liens whatsoever
except the Permitted Encumbrances. The Security Instrument, when properly
recorded in the appropriate records, together with any Uniform Commercial Code
financing statements required to be filed in connection therewith, will create
(i) a valid, perfected first mortgage lien on the Land and the Improvements,
subject only to Permitted Encumbrances and (ii) perfected security interests in
and to, and perfected collateral assignments of, all Personal Property
(including the Leases) and any leases of equipment from third parties, all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances. To Borrower’s knowledge, there are no claims for payment
for work, labor or materials affecting the Property which are or may become a
lien prior to, or of equal priority with, the Liens created by the Loan
Documents other than the Permitted Encumbrances. Borrower and Maryland Loan
Guarantor represent and warrant that none of the Permitted Encumbrances would
individually or in the aggregate reasonably be expected to result in a Material
Adverse Effect as of the Closing Date and thereafter. Borrower (or in the case
of the Maryland Property, the Maryland Loan Guarantor) shall preserve its right,
title and interest in and to the Property for so long as the Notes remains
outstanding and will warrant and defend same and the validity and priority of
the Lien hereof from and against any and all claims whatsoever other than the
Permitted Encumbrances.
4.1.7 No Bankruptcy Filing. None of Borrower, Maryland Loan Guarantor, Guarantor
or Master Lessee is contemplating either the filing of a petition by it under
any state or federal bankruptcy or insolvency laws or the liquidation of all or
a major portion of such entity’s assets or property, to Borrower’s knowledge, no
Person is contemplating the filing of any such petition against it or against
Borrower, Maryland Loan Guarantor, Guarantor or Master Lessee, as applicable.

 

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4.1.8 Full and Accurate Disclosure. No statement of material fact made by
Borrower or Maryland Loan Guarantor in this Agreement or in any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state any material fact necessary to make statements contained herein or therein
not misleading. There is no fact presently known to Borrower or Maryland Loan
Guarantor which has not been disclosed which could reasonably be expected to
have a Material Adverse Effect.
4.1.9 All Property. The Property constitutes all of the real property, personal
property, equipment and fixtures currently (i) owned or leased by Borrower (or
in the case of the Maryland Property, the Maryland Loan Guarantor) and (ii) used
in the operation of the business located on the Property, other than the
Excluded Personal Property.
4.1.10 No Plan Assets.
(a) Neither Borrower nor Maryland Loan Guarantor maintains an employee benefit
plan as defined by Section 3(3) of ERISA, which is subject to Title IV of ERISA,
and (i) to Borrower’s knowledge, neither Borrower nor Maryland Loan Guarantor
has incurred or expect to incur any material liability which is or remains
unsatisfied for any taxes or penalties with respect to any “employee benefit
plan,” within the meaning of Section 3(3) of ERISA, or any “plan,” within the
meaning of Section 4975(e)(1) of the Internal Revenue Code or any other benefit
plan (other than a multiemployer plan) maintained, contributed to, or required
to be contributed to by Borrower (or in the case of the Maryland Property, the
Maryland Loan Guarantor) or by any entity that is under common control with
Borrower or Maryland Loan Guarantor within the meaning of ERISA
Section 4001(a)(14) (a “Plan”) or any plan that would be a Plan but for the fact
that it is a multiemployer plan within the meaning of ERISA Section 3(37); and
(ii) Borrower (or in the case of the Maryland Property, the Maryland Loan
Guarantor) has made and shall continue to make when due all required
contributions to all such Plans, if any. Each such Plan has been and will be
administered in compliance with its terms and the applicable provisions of
ERISA, the Internal Revenue Code, and any other applicable federal or state law;
and no action shall be taken or fail to be taken that would result in the
disqualification or loss of tax-exempt status of any such Plan intended to be
qualified and/or tax exempt; and
(b) Neither Borrower nor Maryland Loan Guarantor is an employee benefit plan, as
defined in Section 3(3) of ERISA, subject to Title I of ERISA, none of the
assets of Borrower or Maryland Loan Guarantor constitutes or will constitute
plan assets of one or more such plans within the meaning of 29 C.F.R.
Section 2510.3-101 and neither Borrower nor Maryland Loan Guarantor is a
governmental plan within the meaning of Section 3(32) of ERISA and transactions
by or with Borrower and Maryland Loan Guarantor are not subject to state
statutes regulating investment of, and fiduciary obligations with respect to,
governmental plans similar to the provisions of Section 406 of ERISA or
Section 4975 of the Code currently in effect, which prohibit or otherwise
restrict the transactions contemplated by this Agreement.

 

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4.1.11 Compliance. To Borrower’s knowledge, Borrower, Maryland Loan Guarantor
and the Property and the use thereof comply in all material respects with all
applicable Legal Requirements, including, without limitation, building and
zoning ordinances and codes. To Borrower’s knowledge, neither Borrower nor
Maryland Loan Guarantor is in default or in violation of any order, writ,
injunction, decree or demand of any Governmental Authority. To Borrower’s
knowledge, there has not been committed by Borrower or Maryland Loan Guarantor
any act or omission affording the federal government or any other Governmental
Authority the right of forfeiture as against the Property or any part thereof or
any monies paid in performance of Borrower’s or Maryland Loan Guarantor’s
obligations under any of the Loan Documents.
4.1.12 Financial Information. To Borrower’s knowledge, all financial data
including, without limitation, the statements of cash flow and income and
operating expense, that have been delivered by or on behalf of Borrower to
Lender in respect of the Property (i) are true, complete and correct in all
material respects, (ii) fairly represent the financial condition of the Property
as of the date of such reports and (iii) to the extent prepared or audited by an
independent certified public accounting firm, have been prepared in accordance
with GAAP throughout the periods covered, except as disclosed therein. To
Borrower’s knowledge, neither Borrower nor Maryland Loan Guarantor has any
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments
that are known to Borrower and could reasonably be expected to have a Material
Adverse Effect. Since the date of such financial statements, there has been no
material adverse change in the financial condition, operations or business of
Borrower or Maryland Loan Guarantor from that set forth in said financial
statements.
4.1.13 Condemnation. No Taking is pending or, to Borrower’s knowledge, is
contemplated with respect to all or any portion of the Property. No Taking is
pending or, to Borrower’s knowledge, is contemplated for the relocation of
roadways providing access to the Property.
4.1.14 Federal Reserve Regulations. None of the proceeds of the Loan will be
used for the purpose of purchasing or carrying any “margin stock” as defined in
Regulation U, Regulation X or Regulation T or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
“margin stock” or for any other purpose which might constitute this transaction
a “purpose credit” within the meaning of Regulation U or Regulation X. As of the
Closing Date, neither Borrower nor Maryland Loan Guarantor owns any “margin
stock.”
4.1.15 Utilities and Public Access. Each Individual Property has rights of
access to one or more public ways, either directly or through a recorded
easement set forth in, and insured under, the Title Policy. Each Individual
Property is served by water, sewer, sanitary sewer and storm drain facilities
adequate to service the Property for its intended uses. To Borrower’s knowledge,
all utilities necessary to the existing use of the Property are located either
in the public right-of-way abutting the Property (which are connected so as to
serve the Property without passing over other property) or in recorded easements
serving the Property and such easements are set forth in and insured by the
Title Policy. All roads necessary for the use of the each Individual Property
for its current purposes have been completed and, if necessary, dedicated to
public use.

 

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4.1.16 Not a Foreign Person. Neither Borrower nor Maryland Loan Guarantor is a
foreign person within the meaning of §1445(f)(3) of the Code.
4.1.17 Separate Lots. Each Individual Property is comprised of one (1) or more
contiguous parcels which constitute a separate tax lot or lots and does not
constitute or include a portion of any other tax lot not a part of such
Individual Property.
4.1.18 Subdivision. The Individual Properties comply in all material respects
with all applicable subdivision laws, ordinances and regulations.
4.1.19 Enforceability. The Loan Documents are not subject to any existing right
of rescission, set-off, counterclaim or defense by Borrower or Maryland Loan
Guarantor, including the defense of usury, nor would the operation of any of the
terms of the Loan Documents, or the exercise of any right thereunder, render the
Loan Documents unenforceable (subject to applicable bankruptcy, insolvency and
similar laws affecting rights of creditors generally, and subject as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law)), and neither
Borrower nor Maryland Loan Guarantor has asserted any right of rescission,
set-off, counterclaim or defense with respect thereto.
4.1.20 Assessments. To Borrower’s knowledge, there are no pending or proposed
special or other assessments for public improvements or otherwise affecting the
Property, nor are there any contemplated improvements to the Property that may
result in such special or other assessments.
4.1.21 Insurance. Borrower has obtained and, to the extent requested by Lender,
has delivered to Lender evidence of all insurance policies required under this
Agreement, reflecting the insurance coverages, amounts and other requirements
set forth in this Agreement. Borrower has not, and to Borrower’s knowledge no
Person has, done by act or omission anything which would impair the coverage of
any such policy.
4.1.22 Use of Property. Each Individual Property is used primarily as a
distribution facility, other than the Individual Property located in Englewood,
Colorado, which Individual Property is used by the Borrower for office purposes.
4.1.23 Certificate of Occupancy; Licenses. To Borrower’s knowledge, all
certifications, permits, licenses and approvals, including without limitation,
certificates of completion and occupancy permits required of Borrower (or in the
case of the Maryland Property, the Maryland Loan Guarantor) for the legal use,
occupancy and operation of each Individual Property for its current use as a
distribution facility (or, in the case of the Individual Property located in
Englewood, Colorado, an office building) (collectively, the “Licenses”), have
been obtained and are in full force and effect. Borrower (or in the case of the
Maryland Property, the Maryland Loan Guarantor) shall keep and maintain all
Licenses necessary for the operation of each Individual Property in accordance
with its current use as aforesaid. To Borrower’s knowledge, the use being made
of each Individual Property is in conformity with the certificate of occupancy
issued for such Individual Property.

 

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4.1.24 Flood Zone. None of the Improvements on the Property are located in an
area as identified by the Federal Emergency Management Agency as an area having
special flood hazards, except as identified on the flood certifications
delivered to Lender prior to the date hereof, and Borrower has obtained the
insurance required under Article VI with respect to any Improvements located in
any such special flood hazards.
4.1.25 Physical Condition. To Borrower’s knowledge and except as expressly
disclosed in the Physical Conditions Reports, the Property, including, without
limitation, all buildings, Improvements, parking facilities, sidewalks, storm
drainage systems, roofs, plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, are in good
condition, order and repair in all material respects; to Borrower’s knowledge
and except as expressly disclosed in the Physical Conditions Reports, there
exists no structural or other material defects or damages in or to the Property,
whether latent or otherwise, and neither Borrower nor Maryland Loan Guarantor
has received any written notice from any insurance company or bonding company of
any defects or inadequacies in the Property, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.
4.1.26 Boundaries. Except as set forth in and insured pursuant to the Title
Policy, to Borrower’s knowledge and in reliance on the Surveys, (a) all of the
Improvements lie wholly within the boundaries and building restriction lines of
the Land relating to the applicable Individual Property, (b) no improvements on
adjoining properties encroach upon the Land, and (c) no easements or other
encumbrances upon the Land encroach upon any of the Improvements.
4.1.27 Leases and Subleases. The Property is not subject to any Leases other
than the Master Lease. To Borrower’s knowledge, the Property is not subject to
any Subleases other than the Subleases set forth on Schedule IV attached hereto.
No Person has any possessory interest in the Property or right to occupy the
same except under and pursuant to the provisions of the Master Lease and the
Subleases. The Master Lease and, to Borrower’s knowledge, the current Subleases
are in full force and effect and to Borrower’s knowledge, there are no material
defaults thereunder by either party (other than as expressly disclosed on
Schedule IV or in the estoppel certificates, if any, delivered to Lender in
connection with the closing of the Loan) and there are no conditions that, with
the passage of time or the giving of notice, or both, would constitute material
defaults thereunder. No Master Lease Rent has been paid more than one (1) month
in advance of its due date, except as disclosed in the Master Lease SNDA
delivered to Lender in connection with the closing of the Loan. There has been
no prior sale, transfer or assignment, hypothecation or pledge by Borrower (or
in the case of the Maryland Property, the Maryland Loan Guarantor) or Master
Lessee of the Master Lease or of the Master Lease Rents received therein, which
will be outstanding following the funding of the Loan, other than those being
assigned to Lender concurrently herewith. To Borrower’s knowledge, no Tenant
under any Sublease has a right or option pursuant to such Sublease or otherwise
to purchase all or any part of the Property of which the leased premises are a
part. Master Lessee does not have a right or option pursuant to the Master Lease
or otherwise to purchase all or any part of the Property of which the leased
premises are a part.

 

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4.1.28 Filing and Recording Taxes. To Borrower’s knowledge, all transfer taxes,
deed stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable Legal Requirements currently
in effect in connection with the transfer of the Property to Borrower (or in the
case of the Maryland Property, the Maryland Loan Guarantor) have been paid and
the granting and recording of the Security Instrument and the UCC financing
statements required to be filed in connection with the Loan. To Borrower’s
knowledge, all mortgage, mortgage recording, stamp, intangible or other similar
tax required to be paid by any Person under applicable Legal Requirements
currently in effect in connection with the execution, delivery, recordation,
filing, registration, perfection or enforcement of any of the Loan Documents,
including, without limitation, the Security Instrument, have been paid, and,
under current Legal Requirements, the Security Instrument is enforceable against
Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor)
in accordance with its terms by Lender (or any subsequent holder thereof)
subject only to applicable bankruptcy, insolvency and similar laws affecting
rights of creditors generally, and subject as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law.
4.1.29 Single Purpose Entity/Separateness.
(a) Until the Indebtedness has been paid in full, Borrower and Maryland Loan
Guarantor hereby represent, warrant and covenant that Borrower, Maryland Loan
Guarantor and each other SPE Entity is, shall be, and shall continue to be, a
Single Purpose Entity.
(b) To Borrower’s knowledge, all of the assumptions made in the
Non-Consolidation Opinion, including, but not limited to, any exhibits attached
thereto, are true and correct in all respects and any assumptions made in any
subsequent non-consolidation opinion delivered in connection with the Loan
Documents (an “Additional Non-Consolidation Opinion”), including, but not
limited to, any exhibits attached thereto, will have been and shall be true and
correct in all respects. Each of Borrower Maryland Loan Guarantor has complied
and will comply with all of the assumptions made with respect to it in the
Non-Consolidation Opinion. Each of Borrower and Maryland Loan Guarantor will
have complied and will comply with all of the assumptions made with respect to
it in any Additional Non-Consolidation Opinion. Each entity other than Borrower
and Maryland Loan Guarantor with respect to which an assumption shall be made in
any Additional Non-Consolidation Opinion will have complied and will comply with
all of the assumptions made with respect to it in any Additional
Non-Consolidation Opinion.
4.1.30 Illegal Activity. No portion of the Property has been or will be
purchased with proceeds of any illegal activity.
4.1.31 No Change in Facts or Circumstances; Disclosure. To Borrower’s knowledge
, all financial statements submitted by Borrower in connection with the Loan are
accurate, complete and correct in all material respects. All other material
written information, reports, certificates and other documents submitted by
Borrower to Lender in connection with the Loan are, to Borrower’s knowledge,
accurate, complete and correct in all material respects except as would not have
a Material Adverse Effect. Except with respect to such representations and
warranties contained in this Agreement or in any other Loan Document which are
qualified as being made to Borrower’s knowledge, all representations and
warranties made by Borrower or Maryland Loan Guarantor in this Agreement or in
any other Loan Document, are accurate, complete and correct in all material
respects except as would not have a Material Adverse Effect. There has been no
material adverse change known to Borrower in any condition, fact, circumstance
or event that would make any such information inaccurate, incomplete or
otherwise misleading in any material respect or that otherwise materially and
adversely affects the Property or the business operations or the financial
condition of Borrower or Maryland Loan Guarantor.

 

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4.1.32 Tax Filings. To the extent required by applicable law, each of Borrower
and Maryland Loan Guarantor has filed (or has obtained effective extensions for
filing) all federal, state and local tax returns required to be filed and has
paid or made adequate provision for the payment of all federal, state and local
taxes, charges and assessments payable by Borrower and Maryland Loan Guarantor.
4.1.33 Solvency/Fraudulent Conveyance. Neither Borrower nor Maryland Loan
Guarantor (a) has entered into the transaction contemplated by this Agreement or
any Loan Document with the actual intent to hinder, delay, or defraud any
creditor and (b) has received reasonably equivalent value in exchange for its
obligations under the Loan Documents. After giving effect to the Loan, the fair
saleable value of Borrower’s and Maryland Loan Guarantor’s assets exceeds and
will, immediately following the making of the Loan, exceed Borrower’s and
Maryland Loan Guarantor’s total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of Borrower’s and Maryland Loan Guarantor’s assets is and will,
immediately following the making of the Loan, be greater than Borrower’s and
Maryland Loan Guarantor’s probable liabilities, including the maximum amount of
its contingent liabilities on its Debts as such Debts become absolute and
matured. Borrower’s and Maryland Loan Guarantor’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. Neither
Borrower nor Maryland Loan Guarantor intends to, and does not believe that it
will, incur Debt and liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such Debt and liabilities as they mature
(taking into account the timing and amounts of cash to be received by it and the
amounts to be payable on or in respect of its obligations).
4.1.34 Investment Company Act. Neither Borrower nor Maryland Loan Guarantor is
(a) an investment company or a company Controlled by an investment company,
within the meaning of the Investment Company Act of 1940, as amended, (b) a
holding company or a subsidiary company of a holding company or an affiliate of
either a holding company or a subsidiary company within the mean of the Public
Utility Holding Company Act of 1935, as amended or (c) subject to any other
federal or state law or regulation which purports to restrict or regulate its
ability to borrow money.
4.1.35 Labor. No organized work stoppage or labor strike is pending or, to
Borrower’s knowledge, threatened by employees and other laborers at the
Property. Neither Borrower nor Maryland Loan Guarantor (i) is involved in or, to
Borrower’s knowledge, threatened with, any labor dispute, grievance or
litigation relating to labor matters involving any employees and other laborers
at the Property, including, without limitation, violation of any federal, state
or local labor, safety or employment laws (domestic or foreign) and/or charges
of unfair labor practices or discrimination complaints which, if adversely
determined, would have a Material Adverse Effect, (ii) has not engaged in any
unfair labor practices within the meaning of the National Labor Relations Act or
the Railway Labor Act or (iii) is not a party to, or bound by, any collective
bargaining agreement or union contract with respect to employees and other
laborers at the Property and no such agreement or contract is currently being
negotiated by Borrower or Maryland Loan Guarantor.

 

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4.1.36 Brokers. Except for Broker, neither Borrower (or Maryland Loan Guarantor)
nor Lender has dealt with any broker or finder with respect to the transactions
contemplated by the Loan Documents, and neither party has done any acts, had any
negotiations or conversations, or made any agreements or promises which will in
any way create or give rise to any obligation or liability for the payment by
either party of any brokerage fee, charge, commission or other compensation to
any Person with respect to the transactions contemplated by the Loan Documents.
Each of Borrower and Maryland Loan Guarantor covenants and agrees that it shall
pay as and when due any and all brokerage fees, charges, commissions or other
compensation or reimbursement due to Broker with respect to the transactions
contemplated by the Loan Documents. Borrower, Maryland Loan Guarantor and Lender
shall each indemnify and hold harmless the other from and against any loss,
liability, cost or expense, including any judgments, attorneys’ fees, or costs
of appeal, incurred by the other party and arising out of or relating to any
breach or default by the indemnifying party of its representations, warranties
and/or agreements set forth in this Section 4.1.36. The provisions of this
Section 4.1.36 shall survive the expiration and termination of this Agreement
and the payment of the Indebtedness.
4.1.37 No Other Debt. Neither Borrower nor Maryland Loan Guarantor has borrowed
or received debt financing that has not been heretofore repaid in full, other
than the Permitted Debt.
4.1.38 Taxpayer Identification Number. Borrower’s and Maryland Loan Guarantor’s
Federal taxpayer identification number is as set forth on Schedule VIII.
4.1.39 Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws.
(i) None of the Borrower, Master Lessee, Maryland Loan Guarantor or any
Guarantor or any Person who owns any equity interest in or Controls any of such
listed Persons currently is identified on the OFAC List or otherwise qualifies
as a Prohibited Person, and (ii) none of Borrower, Maryland Loan Guarantor or
Guarantor is in violation of any Legal Requirements relating to anti-money
laundering or anti-terrorism, including, without limitation, Legal Requirements
related to transacting business with Prohibited Persons or the requirements of
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and the
related regulations issued thereunder, including temporary regulations, all as
amended from time to time. To Borrower’s knowledge, no Tenant currently is
identified on the OFAC List or otherwise qualifies as a Prohibited Person, and
no Tenant is owned or Controlled by a Prohibited Person.
4.1.40 Rights of First Refusal or First Offer to Lease or Purchase. No Person,
whether pursuant to a Lease or a Sublease or otherwise has a right of first
refusal, right of first offer or other right or option pursuant to such Lease or
Sublease or otherwise to lease or purchase or to restrict or impose requirements
upon the lease or purchase of all or any part of any Individual Property.

 

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4.2 Survival of Representations. Borrower and Maryland Loan Guarantor agree that
all of the representations and warranties of Borrower and Maryland Loan
Guarantor set forth in Section 4.1 and elsewhere in this Agreement and in the
other Loan Documents shall survive for so long as any amount remains owing to
Lenders under this Agreement or any of the other Loan Documents by Borrower or
Maryland Loan Guarantor (it being understood, however, that except as otherwise
provided in this Agreement or any of the other Loan Documents, such
representations and warranties shall be true and correct only as of the date
hereof). All representations, warranties, covenants and agreements made in this
Agreement or in the other Loan Documents by Borrower and Maryland Loan Guarantor
shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its behalf.
4.3 Borrower’s or Maryland Loan Guarantor’s Knowledge. Wherever in this
Agreement a representation and warranty is made to Borrower’s knowledge (and
variations thereon used herein, including an Individual Borrower’s knowledge),
or to the knowledge of Borrower (and variations thereon used herein, including
to the knowledge of an Individual Borrower, such representation and warranty
shall also be deemed to be limited to Maryland Loan Guarantor’s, and such
knowledge shall mean the actual (as opposed to constructive or imputed)
knowledge of any of the following individuals after reasonable inquiry under the
circumstances of the applicable representation and warranty: Gary Cummings, Vice
President of Real Estate and Doug Goforth, Controller, which Persons Borrower
and Maryland Loan Guarantor hereby represent and warrant are in a position to
have meaningful knowledge with respect to the subject matter of such
representations and warranties.
V. BORROWER AND MARYLAND LOAN GUARANTOR COVENANTS
5.1 Affirmative Covenants. From the Closing Date and until payment and
performance in full of all obligations of Borrower and Maryland Loan Guarantor
under the Loan Documents or the earlier release of the Liens of the Security
Instrument encumbering the Property (and all related obligations) in accordance
with the terms of this Agreement and the other Loan Documents, each of Borrower
and Maryland Loan Guarantor hereby covenants and agrees with Lenders that:
5.1.1 Performance by Borrower and Maryland Loan Guarantor. Each of Borrower and
Maryland Loan Guarantor shall in a timely manner observe, perform and fulfill
each and every covenant, term and provision of each Loan Document executed and
delivered by, or applicable to, it, and shall not enter into or otherwise suffer
or permit any amendment, waiver, supplement, termination or other modification
of any Loan Document executed and delivered by, or applicable to, it, as
applicable, without the prior written consent of Lender.

 

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5.1.2 Existence; Compliance with Legal Requirements; Insurance. Subject to
Borrower’s (or in the case of the Maryland Property, Maryland Loan Guarantor’s)
right of contest pursuant to Section 7.3, Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor’s) shall at all times comply and
cause Master Lessee and the Property to be in compliance with all Legal
Requirements applicable to Borrower, Maryland Loan Guarantor, Master Lessee
and/or the Property and/or the uses permitted upon the Property. Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor’s) 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 and franchises necessary to
comply with all Legal Requirements applicable to it and the Property. There
shall never be committed by Borrower or Maryland Loan Guarantor, and neither
Borrower nor Maryland Loan Guarantor shall knowingly permit Master Lessee to
commit any act or omission affording the federal government or any state or
local government the right of forfeiture as against the Property or any part
thereof or any monies paid in performance of Borrower’s or Maryland Loan
Guarantor’s obligations under any of the Loan Documents. Each of Borrower and
Maryland Loan Guarantor hereby covenants and agrees not to commit, knowingly
permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor’s) shall at all times maintain, preserve and protect all franchises
and trade names, and preserve all the remainder of its property used in the
conduct of its business and shall keep or cause the Master Lessee to keep the
Property in good working order and repair, and from time to time make, or cause
to be made, all reasonably necessary repairs, renewals, replacements,
betterments and improvements thereto, all as more fully set forth in the
Security Instrument. Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor’s) shall keep the Property insured at all times to such extent
and against such risks, and maintain liability and such other insurance, as is
more fully set forth in this Agreement.
5.1.3 Litigation. Borrower shall give prompt written notice to Lender of any
litigation or governmental proceedings pending or, to Borrower’s knowledge,
threatened in writing against Borrower, Maryland Loan Guarantor, Master Lessee
or the Property which, if determined adversely, would reasonably be expected to
have a Material Adverse Effect.
5.1.4 Single Purpose Entity. Each of Borrower, Maryland Loan Guarantor and each
other SPE Entity has been since the date of its formation and shall remain a
Single Purpose Entity.
(a) Each of Borrower, Maryland Loan Guarantor and each other SPE Entity shall
continue to maintain its own deposit account or accounts, separate from those of
any Affiliate, with commercial banking institutions. None of the funds of
Borrower, Maryland Loan Guarantor or any other SPE Entity will be diverted to
any other Person or for other than business uses of Borrower, Maryland Loan
Guarantor or such other SPE Entity, as applicable, nor will such funds be
commingled with the funds of any other Affiliate.
(b) To the extent that Borrower, Maryland Loan Guarantor or any other SPE Entity
shares the same officers or other employees as any of Borrower, Maryland Loan
Guarantor, any other SPE Entity or their Affiliates, the salaries of and the
expenses related to providing benefits to such officers and other employees
shall be fairly allocated among such entities, and each such entity shall bear
its fair share of the salary and benefit costs associated with all such common
officers and employees.

 

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(c) To the extent that Borrower, Maryland Loan Guarantor or any other SPE Entity
jointly contracts with any of Borrower, Maryland Loan Guarantor, any other SPE
Entity or any of their Affiliates, as applicable, to do business with vendors or
service providers or to share overhead expenses, the costs incurred in so doing
shall be allocated fairly among such entities, and each such entity shall bear
its fair share of such costs. To the extent that any of Borrower, Maryland Loan
Guarantor or any other SPE Entity contracts or does business with vendors or
service providers where the goods and services provided are partially for the
benefit of any other Person, the costs incurred in so doing shall be fairly
allocated to or among such entities for whose benefit the goods and services are
provided, and each such entity shall bear its fair share of such costs. All
material transactions between (or among) Borrower, Maryland Loan Guarantor or
each other SPE Entity and any of their respective Affiliates shall be conducted
on substantially the same terms (or on more favorable terms for Borrower,
Maryland Loan Guarantor or any other SPE Entity, as applicable) as would be
conducted with third parties.
(d) To the extent that Borrower, Maryland Loan Guarantor any other SPE Entity or
any of their Affiliates have offices in the same location, there shall be a fair
and appropriate allocation of overhead costs among them, and each such entity
shall bear its fair share of such expenses.
(e) Borrower, Maryland Loan Guarantor and each other SPE Entity shall conduct
its affairs strictly in accordance with its organizational documents, and
observe all necessary, appropriate and customary corporate, limited liability
company or partnership formalities, as applicable, including, but not limited
to, obtaining any and all members’ consents necessary to authorize actions taken
or to be taken, and maintaining accurate and separate books, records and
accounts, including, without limitation, payroll and intercompany transaction
accounts.
(f) In addition, Borrower, Maryland Loan Guarantor and each other SPE Entity
shall each: (i) maintain books and records separate from those of any other
Person; (ii) maintain its assets in such a manner that it is not more costly or
difficult to segregate, identify or ascertain such assets; (iii) hold regular
meetings of its board of directors, shareholders, partners or members, as the
case may be, and observe all other corporate, partnership or limited liability
company, as the case may be, formalities; (iv) hold itself out to creditors and
the public as a legal entity separate and distinct from any other entity;
(v) prepare separate tax returns and financial statements, or if part of a
consolidated group, it will be shown as a separate member of such group;
(vi) transact all business with its Affiliates on an arm’s-length basis and
pursuant to enforceable agreements; (vii) conduct business in its name and use
separate stationery, invoices and checks; (viii) not commingle its assets or
funds with those of any other Person; and (ix) not assume, guarantee or pay the
debts or obligations of any other Person.
5.1.5 Consents. If Borrower, Maryland Loan Guarantor or any other SPE Entity is
a corporation, the board of directors of such Person may not take any action
requiring the unanimous affirmative vote of one hundred percent (100%) of the
members of the board of directors unless all of the directors, including the
Independent Directors, shall have participated in such vote. If Borrower,
Maryland Loan Guarantor or any other SPE Entity is a limited liability company,
(a) if such Person is managed by a board of managers, the board of managers of
such Person may not take any action requiring the unanimous affirmative vote of
one hundred percent (100%) of the members of the board of managers unless all of
the managers, including the Independent Managers, shall have participated in
such vote, (b) if such Person is not managed by a board of managers, the members
of such Person may not take any action requiring the affirmative vote of one
hundred percent (100%) of the members of such Person unless all of the members,
including the Independent Members, shall have participated in such vote. An
affirmative vote of one hundred percent (100%) of the directors, board of
managers or members, as applicable, of Borrower, Maryland Loan Guarantor and any
other SPE Entity shall be required to (i) file a bankruptcy or insolvency
petition or otherwise institute insolvency proceedings or to authorize Borrower,
Maryland Loan Guarantor or any other SPE Entity to do so or (ii) file an
involuntary bankruptcy petition against any Affiliate. Furthermore, the
formation documents of Borrower, Maryland Loan Guarantor and each other SPE
Entity shall expressly state that for so long as the Loan is outstanding, none
of Borrower, Maryland Loan Guarantor nor any other SPE Entity shall be permitted
to (i) dissolve, liquidate, consolidate, merge or sell all or substantially all
of the assets of Borrower, Maryland Loan Guarantor or any other SPE Entity,
other than in connection with the repayment of the Loan or (ii) engage in any
other business activity and such restrictions shall not be modified or violated
for so long as the Loan is outstanding.

 

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5.1.6 Access to Property. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall permit agents, representatives and employees of
Lender and the Rating Agencies to inspect the Property or any part thereof
during normal business hours on Business Days upon reasonable advance notice.
5.1.7 Notice of Default. Borrower and Maryland Loan Guarantor shall promptly
advise Lender (a) of any event or condition that has or is likely to have a
Material Adverse Effect and (b) of the occurrence of any Default or Event of
Default of which Borrower has knowledge.
5.1.8 Cooperate in Legal Proceedings. Borrower and Maryland Loan Guarantor shall
cooperate fully with Lender with respect to any proceedings before any court,
board or other Governmental Authority which would reasonably be expected to
affect, in any material adverse way, the rights of Lender hereunder or under any
of the other Loan Documents and, in connection therewith, permit Lender, at its
election, to participate in any such proceedings which may have a Material
Adverse Effect.
5.1.9 Insurance.
(a) Borrower and Maryland Loan Guarantor shall cooperate with Lender in
obtaining for Lender the benefits of any Proceeds lawfully or equitably payable
in connection with any Individual Property and Lender shall be reimbursed for
any actual out-of-pocket expenses incurred in connection therewith (including
reasonable attorneys’ fees and disbursements) out of such Proceeds.
(b) Borrower and Maryland Loan Guarantor shall comply with all Insurance
Requirements and shall not bring or keep or permit to be brought or kept any
article upon any of the Property or cause or permit any condition to exist
thereon which would be prohibited by any Insurance Requirement, or would
invalidate insurance coverage required hereunder to be maintained by Borrower or
Maryland Loan Guarantor on or with respect to any part of the Property pursuant
to Section 6.1.
5.1.10 Further Assurances; Severance of Notes and Mezzanine Loan.
(a) Borrower and Maryland Loan Guarantor shall execute and acknowledge (or cause
to be executed and acknowledged) and deliver to Lender all documents, and take
all actions, reasonably required by Lender from time to time to confirm the
rights created or now or hereafter intended to be created under this Agreement
and the other Loan Documents and any security interest created or purported to
be created thereunder, to protect and further the validity, priority and
enforceability of this Agreement and the other Loan Documents, to subject to the
Loan Documents any property of Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor’s) intended by the terms of any one or more of
the Loan Documents to be encumbered by the Loan Documents, or otherwise carry
out the purposes of the Loan Documents and the transactions contemplated
thereunder.

 

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(b) Borrower and Maryland Loan Guarantor each agrees that it shall, upon
request, reasonably cooperate with Lender in connection with any request by
Lender to sever one or more of the Notes into two (2) or more separate
substitute notes in an aggregate principal amount equal to the Principal Amount
and to reapportion the Loan among such separate substitute notes, including,
without limitation, by executing and delivering to Lender new substitute notes
to replace the applicable Note or Notes, amendments to or replacements of
existing Loan Documents to reflect such severance and/or Opinions of Counsel
with respect to such substitute notes, amendments and/or replacements. Borrower
shall bear no costs or expenses in connection with any such severance or
bifurcation, except that Borrower shall be responsible for one hundred percent
(100%) of the costs and expenses of Borrower and Lender with respect to the
initial bifurcation of the Loan and the related transfer of a portion of the
Loan to Wachovia. Any such substitute notes may have varying principal amounts
and economic terms, provided, however, that (i) Borrower shall not be required
to incur, suffer or accept (except to a de minimis extent)) any greater
obligations or liabilities than as currently set forth in the Loan Documents,
(ii) the maturity date of any such substitute notes shall be the same as the
scheduled Maturity Date of the Notes immediately prior to the issuance of such
substitute notes, (iii) the weighted average Interest Rate (as defined in the
Notes) for the term of the substitute notes shall not exceed the Interest Rate
(as defined in the Notes) under the Notes, whether before, after or during an
Event of Default (it being acknowledged that the Default Rate shall be
applicable during the continuance of an Event of Default); and (iv) the
economics of the Loan, taken as a whole, shall not change in a manner which is
adverse to Borrower. Subject to the foregoing clauses (i) through (iv), upon the
occurrence and during the continuance of an Event of Default, Lender may apply
payment of all sums due under such substitute notes in such order and priority
as Lender shall elect in its sole and absolute discretion.
(c) Borrower, Maryland Loan Guarantor and Lender agree that, subject to the
conditions set forth in the last sentence of this Section 5.1.11(c), Lender may,
at any time, elect to reduce the mortgage debt on the Property and re-size the
principal amount of the Loan and allocate the reduced portion to one or more
mezzanine loans (a “Mezzanine Loan”). In connection with the foregoing, at
Lender’s sole cost and expense, Borrower and Maryland Loan Guarantor each agrees
to (i) create one or more (as applicable) new single purpose entities which will
become the mezzanine borrower (a “Mezzanine Borrower”) and cause the Mezzanine
Borrower and any members of Mezzanine Borrower to enter into the documents
deemed reasonably necessary by Lender to evidence the Mezzanine Loan, including,
without limitation, a promissory note and a mezzanine loan agreement and such
other documents reasonably required by Lender which are in a form and substance
reasonably satisfactory to Borrower and substantially similar to the Loan
Documents (collectively, the “Mezzanine Loan Documents”); (ii) cause Mezzanine
Borrower to pledge the equity interests in Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor); and (iii) execute and deliver such
documents and other agreements reasonably required by Lender to reduce the
amount of the mortgage debt encumbering the Property, including, without
limitation, an amendment to the Notes and the other Loan Documents, an
endorsement to the Title Policy reflecting a change in the insured amount
thereunder, legal opinions and other customary loan documentation. Borrower’s
and Maryland Loan Guarantor’s obligations under the foregoing provisions of this
Section 5.1.11(c) are subject to the condition that (A) Borrower shall bear no
costs or expenses in connection therewith; (B) Borrower shall not be required to
incur, suffer or accept (except to a de minimis extent)) any greater obligations
or liabilities than as currently set forth in the Loan Documents; (C) the
maturity date of any mezzanine notes shall be the same as the scheduled Maturity
Date of the Notes immediately prior to the issuance of such mezzanine notes;
(D) the weighted average Interest Rate (as defined in the Notes) for the term of
the mezzanine notes shall not exceed the Interest Rate (as defined in the Notes)
under the Notes, whether before, after or during an Event of Default (it being
acknowledged that the Default Rate shall be applicable during the continuance of
an Event of Default); and (E) the economics of the Loan, taken as a whole, shall
not change in a manner which is adverse to Borrower.

 

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5.1.11 Mortgage Taxes. Borrower and Maryland Loan Guarantor shall pay all taxes,
charges, filing, registration and recording fees, excises and levies payable
with respect to the Notes or the Liens created or secured by the Loan Documents,
other than income, franchise and doing business taxes imposed on Lender. In the
case of the Maryland Property, such taxes shall include any recordation taxes
imposed by Title 12 of the Tax-Property Article of the Maryland Annotated Code
(1994 Replacement Volume), as amended from time to time, including any fines,
penalties, interest or similar charges arising from the non-payment thereof,
which may now or hereafter become due and payable in connection with the
Security Instrument and shall be paid by Borrower and Maryland Loan Guarantor as
and when the same becomes due and payable, whether at the time of the recording
of the Security Instrument or any later date. Subject to the terms and
provisions of Section 18.1 of this Agreement, Borrower and Maryland Loan
Guarantor shall, jointly and severally, indemnify, defend and hold harmless
Lender from and against any and all claims, charges, actions, suits,
proceedings, law suits, obligations, losses, damages, expenses or liabilities,
including attorney’s fees, suffered or incurred by Lender as a result of any
assessment by any applicable governmental authority with respect to recording
fees and expenses. This indemnity shall be a continuing one and shall be
unaffected by repayment of the Loan.
5.1.12 Business and Operations. Borrower and Maryland Loan Guarantor shall each
continue to engage in the businesses presently conducted by it as and to the
extent the same are necessary for the ownership, maintenance, management and
operation of the Property. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall qualify to do business and shall remain in good
standing under the laws of the State in which the Property is located to the
extent required for the ownership, maintenance, management and operation of the
Property.
5.1.13 Title to the Property. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor’s) shall warrant and defend (a) its title to each
Individual Property and every part thereof, subject only to Liens permitted
hereunder (including Permitted Encumbrances) and (b) the validity and priority
of the Liens of the Security Instrument, the Assignment of Leases and this
Agreement on the Property, subject only to Liens permitted hereunder (including
Permitted Encumbrances), in each case against the claims of all Persons
whomsoever. Borrower and Maryland Loan Guarantor shall reimburse Lender for any
losses, costs, damages or expenses (including reasonable attorneys’ fees and
court costs) incurred by Lender if an interest in any Individual Property, other
than as permitted hereunder, is claimed by another Person.

 

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5.1.14 Costs of Enforcement. In the event (a) that this Agreement or the
Security Instrument is foreclosed upon in whole or in part or that this
Agreement or the Security Instrument is put into the hands of an attorney for
collection, suit, action or foreclosure, (b) of the foreclosure of any security
agreement prior to or subsequent to this Agreement encumbering any Individual
Property in which proceeding Lender is made a party, or a mortgage prior to or
subsequent to the Security Instrument encumbering any Individual Property in
which proceeding Lender is made a party, or (c) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of Borrower, Maryland Loan
Guarantor or any of their respective constituent Persons or an assignment by
Borrower, Maryland Loan Guarantor or any of their respective constituent Persons
for the benefit of its creditors, Borrower and Maryland Loan Guarantor, and
their successors or assigns, shall be chargeable with and agrees to pay all
costs of collection and defense, including reasonable attorneys’ fees and costs,
incurred by Lender or Borrower in connection therewith and in connection with
any appellate proceeding or post-judgment action involved therein, together with
all required service or use taxes.
5.1.15 Estoppel Statements.
(a) Borrower and Maryland Loan Guarantor shall, from time to time, upon thirty
(30) days’ prior written request from Lender, execute, acknowledge and deliver
to the Lender, an Officer’s Certificate, stating that this Agreement and the
other Loan Documents are unmodified and in full force and effect (or, if there
have been modifications, that this Agreement and the other Loan Documents are in
full force and effect as modified and setting forth such modifications), stating
the amount of accrued and unpaid interest and the outstanding principal amount
of the Notes and containing such other information with respect to the Borrower,
Maryland Loan Guarantor, the Property and the Loan as Lender shall reasonably
request. The estoppel certificate shall also state that to Borrower’s knowledge
either that no Event of Default exists hereunder or, if any Event of Default
shall exist hereunder, specify such Event Default and the steps being taken to
cure such Event of Default.
(b) Lender shall, from time to time, upon thirty (30) days’ prior written
request from Borrower, execute, acknowledge and deliver to the Borrower, a
certificate executed by an officer of Lender, stating that this Agreement and
the other Loan Documents are unmodified and in full force and effect (or, if
there have been modifications, that this Agreement and the other Loan Documents
are in full force and effect as modified and setting forth such modifications),
stating the amount of accrued and paid interest and the outstanding balance of
the Notes, and such other information as Borrower may reasonably request. The
estoppel certificate shall also state whether Lender has issued any notice of an
Event of Default.
5.1.16 Loan Proceeds. Borrower shall use the proceeds of the Loan received by it
on the Closing Date only for the purposes set forth in Section 2.1.4.
5.1.17 No Joint Assessment. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall not suffer, permit or initiate the joint
assessment of the Property, (a) with any other real property constituting a tax
lot separate from the Property and (b) which 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.

 

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5.1.18 No Further Encumbrances. Borrower shall do, or cause to be done, all
things necessary to keep and protect the Property and all portions thereof
unencumbered from any Liens, easements or agreements granting rights in or
restricting the use or development of the Property, except for (a) Permitted
Encumbrances, (b) Liens permitted pursuant to the Loan Documents, (c) Liens for
Impositions prior to the imposition of any interest, charges or expenses for the
non-payment thereof and (d) any Liens permitted pursuant to the Leases.
5.1.19 Leases and Material Subleases. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) shall, promptly after receipt thereof,
deliver to Lender a copy of any notice received with respect to the Leases or
any Material Subleases claiming that Borrower, Maryland Loan Guarantor or Master
Lessee, as applicable, is in default in the performance or observance of any of
the material terms, covenants or conditions of any of the Leases or Material
Subleases.
5.1.20 Management.
(a) Borrower(or in the case of the Maryland Property, Maryland Loan Guarantor)
shall, and shall use commercially reasonable efforts to cause any third party
property manager under any management agreement executed pursuant to
Section 5.2.14 to, (i) promptly perform and/or observe all of the covenants and
agreements required to be performed and observed by it under such management
agreement and do all things necessary to preserve and to keep unimpaired its
material rights thereunder; (ii) promptly notify Lender of any “event of
default” under such management agreement of which it is aware; (iii) promptly
deliver to Lender a copy of each financial statement, capital expenditures plan,
property improvement plan and any other notice, report and estimate received by
it under such management agreement; and (iv) enforce in a commercially
reasonable manner the performance and observance of all of the covenants and
agreements required to be performed and/or observed by it under such management
agreement.
(b) If (a) an Event of Default has occurred and is continuing or (b) the third
party property manager under any management agreement executed pursuant to
Section 5.2.14 shall become insolvent, Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) shall, at the request of Lender, terminate or
cause Master Lessee to terminate such management agreement and replace the third
party property manager thereunder with a third party property manager approved
by Lender in accordance with Section 5.2.14.
5.1.21 Master Lease.
(a) Each Individual Property shall at all times be leased directly and
exclusively by the Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) to Master Lessee under the Master Lease (and not to any other
Person under the Master Lease or any replacement Master Lease). Master Lessee
shall be permitted to enter into Leases subject to and in accordance with
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(b) The Master Lease shall have a term extending at least through 2021.
(c) The Master Lease shall require Master Lessee to make payments of Master
Lease Rent. Pursuant to the Master Lease and the Master Lease Rent Payment
Direction Letter (i) all Master Lease Scheduled Rent shall at all times during
the term of the Loan be made directly to the Holding Account (the Master Lessee
Base Rent portion of which shall be payable on a monthly basis), (ii) other than
during any Low LCR Cash Sweep Period or any period during which an Event of
Default is continuing, all Master Lease Variable Additional Rent shall be paid
directly by Master Lessee to the Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) or to the party entitled to such sums, as
specified in the Master Lease, and (iii) during any Low LCR Cash Sweep Period or
any period during which an Event of Default is continuing, all Master Lease
Variable Additional Rent shall be paid directly to the Holding Account, and none
of the foregoing payments of Master Lease Rent under clauses (i) and (iii) above
shall be deemed made until such payment has been deposited into the Holding
Account. Lender shall pay all Master Lease Variable Additional Rent directly to
the Person having the right to receive such funds on or prior to the respective
due dates therefore, and shall promptly notify Borrower of such payments in
accordance with the terms of Section 3.1.6.
(d) The Master Lease shall require the Master Lessee to prepare applicable
reports of expenses and revenue in accordance with Article XI and to submit
copies to Lender.
(e) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
shall not terminate the Master Lease or consent to the termination of the Master
Lease without the prior written consent of Lender. The Master Lease shall
provide for the release of an Individual Property therefrom only in connection
with (i) a casualty or Taking in the circumstances set forth therein, (ii) the
payment of amounts with respect to such Individual Property as required by, and
the release of such Individual Property from the lien of the Security Instrument
pursuant to, the provisions of Section 2.3, (iii) the release of an Outparcel,
or (iv) the substitution of an Individual Property with a Replaced Property in
accordance with the provisions of Section 2.3. Upon any such release of an
Individual Property from the Master Lease, the Master Lease will be amended to
reduce the Master Lease Rent by the amount allocable to such Individual Property
(as specified in the Master Lease).
(f) Except for the Assignment of Leases and the Permitted Encumbrances, Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) shall not
shall pledge, transfer, sublease, assign, mortgage, encumber, or allow to be
encumbered its interest in the Master Lease or any interest therein without the
prior written consent of the Lender. The Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) shall not permit and shall not
consent to any assignment by the Master Lessee of its interest in the Master
Lease or its rights and interests thereunder without the prior written consent
of the Lender.
(g) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
shall not, without the prior written consent of Lender, (i) renew (other than
pursuant to renewal rights expressly set forth in the Master Lease), extend,
release any Individual Property from (except in connection with a Property
Release, the release of an Outparcel, a Defeasance or a Substitution in
compliance with Sections 2.3.4, 2.3.5, 2.3.6 and 2.3.7 hereof), terminate, waive
any provisions of, reduce rents or other sums payable under, accept a surrender
of, or shorten the term of, the Master Lease, (ii) waive any provisions of the
Master Lease or (iii) amend or modify any provision of the Master Lease in any
material respect except as permitted in the last sentence of Section 5.1.21(e).

 

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(h) The Master Lease shall be subject and subordinate to the Loan pursuant to
the Master Lease SNDA. Each of Borrower and Maryland Loan Guarantor agrees to
terminate the Master Lease and/or exercise and enforce its remedies under the
Master Lease as directed by Lender following an event of default under the
Master Lease, as more particularly set forth in Section 2(B) of the Master Lease
SNDA.
(i) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
shall (i) promptly perform and/or observe all of the covenants and agreements
required to be performed and observed by it under the Master Lease and do all
things necessary to preserve and to keep unimpaired its material rights
thereunder; (ii) promptly notify Lender of default by Master Lessee under the
Master Lease; (iii) promptly deliver to Lender a copy of each financial
statement, capital expenditures plan, property improvement plan and any other
notice, report and estimate received by it under the Master Lease; and
(iv) enforce in a commercially reasonable manner the performance and observance
of all of the covenants and agreements required to be performed and/or observed
by the Master Lessee under the Master Lease.
5.2 Negative Covenants. From the Closing Date until payment and performance in
full of all obligations of Borrower and Maryland Loan Guarantor under the Loan
Documents or the earlier release of the Lien of this Agreement or the Security
Instrument in accordance with the terms of this Agreement and the other Loan
Documents, Borrower and Maryland Loan Guarantor each covenants and agrees with
Lender that it will not do, directly or indirectly, any of the following:
5.2.1 Incur Debt. Incur, create or assume any Debt other than Permitted Debt or
Transfer or lease all or any part of the Property or any interest therein,
except as permitted in the Loan Documents;
5.2.2 Encumbrances. Incur, create or assume or permit the incurrence, creation
or assumption of any Debt secured by an interest in Borrower, Maryland Loan
Guarantor, Master Lessee or any other SPE Entity;
5.2.3 Engage in Different Business. Engage, directly or indirectly, in any
business other than that of entering into this Agreement and the other Loan
Documents to which Borrower and/or Maryland Loan Guarantor is a party and the
use, ownership, management, leasing, renovation, financing, development,
operation and maintenance of the Property and activities related thereto;
5.2.4 Make Advances. Make advances or make loans to any Person, or hold any
investments, except as expressly permitted pursuant to the terms of this
Agreement or any other Loan Document;
5.2.5 Partition. Partition any Individual Property;
5.2.6 Commingle. Commingle its assets with the assets of any of its Affiliates;

 

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5.2.7 Guarantee Obligations. Guarantee any obligations of any Person;
5.2.8 Transfer Assets. Transfer any asset other than in the ordinary course of
business or Transfer any interest in the Property except, in each case, as may
be permitted hereby or in the other Loan Documents;
5.2.9 Amend Organizational Documents. Amend or modify any of its organizational
documents without Lender’s consent, other than in connection with any Transfer
permitted pursuant to Article VIII or to reflect any change in capital accounts,
contributions, distributions, allocations or other provisions that do not and
could not reasonably be expected to have a Material Adverse Effect and provided
that Borrower, Maryland Loan Guarantor and each other SPE Entity each remain a
Single Purpose Entity;
5.2.10 Dissolve. Dissolve, wind-up, terminate, liquidate, merge with or
consolidate into another Person, except as expressly permitted pursuant to this
Agreement;
5.2.11 Bankruptcy. (i) File a bankruptcy or insolvency petition or otherwise
institute insolvency proceedings, (ii) dissolve, liquidate, consolidate, merge
or sell all or substantially all of Borrower’s or Maryland Loan Guarantor’s
assets other than in connection with the repayment of the Loan, (iii) engage in
any other business activity or (iv) file or solicit the filing of an involuntary
bankruptcy petition against Borrower, Maryland Loan Guarantor, Master Lessee,
Guarantor or any SPE Entity without obtaining the prior consent of all of the
directors, members or managers, as applicable, of the applicable Person;
5.2.12 ERISA. Engage in any activity that would subject Borrower or Maryland
Loan Guarantor to regulation under ERISA or qualify it as an “employee benefit
plan” (within the meaning of Section 3(3) of ERISA) to which ERISA applies and
Borrower’s and Maryland Loan Guarantor’s assets do not and will not constitute
plan assets within the meaning of 29 C.F.R. Section 2510.3-101;
5.2.13 Distributions. From and after the occurrence and during the continuance
of an Event of Default, make any distributions to or for the benefit of any of
its partners or members or its or their Affiliates;
5.2.14 Management.
(a) The Property is currently self-managed by Master Lessee. None of Borrower,
Maryland Loan Guarantor nor Master Lessee shall, without the prior written
consent of Lender, which consent shall not be unreasonably withheld or delayed
(provided, if a Securitization shall have occurred, Borrower obtains a Rating
Agency Confirmation with respect to such action) retain a third party property
manager to manage the Property. Upon the retention of a third party property
manager in accordance with the foregoing sentence, Lender, and if a
Securitization shall have occurred, the Rating Agencies, shall have the right to
approve any management agreement with such third party property manager (which
approval by Lender shall not be unreasonably withheld or delayed). Without
limitation to the foregoing, none of Borrower, Maryland Loan Guarantor nor
Master Lessee shall enter into a management agreement for the Property unless
Lender shall have received a manager’s consent and subordination of management
agreement, executed by Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor), Master Lessee and the applicable third party property
manager, in form and substance reasonably acceptable to Lender, pursuant to
which the management agreement is collaterally assigned to Lender and the third
party property manager agrees that its rights under the management agreement are
subject and subordinate to the Loan;

 

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(b) With respect to any management agreement executed by Borrower (or in the
case of the Maryland Property, Maryland Loan Guarantor) or Master Lessee in
accordance with Section 5.2.14(a), neither Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) nor Master Lessee shall, without the
prior written consent of Lender, which consent shall not be unreasonably
withheld or delayed (provided, if a Securitization shall have occurred, Borrower
obtains a Rating Agency Confirmation with respect to such action):
(i) materially modify, change, supplement, alter or amend such management
agreement or waive or release any of its right and remedies under such
management agreement or (ii) replace the third party property manager under such
management agreement with any Person which has not been approved in accordance
with Section 5.2.14(a);
5.2.15 Reserved.
5.2.16 Modify Account Agreement. Without the prior consent of Lender, which
shall not be unreasonably withheld, delayed or conditioned (and if a
Securitization shall have occurred, a Rating Agency Confirmation obtained by
Borrower), execute any modification to the Account Agreement;
5.2.17 Zoning Reclassification. Without the prior written consent of Lender,
(a) initiate or consent to any zoning reclassification of any portion of the
Property, (b) seek any variance under any existing zoning ordinance that could
result in the use of the Property becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation, or (c) allow
any portion of the Property to be used in any manner that could result in the
use of the Property becoming a non-conforming use under any zoning ordinance or
any other applicable land use law, rule or regulation;
5.2.18 Change of Principal Place of Business. Change its principal place of
business and chief executive office set forth on the first page of this
Agreement without first giving Lender thirty (30) days’ prior written notice
(but in any event, within the period required pursuant to the UCC) and there
shall have been taken such action, reasonably satisfactory to Lender, as may be
necessary to maintain fully the effect, perfection and priority of the security
interest of Lender hereunder in the Account Collateral at all times;
5.2.19 Debt Cancellation. Cancel or otherwise forgive or release any material
claim or debt owed to it by any Person, except for adequate consideration or in
the ordinary course of its business and except for termination of a Lease as
permitted by Section 8.7;
5.2.20 Misapplication of Funds. Distribute any revenue from the Property or any
Proceeds in violation of the provisions of this Agreement, fail to remit amounts
to the Holding Account as required by Section 3.1, misappropriate any security
deposit or portion thereof or apply the proceeds of the Loan in violation of
Section 2.1.4; or

 

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5.2.21 Single Purpose Entity. Fail to be a Single Purpose Entity or take or
suffer any action or inaction the result of which would be to cause it or any
SPE Entity to cease to be a Single Purpose Entity.
VI. INSURANCE; CASUALTY; CONDEMNATION; RESTORATION
6.1 Insurance Coverage Requirements. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) shall, at its sole cost and expense, keep in
full force and effect, or cause the Master Lessee to keep in full force and
effect, insurance coverage of the types and minimum limits as follows during the
term of this Agreement (it being understood that to the extent that Master
Lessee maintains any such coverage on the Closing Date, but thereafter fails to
maintain such coverage, Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall obtain such coverage at its sole cost and
expense):
6.1.1 Property Insurance. Insurance against loss customarily included under so
called “All Risk” policies including flood, windstorm, earthquake, vandalism,
and malicious mischief, boiler and machinery, and such other insurable hazards
as, under good insurance practices, from time to time are insured against for
other property and buildings similar to the Improvements and Building Equipment
in nature, use, location, height, and type of construction. Such insurance
policy shall also insure the additional expense of demolition and if any of the
Improvements or the use of the Property shall at any time constitute legal
non-conforming structures or uses, provide coverage for contingent liability
from Operation of Building Laws, Demolition Costs and Increased Cost of
Construction Endorsements and containing an “Ordinance or Law Coverage” or
“Enforcement” endorsement. The amount of such “All Risk” insurance shall be not
less than one hundred percent (100%) of the replacement cost value of the
Improvements and the Building Equipment. Each such insurance policy shall
contain an agreed amount (coinsurance waiver) and replacement cost value
endorsement and shall cover, without limitation, all tenant improvements and
betterments which Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) is required to insure in accordance with any Lease. Lender shall
be named “Loss Payee” on a “Standard Mortgagee Endorsement” and be provided not
less than thirty (30) days advance notice of change in coverage, cancellation or
non-renewal.
6.1.2 Liability Insurance. “Commercial General Liability” insurance and
“Umbrella Liability” coverage for “Personal Injury,” “Bodily Injury” including
“Accident or Death and Property Damage,” providing in combination no less than
$50,000,000 per occurrence and in the annual aggregate and Automobile insurance
including coverage for “Owned” (if any), “Hired” and “Non Owned vehicles.” The
policies described in this paragraph shall cover “Contractual Liability”
including elevators, escalators and independent contractors (covering Borrower’s
(or in the case of the Maryland Property, Maryland Loan Guarantor) obligation to
indemnify Lender as required under this Agreement and “Products and Completed
Operations Liability” coverage). All liability insurance shall name Lender as
“Additional Insured” either on a specific endorsement or under a blanket
endorsement reasonably satisfactory to Lender.
6.1.3 Workers’ Compensation Insurance. Workers compensation insurance as
required by law.

 

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6.1.4 Business Interruption Insurance. Supplemental Business Interruption
insurance in an amount equal to twelve (12) months actual rental loss and with a
coverage limit of $7,000,000. Each such insurance policy shall contain an agreed
amount (coinsurance waiver). In the event business interruption insurance is no
longer available at commercially reasonable rates, then in lieu of obtaining
business interruption insurance, Borrower may elect to deposit into the LCR
Deterioration Reserve Account Cash or Cash Equivalents or deliver to Lender a
Letter of Credit, in either case in an amount equal to (i) $7,000,000 or
(ii) the difference between $7,000,000 and the amount of business interruption
insurance below $7,000,000 (the “Business Interruption Reserve Amount”). The
Business Interruption Reserve Amount shall be applied by Lender against Master
Lease Rent Shortfalls resulting from a casualty or a Taking. During the
continuance of an Event of Default, Lender shall have the right to draw all
undrawn sums on any such Letter of Credit and deposit same into the LCR
Deterioration Reserve Account for application as set forth in the preceding
sentence, and, notwithstanding anything to the contrary contained herein, the
Business Interruption Reserve Amount shall not be applied against the
Obligations during the continuance of an Event of Default. In the event of a
Master Lease Rent Shortfall resulting from a casualty or Taking, Lender shall
have the right to draw an amount equal to such Master Lease Rent Shortfall on
any such Letter of Credit and deposit same into the LCR Deterioration Reserve
Account. Upon written request of Borrower, Lender agrees to reasonably modify
the requirements herein in the event business interruption insurance is no
longer commercially available.
6.1.5 Builder’s All-Risk Insurance. During any period of repair or restoration,
builder’s “All-Risk” insurance in an amount equal to not less than the full
insurable value of the Property against such risks (including so called “All
Risk” perils coverage and collapse of the Improvements to agreed limits as
Lender may request, in form and substance acceptable to Lender).
6.1.6 Boiler and Machinery Insurance. Comprehensive boiler and machinery
insurance (without exclusion for explosion) covering all mechanical and
electrical equipment against physical damage, rent loss and improvements loss
and covering, without limitation, all tenant improvements and betterments that
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) or
Master Lessee is required to insure pursuant to the Master Lease or any Lease on
a replacement cost basis. The minimum amount of limits to be provided shall be
$10,000,000 per accident.
6.1.7 Flood Insurance and Earthquake Insurance.
(a) If any portion of the Improvements is located within an area designated as
“flood Zone A or V” or a “special flood hazard area” (as defined under the
regulations adopted under the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973), flood insurance shall be provided, in an
amount not less than the maximum limit of coverage available under the Federal
Flood Insurance plan with respect to the Property. Lender reserves the right to
require flood insurance in excess of that available under the Federal Flood
Insurance plan in commercially reasonable amounts. Lender agrees to
(a) reasonably modify the requirements herein if such insurance is not
commercially available and (b) accept any reduced coverage requirements
acceptable to the Rating Agencies as evidenced by a Rating Agency Confirmation.

 

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(b) If earthquake insurance limits and aggregates are shared with locations
other than the Property insured on the same policy as any of the Property or, if
the amount of Earthquake insurance provided is less than one hundred percent
(100%) of the insurable values of the Property and business interruption
coverage combined, then the amount of earthquake coverage shall be based on a
“Probable Maximum Loss” Study for the applicable Individual Property, which must
be conducted by a firm satisfactory to Lender, which for purposes of this
Agreement, Lender agrees that Aon Risk Services, Borrower’s property insurance
broker is satisfactory. The results of the “Probable Maximum Loss” Study, on an
Individual Property basis and for all locations insured in the same earthquake
insurance policies, shall be used to determine the amount of earthquake coverage
to be provided by Borrower. The amount of insurance shall be determined by
adding the total expected damage to all Improvements subject to a single
earthquake event in a given region together along with the expected loss of
Rents and other income from the applicable Individual Property. The total amount
of earthquake insurance in limits shall be the sum of expected property damage,
reconstruction cost and annual business income expected loss. Should the
available aggregate limits of earthquake insurance be eroded by losses so that
the remaining limits available to pay losses are less than forty percent (40%)
of the required limits, Borrower shall purchase additional coverage to restore
the available limit and aggregate limit to not less than eighty percent (80%) of
the required amount of insurance. If the earthquake insurance and associated
aggregate limits are shared among other locations the risks associated with
other locations also insured in the same policy shall be taken into
consideration in determining the amount of insurance to be provided herein.
Lender agrees to (a) reasonably modify the requirements herein if such insurance
is not commercially available and (b) accept any reduced coverage requirements
acceptable to the Rating Agencies as evidenced by a Rating Agency Confirmation.
6.1.8 Terrorism Insurance. To the extent commercially available, Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) shall be required to
carry insurance with respect to the Improvements and Building Equipment covering
acts of sabotage or acts by terrorist groups or individuals (“Terrorism
Insurance”) throughout the Loan term consistent with the amounts of insurance
required by Sections 6.1.1 and 6.1.5 in an amount not less than $25,000,000, and
having a deductible commensurate with the deductibles under the insurance
required by Sections 6.1.1 and 6.1.5, or following a Securitization, such lesser
coverage amount or such greater deductible, on a blanket basis, that is
acceptable to the Rating Agencies as evidenced by a Rating Agency Confirmation.
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
agrees that if any property insurance policy covering any Individual Property
provides for any exclusions of coverage for acts of terrorism, then a separate
Terrorism Insurance policy in the coverage amount required under this section
and in form and substance reasonably acceptable to Lender will be obtained by
the Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
for such Property to the extent such Terrorism Insurance is commercially
available. Lender agrees that Terrorism Insurance coverage may be provided under
a Blanket Policy that is reasonably acceptable to Lender. Notwithstanding
anything to the contrary in this Section 6.1.8, Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) shall not be obligated to maintain
Terrorism Insurance in an amount more than that which can be purchased for a sum
equal to $150,000 or such lesser amount of coverage acceptable to the Rating
Agencies as evidenced by a Rating Agency Confirmation.

 

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6.1.9 Storage Tank System Third Party Liability and Cleanup Insurance. Storage
Tank System Third Party Liability and Cleanup Insurance providing coverage
amounts not less than $2,000,000 per occurrence and $4,000,000 in the annual
aggregate.
6.1.10 Other Insurance. At Lender’s reasonable request, such other insurance
(including, without limitation, to the extent requested by Lender, windstorm
insurance) with respect to the Property against loss or damage of the kinds from
time to time customarily insured against and in such amounts as are generally
required by institutional lenders on loans of similar amounts and secured by
properties comparable to, and in the general vicinity of, the Property.
6.1.11 Ratings of Insurers. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall maintain the insurance coverage described in
Section 6.1.1 through Section 6.1.10 above, in all cases, with one or more
domestic primary insurers reasonably acceptable to Lender, having both
(x) claims-paying-ability and financial strength ratings by S&P of not less than
“A” and its equivalent by the other Rating Agencies and (y) an Alfred M. Best
Company, Inc. rating of “A-” or better and a financial size category of not less
than “X.” All insurers providing insurance required by this Agreement shall be
authorized to issue insurance in the State.
6.1.12 Form of Insurance Policies; Endorsements. All insurance policies shall be
in such form and with such endorsements as are specified herein (and Lender
shall have the right to reasonably approve deductibles and loss payees on the
Property secured under this Agreement). A certificate of insurance with respect
to all of the above-mentioned insurance policies has been delivered to Lender
and copies of all such policies shall be delivered to Lender when the same are
available upon request by Lender and shall be held by Lender. Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) shall name Lender as
an additional insured, shall provide that all Proceeds (except with respect to
Proceeds of general liability, automobile liability, excess liability and
workers’ compensation insurance) be payable to Lender as and to the extent set
forth in Section 6.2, and shall contain: (i) a standard “non-contributory
mortgagee” endorsement or its equivalent relating, inter alia, to recovery by
Lender notwithstanding the negligent or willful acts or omissions of Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor); (ii) a
waiver of subrogation endorsement in favor of Lender; (iii) an endorsement
providing for a deductible per loss of an amount not more than that which is
customarily maintained by prudent owners of properties with a standard of
operation and maintenance comparable to and in the general vicinity of the
Property, but in no event in excess of an amount reasonably acceptable to Lender
(and Lender hereby agrees and acknowledges that in no event shall Borrower (or
in the case of the Maryland Property, Maryland Loan Guarantor) be required to
maintain a deductible in an amount less than $1,000,000 with respect to any
insurance policy obtained pursuant to Section 6.1.1); and (iv) a provision that
such policies shall not be canceled, terminated or expire without at least
thirty (30) days’ prior written notice to Lender, in each instance.

 

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6.1.13 Evidence of Insurance. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall deliver to Lender annually, prior to the
expiration of the insurance policies required hereunder, evidence that the
insurance policies required pursuant to this Section 6.1 are maintained with
insurers who comply with the terms of Section 6.1.10, setting forth a schedule
describing all premiums required to be paid to maintain the policies of
insurance required under this Section 6.1, and stating that Borrower (or in the
case of the Maryland Property, Maryland Loan Guarantor) has or will pay such
premiums when due. Evidence of insurance with respect to all replacement
policies shall be delivered to Lender prior to the expiration date of any of the
insurance policies required to be maintained hereunder. If Borrower (or in the
case of the Maryland Property, Maryland Loan Guarantor) fails to maintain and
deliver to Lender the evidence of insurance required by this Agreement, Lender
may procure such insurance, and all costs thereof (and interest thereon at the
Default Rate) shall be added to the Indebtedness. Lender shall not, by the fact
of approving, disapproving, accepting, preventing, obtaining or failing to
obtain any insurance, incur any liability for or with respect to the amount of
insurance carried, the form or legal sufficiency of insurance contracts,
solvency of insurance companies, or payment or defense of lawsuits, and Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) hereby
expressly assumes full responsibility therefor and all liability, if any, with
respect to such matters.
6.1.14 Separate Insurance. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall not take out separate insurance contributing in
the event of loss with such required to be maintained pursuant to this
Section 6.1 unless such insurance complies with this Section 6.1.
6.1.15 Blanket Policies. The insurance coverage required under this Section 6.1
may be effected under a blanket policy or policies covering the Property and
other properties and assets not constituting a part of the Property (a “Blanket
Policy”), provided that any blanket insurance policy shall cover each Individual
Property in an amount of coverage that is not less than the amounts required
pursuant to this Section 6.1 and which shall in any case comply in all other
respects with the requirements of this Section 6.1.
6.2 Condemnation and Insurance Proceeds.
6.2.1 Notification. Borrower shall promptly notify Lender in writing upon
obtaining knowledge of (i) the institution of any proceedings relating to any
Taking (whether material or immaterial) of, or (ii) the occurrence of any
casualty, damage or injury to, the Property or any portion thereof, the
restoration of which is estimated by Borrower in good faith to cost more than
the Casualty Amount as to any Individual Property. In addition, each such notice
shall set forth such good faith estimate of the cost of repairing or restoring
such casualty, damage, injury or Taking in reasonable detail if the same is then
available and, if not, as soon thereafter as it can reasonably be provided.
Borrower shall promptly provide Lender with copies of any material documentation
available to Borrower and requested by Lender relating to any Taking.

 

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6.2.2 Proceeds. In the event of any Taking of or any casualty or other damage or
injury to the Property, Borrower’s (or in the case of the Maryland Property,
Maryland Loan Guarantor) right, title and interest in and to all compensation,
awards, proceeds, damages, claims, insurance recoveries, causes and rights of
action (whether accrued prior to or after the date hereof) and payments which
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) may
receive or become entitled with respect to the Property or any part thereof
other than payments received in connection with any liability or business
interruption insurance and other than any of the foregoing with respect to the
Excluded Personal Property (collectively, “Proceeds”) in connection with any
such Taking of, or casualty or other damage or injury to, the Property or any
part thereof are hereby assigned by Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) to Lender and, except as otherwise herein
provided, shall be paid to the Lender. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) shall, in good faith and in a commercially
reasonable manner, file and prosecute the adjustment, compromise or settlement
of any claim for Proceeds and, subject to Borrower’s (or in the case of the
Maryland Property, Maryland Loan Guarantor’s) right to receive the direct
payment of any Proceeds as herein provided, will cause the same to be paid
directly to Lender to be held and applied in accordance with the provisions of
this Agreement. Except upon the occurrence and during the continuance of an
Event of Default, Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) may settle any insurance claim with respect to Proceeds which
does not exceed the Casualty Amount as to any Individual Property. Whether or
not an Event of Default shall have occurred and be continuing, Lender shall have
the right to approve, such approval not to be unreasonably withheld, any
settlement which might result in any Proceeds in excess of the Casualty Amount
as to any Individual Property and Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) shall deliver or cause to be delivered to
Lender all instruments reasonably requested by Lender to permit such approval.
Borrower shall pay all reasonable out-of-pocket costs, fees and expenses
reasonably incurred by Lender (including all reasonable attorneys’ fees and
expenses, the reasonable fees of insurance experts and adjusters and reasonable
costs incurred in any litigation or arbitration), and interest thereon at the
Default Rate to the extent not paid within ten (10) Business Days after delivery
of a request for reimbursement by Lender, in connection with the settlement of
any claim for Proceeds and seeking and obtaining of any payment on account
thereof in accordance with the foregoing provisions. If any Proceeds are
received by Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) and may be retained by Borrower or Maryland Loan Guarantor pursuant
to this Section 6.2, such Proceeds shall, until the completion of the related
Work, be held in trust for Lender and shall be segregated from other funds of
Borrower and Maryland Loan Guarantor to be used to pay for the cost of the Work
in accordance with the terms hereof, and in the event such Proceeds exceed the
Casualty Amount as to any Individual Property, such Proceeds shall be forthwith
paid directly to and held by Lender in the Proceeds Reserve Account in trust for
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor), in
each case to be applied or disbursed in accordance with this Section 6.2.
Notwithstanding anything to the contrary set forth in this Agreement, however,
and excluding situations requiring prepayment of the Notes, to the extent any
Proceeds (either singly or when aggregated with all other then unapplied
Proceeds with respect to the Property) do not exceed the Casualty Amount as to
any Individual Property, such Proceeds are to be paid directly to Borrower (or
in the case of the Maryland Property, Maryland Loan Guarantor) to be applied to
restoration of the Property in accordance with the terms hereof (except that
Proceeds paid in respect of the insurance described in Section 6.1.4 shall be
deposited directly to the Holding Account as revenue of the Property).

 

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6.2.3 Lender to Take Proceeds. If (i) the Proceeds with respect to any
particular Individual Property shall equal or exceed the Allocated Loan Amount
for such Individual Property at a time when the aggregate Allocated Loan Amounts
of Individual Properties then currently impacted by a casualty, damage,
destruction or Taking is greater than 10% of the Principal Amount, (ii) an Event
of Default shall have occurred and be continuing, (iii) a Total Loss with
respect to any Individual Property shall have occurred, (iv) the Work is not
capable of being completed before the earlier to occur of the date which is six
(6) months prior to the earlier of the Maturity Date and the date on which the
business interruption insurance carried with respect to such Individual Property
on which the business interruption insurance carried with respect to such
Individual Property shall expire (the “Cut-Off Date”), unless on or prior to the
Cut-Off Date (A) Borrower shall deliver to the Lender and there shall remain in
effect a binding written offer, subject only to customary conditions, of an
Approved Bank or such other financial institution or investment bank duly
authorized to originate loans secured by real property located in the State and
reasonably satisfactory to Lender for a loan from such Approved Bank or such
other financial institution or investment bank to the Borrower (or in the case
of the Maryland Property, Maryland Loan Guarantor) in a principal amount of not
less than the then outstanding Allocated Loan Amount for such Individual
Property and which shall, in the Lender’s reasonable judgment, enable the
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) to
refinance the Allocated Loan Amount with respect to such Individual Property at
or prior to the Maturity Date and (B) if a Securitization shall have occurred,
Borrower shall obtain a Rating Agency Confirmation, (v) the Individual Property
is not capable of being restored substantially to its condition prior to such
Taking or casualty and such incapacity shall have a Material Adverse Effect,
(vi) the Master Lessee or Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall exercise any termination right under the Master
Lease or (vii) Lender determines that, upon the completion of the restoration,
the gross cash flow and the net cash flow of the Property will not be restored
to a level sufficient to cover all carrying costs and operating expenses of the
Property, including, without limitation, debt service on the Notes at a coverage
ratio (after deducting all required reserves, as required by Lender, from net
operating income) of at least 1.0 to 1.0, which coverage ratio shall be
determined by Lender in its reasonable discretion; then in any such case, all
Proceeds shall be paid over to Lender (if not paid directly to Lender) for
application as set forth in clause (b) below. Any Proceeds remaining after
reimbursement of Lender’s or its agent’s costs and expenses incurred in
connection with recovery of any such Proceeds (including, without limitation,
administrative costs and inspection fees) shall, except to the extent required
under the provisions hereof to be applied for restoration, be paid to the
Holding Account to be applied by Lender to prepay the Notes to the extent of the
Release Price for such Individual Property in accordance with the provisions
hereof (without the imposition of any Yield Maintenance Premium), with the
balance, if any, to be paid to the Borrower’s Account. If the Proceeds applied
by Lender pursuant to the preceding sentence equal or exceed the Release Price
for such Individual Property, Borrower shall be entitled to obtain a Property
Release subject to and in accordance with Section 2.3.4. If the Proceeds so
applied by Lender pursuant to clauses (a)(iii), (v) or (vi) above are not
sufficient to pay the Release Price with respect to an Individual Property in
full, Borrower shall be entitled to prepay the remainder of the Release Price
and obtain a Property Release with respect to the Individual Property for which
the Proceeds were received in accordance with Section 2.3.4 without the
imposition of any Yield Maintenance Premium and otherwise in accordance with the
terms and provisions of the Note.

 

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6.2.4 Borrower to Restore.
(a) Subject to Borrower’s rights pursuant to Section 2.3.4 to cause the Property
to be released from the Lien of the Security Instrument, and provided that the
Proceeds, if any, shall be made available to Borrower by Lender, Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) shall (whether or
not such Proceeds shall be sufficient) promptly after the occurrence of any
damage or destruction to all or any portion of the Property or a Taking of a
portion of the Property, commence and diligently prosecute, or cause to be
commenced and diligently prosecuted, to completion, subject to Excusable Delays,
the repair, restoration and rebuilding of the Property (in the case of a partial
Taking, to the extent it is capable of being restored) so damaged, destroyed or
remaining after such Taking in full compliance with all material Legal
Requirements and free and clear of any and all Liens except Permitted
Encumbrances (such repair, restoration and rebuilding are collectively referred
to herein as the “Work”). The plans and specifications shall require that the
Work be done in a workmanlike manner at least equivalent to the quality and
character prior to the damage or destruction (provided, however, that in the
case of a partial Taking, the Property restoration shall be done to the extent
reasonably practicable after taking into account the consequences of such
partial Taking), so that upon completion thereof, the Property shall be at least
equal in value and general utility to the Property prior to the damage or
destruction; it being understood, however, that Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) shall not be obligated to restore
the Property to the precise condition of the Property prior to any partial
Taking of, or casualty or other damage or injury to, the Property, if the Work
actually performed, if any, or failed to be performed, shall have no Material
Adverse Effect on the value of the Property from the value that the Property
would have had if the same had been restored to its condition immediately prior
to such Taking or casualty.
(b) If Proceeds are not required to be applied toward payment of the
Indebtedness pursuant to the terms hereof, then Lender shall make the Proceeds
which it is holding pursuant to the terms hereof (after payment of any expenses
incurred by Lender in connection with the collection thereof plus interest
thereon at the Default Rate from the date advanced through the date of
reimbursement) available to Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) for payment or reimbursement of Borrower’s (or in the
case of the Maryland Property, Maryland Loan Guarantor’s) or the applicable
Tenant’s expenses incurred with respect to the Work, upon the terms and subject
to the conditions set forth in paragraphs (i), (ii) and (iii) below and in
Section 6.2.5:
(i) at the time of loss or damage or at any time thereafter while Borrower (or
in the case of the Maryland Property, Maryland Loan Guarantor) is holding any
portion of the Proceeds, there shall be no Event of Default;
(ii) if, at any time, the estimated cost of the Work (as estimated by the
Independent Architect referred to in clause (iii) below) shall exceed the
Proceeds (a “Deficiency”) and for so long as such Deficiency shall exist, Lender
shall not be required to make any Proceeds disbursement to Borrower (or in the
case of the Maryland Property, Maryland Loan Guarantor) unless Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) (within a reasonable
period of time after receipt of such estimate), at its election, either deposits
with or delivers to Lender (A) Cash and Cash Equivalents or a Letter or Letters
of Credit in an amount equal to the estimated cost of the Work less the Proceeds
available, or (B) such other evidence of Borrower’s (or in the case of the
Maryland Property, Maryland Loan Guarantor’s) ability to meet such excess costs
and which is satisfactory to Lender and the Rating Agencies;

 

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(iii) Each of Lender and the Independent Architect shall have reasonably
approved the plans and specifications for the Work and any change orders in
connection with such plans and specifications; and
(iv) Lender shall, within a reasonable period of time prior to request for
initial disbursement, be furnished with an estimate of the cost of the Work
accompanied by an Independent Architect’s certification as to such costs and
appropriate plans and specifications for the Work. Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) shall restore all Improvements
such that when they are fully restored and/or repaired, such Improvements and
their contemplated use fully comply with all applicable Legal Requirements
including zoning, environmental and building laws, codes, ordinances and
regulations.
6.2.5 Disbursement of Proceeds.
(a) Disbursements of the Proceeds in Cash or Cash Equivalents to Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) hereunder shall be
made from time to time (but not more frequently than once in any month) by
Lender but only for so long as no Event of Default shall have occurred and be
continuing, as the Work progresses upon receipt by Lender of (i) an Officer’s
Certificate dated not more than ten (10) Business Days prior to the application
for such payment, requesting such payment or reimbursement and describing the
Work performed that is the subject of such request, the parties that performed
such Work and the actual cost thereof, and also certifying that such Work and
materials are or, upon disbursement of the payment requested to the parties
entitled thereto, will be free and clear of Liens other than Permitted
Encumbrances, (ii) evidence reasonably satisfactory to Lender that (A) all
materials installed and work and labor performed in connection with such Work
have been paid for in full and (B) there exists no notices of pendency, stop
orders, mechanic’s liens or notices of intention to file same (unless the same
is required by the applicable State law as a condition to the payment of a
contractor) or any liens or encumbrances of any nature whatsoever on the
Property arising out of the Work which have not been either fully bonded to the
satisfaction of Lender or discharged of record or in the alternative, fully
insured to the satisfaction of Lender by the Title Company and (iii) an
Independent Architect’s certificate certifying performance of the Work together
with an estimate of the cost to complete the Work. No payment made prior to the
final completion of the Work, as certified by the Architect, except for payment
made to contractors or subcontractors whose Work shall have been fully completed
and from which final lien waivers have been received, shall exceed ninety
percent (90%) of the value of the Work performed and materials furnished and
incorporated into the Improvements from time to time, and at all times the
undisbursed balance of said Proceeds together with all amounts deposited,
bonded, guaranteed or otherwise provided for pursuant to Section 6.2.4(b) above,
shall be at least sufficient to pay for the estimated cost of completion of the
Work; final payment of all Proceeds remaining with Lender shall be made upon
receipt by Lender of a certification by an Independent Architect, as to the
completion of the Work substantially in accordance with the submitted plans and
specifications, final lien releases, and the filing of a notice of completion
and the expiration of the period provided under the law of the applicable State
for the filing of mechanics’ and materialmens’ liens which are entitled to
priority as to other creditors, encumbrances and purchasers, as certified
pursuant to an Officer’s Certificate, and delivery of a certificate of occupancy
with respect to the Work, or, if not applicable, an Officer’s Certificate to the
effect that a certificate of occupancy is not required.

 

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(b) If, after the Work is completed in accordance with the provisions hereof and
Lender receives evidence that all costs of completion have been paid, there are
excess Proceeds, such excess Proceeds shall be paid over to Lender for
application in accordance with Section 6.2.3(b).
VII. IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS
7.1 Borrower or Maryland Loan Guarantor to Pay Impositions and Other Charges.
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
shall pay all Impositions now or hereafter levied or assessed or imposed against
the Property or any part thereof prior to the imposition of any interest,
charges or expenses for the non-payment thereof and shall pay all Other Charges
on or before the date they are due. Borrower shall deliver to Lender annually,
no later than fifteen (15) Business Days after the first day of each fiscal year
of Borrower, and shall update as new information is received, a schedule
describing all Impositions, payable or estimated to be payable during such
fiscal year attributable to or affecting the Property or Borrower. Subject to
Borrower’s right of contest set forth in Section 7.3, as set forth in the next
two (2) sentences and provided that there are sufficient funds available in the
Tax Reserve Account, Lender, on behalf of Borrower, shall pay all Impositions
and Other Charges which are attributable to or affect the Property or Borrower,
prior to the date such Impositions or Other Charges shall become delinquent or
late charges may be imposed thereon, directly to the applicable taxing authority
with respect thereto. Lender shall, or Lender shall direct the Cash Management
Bank to, pay to the taxing authority such amounts to the extent funds in the Tax
Reserve Account are sufficient to pay such Impositions. Nothing contained in
this Agreement or the Security Instrument shall be construed to require Borrower
or Maryland Loan Guarantor to pay any tax, assessment, levy or charge imposed on
Lender in the nature of a franchise, capital levy, estate, inheritance,
succession, income or net revenue tax.
7.2 No Liens. Subject to its right of contest set forth in Section 7.3, Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) shall at all
times keep, or cause to be kept, the Property free from all Liens (other than
Permitted Encumbrances) and shall pay when due and payable (or bond over) all
claims and demands of mechanics, materialmen, laborers and others which, if
unpaid, might result in or permit the creation of a Lien on the Property or any
portion thereof and shall in any event cause the prompt, full and unconditional
discharge of all Liens imposed on or against the Property or any portion thereof
within forty-five (45) days after receiving written notice of the filing
(whether from Lender, the lienor or any other Person) thereof. Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) shall do or cause to
be done, at the sole cost of Borrower, everything reasonably necessary to fully
preserve the first priority of the Lien of the Security Instrument against the
Property, subject to the Permitted Encumbrances. Upon the occurrence and during
the continuance of an Event of Default with respect to its Obligations as set
forth in this Article VII, Lender may (but shall not be obligated to) make such
payment or discharge such Lien, and Borrower shall reimburse Lender on demand
for all such advances pursuant to Section 19.12 (together with interest thereon
at the Default Rate).

 

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7.3 Contest. Nothing contained herein shall be deemed to require Borrower to
pay, or cause to be paid, any Imposition or to satisfy any Lien, or to comply
with any Legal Requirement or Insurance Requirement, so long as Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) is in good faith,
and by proper legal proceedings, where appropriate, diligently contesting the
validity, amount or application thereof, provided that in each case, at the time
of the commencement of any such action or proceeding, and during the pendency of
such action or proceeding (i) no Event of Default shall exist and be continuing
hereunder, (ii) Borrower shall keep Lender informed of the status of such
contest at reasonable intervals, (iii) if Borrower is not providing security as
provided in clause (vi) below, adequate reserves with respect thereto are
maintained on Borrower’s books in accordance with GAAP or in the Tax Reserve
Account or Insurance Reserve Account, as applicable, (iv) either such contest
operates to suspend collection or enforcement as the case may be, of the
contested Imposition, Lien or Legal Requirement and such contest is maintained
and prosecuted continuously and with diligence or the Imposition or Lien is
bonded, (v) in the case of any Insurance Requirement, the failure of Borrower to
comply therewith shall not impair the validity of any insurance required to be
maintained by Borrower under Section 6.1 or the right to full payment of any
claims thereunder, and (vi) in the case of Impositions and Liens which are not
bonded in excess of an amount equal to five percent (5%) of the Allocated Loan
Amount of the applicable Individual Property, or Two Million Dollars
($2,000,000) in the aggregate, during such contest, Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor), shall deposit with or deliver
to Lender either Cash and Cash Equivalents or a Letter of Credit or Letters of
Credit in an amount equal to one hundred twenty-five percent (125%) of (A) the
amount of Borrower’s (or in the case of the Maryland Property, Maryland Loan
Guarantor’s) obligations being contested plus (B) any additional interest,
charge, or penalty arising from such contest. Notwithstanding the foregoing, the
creation of any such reserves or the furnishing of any bond or other security,
Borrower and Maryland Loan Guarantor promptly shall comply with any contested
Legal Requirement or Insurance Requirement or shall pay any contested Imposition
or Lien, and compliance therewith or payment thereof shall not be deferred, if,
at any time the Property or any portion thereof shall be, in Lender’s reasonable
judgment, in imminent danger of being forfeited or lost or Lender is likely to
be subject to criminal damages as a result thereof. If such action or proceeding
is terminated or discontinued adversely to Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor), Borrower or Maryland Loan
Guarantor, as applicable, shall deliver to Lender reasonable evidence of its
compliance with such contested Imposition, Lien, Legal Requirements or Insurance
Requirements, as the case may be.
VIII. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS
8.1 General Restriction on Transfers and Debt. Unless such action is permitted
by the provisions of this Agreement, Borrower and Maryland Loan Guarantor shall
not, and shall not permit Master Lessee or any Person holding any direct or
indirect ownership interest in Borrower, Maryland Loan Guarantor, Master Lessee,
or any other SPE Entity or the Property to, except with the prior written
consent of Lender and, if a Securitization has occurred, delivery of a Rating
Agency Confirmation, (i) Transfer all or any part of the Property, (ii) incur
any Debt, other than Permitted Debt or Permitted Encumbrances, or (iii) permit
any Transfer (directly or indirectly) of any direct or indirect interest in
Borrower, Maryland Loan Guarantor, Master Lessee, any SPE Entity or Guarantor.
Notwithstanding the forgoing or anything to the contrary contained in this
Agreement, the provisions of this Article VIII shall not apply to or prohibit
and the Lender’s consent shall not be required for (A) the transfer of shares of
stock of any Person (other than Borrower or Maryland Loan Guarantor) that is an
Affiliate of Borrower, Maryland Loan Guarantor, Master Lessee, any SPE Entity or
Guarantor (1) in connection with an initial public offering of such Person’s
stock provided that Borrower complies with Section 8.4(b)(i), (ii), (iv), (v)
and (vi) and/or (2) if such Person is publicly traded, in ordinary course
trading on a nationally recognized stock exchange, or (B) the incurrence of Debt
by Master Lessee and the grant of a Lien by Master Lessee on the Excluded
Personal Property as security for such Debt.

 

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8.2 Sale of Building Equipment. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) may Transfer or dispose of Building Equipment
which is being replaced or which is no longer necessary in connection with the
operation of the Property free from the Lien of the Security Instrument provided
that such Transfer or disposal will not have a Material Adverse Effect on the
value of the Property taken as a whole, will not materially impair the utility
of the Property and will not result in a reduction or abatement of, or right of
offset against, the Rents payable under the Master Lease or any Lease, in either
case as a result thereof, and provided, further, that any new Building Equipment
acquired by Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) (and not so disposed of) shall be subject to the Lien of the Security
Instrument. Lender shall, from time to time, upon receipt of an Officer’s
Certificate requesting the same and confirming satisfaction of the conditions
set forth above, execute a written instrument in form reasonably satisfactory to
Lender to confirm that such Building Equipment which is to be, or has been, sold
or disposed of is free from the Lien of the Security Instrument.
8.3 Immaterial Transfers and Easements, etc. Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) may, without the consent of Lender,
(i) make immaterial Transfers of portions of the Property to Governmental
Authorities for dedication or public use (subject to the provisions of
Section 6.2) or, portions of the Property to third parties for the purpose of
erecting and operating additional structures whose use is integrated with the
use of the Property, and (ii) grant easements, restrictions, covenants,
reservations and rights of way in the ordinary course of business for access,
water and sewer lines, telephone and telegraph lines, electric lines or other
utilities or for other similar purposes, provided that no such Transfer,
conveyance or encumbrance set forth in the foregoing clauses (i) and (ii) shall
materially impair the utility and operation of the Property or have a Material
Adverse Effect on the value of the Property taken as a whole. In connection with
any Transfer permitted pursuant to this Section 8.3, Lender shall execute and
deliver any instrument reasonably necessary or appropriate, in the case of the
Transfers referred to in clause (i) above, to release the portion of the
Property affected by such Taking or such Transfer from the Lien of the Security
Instrument or, in the case of clause (ii) above, to subordinate the Lien of the
Security Instrument to such easements, restrictions, covenants, reservations and
rights of way or other similar grants upon receipt by Lender of:
(a) thirty (30) days prior written notice thereof;
(b) a copy of the instrument or instruments of Transfer;
(c) an Officer’s Certificate stating (x) with respect to any Transfer, the
consideration, if any, being paid for the Transfer and (y) that such Transfer
does not materially impair the utility and operation of the Property, materially
reduce the value of the Property or have a Material Adverse Effect; and
(d) reimbursement of all of Lender’s costs and expenses incurred in connection
with such Transfer.

 

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8.4 Permitted Equity Transfers.
(a) A Transfer (but not a pledge or encumbrance) of a direct or indirect
beneficial interest in Borrower (other than Maryland Borrower), Maryland Loan
Guarantor or Master Lessee that is otherwise prohibited hereunder shall
nevertheless be permitted without Lender’s prior written consent if (i) Lender
receives thirty (30) days prior written notice thereof, (ii) immediately prior
to such Transfer, no Event of Default shall have occurred and be continuing,
(iii) no more than forty-nine percent (49%) of the direct or indirect ownership
interests in Borrower is being Transferred (in the aggregate of all such
Transfers), (iv) the transferee is not a Disqualified Transferee, (v) Guarantor
retains Control of Borrower and Master Lessee and continues to own, directly
and/or indirectly, at least fifty-one percent (51%) of the equity interests in
Borrower and Master Lessee, (vi) Master Lessee remains the master lessee under
the Master Lease, (vii) Borrower retains control and management of the Property,
(viii) Maryland Loan Guarantor retains a 100% direct ownership interest in
Maryland Borrower and (ix) if the Loan has been restructured to include any
mezzanine component, such Transfer is not a Transfer of the direct interests in
Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor)
which serve as collateral for such mezzanine loan.
(b) A Transfer of more than forty-nine percent (49%) of the direct or indirect
ownership interests in Borrower (other than direct interests in Maryland
Borrower) and Maryland Loan Guarantor (in the aggregate of all such Transfers)
shall be permitted only upon the satisfaction of the following conditions
precedent: (i) Lender shall have received thirty (30) days prior written notice
thereof, (ii) immediately prior to such Transfer, no Event of Default shall have
occurred and be continuing, (iii) Lender shall have granted its prior written
consent to such Transfer, such consent not to be unreasonably withheld,
conditioned or delayed, (iv) the proposed transferee shall be a Qualified
Transferee, (v) Borrower shall have reimbursed to Lender all of Lender’s costs
and expenses incurred in connection with such Transfer, (vi) Borrower shall have
delivered to Lender and, if a Securitization has occurred, the Rating Agencies,
(A) a Non-consolidation Opinion and (B) such other documentation and Opinions of
Counsel as shall be reasonably required by Lender and/or, if a Securitization
has occurred, required by the Rating Agencies, in each case in a form reasonably
satisfactory to Lender and, if the Loan is the subject of a Securitization, in a
form satisfactory to the Rating Agencies in their sole discretion and
(vii) prior to such Transfer, Borrower shall have obtained a Rating Agency
Confirmation.
(c) Notwithstanding anything herein to the contrary, the following Transfers
shall not require the prior written consent of Lender or a Rating Agency
Confirmation (but shall be subject to the remaining conditions of Section 8.4(a)
and (b) as applicable other than 8(a)(v), 8(b)(iii), (iv) and (vii) all of which
shall not be required: a Transfer (but not a pledge or encumbrance) of any
direct or indirect interests in Guarantor, Master Lessee, Maryland Loan
Guarantor or Borrower (other than direct interests in Maryland Borrower),
provided that subsequent to any such Transfer, more than fifty-one percent (51%)
percent of Borrower, Maryland Loan Guarantor and Master Lessee is directly or
indirectly owned by one or more investment funds, limited liability companies,
limited partnerships or general partnerships with combined committed capital of
at least $1,000,000,000 where one or more Permitted Fund Managers acts as the
general partners, managing members or fund managers and at least fifty-one
percent (51%) of the equity interests in each of such Permitted Fund Managers
are owned, directly or indirectly, by Guarantor, Cerberus Capital Management,
L.P. or a wholly owned subsidiary of Guarantor or Cerberus Capital Management,
L.P.

 

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8.5 Deliveries to Lender. Not less than thirty (30) days prior to the closing of
any transaction subject to the provisions of this Article VIII, Borrower shall
deliver to Lender an Officer’s Certificate describing the proposed transaction
and stating that such transaction is permitted by this Article VIII, together
with any appraisal or other documents upon which such Officer’s Certificate is
based. In addition, Borrower shall provide Lender with copies of executed deeds
or other similar closing documents within ten (10) Business Days after such
closing.
8.6 Loan Assumption. Upon receipt of Lender’s prior written consent (which
consent shall not be unreasonably withheld or delayed) and provided no Event of
Default is then continuing, Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) may sell, assign, convey or transfer (but not mortgage,
hypothecate or otherwise encumber or grant a security interest in) legal or
equitable title to all (but not fewer than all) of the Individual Properties
only if, after giving effect to the proposed transaction, the Individual
Properties will be owned by one or more Single Purpose Entities wholly owned by
a Qualified Transferee which shall have executed and delivered to Lender an
assumption agreement in form and substance acceptable to Lender. Any such
assumption of the Loan shall be conditioned upon, among other things, (i) the
delivery of financial information, including, without limitation, audited
financial statements, for such purchaser and the direct and indirect owners such
purchaser, (ii) the delivery of evidence that the purchaser is a Single Purpose
Entity and is a Qualified Transferee, (iii) the execution and delivery of all
documentation reasonably requested by Lender or, if applicable, requested by the
Rating Agencies, (iv) the delivery of Opinions of Counsel requested by Lender or
the Rating Agencies, including, without limitation, a Non-Consolidation Opinion
with respect to the purchaser and other entities identified by Lender and
Opinions of Counsel with respect to the valid formation, due authority and good
standing of the purchaser and any additional pledgors and the continued
enforceability of the Loan Documents and any other matters requested by Lender
or, if applicable, the Rating Agencies, (v) the delivery of an endorsement to
the Title Policy in form and substance acceptable to Lender, insuring the lien
of the Security Instrument, as assumed, subject only to the Permitted
Encumbrances, (vi) the payment of (A) all of Lender’s fees, costs and expenses,
including, without limitation, reasonable attorneys’ fees and costs, incurred by
Lender in connection with such assumption, (B) any fees of the Rating Agencies
and (C) an assumption fee in the amount of $200,000 and (vii) if the Loan is the
subject of a Securitization, delivery of a Rating Agency Confirmation with
respect to such assumption.

 

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8.7 Leases and Subleases.
8.7.1 Leasing Conditions. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall not enter into any Lease without the prior
written consent of Lender. During the continuance of Event of Default, Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) shall not
permit Master Lessee to (i) enter into any Sublease (a “New Sublease”) or
(ii) modify any Sublease (including, without limitation, accept a surrender of
any portion of the Property subject to a Sublease (unless otherwise permitted or
required by law), allow a reduction in the term of any Sublease or a reduction
in the rent payable under any Sublease, change any renewal provisions of any
Sublease, materially increase the obligations of the landlord or materially
decrease the obligations of any Tenant) or terminate any Sublease unless the
Tenant under such Sublease is in default (any such action referred to in clause
(ii) being referred to herein as a “Sublease Modification”), without the prior
written consent of Lender. If no Event of Default is then continuing, Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) may permit
Master Lessee to enter into any New Sublease or execute or effect any Sublease
Modification without Lender’s consent (provided that, in each case, the terms
thereof are market terms and, unless consented to in writing by Lender (such
consent not to be unreasonably, withheld, conditioned or delayed) the tenant
thereunder is a bona fide third party); provided, however, that during any Low
LCR Cash Flow Sweep Period, Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall not permit Master Lessee to enter into a New
Sublease that is a Material Sublease or execute or effect any Sublease
Modification with respect to a Material Sublease, without the prior written
consent of Lender.
8.7.2 Delivery of New Sublease or Sublease Modification. Upon the execution of
any New Sublease or Sublease Modification, as applicable, Borrower shall deliver
to Lender an executed copy of thereof.
8.7.3 Security Deposits. All security or other deposits of Tenants of the
Property shall be treated by Borrower as trust funds and shall not be commingled
with any other funds of Borrower, and such deposits shall be deposited, upon
receipt of the same by Borrower in a separate trust account maintained by
Borrower expressly for such purpose. Within ten (10) Business Days after written
request by Lender, Borrower shall furnish to Lender reasonably satisfactory
evidence of compliance with this Section 8.7.3, together with a statement of all
lease securities deposited with Borrower by the Tenants and the location and
account number of the account in which such security deposits are held.
8.7.4 No Default Under Subleases. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) shall cause Master Lessee to (i) use
reasonable efforts to promptly perform and observe all of the material terms,
covenants and conditions required to be performed and observed by Master Lessee
under the Subleases, (ii) exercise, within ten (10) Business Days after a
written request by Lender made not more than two (2) times in any calendar year,
any right to request from the Tenant under any Lease a certificate with respect
to the status thereof and (iii) not collect any of the rents thereunder, more
than one (1) month in advance.
8.7.5 Subordination. All Sublease Modifications and New Subleases entered into
by Master Lessee after the date hereof shall by their express terms be subject
and subordinate to the Master Lease.

 

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8.7.6 Attornment. Each New Sublease entered into from and after the date hereof
shall provide that, (a) in the event of a termination of the Master Lease the
Tenant under such Sublease shall attorn to Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) and shall recognize Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) as lessor under such
Sublease without change in the provisions thereof and (b) in the event,
following any termination of the Master Lease, of the enforcement by Lender of
any remedy under this Agreement or the Security Instrument, the Tenant under
such Lease shall, at the option of Lender or of any other Person succeeding to
the interest of Lender as landlord under such Lease as a result of such
enforcement, attorn to Lender or to such Person and shall recognize Lender or
such successor in the interest as lessor under such Lease without change in the
provisions thereof; provided, however, Lender or such successor in interest
shall not be liable for or bound by (i) any payment of an installment of rent or
additional rent made more than thirty (30) days before the due date of such
installment, (ii) any act or omission of or default by Borrower (or in the case
of the Maryland Property, Maryland Loan Guarantor) or Master Lessee, as
applicable, under any such Lease, (iii) any credits, claims, setoffs or defenses
which any Tenant may have against Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) or Master Lessee, as applicable, (iv) any
obligation on the part of Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) or Master Lessee, as applicable, pursuant to such
Lease, to perform any tenant improvement work or (v) any obligation on the part
of Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
or Master Lessee, as applicable, pursuant to such Lease, to pay any sum of money
to any Tenant. Each such New Sublease shall also provide that, upon the
reasonable request by Lender or such successor in interest, the Tenant shall
execute and deliver an instrument or instruments confirming such attornment.
8.7.7 Non-Disturbance Agreements. Lender shall enter into, and, if required by
applicable law to provide constructive notice or requested by a Tenant, record
in the county where the subject Property is located, a subordination, attornment
and non-disturbance agreement, substantially in form and substance substantially
similar to the form attached hereto as Exhibit N (a “Non-Disturbance
Agreement”), with any Tenant (other than an Affiliate of Borrower) entering into
a Lease or Sublease, within ten (10) Business Days after written request
therefor by Borrower; provided that Lender’s consent to such Lease or Sublease
has been obtained if and to the extent required hereunder and such request is
accompanied by an Officer’s Certificate stating that such Lease or Sublease (as
applicable) complies in all material respects with this Section 8.7 and payment
of all costs and expenses incurred by Lender in connection with the negotiation,
preparation, execution and delivery of any Non-Disturbance Agreement, including,
without limitation, reasonable attorneys’ fees and disbursements.
IX. RESERVED
X. MAINTENANCE OF PROPERTY; ALTERATIONS
10.1 Maintenance of Property. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall keep and maintain, or cause to be kept and
maintained, the Property and every part thereof in good condition and repair,
subject to ordinary wear and tear, and, subject to Excusable Delays and the
provisions of this Agreement with respect to damage or destruction caused by
casualty events or Takings, shall not permit or commit any waste, impairment or
deterioration of any portion of the Property in any material respect. Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) further
covenants to do all other acts which from the character or use of the Property
may be reasonably necessary to protect the security hereof, the specific
enumerations herein not excluding the general. Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) shall not remove or demolish any
Improvement on the Property except as the same may be necessary in connection
with an Alteration or a restoration in connection with a Taking or casualty, or
as otherwise permitted herein, in each case in accordance with the terms and
conditions hereof.

 

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10.2 Conditions to Alteration. Provided that no Event of Default shall have
occurred and be continuing hereunder, Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) shall have the right, without Lender’s
consent, to undertake any alteration, improvement, demolition or removal of the
Property or any portion thereof (any such alteration, improvement, demolition or
removal, an “Alteration”) so long as (i) Borrower provides Lender with prior
written notice of any Material Alteration, and (ii) such Alteration is
undertaken in accordance with the applicable provisions of this Agreement and
the other Loan Documents, is not prohibited by any relevant Lease or Sublease
and shall not, upon completion (giving credit to rent and other charges
attributable to Leases executed upon such completion), have a Material Adverse
Effect on the value, use or operation of the Property taken as a whole or
otherwise. Any Material Alteration shall be conducted under the supervision of
an Independent Architect and, in connection with any Material Alteration,
Borrower shall deliver to Lender, for information purposes only and not for
approval by Lender, detailed plans and specifications and cost estimates
therefor prepared or approved by such Independent Architect, as well as an
Officer’s Certificate stating that such Alteration will involve estimated costs
of no more than the Threshold Amount. Such plans and specifications may be
revised at any time and from time to time by such Independent Architect provided
that material revisions of such plans and specifications are filed with Lender,
for information purposes only. All work done in connection with any Alteration
shall be performed with due diligence in a good and workmanlike manner, all
materials used in connection with any Alteration shall not be less than the
standard of quality of the materials currently used at the Property and all
materials used shall be in accordance with all applicable material Legal
Requirements and Insurance Requirements.
10.3 Costs of Alteration. Notwithstanding anything to the contrary contained in
this Article X, no Material Alteration or Alteration which, when aggregated with
all other Alterations (other than Material Alterations) then being undertaken by
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) or
Master Lessee (exclusive of Alterations being directly paid for by Tenants at
the Property), exceeds the Threshold Amount shall be performed by or on behalf
of Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
or Master Lessee unless Borrower shall have delivered to Lender Cash and Cash
Equivalents and/or a Letter of Credit as security in an amount not less than
(a) the estimated cost of the Material Alteration or the Alterations minus the
Threshold Amount (as set forth in the Independent Architect’s written estimate
referred to above) or (b) in the case of Alterations being performed by or on
behalf of the Master Lessee, any sums required to be deposited by Master Lessee
under the Master Lease. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall deliver to Lender any security deposited by the
Master Lessee for any Alteration under the Master Lease. In addition to payment
or reimbursement from time to time of Borrower’s expenses incurred in connection
with any Material Alteration or any such Alteration, the amount of any such
security shall be reduced on any given date to the Independent Architect’s
written estimate of the cost to complete the Material Alteration or the
Alterations (including any retainages), free and clear of Liens, other than
Permitted Encumbrances. Costs which are subject to retainage (which in no event
shall be less than five percent (5%) in the aggregate until fifty percent (50%)
of the work to be performed under the applicable contract has been substantially
completed) shall be treated as due and payable and unpaid from the date they
would be due and payable but for their characterization as subject to retainage.
In the event that any Material Alteration or Alteration shall be made in
conjunction with any restoration with respect to which Borrower shall be
entitled to withdraw Proceeds pursuant to Section 6.2, the amount of the Cash
and Cash Equivalents and/or Letter of Credit to be furnished pursuant hereto
need not exceed the aggregate cost of such restoration and such Material
Alteration or Alteration (as estimated by the Independent Architect), less the
sum of the amount of any Proceeds which Borrower may be entitled to withdraw
pursuant to Section 6.2 and which are held by Lender in accordance with
Section 6.2. Payment or reimbursement of Borrower’s expenses incurred with
respect to any Material Alteration or any such Alteration shall be accomplished
upon the terms and conditions specified in Section 6.2.

 

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At any time after substantial completion of any Material Alteration or any such
Alteration in respect of which Cash and Cash Equivalents and/or a Letter of
Credit is deposited pursuant hereto, the whole balance of any Cash and Cash
Equivalents so deposited by Borrower with Lender and then remaining on deposit
(together with earnings thereon), as well as all retainages, may be withdrawn by
Borrower and shall be paid by Lender to Borrower, and any other Cash and Cash
Equivalents and/or a Letter of Credit so deposited or delivered shall, to the
extent it has not been called upon, reduced or theretofore released, be released
to Borrower, within ten (10) days after receipt by Lender of an application for
such withdrawal and/or release together with an Officer’s Certificate, and
signed also (as to the following clause (a)) by the Independent Architect,
setting forth in substance as follows:
(a) that to the knowledge of the certifying Person, the Material Alteration or
Alteration in respect of which such Cash and Cash Equivalents and/or a Letter of
Credit was deposited has been substantially completed in all material respects
substantially in accordance with any plans and specifications therefor
previously filed with Lender under Section 10.2 and that, if applicable, a
certificate of occupancy has been issued with respect to such Material
Alteration or Alteration by the relevant Governmental Authority(ies) or, if not
applicable, that a certificate of occupancy is not required; and
(b) that to the knowledge of the certifying Person all amounts which Borrower is
or may become liable to pay in respect of such Material Alteration or Alteration
through the date of the certification have been paid in full or adequately
provided for or are being contested in accordance with Section 7.3 and that,
except to the extent of such contests, lien waivers have been obtained from the
general contractor and major subcontractors performing such Material Alterations
or Alterations (or such waivers are not customary and reasonably obtainable by
prudent owners in the area where the Property is located).
Notwithstanding the foregoing, in lieu of posting Cash and Cash Equivalents
and/or a Letter of Credit with Lender pursuant to the provisions of this
Section 10.3, Borrower may, at its election, deliver to lender a guaranty from
Guarantor in form acceptable to Lender, pursuant to which Guarantor
unconditionally guaranties the lien free completion of the subject Alteration
and payment in full of all costs related thereto in excess of the Threshold
Amount.

 

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XI. BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION
11.1 Books and Records. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) shall keep and maintain on a fiscal year basis proper
books and records separate from any other Person, in which accurate and complete
entries shall be made of all dealings or transactions of or in relation to the
Notes, the Property and the business and affairs of Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) relating to the Property which
shall reflect all items of income and expense in connection with the operation
of the Property and in connection with any services, equipment or furnishings
provided in connection with the operation of the Property, in accordance with
GAAP. Lender and its authorized representatives shall have the right, at
reasonable times and upon reasonable notice, to examine the books and records of
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
relating to the operation of the Property and to make such copies or extracts
thereof as Lender may reasonably require.
11.2 Financial Statements.
11.2.1 Quarterly Reports. Commencing not later than forty-five (45) days
following the end of each Fiscal Quarter (commencing with the Fiscal Quarter
ending in June, 2006), Borrower shall deliver, and shall cause Master Lessee to
deliver, to Lender unaudited financial statements of Guarantor, Borrower,
Maryland Loan Guarantor and Master Lessee, internally prepared in accordance
with GAAP, reporting Master Lessee’s EBITDAR, including (i) a balance sheet and
profit and loss statement, as of the end of such Fiscal Quarter and for the
corresponding Fiscal Quarter of the previous year, including a statement of net
income (in respect of the Property) for the year to date and (ii) a statement of
revenues and expenses for such Fiscal Quarter, together with a comparison of the
year to date results with (A) the results for the same period of the previous
year, (B) the results that had been projected by Borrower and Master Lessee for
such period and (C) the portion of the Annual Budget applicable to such period,
and (c) a calculation of the LCR for such period and a statement of the Master
Lease Variable Additional Rent and Master Lease Recurrent Additional Rent for
such period. Such statements for each Fiscal Quarter shall be accompanied by an
Officer’s Certificate certifying to the signer’s knowledge, (1) that such
statements fairly represent the financial condition and results of operations of
Borrower, Maryland Loan Guarantor and Master Lessee, (2) that as of the date of
such Officer’s Certificate, no Default exists under this Agreement, the Notes or
any other Loan Document or, if so, specifying the nature and status of each such
Default and the action then being taken by Borrower or proposed to be taken to
remedy such Default, (3) that as of the date of each Officer’s Certificate, no
litigation exists (A) involving Borrower, Maryland Loan Guarantor or the
Property in which the amount involved is $500,000 (in the aggregate) or more or
in which all or substantially all of the potential liability is not covered by
insurance, or (B) involving Master Lessee which if adversely determined would be
reasonably likely to have a Material Adverse Effect, or if so, specifying such
litigation and the actions being taking in relation thereto and (4) the amount
by which actual operating expenses were greater than or less than the operating
expenses anticipated in the applicable Annual Budget. Borrower shall provide
such other financial information as shall be reasonably requested by Lender for
purposes of calculations to be made by Lender pursuant to the terms of this
Agreement.

 

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11.2.2 Annual Reports. Concurrently with the public filings of any financial
statements of Borrower and in any event not later than one-hundred twenty
(120) days after the end of each Fiscal Year of Borrower’s operations, Borrower
shall deliver, and shall cause Master Lessee to deliver, to Lender
(a) consolidated audited financial statements of Guarantor certified by an
Independent Accountant in accordance with GAAP and unaudited financial
statements of Borrower, Maryland Loan Guarantor and Master Lessee, including a
balance sheet as of the end of such Fiscal Year and a statement of revenues and
expenses for such Fiscal Year, as well as a supplemental schedule of net income
or loss presenting the net income or loss for the Property and the figures for
the previous Fiscal Year and the figures set forth in the Annual Budget for such
Fiscal Year, (b) a calculation of the LCR, Master Lease Variable Additional Rent
and Master Lease Recurrent Additional Rent for such period and (c) copies of all
federal income tax returns of Borrower, Maryland Loan Guarantor, Master Lessee
and Guarantor if and to the extend such tax returns are required to be filed
under applicable law. Such annual financial statements shall also be accompanied
by an Officer’s Certificate in the form required pursuant to Section 11.2.1.
11.2.3 Capital Expenditures Summaries. Borrower shall, or shall cause Master
Lessee to, within ninety (90) days after the end of each calendar year during
the term of the Notes, deliver to Lender an annual summary of material Capital
Expenditures made at the Property during the prior twelve (12) month period.
11.2.4 Master Lease. Without duplication of any other provision of this
Agreement or any other Loan Documents, Borrower shall deliver to Lender, within
ten (10) Business Days of the receipt thereof by Borrower, a copy of all reports
prepared by Master Lessee, if any, pursuant to the Master Lease, including,
without limitation, the Annual Budget and any inspection reports.
11.2.5 Annual Budget. Borrower shall deliver to Lender the Annual Budget for
Lender’s review, but not approval, not more than ninety (90) days after the end
of each Fiscal Year. Any proposed modifications to such Annual Budget shall be
delivered to Lender for its review, but not approval.
11.2.6 Other Information. Borrower shall, promptly after written request by
Lender or, if a Securitization shall have occurred, the Rating Agencies, furnish
or cause to be furnished to Lender, in such manner and in such detail as may be
reasonably requested by Lender or requested by the Rating Agencies, such
reasonable additional financial information as may be reasonably requested by
Lender or requested by the Rating Agencies with respect to the Property,
Borrower, Maryland Loan Guarantor, Master Lessee and/or Guarantor.
11.2.7 Consolidation. Lender acknowledges that all financial reporting of
Borrower and Maryland Loan Guarantor will be consolidated.

 

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XII. ENVIRONMENTAL MATTERS
12.1 Representations. Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) hereby represents and warrants that except as set forth
in the environmental reports and studies delivered to Lender (the “Environmental
Reports”), to Borrower’s knowledge, (i) Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) has not engaged in or knowingly permitted any
operations or activities upon, or any use or occupancy of the Property, or any
portion thereof, for the purpose of or in any way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Materials on, under, in or about the
Property, or transported any Hazardous Materials to, from or across the
Property, except in all cases in material compliance with Environmental Laws and
only in the course of legitimate business operations at the Property; (ii) no
tenant, occupant or user of the Property, or any other Person, has engaged in or
permitted any operations or activities upon, or any use or occupancy of the
Property, or any portion thereof, for the purpose of or in any material way
involving the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of any Hazardous Materials on,
in or about the Property, or transported any Hazardous Materials to, from or
across the Property, except in all cases in material compliance with
Environmental Laws and only in the course of legitimate business operations at
the Property; (iii) no Hazardous Materials are presently constructed, deposited,
stored, or otherwise located on, under, in or about the Property except in
material compliance with Environmental Laws; (iv) no Hazardous Materials have
migrated from the Property upon or beneath other properties which would
reasonably be expected to result in material liability for Borrower (or in the
case of the Maryland Property, Maryland Loan Guarantor); and (v) no Hazardous
Materials have migrated or threaten to migrate from other properties upon, about
or beneath the Property which would reasonably be expected to result in material
liability for Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor).
12.2 Covenants.
12.2.1 Compliance with Environmental Laws. Subject to Borrower’s right to
contest under Section 7.3, each of Borrower and Maryland Loan Guarantor
covenants and agrees with Lender that it shall comply with all Environmental
Laws. If at any time during the continuance of the Lien of the Security
Instrument, a Governmental Authority having jurisdiction over the Property
requires remedial action to correct the presence of Hazardous Materials in,
around, or under the Property (an “Environmental Event”), Borrower shall deliver
prompt notice of the occurrence of such Environmental Event to Lender. Within
thirty (30) days after Borrower has knowledge of the occurrence of an
Environmental Event, Borrower shall deliver to Lender an Officer’s Certificate
(an “Environmental Certificate”) explaining the Environmental Event in
reasonable detail and setting forth the proposed remedial action, if any.
Borrower shall promptly provide Lender with copies of all notices which allege
or identify any actual or potential violation or noncompliance received by or
prepared by or for Borrower in connection with any Environmental Law. For
purposes of this paragraph, the term “notice” shall mean any summons, citation,
directive, order, claim, pleading, letter, application, filing, report,
findings, declarations or other materials pertinent to compliance of the
Property and Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) with such Environmental Laws.

 

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12.3 Environmental Reports. Upon the occurrence and during the continuance of an
Environmental Event with respect to any Individual Property or any Event of
Default, Lender shall have the right to have its consultants perform a
comprehensive environmental audit of such affected Individual Property. Such
audit shall be conducted by an environmental consultant chosen by Lender and may
include a visual survey, a record review, an area reconnaissance assessing the
presence of hazardous or toxic waste or substances, PCBs or storage tanks at
such Individual Property, an asbestos survey of such Individual Property, which
may include random sampling of the Improvements and air quality testing, and
such further site assessments as Lender may reasonably require due to the
results obtained from the foregoing. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) grants Lender, its agents, consultants and
contractors the right to enter any Individual Property affected by an
Environmental Event as reasonable or appropriate for the circumstances for the
purposes of performing such studies and the reasonable cost of such studies
shall be due and payable by Borrower to Lender upon demand and shall be secured
by the Lien of the Security Instrument. Lender shall not unreasonably interfere
with, and Lender shall direct the environmental consultant to use its
commercially reasonable efforts not to hinder, Borrower’s, Maryland Loan
Guarantor’s, Master Lessee’s or any Tenant’s operations upon such Individual
Property when conducting such audit, sampling or inspections. By undertaking any
of the measures identified in and pursuant to this Section 12.3, Lender shall
not be deemed to be exercising any control over the operations of Borrower (or
in the case of the Maryland Property, Maryland Loan Guarantor) or the handling
of any environmental matter or hazardous wastes or substances of Borrower (or in
the case of the Maryland Property, Maryland Loan Guarantor) for purposes of
incurring or being subject to liability therefor.
12.4 Environmental Indemnification. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) shall protect, indemnify, save, defend, and
hold harmless the Indemnified Parties from and against any and all liability,
loss, damage, actions, causes of action, costs or expenses whatsoever (including
reasonable attorneys’ fees and expenses) and any and all claims, suits and
judgments which any Indemnified Party may suffer, as a result of or with respect
to: (a) any Environmental Claim relating to or arising from the Property;
(b) the violation of any Environmental Law in connection with the Property;
(c) any release, spill, or the presence of any Hazardous Materials affecting the
Property; and (d) the presence at, in, on or under, or the release, escape,
seepage, leakage, discharge or migration at or from, the Property of any
Hazardous Materials, whether or not such condition was known or unknown to
Borrower, provided that, in each case, the liabilities and obligations of
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
hereunder shall not apply to the extent that any event or condition described in
the foregoing clauses (a) through (d) (i) is fully insured against by an
Environmental Insurance Policy and the related insurer defends Lender and fully
pays Lender’s claims thereunder, (ii) is caused by or results from the gross
negligence or willful misconduct of any of the Indemnified Parties or any of
their respective Affiliates, agents, employees or contractors, or (iii) did not
occur (but need not have been discovered) prior to (A) the foreclosure of the
Security Instrument, (B) the delivery by Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) to Lender or its designee of a
deed-in-lieu of foreclosure with respect to the Property, or (C) Lender’s or its
designee’s taking possession and control of the Property after the occurrence of
an Event of Default. If any action or other proceeding shall be brought against
Lender which Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) is required to defend pursuant to the foregoing provisions of this
Section 12.4, upon written notice from Borrower to Lender (given reasonably
promptly following Lender’s notice to Borrower of such action or proceeding),
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
shall be entitled to assume the defense thereof, at Borrower’s expense, with
counsel reasonably acceptable to Lender; provided, however, Lender may, at its
own expense, retain separate counsel to participate in such defense, but such
participation shall not be deemed to give Lender a right to control such
defense, which right Borrower expressly retains. Notwithstanding the foregoing,
each Indemnified Party shall have the right to employ separate counsel in any
action or other proceeding which Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) is required to defend pursuant to the
foregoing provisions of this Section 12.4, at Borrower’s expense if, in the
reasonable opinion of legal counsel, a conflict or potential conflict exists
between the Indemnified Party and Borrower that would make such separate
representation advisable. Notwithstanding the foregoing, Lender and the other
Indemnified Parties agree to seek recovery against Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) for losses for which they are
indemnified under this Section 12.4 only after a claim for such losses has been
filed under any Environmental Insurance Policy then in full force and effect
which covers such losses and Lender has received any written communication from
the insurer rejecting such claim. In addition, Borrower shall have no obligation
to indemnify an Indemnified Party for damage or loss resulting from such
Indemnified Party’s gross negligence or willful misconduct.

 

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12.5 Recourse Nature of Certain Indemnifications. Except as otherwise provided
in this Agreement or in any other Loan Document, including, without limitation,
the provisions of Article XVIII, the indemnification provided in Section 12.4
shall be fully recourse to Borrower (or in the case of the Maryland Property,
Maryland Loan Guarantor) and shall be independent of, and shall survive, the
discharge of the Indebtedness, the release of the Lien created by the Security
Instrument, and/or the conveyance of title to the Property to Lender or any
purchaser or designee in connection with a foreclosure of the Security
Instrument or conveyance in lieu of foreclosure.
XIII. RESERVED
XIV. SECURITIZATION
14.1 Sale of Notes and Securitization. At the request of Lender and, to the
extent not already required to be provided by Borrower or Maryland Loan
Guarantor under this Agreement, Borrower and Maryland Loan Guarantor shall use
reasonable efforts to cooperate with Lender and the Rating Agencies in
connection with the sale of one or more of the Notes or a participation interest
therein as part of the securitization (such sale and/or securitization, the
“Securitization”) of rated single or multi-class securities (the “Securities”)
secured by or evidencing ownership interests in the applicable Note or Notes and
this Agreement, including using reasonable efforts to cooperate with Lender and
the Rating Agencies in connection with the actions set forth in clauses
(a) through (d) below, but Borrower shall not, in connection with a
Securitization, be required to incur, suffer or accept (except to a de minimis
extent)) (i) any greater obligations or liabilities than as currently set forth
in the Loan Documents or (ii) any cost or expense.
(a) Provided Information. (i) Use reasonable efforts to provide such financial
and other information (but not projections) with respect to the Property,
Borrower, Maryland Loan Guarantor, Master Lessee and Guarantor to the extent
such information is reasonably available to Borrower and provided any such
request for financial information is consistent with the financial reporting
requirements set forth in Article XI, (ii) provide business plans (but not
projections) and budgets relating to the Property, to the extent previously
prepared by or on behalf of the Borrower, and (iii) cooperate with the holder of
the Notes (and its representatives) in obtaining such site inspection,
appraisals, market studies, environmental reviews and reports, engineering
reports and other due diligence investigations of the Property, as may be
reasonably requested by the holder of the Notes or reasonably requested by the
Rating Agencies (all information provided pursuant to this Section 14.1 together
with all other information heretofore provided to Lender in connection with the
Loan, as such may be updated, at Lender’s request, in connection with a
Securitization, or hereafter provided to Lender in connection with the Loan or a
Securitization, being herein collectively called the “Provided Information”);

 

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(b) Opinions of Counsel. Use reasonable efforts to cause to be rendered such
customary updates or customary modifications to the Opinions of Counsel
delivered at the closing of the Loan as may be reasonably requested by the
holder of the Notes or the Rating Agencies in connection with the
Securitization;
(c) Modifications to Loan Documents. Execute such amendments to the Security
Instrument and Loan Documents as may be reasonably requested by Lender or the
Rating Agencies in order to achieve the required rating or to effect the
Securitization (including, without limitation, modifying the Payment Date and
modifying the commencement and expiration of the Interest Period, in each case
to dates other than as originally set forth in the Notes to the extent provided
in the Note), and
(d) Cooperation with Rating Agencies. Borrower and Maryland Loan Guarantor
shall, on reasonable prior notice, (i) at Lender’s request, meet with
representatives of the Rating Agencies at reasonable times to discuss the
business and operations of the Property and (ii) cooperate with the reasonable
requests of the Rating Agencies in connection with the Property. After a
Securitization and until the Obligations are paid in full, Lender may provide
the Rating Agencies with all financial reports and other information required
hereunder, including copies of any default notices or other material notices
delivered to and received from Lender hereunder, to enable them to continuously
monitor the creditworthiness of Borrower and Maryland Loan Guarantor and to
permit an annual surveillance of the implied credit rating of the Securities.
14.2 Securitization Financial Statements. Borrower acknowledges that all
financial information delivered by Borrower to Lender pursuant to Article XI
may, at Lender’s option, be delivered to the Rating Agencies.
14.3 Securitization Indemnification.
14.3.1 Disclosure Documents. Borrower understands that certain of the Provided
Information may be included in disclosure documents in connection with the
Securitization, including a prospectus, private placement memorandum, collateral
term sheet or a public registration statement (each, a “Disclosure Document”)
and may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the “Securities Act”) or the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or
provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization. In the event that the Disclosure Document is required to be
revised prior to the sale of all Securities, upon request, Borrower and Maryland
Loan Guarantor shall reasonably cooperate with the holder of the Notes, at no
cost or expense to Borrower, in updating the Provided Information for inclusion
or summary in the Disclosure Document by providing all current information
pertaining to Borrower, Maryland Loan Guarantor and the Property reasonably
requested by Lender:

 

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14.3.2 Indemnification Certificate. In connection with each applicable
Disclosure Document, Borrower and Maryland Loan Guarantor each agrees to
provide, at Lender’s reasonable request, an indemnification certificate:
(a) certifying that Borrower and Maryland Loan Guarantor each has carefully
examined those portions of such memorandum or prospectus, as applicable,
reasonably designated in writing by Lender for Borrower’s review pertaining to
Borrower, Maryland Loan Guarantor, the Property, Guarantor, the Loan and/or the
Provided Information and insofar as such sections or portions thereof
specifically pertain to Borrower, Maryland Loan Guarantor, the Property,
Guarantor, the Provided Information or the Loan (such portions, the “Relevant
Portions”), the Relevant Portions do not (except to the extent specified by
Borrower if Borrower does not agree with the statements therein), as of the date
of such certificate, to Borrower’s knowledge, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading.
(b) subject to the provisions of Article XVIII hereof, indemnifying Lender and
the Affiliates of Deutsche Bank Securities, Inc. (collectively, “DBS”) as well
as Wachovia Bank, National Association and its Affiliates (“Wachovia”) that have
prepared the Disclosure Document relating to the Securitization, each of their
respective directors, each of their respective officers who have signed the
Disclosure Document and each person or entity who controls DBS or Wachovia
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (collectively, the “Lender Group”), and DBS and Wachovia, together
with the Lender Group, each of their respective directors and each person who
controls DBS or Wachovia or the Lender Group, within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act (collectively, the
“Underwriter Group”) for any actual, out-of-pocket losses, third party claims,
damages (excluding lost profits, diminution in value and other consequential
damages) or liabilities arising out of third party claims (the “Liabilities”) to
which any member of the Underwriter Group may become subject to the extent such
Liabilities arise out of or are based upon any untrue statement of any material
fact contained in the Relevant Portions and in the Provided Information or arise
out of or are based upon the omission by Borrower to state therein a material
fact required to be stated in the Relevant Portions in order to make the
statements in the Relevant Portions in light of the circumstances under which
they were made, not misleading (except that (x) Borrower’s obligation to
indemnify in respect of any information contained in a Disclosure Document that
is derived in part from information provided by Borrower or any Affiliate of
Borrower and in part from information provided by others unrelated to or not
employed by Borrower, and (y) Borrower shall have no responsibility for the
failure of any member of the Underwriting Group to accurately transcribe written
information supplied by Borrower or to include such portions of the Provided
Information); provided that Liabilities shall exclude all actual, out-of-pocket
losses, third party claims, damages or liabilities arising out any corrections,
qualifications and/or clarifications to the Relevant Portions which are
disclosed by Borrower to Lender in writing as provided above and as to which
Lender does not change the Relevant Portions to reflect such corrections,
qualifications and/or clarifications). The indemnity contained in the
indemnification certificate will be in addition to any liability which Borrower
may otherwise have.

 

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(c) The indemnification certificate shall provide that Borrower’s and Maryland
Loan Guarantor’s liability under the indemnification certificate shall be
(i) limited solely to Liabilities arising solely out of or based upon any such
untrue statement or omission made in a Disclosure Document in reliance upon and
in conformity with the Relevant Portions and (ii) subject to the provisions of
Article XVIII hereof.
(d) The indemnification certificate shall also provide that promptly after
receipt by an indemnified party of notice of the commencement of any action
covered by the indemnification certificate, such indemnified party will notify
the indemnifying party in writing of the commencement thereof, but the omission
to so notify the indemnifying party will not relieve the indemnifying party from
any liability which the indemnifying party may have to any indemnified party
thereunder except to the extent that failure to notify causes prejudice to the
indemnifying party. In the event that any action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled, jointly with any other
indemnifying party, to participate therein and, to the extent that it (or they)
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party.
After such notice from the indemnifying party to such indemnified party of its
assumption of such defense, the indemnifying party shall not be liable for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof; provided, however, if an indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there are any legal defenses available to it that are different
from or in conflict with those available to the indemnifying party, or
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties at the expense of the
indemnifying party.
(e) Retention of Servicer. Lender reserves the right to retain the Servicer at
no cost or expense to Borrower. Lender has advised Borrower that the Servicer
initially retained by Lender shall be Wachovia Bank, National Association or its
Affiliate. Borrower shall pay any fees and expenses of the Servicer and any
reasonable third party fees and expenses of the Servicer, including, without
limitation, special servicing fees, work out fees and reasonable attorneys fees
and disbursements, in connection with a prepayment, release or substitution of
the Property, assumption or modification of the Loan, or following an event of
Default, special servicing or work out of the Loan or enforcement of the Loan
Documents; provided however that Servicer fees (excluding any reasonable third
party fees and expenses) for releases, substitutions and prepayments shall not
exceed the following amounts:

  (i)  
Releases: $2500 (inclusive of payoff calculation) per release;
    (ii)  
Substitutions: $7500 per substitution; and
    (iii)  
Prepayments: $300 for payoff quote calculation.

 

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XV. ASSIGNMENTS AND PARTICIPATIONS
15.1 Assignment and Acceptance. Lender may assign to one or more Persons all or
a portion of its rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of one or more of the
Notes); provided that the parties to each such assignment shall execute and
deliver to Lender, for its acceptance and recording in the Register (as
hereinafter defined), an Assignment and Acceptance. In addition, Lender may
participate to one or more Persons all or any portion of its rights and
obligations under this Agreement and the other Loan Documents (including without
limitation, all or a portion of one or more of the Notes) utilizing such
documentation to evidence such participation and the parties’ respective rights
thereunder as Lender, in its sole discretion, shall elect.
15.2 Effect of Assignment and Acceptance. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in such
Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of Lender, as the case may be, hereunder and such assignee shall be deemed to
have assumed such rights and obligations, and (ii) Lender shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement and the other Loan Documents (and, in the case
of an Assignment and Acceptance covering all or the remaining portion of
Lender’s rights and obligations under this Agreement and the other Loan
Documents, Lender shall cease to be a party hereto) accruing from and after the
effective date of the Assignment and Acceptance, except with respect to (A) any
payments made by Borrower to Lender pursuant to the terms of the Loan Documents
after the effective date of the Assignment and Acceptance and (B) any letter of
credit, cash deposit or other deposits or security (other than the Lien of the
Security Instrument and the other Loan Documents) delivered to or for the
benefit of or deposited with German American Capital Corporation, on behalf of
the holders of the Notes, as Lender, for which German American Capital
Corporation, on behalf of the holders of the Notes, shall remain responsible for
the proper disposition thereof until such items are delivered to a party who is
qualified as an Approved Bank and agrees to hold the same in accordance with the
terms and provisions of the agreement pursuant to which such items were
deposited.
15.3 Content. By executing and delivering an Assignment and Acceptance, Lender
and the assignee thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such Assignment and
Acceptance, Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, this Agreement or any other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; (ii) Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or Maryland
Loan Guarantor or the performance or observance by Borrower or Maryland Loan
Guarantor of any of its obligations under any Loan Documents or any other
instrument or document furnished pursuant thereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents; (v) such assignee appoints
and authorizes Lender to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to Lender
by the terms hereof together with such powers and discretion as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform, in
accordance with their terms, all of the obligations which by the terms of this
Agreement and the other Loan Documents are required to be performed by Lender.

 

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15.4 Register. Lender shall maintain a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of Lender and each assignee pursuant to this Article XV and the
principal amount of the Loan owing to each such assignee from time to time (the
“Register”). The entries in the Register shall, with respect to such assignees,
be conclusive and binding for all purposes, absent manifest error. The Register
shall be available for inspection by Borrower or any assignee pursuant to this
Article XV at any reasonable time and from time to time upon reasonable prior
written notice.
15.5 Substitute Notes. Upon its receipt of an Assignment and Acceptance executed
by an assignee, together with any Note or Notes subject to such assignment,
Lender shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit M hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register, and
(iii) give prompt written notice thereof to Borrower. Within five (5) Business
Days after its receipt of such notice, Borrower, at Lender’s expense, shall
execute and deliver to Lender in exchange and substitution for the surrendered
Note or Notes a new Note to the order of such assignee in an amount equal to the
portion of the Loan assigned to it and a new Note to the order of Lender in an
amount equal to the portion of the Loan retained by it hereunder. Such new Note
or Notes shall be in an aggregate principal amount equal to the aggregate then
outstanding principal amount of such surrendered Note or Notes, shall be dated
the effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the Notes (modified, however, to the extent necessary
so as not to impose duplicative or increased obligations on Borrower and to
delete obligations previously satisfied by Borrower). Notwithstanding the
provisions of this Article XV, Borrower shall not be responsible or liable for
any additional taxes, reserves, adjustments or other costs and expenses that are
related to, or arise as a result of, any transfer of the Loan or any interest or
participation therein that arise from the transfer of the Loan or any interest
or participation therein or from the execution of the new Note contemplated by
this Section 15.5, including, without limitation, any mortgage tax. Lender
and/or the assignees, as the case may be, shall from time to time designate one
agent through which Borrower shall request all approvals and consents required
or contemplated by this Agreement and on whose statements Borrower may rely.

 

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15.6 Participations. Each assignee pursuant to this Article XV may sell
participations to one or more Persons (other than Borrower or any of its
Affiliates) in or to all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of the Note held by it); provided, however, that (i) such assignee’s
obligations under this Agreement and the other Loan Documents shall remain
unchanged, (ii) such assignee shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such assignee
shall remain the holder of any such Note for all purposes of this Agreement and
the other Loan Documents, (iv) Borrower, Lender and the assignees pursuant to
this Article XV shall continue to deal solely and directly with such assignee in
connection with such assignee’s rights and obligations under this Agreement and
the other Loan Documents, (v) Borrower shall bear no costs or expenses in
connection therewith, (vi) Borrower shall not be required to incur, suffer or
accept (except to a de minimis extent)) any greater obligations or liabilities
than as currently set forth in the Loan Documents, and (vii) the economics of
the Loan, taken as a whole, shall not change in a manner which is adverse to
Borrower. In the event that more than one (1) party comprises Lender, Lender
shall designate one party to act on the behalf of all parties comprising Lender
in providing approvals and all other necessary consents under the Loan Documents
and on whose statements Borrower may rely.
15.7 Disclosure of Information. Any assignee pursuant to this Article XV may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Article XV, disclose to the assignee or
participant or proposed assignee or participant, any information relating to
Borrower furnished to such assignee by or on behalf of Borrower; provided,
however, that, prior to any such disclosure, the assignee or participant or
proposed assignee or participant shall agree in writing for the benefit of
Borrower to preserve the confidentiality of any confidential information
received by it.
15.8 Security Interest in Favor of Federal Reserve Bank. Notwithstanding any
other provision set forth in this Agreement or any other Loan Document, any
assignee pursuant to this Article XV may at any time create a security interest
in all or any portion of its rights under this Agreement or the other Loan
Documents (including, without limitation, the amounts owing to it and the Note
or Notes held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.
XVI. RESERVE ACCOUNTS
16.1 Tax Reserve Account. In accordance with the time periods set forth in
Section 3.1, Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) shall cause to be deposited into the Tax Reserve Account an amount
equal to (a) one-twelfth of the annual Impositions that Lender reasonably
estimates, based on the most recent tax bill for the Property, will be payable
during the next ensuing twelve (12) months in order to accumulate with Lender
sufficient funds to pay all such Impositions thirty (30) days prior to the
imposition of any interest, charges or expenses for the non-payment thereof and
(b) one-twelfth of the annual Other Charges that Lender reasonably estimates
will be payable during the next ensuing twelve (12) months (said monthly amounts
in (a) and (b) above hereinafter called the “Monthly Tax Reserve Amount,” and
the aggregate amount of funds held in the Tax Reserve Account being the “Tax
Reserve Amount”). As of the Closing Date, the Monthly Tax Reserve Amount is
$739,696.79, but such amount is subject to adjustment by Lender upon notice to
Borrower. The Monthly Tax Reserve Amount shall be paid by Borrower (or in the
case of the Maryland Property, Maryland Loan Guarantor) to Lender on each

 

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Payment Date. Lender will apply the Monthly Tax Reserve Amount to payments of
Impositions and Other Charges required to be made by Borrower (or in the case of
the Maryland Property, Maryland Loan Guarantor) pursuant to Article V and
Article VII and under the Security Instrument, subject to Borrower’s right to
contest Impositions in accordance with Section 7.3. In making any payment
relating to the Tax Reserve Account, Lender may do so according to any bill,
statement or estimate procured from the appropriate public office, without
inquiry into the accuracy of such bill, statement or estimate or into the
validity of any tax, assessment, sale, forfeiture, tax lien or title or claim
thereof. If the amount of funds in the Tax Reserve Account shall exceed the
amounts due for Impositions and Other Charges pursuant to Article V and
Article VII, Lender shall credit such excess against future payments to be made
to the Tax Reserve Account. If at any time Lender reasonably determines that the
Tax Reserve Amount is not or will not be sufficient to pay Impositions and Other
Charges by the dates set forth above, Lender shall notify Borrower of such
determination and Borrower (or in the case of the Maryland Property, Maryland
Loan Guarantor) shall increase its monthly payments to Lender by the amount that
Lender reasonably estimates is sufficient to make up the deficiency at least
thirty (30) days prior to the imposition of any interest, charges or expenses
for the non-payment of the Impositions and Other Charges. Upon payment of the
Impositions and Other Charges, Lender shall reassess the amount necessary to be
deposited in the Tax Reserve Account for the succeeding period, which
calculation shall take into account any excess amounts remaining in the Tax
Reserve Account.
16.2 Insurance Reserve Account. Borrower (or in the case of the Maryland
Property, Maryland Loan Guarantor) shall, in accordance with the time periods
set forth in Section 3.1, cause to be deposited into the Insurance Reserve
Account an amount equal to one-twelfth of the insurance premiums that Lender
reasonably estimates, based on the most recent bill, will be payable for the
renewal of the coverage afforded by the insurance policies upon the expiration
thereof in order to accumulate with Lender sufficient funds to pay all such
insurance premiums thirty (30) days prior to the expiration of the policies
required to be maintained by Borrower pursuant to the terms hereof (said monthly
amounts hereinafter called the “Monthly Insurance Reserve Amount,” and the
aggregate amount of funds held in the Insurance Reserve Account being the
“Insurance Reserve Amount”). As of the Closing Date, the Monthly Insurance
Reserve Amount is $206,007.88, but such amount is subject to adjustment by
Lender upon notice to Borrower. The Monthly Insurance Reserve Amount shall be
paid by Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) to Lender on each Payment Date. Lender will apply the Monthly
Insurance Reserve Amount to payments of insurance premiums required to be made
by Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
pursuant to Article VI and under the Security Instrument. In making any payment
relating to the Insurance Reserve Account, Lender may do so according to any
bill, statement or estimate procured from the insurer or agent, without inquiry
into the accuracy of such bill, statement or estimate or into the validity
thereof. If the amount of funds in the Insurance Reserve Account shall exceed
the amounts due for insurance premiums pursuant to Article VI, Lender shall
credit such excess against future payments to be made to the Insurance Reserve
Account. If at any time Lender reasonably determines that the Insurance Reserve
Amount is not or will not be sufficient to pay insurance premiums by the dates
set forth above, Lender shall notify Borrower of such determination and Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) shall
increase its monthly payments to Lender by the amount that Lender reasonably
estimates is sufficient to make up the deficiency at least thirty (30) days
prior to expiration of the applicable insurance policies. Upon payment of such
insurance premiums, Lender shall reassess the amount necessary to be deposited
in the Insurance Reserve Account for the succeeding period, which calculation
shall take into account any excess amounts remaining in the Insurance Reserve
Account.

 

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16.3 Structural Repair Reserve Account.
(a) In accordance with the time periods set forth in Section 3.1, Borrower (or
in the case of the Maryland Property, Maryland Loan Guarantor) shall deposit, or
cause to be deposited into the Structural Repair Reserve Account, an amount
equal to the Monthly Structural Repair Reserve Amount to be held by the Cash
Management Bank for the benefit of Lender as additional security for the Loan in
accordance with Section 3.1 and the Account Agreement.
(b) Lender shall make disbursements from the Structural Repair Reserve Account
to or as directed by Borrower to pay or reimburse Borrower for the cost of
Structural Repairs in accordance with and in the manner provided in this
Section 16.3. Any Structural Repairs that in the aggregate with all related
Structural Repairs (collectively, a “Project”) would reasonably be expected to
cost in excess of the Threshold Amount shall be subject to compliance with
Section 10.2. Lender shall, within fifteen (15) Business Days of a written
request from Borrower and upon satisfaction of the requirements set forth in
this Section 16.3, disburse to Borrower amounts from the Structural Repair
Reserve Account necessary to pay for the actual costs incurred with respect to
Structural Repairs, which work shall be subject to the inspection of Lender for
compliance with the requirements of this Agreement. In no event shall Lender be
obligated to disburse funds from the Structural Repair Reserve Account if a
Monetary Default or an Event of Default exists.
(c) Each request for disbursement from the Structural Repair Reserve Account
shall be in a form reasonably specified or reasonably approved by Lender and be
submitted together with an Officer’s Certificate specifying the specific items
for which the disbursement is requested, certifying that such item qualifies as
a Structural Repair, the estimated cost for the applicable Project through
completion and the cost of each item purchased. Each request for disbursement
shall be delivered at least fifteen (15) Business Days prior to the date of the
requested disbursement and shall include copies of invoices for all costs
incurred and each request shall include evidence satisfactory to Lender of
payment of all such amounts or evidence that such amounts will be paid by such
disbursement. Borrower shall not make a request for disbursement from the
Structural Repair Reserve Account more frequently than once in any calendar
month and the total amount of any request shall not be less than $10,000 (except
in the case of the final request for disbursement).

 

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16.4 Immediate Repair and Remediation Reserve Account.
(a) On the Closing Date, a portion of the Loan in the amount of $404,310,
representing one hundred twenty-five percent (125%) of the cost to complete the
Immediate Repairs and Remediation, will be deposited by Lender into the
Immediate Repair and Remediation Reserve Account. Subject to the pre-conditions
to disbursement set forth in this Section 16.4, Lender shall make disbursements
of amounts deposited in the Immediate Repair and Remediation Reserve Account
from time to time (but no more frequently than once a calendar month) to pay for
the costs of completing the Immediate Repairs and Remediation. Lender shall,
upon written request from Borrower and satisfaction of the requirements to final
disbursement set forth in this Section 16.4 (the “Completion”), instruct the
Cash Management Bank to disburse to Borrower the amounts remaining in the
Immediate Repair and Remediation Reserve Account. Subject to Excusable Delay,
the Completion shall occur on or before the date which is one hundred eighty
(180) days following the date hereof (the “Immediate Repairs and Remediation
Completion Deadline”). In the event Completion does not occur on or before the
Immediate Repairs Completion Deadline, Lender shall notify Borrower of such fact
and Borrower shall have a period of at least thirty (30) days, as determined by
Lender and set forth in such notice, to effect the Completion. It shall be an
Event of Default hereunder in the event the Completion does not occur on or
before the Immediate Repairs and Remediation Completion Deadline or any date
afforded by Lender’s notice to effect the Completion as set forth in Lender’s
notice, and upon such event, Lender shall have no further obligation to disburse
the remaining amounts deposited in the Immediate Repair and Remediation Reserve
Account to Borrower and such remaining amounts shall be applied by Lender reduce
the Principal Amount then outstanding under the Notes.
(b) Amounts deposited in the Immediate Repair and Remediation Reserve Account
may be disbursed from time to time, (provided that Borrower shall not make a
request for disbursement therefrom more frequently than once in any calendar
month and the total amount of any request shall not be less than $10,000 (except
in the case of the final request for disbursement)) upon Borrower’s satisfaction
of the conditions set forth in subsection (c) below, except that the final
disbursement of amounts deposited in the Immediate Repair and Remediation
Reserve Account shall not be disbursed until the conditions set forth in
subsection (c)(ii)(E) shall have also been satisfied.
(c) The obligation of Lender to disburse any portion of the amounts deposited in
the Immediate Repair and Remediation Reserve Account is subject to the condition
precedent that all of the following requirements shall have been completed to
Lender’s reasonable satisfaction:

  (i)  
No Event of Default shall have occurred and be continuing;
    (ii)  
Lender shall have received the following items:

(A) a request for advance duly executed by an authorized officer of the Borrower
delivered to Lender no earlier than ten (10) Business Days prior to the date the
disbursement is requested;
(B) with respect to all but the final disbursement of the amounts deposited in
the Immediate Repair and Remediation Reserve Account, a certificate from
Borrower certifying to Lender that there are sufficient funds remaining in the
Immediate Repair and Remediation Reserve Account to attain Completion;

 

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(C) with respect to all but the final disbursement of the amounts deposited in
the Immediate Repair and Remediation Reserve Account, evidence reasonably
satisfactory to Lender that the applicable Immediate Repairs and Remediation
have been completed and all amounts due in respect thereof have been paid,
including specific general ledger entries and/or copies of invoices, in either
case, equal to (or greater than) the amount being disbursed from the Immediate
Repair and Remediation Reserve Account;
(D) payment of all of Lender’s costs and expenses, if any, incurred in
connection with disbursement from the Immediate Repair and Remediation Reserve
Account, including, without limitation, reasonable attorneys fees and
disbursements (which may, at the option of Lender, be paid from the amounts
deposited in the Immediate Repair and Remediation Reserve Account); and
(E) in connection with the final disbursement (in addition to satisfying each of
the conditions, other than the condition in clauses (B) and (C), set forth
above), a certificate from Lender’s Consultant certifying to Lender that the
Immediate Repairs and Remediation have been completed to the satisfaction of
such Person.
16.5 Master Lease Variable Additional Rent Reserve Account and LCR Deterioration
Reserve Account.
(a) Pursuant to and in accordance with the provisions of Section 3.1, during a
Low LCR Cash Sweep Period, certain monies shall be transferred, in accordance
with Section 3.1 hereof, from the Holding Account into the Master Lease Variable
Additional Rent Reserve Account and retained by Lender as additional security
for the Indebtedness and shall be applied or disbursed as hereinafter provided.
From and after the occurrence and continuation of an Event of Default, Lender
shall have the right to apply any amounts then remaining in the Master Lease
Variable Additional Rent Reserve Account to repay the Indebtedness or any other
amounts due hereunder or under the other Loan Documents in such order, manner
and amount as Lender shall determine in its sole discretion. Provided no Event
of Default has occurred and is then continuing hereunder, Lender shall instruct
the Cash Management Bank to transfer to Borrower’s Account, free and clear of
all Liens, any amounts remaining in the Master Lease Variable Additional Rent
Reserve Account within ten (10) Business Days following the termination of a Low
LCR Cash Sweep Period.
(b) Following each Fiscal Quarter after the Closing Date, Lender will perform an
LCR Test to determine whether a Low LCR Cash Sweep Period has occurred and is
continuing. Such LCR Test shall be made by Lender based on the financial
information delivered by Borrower pursuant to Section 11.1 hereof. Pursuant to
and in accordance with the provisions of Section 3.1, during a Low LCR Cash
Sweep Period, the Excess Proceeds shall be transferred, in accordance with
Section 3.1 hereof, from the Holding Account into the LCR Deterioration Reserve
Account and retained by Lender as additional security for the Indebtedness and
shall be applied or disbursed as hereinafter provided. From and after the
occurrence and continuation of an Event of Default, Lender shall have the right
to apply any amounts then remaining in the LCR Deterioration Reserve Account to
repay the Indebtedness or any other amounts due hereunder or under the other
Loan Documents in such order, manner and amount as Lender shall determine in its
sole discretion. Provided no Event of Default has occurred and is then
continuing hereunder, Lender shall instruct the Cash Management Bank to transfer
to Borrower’s Account, free and clear of all Liens, any amounts remaining in the
LCR Deterioration Reserve Account within ten (10) Business Days following the
termination of a Low LCR Cash Sweep Period.

 

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XVII. DEFAULTS
17.1 Event of Default.
(a) Each of the following events shall constitute an event of default hereunder
(an “Event of Default”):
(i) if (A) the Indebtedness is not paid in full on the Maturity Date, (B) any
regularly scheduled monthly payment of interest due under the Notes is not paid
in full on or before the fifth (5th) calendar day following the applicable
Payment Date (or, if such fifth (5th) calendar day is not a Business Day, on or
before the immediately preceding Business Day), (C) any prepayment of principal
due under this Agreement or the Notes is not paid on or before the fifth (5th)
calendar day following the date the same is due (or, if such fifth (5th)
calendar day is not a Business Day, on or before the immediately preceding
Business Day), (D) the Yield Maintenance Premium is not paid when due, (E) any
deposit to the Holding Account is not made when due, and such failure continuing
for ten (10) Business Days after Lender delivers written notice thereof to
Borrower, or (F) except as to any amount included in (A), (B), (C) or (D) of
this clause (i), any other amount payable pursuant to this Agreement, the Notes
or any other Loan Document is not paid in full when due and payable in
accordance with the provisions of the applicable Loan Document, with such
failure continuing for ten (10) Business Days after Lender delivers written
notice thereof to Borrower;
(ii) subject to Borrower’s right to contest as set forth in Section 7.3, if any
of the Impositions or Other Charges are not paid prior to the imposition of any
interest, penalty, charge or expense for the non-payment thereof;
(iii) if the insurance policies required by Section 6.1 are not kept in full
force and effect or if certified copies of any of such insurance policies are
not delivered to Lender within fifteen (15) days of the effective date of such
insurance policies;
(iv) if, except as permitted pursuant to this Agreement, any of the following
shall occur: (a) any Transfer of any direct or indirect legal, beneficial or
equitable interest in all or any portion of the Property, (b) any Transfer of
any direct or indirect interest in Borrower, Master Lessee, Maryland Loan
Guarantor any other SPE Entity or Guarantor, (c) Borrower (or in the case of the
Maryland Property, Maryland Loan Guarantor) fails to remove any Lien or
encumbrance (other than a Permitted Encumbrance) on all or any portion of the
Property (other than a Permitted Encumbrance) within thirty (30) days after
Lender delivers written notice thereof to Borrower, (d) any pledge,
hypothecation, creation of a security interest in or other encumbrance of any
direct or indirect interests in Borrower, Maryland Loan Guarantor, Master
Lessee, any other SPE Entity or Guarantor or (e) the filing of a declaration of
condominium with respect to the Property;

 

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(v) if any representation or warranty made by Borrower or Maryland Loan
Guarantor herein or by Borrower, Maryland Loan Guarantor or Guarantor in any
other Loan Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or warranty
was made, unless, if the representation or warranty is of a nature that can be
made to be true and correct as of the then-current date, and is not likely to
have a Material Adverse Effect and was not intentionally false or misleading in
any material respect when made, then same does not constitute an Event of
Default if Borrower makes such representation or warranty true and correct and
not misleading within thirty (30) days after written notice thereof from
Lenders;
(vi) if Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity
or Guarantor shall make an assignment for the benefit of creditors;
(vii) if a receiver, liquidator or trustee shall be appointed for Borrower,
Maryland Loan Guarantor, Master Lessee, any other SPE Entity or Guarantor or
Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity or
Guarantor shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Borrower, Maryland Loan Guarantor, Master Lessee, any other
SPE Entity or Guarantor, or if any proceeding for the dissolution or liquidation
of Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity or
Guarantor shall be instituted; provided, however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity or
Guarantor upon the same not being discharged, stayed or dismissed within one
hundred (120) days;
(viii) if Borrower, Maryland Loan Guarantor, any other SPE Entity or Guarantor,
as applicable, attempts to assign its rights under this Agreement or any of the
other Loan Documents or any interest herein or therein in contravention of the
Loan Documents;
(ix) with respect to any term, covenant or provision set forth herein (other
than the other subsections of this Section 17.l) which specifically contains a
notice requirement or grace period, if Borrower, Maryland Loan Guarantor, any
other SPE Entity or Guarantor shall be in default under such term, covenant or
condition after the giving of such notice or the expiration of such grace
period;
(x) if any of the assumptions contained in the Non-Consolidation Opinion, in any
Additional Non-Consolidation Opinion or in any other non-consolidation opinion
delivered to Lender in connection with the Loan, or in any other
non-consolidation opinion delivered subsequent to the closing of the Loan, is or
shall become untrue;
(xi) if Borrower or Maryland Loan Guarantor shall fail to comply with any
covenants set forth in Section 5.1.4, Section 5.2.9 or Section 5.2.21;
(xii) except as provided clause (xi) above, if Borrower or Maryland Loan
Guarantor shall fail to comply with any covenants set forth in Article V or
Section XI with such failure continuing for ten (10) Business Days after Lender
delivers written notice thereof to Borrower;

 

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(xiii) if Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) shall fail to comply with any covenants set forth in Section 3(d) or
Section 8 of the Security Instrument with such failure continuing for ten
(10) Business Days after Lender delivers written notice thereof to Borrower;
(xiv) if Borrower or Maryland Loan Guarantor shall fail to deposit any sums
required to be deposited in the Collateral Accounts pursuant to Article XVI when
due;
(xv) if this Agreement or any other Loan Document or any Lien granted hereunder
or thereunder, in whole or in part, shall terminate or shall cease to be
effective or shall cease to be a legally valid, binding and enforceable
obligation of Borrower, Maryland Loan Guarantor or Guarantor, or any Lien
securing the Indebtedness shall, in whole or in part, cease to be a perfected
first priority Lien, subject to the Permitted Encumbrances (except in any of the
foregoing cases in accordance with the terms hereof or under any other Loan
Document or by reason of any affirmative act of Lender);
(xvi) except as expressly permitted pursuant to the Loan Documents, if Borrower
(or in the case of the Maryland Property, Maryland Loan Guarantor) or Master
Lessee grants any easement, covenant or restriction (other than the Permitted
Encumbrances) over the Property and such easement, covenant or restriction is
not terminated within thirty (30) days after Lender delivers written notice
thereof to Borrower;
(xvii) if the Master Lease shall be materially modified without the prior
written consent of Lender, except as expressly permitted hereunder;
(xviii) if Borrower (or in the case of the Maryland Property, Maryland Loan
Guarantor) shall be in default in any material obligation on the part of
Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)
beyond any applicable notice periods and cure periods pursuant to the terms of
the Master Lease and such default is reasonably likely to have a Material
Adverse Effect;
(xix) if the Master Lease shall terminate;
(xx) if Borrower or Maryland Loan Guarantor shall continue to be in Default
under any of the other terms, covenants or conditions of this Agreement or of
any Loan Document not specified in clauses (i) through (xix) above, for thirty
(30) days after notice from Lender; provided, however, that if such Default is
susceptible of cure but cannot reasonably be cured within such thirty (30) day
period and provided, further, that Borrower or Maryland Loan Guarantor, as
applicable, shall have commenced to cure such Default within such thirty
(30) day period and thereafter diligently proceeds to cure the same, such thirty
(30) day period shall be extended for such time as is reasonably necessary for
Borrower or Maryland Loan Guarantor, as applicable, in the exercise of due
diligence to cure such Default, such additional period not to exceed ninety
(90) days.

 

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(b) Unless waived in writing by Lender, upon the occurrence and during the
continuance of an Event of Default (other than an Event of Default described in
clauses (a)(vi), (vii) or (viii) above) Lender may, without notice or demand, in
addition to any other rights or remedies available to it pursuant to this
Agreement and the other Loan Documents or at law or in equity, take such action
that Lender deems advisable to protect and enforce its rights against Borrower
and Maryland Loan Guarantor and in the Property, including, without limitation,
(i) declaring immediately due and payable the entire Principal Amount together
with interest thereon and all other sums due by Borrower and Maryland Loan
Guarantor under the Loan Documents, (ii) collecting interest on the Principal
Amount at the Default Rate whether or not Lender elects to accelerate the Notes
and (iii) enforcing or availing itself of any or all rights or remedies set
forth in the Loan Documents against Borrower, Maryland Loan Guarantor and the
Property, including, without limitation, all rights or remedies available at law
or in equity; and upon any Event of Default described in clauses (a)(vi) or
(a)(vii) above, the Indebtedness and all other obligations of Borrower and
Maryland Loan Guarantor hereunder and under the other Loan Documents shall
immediately and automatically become due and payable, without notice or demand,
and Borrower and Maryland Loan Guarantor each hereby expressly waives any such
notice or demand, anything contained herein or in any other Loan Document to the
contrary notwithstanding. The foregoing provisions shall not be construed as a
waiver by Lender of its right to pursue any other remedies available to it under
this Agreement, the Security Instrument or any other Loan Document. Any payment
hereunder may be enforced and recovered in whole or in part at such time by one
or more of the remedies provided to Lender in the Loan Documents.
17.2 Remedies.
(a) Unless waived in writing by Lender, upon the occurrence and during the
continuance of an Event of Default, all or any one or more of the rights,
powers, privileges and other remedies available to Lender against Borrower and
Maryland Loan Guarantor under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, Borrower or Maryland Loan Guarantor
or at law or in equity may be exercised by Lender at any time and from time to
time, whether or not all or any of the Indebtedness shall be declared due and
payable, and whether or not Lender shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents with respect to the Property. Any such actions taken
by Lender shall be cumulative and concurrent and may be pursued independently,
singly, successively, together or otherwise, at such time and in such order as
Lender may determine in its sole discretion, to the fullest extent permitted by
law, without impairing or otherwise affecting the other rights and remedies of
Lender permitted by law, equity or contract or as set forth herein or in the
other Loan Documents. Without limiting the generality of the foregoing, Borrower
and Maryland Loan Guarantor each agrees that if an Event of Default is
continuing (i) Lender shall not be subject to any one action or election of
remedies law or rule and (ii) all liens and other rights, remedies or privileges
provided to Lender shall remain in full force and effect until Lender has
exhausted all of its remedies against the Property and the Security Instrument
has been foreclosed, sold and/or otherwise realized upon in satisfaction of the
Indebtedness or the Indebtedness has been paid in full.

 

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(b) Upon the occurrence and during the continuance of an Event of Default, with
respect to the Account Collateral, the Lender may:
(i) without notice to Borrower, except as required by law, and at any time or
from time to time, charge, set-off and otherwise apply all or any part of the
Account Collateral against the Obligations, operating expenses and/or Capital
Expenditures for the Property or any part thereof;
(ii) in Lender’s sole discretion, at any time and from time to time, exercise
any and all rights and remedies available to it under this Agreement, and/or as
a secured party under the UCC;
(iii) demand, collect, take possession of or receipt for, settle, compromise,
adjust, sue for, foreclose or realize upon the Account Collateral (or any
portion thereof) as Lender may determine in its sole discretion; and
(iv) take all other actions provided in, or contemplated by, this Agreement.
(c) With respect to Borrower, Maryland Loan Guarantor, the Account Collateral
and the Property, nothing contained herein or in any other Loan Document shall
be construed as requiring Lender to resort to the Property for the satisfaction
of any of the Indebtedness, and Lender may seek satisfaction out of the Property
or any part thereof, in its absolute discretion in respect of the Indebtedness.
In addition, Lender shall have the right from time to time to partially
foreclose this Agreement and the Security Instrument in any manner and for any
amounts secured by this Agreement or the Security Instrument then due and
payable as determined by Lender in its sole discretion including, without
limitation, the following circumstances: (i) in the event Borrower or Maryland
Loan Guarantor defaults beyond any applicable grace period in the payment of one
or more scheduled payments of principal or interest, Lender may foreclose this
Agreement and the Security Instrument to recover such delinquent payments, or
(ii) in the event Lender elects to accelerate less than the entire outstanding
principal balance of the Loan, Lender may foreclose this Agreement and the
Security Instrument to recover so much of the principal balance of the Loan as
Lender may accelerate and such other sums secured by this Agreement or the
Security Instrument as Lender may elect. Notwithstanding one or more partial
foreclosures, the Property shall remain subject to this Agreement and the
Security Instrument to secure payment of sums secured by this Agreement and the
Security Instrument and not previously recovered.
17.3 Remedies Cumulative; Waivers. The rights, powers and remedies of Lender
under this Agreement and the Security Instrument shall be cumulative and not
exclusive of any other right, power or remedy which Lender may have against
Borrower or Maryland Loan Guarantor pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender’s rights, powers
and remedies may be pursued singly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender’s sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower, Maryland Loan Guarantor or Guarantor
shall not be construed to be a waiver of any subsequent Default or Event of
Default by Borrower, Maryland Loan Guarantor or Guarantor or to impair any
remedy, right or power consequent thereon.

 

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17.4 Costs of Collection. In the event that after an Event of Default: (i) the
Notes or any of the Loan Documents is placed in the hands of an attorney for
collection or enforcement or is collected or enforced through any legal
proceeding; (ii) an attorney is retained to represent Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors’ rights
and involving a claim under the Notes or any of the Loan Documents; or (iii) an
attorney is retained to protect or enforce the lien or any of the terms of this
Agreement, the Security Instrument or any of the Loan Documents; then Borrower
shall pay to Lender all reasonable attorney’s fees, costs and expenses actually
incurred in connection therewith, including costs of appeal, together with
interest on any judgment obtained by Lender at the Default Rate.
XVIII. SPECIAL PROVISIONS
18.1 Exculpation.
18.1.1 Exculpated Parties. Except as set forth in this Section 18.1, the
Recourse Guaranty and the Environmental Indemnity, no personal liability shall
be asserted, sought or obtained by Lender or enforceable against (i) Borrower,
(ii) any Affiliate of Borrower, (iii) any Person owning, directly or indirectly,
any legal or beneficial interest in Borrower or any Affiliate of Borrower or
(iv) any direct or indirect partner, member, principal, officer, Controlling
Person, beneficiary, trustee, advisor, shareholder, employee, agent, Affiliate
or director of any Persons described in clauses (i) through (iii) above
(collectively, the “Exculpated Parties”) and none of the Exculpated Parties
shall have any personal liability (whether by suit deficiency judgment or
otherwise) in respect of the Obligations, this Agreement, the Security
Instrument, the Notes, the Property or any other Loan Document, or the making,
issuance or transfer thereof, all such liability, if any, being expressly waived
by Lender. The foregoing limitation shall not in any way limit or affect
Lender’s right to any of the following and Lender shall not be deemed to have
waived any of the following:
(a) Foreclosure of the lien of this Agreement and the Security Instrument in
accordance with the terms and provisions set forth herein and in the Security
Instrument;
(b) Action against any other security at any time given to secure the payment of
the Notes and the other Obligations;
(c) Exercise of any other remedy set forth in this Agreement or in any other
Loan Document which is not inconsistent with the terms of this Section 18.1;
(d) Any right which Lender may have under Sections 506(a), 506(b), 1111(b) or
any other provisions of the Bankruptcy Code to file a claim for the full amount
of the Indebtedness secured by this Agreement and the Security Instrument or to
require that all collateral shall continue to secure all of the Indebtedness
owing to Lender in accordance with the Loan Documents; or
(e) The liability of any given Exculpated Party with respect to any separate
written guaranty or agreement given by any such Exculpated Party in connection
with the Loan (including, without limitation, the Recourse Guaranty and the
Environmental Indemnity).

 

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18.1.2 Carveouts From Non-Recourse Limitations. Notwithstanding the foregoing or
anything in this Agreement or any of the other Loan Documents to the contrary,
there shall at no time be any limitation on Borrower’s, Maryland Loan
Guarantor’s or, except as set forth in the Recourse Guaranty, Guarantor’s
liability for the payment, in accordance with the terms of this Agreement, the
Notes, the Security Instrument and the other Loan Documents, to Lender of and
for:
(a) any actual out-of-pocket loss, damage, cost, expense, liability, claim and
any other obligation incurred by or on behalf of Lender arising out of or in
connection with fraud or intentional material misrepresentation by Borrower,
Maryland Loan Guarantor, Master Lessee, Guarantor or any of their principals,
officers, agents or employees in connection with the Loan;
(b) damage to the Property arising from intentional misconduct of Borrower,
Maryland Loan Guarantor, Master Lessee, Guarantor or any of their principals,
officers, agents or employees, and any removal of assets forming part of any
Individual Property by Borrower, Maryland Loan Guarantor or Master Lessee in
violation of the Loan Documents;
(c) any actual out-of-pocket loss, damage, cost, expense, liability, claim and
any other obligation incurred by or on behalf of Lender arising out of or in
connection with the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or herein concerning
environmental laws, hazardous substances and asbestos and any indemnification of
Lender with respect thereto in the Environmental Indemnity or herein, but only
to the extent that the same are not insured against by an Environmental
Insurance Policy;
(d) the amount of any misappropriation or conversion by Borrower, Maryland Loan
Guarantor or Master Lessee of (A) any Proceeds paid by reason of any casualty,
damage or destruction of the Property, (B) any Proceeds received in connection
with a Taking, (C) any Rents following and during the continuance of an Event of
Default, or (D) any Rents paid more than one (1) month in advance (it being
agreed that no use of funds for the repair, maintenance or operations of the
Property shall be treated as a “misappropriation” hereunder);
(e) any actual out-of-pocket loss, damage, cost, expense, liability, claim and
any other obligation incurred by or on behalf of Lender arising out of or in
connection with a breach of any representation set forth in Section 4.1.29;
(f) any actual out-of-pocket loss, damage, cost, expense, liability, claim and
any other obligation incurred by or on behalf of Lender arising out of or in
connection with Borrower’s or Maryland Loan Guarantor’s failure to obtain
Lender’s prior consent to any Debt or voluntary Lien encumbering the Property as
required by this Agreement or by the Security Instruments;

 

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(g) any actual out-of-pocket loss, damage, cost, expense, liability, claim and
any other obligation incurred by or on behalf of Lender (including, without
limitation, reasonable attorneys’ fees, causes of action, suits, claims, demands
and adjustments of any nature or description whatsoever) which may at any time
be imposed upon, incurred by or awarded against Lender, in the event (and
arising out of such circumstances) that Borrower or Maryland Loan Guarantor
should raise any defense, counterclaim and/or allegation in any foreclosure
action by Lender relative to any Individual Property or the Account Collateral
or any part thereof which is found by a court of competent jurisdiction in a
final, unappealable decision to have been raised by Borrower or Maryland Loan
Guarantor in bad faith or to be without basis in fact or law;
(h) any actual out-of-pocket loss, damage, cost, expense, liability, claim and
any other obligation incurred by or on behalf of Lender arising out of or in
connection with (A) any Borrower or Maryland Loan Guarantor filing a voluntary
petition under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law; (B) any Borrower or Maryland Loan Guarantor soliciting or
causing to be solicited petitioning creditors for an involuntary petition
against any Borrower or Maryland Loan Guarantor under the Bankruptcy Code or any
other Federal or state bankruptcy or insolvency law, or an involuntary case
being commenced against any Borrower or Maryland Loan Guarantor under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law with
the collusion of any Individual Borrower or Maryland Loan Guarantor or any of
its Affiliates, (C) any Borrower or Maryland Loan Guarantor filing an answer
consenting to or otherwise acquiescing in or joining in any involuntary petition
filed against it, by any other Person under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law; (D) any Borrower or Maryland Loan
Guarantor consenting to or acquiescing in or joining in an application for the
appointment of a custodian, receiver, trustee, or examiner for any such Borrower
or Maryland Loan Guarantor or any portion of the Property; (E) any Borrower or
Maryland Loan Guarantor making an assignment for the benefit of creditors, or
admitting, in writing or in any legal proceeding, its insolvency or inability to
pay its debts as they become due;
(i) any actual out-of-pocket loss, damage, cost, expense, liability, claim and
any other obligation incurred by or on behalf of Lender arising out of or in
connection with any Borrower’s or Maryland Loan Guarantor’s failure to obtain
Lender’s prior written consent to any Transfer as required by the Loan Agreement
or the Security Instruments; or
(j) reasonable attorney’s fees and expenses incurred by Lender in connection
with any successful suit filed on account of any of the foregoing clauses
(a) through (i).
Notwithstanding the foregoing provisions of this Section 18.1.2, Borrower and
Maryland Loan Guarantor shall not be liable for the payment of any such costs
and expenses to the extent that a court of competent jurisdiction determines in
a final decision that the same arose by reason of the gross negligence, criminal
acts, fraud or willful misconduct of Lender.

 

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XIX. MISCELLANEOUS
19.1 Survival. This Agreement and all covenants, indemnifications, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the execution
and delivery to Lender of the Notes, and shall continue in full force and effect
so long as all or any of the Indebtedness is outstanding and unpaid unless a
longer period is expressly set forth herein or in the other Loan Documents.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party.
All covenants, promises and agreements in this Agreement, by or on behalf of
Borrower or Maryland Loan Guarantor, shall inure to the benefit of the
successors and assigns of Lender. If Borrower consists of more than one person,
the obligations and liabilities of each such person hereunder and under the
other Loan Documents shall be joint and several. The obligations and liabilities
of Borrower and Maryland Loan Guarantor hereunder and under the other Loan
Documents shall be joint and several.
19.2 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 discretion
of Lender and shall be final and conclusive.
19.3 Governing Law.
(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY
LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER AND MARYLAND LOAN
GUARANTOR EACH HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT
THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTES, AND
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

 

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(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER OR MARYLAND
LOAN GUARANTOR ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER’S
OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK,
COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND BORROWER AND MARYLAND LOAN GUARANTOR EACH WAIVES ANY
OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON
CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER AND MARYLAND
LOAN GUARANTOR EACH HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER AND MARYLAND LOAN GUARANTOR
EACH DOES HEREBY DESIGNATE AND APPOINT:
CORPORATION SERVICE COMPANY
80 STATE STREET
ALBANY, NEW YORK 12207-2543

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER AND MARYLAND LOAN GUARANTOR IN THE MANNER
PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS
UPON BORROWER AND MARYLAND LOAN GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING
IN THE STATE OF NEW YORK. BORROWER AND MARYLAND LOAN GUARANTOR (I) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF
PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED
AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT
LEAVING A SUCCESSOR.
19.4 Modification, Waiver in Writing. No modification, amendment, extension,
discharge, termination or waiver of any provision of this Agreement, or of the
Notes, or of any other Loan Document, or consent to any departure therefrom,
shall in any event be effective unless the same shall be in a writing signed by
the party against whom enforcement is sought (and, if a Securitization shall
have occurred, a Rating Agency Confirmation is obtained), and then such waiver
or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to or demand on Borrower shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances.
19.5 Delay Not a Waiver. Neither any failure nor any delay on the part of Lender
in insisting upon strict performance of any term, condition, covenant or
agreement, or exercising any right, power, remedy or privilege hereunder, or
under the Notes or under any other Loan Document, or any other instrument given
as security therefor, shall operate as or constitute a waiver thereof, nor shall
a single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Agreement, the Notes or any other Loan Document, Lender shall
not be deemed to have waived any right either to require prompt payment when due
of all other amounts due under this Agreement, the Notes or the other Loan
Documents, or to declare a default for failure to effect prompt payment of any
such other amount.

 

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19.6 Notices. All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, return receipt
requested, or (b) expedited prepaid delivery service, either commercial or
United States Postal Service, with proof of attempted delivery, addressed as
follows (or at such other address and Person as shall be designated from time to
time by any party hereto, as the case may be, in a written notice to the other
parties hereto in the manner provided for in this Section):

     
If to Lender:
  German American Capital Corporation, on behalf of the holders of the Notes
 
  60 Wall Street, 10th floor
 
  New York, NY 10005
 
  Attention: Todd Sammann and General Counsel
 
   
With a copy to:
  Wachovia Bank, National Assocation, as Servicer, at such notice address as
shall be designated by notice delivered in accordance with this Section.
 
   
With a copy to:
  Skadden, Arps, Slate, Meagher & Flom LLP
 
  Four Times Square
 
  New York, New York 10036
 
  Attention: Harvey R. Uris, Esq.
 
   
With a copy to:
  Wachovia Bank, National Association
 
  375 Park Avenue, 5th Floor
 
  New York, New York 10022
 
  Attention: Mr. Peter Scola
 
   
If to Borrower (which shall be deemed notice to
   
Maryland Loan Guarantor):
  c/o BlueLinx Holdings Inc.
 
  4300 Wildwood Parkway
 
  Atlanta, Georgia 30339
 
  Attention: Mr. David Morris, CFO & Treasurer
 
   
With a copy to:
  Schulte Roth & Zabel LLP
 
  919 Third Avenue
 
  New York, New York 10022
 
  Attention: Jeffrey A. Lenobel, Esq.

All notices, elections, requests and demands under this Agreement shall be
effective and deemed received upon the earliest of (i) the actual receipt of the
same by personal delivery or otherwise, (ii) one (1) Business Day after being
deposited with a nationally recognized overnight courier service as required
above, or (iii) three (3) Business Days after being deposited in the United
States mail as required above. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given as
herein required shall be deemed to be receipt of the notice, election, request,
or demand sent.

 

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19.7 TRIAL BY JURY. EACH OF BORROWER, MARYLAND LOAN GUARANTOR AND LENDER AND ALL
PERSONS CLAIMING BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT, THE SECURITY
INSTRUMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT, INCLUDING, WITHOUT LIMITATION,
ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS AGREEMENT, THE SECURITY INSTRUMENT, THE NOTES OR ANY OTHER LOAN
DOCUMENT (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE; AND BORROWER AND MARYLAND LOAN GUARANTOR EACH
HEREBY AGREES AND CONSENTS THAT AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT HERETO TO
THE WAIVER OF ANY RIGHT TO TRIAL BY JURY. BORROWER AND MARYLAND LOAN GUARANTOR
EACH ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING
OF THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR
THE MAKING OF THE LOAN. THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.
19.8 Headings. The Article and/or Section headings and the Table of Contents in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
19.9 Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
19.10 Preferences. To the extent Borrower or Maryland Loan Guarantor makes a
payment or payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.

 

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19.11 Waiver of Notice. Borrower and Maryland Loan Guarantor shall not be
entitled to any notices of any nature whatsoever from Lender except with respect
to matters for which this Agreement or the other Loan Documents specifically and
expressly provide for the giving of notice by Lender to Borrower and except with
respect to matters for which Borrower is not, pursuant to applicable Legal
Requirements, permitted to waive the giving of notice. Borrower hereby expressly
waives the right to receive any notice from Lender with respect to any matter
for which this Agreement or the other Loan Documents do not specifically and
expressly provide for the giving of notice by Lender to Borrower.
19.12 Expenses; Indemnity.
(a) Borrower and Maryland Loan Guarantor each covenants and agrees to pay or, if
Borrower or Maryland Loan Guarantor fails to pay, to reimburse, Lender upon
receipt of written notice from Lender for all reasonable costs and expenses
(including reasonable attorneys’ fees and disbursements) actually incurred by
Lender in connection with (i) the preparation, negotiation, execution and
delivery of this Agreement and the other Loan Documents and the consummation of
the transactions contemplated hereby and thereby and all the costs of furnishing
all opinions by counsel for Borrower (including without limitation any opinions
requested by Lender pursuant to this Agreement); (ii) the servicing of the Loan
by the Servicer after the Closing Date in accordance with Section 14.3.2(e);
(iii) the negotiation, preparation, execution, delivery and administration of
any consents, amendments, waivers or other modifications to this Agreement and
the other Loan Documents and any other documents or matters as required herein
or under the other Loan Documents; (iv) securing Borrower’s compliance with any
requests made pursuant to the provisions of this Agreement; (v) the filing and
recording fees and expenses, mortgage recording taxes, title insurance and
reasonable fees and expenses of counsel for providing to Lender all required
legal opinions, and other similar expenses incurred in creating and perfecting
the Lien in favor of Lender pursuant to this Agreement and the other Loan
Documents; (vi) enforcing or preserving any rights, in response to third party
claims or the prosecuting or defending of any action or proceeding or other
litigation, in each case against, under or affecting Borrower, Maryland Loan
Guarantor, this Agreement, the other Loan Documents, the Property, or any other
security given for the Loan; (vii) enforcing any obligations of or collecting
any payments due from Borrower or Maryland Loan Guarantor under this Agreement,
the other Loan Documents or with respect to the Property or in connection with
any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a work-out or of any insolvency or bankruptcy
proceedings and (viii) procuring insurance policies pursuant to Section 6.1;
provided, however, that Borrower shall not be liable for the payment of any such
costs and expenses to the extent the same arise by reason of the gross
negligence, illegal acts, fraud or willful misconduct of Lender. Any cost and
expenses due and payable to Lender may be paid from any amounts in the Holding
Account.

 

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(b) Subject to the non-recourse provisions of Section 18.1, Borrower and
Maryland Loan Guarantor shall protect, indemnify and save harmless Lender, and
all officers, directors, stockholders, members, partners, employees, agents,
successors and assigns thereof (collectively, the Indemnified Parties) from and
against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including all reasonable attorneys’ fees and
expenses actually incurred) imposed upon or incurred by or asserted against the
Indemnified Parties or the Property or any part of its interest therein, by
reason of the occurrence or existence of any of the following (to the extent
Proceeds payable on account of the following shall be inadequate; it being
understood that in no event will the Indemnified Parties be required to actually
pay or incur any costs or expenses as a condition to the effectiveness of the
foregoing indemnity) prior to (i) the acceptance by Lender or its designee of a
deed-in-lieu of foreclosure with respect to the Property, or (ii) an Indemnified
Party or its designee taking possession or control of the Property or (iii) the
foreclosure of the Security Instrument, except to the extent caused by the
actual willful misconduct or gross negligence of any Indemnified Party (other
than such willful misconduct, criminal acts, fraud or gross negligence imputed
to the Indemnified Parties because of their interest in the Property):
(1) ownership of Borrower’s (or in the case of the Maryland Property, Maryland
Loan Guarantor’s) interest in the Property, or any interest therein, or receipt
of any Rents or other sum therefrom, (2) any accident, injury to or death of any
persons or loss of or damage to property occurring on or about the Property or
any Appurtenances thereto, (3) any design, construction, operation, repair,
maintenance, use, non-use or condition of the Property or Appurtenances thereto,
including claims or penalties arising from violation of any Legal Requirement,
Environmental Law or Insurance Requirement, as well as any claim based on any
patent or latent defect, whether or not discoverable by Lender, any claim the
insurance as to which is inadequate, and any Environmental Claim except to the
extent such Environmental Claim is covered by the Environmental Insurance Policy
and the related insurer agrees to pay Lender’s claims thereunder, (4) any Event
of Default under this Agreement or any of the other Loan Documents, (5) any
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property or any part thereof, (6) any negligence or
tortious act or omission on the part of Borrower, Maryland Loan Guarantor or any
of its agents, contractors, servants, employees, sublessees, licensees or
invitees, (7) any contest referred to in Section 7.3 hereof, or (8) any
obligation or undertaking relating to the performance or discharge of any of the
terms, covenants and conditions of the landlord contained in the Leases. Any
amounts the Indemnified Parties are legally entitled to receive under this
Section 19.12(b) which are not paid within thirty (30) days after written demand
therefor by the Indemnified Parties or Lender, setting forth in reasonable
detail the amount of such demand and the basis therefor, shall bear interest
from the date of demand at the Default Rate, and shall, together with such
interest, be part of the Indebtedness and secured by the Security Instrument. In
case any action, suit or proceeding is brought against the Indemnified Parties
by reason of any such occurrence, Borrower shall at Borrower’s expense resist
and defend such action, suit or proceeding or will cause the same to be resisted
and defended by counsel at Borrower’s reasonable expense for the insurer of the
liability or by counsel designated by Borrower (unless reasonably disapproved by
Lender promptly after Lender has been notified of such counsel); provided,
however, that nothing herein shall compromise the right of Lender (or any
Indemnified Party) to appoint its own counsel at Borrower’s reasonable expense
for its defense with respect to any action which in its reasonable opinion
presents a conflict or potential conflict between Lender and Borrower that would
make such separate representation advisable; provided, further, that if Lender
shall have appointed separate counsel pursuant to the foregoing, Borrower shall
not be responsible for the expense of additional separate counsel of any
Indemnified Party unless in the reasonable opinion of Lender a conflict or
potential conflict exists between such Indemnified Party and Lender. So long as
Borrower is resisting and defending such action, suit or proceeding as provided
above in a prudent and commercially reasonable manner, Lender and the
Indemnified Parties shall not be entitled to settle such action, suit or
proceeding without Borrower’s consent which shall not be unreasonably withheld
or delayed, and claim the benefit of this Section 19.12(b) with respect to such
action, suit or proceeding and Lender agrees that it will not settle any such
action, suit or proceeding without the consent of Borrower. Any Indemnified
Party will give Borrower prompt notice after such Indemnified Party obtains
actual knowledge of any potential claim by such Indemnified Party for
indemnification hereunder.

 

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19.13 Exhibits and Schedules Incorporated. The Exhibits and Schedules annexed
hereto are hereby incorporated herein as a part of this Agreement with the same
effect as if set forth in the body hereof.
19.14 Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in
and to this Agreement, the Notes and the other Loan Documents shall take the
same free and clear of all offsets, counterclaims or defenses which are
unrelated to such documents which Borrower or Maryland Loan Guarantor may
otherwise have against any assignor of such documents, and no such unrelated
counterclaim or defense shall be interposed or asserted by Borrower or Maryland
Loan Guarantor in any action or proceeding brought by any such assignee upon
such documents and any such right to interpose or assert any such unrelated
offset, counterclaim or defense in any such action or proceeding is hereby
expressly waived by Borrower and Maryland Loan Guarantor.
19.15 Liability of Assignees of Lender. No assignee of Lender shall have any
personal liability, directly or indirectly, under or in connection with this
Agreement or any other Loan Document or any amendment or amendments hereto made
at any time or times, heretofore or hereafter, any different than the liability
of Lender hereunder. In addition, no assignee shall have at any time or times
hereafter any personal liability, directly or indirectly, under or in connection
with or secured by any agreement, lease, instrument, encumbrance, claim or right
affecting or relating to the Property or to which the Property is now or
hereafter subject any different than the liability of Lender hereunder. The
limitation of liability provided in this Section 19.15 is (i) in addition to,
and not in limitation of, any limitation of liability applicable to the assignee
provided by law or by any other contract, agreement or instrument, and
(ii) shall not apply to any assignee’s gross negligence or willful misconduct.
19.16 No Joint Venture or Partnership; No Third Party Beneficiaries.
(a) Borrower and Lender intend that the relationships created hereunder and
under the other Loan Documents be solely that of borrower and lender. Nothing
herein or therein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and Lender or
to grant Lender any interest in the Property other than that of mortgagee,
beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for the benefit of
Lender and Borrower and Maryland Loan Guarantor and nothing contained in this
Agreement or the other Loan Documents shall be deemed to confer upon anyone
other than Lender, Borrower and Maryland Loan Guarantor any right to insist upon
or to enforce the performance or observance of any of the obligations contained
herein or therein. All conditions to the obligations of Lender to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lender and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will refuse to
make the Loan in the absence of strict compliance with any or all thereof and no
other Person shall under any circumstances be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable
to do so.

 

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19.17 Publicity. Other than legally required disclosures, filings and reporting
requirements, all news releases, publicity or advertising by Borrower or Lender
or their respective Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the Loan
Documents, to Lender, or any of its Affiliates shall be subject to the prior
written approval of Lender and Borrower.
19.18 Waiver of Marshalling of Assets. To the fullest extent permitted by law,
Borrower and Maryland Loan Guarantor, for itself and its successors and assigns,
waives all rights to a marshalling of the assets of Borrower, Maryland Loan
Guarantor, Borrower’s and Maryland Loan Guarantor’s members and others with
interests in Borrower, Maryland Loan Guarantor and of the Property, and agrees
not to assert any right under any laws pertaining to the marshalling of assets,
the sale in inverse order of alienation, homestead exemption, the administration
of estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of Lender under the Loan Documents to a sale of the Property
for the collection of the Indebtedness without any prior or different resort for
collection or of the right of Lender to the payment of the Indebtedness out of
the net proceeds of the Property in preference to every other claimant
whatsoever.
19.19 Waiver of Counterclaim and other Actions. Borrower and Maryland Loan
Guarantor each hereby expressly and unconditionally waives, in connection with
any suit, action or proceeding brought by Lender on this Agreement, the Notes,
the Security Instrument or any Loan Document, any and every right it may have to
(i) interpose any counterclaim therein (other than a counterclaim which can only
be asserted in the suit, action or proceeding brought by Lender on this
Agreement, the Notes, the Security Instrument or any Loan Document and cannot be
maintained in a separate action) and (ii) have any such suit, action or
proceeding consolidated with any other or separate suit, action or proceeding.
19.20 Conflict; Construction of Documents; Reliance. In the event of any
conflict between the provisions of this Agreement and any of the other Loan
Documents, the provisions of this Agreement shall control. The parties hereto
acknowledge that they were represented by competent counsel in connection with
the negotiation, drafting and execution of the Loan Documents and that such Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in
the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by virtue
of the ownership by it or any parent, subsidiary or Affiliate of Lender of any
equity interest any of them may acquire in Borrower or Maryland Loan Guarantor,
and Borrower and Maryland Loan Guarantor each hereby irrevocably waives the
right to raise any defense or take any action on the basis of the foregoing with
respect to 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.

 

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19.21 Prior Agreements. This Agreement and the other Loan Documents contain the
entire agreement of the parties hereto and thereto in respect of the
transactions contemplated hereby and thereby, and all prior agreements among or
between such parties, whether oral or written, are superseded by the terms of
this Agreement and the other Loan Documents and unless specifically set forth in
a writing contemporaneous herewith the terms, conditions and provisions of any
and all such prior agreements do not survive execution of this Agreement.
19.22 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original, but all of which shall constitute
one document.
[NO FURTHER TEXT ON THIS PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives, all as of the day and year
first above written.

      BORROWER:

     
 
   
ABP AL (MIDFIELD) LLC
  ABP AR (LITTLE ROCK) LLC
ABP CA (CITY OF INDUSTRY) LLC
  ABP CA (NATIONAL CITY) LLC
ABP CA (NEWARK) LLC
  ABP CO I (DENVER) LLC
ABP CA (RIVERSIDE) LLC
  ABP CT (NEWTON) LLC
ABP CO II (DENVER) LLC
  ABP FL (MIAMI) LLC
ABP FL (LAKE CITY) LLC
  ABP FL (TAMPA) LLC
ABP FL (PENSACOLA) LLC
  ABP GA (LAWRENCEVILLE) LLC
ABP FL (YULEE) LLC
  ABP IL (UNIVERSITY PARK) LLC
ABP IA (DES MOINES) LLC
  ABP KY (INDEPENDENCE) LLC
ABP IN (ELKHART) LLC
  ABP MA (BELLINGHAM) LLC
ABP LA (SHREVEPORT) LLC
  ABP ME (PORTLAND) LLC
ABP MD (BALTIMORE) SUBSIDIARY LLC
  ABP MI (GRAND RAPIDS) LLC
ABP MI (DETROIT) LLC
  ABP MN (MAPLE GROVE) LLC
ABP MN (EAGAN) LLC
  ABP MO (KANSAS CITY) LLC
ABP MO (BRIDGETON) LLC
  ABP MS (PEARL) LLC
ABP MO (SPRINGFIELD) LLC
  ABP NC (CHARLOTTE) LLC
ABP NC (BUTNER) LLC
  ABP NJ (DENVILLE) LLC
ABP ND (NORTH FARGO) LLC
  ABP NY (YAPHANK) LLC
ABP NM (ALBUQUERQUE) LLC
  ABP OK (TULSA) LLC
ABP OH (TALMADGE) LLC
  ABP PA (ALLENTOWN) LLC
ABP OR (BEAVERTON) LLC
  ABP SC (CHARLESTON) LLC
ABP PA (STANTON) LLC
  ABP TN (ERWIN) LLC
ABP SD (SIOUX FALLS) LLC
  ABP TN (NASHVILLE) LLC
ABP TN (MEMPHIS) LLC
  ABP TX (FORT WORTH) LLC
ABP TX (EL PASO) LLC
  ABP TX (HOUSTON) LLC
ABP TX (HARLINGEN) LLC
  ABP TX (SAN ANTONIO) LLC
ABP TX (LUBBOCK) LLC
  ABP VA (VIRGINIA BEACH) LLC
ABP VA (RICHMOND) LLC
  ABP WA (WOODINVILLE) LLC
ABP VT (SHELBURNE) LLC
  ABP WI (WAUSAU) LLC

            By:   /s/ David Morris         Name:   David Morris        Title:  
Vice President   

 

S-1 (Borrower)

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            MARYLAND LOAN GUARANTOR:

ABP MD (BALTIMORE) LLC
      By:   /s/ David Morris         Name:   David Morris        Title:   Vice
President   

[Lender’s signature appears on following page]

 

S-2 (Borrower)

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            LENDER:

GERMAN AMERICAN CAPITAL
CORPORATION, a Maryland corporation, on
behalf of the holders of the Notes
      By:   /s/ Todd O. Sammann         Name:   Todd O. Sammann        Title:  
Vice President            By:   /s/ Thomas R. Traynor         Name:   Thomas R.
Traynor        Title:   Vice President   

 

S-1 (Lender)

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EXHIBIT A

TITLE INSURANCE REQUIREMENTS, ENDORSEMENTS
AND AFFIRMATIVE COVERAGES
1. General. Borrower and/or its counsel is responsible for ordering or updating
any title insurance work. Lender requires a lender’s title insurance policy
insuring “German American Capital Corporation, a Maryland corporation, for the
benefit of the holders of the Notes, and its successors and assigns”. The
approved title underwriters, type and amount of insurance and required
endorsements are described below. The list of endorsements is subject to review
by Lender’s counsel, local counsel and additional specific coverages may be
required after review of the related title commitment. The requirements of this
Exhibit A shall not limit any requirements set forth in the Loan Agreement with
respect to the matters set forth herein.
2. Title Insurer. The title company or title companies must be approved by
Lender and licensed to do business in the jurisdiction in which the Property is
located. The Title Company (as defined in the Loan Agreement) has been
pre-approved by Lender.
3. Title Agent. Unless Lender otherwise agrees, all title work shall be ordered
and coordinated, and the closing of the Loan shall be conducted through the
Title Company.
4. Primary Title Insurance Requirements.
(a) Amount of Coverage. As required pursuant to the Loan Agreement.
(b) Effective Date. The later of the date of recording of the Security
Instrument or the date of funding of the Loan. Borrower shall be required to
provide a customary “gap” indemnity in order to enable the Title Company to
provide “gap” coverage.
(c) Insured. “German American Capital Corporation, a Maryland corporation, for
the benefit of the holders of the Notes, and its successors and assigns”.
(d) Legal Description. Metes and bounds description to be provided which must
conform to that shown on the Survey, the Security Instrument and any other Loan
Documents that require a legal description of the Property. A lot and block
description shall be acceptable in place of a metes and bounds description if
accepted by the Title Company for issuance of a Title Policy for an Individual
Property.
(e) Policy Form. An ALTA (or equivalent) lender’s policy of title insurance in
form and substance acceptable to Lender. Without limiting Lender’s right to
require specific coverages, endorsements or other title work, the Title Policy
shall (i) be in the 1970 ALTA (as amended 84) form or, if not available, ALTA
1992 form (deleting arbitration and creditor rights exclusions) or, if not
available, the form commonly used in the state where the Property is located,
(ii) to the extent available, include the “extended coverage” provisions
described in paragraph 5 below, (iii) include all applicable endorsements
described in paragraph 6 below, and (iv) include Schedule B exceptions in a form
and to the extent acceptable to Lender’s counsel.

 

A-1

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5. Extended Coverage Requirements. The Title Policy shall:
(a) not contain any exception for filed or unfiled mechanic, materialmen or
similar liens;
(b) limit any general exception for real estate taxes and other charges to real
estate or other similar taxes or assessments that are not yet due and payable or
delinquent and are not a current lien on the Property;
(c) limit any general exception for the rights of persons in possession to the
rights of specified tenants, as tenants only with no right or option to
purchase, set forth on the rent roll for the Property and attached to the Title
Policy; and
(d) not contain any general exception as to matters that an accurate Survey of
the Property would disclose, but may contain specific exceptions to matters
disclosed on the Survey to be delivered on the Closing Date, subject to review
by Lender’s counsel.
6. Required Endorsements. In addition to any other endorsements required by
Lender to be obtained by Borrower pursuant to the terms of the Loan Agreement,
the following endorsements are required, to the extent applicable and otherwise
available in the jurisdiction in which the Property is located:

  •  
Extended Coverage.

  •  
Restrictions, Encroachments, Minerals Endorsement ALTA Form 9 or equivalent. (If
not available, the Title Policy must insure by way of affirmative coverage
statements that there are no encroachments by any of the improvements onto
easements, rights of way or other exceptions to streets or adjacent property, or
insure against loss or damage resulting therefrom.)

  •  
Deletion of Creditors Rights Exclusion Endorsement.

  •  
Environmental Protection Lien Endorsement. (The Title Policy may make an
exception only for specific state statutes that provide for potential subsequent
liens that could take priority over the lien securing the Loan.)

  •  
Direct Access to Public Road Endorsement;

  •  
Usury Endorsement.

  •  
Land Same As Survey/Legal Description Endorsement.

 

A-2

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  •  
Zoning 3.1 Endorsement (including parking).

  •  
Subdivision Endorsement.

  •  
Doing Business Endorsement.

  •  
Deletion of Arbitration Endorsement.

  •  
Separate Tax Lot Endorsement.

  •  
Street Address Endorsement

  •  
Contiguity Endorsement.

  •  
Variable Rate Endorsement.

  •  
Mortgage Recording Tax Endorsement.

  •  
REA Endorsement.

  •  
Any of the following endorsements customary in the state in which the Property
is located or as required by the nature of the transaction:

Tie-In Endorsement for Multiple Policies
Mortgage Assignment Endorsement
First Loss / Last Dollar Endorsement
Blanket Un-located Easements Endorsement
Closure Endorsement

 

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EXHIBIT B

GERMAN AMERICAN CAPITAL CORPORATION
SURVEY REQUIREMENTS
The requirements of this Exhibit A shall not limit any requirements set forth in
the Loan Agreement with respect to the matters set forth herein. The Surveys
shall contain the following:
• The legal description of the Property;
• The courses and measured distances of the exterior boundary lines of the
Property and the identification of owners of abutting parcels;
• The total acreage of the Property to the nearest tenth of an acre;
• The location of any existing improvements, the dimensions thereof at the
ground surface level and their relationship to the facing exterior property
lines, streets and set-back lines of the Property;
• The location, lines and widths of adjoining publicly dedicated and accepted
streets showing the number and location of existing curb cuts, driveways, and
fences;
• The location and dimensions of encroachments, if any, upon the Property;
• The location of all set-back lines, restrictions of record, other restrictions
established by zoning or building code ordinance, utilities, easements,
rights-of-way and other matters affecting title to the Property which are to be
shown in Schedule B-2 of the Title Policy identifying each by reference to its
recording data, where applicable;
• Evidence that adequate means of ingress and egress to and from the Property
exist and that the Property does not serve any adjoining property for ingress,
egress or any other purpose;
• If the Property is described as being on a recorded map or plat, a legend
relating the survey to such map or plat;
• The street address of the Property;
• Parking areas at the Property and, if striped, the striping and type (e.g.,
handicapped, motorcycle, regular, etc.) and number of parking spaces at the
Property;
• A statement as to whether the Property is located in a special flood or
mudslide hazard area as determined by a review of a stated and identified Flood
Hazard Boundary Map published by the Federal Insurance Administration of the
U.S. Department of Housing and Urban Development;

 

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• A vicinity map showing the property in reference to nearby highways or major
street intersections.
• The exterior dimensions of all buildings at ground level and the square
footage of the exterior footprint of all buildings, or gross floor area of all
buildings, at ground level.
• The location of utilities serving or existing on the property as evidenced by
on-site observation or as determined by records provided by client, utility
companies and other appropriate sources (with reference as to the source of
information) (for example)

  •  
railroad tracks and sidings;

  •  
manholes, catch basins, valve vaults or other surface indications of
subterranean uses;

  •  
wire and cables (including their function) crossing the surveyed premises, all
poles on or within ten feet of the surveyed premises, and the dimensions of all
crosswires or overhangs affecting the surveyed premises; and

  •  
utility company installations on the surveyed premises.

• A certificate in substantially the following form:
The undersigned being a registered surveyor of the State of [State] hereby
certifies to GERMAN AMERICAN CAPITAL CORPORATION, A MARYLAND CORPORATION, ON
BEHALF OF THE HOLDERS OF THE NOTES [NAME OF BORROWING ENTITY] and [INSERT NAME
OF TITLE COMPANY], and each of their respective successors and assigns, as of
the date below, as follows:
I,                                         , a Registered Land Surveyor in the
[State/Commonwealth] of                                         , do hereby
certify to the aforesaid parties, their successors and assigns, as of the date
set forth above that I have made a careful survey of a tract of land described
as follows:
See Surveyor’s Legal Description.
I further certify that:
i. The survey map and the survey on which it is based were made (a) in
accordance with: “Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys” jointly established and adopted by ALTA and ACSM in 1999, including
items 1 (except for states that require record monument platting), 2, 3, 4, 6,
7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 13, 14, 15 and 16 of Table A thereof,
(b) pursuant to Accuracy Standards (as adopted by ALTA and ACSM and in effect on
the date of this certification), with Positional Uncertainties resulting from
the survey measurements made on the survey not exceeding the allowable
Positional Tolerance, and (c) in compliance with all applicable laws of the
jurisdiction in which the subject property lies.

 

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ii. The survey is an accurate survey of all of the real property legally
described therein (the “Property”).
iii. The survey map properly and accurately indicates and locates: (a) all
visible improvements on the Property as of the date of the survey; (b) visible
utility structures for power, telephone, storm drainage, sanitary waste disposal
and drinking water; (c) visible footprint foundations, parking spaces, loading
docks and other visible structures and improvements on the Property; and (d) any
changes in street right of way lines completed and available from the
controlling jurisdiction, as well as observable evidence of recent street or
sidewalk construction repairs.
iv. The survey map was prepared under the direct supervision and control of the
undersigned from an actual instrument survey made of the Property.
v. There are no encroachments either across property lines or zoning district
lines or restriction lines in effect as of the date of the survey except as
follows [if no encroachments are specified, there are NONE]:
                                                            
                                                                                ;
vi. The Property described hereon is the same as the property described in title
insurance commitment #                     issued by the
                                         Title Insurance Company dated
                    , 2005 (the “Title Commitment”), and the survey map properly
designates and locates all visible or recorded easements, rights-of-way, party
walls and restricted areas as of the date of the survey and areas affected by
other survey-related matters, if any, listed on the Title Commitment;
vii. The Property has direct physical ingress and egress to [names of streets or
roads                                         ] upon which the Property abuts,
the same being paved and public streets, or paved and private ways leading to
public streets.
viii. The Property is [or in not] located in an area designated as a special
flood hazard area by the United States Department of Housing and Urban
Development and lies in an area having a Zone Designation                     
by the Secretary of Housing and Urban Development, on Flood Insurance Rate Map
No.                     , with a date of identification of                     ,
 _____, which is the current Flood Insurance Rate Map for the community in which
the Property is situated.
ix. The Property does not service any adjoining property for drainage, ingress
or egress.

 

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x. The Property [is/is not] an acceptable subdivision of land under state law or
local, county or city ordinances.
If the Property constitutes more than one parcel or lot, there are no gaps,
gores or strips between them.

         
 
 
 
   
 
  , Licensed Surveyor    

Date:                                                             
[seal]

 

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EXHIBIT C

SINGLE PURPOSE ENTITY PROVISIONS
It is a requirement that the borrower be a bankruptcy remote, special purpose
entity. A bankruptcy remote, special purpose entity is an entity which is
unlikely to become insolvent as a result of its own activities and which is
adequately insulated from the consequences of any other party’s insolvency. Set
forth below is language to be included in the organizational documents of
corporations, limited partnerships and limited liability companies to evidence
such entities’ existence as bankruptcy remote, special purpose entities.
I. CORPORATION.
If the Single Purpose Entity is a corporation, its certificate of incorporation
will have to have the following provisions to be considered a special purpose
entity:
A. Purpose.
The corporation’s purpose should be limited to owning and operating the
mortgaged property (or interests in the Borrower).
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: The nature of the business and of the purposes to be
conducted and promoted by the Corporation, is to engage solely in the following
activities:
1. To acquire that certain parcel of real property, together with all
improvements located thereon, in the City of                     , State of
                     [                     interests in [insert Borrower or
other applicable entity’s name]] (the “Property”).
2. To own, hold, sell, assign, transfer, operate, lease, mortgage, pledge and
otherwise deal with the Property.
3. To exercise all powers enumerated in the [General Corporation Law] of
                     necessary or convenient to the conduct, promotion or
attainment of the business or purposes otherwise set forth herein.
B. Certain Prohibited Activities.
The corporation shall be prohibited, except in certain circumstances, from
engaging in certain activities, including various types of insolvency
proceedings, dissolution, liquidation, consolidation, merger, sale of all or
substantially all of the corporation’s assets, transfer of ownership assets,
incurrence of additional debt and amendment of the corporation’s articles of
incorporation.

 

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“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: The Corporation shall only incur indebtedness in an
amount necessary to acquire, operate and maintain the [Property] [use other term
for the real estate if necessary]. For so long as any mortgage lien exists on
the [Property] [use other term for the real estate if necessary], the
Corporation shall not incur, assume, or guaranty any other indebtedness. The
Corporation shall not consolidate or merge with or into any other entity or
convey or transfer its properties and assets substantially as an entirety to any
entity unless (i) the entity (if other than the Corporation) formed or surviving
such consolidation or merger or that acquired by conveyance or transfer the
properties and assets of the Corporation substantially as an entirety (a) shall
be organized and existing under the laws of the United States of America or any
State or the District of Columbia, (b) shall include in its organizational
documents the same limitations set forth in this Article  _____  and in Article
[insert section setting forth Separateness Covenants], and (c) shall expressly
assume the due and punctual performance of the Corporation’s obligations; and
(ii) immediately after giving effect to such transaction, no default or event of
default under any agreement to which it is a party shall have been committed by
this corporation and be continuing. For so long as a mortgage lien exists on the
[Property] [use other term for the real estate if necessary], the Corporation
will not voluntarily commence a case with respect to itself, as debtor, under
the Federal Bankruptcy Code or any similar federal or state statute without the
unanimous consent of the Board of Directors. For so long as a mortgage lien
exists on the [Property] [use other term for the real estate if necessary],
(ii) no amendment to this certificate of incorporation or to the Corporation’s
By-Laws may be made without first obtaining approval of the mortgagee holding a
first mortgage lien on the [Property] [use other term for the real estate if
necessary] and (ii) the Corporation shall not dissolve, terminate or liquidate.”
“The Board of Directors may not take any action requiring the unanimous
affirmative vote of 100% of the members of the Board of Directors unless all
directors including the Independent Directors shall have participated in such
vote.”
C. Indemnification.
Indemnification of a corporation’s directors and officers should be fully
subordinated to obligations respecting the Property.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: Any indemnification shall be fully subordinated to any
obligations respecting the [Property] [use other term for the real estate if
necessary] and shall not constitute a claim against the Corporation in the event
that cash flow is insufficient to pay such obligations.”

 

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D. Separateness Covenants.
In order to demonstrate that it is a bankruptcy remote entity not at risk of
having its assets substantively consolidated with those of another entity, the
corporation must observe certain covenants designed to make evident the special
purpose entity’s separateness from its affiliates.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: For so long as any mortgage lien exists on the
[Property] [use other term for the real estate if necessary], in order to
preserve and ensure its separate and distinct corporate identity, in addition to
the other provisions set forth in this certificate of incorporation, the
Corporation shall conduct its affairs in accordance with the following
provisions:
1. It shall establish and maintain an office through which its business shall be
conducted separate and apart from those of its parent and any affiliate and
shall allocate fairly and reasonably any overhead for shared office space.
2. It shall maintain separate corporate records and books of account from those
of its parent and any affiliate.
3. Its Board of Directors shall hold appropriate meetings (or act by unanimous
consent) to authorize all appropriate corporate actions, and in authorizing such
actions, shall observe all corporate formalities. The Board of Directors shall
include at least two (2) individuals who are Independent Directors. As used
herein, an “Independent Director” shall mean an individual who shall not have
been at the time of such individual’s appointment, and may not have been at any
time (i) a partner, member, shareholder of, or an officer or employee of, the
Corporation or any of its respective partners, members, shareholders,
subsidiaries or affiliates, (ii) a customer of, or supplier to, the Corporation
or managing member of the Corporation or any of their respective partners,
members, shareholders, subsidiaries or affiliates, (iii) a person controlling
any such partner, member, shareholder, supplier or customer, or (iv) a member of
the immediate family of any such shareholder, officer, employee, supplier or
customer of any other director of the Corporation or of the managing member of
the Corporation. As used herein, the term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a person or entity, whether through ownership of
voting securities, by contract or otherwise.
4. It shall not commingle assets with those of its parent and any affiliate.
5. It shall conduct its own business in its own name.
6. It shall maintain financial statements separate from its parent and any
affiliate.
7. It shall pay any liabilities out of its own funds, including salaries of any
employees, not funds of its parent or any affiliate.

 

C-3

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8. It shall maintain an arm’s length relationship with its parent and any
affiliate.
9. It shall maintain adequate capital in light of its contemplated business
operations.
10. It shall not guarantee or become obligated for the debts of any other
entity, including its parent or any affiliate or hold out its credit as being
available to satisfy the obligations of others.
11. It shall not acquire obligations or securities of its partners, members or
shareholders.
12. It shall use stationery, invoices and checks separate from its parent and
any affiliate.
13. It shall not pledge its assets for the benefit of any other entity,
including its parent and any affiliate or make any loans or advances to any
other person.
14. It shall hold itself out as an entity separate from its parent and any
affiliate.
15. It shall correct any known misunderstanding regarding its separate
identity.”
For purpose of this Article  _____, the following terms shall have the following
meanings:
“affiliate” means any person controlling or controlled by or under common
control with the parent, including, without limitation (i) any person who has a
familial relationship, by blood, marriage or otherwise with any director,
officer or employee of the Corporation, its parent, or any affiliate thereof and
(ii) any person which receives compensation for administrative, legal or
accounting services from this corporation, its parent or any affiliate. For
purposes of this definition, “control” when used with respect to any specified
person, means the power to direct the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.
“parent” means, with respect to a corporation, any other corporation owning or
controlling, directly or indirectly, fifty percent (50%) or more of the voting
stock of the Corporation.
“person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization, or government or any agency
or political subdivision thereof.

 

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II. LIMITED PARTNERSHIP.
If the Single Purpose Entity is a limited partnership, to be a special purpose
entity, all of its general partners shall be special purpose entities. If such
limited partnership has more than one general partner, then such limited
partnership shall continue (and not dissolve) for so long as a solvent general
partner exists. Consequently, both the limited partnership’s partnership
agreement and the certificate of incorporation of its general partner(s) will
have to meet certain requirements to be considered special purpose entities.
Such requirements are as follows:
A. Limited Partnership Agreement.
a. Purpose.
The limited partnership’s purpose should be limited to owning and operating the
mortgaged property.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Partnership to the contrary, the
following shall govern: The nature of the business and of the purposes to be
conducted and promoted by the Partnership, is to engage solely in the following
activities:
1. To acquire that certain parcel of real property, together with all
improvements located thereon, in the City of                     , State of
                                         [                      interests in
[insert Borrower or other applicable entity’s name]] (the “Property”).
2. To own, hold, sell, assign, transfer, operate, lease, mortgage, pledge and
otherwise deal with the Property.
3. To exercise all powers enumerated in the Uniform Limited Partnership Act of
                     necessary or convenient to the conduct, promotion or
attainment of the business or purposes otherwise set forth herein.”
b. Certain Prohibited Activities.
The partnership shall be prohibited, except in certain circumstances, from
engaging in certain activities, including various types of insolvency
proceedings, dissolution, liquidation, consolidation, merger, sale of all or
substantially all of the partnership’s assets, transfer of partnership
interests, incurrence of additional debt and amendment of the partnership
agreement.

 

C-5

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“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Partnership to the contrary, the
following shall govern: The Partnership shall only incur indebtedness in an
amount necessary to acquire, operate and maintain the [Property] [use other term
for the real estate if necessary]. For so long as any mortgage lien exists on
the [Property] [use other term for the real estate if necessary] , the
Partnership shall not incur, assume, or guaranty any other indebtedness. The
Partnership shall not consolidate or merge with or into any other entity or
convey or transfer its properties and assets substantially as an entirety to any
entity unless (i) the entity (if other than the Partnership) formed or surviving
such consolidation or merger or that acquired by conveyance or transfer the
properties and assets of the Partnership substantially as an entirety (a) shall
be organized and existing under the laws of the United States of America or any
State or the District of Columbia, (b) shall include in its organizational
documents the same limitations set forth in this Article                     
and in Article [insert section setting forth Separateness Covenants], and
(c) shall expressly assume the due and punctual performance of the Partnership’s
obligations; and (ii) immediately after giving effect to such transaction, no
default or event of default under any agreement to which it is a party shall
have been committed by this partnership and be continuing. For so long as a
mortgage lien exists on the [Property] [use other term for the real estate if
necessary], the Partnership will not voluntarily commence a case with respect to
itself, as debtor, under the Federal Bankruptcy Code or any similar federal or
state statute without the unanimous consent of all of the partners of the
Partnership. For so long as a mortgage lien exists on the [Property] [use other
term for the real estate if necessary], (i) no amendment to this partnership
agreement may be made and (ii) the partnership shall not dissolve, liquidate or
terminate without first obtaining approval of the mortgagee holding a first
mortgage lien on the [Property] [use other term for the real estate if
necessary] .”
c. Indemnification.
Indemnification of a partnership’s partners should be fully subordinated to
obligations respecting the Property.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Partnership to the contrary, the
following shall govern: Any indemnification shall be fully subordinated to any
obligations respecting the [Property] [use other term for the real estate if
necessary] and shall not constitute a claim against the Partnership in the event
that cash flow is insufficient to pay such obligations.”
d. Separateness Covenants.
In order to demonstrate that it is a bankruptcy remote entity not at risk of
having its assets substantively consolidated with those of another entity, the
partnership must observe certain covenants designed to make evident the special
purpose entity’s separateness from its affiliates.

 

C-6

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“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Partnership to the contrary, the
following shall govern: For so long as any mortgage lien exists on the
[Property] [use other term for the real estate if necessary] , in order to
preserve and ensure its separate and distinct identity, in addition to the other
provisions set forth in this partnership agreement, the Partnership shall
conduct its affairs in accordance with the following provisions:
1. It shall establish and maintain an office through which its business shall be
conducted separate and apart from that of any of its affiliate and shall
allocate fairly and reasonably any overhead for shared office space.
2. It shall maintain separate partnership records and books of account from
those of any affiliate.
3. It shall not commingle assets with those of any affiliate.
4. It shall conduct its own business in its own name.
5. It shall observe all partnership formalities.
6. It shall maintain financial statements separate from any affiliate.
7. It shall pay any liabilities out of its own funds, including salaries of any
employees, not funds of any affiliate.
8. It shall maintain an arm’s length relationship with any affiliate.
9. It shall maintain adequate capital in light of its contemplated business
operations.
10. It shall not guarantee or become obligated for the debts of any other
entity, including any affiliate, or hold out its credit as being available to
satisfy the obligations of others.
11. It shall not acquire obligations or securities of its partners, members or
shareholders.
12. It shall use stationery, invoices and checks separate from any affiliate.
13. It shall not pledge its assets for the benefit of any other entity,
including any affiliate or make any loans or advances to any other person.
14. It shall hold itself out as an entity separate from any affiliate.
15. It shall correct any known misunderstanding regarding its separate identity.
16. At all times have all of its general partners shall be special purpose
corporate entities with at least two (2) Independent Directors.”

 

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For purpose of this Article                     , the following terms shall have
the following meanings:
“affiliate” means any person controlling or controlled by or under common
control with the Partnership including, without limitation (i) any person who
has a familial relationship, by blood, marriage or otherwise with any partner or
employee of the Partnership, or any affiliate thereof and (ii) any person which
receives compensation for administrative, legal or accounting services from this
partnership, or any affiliate. For purposes of this definition, “control” when
used with respect to any specified person, means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.
“Independent Director” shall mean an individual who shall not have been at the
time of such individual’s appointment, and may not have been at any time (i) a
partner, member, shareholder of, or an officer or employee of, the Partnership
or any of its respective partners, members, shareholders, subsidiaries or
affiliates, (ii) a customer of, or supplier to, the Partnership or managing
member of the Partnership or any of their respective partners, members,
shareholders, subsidiaries or affiliates, (iii) a person controlling any such
partner, member, shareholder, supplier or customer, or (iv) a member of the
immediate family of any such shareholder, officer, employee, supplier or
customer of any other director of the Partnership or of the managing member of
the Partnership. As used herein, the term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a person or entity, whether through ownership of
voting securities, by contract or otherwise.
“person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization, or government or any agency
or political subdivision thereof.
e. Dissolution.
The limited partnership agreement should provide that the partnership will
continue (and not dissolve) so long as a solvent general partner exists.
“Notwithstanding any provision or of any other document governing the formation,
management or operation of the Partnership hereof to the contrary, the following
shall govern: The Partnership shall not terminate solely as a consequence of the
[Bankruptcy] of one or more of the general partners of the Partnership so long
as there remains a solvent general partner of the Partnership.”
In addition, dissolution of the partnership must not occur so long as the
partnership remains mortgagor of the mortgaged properly.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Partnership to the contrary, the
following shall govern: Subject to applicable law, dissolution of the
Partnership shall not occur so long as the Partnership remains mortgagor of the
[Property] [use other term for the real estate if necessary] .”

 

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B. Corporate General Partner
a. Purpose.
The corporation’s purpose should be limited to acting as general partner of the
limited partnership whose purpose, as set forth above, generally should be
limited to owning and operating the mortgaged property.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: The nature of the business and of the purposes to be
conducted and promoted by the Corporation is to engage solely in the activity of
acting as a general partner of a limited partnership (the “Partnership”) whose
purpose is to acquire that certain parcel of real property, together with all
improvements located thereon, in the City of                     , State of
                     (the “Property”) and own, hold, sell, assign, transfer,
operate, lease, mortgage, pledge and otherwise deal with the Property. The
Corporation shall exercise all powers enumerated in the General Corporation Law
of                      necessary or convenient to the conduct, promotion or
attainment of the business or purposes otherwise set forth herein.”
b. Certain Prohibited Activities.
The corporation shall be prohibited, except in certain circumstances, from
engaging in or causing the partnership to engage in certain activities,
including various types of insolvency proceedings, dissolution, liquidation,
consolidation, merger, sale of all or substantially all of the corporation’s or
partnership’s assets, transfer of ownership assets, transfer of partnership
interests, incurrence of additional debt, amendment of the corporation’s
articles of incorporation and amendment of the partnership agreement.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: The Corporation shall only incur or cause the
Partnership to incur indebtedness in an amount necessary to acquire, operate and
maintain the Property. For so long as any mortgage lien exists on the Property,
the Corporation shall not and shall not cause the Partnership to incur, assume,
or guaranty any other indebtedness. For so long as the Partnership remains
mortgagor of the Property, the Corporation shall not cause the Partnership to
dissolve. The Corporation shall not and shall not cause the Partnership to
consolidate or merge with or into any other entity or convey or transfer its
properties and assets substantially as an entirety to any entity unless (i) the
entity

 

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(if other than the Corporation or Partnership) formed or surviving such
consolidation or merger or that acquired by conveyance or transfer the
properties and assets of the Corporation or Partnership substantially as an
entirety (a) shall be organized and existing under the laws of the United States
of America or any State or the District of Columbia, (b) shall include in its
organizational documents the same limitations set forth in this Article
                     and in Article [insert section setting forth Separateness
Covenants], and (c) shall expressly assume the due and punctual performance of
the Corporation’s obligations; and (ii) immediately after giving effect to such
transaction, no default or event of default under any agreement to which it is a
party shall have been committed by this corporation or the Partnership and be
continuing. For so long as a mortgage lien exists on the Property, the
Corporation shall not voluntarily commence a case with respect to itself or
cause the Partnership to voluntarily commence a case with respect to itself, as
debtor, under the Federal Bankruptcy Code or any similar federal or state
statute without the unanimous consent of the Board of Directors. For so long as
a mortgage lien exists on the Property, (i) no amendment to this certificate of
incorporation or to the Corporation’s By-Laws nor to the Partnership agreement
of the Partnership may be made and (ii) neither the Corporation nor the
Partnership shall be dissolved, liquidated or terminated without first obtaining
approval of the mortgagee holding a first mortgage lien on the Property.”
“The Board of Directors may not take any action requiring the unanimous
affirmative vote of 100% of the members of the Board of Directors unless all
directors including the Independent Directors shall have participated in such
vote.”
c. Indemnification.
Indemnification of a corporation’s directors and officers should be fully
subordinated to obligations respecting the Property.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: Any indemnification shall be fully subordinated to any
obligations respecting the Partnership or the Property and shall not constitute
a claim against the Corporation in the event that cash flow is insufficient to
pay such obligations.”
d. Separateness Covenants.
In order to demonstrate that it is a bankruptcy remote entity not at risk of
having its assets substantively consolidated with those of another entity, the
Corporation must observe certain covenants designed to make evident the special
purpose entity’s separateness from its affiliates.

 

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“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: For so long as any mortgage lien exists on the Property,
in order to preserve and ensure its separate and distinct corporate identity, in
addition to the other provisions set forth in this certificate of incorporation,
the Corporation shall conduct its affairs in accordance with the following
provisions:
1. It shall establish and maintain an office through which its business shall be
conducted separate and apart from those of its parent and any affiliate and
shall allocate fairly and reasonably any overhead for shared office space.
2. It shall maintain separate corporate records and books of account from those
of its parent and any affiliate.
3. Its Board of Directors shall hold appropriate meetings (or act by unanimous
consent) to authorize all appropriate corporate actions, and in authorizing such
actions, shall observe all corporate formalities. The Board of Directors shall
include at least two (2) individuals who are Independent Directors. As used
herein, an “Independent Director” shall mean an individual who shall not have
been at the time of such individual’s appointment, and may not have been at any
time (i) a partner, member, shareholder of, or an officer or employee of, the
Corporation or any of its respective partners, members, shareholders,
subsidiaries or affiliates, (ii) a customer of, or supplier to, the Corporation
or managing member of the Corporation or any of their respective partners,
members, shareholders, subsidiaries or affiliates, (iii) a person controlling
any such partner, member, shareholder, supplier or customer, or (iv) a member of
the immediate family of any such shareholder, officer, employee, supplier or
customer of any other director of the Corporation or of the managing member of
the Corporation. As used herein, the term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a person or entity, whether through ownership of
voting securities, by contract or otherwise.
4. It shall not commingle assets with those of its parent and any affiliate.
5. It shall conduct its own business in its own name.
6. It shall maintain financial statements separate from its parent and any
affiliate.
7. It shall pay any liabilities out of its own funds, including salaries of any
employees, not funds of its parent or any affiliate.
8. It shall maintain an arm’s length relationship with its parent and any
affiliate.
9. It shall maintain adequate capital in light of its contemplated business
operations.
10. It shall not guarantee or, except to the extent of its liability for the
debt secured by such mortgage lien, become obligated for the debts of any other
entity, including its parent or any affiliate or hold out its credit as being
available to satisfy the obligations of others.

 

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11. It shall not acquire obligations or securities of its partners, members or
shareholders.
12. It shall use stationery, invoices and checks separate from its parent and
any affiliate.
13. It shall not pledge its assets for the benefit of any other entity,
including its parent and any affiliate or make any loans or advances to any
other person.
14. It shall hold itself out as an entity separate from its parent and any
affiliate.
15. It shall correct any known misunderstanding regarding its separate
identity.”
For purpose of this Article                                         , the
following terms shall have the following meanings:
“affiliate” means any person controlling or controlled by or under common
control with the parent, including, without limitation (i) any person who has a
familial relationship, by blood, marriage or otherwise with any director,
officer or employee of the Corporation, its parent, or any affiliate thereof and
(ii) any person which receives compensation for administrative, legal or
accounting services from this corporation, its parent or any affiliate. For
purposes of this definition, “control” when used with respect to any specified
person, means the power to direct the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.
“parent” means, with respect to a corporation, any other corporation owning or
controlling, directly or indirectly, fifty percent (50%) or more of the voting
stock of the Corporation.
“person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization, or government or any agency
or political subdivision thereof.
III. LIMITED LIABILITY COMPANY
If the Single Purpose Entity is a limited liability company, to be a special
purpose entity, each managing member shall be a special purpose corporation. If
such limited liability company has more than one managing member then such
limited liability company shall continue (and not dissolve) for so long as a
solvent managing member exists. Consequently, both the Limited Liability
Company’s articles of organization and the certificate of incorporation of its
outside member will have to meet certain requirements to be considered special
purpose entities. Such requirements are as follows:
A. Articles of Organization
a. Purpose.
The limited liability company’s purpose should be limited to owning and
operating the mortgaged property.

 

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“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Limited Liability Company to the
contrary, the following shall govern: The nature of the business and of the
purposes to be conducted and promoted by the Limited Liability Company, is to
engage solely in the following activities:
1. To acquire that certain parcel of real property, together with all
improvements located thereon, in the City of                     , State of
                      [_____  interests in [insert Borrower or other applicable
entity’s name]] (the “Property”).
2. To own, hold, sell, assign, transfer, operate, lease, mortgage, pledge and
otherwise deal with the Property.
3. To exercise all powers enumerated in the Limited Liability Company Act of
                     necessary or convenient to the conduct, promotion or
attainment of the business or purposes otherwise set forth herein.”
b. Certain Prohibited Activities.
The limited liability company shall be prohibited, except in certain
circumstances from engaging in certain activities, including various types of
insolvency proceedings, dissolution, liquidation, consolidation, merger, sale of
all or substantially all of the limited liability company’s assets, transfer of
limited liability company interests, incurrence of additional debt and amendment
of the articles of organization.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Limited Liability Company to the
contrary, the following shall govern: The Limited Liability Company shall only
incur indebtedness in an amount necessary to acquire, operate and maintain the
[Property] [use other term for the real estate if necessary]. For so long as any
mortgage lien exists on the [Property] [use other term for the real estate if
necessary], the Limited Liability Company shall not incur, assume, or guaranty
any other indebtedness. The Limited Liability Company shall not consolidate or
merge with or into any other entity or convey or transfer its properties and
assets substantially as an entirety to any entity unless (i) the entity (if
other than the Limited Liability Company) formed or surviving such consolidation
or merger or that acquired by conveyance or transfer the properties and assets
of the Limited Liability Company substantially as an entirety (a) shall be
organized and existing under the laws of the United States of America or any
State or the District of Columbia, (b) shall include in its organizational
documents the same limitations set forth in this Article  _____  and in Article
[insert section setting forth Separateness Covenants], and (c) shall expressly
assume the due

 

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and punctual performance of the Limited Liability Company’s obligations; and
(ii) immediately after giving effect to such transaction, no default or event of
default under any agreement to which it is a party shall have been committed by
this limited liability company and be continuing. For so long as a mortgage lien
exists on the [Property] [use other term for the real estate if necessary], the
Limited Liability Company will not voluntarily commence a case with respect to
itself, as debtor, under the Federal Bankruptcy Code or any similar federal or
state statute without the unanimous consent of all of the members of the Limited
Liability Company. For so long as a mortgage lien exists on the [Property] [use
other term for the real estate if necessary], (i) no amendment to these articles
of organization may be made and (ii) the Limited Liability Company shall not be
dissolved, liquidated or terminated without first obtaining approval of the
mortgagee holding a first mortgage lien on the [Property] [use other term for
the real estate if necessary].”
c. Indemnification.
Indemnification of a limited liability company’s partners should be fully
subordinated to obligations respecting the Property.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Limited Liability Company to the
contrary, the following shall govern: Any indemnification shall be fully
subordinated to any obligations respecting the [Property] [use other term for
the real estate if necessary] and shall not constitute a claim against the
Limited Liability Company in the event that cash flow is insufficient to pay
such obligations.”
d. Separateness Covenants.
In order to demonstrate that it is a bankruptcy remote entity not at risk of
having its assets substantively consolidated with those of another entity, the
limited liability company must observe certain covenants designed to make
evident the special purpose entity’s separateness from its affiliates.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Limited Liability Company to the
contrary, the following shall govern: For so long as any mortgage lien exists on
the [Property] [use other term for the real estate if necessary], in order to
preserve and ensure its separate and distinct identity, in addition to the other
provisions set forth in these articles of organization, the Limited Liability
Company shall conduct its affairs in accordance with the following provisions:
1. It shall establish and maintain an office through which its business shall be
conducted separate and apart from that of any of its affiliates and shall
allocate fairly and reasonably any overhead for shared office space.
2. It shall maintain separate records and books of account from those of any
affiliate.

 

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3. It shall not commingle assets with those of any affiliate.
4. It shall conduct its own business in its own name.
5. It shall maintain financial statements separate from any affiliate.
6. It shall pay any liabilities out of its own funds, including salaries of any
employees, not funds of any affiliate.
7. It shall maintain an arm’s length relationship with any affiliate.
8. It shall maintain adequate capital in light of its contemplated business
operations.
9. It shall not guarantee or become obligated for the debts of any other entity,
including any affiliate, or hold out its credit as being available to satisfy
the obligations of others.
10. It shall not acquire obligations or securities of its partners, members or
shareholders.
11. It shall use stationery, invoices and checks separate from any affiliate.
12. It shall not pledge its assets for the benefit of any other entity,
including any affiliate or make any loans or advances to any other person.
13. It shall hold itself out as an entity separate from any affiliate.
14. It shall correct any known misunderstanding regarding its separate identity.
15. At all times all managing members shall be a special purpose corporate
member with at least two (2) Independent Directors.”
For purpose of this Article  _____, the following terms shall have the following
meanings:
“affiliate” means any person controlling or controlled by or under common
control with the Limited Liability Company including, without limitation (i) any
person who has a familial relationship, by blood, marriage or otherwise with any
partner or employee of the Limited Liability Company, or any affiliate thereof
and (ii) any person which receives compensation for administrative, legal or
accounting services from this limited liability company, or any affiliate. For
purposes of this definition, “control” when used with respect to any specified
person, means the power to direct the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

 

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“Independent Director” shall mean an individual who shall not have been at the
time of such individual’s appointment, and may not have been at any time (i) a
partner, member, shareholder of, or an officer or employee of, the Limited
Liability Company or any of its respective partners, members, shareholders,
subsidiaries or affiliates, (ii) a customer of, or supplier to, the Limited
Liability Company or managing member of the Limited Liability Company or any of
their respective partners, members, shareholders, subsidiaries or affiliates,
(iii) a person controlling any such partner, member, shareholder, supplier or
customer, or (iv) a member of the immediate family of any such shareholder,
officer, employee, supplier or customer of any other director of the Limited
Liability Company or of the managing member of the Limited Liability Company. As
used herein, the term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
person or entity, whether through ownership of voting securities, by contract or
otherwise.
“person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization, or government or any agency
or political subdivision thereof.
e. Dissolution.
To the extent permitted by tax law the articles of organization should provide
that the vote of a majority-in-interest of the remaining members is sufficient
to continue the life of the limited liability company. If such vote is not
obtained, for so long as a mortgage lien exists on the [Property] [use other
term for the real estate if necessary] the limited liability company may not be
permitted to liquidate the [Property] [use other term for the real estate if
necessary] without first obtaining approval of the mortgagee holding a first
mortgage lien on the [Property] [use other term for the real estate if
necessary]. Such holders may continue to exercise all of their rights under the
existing security agreements or mortgages until the debt underlying the mortgage
lien has been paid in full or otherwise completely discharged.”
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Limited Liability Company to the
contrary, the following shall govern: To the extent permissible under applicable
federal and state tax law, the vote of a majority-in-interest of the remaining
members is sufficient to continue the life of the Limited Liability Company. If
such vote is not obtained, for so long as a mortgage lien exists on the
[Property] [use other term for the real estate if necessary] the Limited
Liability Company shall not liquidate the [Property] [use other term for the
real estate if necessary] without first obtaining approval of the mortgagee
holding a first mortgage lien on the [Property] [use other term for the real
estate if necessary]. Such holders may continue to exercise all of their rights
under the existing security agreements or mortgages until the debt underlying
the mortgage liens has been paid in full or otherwise completely discharged.

 

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f. Voting.
When acting on matters subject to the vote of the members, notwithstanding that
the limited liability company is not then insolvent, the members and the outside
member must take into account the interest of the Limited Liability Company’s
creditors, as well as those of the members.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Limited Liability Company to the
contrary, the following shall govern: When acting on matters subject to the vote
of the members, notwithstanding that the Limited Liability Company is not then
insolvent, all of the members shall take into account the interest of the
Limited Liability Company’s creditors, as well as those of the members.”
B. Outside Corporate Member
a. Purpose.
The outside corporate member’s purpose should be limited to acting as corporate
member of the limited liability company whose purpose, as set forth above,
generally should be limited to owning and operating the mortgaged property.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: The nature of the business and of the purposes to be
conducted and promoted by the Corporation is to engage solely in the activity of
acting as the outside member of a limited liability company (the “Limited
Liability Company”) whose purpose is to acquire that certain parcel of real
property, together with all improvements located thereon, in the City of
                    , State of                      (the “Property”) and own,
hold, sell, assign, transfer, operate, lease, mortgage, pledge and otherwise
deal with the Property. The Corporation shall exercise all powers enumerated in
the General Corporation Law of                      necessary or convenient to
the conduct, promotion or attainment of the business or purposes otherwise set
forth herein.”
b. Certain Prohibited Activities.
The corporation shall be prohibited, except in certain circumstances, from
engaging in or causing the limited liability company to engage in certain
activities, including various types of insolvency proceedings, dissolution,
liquidation, consolidation, merger, sale of all or substantially all of the
corporation’s or the limited liability company’s assets, transfer of ownership
assets, transfer of limited liability company interests, incurrence of
additional debt, amendment of the corporation’s articles of incorporation and
amendment of the articles of organization.

 

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“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: The Corporation shall only incur or cause the Limited
Liability Company to incur indebtedness in an amount necessary to acquire,
operate and maintain the Property. For so long as any mortgage lien exists on
the Property, the Corporation shall not and shall not cause the Limited
Liability Company to incur, assume, or guaranty any other indebtedness. The
Corporation shall not and shall not cause the Limited Liability Company to
consolidate or merge with or into any other entity or convey or transfer its
properties and assets substantially as an entirety to any entity unless (i) the
entity (if other than the Corporation or Limited Liability Company) formed or
surviving such consolidation or merger or that acquired by conveyance or
transfer of the properties and assets of the Corporation or Limited Liability
Company substantially as an entirety (a) shall be organized and existing under
the laws of the United States of America or any State or the District of
Columbia, (b) shall include in its organizational documents the same limitations
set forth in this Article                      and in Article [insert section
setting forth Separateness Covenants], and (c) shall expressly assume the due
and punctual performance of the Corporation’s obligations; and (ii) immediately
after giving effect to such transaction, no default or event of default under
any agreement to which it is a party shall have been committed by this
corporation or the Limited Liability Company and be continuing. For so long as a
mortgage lien exists on the Property, the Corporation shall not voluntarily
commence a case with respect to itself or cause the Limited Liability Company to
voluntarily commence a case with respect to itself, as debtor, under the Federal
Bankruptcy Code or any similar federal or state statute without the unanimous
consent of the Board of Directors. For so long as a mortgage lien exists on the
Property, without first obtaining approval of the mortgagee holding a first
mortgage lien on the Property (i) no material amendment to this certificate of
incorporation or to the Corporation’s By-Laws nor to the articles of
organization of the Limited Liability Company may be made and (ii) neither the
Corporation nor the Limited Liability Company shall dissolve, liquidate or
terminate without first obtaining approval of the mortgagee holding a first
mortgage lien on the Property.”
“The Board of Directors may not take any action requiring the unanimous
affirmative vote of 100% of the members of the Board of Directors unless all
directors including the Independent Directors shall have participated in such
vote.”
c. Indemnification.
Indemnification of a corporation’s directors and officers should be fully
subordinated to obligations respecting the Property.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: Any indemnification shall be fully subordinated to any
obligations respecting the Limited Liability Company or the Property and shall
not constitute a claim against the Corporation in the event that cash flow is
insufficient to pay such obligations.”

 

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d. Separateness Covenants.
In order to demonstrate that it is a bankruptcy remote entity not at risk of
having its assets substantively consolidated with those of another entity, the
corporation must observe certain covenants designed to make evident the special
purpose entity’s separateness from its affiliates.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: For so long as any mortgage lien exists on the Property,
in order to preserve and ensure its separate and distinct corporate identity, in
addition to the other provisions set forth in this certificate of incorporation,
the Corporation shall conduct its affairs in accordance with the following
provisions:
1. It shall establish and maintain an office through which its business shall be
conducted separate and apart from those of its parent and any affiliate and
shall allocate fairly and reasonably any overhead for shared office space.
2. It shall maintain separate corporate records and books of account from those
of its parent and any affiliate.
3. Its Board of Directors shall hold appropriate meetings (or act by unanimous
consent) to authorize all appropriate corporate actions, and in authorizing such
actions, shall observe all corporate formalities. The Board of Directors shall
include at least two (2) individuals who are Independent Directors. As used
herein, an “Independent Director” shall mean an individual who shall not have
been at the time of such individual’s appointment, and may not have been at any
time (i) a partner, member, shareholder of, or an officer or employee of, the
Corporation or any of its respective partners, members, shareholders,
subsidiaries or affiliates, (ii) a customer of, or supplier to, the Corporation
or managing member of the Corporation or any of their respective partners,
members, shareholders, subsidiaries or affiliates, (iii) a person controlling
any such partner, member, shareholder, supplier or customer, or (iv) a member of
the immediate family of any such shareholder, officer, employee, supplier or
customer of any other director of the Corporation or of the managing member of
the Corporation. As used herein, the term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a person or entity, whether through ownership of
voting securities, by contract or otherwise.
4. It shall not commingle assets with those of its parent and any affiliate.
5. It shall conduct its own business in its own name.
6. It shall maintain financial statements separate from its parent and any
affiliate.

 

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7. It shall pay any liabilities out of its own funds, including salaries of any
employees, not funds of its parent or any affiliate.
8. It shall maintain an arm’s length relationship with its parent and any
affiliate.
9. It shall maintain adequate capital in light of its contemplated business
operations.
10. It shall not guarantee or become obligated for the debts of any other
entity, including its parent or any affiliate or hold out its credit as being
available to satisfy the obligations of others.
11. It shall not acquire obligations or securities of its partners, members or
shareholders.
12. It shall use stationery, invoices and checks separate from its parent and
any affiliate.
13. It shall not pledge its assets for the benefit of any other entity,
including its parent and any affiliate or make any loans or advances to any
other person.
14. It shall hold itself out as an entity separate from its parent and any
affiliate.
15. It shall correct any known misunderstanding regarding its separate
identity.”
For purpose of this Article  _____, the following terms shall have the following
meanings:
“affiliate” means any person controlling or controlled by or under common
control with the parent, including, without limitation (i) any person who has a
familial relationship, by blood, marriage or otherwise with any director,
officer or employee of the Corporation, its parent, or any affiliate thereof and
(ii) any person which receives compensation for administrative, legal or
accounting services from this corporation, its parent or any affiliate. For
purposes of this definition, “control” when used with respect to any specified
person, means the power to direct the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.
“parent’’ means, with respect to a corporation, any other corporation owning or
controlling, directly or indirectly, fifty percent (50%) or more of the voting
stock of the Corporation.
“person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization, or government or any agency
or political subdivision thereof.

 

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e. Voting.
When voting on matters concerning the limited liability company, notwithstanding
that the limited liability company is not then insolvent, the Corporation must
take into account the interest of the Limited Liability Company’s creditors, as
well as those of its members.
“Notwithstanding any provision hereof or of any other document governing the
formation, management or operation of the Corporation to the contrary, the
following shall govern: When voting on matters concerning the Limited Liability
Company, notwithstanding that the Limited Liability Company is not then
insolvent, the Corporation shall take into account the interest of the Limited
Liability Company’s creditors, as well as those of its members.”
IV. OTHER STRUCTURES
The foregoing provisions do not exhaustively contemplate all ownership
structures for a mortgaged property. Situations involving ownership structures
not specifically contemplated by the provisions set forth on this Exhibit C
shall nevertheless require Single Purpose Entities substantively to comply with
the requirements to these provisions, modified as appropriate to accommodate the
ownership structure in question.

 

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EXHIBIT D

ENFORCEABILITY OPINION REQUIREMENTS

1.  
The Opinion shall be delivered on the Closing Date and shall satisfy all
applicable requirements of the Rating Agencies in relation thereto.

2.  
The Opinion shall be given by a professional law firm selected by Borrower and
reasonably acceptable to Lender.

3.  
The Opinion shall be in form and substance acceptable to Lender and shall be
given in relation to Borrower, Guarantor, Manager and any other relevant party
to the Loan (each a “Loan Party”). Depending on the nature of the transaction,
the Opinion shall address the applicable law of the State of New York, the State
where the Property is located and each State where any Loan Party is organized
(collectively, the “Relevant States”). To the extent that the Property is
located in a jurisdiction outside of the State of New York and/or any Loan Party
is organized under a jurisdiction outside the States of New York or Delaware,
the appropriate opinions below should be given by local counsel. The Opinion
shall be given on the basis of an examination of an executed original of each
completed Loan Document in addition to such other documents or instruments
counsel deems relevant.

4.  
The Opinion shall contain the following opinions:

I.  
Opinions with respect to the law of the State of Formation or Organization of
the Loan Parties

  (a)  
Each Loan Party is a [Describe Legal Form] duly organized, validly existing and
in good standing under the laws of the State of [State of Organization] and is
authorized to do business and in good standing in the State of [State of
Organization].

  (b)  
Each Loan Party has the requisite power to own its properties and to carry on
its business as now being conducted and to enter into the transactions covered
by the Loan Documents.

  (c)  
The execution and delivery by each Loan Party of each Loan Document to which it
is a party has been duly authorized by all necessary partnership, company and/or
corporate action, as applicable. To the extent a party thereto, the Loan
Documents have been duly executed and delivered by each Loan Party.

  (d)  
The execution, delivery and performance by each Loan Party of the Loan Documents
to which it is a party does not:

  (i)  
conflict with or result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, the partnership agreement,
partnership certificate, articles of incorporation, by-laws, trust agreement or
trust certificate, as applicable, of such Loan Party;

 

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  (ii)  
contravene any law, statute or regulation of the United States of America or the
[State of Organization] or any agency or political subdivision of either
thereof;

  (iii)  
violate any order, writ, injunction, or decree of which, after due inquiry,
counsel has actual knowledge, issued by any court or governmental authority of
the United States of America or the [State of Organization] or any agency or
political subdivision of either thereof to which such Loan Party is subject; or

  (iv)  
conflict with or result in any breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any lien other than the lien of the Loan
Documents upon any of the assets or properties of such Loan Party pursuant to
the terms of any material indenture, mortgage, deed of trust, agreement,
contract or instrument to which such Loan Party is a party or by which it or any
of its assets or properties is bound.

  (e)  
No order, consent, approval, license or authorization of, or filing, recording
or registration with, any governmental or public body or authority of the United
States of America or the State of [Relevant State] or any agency or political
subdivision of either thereof is required in connection with the execution and
delivery of any of the Loan Documents, the validity, binding effect or
enforceability of any of the Loan Documents or the consummation of the
transactions contemplated thereby.

  (f)  
There are no actions, suits or proceedings by or before any court, governmental
or regulatory authority or agency of which, after due inquiry, we have actual
knowledge pending or threatened against or affecting any Loan Party or
Borrower’s rights with respect to the Property wherein an adverse ruling or
decision, individually or collectively with other such actions, suits or
proceedings, is reasonably likely (i) to affect materially and adversely the
ability of any Loan Party to consummate the transactions contemplated by the
Loan Documents or to perform its obligations under any of the Loan Documents, or
(ii) to result in a challenge to the legality, validity, binding effect or
enforceability of any of the Loan Documents.

  (g)  
To the extent the State of [State of Organization] UCC is applicable to the
authorization of the Financing Statement, pursuant to the provisions of the Loan
Agreement and the Security Instrument, Borrower has authorized the filing of the
Financing Statement for purposes of Section 9-509 of the State of [State of
Organization] UCC.

 

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  (h)  
To the extent the State of [State of Organization] UCC is applicable, the
financing Statement includes not only all of the types of information required
by Section 9-502(a) of the State of [State of Organization] UCC but also the
types of information without which the Filing Office may refuse to accept the
Financing Statement pursuant to Section 9-516 of the State of [State of
Organization] UCC.

  (i)  
To the extent the State of [State of Organization] UCC is applicable, the
security interest of the Secured Party will be perfected in Borrower’s rights in
all UCC Collateral upon the later of the attachment of the security interest and
the filing of the Financing Statement in the Filing Office; provided, however,
we express no opinion with respect to (i) money, (ii) deposit accounts,
(iii) letter of credit rights, (iv) goods covered by a certificate of title
statute, (v) as-extracted collateral, timber to be cut, or (vi) any property
subject to a statute, regulation or treaty of the United States whose
requirements for a security interest’s obtaining priority over the rights of a
lien creditor with respect to the property preempt Section 9-310(a) of the State
of [State of Organization]. “UCC Collateral” means the portion of the Property
(as defined in the Security Instrument), the Rate Cap Collateral, the Account
Collateral (as defined in the Loan Agreement) and the Collateral Accounts (as
defined in the Account Agreement) to the extent the UCC governs a security
interest in such collateral.

  (j)  
You have asked whether Borrower is a “registered organization” as such term is
defined in Section 9-102(a)(70) of the State of [State of Organization] UCC.
Pursuant to Section 9-102(a)(70) of the State of [State of Organization] UCC, a
“registered organization” must be (i) organized solely under the laws of a
single State (or the United States) and (ii) the State (or the United States)
must maintain a public record showing the organization to have been organized.

II.  
Opinions with respect to New York Law

  (a)  
To the extent governed by New York law and to the extent a party thereto, the
Loan Documents are the legal, valid and binding obligations of each Loan Party,
enforceable against such Loan Party in accordance with their terms.

 

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  (b)  
The execution, delivery and performance by each Loan Party of the Loan Documents
to which it is a party does not:

  (i)  
contravene any law, statute or regulation of the United States of America or the
State of New York or any agency or political subdivision of either thereof;

  (ii)  
violate any order, writ, injunction, or decree of which, after due inquiry,
counsel has actual knowledge, issued by any court or governmental authority of
the United States of America or the State of New York or any agency or political
subdivision of either thereof to which such Loan Party is subject; or

  (iii)  
conflict with or result in any breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any lien other than the lien of the Loan
Documents upon any of the assets or properties of such Loan Party pursuant to
the terms of any material indenture, mortgage, deed of trust, agreement,
contract or instrument to which such Loan Party is a party or by which it or any
of its assets or properties is bound.

  (c)  
No order, consent, approval, license or authorization of, or filing, recording
or registration with, any governmental or public body or authority of the United
States of America or the State of New York or any agency or political
subdivision of either thereof is required in connection with the execution and
delivery of any of the Loan Documents, the validity, binding effect or
enforceability of any of the Loan Documents or the consummation of the
transactions contemplated thereby.

  (d)  
There are no actions, suits or proceedings by or before any court, governmental
or regulatory authority or agency of which, after due inquiry, we have actual
knowledge pending or threatened against or affecting any Loan Party or
Borrower’s rights with respect to the Property wherein an adverse ruling or
decision, individually or collectively with other such actions, suits or
proceedings, is reasonably likely (i) to affect materially and adversely the
ability of any Loan Party to consummate the transactions contemplated by the
Loan Documents or to perform its obligations under any of the Loan Documents, or
(ii) to result in a challenge to the legality, validity, binding effect or
enforceability of any of the Loan Documents.

  (e)  
The payment by Borrower and receipt by Lender of all principal and interest will
not violate the usury laws of the State of New York or otherwise constitute
unlawful interest.

  (f)  
The provisions of the Loan Agreement and the Security Instrument are effective
to create, in favor of Lender to secure the obligations purported to be secured
thereby, a valid security interest in Borrower’s rights in the UCC Collateral.

 

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  (g)  
Under New York UCC, the provisions of the Account Agreement are effective to
perfect the security interest of Lender in Borrower’s rights in the Collateral
Accounts (as defined in the Account Agreement).

III.  
Opinions with respect to the law of States in which the Property is located

  (a)  
Each Loan Party is authorized to do business and in good standing in the State
of [Relevant State].

  (b)  
To the extent governed by the laws of the State of [Relevant States], the
Security Instrument and the Assignment of Leases are the legal, valid and
binding obligations of Borrower, enforceable against Borrower in accordance with
their terms.

  (c)  
The Security Instrument is in proper form so as to comply with recording
requirements of the State of [Relevant State]. The Security Instrument creates
in favor of Lender valid liens on the portion of the Property that are located
in the State of [Relevant States], securing payment of the Obligations (as
defined in the Security Instrument), and no further action will be required for
the valid creation of such liens. Upon recordation in the office of the
[Recording Office] the Security Instrument will provide constructive notice of
the terms thereof and the liens created thereby to third parties acquiring
interests in the portion of the Property that are located in the State of
[Relevant States] subsequent to such recordation.

  (d)  
The Assignment of Leases is in proper form so as to comply with the recording
requirements of the State of [Relevant States]. At the time the Assignment of
Leases is delivered to the Recording Office for recording, it will take effect
as to all creditors and subsequent purchasers for a valuable consideration
without notice, and it shall be entitled to priority over any other similar
instrument delivered to said Recording Office for recording after that time, in
the absence of actual notice.

  (e)  
Pursuant to the provisions of the Security Instrument Borrower has authorized
the filing of the Fixture Financing Statement identifying the Fixture Collateral
for purposes of Section 9-509 of the [Relevant States] UCC. “Fixture Collateral”
means that portion of the UCC Collateral which consists of “fixtures” (as
defined in Article 9 of the UCC) to the extent the UCC governs a security
interest in such collateral.

  (f)  
The Fixture Financing Statement includes not only all the types of information
required by Section 9-502(a) and 9-502(b) of the [Relevant States] UCC but also
the types of information without which the Fixture Filing Office may refuse to
accept the Fixture Financing Statement pursuant to Section 9-516 of the State of
[Relevant States] UCC.

 

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  (g)  
Under the [Relevant States] UCC, the security interest of the Secured Party will
be perfected in Borrower’s rights in any Fixture Collateral located on the real
property described on Schedule 1 to the Fixture Financing Statement upon the
later of the attachment of the security interest and the filing of the Fixture
Financing Statement in the Fixture Filing Office.

  (h)  
Borrower has paid all recording tax due in connection with the recording of the
Security Instrument and the Assignment of Leases. No additional deed of trust
recording, intangibles tax, documentary stamp tax or similar taxes or charges,
other than nominal recordation or filing fees, are required to be paid as a
condition of the legality of enforceability of the Security Instrument or the
Assignment of Leases.

  (i)  
The State of [Relevant States] has no law pursuant to which a lien against any
assets or properties of Borrower (whether real, personal, mixed, tangible or
intangible) superior to the lien created by the Security Instrument could arise
as a result of a violation of environmental laws or regulations of such State.
No environmental law or regulation of the State of [Relevant States] would
require any remedial or removal action or certification of nonapplicability as a
condition to the granting of the Security Instrument, the foreclosure or other
enforcement of the Loan Documents or the sale of any assets or properties of
Borrower (whether real, personal, mixed, tangible or intangible) located in the
State of [Relevant States].

  (j)  
No order, consent, approval, license or authorization of, or filing, recording
or registration with, any governmental or public body or authority of the United
States of America or the State of [Relevant States] or any agency or political
subdivision of either thereof is required in connection with the execution and
delivery of any of the Loan Documents, the validity, binding effect or
enforceability of any of the Loan Documents or the consummation of the
transactions contemplated thereby.

  (k)  
There are no actions, suits or proceedings by or before any court, governmental
or regulatory authority or agency of which, after due inquiry, we have actual
knowledge pending or threatened against or affecting any Loan Party or
Borrower’s rights with respect to the Property wherein an adverse ruling or
decision, individually or collectively with other such actions, suits or
proceedings, is reasonably likely (i) to affect materially and adversely the
ability of any Loan Party to consummate the transactions contemplated by the
Loan Documents or to perform its obligations under any of the Loan Documents, or
(ii) to result in a challenge to the legality, validity, binding effect or
enforceability of any of the Loan Documents.

 

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  (l)  
If the Obligations (as defined in the Security Instrument) were to be governed
by the laws of the State of [Relevant States], the payment by Borrower and
receipt by Lender of all principal and interest will not violate the usury laws
of the State of [Relevant States] or otherwise constitute unlawful interest.

  (m)  
A federal court sitting in the State of [Relevant States] and applying the
conflict of law rules of the State of [Relevant States], and the state courts in
the State of [Relevant States], would give effect to the choice of law
provisions contained in the Loan Documents. If counsel is not able to give this
opinion as an unqualified opinion, an opinion that the Loan Agreement and Note
would be enforceable under the law of the State of [Relevant States] if such law
were held to apply will be required.

  (n)  
The operation of any term of the Loan Documents, including, without limitation,
the terms regarding late charges, default interest or prepayment premiums, or
the lawful exercise of any right thereunder, shall not render the Loan Documents
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense.

5.  
The Opinion shall be addressed to Lender and its successors and assigns and
shall state that it may be relied upon by (i) any assignee of Lender’s interest
in the Loan, (ii) any servicer of the Loan, (iii) any purchaser of the Loan or
any portion thereof in any Securitization, (iv) any Rating Agency involved in a
Securitization of the Loan, (v) the issuer of securities in a Securitization of
the Loan, and (vi) any trustee or servicer appointed in connection with a
Securitization of the Loan.

 

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EXHIBIT E

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EXHIBIT F

INTENTIONALLY DELETED

 

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EXHIBIT G

INTENTIONALLY DELETED

 

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EXHIBIT H

INTENTIONALLY DELETED

 

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EXHIBIT I

INTENTIONALLY DELETED

 

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EXHIBIT J

INTENTIONALLY DELETED

 

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EXHIBIT K

BORROWER ORGANIZATIONAL STRUCTURE
(FLOW CHART) [c92077c92077z0001.gif]

BLUELINX HOLDINGS INC. ABP AL (MIDFIELD) LLC ABP AR (LITTLE ROCK) LLC ABP CA
(CITY OF INDUSTRY) LLC ABP CA (NATIONAL CITY) LLC ABP CA (NEWARDK) LLC ABP CO I
(DENVER) LLC ABP CA (RIVERSIDE) LLC ABP CT (NEWTON) LLC ABP FL (MIAMI) LLC ABP
FL (LAKE CITY) LLC ABP FL (TAMPA) LLC ABP FL (PENSACOLA) LLC ABP GA
(LAWRENCEVILLE) LLC ABP FL (YULEE) LLC ABP IL (UNIVERSITY PARK) LLC ABP IA (DES
MOINES) LLC ABP KY (INDEPENDENCE) LLC ABP IN (ELKHART) LLC ABP MA
(BELLINGHAM) LLC ABP LA (SHEVEPORT) LLC ABP ME (PORTLAND) LLC ABP MI (GRAND
RAPIDS) LLC ABP MI (DETROIT) LLC ABP MN (MAPLE GROVE) LLC ABP MN (EAGAN) LLC ABP
MO (KANSAS CITY) LLC ABP MO (BRIDGETON) LLC ABP MS (PEARL) LLC ABP MO
(SPRINGFIELD) LLC ABP NC (CHARLOTTE) LLC ABP NC (BUTNER) LLC ABP NJ
(DENVILLE) LLC ABP ND (NORTH FARGO) LLC ABP NY (YAPHANK) LLC ABP NM
(ALBUQUERQUE) LLC ABP OK (TULSA) LLC ABP OH (TALMADGE) LLC ABP PA
(ALLENTOWN) LLC ABP OR (BEAVERTON) LLC ABP SC (CHARLESTON) LLC ABP PA
(STANTON) LLC ABP TN (ERWIN) LLC ABP SD (SIOUX FALLS) LLC ABP TN (NASHVILLE) LLC
ABP TN (MEMPHIS) LLC ABP TX (FORT WORTH) LLC ABP TX (EL PASO) LLC ABP TX
(HOUSTON) LLC ABP TX (HARLINGEN) LLC ABP TX (SAN ANTONIO) LLC ABP TX
(LUBBOCK) LLC ABP VA (VIRGINIA BEACH) LLC ABP VA (RICHMOND) LLC ABP VA
(RICHMOND) LLC ABP VT (SHELBURNE) LLC ABP WI (WAUSAU) LLC ABP MD (BALTIMORE) LLC
ABP MD (BALTIMORE) SUBSIDIARY LLC

 

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EXHIBIT L

INTENTIONALLY DELETED

 

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EXHIBIT M

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
Reference is made to that certain Loan and Security Agreement, dated as of
                     200__  (as amended, supplemented or otherwise modified from
time to time, the “Loan Agreement”) between the borrower signatory thereto
(collectively, “Borrower”), and German American Capital Corporation, a Maryland
corporation (“Lender”), and certain notes of even date with the Loan Agreement
(collectively, the “Note”), made by Borrower in favor of Lender. Terms defined
in the Loan Agreement and not otherwise defined herein are used herein with the
same meaning.
The Assignor and the Assignee referred to on Schedule 1 attached hereto agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, an interest in and to the
Assignor’s rights and obligations under the Note and the Loan Agreement as of
the date hereof equal to the percentage interest specified on Schedule 1
attached hereto. After giving effect to such sale and assignment, the amount of
the Loan and the Note owing to the Assignee will be as set forth on Schedule 1
attached hereto.
2. The Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; (ii) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with the Loan Documents or any
other instrument or document furnished pursuant thereto; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrower or the performance or observance by Borrower of
any of its obligations under any Loan Document or any other instrument or
document furnished pursuant thereto; and (iv) attaches the Note or notes held by
the Assignor and requests that the Lender exchange such Note or notes for a new
note or notes payable to the order of the Assignee in an amount equal to the
principal amount of the Loan assumed by the Assignee pursuant hereto or new
notes payable to the order of the Assignee in an amount equal to the principal
amount of the Loan assumed by the Assignee pursuant hereto and the Assignor in
an amount equal to the principal amount of the Loan retained by the Assignor
under the Note and the Loan Agreement, respectively, as specified on Schedule 1
attached hereto.

 

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3. The Assignee (i) confirms that it has received a copy of the Note and the
Loan Agreement, together with such financial statements and other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon Lender or the Assignor based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Agreement or the Note; (iii) appoints and authorizes Lender to take such action
as agent on its behalf and to exercise such powers and discretion under the Loan
Documents as are delegated to Lender by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; and (iv) agrees that
it will perform in accordance with their terms all of the obligations that by
the terms of the Loan Agreement and the Note are required to be performed by it
as an assignee of an interest therein.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to Lender for acceptance and recording. The effective date for this
Assignment and Acceptance (the “Effective Date”) shall be the date of acceptance
hereof by the Lender, unless otherwise specified on Schedule 1 attached hereto.
5. Upon such acceptance and recording by Lender, as of the Effective Date,
(i) the Assignee shall be a party to the Loan Agreement and the Note and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of an assignee thereof, and (ii) the Assignor shall, to the extent
provided in the Loan Agreement and this Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan Agreement and the
Note.
6. Upon such acceptance and recording by Lender, from and after the Effective
Date, Lender shall make all payments under the Loan Agreement and the Note or
notes in respect of the interest assigned hereby (including, without limitation,
all payments of principal, interest and commitment fees with respect thereto) to
the Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Loan Agreement and the Note or notes for periods prior to
the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule 1 to this Assignment and Acceptance by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment and Acceptance.
* * *

IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment
and Acceptance and Schedule 1 to this Assignment and Acceptance to be executed
by their officers thereunto duly authorized as of the date specified on
Schedule 1.

 

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Schedule 1

         
As to the Loan in respect of which an interest is being assigned:
       
 
       
Percentage interest assigned:
      %
 
     
 
       
Aggregate outstanding principal amount of the Loan assigned:
  $    
 
     
 
       
Principal amount of Note payable to Assignee:
  $    
 
     
 
       
Principal amount of Note payable to Assignor:
  $    
 
     
 
       
Effective Date (if other than date of acceptance by Lender):                    
__, ______
       

                      [NAME OF ASSIGNOR], as Assignor    
 
               
 
  By:                          
 
      Name:        
 
               
 
      Title:        
 
               
 
                          Dated:                      __, ____    
 
                    [NAME OF ASSIGNEE], as Assignee    
 
               
 
  By:                          
 
      Name:        
 
               
 
      Title:        
 
               
 
                          Dated:                     , ____    

Accepted this  _____  day of                     ,  _____ 
[NAME OF LENDER]

             
By:
                     
 
  Name:        
 
     
 
   
 
  Title:        
 
           

 

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EXHIBIT N

FORM OF
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
 
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
                    ,
Tenant

AND
GERMAN AMERICAN CAPITAL CORPORATION
Lender

         
 
  County:   [                      ]
 
  Section:   [                      ]
 
  Block:   [                      ]
 
  Lot:   [                      ]
 
 
 
  Premises:    

Dated: as of                     , ____
 
Record and return by mail to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Harvey R. Uris, Esq.

 

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SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT made as of this  _____  day of  _____, 200_, between GERMAN
AMERICAN CAPITAL CORPORATION, a Maryland corporation, having an address at 60
Wall Street, New York, New York 10005 (hereinafter called “Lender”), and  _____,
a                     , having an address at                      (hereinafter
called “Tenant”).
RECITALS:
WHEREAS, by a lease (the “Original Lease”) dated  _____, 200__  between
                     (hereinafter called “Landlord”), as landlord, and Tenant,
as tenant, as amended by lease amendment[s] dated  _____, 200_, [_____, 200__ 
and  _____, 200_] (the Original Lease, as so amended, is hereinafter the
“Lease”), a memorandum of which Lease was dated  _____  and was recorded in
 _____  in Reel  _____, Page  _____, [ADD RECORDING DATA FOR MEMORANDA OF
AMENDMENTS, IF APPLICABLE], Landlord leased to Tenant certain premises located
in                                          (the “Premises”) on the property
described in Schedule “A” annexed hereto and made a part hereof (the
“Property”); and
WHEREAS, Lender is about to make a loan to Landlord, which loan shall be secured
by, among other things, a mortgage or deed of trust (which mortgage or deed of
trust, and all amendments, renewals, increases, modifications, replacements,
substitutions, extensions, spreaders and consolidations thereof and all
re-advances thereunder and addictions thereto, is referred to as the “Security
Instrument”) encumbering the Property; and
WHEREAS, Lender and Tenant desire to confirm their understanding and agreement
with respect to the Lease and the Security Instrument.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, Lender and Tenant hereby agree and covenant as follows:
1. The Lease, and all of the terms, covenants, provisions and conditions thereof
(including, without limitation, any right of first refusal, right of first
offer, option or any similar right with respect to the sale or purchase of the
Property, or any portion thereof) is, shall be and shall at all times remain and
continue to be subject and subordinate in all respects to the lien, terms,
covenants, provisions and conditions of the Security Instrument and to all
advances and re-advances made thereunder and all sums secured thereby. This
provision shall be self-operative but Tenant shall execute and deliver any
additional instruments which Lender may reasonably require to effect such
subordination.

 

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2. So long as (i) Tenant is not in default (beyond any period given in the Lease
to Tenant to cure such default) in the payment of rent, percentage rent or
additional rent or in the performance or observance of any of the other terms,
covenants, provisions or conditions of the Lease on Tenant’s part to be
performed or observed, (ii) Tenant is not in default under this Agreement and
(iii) the Lease is in full force and effect: (a) Tenant’s possession of the
Premises and Tenant’s rights and privileges under the Lease, or any extensions
or renewals thereof which may be effected in accordance with any option therefor
which is contained in the Lease, shall not be diminished or interfered with by
Lender, and Tenant’s occupancy of the Premises shall not be disturbed by Lender
for any reason whatsoever during the term of the Lease or any such extensions or
renewals thereof and (b) Lender will not join Tenant as a party defendant in any
action or proceeding to foreclose the Security Instrument or to enforce any
rights or remedies of Lender under the Security Instrument which would cut-off,
destroy, terminate or extinguish the Lease or Tenant’s interest and estate under
the Lease (except to the extent required so that Tenant’s right to receive or
set-off any monies or obligations owed or to be performed by any of Lender’s
predecessors-in-interest shall not be enforceable thereafter against Lender or
any of Lender’s successors-in-interest). Notwithstanding the foregoing
provisions of this paragraph, if it would be procedurally disadvantageous for
Lender not to name or join Tenant as a party in a foreclosure proceeding with
respect to the Security Instrument, Lender may so name or join Tenant without in
any way diminishing or otherwise affecting the rights and privileges granted to,
or inuring to the benefit of, Tenant under this Agreement.
3. (A) After notice is given by Lender that the Security Instrument is in
default and that the rentals under the Lease should be paid to Lender, Tenant
will attorn to Lender and pay to Lender, or pay in accordance with the
directions of Lender, all rentals and other monies due and to become due to
Landlord under the Lease or otherwise in respect of the Premises. Such payments
shall be made regardless of any right of set-off, counterclaim or other defense
which Tenant may have against Landlord, whether as the tenant under the Lease or
otherwise.
(B) In addition, if Lender (or its nominee or designee) shall succeed to the
rights of Landlord under the Lease through possession or foreclosure action,
delivery of a deed or otherwise, or another person purchases the Property or the
portion thereof containing the Premises upon or following foreclosure of the
Security Instrument or in connection with any bankruptcy case commenced by or
against Landlord, then at the request of Lender (or its nominee or designee) or
such purchaser (Lender, its nominees and designees, and such purchaser, and
their respective successors and assigns, each being a “Successor-Landlord”),
Tenant shall attorn to and recognize Successor-Landlord as Tenant’s landlord
under the Lease and shall promptly execute and deliver any instrument that
Successor-Landlord may reasonably request to evidence such attornment. Upon such
attornment, the Lease shall continue in full force and effect as, or as if it
were, a direct lease between Successor-Landlord and Tenant upon all terms,
conditions and covenants as are set forth in the Lease. If the Lease shall have
terminated by operation of law or otherwise as a result of or in connection with
a bankruptcy case commenced by or against Landlord or a foreclosure action or
proceeding or delivery of a deed in lieu, upon request of Successor-Landlord,
Tenant shall promptly execute and deliver a direct lease with Successor-Landlord
which direct lease shall be on substantially the same terms and conditions as
the Lease (subject, however, to the provisions of clauses (i)-(v) of this
paragraph 3(B)) and shall be effective as of the day the Lease shall have
terminated as aforesaid. Notwithstanding the continuation of the Lease, the
attornment of Tenant thereunder or the execution of a direct lease between
Successor-Landlord and Tenant as aforesaid, Successor-Landlord shall not:
(i) be liable for any previous act or omission of Landlord under the Lease;
(ii) be subject to any off-set, defense or counterclaim which shall have
theretofore accrued to Tenant against Landlord;

 

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(iii) be bound by any modification of the Lease or by any previous prepayment of
rent or additional rent made more than one (1) month prior to the date same was
due which Tenant might have paid to Landlord, unless such modification or
prepayment shall have been expressly approved in writing by Lender;
(iv) be liable for any security deposited under the Lease unless such security
has been physically delivered to Lender or Successor-Landlord; and
(v) be liable or obligated to comply with or fulfill any of the obligations of
the Landlord under the Lease or any agreement relating thereto with respect to
the construction of, or payment for, improvements on or above the Premises (or
any portion thereof), leasehold improvements, tenant work letters and/or similar
items.
4. Tenant agrees that without the prior written consent of Lender, it shall not
(a) amend, modify, terminate or cancel the Lease or any extensions or renewals
thereof, (b) tender a surrender of the Lease, (c) make a prepayment of any rent
or additional rent more than one (1) month in advance of the due date thereof,
or (d) subordinate or permit the subordination of the Lease to any lien
subordinate to the Security Instrument. Any such purported action without such
consent shall be void as against the holder of the Security Instrument.
5. (A) Tenant shall promptly notify Lender of any default by Landlord under the
Lease and of any act or omission of Landlord which would give Tenant the right
to cancel or terminate the Lease or to claim a partial or total eviction.
(B) In the event of a default by Landlord under the Lease which would give
Tenant the right, immediately or after the lapse of a period of time, to cancel
or terminate the Lease or to claim a partial or total eviction, or in the event
of any other act or omission of Landlord which would give Tenant the right to
cancel or terminate the Lease, Tenant shall not exercise such right (i) until
Tenant has given written notice of such default, act or omission to Lender and
(ii) unless Lender has failed, within sixty (60) days after Lender receives such
notice, to cure or remedy the default, act or omission or, if such default, act
or omission shall be one which is not reasonably capable of being remedied by
Lender within such sixty (60) day period, until a reasonable period for
remedying such default, act or omission shall have elapsed following the giving
of such notice and following the time when Lender shall have become entitled
under the Security Instrument to remedy the same (which reasonable period shall
in no event be less than the period to which Landlord would be entitled under
the Lease or otherwise, after similar notice, to effect such remedy), provided
that Lender shall with due diligence give Tenant written notice of its intention
to and shall commence and continue to, remedy such default, act or omission. If
Lender cannot reasonably remedy a default, act or omission of Landlord until
after Lender obtains possession of the Premises, Tenant may not terminate or
cancel the Lease or claim a partial or total eviction by reason of such default,
act or omission until the expiration of a reasonable period necessary for the
remedy after Lender secures possession of the Premises. To the extent Lender
incurs any expenses or other costs in curing or remedying such default, act or
omission, including, without limitation, attorneys’ fees and disbursements,
Lender shall be subrogated to Tenant’s rights against Landlord.
(C) Notwithstanding the foregoing, Lender shall have no obligation hereunder to
remedy such default, act or omission.

 

N-4

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6. To the extent that the Lease shall entitle Tenant to notice of the existence
of any mortgage and the identity of any mortgagee or any ground lessor, this
Agreement shall constitute such notice to Tenant with respect to the Security
Instrument and Lender.
7. Upon and after the occurrence of a default under the Security Instrument,
which is not cured after any applicable notice and/or cure periods, Lender shall
be entitled, but not obligated, to exercise the claims, rights, powers,
privileges and remedies of Landlord under the Lease and shall be further
entitled to the benefits of, and to receive and enforce performance of, all of
the covenants to be performed by Tenant under the Lease as though Lender were
named therein as Landlord.
8. Anything herein or in the Lease to the contrary notwithstanding, in the event
that a Successor-Landlord shall acquire title to the Property or the portion
thereof containing the Premises, Successor-Landlord shall have no obligation,
nor incur any liability, beyond Successor-Landlord’s then interest, if any, in
the Property, and Tenant shall look exclusively to such interest, if any, of
Successor-Landlord in the Property for the payment and discharge of any
obligations imposed upon Successor-Landlord hereunder or under the Lease, and
Successor-Landlord is hereby released or relieved of any other liability
hereunder and under the Lease. Tenant agrees that, with respect to any money
judgement which may be obtained or secured by Tenant against Successor-Landlord,
Tenant shall look solely to the estate or interest owned by Successor-Landlord
in the Property, and Tenant will not collect or attempt to collect any such
judgement out of any other assets of Successor-Landlord.
9. Notwithstanding anything to the contrary in the Lease, Tenant agrees for the
benefit of Landlord and Lender that, except as permitted by, and fully in
accordance with, applicable law, Tenant shall not generate, store, handle,
discharge or maintain in, on or about any portion of the Property, any asbestos,
polychlorinated biphenyls, or any other hazardous or toxic materials, wastes and
substances which are defined, determined or identified as such (including, but
not limited to, pesticides and petroleum products if they are defined,
determined or identified as such) in any federal, state or local laws, rules or
regulations (whether now existing or hereafter enacted or promulgated) or any
judicial or administrative interpretation of any thereof, including any judicial
or administrative interpretation of any thereof, including any judicial or
administrative orders or judgments.

 

N-5

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10. If the Lease provides that Tenant is entitled to expansion space,
Successor-Landlord shall have no obligation nor any liability for failure to
provide such expansion space if a prior landlord (including, without limitation,
Landlord), by reason of a lease or leases entered into by such prior landlord
with other tenants of the Property, has precluded the availability of such
expansion space.
11. Except as specifically provided in this Agreement, Lender shall not, by
virtue of this Agreement, the Security Instrument or any other instrument to
which Lender may be a party, be or become subject to any liability or obligation
to Tenant under the Lease or otherwise.
12. (A) Tenant acknowledges and agrees that this Agreement satisfies and
complies in all respects with the provisions of Article  _____  of the Lease and
that this Agreement supersedes (but only to the extent inconsistent with) the
provisions of such Article and any other provision of the Lease relating to the
priority or subordination of the Lease and the interests or estates created
thereby to the Security Instrument.
(B) Tenant agrees to enter into a subordination, non-disturbance and attornment
agreement with any lender which shall succeed Lender as lender with respect to
the Property, or any portion thereof, provided such agreement is substantially
similar to this Agreement. Tenant does herewith irrevocably appoint and
constitute Lender as its true and lawful attorney-in-fact in its name, place and
stead to execute such subordination, non-disturbance and attornment agreement,
without any obligation on the part of Lender to do so. This power, being coupled
with an interest, shall be irrevocable as long as the Indebtedness secured by
the Security Instrument remains unpaid. Lender agrees not to exercise its rights
under the preceding two sentences if Tenant promptly enters into the
subordination, non-disturbance and attornment agreement as required pursuant to
the first sentence of this subparagraph (B).
13. (A) Any notice required or permitted to be given by Tenant to Landlord shall
be simultaneously given also to Lender, and any right to Tenant dependent upon
notice shall take effect only after notice is so given. Performance by Lender
shall satisfy any conditions of the Lease requiring performance by Landlord, and
Lender shall have a reasonable time to complete such performance as provided in
Paragraph 5 hereof.
(B) All notices or other communications required or permitted to be given to
Tenant or to Lender pursuant to the provisions of this Agreement shall be in
writing and shall be deemed given only if mailed by United States registered
mail, postage prepaid, or if sent by nationally recognized overnight delivery
service (such as Federal Express or United States Postal Service Express Mail),
addressed as follows: to Tenant, at the address first set forth above,
Attention:                     ; to Lender, at the address first set forth
above, Attention:                                         and General Counsel,
with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New
York, New York 10036, Attention: Harvey R. Uris, Esq.; or to such other address
or number as such party may hereafter designate by notice delivered in
accordance herewith. All such notices shall be deemed given three (3) business
days after delivery to the United States Post office registry clerk if given by
registered mail, or on the next business day after delivery to an overnight
delivery courier.

 

N-6

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14. This Agreement may be modified only by an agreement in writing signed by the
parties hereto, or their respective successors-in-interest. This Agreement shall
inure to the benefit of and be binding upon the parties hereto, and their
respective successors and assigns. The term “Lender” shall mean the then holder
of the Security Instrument. The term “Landlord” shall mean the then holder of
the landlord’s interest in the Lease. The term “person” shall mean an
individual, joint venture, corporation, partnership, trust, limited liability
company, unincorporated association or other entity. All references herein to
the Lease shall mean the Lease as modified by this Agreement and to any
amendments or modifications to the Lease which are consented to in writing by
Lender. Any inconsistency between the Lease and the provisions of this Agreement
shall be resolved, to the extent of such inconsistency, in favor of this
Agreement.
15. Tenant hereby represents to Lender as follows:
(a) The Lease is in full force and effect and has not been further amended.
(b) There has been no assignment of the Lease or subletting of any portion of
the premises demised under the Lease.
(c) There are no oral or written agreements or understandings between Landlord
and Tenant relating to the premises demised under the Lease or the Lease
transaction except as set forth in the Lease.
(d) The execution of the Lease was duly authorized and the Lease is in full
force and effect and to the best of Tenant’s knowledge there exists no default
(beyond any applicable grace period) on the part of either Tenant or Landlord
under the Lease.
(e) There has not been filed by or against nor to the best of the knowledge and
belief of Tenant is there threatened against Tenant, any petition under the
bankruptcy laws of the United States.
(f) To the best of Tenant’s knowledge, there is no present assignment,
hypothecation or pledge of the Lease or rents accruing under the Lease by
Landlord, other than pursuant to the Security Instrument.
16. Whenever, from time to time, reasonably requested by Lender (but not more
than three (3) times during any calendar year), Tenant shall execute and deliver
to or at the direction of Lender, and without charge to Lender, one or more
written certifications, in a form acceptable to Tenant, of all of the matters
set forth in Paragraph 15 above, and any other information the Lender may
reasonably require to confirm the current status of the Lease.

 

N-7

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17. BOTH TENANT AND LENDER HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
18. This Agreement shall be governed by and construed in accordance with the
laws of the State in which the Property is located.
 
  [Signature   Page   Follows]

 

N-8

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

                      GERMAN AMERICAN CAPITAL CORPORATION,         a Maryland
corporation    
 
               
 
  By:                          
 
      Name:        
 
               
 
      Title:        
 
               
 
               
 
  By:                          
 
      Name:        
 
               
 
      Title:        
 
               
 
                    [TENANT]    
 
               
 
  By:                          
 
      Name:        
 
               
 
      Title:        
 
               

AGREED AND CONSENTED TO:
LANDLORD:
[                                                            ]

             
By:
                     
 
  Name:        
 
     
 
   
 
  Title:        
 
     
 
   

 

N-9

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STATE OF NEW YORK
  )  
 
  ) ss.  
COUNTY OF NEW YORK
  )  

On the  _____  day of                      in the year 200__  before me, the
undersigned, a notary public in and for said state, personally appeared
                    , personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity, and that by his/her/their signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

     
 
   
 
  Notary Public

     
[Notary Seal]
  My commission expires:

         
STATE OF NEW YORK
  )    
 
  ) ss.  
COUNTY OF NEW YORK
  )    

On the  _____  day of                      in the year 200__  before me, the
undersigned, a notary public in and for said state, personally appeared
                                        , personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their capacity, and that by his/her/their signature
on the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

     
 
   
 
  Notary Public

     
[Notary Seal]
  My commission expires:

 

N-10

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STATE OF NEW YORK
  )    
 
  ) ss.  
COUNTY OF NEW YORK
  )    

On the  _____  day of                      in the year 200__  before me, the
undersigned, a notary public in and for said state, personally appeared
                    , personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity, and that by his/her/their signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

     
 
   
 
  Notary Public

     
[Notary Seal]
  My commission expires:

         
STATE OF NEW YORK
  )    
 
  ) ss.  
COUNTY OF NEW YORK
  )    

On the  _____  day of                      in the year 200__  before me, the
undersigned, a notary public in and for said state, personally appeared
                                        , personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their capacity, and that by his/her/their signature
on the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

     
 
   
 
  Notary Public

     
[Notary Seal]
  My commission expires:

 

N-11

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SCHEDULE A TO SNDA

Legal Description of Property

 

N-12

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EXHIBIT O

[INTENTIONALLY DELETED]

 

O-1

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EXHIBIT P

FORM OF MASTER LEASE RENT PAYMENT DIRECTION LETTER
[Borrower Letterhead]
BlueLinx Corporation
[Address]
[                    ], 2006

  Re:  
[Master Lease Agreement] between [Borrower] (“Borrower”), as lessor, and
BlueLinx Corporation, a Delaware corporation, as lessee, dated
[                    ], 2006

Ladies and Gentlemen:
With reference to the above referenced lease (the “Master Lease”), please be
advised that Borrower has obtained a loan (the “Loan”) with German American
Capital Corporation, having an address at 60 Wall Street, New York, New York
10005 (together with its successors and assigns, “Lender”) pursuant to that
certain Loan and Security Agreement of even date herewith between Borrower and
Lender (the “Loan Agreement”), which Loan is secured by, among other things, the
properties demised by the Master Lease. Capitalized terms not separately defined
herein shall the meanings provided in the Loan Agreement.
In connection with the Loan, from and after the date hereof and until notified
otherwise by written instruction from Lender, you are hereby irrevocably
instructed to (a) make all payments of Master Lease Scheduled Rent directly to
the Holding Account at all times during the term of the Loan and (b) make all
payment of Master Lease Variable Additional Rent directly to the Holding Account
at all times during the continuance of an Event of Default and during any Low
LCR Cash Sweep Period, in each case by wire transfer as follows:

         
 
  Bank:   [                                        ]
 
  Account Name:   [                                        ]
 
  Account No.:   [                                        ]
 
  ABA No.:   [                                        ]

 

P-1

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If you have any questions regarding this letter, please contact Borrower at the
address indicated above.
Very truly yours,
BORROWER:
[Borrower Signature Block(s)]

     
cc:
  German American Capital Corporation
 
  60 Wall Street, 10th Floor
 
  New York, New York 10005
 
  Attention: Todd Sammann

 

P-2

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EXHIBIT Q

INTENTIONALLY DELETED

 

Q-1

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EXHIBIT R

INTENTIONALLY DELETED

 

R-1

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EXHIBIT S

INTENTIONALLY DELETED

 

S-1

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EXHIBIT T

CERTIFICATE OF INDEPENDENT MANAGER/MEMBER/DIRECTOR*
THE UNDERSIGNED,                                        , hereby certifies as
follows:
1. I have been elected to serve as an independent member/manager of [INSERT
BORROWER NAME], a Delaware limited liability company (the “Company”).
2. I am aware that, under its Limited Liability Company Agreement, the Company
is required to have at least two so-called “Independent Managers” and/or
“Independent Members”.
3. I hereby certify that I am aware of the definition of and requirement for
Independent Managers and Independent Members as set forth in the Limited
Liability Company Agreement of the Company, including but not limited to, the
requirement that when voting on a matter put to the vote of the membership or
board of managers, that notwithstanding that the Company [may be insolvent, an
Independent Manager shall, to the extent permitted by law, take into account the
interest of the creditors of the Company as well as the interest of the Company.
As an Independent Manager and/or Independent Member of the Company, I will vote
in accordance with my fiduciary duties under applicable law.
4. I hereby certify that I meet the requirements of an Independent Manager
and/or Independent Member as set forth in the Limited Liability Company
Agreement.
 

      *  
Following are contacts for independent directors/managers/members appinted by
borrowers on prior transaction:
     
CT Corporation System
Attention: Corporate Staffing Division
The Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
Attention: Domenic Borriello
Telephone: (302) 777-0240

     
Mark A. Ferrucci (no longer employed by CT Corporation System)
212 Mangum Drive
Bear, DE 19701
(302) 836-9162 (telephone)
(302) 8376-836-9182 (fax)

 

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5. I certify that, subject to my fiduciary duties as an Independent Manager
and/or Independent Member, it is my intention as a so-called “Independent
Manager” and/or “Independent Member” to take into account, to the extent
permitted by law, the interest of all creditors of the Company as well as the
Company in fulfilling my duties as an Independent Manager and/or Independent
Member of the Company.
6. I understand that German American Capital Corporation and its successors,
participants, transferees and assigns, will rely on this Certificate in
conjunction with loans to be made to the Borrower.
Executed as of this  _____  day of                     , 2006.

     
 
   
 
  Print Name:

 

T-2

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SCHEDULE I

ALLOCATION LOAN AMOUNTS
Blue Linx Portfolio
Loan Allocations

                                                                               
                                      Allocated                                
                            Loan %                                            
“As-Is”             of         No.     Name   Gross Revenue     As-Stabilized
U/W     DSCR     Appraised Value     Allocated Loan     Value     UW Cap        
 
Riverside
  $ 366,301     $ 322,345       1.20       ***     $ 4,116,143       ***      
***          
Charlotte
  $ 262,570     $ 231,062       1.20       ***     $ 2,950,512       ***      
***          
Bridgeton
  $ 577,500     $ 508,200       1.20       ***     $ 6,489,396       ***      
***          
Denver
  $ 395,640     $ 348,163       1.20       ***     $ 4,445,826       ***      
***          
La Puente
  $ 733,433     $ 645,421       1.20       ***     $ 8,241,623       ***      
***          
Lawrenceville (Corp. HQ)
  $ 1,400,000     $ 1,232,000       1.20       ***     $ 15,731,870       ***  
    ***          
National City
  $ 669,600     $ 589,248       1.20       ***     $ 7,524,329       ***      
***          
Ft. Worth
  $ 817,347     $ 719,265       1.20       ***     $ 9,184,569       ***      
***          
Frederick
  $ 2,847,500     $ 2,505,800       1.30       ***     $ 29,536,153       ***  
    ***          
Nashville
  $ 277,750     $ 244,420       1.25       ***     $ 2,996,247       ***      
***          
Ypsilanti
  $ 740,684     $ 651,802       1.25       ***     $ 7,990,179       ***      
***          
Memphis
  $ 220,943     $ 194,430       1.25       ***     $ 2,383,438       ***      
***          
Pensacola
  $ 323,532     $ 284,708       1.25       ***     $ 3,490,123       ***      
***          
Pearl
  $ 92,625     $ 81,510       1.15       ***     $ 948,000       ***       ***  
       
Woodinville
  $ 444,820     $ 391,442       1.15       ***     $ 4,542,500       ***      
***          
Butner
  $ 1,004,120     $ 883,626       1.16       ***     $ 10,230,500       ***    
  ***          
Albuquerque
  $ 261,720     $ 230,314       1.18       ***     $ 2,607,000       ***      
***          
Des Moines
  $ 153,192     $ 134,809       1.18       ***     $ 1,524,700       ***      
***          
Miami
  $ 437,189     $ 384,726       1.18       ***     $ 4,345,000       ***      
***          
Beaverton
  $ 578,424     $ 509,013       1.17       ***     $ 5,800,000       ***      
***          
Newark
  $ 1,039,360     $ 914,637       1.19       ***     $ 10,270,000       ***    
  ***          
Independence
  $ 656,568     $ 577,780       1.18       ***     $ 6,560,000       ***      
***          
New Stanton
  $ 267,015     $ 234,973       1.19       ***     $ 2,640,000       ***      
***          
Portland
  $ 246,611     $ 217,018       1.20       ***     $ 2,424,000       ***      
***          
Englewood (OFFICE) — SE Denver
  $ 687,210     $ 604,745       1.20       ***     $ 6,720,000       ***      
***          
San Antonio
  $ 285,693     $ 251,410       1.21       ***     $ 2,784,000       ***      
***          
N. Kansas City
  $ 586,708     $ 516,303       1.21       ***     $ 5,704,000       ***      
***          
Erwin
  $ 382,673     $ 336,752       1.21       ***     $ 3,720,000       ***      
***  

*** Portions hereof have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 24b-2 of the Exchange Act.

 

I-1

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                                      Allocated                                
                            Loan %                                            
“As-Is”             of         No.     Name   Gross Revenue     As-Stabilized
U/W     DSCR     Appraised Value     Allocated Loan     Value     UW Cap        
 
Bellingham
  $ 2,242,500     $ 1,973,400       1.21       ***     $ 21,744,000       ***  
    ***          
Yulee
  $ 1,388,400     $ 1,221,792       1.22       ***     $ 13,440,000       ***  
    ***          
Yaphank
  $ 266,409     $ 234,440       1.22       ***     $ 2,560,000       ***      
***          
Tampa
  $ 571,473     $ 502,896       1.24       ***     $ 5,440,000       ***      
***          
Charleston
  $ 143,297     $ 126,101       1.24       ***     $ 1,360,000       ***      
***          
Little Rock
  $ 230,750     $ 203,060       1.25       ***     $ 2,176,000       ***      
***          
Newtown
  $ 322,500     $ 283,800       1.25       ***     $ 3,040,000       ***      
***          
Lake City
  $ 238,561     $ 209,934       1.25       ***     $ 2,240,000       ***      
***          
Allentown
  $ 311,250     $ 273,900       1.26       ***     $ 2,900,000       ***      
***          
Tallmadge
  $ 231,000     $ 203,280       1.32       ***     $ 2,060,000       ***      
***          
Virginia Beach
  $ 240,090     $ 211,279       1.33       ***     $ 2,128,000       ***      
***          
Denville
  $ 551,469     $ 485,293       1.35       ***     $ 4,800,000       ***      
***          
Wausau
  $ 151,590     $ 133,399       1.36       ***     $ 1,312,000       ***      
***          
Tulsa
  $ 358,750     $ 315,700       1.36       ***     $ 3,104,000       ***      
***          
Lubbock
  $ 143,442     $ 126,229       1.36       ***     $ 1,240,000       ***      
***          
Sioux Falls
  $ 201,015     $ 176,893       1.38       ***     $ 1,720,000       ***      
***          
Houston
  $ 473,475     $ 416,658       1.38       ***     $ 4,041,900       ***      
***          
Shreveport
  $ 264,200     $ 232,496       1.38       ***     $ 2,251,800       ***      
***          
Harlingen
  $ 174,200     $ 153,296       1.38       ***     $ 1,482,300       ***      
***          
El Paso
  $ 180,125     $ 158,510       1.38       ***     $ 1,530,900       ***      
***          
Grand Rapids
  $ 160,529     $ 141,266       1.39       ***     $ 1,360,800       ***      
***          
Fargo
  $ 272,619     $ 239,905       1.41       ***     $ 2,280,000       ***      
***          
Maple Grove
  $ 431,052     $ 379,326       1.41       ***     $ 3,600,000       ***      
***          
University Park
  $ 1,909,500     $ 1,680,360       1.41       ***     $ 15,936,000       ***  
    ***          
Midfield
  $ 371,250     $ 326,700       1.42       ***     $ 3,080,000       ***      
***          
Shelburne
  $ 280,125     $ 246,510       1.40       ***     $ 2,361,600       ***      
***          
Springfield
  $ 221,405     $ 194,836       1.40       ***     $ 1,861,400       ***      
***          
Elkhart
  $ 411,750     $ 362,340       1.40       ***     $ 3,460,400       ***      
***          
St. Paul (Eagan)
  $ 237,096     $ 208,644       1.44       ***     $ 1,944,000       ***      
***          
Richmond
  $ 335,960     $ 295,645       1.50       ***     $ 2,644,792       ***      
***                                                            
Total
  $ 30,072,510     $ 26,463,809       1.21       ***     $ 295,000,000       ***
      ***                                                            
 
                                                               
 
                                  $ 295,000,000                          
 
                                                               
 
                                  $ (0 )                

      ***  
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 24b-2 of the Exchange Act.

 

I-2

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SCHEDULE II

GEOGRAPHIC QUADRANTS

                                  Address   Location Name   State   Country  
Zip Code   Region   306  
4300 GEORGIA-PACIFIC BLVD
  FREDERICK (Baltimore),   MD   USA   21704     1   303  
419 Maple Street
  BELLINGHAM (Worcester),   MA   USA   02019     1   307  
LUGER ROAD
  DENVILLE,   NJ   USA   07834     1   899  
210 South Main Street
  NEWTOWN,   CT   USA   06470     1   310  
DABNEY & BETHLEHAM
  RICHMOND,   VA   USA   23230     1   305  
508 Warrant Ave
  PORTLAND,   ME   USA   04104     1   308  
YAPHANK AV & PARK ST, YAPHANK
  LONG ISLAND (Yaphank),   NY   USA   11980     1   566  
6980 SNOWDRIFT RD N.
  ALLENTOWN,   PA   USA   18106     1   311  
200 PRICE STREET, VIRGINIA BEACH
  NORFOLK (Virginia Beach),   VA   USA   23462     1   304  
Pine Haven Shore Road
  BURLINGTON,   VT   USA         1   300  
HUNKER RD & RT. 119, NEW STANTON
  PITTSBURG (New Stanton)   PA   USA   15672     1   580  
591 Gene Lasserre Blvd, Yulee
  JACKSONVILLE (Yulee),   FL   USA   32097     2   606  
200 HOSEA ROAD
  LAWRENCEVILLE,   GA   USA   30248     2   309  
1712 D Street, Butner
  RALEIGH (Butner),   NC   USA   27509     2   626  
1040 S INDUSTRIAL BLVD
  ERWIN (Bristol),   TN   USA   37650     2   607  
1523 Industrial Blvd
  MIDFIELD (Birmingham)   AL   USA   35228     2   582  
815 So 56th Street
  TAMPA,   FL   USA   33675     2   584  
3201 NW 110TH ST
  MIAMI   FL   USA   33168     2   336  
1820 BELLAMAH AVE NW
  ALBUQUERQUE,   NM   USA   87104     2   581  
4601 McCoy Drive
  PENSACOLA   FL   USA   32513     2   829  
Price Creek Road & Hwy 100
  LAKE CITY,   FL   USA   32025     2   632  
4287 PILOT DRIVE
  MEMPHIS,   TN   USA   38130     2   647  
331 28TH AVE NORTH
  NASHVILLE,   TN   USA   37202     2   786  
330 Parkside Drive
  CHARLOTTE,   NC   USA   28266     2   330  
2801 Valley View Drive
  SHREVEPORT,   LA   USA   71108     2   583  
4290 ATLANTA STREET
  CHARLESTON   SC   USA   29418     2   592  
555 GULF LINE ROAD, PEARL
  JACKSON (Pearl),   MS   USA   39288     2   585  
3101 Dugan Street
  LITTLE ROCK   AR   USA   72216     2   312  
2101 Dralle Road, University Park
  UNIVERSITY PARK (Chicago)   IL   USA   60466     3   315  
13860 Corp Woods Tr.
  ST. LOUIS (Bridgeton),   MO   USA   63044     3   313  
10347 Toebben Drive
  CINCINNATI (Union, KY),   OH   USA   41051     3   314  
6101 McKean, Ypsilanti
  DETROIT (Ypsilanti),   MI   USA   48197     3   317  
1727 WARREN STREET, NORTH KANSAS CITY
  KANSAS CITY,   MO   USA   64116     3   642  
225 Collins Rd
  ELKHART,   IN   USA   46515     3   319  
8175 JEFFERSON HWY, MAPLE GROVE
  MINNEAPOLIS (Maple Grove)   MN   USA   55369     3   329  
5717 North Mingo
  TULSA,   OK   USA   74117     3   323  
4501 N 4TH AVENUE
  SIOUX FALLS,   SD   USA   57104     3   322  
3941 15th Ave, North
  FARGO,   ND   USA   58105     3   316  
825 Buchanan Ave SW
  GRAND RAPIDS   MI   USA   49501     3   320  
5631 NE 17th
  DES MOINES,   IA   USA   50316     3   321  
2871 West Service Rd.
  ST. PAUL (Eagan),   MN   USA   55121     3   563  
809 South 62nd Avenue
  WAUSAU,   WI   USA   54401     3   302  
550 MUNROE FALLS RD OFF GILCHR
  AKRON (Tallmadge),   OH   USA   44278     3   318  
3220 E. Cherry Street
  SPRINGFIELD,   MO   USA   65808     3   337  
38811 Cherry St.
  FREMONT (Newark),   CA   USA   94560     4   485  
14750 Nelson Avenue
  LOS ANGELES (City of Industry)   CA   USA   91749     4   743  
360 INVERNESS DR SO, ENGLEWOOD
  DENVER (Englewood)   CO   USA   80111     4   392  
901 W 24th Street
  SAN DIEGO   CA   USA   91951     4   395  
12815 NE 178th Street
  SEATTLE,   WA   USA   98072     4   333  
3900 Uvalda Street
  DENVER,   CO   USA   80239     4   339  
1450 Citrus Avenue
  RIVERSIDE,   CA   USA   92507     4   393  
10515 SW ALLEN BLVD, BEAVERTON
  PORTLAND (Beaverton),   OR   USA   97005     4   325  
4747 MARK IV PKWY
  FORTH WORTH,   TX   USA   76106     4   326  
650 GELLHORN DRIVE
  HOUSTON   TX   USA   77229     4   334  
6990 Market Street
  EL PASO,   TX   USA   79915     4   324  
I/4 Mi. West Wilson Road
  HARLINGEN   TX   USA   78550     4   328  
535 N WW WHITE RD
  SAN ANTONIO   TX   USA   78219     4   327  
702 East 44th Street
  LUBBOCK   TX   USA   79404     4  

 

II-1

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SCHEDULE III

IMMEDIATE REPAIRS AND REMEDIATION

                                                                               
                                                                               
          BRIEF DESCRIPTION OF ANY IMMEDIATE,                                
Total     Total Short     Total     Total     Uninflated     Inflated    
Weighted   SHORT TERM OR RESERVE COSTS Project   Project           Date of  
Date of   Immediate     Immediate     Term     Reserve     Square     Reserves  
  Reserves     PML   AND/OR ANY ADDITIONAL ENGINEERING Name   Address   City  
State   Report   Inspection   Reserve     Costs     Costs     Costs     Feet    
$/SF/Yr     $/SF/Yr     Value   STUDIES REQUIRED
Akron
  550 Munroe Falls Rd   Tallmadge   OH   5/18/2006   5/9/2006     80,410     $
80,410     $ 0     $ 49,600       63,000     $ 0.07     $ 0.08     N/A   Roof
replacement ($72,450); parking lot repair ($1,600); repair damaged wall panels
on west and south warehouse and east wall of north shed ($6,360)
Fargo
  3941 15th Avenue   Fargo   ND   5/31/2006   5/22/2006     32,250     $ 32,250
    $ 21,400     $ 50,200       83,100     $ 0.05     $ 0.06     N/A  
Repair/replace damaged ceiling insulation ($20,000); replace exterior siding on
east elevation of office area ($3,250); repair damaged concrete on loading dock
near railroad spur ($1,500); repair chain link fence along the perimeter
($7,500)
Pittsburgh
  Old Route 119 & Hunker Road   New Stanton   PA   6/1/2006   5/11/2006    
51,788     $ 51,788     $ 0     $ 32,860       63,154     $ 0.04     $ 0.05    
N/A   Replace roof on the eastern portion of warehouse ($51,788)
Miami
  3201 NW 110th Street   Miami   FL   6/1/2006   5/11/2006     74,000     $
74,000     $ 0     $ 187,250       103,870     $ 0.15     $ 0.16     N/A   West
building roof was damaged during hurricane Wilma (work to be completed under
2006 capital plan) and parking needs repair ($58,000); exterior paint is faded
and peeling, repainting required ($16,000)
Lake City
  694 S.E. County Road 245   Lake City   FL   6/2/2006   5/26/2006     45,000  
  $ 45,000     $ 0     $ 61,092       106,519     $ 0.05     $ 0.06     N/A  
Replace roof on Building No. 2 ($45,000)
Charleston
  4290 Atlanta Street   North Charleston   SC   6/5/2006   5/22/2006     40,000
    $ 40,000     $ 0     $ 28,200       41,580     $ 0.06     $ 0.07     N/A  
Install adequate storm drainage along railroad spur as required by local
officials ($25,000); rake/clean expansion joints and install new sealant to
prevent more cracking on concrete pavement ($10,000); sawcut areas of failed
concrete pavement, remove and install new pavement ($3,750); replace missing
gutters and downspouts ($1,250)
TOTAL
                      $ 323,448     $ 323,448     $ 21,400                      
                   
 
                  immediate repair escrow (125%)   $ 404,310                    
                                     

 

III-1

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SCHEDULE IV

SUBLEASES
1. 591 Gene Lasserre Boulevard, Yulee, FL — Lease Agreement between BlueLinx
Corporation (successor in interest to Georgia-Pacific Corporation), as Landlord,
and Masonite Door Corporation (successor in interest to Door Fabrication
Services, Inc.), as Tenant, dated March 2, 1998 and amended by:

  a)  
First Lease Amendment dated April  _____, 1999;
    b)  
Second Lease Amendment dated                     , 1999;
    c)  
Third Lease Amendment dated June 1, 2001;
    d)  
Fourth Lease Amendment dated May 21, 2002;
    e)  
Fifth Lease Amendment dated September 1, 2003; and
    f)  
Sixth Lease Amendment dated June 1, 2004.

2. 4300 Georgia Pacific Boulevard, Frederick, MD — Lease Agreement between
BlueLinx Corporation (successor in interest to Georgia-Pacific Corporation), as
Landlord, and Masonite Door Corporation (successor in interest to Door
Fabrication Services, Inc.), as Tenant, dated March 2, 1998 and amended by:

  a)  
First Lease Amendment dated August 1, 1999;
    b)  
Second Lease Amendment dated                     , 2000;
    c)  
Third Lease Amendment dated June 1, 2001; and
    d)  
Fourth Lease Amendment dated June 1, 2004.

 

IV-1

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SCHEDULE V

INTENTIONALLY DELETED

 

V-1

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SCHEDULE VI

LITIGATION SCHEDULE
1. Wickes Inc. v. Georgia Pacific Distribution Division (BlueLinx). The
following language was filed most recently in BlueLinx Holdings Inc.’s 10-Q for
the three month period ended April 1, 2006, and also filed in BlueLinx Holdings
Inc.’s Annual Report on Form 10-K for the year ended December 31, 2005: “On
November 19, 2004, we received a letter from Wickes Lumber, or Wickes, asserting
that approximately $16 million in payments received by the Distribution Division
of Georgia-Pacific Corporation during the 90-day period prior to Wickes’
January 20, 2004 Chapter 11 filing were preferential payments under section 547
of the United States Bankruptcy Code. On October 14, 2005, Wickes Inc. filed a
lawsuit in the United States Bankruptcy Court for the Northern District of
Illinois titled “Wickes Inc. v. Georgia Pacific Distribution Division
(BlueLinx),” (Bankruptcy Adversary Proceeding No. 05-2322) asserting its claim.
On November 14, 2005, we filed our answer to the complaint denying liability.
Although the ultimate outcome of this matter cannot be determined with
certainty, we believe Wickes’ assertion to be without merit and, in any event,
subject to one or more complete defenses, including, but not limited to, that
the payments were made and received in the ordinary course of business and were
a substantially contemporaneous exchange for new value given to Wickes.
Accordingly, we have not recorded a reserve with respect to the asserted claim.”
2. In re Oakwood Homes Corp;  OHC Liquidation Trust v. Georgia-Pacific
Corporation.  This is a lawsuit to avoid and recover $4,241,798.66 of
preference-period payments from BlueLinx Corporation.  The case was mediated in
early May of 2006.  The trustee offered to settle the matter by subtracting
$250,000 from BlueLinx’ $270,000 reclamation claim against the Oakwood Homes
bankruptcy estate and to pay the $20,000 balance of the reclamation claim over
to BlueLinx.  BlueLinx declined this result, and the parties were unable to
settle their differences.  The matter is now scheduled for trial on September 9,
2006. 
3. In re Scott Acquisition Corp.; Official Creditors’ Committee v. BlueLinx
Corporation.  This is a lawsuit to avoid and recover $600,668.24 of
preference-period payments from BlueLinx Corporation.  The bankruptcy court has
ordered that the matter be subject to mediation to be completed by June 30,
2006, and the matter is otherwise set for trial on August 10, 2006.
4. BlueLinx Corporation v. Wachovia Bank NA. This a lawsuit against Wachovia
filed on May 11, 2006 to recover $126,062.82 that Wachovia paid from the
BlueLinx account against a check that was evidently stolen and fraudulently
modified.

 

VI-1

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SCHEDULE VII

OUTPARCEL LEGAL DESCRIPTIONS
Frederick, MD: A Portion of that certain tract, piece or parcel of land lying
and being situated in Frederick County, Maryland and being more particularly
described as follows:
Beginning at a point in the South line of Geoffrey Way, which point is 2348’
from the Northeast intersection of Buckeystown Pike and Geoffrey Way;

Thence along the south line of said Geoffrey Way South 38 degrees 13 minutes 56
seconds East 327.89 feet to a point;

Thence South 02 degrees 58 minutes 05 seconds East 34.64 feet to a point;

Thence along a curve to the left with a radius of 60.00 feet, an arc distance of
168.09 feet, a chord bearing of South 51 degrees 46 minutes 22 seconds East and
a chord of 118.27 feet to a point;

Thence South 38 degrees 13 minutes 58 seconds East 320.64 feet to a point;

Thence leaving said road South 34 degrees 23 minutes 21 seconds West 575.15 feet
to a point;

Thence North 63 degrees 25 minutes 07 seconds West 639.00 feet to a point;

Thence North 26 degrees 24 minutes 43 seconds East 899.82 feet to the point and
place of beginning, containing 11.466 acres or 499,445 square feet, less and
except rail extension of no more than 100,000 square feet.
University Park, IL: The south 800 feet, as measured along the east line
thereof, of lot 2 less and except the improved land thereof, and the following
described part of lot 3 in the subdivision of section 16, township 34 north,
range 13 east of the third principal meridian, in Will county, Illinois:

Beginning at the northwest corner of lot 3; thence east along and upon the north
line of lot 3, for a distance of 50.00 feet; thence southerly to a point on the
west line of said lot 3, which line is also the southeasterly right of way line
of the railroad right of way, said point being 200.00 feet southwesterly of the
northwest corner of said lot 3; thence northeasterly along and upon said west
line, which is also said southeasterly right of way line, for a distance of
200.00 feet to the point of beginning, in Will county, Illinois.
Maple Grove, MN: The South 417.30 feet of the East 710.00 feet, except the South
70.00 feet thereof all in the Southeast Quarter of the Northeast Quarter of
Section 24, Township 119, Range 22, Hennepin County, Minnesota
Woodinville, WA: Parcel A — 12811 Northeast 178th Street, Tax ID: 726910-0047
Independence, KY: Beginning at an iron pin of the southern right of way of
Toebben Road at the terminus of the first course of D.B. 595, page 155 and
running with property of Toebben LTD and JJEMS INV. LLC South 05 degrees 19
minutes 41 seconds West for 600 feet; thence North 84 degrees 44 minutes 47
seconds West for 400 feet; thence North 05 degrees 19 minutes 41 seconds East
for 600 feet to the south line of Toebben drive; thence South 85 degrees 29
minutes 18 seconds East to the point of beginning.

 

VII-1

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Newtown, CT: A certain piece or parcel of land situated on the easterly side of
Route 25 in the Town of Newtown, County of Fairfield and State of Connecticut,
being a part of the land as shown and designated on a certain map entitled “Map
prepared for Georgia Pacific Corporation Conn. Route 25, Newtown, Connecticut,
Scale 1“=60’ Dec. 14, 1976” by C James Osborne, Jr. RLS, Charles J. Osborne
Associates, New Milford, Connecticut. Said map being on file in the office of
the Town Clerk of the Town of Newtown as Map No. 4562. Also being part of the
premises conveyed to Georgia Pacific Corporation by The Homer C Godfrey Company
in a deed recorded in Vol. 262 Page 708.
Beginning at a point marked by and existing marble monument, said point lying
16.17’ southwesterly from the Southeast corner of the herein described parcel.
Said point being on the northerly line of the property of N/F Union Water Co.,
Inc. recorded in Deed Book 510 Page 35 & Deed Book 291 Page 641)Thence along
said line the following courses and distances:
S37°12’13”W a distance of 235.24 feet;
S50°16’38”W a distance of 200.00 feet;
N62°43’22”W a distance of 35.00 feet;
S62°16’38”W a distance of 57.07 feet to a point on the northeasterly side of
Connecticut Route 25; said point marking the southwest corner of the herein
described parcel. Thence turning and running along said CT Route 25 the
following courses:
N53°12’14”W a distance of 217.06 feet;
N62°07’18”W a distance of 64.21 feet;
Thence continuing along said CT Route 25 on a curve to the right having a radius
of 2404.20 feet and a length of 529.90 feet to a CHD monument;
Thence N52°59’31”E a distance of 8.82 feet:
Thence N64°08’54”E a distance of 139.54 feet to an existing chain link fence
corner post;
Thence S79°20’06”E a distance of 109.56 feet to an existing chain link fence
corner post;
Thence N67°28’00”E a distance of 428.76 feet to an existing chain link fence
corner post;
Thence S79°23’20”E a distance of 181.07 feet to a point on the West line of the
New York, New Haven and Hartford Railroad (formerly Con-Rail) said point being
the Northerly most corner of a 50’ Right of Way (0.763 acres) recorded in Book
147 Page 319 and shown on the above referenced map being on file in the office
of the Town Clerk of the Town of Newtown as Map No. 4562;
Thence along said railroad S23°55’28”E a distance of 152.52 feet;
Thence continuing along said railroad S30°14’51”E a distance of 254.65 feet;
Thence leaving said railroad S37°12’13”W a distance of 16.17 feet along the line
of Union Water Co., Inc. to an existing marble monument marking the point or
place of beginning, containing 9.6 acres more or less.

 

VII-2

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Ft Worth, TX: Being a tract of land situated in the D. ODUM SURVEY, ABSTRACT NO.
1184, City of Fort Worth, Tarrant County, Texas and being a portion of those
tracts of land (Tract One & Tract Two) as described in Deed to Ballister Group,
Inc. recorded in Volume 11577, Page 287 of the Deed Records of Tarrant County,
Texas and being more particularly described as follows:
BEGINNING at a 1/2” iron rod with a plastic cap found at the northwest corner of
Site 1-Block 8, Mark IV Industrial Park, an addition to the City of Fort Worth,
Tarrant County, Texas as recorded in Volume 388-79, Page 38 of the Plat Records
of Tarrant County, Texas (Prtct);
THENCE South 89 degrees 58 minutes 34 seconds West, 464.68 feet, along the
Southern right-of-way of Great Southwest Parkway (60’ R/W), to a capped iron pin
found, being the PRINCIPLE POINT OF BEGINNING of herein described tract;
THENCE, South 00 degrees 01 minutes 31 seconds East, 506.27 feet, departing the
South right-of-way of Great Southwest Parkway, to a capped iron pin found;
THENCE, South 89 degrees 58 minutes 23 seconds West, 325.02 feet to a point;
THENCE, South 00 degrees 05 minutes 11 seconds East, 754.06 feet to a point in
the Northern right-of-way of a 53-foot wide Railroad Easement;
THENCE; North 90 degrees 00 minutes 00 seconds West, 830.83 feet, along said
Railroad right-of-way to a capped iron pin found;
THENCE; North 00 degrees 00 minutes 00 seconds East, 1260.00 feet, to a 1/2 inch
pipe found in the Southern right-of-way of Great Southwest Parkway;
THENCE; North 89 degrees 58 minutes 34 seconds East, 1154.49 feet to the
PRINCIPLE POINT OF BEGINNING, containing 27.789 acres more or less.
St Louis (Bridgeton), MO: The Northwest 400 feet measured along the Southwest
line thereof; of Lot 17 of a line drawn parallel to the Northwest boundary line
bearing N 52o 44’ 21” E of the Hoechst Tract Subdivision according to the Plat
thereof recorded in Plat book 341, Page 3 St. Louis County, Missouri;

 

VII-3

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SCHEDULE VIII

BORROWER TAXPAYER IDENTIFICATION NUMBERS

                  Entity   EIN   1.  
ABP AL (MIDFIELD) LLC
    77-0627356   2.  
ABP AR (LITTLE ROCK) LLC
    77-0627356   3.  
ABP CA (CITY OF INDUSTRY) LLC
    77-0627356   4.  
ABP CA (NATIONAL CITY) LLC
    77-0627356   5.  
ABP CA (NEWARK) LLC
    77-0627356   6.  
ABP CA (RIVERSIDE) LLC
    77-0627356   7.  
ABP CO I (DENVER) LLC
    77-0627356   8.  
ABP CO II (DENVER) LLC
    77-0627356   9.  
ABP CT (NEWTON) LLC
    36-4553871   10.  
ABP FL (LAKE CITY) LLC
    77-0627356   11.  
ABP FL (MIAMI) LLC
    77-0627356   12.  
ABP FL (PENSACOLA) LLC
    77-0627356   13.  
ABP FL (TAMPA) LLC
    77-0627356   14.  
ABP FL (YULEE) LLC
    77-0627356   15.  
ABP GA (LAWRENCEVILLE) LLC
    77-0627356   16.  
ABP IA (DES MOINES) LLC
    77-0627356   17.  
ABP IL (UNIVERSITY PARK) LLC
    77-0627356   18.  
ABP IN (ELKHART) LLC
    77-0627356   19.  
ABP KY (INDEPENDENCE) LLC
    77-0627356   20.  
ABP LA (SHREVEPORT) LLC
    30-0247739   21.  
ABP MA (BELLINGHAM) LLC
    77-0627356   22.  
ABP MD (BALTIMORE) LLC
    77-0627356   23.  
ABP ME (PORTLAND) LLC
    61-1470388   24.  
ABP MI (DETROIT) LLC
    77-0627356   25.  
ABP MI (GRAND RAPIDS) LLC
    77-0627356   26.  
ABP MN (EAGAN) LLC
    77-0627356  

 

VIII-1

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                  Entity   EIN   27.  
ABP MN (MAPLE GROVE) LLC
    77-0627356   28.  
ABP MO (BRIDGETON) LLC
    77-0627356   29.  
ABP MO (KANSAS CITY) LLC
    77-0627356   30.  
ABP MO (SPRINGFIELD) LLC
    77-0627356   31.  
ABP MS (PEARL) LLC
    77-0627356   32.  
ABP NC (BUTNER) LLC
    77-0627356   33.  
ABP NC (CHARLOTTE) LLC
    77-0627356   34.  
ABP ND (NORTH FARGO) LLC
    77-0634934   35.  
ABP NJ (DENVILLE) LLC
    77-0627356   36.  
ABP NM (ALBUQUERQUE) LLC
    77-0627356   37.  
ABP NY (YAPHANK) LLC
    77-0627356   38.  
ABP OH (TALMADGE) LLC
    77-0627356   39.  
ABP OK (TULSA) LLC
    77-0627356   40.  
ABP OR (BEAVERTON) LLC
    77-0627356   41.  
ABP PA (ALLENTOWN) LLC
    77-0627356   42.  
ABP PA (STANTON) LLC
    77-0627356   43.  
ABP SC (CHARLESTON) LLC
    77-0627356   44.  
ABP SD (SIOUX FALLS) LLC
    77-0627356   45.  
ABP TN (ERWIN) LLC
    77-0627356   46.  
ABP TN (MEMPHIS) LLC
    77-0627356   47.  
ABP TN (NASHVILLE) LLC
    77-0627356   48.  
ABP TX (EL PASO) LLC
    77-0627356   49.  
ABP TX (FORT WORTH) LLC
    77-0627356   50.  
ABP TX (HARLINGEN) LLC
    77-0627356   51.  
ABP TX (HOUSTON) LLC
    77-0627356   52.  
ABP TX (LUBBOCK) LLC
    77-0627356   53.  
ABP TX (SAN ANTONIO) LLC
    77-0627356   54.  
ABP VA (RICHMOND) LLC
    77-0627356   55.  
ABP VA (VIRGINIA BEACH) LLC
    77-0627356   56.  
ABP VT (SHELBURNE) LLC
    05-0602221   57.  
ABP WA (WOODINVILLE) LLC
    77-0627356   58.  
ABP WI (WAUSAU) LLC
    05-0602220   59.  
ABP MD (BALTIMORE) SUBSIDIARY LLC
    77-0627356  

 

VIII-2