Exhibit 10.32

 

 

 

LOAN AGREEMENT

 

 

 

Dated as of August 7, 2015

 

Among

 

EACH OF THE ENTITIES LISTED ON SCHEDULE I ATTACHED HERETO,
individually and/or collectively, as the context may require, as Borrower

 

and

 

BARCLAYS BANK PLC, COLUMN FINANCIAL, INC. and UBS REAL ESTATE SECURITIES INC.,
collectively, as Lender

 

 

 

 

Table of Contents

 

ARTICLE 1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION 1       Section 1.1.
Definitions 1       Section 1.2. Principles of Construction 33       ARTICLE 2
GENERAL TERMS 33       Section 2.1. Loan Commitment; Disbursement to Borrower 33
      Section 2.2. The Loan 33       Section 2.3. Disbursement to Borrower 33  
    Section 2.4. The Note and the other Loan Documents 33       Section 2.5.
Interest Rate 33       Section 2.6. Loan Payments 34       Section 2.7.
Prepayments 35       Section 2.8. Intentionally Omitted 37       Section 2.9.
Release of Individual Property 37       Section 2.10. Withholding and
Indemnified Taxes 39       ARTICLE 3 REPRESENTATIONS AND WARRANTIES 43      
Section 3.1. Legal Status and Authority 43       Section 3.2. Validity of
Documents 44       Section 3.3. Litigation 44       Section 3.4. Agreements 44  
    Section 3.5. Financial Condition 45       Section 3.6. Disclosure 45      
Section 3.7. No Plan Assets 45       Section 3.8. Not a Foreign Person 45      
Section 3.9. Intentionally Omitted 45       Section 3.10. Business Purposes 46  
    Section 3.11. Borrower’s Principal Place of Business 46       Section 3.12.
Status of Property 46       Section 3.13. Financial Information 47       Section
3.14. Condemnation 48       Section 3.15. Separate Lots 48

 

 -i- 

 

 

Section 3.16. Insurance 48       Section 3.17. Use of Property 48       Section
3.18. Leases and Rent Roll 48       Section 3.19. Filing and Recording Taxes 49
      Section 3.20. Management Agreement 49       Section 3.21. Illegal
Activity/Forfeiture 49       Section 3.22. Taxes 50       Section 3.23.
Permitted Encumbrances 50       Section 3.24. Third Party Representations 50    
  Section 3.25. Non-Consolidation Opinion Assumptions 50       Section 3.26.
Federal Reserve Regulations 50       Section 3.27. Investment Company Act 50    
  Section 3.28. Fraudulent Conveyance 50       Section 3.29. Embargoed Person 51
      Section 3.30. Anti-Money Laundering and Economic Sanctions 51      
Section 3.31. Organizational Chart 51       Section 3.32. Bank Holding Company
52       Section 3.33. Ground Lease Representations 52       Section 3.34.
Property Document Representations 53       Section 3.35. No Change in Facts or
Circumstances; Disclosure 54       ARTICLE 4 BORROWER COVENANTS 55       Section
4.1. Existence 55       Section 4.2. Legal Requirements 55       Section 4.3.
Maintenance and Use of Property 56       Section 4.4. Waste 56       Section
4.5. Taxes and Other Charges 56       Section 4.6. Litigation 58       Section
4.7. Access to Property 58       Section 4.8. Notice of Default 58       Section
4.9. Cooperate in Legal Proceedings 58       Section 4.10. Performance by
Borrower 58       Section 4.11. Intentionally Omitted 58

 

 -ii- 

 

 

Section 4.12. Books and Records 58       Section 4.13. Estoppel Certificates 60
      Section 4.14. Leases and Rents 61       Section 4.15. Management Agreement
63       Section 4.16. Payment for Labor and Materials 66       Section 4.17.
Performance of Other Agreements 66       Section 4.18. Debt Cancellation 66    
  Section 4.19. ERISA 66       Section 4.20. No Joint Assessment 67      
Section 4.21. Alterations 67       Section 4.22. Property Document Covenants 68
      Section 4.23. Ground Lease Covenants 70       ARTICLE 5 ENTITY COVENANTS
70       Section 5.1. Single Purpose Entity/Separateness 71       Section 5.2.
Independent Director 76       Section 5.3. Change of Name, Identity or Structure
77       Section 5.4. Business and Operations 78       ARTICLE 6 NO SALE OR
ENCUMBRANCE 78       Section 6.1. Transfer Definitions 78       Section 6.2. No
Sale/Encumbrance 78       Section 6.3. Permitted Equity Transfers 79      
Section 6.4. Lender’s Rights 82       Section 6.5. Economic Sanctions,
Anti-Money Laundering and Transfers 83       ARTICLE 7 INSURANCE; CASUALTY;
CONDEMNATION; RESTORATION 83       Section 7.1. Insurance 83       Section 7.2.
Casualty 89       Section 7.3. Condemnation 90       Section 7.4. Restoration 91
      ARTICLE 8 RESERVE FUNDS 95       Section 8.1. Immediate Repair Funds 95

 

 -iii- 

 

 

Section 8.2. Replacement Reserve Funds 96       Section 8.3. Leasing Reserve
Funds 98       Section 8.4. Ground Rent Funds 99       Section 8.5. Excess Cash
Flow Funds 99       Section 8.6. Tax and Insurance Funds 100       Section 8.7.
Environmental Remediation Funds 101       Section 8.8. Unfunded Obligations
Funds 103       Section 8.9. Special Reserve Funds 104       Section 8.10. The
Accounts Generally 106       Section 8.11. Letters of Credit 109       ARTICLE 9
CASH MANAGEMENT 110       Section 9.1. Establishment of Certain Accounts 110    
  Section 9.2. Deposits into the Restricted Account 111       Section 9.3.
Disbursements from the Cash Management Account 112       Section 9.4.
Withdrawals from the Debt Service Account 113       Section 9.5. Payments
Received Under this Agreement 113       ARTICLE 10 EVENTS OF DEFAULT; REMEDIES
114       Section 10.1. Event of Default 114       Section 10.2. Remedies 117  
    ARTICLE 11 SECONDARY MARKET 119       Section 11.1. Securitization 119      
Section 11.2. Disclosure 122       Section 11.3. Reserves/Escrows 127      
Section 11.4. Servicer 127       Section 11.5. Rating Agency Costs 127      
Section 11.6. Mezzanine Option 127       Section 11.7. Conversion to Registered
Form 128       Section 11.8. Uncross of Properties 128       Section 11.9.
Syndication 130       ARTICLE 12 INDEMNIFICATIONS 133

 

 -iv- 

 

 

Section 12.1. General Indemnification 133       Section 12.2. Mortgage and
Intangible Tax Indemnification 134       Section 12.3. ERISA Indemnification 134
      Section 12.4. Duty to Defend, Legal Fees and Other Fees and Expenses 134  
    Section 12.5. Survival 135       Section 12.6. Environmental Indemnity 135  
    ARTICLE 13 EXCULPATION 135       Section 13.1. Exculpation 135       ARTICLE
14 NOTICES 137       Section 14.1. Notices 137       ARTICLE 15 FURTHER
ASSURANCES 138       Section 15.1. Replacement Documents 138       Section 15.2.
Recording of Security Instrument 139       Section 15.3. Further Acts 139      
Section 15.4. Changes in Tax, Debt, Credit and Documentary Stamp Laws 140      
ARTICLE 16 WAIVERS 140       Section 16.1. Remedies Cumulative; Waivers 140    
  Section 16.2. Modification, Waiver in Writing 141       Section 16.3. Delay
Not a Waiver 141       Section 16.4. Waiver of Trial by Jury 141       Section
16.5. Waiver of Notice 141       Section 16.6. Remedies of Borrower 141      
Section 16.7. Marshalling and Other Matters 142       Section 16.8.
Intentionally Omitted 142       Section 16.9. Waiver of Counterclaim 142      
Section 16.10. Sole Discretion of Lender 142       ARTICLE 17 MISCELLANEOUS 142
      Section 17.1. Survival 142       Section 17.2. Governing Law 143

 

 -v- 

 

 

Section 17.3. Headings 144       Section 17.4. Severability 144       Section
17.5. Preferences 144       Section 17.6. Expenses 145       Section 17.7. Cost
of Enforcement 146       Section 17.8. Schedules Incorporated 146       Section
17.9. Offsets, Counterclaims and Defenses 146       Section 17.10. No Joint
Venture or Partnership; No Third Party Beneficiaries 146       Section 17.11.
Publicity 147       Section 17.12. Limitation of Liability 148       Section
17.13. Conflict; Construction of Documents; Reliance 148       Section 17.14.
Entire Agreement 149       Section 17.15. Liability 149       Section 17.16.
Duplicate Originals; Counterparts 149       Section 17.17. Brokers 149      
Section 17.18. Set-Off 150       Section 17.19. Contributions and Waivers 150  
    Section 17.20. Cross Default; Cross-Collateralization 151

 

 -vi- 

 

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT, dated as of August 7, 2015 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this “Agreement”), among
BARCLAYS BANK PLC, having an address at 745 Seventh Avenue, New York, New York
10019 (“Barclays”), COLUMN FINANCIAL, INC., having an address at 11 Madison
Avenue, New York, New York 10010 (“CF”) and UBS REAL ESTATE SECURITIES INC.,
having an address at 1285 Avenue of the Americas, New York, New York 10019
(“UBS”; and together with Barclays and CF, together with each of their
respective successors and/or assigns, “Lender”), and EACH OF THE ENTITIES LISTED
ON SCHEDULE I ATTACHED HERETO, each having its principal place of business at
106 York Road, Jenkintown, Pennsylvania 19046 (individually and/or collectively,
as the context may require, together with their respective successors and/or
assigns, “Borrower”).

 

RECITALS:

 

Borrower desires to obtain the Loan (defined below) from Lender.

 

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 (defined below).

 

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:

 

ARTICLE 1.

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

Section 1.1.          Definitions.

 

For all purposes of this Agreement, except as otherwise expressly required or
unless the context clearly indicates a contrary intent:

 

“Acceptable LLC” shall mean a limited liability company formed under Delaware
law which has at least one springing member, which, upon the dissolution of all
of the members or the withdrawal or the disassociation of all of the members
from such limited liability company, shall immediately become the sole member of
such limited liability company.

 

“Account Collateral” shall mean (i) the Accounts, and all cash, checks, drafts,
certificates and instruments, if any, from time to time deposited or held in the
Accounts from time to time; (ii) any and all amounts in the Accounts invested in
Permitted Investments; (iii) all interest, dividends, cash, instruments 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; and (iv) to the
extent not covered by clauses (i) - (iii) above, all “proceeds” (as defined
under the UCC as in effect in the State in which the Accounts are located) of
any or all of the foregoing.

 

 

 

 

“Accounts” shall mean the Cash Management Account, the Debt Service Account, the
Restricted Account, the Tax Account, the Insurance Account, the Replacement
Reserve Account, the Immediate Repair Account, the Leasing Reserve Account, the
Environmental Remediation Account, the Unfunded Obligations Account, the Excess
Cash Flow Account, the Ground Rent Account, the Special Reserve Account and any
other account established by this Agreement or the other Loan Documents.

 

“Act” is defined in Section 5.1 hereof.

 

“Affected Property” shall have the meaning set forth in Section 11.8 hereof.

 

“Affiliate” shall mean, as to any Person, any other Person that (a) directly or
indirectly, is in Control of, is Controlled by or is under common Control with
such Person and/or (b) is a director or officer of such Person or of an
Affiliate of such Person.

 

“Affiliated Manager” shall mean any managing agent of any Individual Property in
which Borrower, Guarantor, any SPE Component Entity (if any) or any Affiliate of
such entities has, directly or indirectly, five percent (5%) or more of the
aggregate legal, beneficial or economic interest or which is Controlled by
Borrower, Guarantor, any SPE Component Entity (if any) or any Affiliate of such
entities.

 

“AFOP” shall have the meaning set forth in Section 6.3 hereof.

 

“Agent” shall have the meaning set forth in Section 11.9 hereof.

 

“Aggregate Square Footage” shall mean the aggregate rentable square footage of
the Properties (but excluding the rentable square footage of each Released
Property that shall have been released from the lien of the related Security
Instrument pursuant to Section 2.9 hereof prior to the date of determination).

 

“Allocable Principal Balance” shall have the meaning set forth in Section 17.19
hereof.

 

“Allocated Loan Amount” shall mean the portion of the principal amount of the
Loan allocated to any applicable Individual Property as set forth on Schedule V
hereof.

 

“ALTA” shall mean American Land Title Association or any successor thereto.

 

“Alteration Threshold” shall mean, with respect to each Individual Property, an
amount equal to 5% of the outstanding principal amount of the Allocated Loan
Amount attributable to such Individual Property.

 

“Approved Accounting Method” shall mean GAAP, federal tax basis accounting
(consistently applied) or such other method of accounting, consistently applied,
as may be reasonably acceptable to Lender.

 

“Approved Annual Budget” shall have the meaning set forth in Section 4.12
hereof.

 

 - 2 - 

 

 

“Approved Bank” means (a) a bank or other financial institution which has the
Required Rating, (b) if a Securitization has not occurred, a bank or other
financial institution acceptable to Lender or (c) if a Securitization has
occurred, a bank or other financial institution with respect to which Lender
shall have received a Rating Agency Confirmation.

 

“Approved Extraordinary Expense” shall mean an operating or capital expense of
the applicable Individual Property not set forth on the Approved Annual Budget
but approved by Lender in writing (which such approval shall not be unreasonably
withheld, conditioned or delayed).

 

“Approved ID Provider” shall mean each of CT Corporation, Corporation Service
Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart
Management Company and Lord Securities Corporation; provided, that, (A) the
foregoing shall be deemed Approved ID Providers unless and until disapproved by
any Rating Agency and (B) additional national providers of Independent Directors
may be deemed added to the foregoing hereunder to the extent reasonably approved
in writing by Lender and approved in writing by the Rating Agencies.

 

“Approved Operating Expense” shall mean an operating expense of the applicable
Individual Property set forth on the Approved Annual Budget.

 

“Assignment and Assumption” shall have the meaning set forth in Section 11.9
hereof.

 

“Assignment of Bond and Deed” shall mean that certain Collateral Assignment of
Bond and Deed to Secure Debt, Assignment of Rents and Leases and Security
Agreement, dated as of the date hereof, by and between ARC HR5VAGA001, LLC
(formerly known as Inland American Valdosta NA Logistics Portfolio, L.L.C.), a
Delaware limited liability company, and Lender, and consented to by
Valdosta-Lowndes County Industrial Authority, a body corporate and politic
created and existing under the laws of the State of Georgia, as the same may be
amended, restated, replaced, extended, renewed, supplemented or otherwise
modified from time to time in accordance with this Agreement.

 

“Assignment of Management Agreement” shall mean, individually and/or
collectively, those certain Conditional Assignment of Management Agreement each
dated as of the date hereof among Lender, Borrower and the applicable Manager,
as the same may be amended, restated, replaced, extended, renewed, supplemented
or otherwise modified from time to time.

 

“Award” shall mean any compensation paid by any Governmental Authority in
connection with a Condemnation in respect of all or any part of any Individual
Property.

 

“Bank” shall be deemed to refer to the bank or other institution maintaining the
Restricted Account pursuant to the Restricted Account Agreement.

 

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled
“Bankruptcy”, as amended from time to time, and any successor statute or
statutes and all rules and regulations from time to time promulgated thereunder,
and any comparable foreign laws relating to bankruptcy, insolvency or creditors’
rights.

 

 - 3 - 

 

 

“Bankruptcy Action” shall mean with respect to any Person (a) such Person filing
a voluntary petition under the Bankruptcy Code and/or any Creditors Rights Laws;
(b) the filing of an involuntary petition against such Person under the
Bankruptcy Code and/or any Creditors Rights Laws, or such Person soliciting or
causing to be solicited petitioning creditors for any involuntary petition
against such Person; (c) such Person filing an answer consenting to or otherwise
acquiescing in or joining in any involuntary petition filed against it, by any
other Person under the Bankruptcy Code and/or any Creditors Rights Laws, or
soliciting or causing to be solicited petitioning creditors for any involuntary
petition from any Person; (d) such Person consenting to or acquiescing in or
joining in an application for the appointment of a custodian, receiver, trustee,
assignee, sequestrator (or similar official), liquidator, or examiner for such
Person or any portion of any Individual Property; (e) the filing of a petition
against a Person seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the Bankruptcy Code, any
Creditors Rights Laws and/or any other applicable law, (f) under the provisions
of any other law for the relief or aid of debtors, an action taken by any court
of competent jurisdiction that allows such court to assume custody or Control of
a Person or of the whole or any substantial part of its property or assets, (g)
such Person making an assignment for the benefit of creditors, or admitting, in
writing or in any legal proceeding, its insolvency or inability to pay its debts
as they become due or (h) such Person takes any action in furtherance of any of
the foregoing.

 

“Bankruptcy Event” shall mean the occurrence of any one or more the of the
following: (i) Borrower or any SPE Component Entity shall commence any case,
proceeding or other action (A) under the Bankruptcy Code and/or any Creditors
Rights Laws seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
liquidation or dissolution or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
substantially all of its assets; (ii) Borrower or any SPE Component Entity shall
make a general assignment for the benefit of its creditors; (iii) Borrower, any
SPE Component Entity, Guarantor or Affiliated Manager (and/or Person owning an
interest (directly or indirectly) in Borrower, any SPE Component Entity,
Guarantor or Affiliated Manager, but excluding any Person whose indirect
interest in Borrower, any SPE Component Entity and/or Affiliated Manager and/or
direct or indirect interest in Guarantor is derived solely from its ownership of
shares of stock in American Finance Trust, Inc., a Maryland corporation, that
are listed on the New York Stock Exchange, NASDAQ Global Select Market or
another nationally recognized stock exchange, unless (I) such Person is an
officer, director, member and/or employee of Borrower, any SPE Component Entity,
Guarantor, any Affiliated Manager and/or their respective Affiliates, (II) such
Person owns a five percent (5%) or greater interest in American Finance Trust,
Inc., a Maryland corporation through its ownership of shares of stock in
American Finance Trust, Inc. that are listed on the New York Stock Exchange,
NASDAQ Global Select Market or another nationally recognized stock exchange
and/or (III) such Person Controls Borrower, any SPE Component Entity, Guarantor,
any Affiliated Manager and/or their respective Affiliates) files, or joins or
colludes in the filing of, (A) an involuntary petition against Borrower or any
SPE Component Entity under the Bankruptcy Code or any other Creditors Rights
Laws, or solicits or causes to be solicited or colludes with petitioning
creditors for any involuntary petition under the Bankruptcy Code or any other
Creditors Rights Laws against Borrower or any SPE Component Entity or (B) any
case, proceeding or other action under the Bankruptcy Code or any other
Creditors Rights Laws seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or

 

 - 4 - 

 

 

substantially all of Borrower’s or any SPE Component Entity’s assets; (iv)
Borrower or any SPE Component Entity files 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 Creditors Rights Laws, or
solicits or causes to be solicited or colludes with petitioning creditors for
any involuntary petition from any Person against Borrower or any SPE Component
Entity; (v) Borrower, any SPE Component Entity, Guarantor or Affiliated Manager
(and/or Person owning an interest (directly or indirectly) in Borrower, any SPE
Component Entity, Guarantor or Affiliated Manager, but excluding any Person
whose indirect interest in Borrower, any SPE Component Entity and/or Affiliated
Manager and/or direct or indirect interest in Guarantor is derived solely from
its ownership of shares of stock in American Finance Trust, Inc., a Maryland
corporation, that are listed on the New York Stock Exchange, NASDAQ Global
Select Market or another nationally recognized stock exchange, unless (I) such
Person is an officer, director, member and/or employee of Borrower, any SPE
Component Entity, Guarantor, any Affiliated Manager and/or their respective
Affiliates, (II) such Person owns a five percent (5%) or greater interest in
American Finance Trust, Inc., a Maryland corporation through its ownership of
shares of stock in American Finance Trust, Inc. that are listed on the New York
Stock Exchange, NASDAQ Global Select Market or another nationally recognized
stock exchange and/or (III) such Person Controls Borrower, any SPE Component
Entity, Guarantor, any Affiliated Manager and/or their respective Affiliates)
consents to or acquiesces in or joins in an application for the appointment of a
custodian, receiver, trustee, or examiner for Borrower, any SPE Component Entity
or any portion of the Property; and (vi) Borrower or any SPE Component Entity
admits, in writing or in any legal proceeding, its insolvency or inability to
pay its debts as they become due.

 

“Barclays” shall have the meaning set forth in the preamble hereof.

 

“Benefit Amount” shall have the meaning set forth in Section 17.19 hereof.

 

“Benefitted Borrower” shall have the meaning set forth in Section 17.19 hereof.

 

“Borrower Party” and “Borrower Parties” shall mean each of Borrower, any SPE
Component Entity and Guarantor.

 

“Borrower Tax Period” shall mean, with respect to any Waived Tax Deposit
Property, a period commencing, with respect to each Waived Tax Deposit Property,
on the earlier to occur of: (i) the date the applicable Lease with respect to
such Waived Tax Deposit Property as of the Closing Date is no longer in effect
(unless Borrower shall enter into a replacement Lease with respect to such
Waived Tax Deposit Property in accordance with the terms and conditions hereof
and such replacement Lease provides that the Tenant thereunder is obligated to
pay all Taxes and Other Charges), or (ii) if the Lease with respect to such
Waived Tax Deposit Property as of the Closing Date (or a replacement Lease
entered into pursuant to the parenthetical clause of clause (i) of this
definition) is in effect, the date on which the Tenant under such Lease shall
have failed to pay all Taxes and Other Charges under such Lease prior to
delinquency and ending on the date a new Lease meeting the requirements set
forth in the parenthetical clause of clause (i) above is entered into or the
applicable Tenant pays all delinquent Taxes and Other Charges (including any
penalties and/or fees associated therewith).

 

 - 5 - 

 

 

“Business Day” shall mean a day on which commercial banks are not authorized or
required by applicable law to close in New York, New York.

 

“Cash Flow Adjustments” shall mean adjustments made by Lender in its calculation
of Underwritable Cash Flow and the components thereof, in each case, based upon
Lender underwriting criteria, which shall be customary and consistent with loans
similar to the Loan and which such adjustments shall include, without
limitation, adjustments (A) for (i) items of a non-recurring nature, (ii) a
credit loss/vacancy allowance equal to the greater of actual vacancy and 5.0%
and (iii) imminent liabilities and/or other expense increases (including,
without limitation, imminent increases to Taxes and Insurance Premiums); (B) to
exclude rental income attributable to any Tenant (1) in bankruptcy that has not
affirmed its Lease in the applicable bankruptcy proceeding pursuant to a final,
non-appealable order of a court of competent jurisdiction (unless such Tenant is
an Investment Grade Tenant and is paying full, unabated rent to Borrower during
such bankruptcy), (2) not paying rent under its Lease, (3) that has stated in
writing that it is not renewing or is terminating, canceling and/or rejecting
its applicable Lease (provided, that, with respect to any Lease pursuant to
which Tenant is paying to Borrower full and unabated rent after it has delivered
such notification to Borrower, Lender shall continue to include such rental
income in its calculation of Underwritable Cash Flow until the first to occur of
(I) with respect to a non-renewal, the date required under such Lease for Tenant
to exercise its notice of renewal and (II) with respect to a termination,
cancellation or rejection, six (6) months prior to the termination date,
cancellation date and/or rejection date of the Lease) and/or (4) whose tenancy
at the Property is month-to-month and (C) to reflect only those Properties that
have not been released from the liens of the Security Instruments at the time of
such calculation of Underwritable Cash Flow.

 

“Cash Management Account” shall have the meaning set forth in Section 9.1
hereof.

 

“Cash Management Agreement” shall have the meaning set forth in Section 9.1
hereof.

 

“Casualty” shall have the meaning set forth in Section 7.2.

 

“Casualty/Condemnation Prepayment” shall have the meaning set forth in Section
7.4 hereof.

 

“Casualty Consultant” shall have the meaning set forth in Section 7.4 hereof.

 

“CF” shall have the meaning set forth in the preamble hereof.

 

“Closing Date” shall mean the date of the funding of the Loan.

 

“Closing Date Debt Service Coverage Ratio” shall mean a Debt Service Coverage
Ratio of 2.19 to 1.00.

 

“Co-Lender” shall have the meaning set forth in Section 11.9 hereof.

 

“Condemnation” shall mean a temporary or permanent taking by any Governmental
Authority as the result, in lieu or in anticipation, of the exercise of the
right of condemnation or eminent domain, of all or any part of any Individual
Property, or any interest therein or right

 

 - 6 - 

 

 

accruing thereto, including any right of access thereto or any change of grade
affecting any Individual Property or any part thereof.

 

“Condemnation Proceeds” shall have the meaning set forth in Section 7.3(b)
hereof.

 

“Contribution” shall have the meaning set forth in Section 17.19 hereof.

 

“Contribution Payment” shall have the meaning set forth in Section 17.19 hereof.

 

“Control” shall mean the power to direct the management and policies of an
entity, directly or indirectly, whether through the ownership of voting
securities or other beneficial interests, by contract or otherwise. The terms
“Controlled” and “Controlling” shall have correlative meanings.

 

“Covered Disclosure Information” shall have the meaning set forth in Section
11.2 hereof.

 

“Covered Rating Agency Information” shall mean any Provided Information
furnished to the Rating Agencies in connection with issuing, monitoring and/or
maintaining the Securities.

 

“Creditors Rights Laws” shall mean any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to its debts
or debtors.

 

“Debt” shall mean the outstanding principal amount set forth in, and evidenced
by, this Agreement and the Note together with all interest accrued and unpaid
thereon and all other sums due to Lender in respect of the Loan under the Note,
this Agreement or the other Loan Documents (including, without limitation, all
costs and expenses payable to Lender thereunder).

 

“Debt Service” shall mean, with respect to any particular period of time,
scheduled interest payments hereunder.

 

“Debt Service Account” shall have the meaning set forth in Section 9.1 hereof.

 

“Debt Service Coverage Ratio” shall mean the ratio of (i) the Underwritable Cash
Flow as of the date of calculation to (ii) the Debt Service which was due for
the twelve (12) month period immediately preceding the date of calculation;
provided, that, the foregoing shall be calculated by Lender (A) based upon the
actual amount of debt service which would be due for such period, (B) assuming
that the Loan had been in place for the entirety of said period and (C) assuming
that constant principal and interest payments were due hereunder for the
entirety of said period based on a thirty (30) year amortization schedule.

 

"Deemed Approval Requirements" shall mean, with respect to any matter, that (i)
no Event of Default shall have occurred and be continuing (either at the date of
any notices specified below or as of the effective date of any deemed approval),
(ii) Borrower shall have sent Lender a written request for approval with respect
to such matter in accordance with the applicable terms and conditions hereof
(the "Initial Notice"), which such Initial Notice shall

 

 - 7 - 

 

 

have been (A) accompanied by any and all required information and documentation
relating thereto as may be reasonably required in order to approve or disapprove
such matter (the "Approval Information") and (B) marked in bold lettering with
the following language: “LENDER’S RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS
DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN
THE UNDERSIGNED AND LENDER” and the envelope containing the Initial Notice shall
have been marked “PRIORITY-DEEMED APPROVAL MAY APPLY”; (iii) Lender shall have
failed to approve or disapprove the matter identified in the Initial Notice
within the aforesaid time-frame; (iv) Borrower shall have submitted a second
request for approval with respect to such matter in accordance with the
applicable terms and conditions hereof (the "Second Notice"), which such Second
Notice shall have been (A) accompanied by the Approval Information and (B)
marked in bold lettering with the following language: “LENDER’S RESPONSE IS
REQUIRED WITHIN FIVE (5) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE
TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER” and the envelope
containing the Second Notice shall have been marked “PRIORITY-DEEMED APPROVAL
MAY APPLY”; and (v) Lender shall have failed to approve or disapprove the matter
identified in the Second Notice within the aforesaid time-frame. For purposes of
clarification, Lender may request in writing additional and/or clarified
information provided such request for information is delivered within five (5)
Business Days of Lender’s receipt of the Initial Notice, provided, however,
notwithstanding the foregoing, Lender shall still be required to approve or
disapprove any request within the timeframes set forth above in this paragraph.

 

“Default” shall mean the occurrence of any event hereunder or under the Note or
the other Loan Documents which, but for the giving of notice or passage of time,
or both, would be an Event of Default.

 

“Default Rate” shall mean, with respect to the Loan, a rate per annum equal to
the lesser of (i) the Maximum Legal Rate, or (ii) four percent (4%) above the
Interest Rate.

 

“Default Yield Maintenance Premium” shall mean an amount equal to the Yield
Maintenance Premium except that when calculating the Yield Maintenance Premium,
the reference to “Interest Rate” in the definition of “Calculated Payments”
shall be deemed to mean and refer to the “Default Rate”.

 

“Defaulting Borrower” shall have the meaning set forth in Section 17.19 hereof.

 

“Disclosure Documents” shall mean, collectively and as applicable, any offering
circular, free writing prospectus, prospectus, prospectus supplement, private
placement memorandum, term sheet or other offering document, in each case,
provided to prospective investors and the Rating Agencies in connection with a
Securitization.

 

“Eligibility Requirements” means, with respect to any Person, that such Person
(i) has total assets (in name or under management or advisement) in excess of
$1,000,000,000 and (except with respect to a pension advisory firm, asset
manager or similar fiduciary) capital/statutory surplus or shareholder’s equity
of at least $400,000,000 and (ii) is regularly engaged in the business of making
or owning (or, in the case of a pension advisory firm or

 

 - 8 - 

 

 

similar fiduciary, regularly engaged in managing investments in) commercial real
estate loans (including mezzanine loans to direct or indirect owners of
commercial properties, which loans are secured by pledges of direct or indirect
ownership interests in the owners of such commercial properties) or corporate
credit loans, or operating commercial properties.

 

“Eligible Account” shall mean a separate and identifiable account from all other
funds held by the holding institution that is an account or accounts maintained
with a federal or state-chartered depository institution or trust company which
(a) complies with the definition of Eligible Institution, (b) has a combined
capital and surplus of at least $50,000,000 and (c) has corporate trust powers
and is acting in its fiduciary capacity. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other instrument.

 

“Eligible Institution” shall mean (a) a depository institution or trust company
insured by the Federal Deposit Insurance Corporation (i) the short term
unsecured debt obligations or commercial paper of which are rated at least
“A-1+” (or its equivalent) from each of the Rating Agencies (in the case of
accounts in which funds are held for thirty (30) days or less) and (ii) the long
term unsecured debt obligations of which are rated at least “A+” (or its
equivalent) from each of the Rating Agencies (in the case of accounts in which
funds are held for more than thirty (30) days), (b) such other depository
institution otherwise approved by the Rating Agencies from time-to-time or (c)
Wells Fargo Bank, National Association in its capacity as Cash Management Bank;
provided, that, with respect to this clause (c), Wells Fargo Bank, National
Association complies with the definition of “Eligible Institution” set forth in
the Cash Management Agreement.

 

“Embargoed Person” shall have the meaning set forth in Section 3.29 hereof.

 

“Emergency Alterations” shall have the meaning set forth in Section 4.21 hereof.

 

“Environmental Indemnity” shall mean that certain Environmental Indemnity
Agreement, dated as of the date hereof, executed by Borrower and Guarantor in
connection with the Loan for the benefit of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

 

“Environmental Laws” shall have the meaning set forth in the Environmental
Indemnity.

 

“Environmental Remediation” shall have the meaning set forth in Section 8.7
hereof.

 

“Environmental Remediation Account” shall have the meaning set forth in Section
8.7 hereof.

 

“Environmental Remediation Funds” shall have the meaning set forth in Section
8.7 hereof.

 

“Environmental Reports” shall mean those certain Phase I environmental site
assessments with respect to Properties delivered to Lender in connection with
the closing of the Loan.

 

 - 9 - 

 

 

“Equity Collateral” shall have the meaning set forth in Section 11.6 hereof.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the
same may heretofore have been or shall be amended, restated, replaced or
otherwise modified.

 

“Event of Default” shall have the meaning set forth in Section 10.1 hereof.

 

“Excess Cash Flow” shall have the meaning set forth in Section 9.3 hereof.

 

“Excess Cash Flow Account” shall have the meaning set forth in Section 8.5
hereof.

 

“Excess Cash Flow Funds” shall have the meaning set forth in Section 8.5 hereof.

 

“Exchange Act” shall mean the Securities and Exchange Act of 1934, as amended.

 

“Exchange Act Filing” shall have the meaning set forth in Section 11.1 hereof.

 

“Excluded Taxes” shall mean any of the following Section 2.10 Taxes imposed on
or with respect to a Recipient or required to be withheld or deducted from a
payment to a Recipient, (a) Section 2.10 Taxes imposed on or measured by net
income (however denominated), franchise Section 2.10 Taxes, and branch profits
Section 2.10 Taxes, in each case, (i) imposed as a result of such Recipient
being organized under the laws of, or having its principal office or, in the
case of any Lender, its applicable lending office located in, the jurisdiction
imposing such Section 2.10 Tax (or any political subdivision thereof) or (ii)
that are Other Connection Taxes, (b) in the case of a Lender, withholding taxes
imposed on amounts payable to or for the account of such Lender with respect to
an applicable interest in a Loan pursuant to a law in effect on the date on
which (i) such Lender originates or acquires such interest in the Loan or (ii)
such Lender changes its lending office, except in each case to the extent that,
pursuant to Section 2.10, amounts with respect to such Section 2.10 Taxes were
payable either to such Lender’s assignor immediately before such Lender became a
party hereto or to such Lender immediately before it changed its lending office,
(c) Section 2.10 Taxes attributable to such Recipient’s failure to comply with
Section 2.10(f) and (d) any U.S. federal withholding taxes imposed under FATCA.

 

“Exculpated Parties” shall have the meaning set forth in Section 13.1 hereof.

 

“FATCA” shall mean Sections 1471 through 1474 of the IRS Code, as of the date of
this Agreement (or any amended or successor version), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the IRS Code and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement entered into in connection with the implementation of such Sections of
the IRS Code.

 

“Fee Estate” shall mean the fee interest of the lessor under a Ground Lease in
the Land and the Improvements demised under such Ground Lease.

 

“Fee Owner” shall mean the owner of the lessor’s interest in a Ground Lease and
the related Fee Estate.

 

 - 10 - 

 

 

“First Monthly Payment Date” shall mean October 6, 2015.

 

“Fitch” shall mean Fitch, Inc.

 

“Flood Insurance Acts” shall have the meaning set forth in Section 7.1 hereof.

 

“Foreign Lender” shall mean a Lender that is not a U.S. Person.

 

“GAAP” shall mean generally accepted accounting principles in the United States
of America as of the date of the applicable financial report.

 

“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.

 

“Gross Rents” shall mean an amount equal to annual rental income reflected in a
current rent roll for (i) all Tenants paying rent (other than non-Investment
Grade Tenants who are paying rent but who have ceased operations (i.e., “gone
dark”) in the space demised under their Leases) and (ii) all Tenants who are
open for business and in actual physical occupancy of their respective space
demised under their Leases but who are benefitting from a free rent period
(provided that rental income will only be included in Gross Rents for any Tenant
benefitting from (I) with respect to a Lease with a term of five (5) years or
less, an amount not to exceed six (6) months of free rent and (II) with respect
to a Lease with a term greater than five (5) years, an amount not to exceed
twelve (12) months of free rent), in each instance pursuant to Leases which are
in full force and effect.

 

“Ground Lease” shall mean, collectively, (i) the “Ground Lease” as defined in
each applicable Security Instrument and (ii) the Ground Lease Estoppels.

 

“Ground Lease Estoppel” shall mean, collectively, each ground lease estoppel as
set forth on Schedule XI attached hereto.

 

“Ground Rent” shall mean the ground rent, and other sums and amounts payable to
Fee Owner, by Borrower under each Ground Lease.

 

“Ground Rent Account” shall have the meaning set forth in Section 8.4 hereof.

 

“Ground Rent Funds” shall have the meaning set forth in Section 8.4 hereof.

 

“Guarantor” shall mean American Finance Trust, Inc., a Maryland corporation and
any successor to and/or replacement of any of the foregoing Person, in each
case, pursuant to and in accordance with the applicable terms and conditions of
the Loan Documents.

 

“Guarantor Control Condition” shall mean a condition which shall be deemed
satisfied to the extent that Borrower and, if applicable, each SPE Component
Entity is, in each case, Controlled directly or indirectly by a current
Guarantor (as distinguished from any prior Guarantor that has been replaced in
accordance with the applicable terms and conditions of the Loan Documents).

 

 - 11 - 

 

 

“Guaranty” shall mean that certain Limited Recourse Guaranty executed by
Guarantor and dated as of the date hereof, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

“Immediate Repair Account” shall have the meaning set forth in Section 8.1
hereof.

 

“Immediate Repair Funds” shall have the meaning set forth in Section 8.1 hereof.

 

“Immediate Repairs” shall have the meaning set forth in Section 8.1 hereof.

 

“Improvements” shall mean, individually and/or collectively (as the context
requires), the “Improvements” as defined in each applicable Security Instrument.

 

“Indebtedness” shall mean, for any Person, any indebtedness or other similar
obligation for which such Person is obligated (directly or indirectly, by
contract, operation of law or otherwise), including, without limitation, (i) all
indebtedness of such Person for borrowed money, for amounts drawn under a letter
of credit, or for the deferred purchase price of property for which such Person
or its assets is liable, (ii) all unfunded amounts under a loan agreement,
letter of credit, or other credit facility for which such Person would be liable
if such amounts were advanced thereunder, (iii) all amounts required to be paid
by such Person pursuant to a guaranty, (iv) all indebtedness incurred and/or
guaranteed by such Person, directly or indirectly, (v) all obligations under
leases that constitute capital leases for which such Person is liable, (vi) all
obligations of such Person under interest rate swaps, caps, floors, collars and
other interest hedge agreements, in each case whether such Person is liable
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against loss and
(vii) any property-assessed clean energy loans or similar indebtedness,
including, without limitation, if such loans or indebtedness are made or
otherwise provided by any Governmental Authority and/or secured or repaid
(directly or indirectly) by any taxes or similar assessments.

 

“Indemnified Person” shall mean Lender, any Affiliate of Lender that has filed
any registration statement relating to the Securitization or has acted as the
sponsor or depositor in connection with the Securitization, any Affiliate of
Lender that acts as an underwriter, placement agent or initial purchaser of
Securities issued in the Securitization, any other co-underwriters, co-placement
agents or co-initial purchasers of Securities issued in the Securitization, and
each of their respective officers, directors, partners, employees,
representatives, agents and Affiliates and each Person or entity who Controls
any such Person within the meaning of Section 15 of the Securities Act of 1933
as amended or Section 20 of the Security Exchange Act of 1934 as amended, any
Person who is or will have been involved in the origination of the Loan on
behalf of Lender, any Person who is or will have been involved in the servicing
of the Loan secured hereby, any Person in whose name the encumbrance created by
the Security Instruments is or will have been recorded, any Person who may hold
or acquire or will have held a full or partial direct interest in the Loan
secured hereby as well as custodians, trustees and other fiduciaries who hold or
have held a full or partial interest in the Loan secured hereby for the benefit
of third parties as well as the respective directors, officers, shareholders,
partners, employees, agents, representatives of any and all of the foregoing
(including, but not limited to, any successors by merger, consolidation or
acquisition of all or a substantial portion of Lender’s assets and

 

 - 12 - 

 

 

business) and any receiver or other fiduciary appointed in a foreclosure or
other Creditors Rights Laws proceeding.

 

“Indemnified Taxes” shall mean (a) Section 2.10 Taxes, other than Excluded
Taxes, imposed on or with respect to any payment made by or on account of any
obligation of Borrower under any Loan Document and (b) to the extent not
otherwise described in (a), Other Taxes.

 

“Independent Director” shall have the meaning set forth in Section 5.2 hereof.

 

“Individual Property” shall mean each parcel of real property, the Improvements
thereon and all personal property owned by Borrower and encumbered by the
applicable Security Instrument, together with all rights pertaining to such
property and Improvements, as more particularly described in the granting
clauses of the applicable Security Instrument and referred to therein as the
“Property.”

 

“Information” shall have the meaning set forth in Section 11.9 hereof.

 

“Insurance Account” shall have the meaning set forth in Section 8.6 hereof.

 

“Insurance Payment Date” shall mean, with respect to any applicable Policies,
the date occurring 30 days prior to the date the applicable Insurance Premiums
associated therewith are due and payable.

 

“Insurance Premiums” shall have the meaning set forth in Section 7.1 hereof.

 

“Interest Accrual Period” shall mean the period beginning on (and including) the
sixth (6th) day of each calendar month during the term of the Loan and ending on
(and including) the fifth (5th) day of the next succeeding calendar month.

 

“Interest Bearing Accounts” shall mean the following Reserve Accounts: the
Replacement Reserve Account, the Immediate Repair Account, the Excess Cash Flow
Account, the Leasing Reserve Account, the Environmental Remediation Account, the
Special Reserve Account and the Unfunded Obligations Account.

 

“Interest Rate” shall mean a rate per annum equal to 4.29625%.

 

“Interest Shortfall” shall have the meaning set forth in Section 2.7 hereof.

 

“Investment Grade Ratings” shall mean, as applicable, a long-term unsecured debt
rating of “BBB-” or higher by S&P or Fitch or “Baa3” or higher by Moody’s.

 

“Investment Grade Tenant” shall mean a Tenant that, as of the date of
determination, has an Investment Grade Rating.

 

“Investor” shall mean any investor or potential investor in the Loan (or any
portion thereof or interest therein) in connection with any Secondary Market
Transaction.

 

 - 13 - 

 

 

“IRS Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time or any successor statute.

 

“Land” shall mean, individually and/or collectively (as the context requires),
the “Land” as defined in each applicable Security Instrument.

 

“Landlord Alterations” shall have the meaning set forth in Section 4.21.

 

“Lease” shall have the meaning set forth in the Security Instrument.

 

“Leasing Reserve Account” shall have the meaning set forth in Section 8.3
hereof.

 

“Leasing Reserve Funds” shall have the meaning set forth in Section 8.3 hereof.

 

“Leasing Reserve Monthly Deposit” shall mean, for each date of determination,
one-twelfth (1/12th) of the amount equal to the Aggregate Square Footage
multiplied by one dollar ($1.00).

 

“Legal Requirements” shall mean all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities affecting Borrower or any
Individual Property or any part thereof, or the construction, use, alteration or
operation thereof, or any part thereof, whether now or hereafter enacted and in
force, including, without limitation, the Americans with Disabilities Act of
1990, and all Permits, authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower, at any time in force
affecting Borrower or any Individual Property or any part thereof, including,
without limitation, any which may (i) require repairs, modifications or
alterations in or to any Individual Property or any part thereof, or (ii) in any
way limit the use and enjoyment thereof.

 

“Lender Affiliate” shall have the meaning set forth in Section 11.2 hereof.

 

“Lender Group” shall have the meaning set forth in Section 11.2 hereof.

 

“Letter of Credit” shall mean an irrevocable, auto-renewing, unconditional,
transferable, clean sight draft standby letter of credit having an initial term
of not less than one (1) year and with automatic renewals for one (1) year
periods (unless the obligation being secured by, or otherwise requiring the
delivery of, such letter of credit is required to be performed at least thirty
(30) days prior to the initial expiry date of such letter of credit), for which
Borrower shall have no reimbursement obligation and which reimbursement
obligation is not secured by the Property or any other property pledged to
secure the Note, in favor of Lender and entitling Lender to draw thereon in New
York, New York, based solely on a statement that Lender has the right to draw
thereon executed by an officer or authorized signatory of Lender. A Letter of
Credit must be issued by an Approved Bank. Borrower’s delivery of any Letter of
Credit hereunder shall, at Lender’s option, be conditioned upon Lender’s receipt
of either an update to the Non-Consolidation Opinion reasonably acceptable to
Lender and acceptable to the Rating Agencies or a New Non-Consolidation Opinion
relating to such Letter of Credit.

 

 - 14 - 

 

 

“Liabilities” shall have the meaning set forth in Section 11.2 hereof.

 

“Loan” shall mean the loan made by Lender to Borrower pursuant to this
Agreement.

 

“Loan Bifurcation” shall have the meaning set forth in Section 11.1 hereof.

 

“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Security Instrument, the Environmental Indemnity, the Assignment of Management
Agreement, the Guaranty, the Assignment of Bond and Deed, the Valdosta Power of
Attorney, the Post Closing Agreement and all other documents executed and
delivered in connection with the Loan, as each of the same may be amended,
restated, replaced, extended, renewed, supplemented or otherwise modified from
time to time.

 

“Loan-to-Value Ratio” shall mean, as of the date of its calculation, the ratio
of (a) the outstanding principal amount of the Loan as of the date of such
calculation to (b) the fair market value of the Properties (for purposes of the
REMIC provisions, counting only real property and excluding any personal
property or going concern value), as determined, in Lender’s reasonable
discretion, by any commercially reasonable method permitted to a REMIC Trust.

 

“Losses” shall mean any and all losses, damages, costs, fees, expenses, claims,
suits, judgments, awards, liabilities (including but not limited to strict
liabilities), obligations, fines, penalties, charges, amounts paid in
settlement, litigation costs and attorneys’ fees, in the case of each of the
foregoing, of whatever kind or nature and whether or not incurred in connection
with any judicial or administrative proceedings, actions, claims, suits,
judgments or awards (but excluding consequential, special and/or punitive
damages except to the extent Lender or its Affiliates are responsible therefore
to third parties).

 

“Major Lease” shall mean as to each Individual Property (i) any Master Lease
demising such Individual Property and/or any other Lease (and any document
and/or agreement with respect to any Lease) that affects one or more Properties,
(ii) any Lease which, individually or when aggregated with all other leases at
the applicable Individual Property with the same Tenant or its Affiliate,
demises 20,000 square feet or more of the applicable Individual Property’s gross
leasable area, (iii) any Lease which contains any option, offer, right of first
refusal or other similar entitlement to acquire all or any portion of any
Individual Property and (iv) any instrument guaranteeing or providing credit
support for any Lease meeting the requirements of (i), (ii) and/or (iii) above.

 

“Management Agreement” shall mean individually and/or collectively (as the
context may require), each management agreement entered into by and between
Borrower and Manager, pursuant to which Manager is to provide management and
other services with respect to the Properties or any portion thereof, as the
same may be amended, restated, replaced, extended, renewed, supplemented or
otherwise modified from time to time.

 

“Manager” shall mean (i) with respect to that certain Individual Property
located at 1919 Rolling Hills Lane, Winchester, Kentucky, CBRE, Inc., a Delaware
corporation or (ii) such other Person selected as the manager of any applicable
Individual Property in accordance with the terms of this Agreement or the other
Loan Documents.

 

 - 15 - 

 

 

“Master Lease” shall mean, individually and/or collectively, as the context may
require, those certain Leases listed on Schedule X attached hereto together with
any replacements, amendments, modifications, renewals or supplements thereto in
accordance with the terms and conditions of this Agreement, including, without
limitation, any replacement Lease entered into in accordance with the terms and
conditions of this Agreement with respect to any space demised under a Master
Lease.

 

“Material Adverse Effect” shall mean a material adverse effect on (i) any
Individual Property, (ii) the business, management, operations or condition
(financial or otherwise) of any Borrower, Guarantor, or any Individual Property,
(iii) the enforceability, validity, perfection or priority of the lien of any
Security Instrument or the enforceability of the other Loan Documents, or (iv)
the ability of any Borrower and/or Guarantor to perform its obligations under
the related Security Instrument or the other Loan Documents.

 

“Maturity Date” shall mean the Stated Maturity Date or such other date on which
the final payment of the principal amount of the Loan becomes due and payable as
herein provided, whether at the Stated Maturity Date, by declaration of
acceleration, or otherwise.

 

“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 Note and as provided
for herein or the other Loan Documents, under the laws of such state or states
whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.

 

“Member” is defined in Section 5.1 hereof.

 

“Mezzanine Borrower” shall have the meaning set forth in Section 11.6 hereof.

 

“Mezzanine Option” shall have the meaning set forth in Section 11.6 hereof.

 

“Minimum Disbursement Amount” shall mean Twenty-Five Thousand and No/100 Dollars
($25,000).

 

“Monthly Debt Service Payment Amount” shall mean for the First Monthly Payment
Date and for each Monthly Payment Date occurring thereafter up to and including
the Monthly Payment Date occurring in September, 2020, a payment equal to the
amount of interest which has accrued during the preceding Interest Accrual
Period computed at the Interest Rate.

 

“Monthly Ground Rent Deposit” shall have the meaning set forth in Section 8.4
hereof.

 

“Monthly Insurance Deposit” shall have the meaning set forth in Section 8.6
hereof.

 

“Monthly Payment Date” shall mean the First Monthly Payment Date and the sixth
(6th) day of every calendar month occurring thereafter during the term of the
Loan.

 

“Monthly Tax Deposit” shall have the meaning set forth in Section 8.6 hereof.

 

“Moody’s” shall mean Moody’s Investor Service, Inc.

 

 - 16 - 

 

 

“Net Proceeds” shall mean: (i) the net amount of all insurance proceeds payable
as a result of a Casualty to any Individual Property, after deduction of
reasonable costs and expenses (including, but not limited to, reasonable
attorneys’ fees), if any, in collecting such insurance proceeds, or (ii) the net
amount of the Award, after deduction of reasonable costs and expenses
(including, but not limited to, reasonable attorneys’ fees), if any, in
collecting such Award.

 

“Net Proceeds Deficiency” shall have the meaning set forth in Section 7.4
hereof.

 

“New Manager” shall mean any Person replacing or becoming the assignee of the
then current Manager, in each case, in accordance with the applicable terms and
conditions hereof.

 

“New Non-Consolidation Opinion” shall mean a substantive non-consolidation
opinion provided by outside counsel reasonably acceptable to Lender and
acceptable to the Rating Agencies and otherwise in form and substance reasonably
acceptable to Lender and acceptable to the Rating Agencies.

 

“Non-Conforming Policy” shall have the meaning set forth in Section 7.1 hereof.

 

“Non-Consolidation Opinion” shall mean that certain substantive
non-consolidation opinion delivered to Lender by Duane Morris LLP in connection
with the closing of the Loan.

 

“Note” shall mean, collectively, (i) that certain Promissory Note A-1, dated the
date hereof, in the principal amount of THREE HUNDRED TWENTY-SEVEN MILLION FIVE
HUNDRED THOUSAND AND 00/100 DOLLARS ($327,500,000) by Borrower in favor of
Barclays (“Note A-1”), (ii)  that certain Promissory Note A-2, dated the date
hereof, in the principal amount of ONE HUNDRED SIXTY THREE MILLION SEVEN HUNDRED
FIFTY THOUSAND AND 00/100 DOLLARS ($163,750,000) by Borrower in favor of CF
(“Note A-2”), and (iii)  that certain Promissory Note A-3, dated the date
hereof, in the principal amount of ONE HUNDRED SIXTY THREE MILLION SEVEN HUNDRED
FIFTY THOUSAND AND 00/100 DOLLARS ($163,750,000) by Borrower in favor of UBS
(“Note A-3”), as each of the same may be amended, restated, replaced, extended,
renewed, supplemented, severed, split, or otherwise modified from time to time.

 

“Note A-1” shall have the meaning set forth in the definition of “Note” in
Section 1.1 hereof.

 

“Note A-2” shall have the meaning set forth in the definition of “Note” in
Section 1.1 hereof.

 

“Note A-3” shall have the meaning set forth in the definition of “Note” in
Section 1.1 hereof.

 

“OFAC” shall have the meaning set forth in Section 3.30 hereof.

 

“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower
which is signed by Responsible Officer of Borrower.

 

 - 17 - 

 

 

“Op Ex Monthly Amount” shall mean an amount equal to the aggregate amount of
Approved Operating Expenses and Approved Extraordinary Expenses to be incurred
by Borrower for the then current Interest Accrual Period.

 

“Open Prepayment Period” shall have the meaning set forth in Section 2.7(a)
hereof.

 

“Operating Expenses” shall mean for any period the total of all expenditures,
computed in accordance with the Approved Accounting Method, of whatever kind
relating to the operation, maintenance and management of the Properties that are
incurred on a regular monthly or other periodic basis, including without
limitation, (and without duplication) (a) utilities, ordinary repairs and
maintenance, insurance, license fees, property taxes and assessments,
advertising expenses, payroll and related taxes, computer processing charges,
assumed management fees (equal to the greater of (x) three percent (3.0%) of
Gross Rents or (y) actual management fees payable under the Management
Agreement), operational equipment or other lease payments as approved by Lender,
but specifically excluding (i) depreciation, (ii) Debt Service, (iii)
non-recurring or extraordinary expenses, and (iv) deposits into the Reserve
Funds; (b) normalized capital expenditures equal to $0.20 per Aggregate Square
Footage per annum; and (c) normalized tenant improvement and leasing commission
expenditures equal to $1.00 per Aggregate Square Footage per annum.

 

“Operating Income” shall mean all income, computed in accordance with the
Approved Accounting Method, derived from the ownership and operation of the
Properties from whatever source, including, but not limited to common area
maintenance, real estate tax recoveries, utility recoveries, other miscellaneous
expense recoveries and other miscellaneous income, but excluding rental income
taxes, sales, use and occupancy taxes or other taxes on receipts required to be
accounted for by Borrower to any Governmental Authority, refunds and
uncollectible accounts, sales of furniture, fixtures and equipment, interest
income, insurance proceeds (other than business interruption or other loss of
income insurance), Awards, unforfeited security deposits, utility and other
similar deposits, non-recurring or extraordinary income, including, without
limitation lease termination payments, and any disbursements to Borrower from
the Reserve Funds. Operating Income shall not be diminished as a result of the
Security Instruments or the creation of any intervening estate or interest in
the Properties or any part thereof. Notwithstanding the foregoing or anything to
the contrary contained herein or in any other Loan Document, “Gross Rents” and
“Operating Income” shall be calculated hereunder without duplication of one
another or of any individual item contained within the definitions thereof.

 

“Other Charges” shall mean all maintenance charges, impositions other than
Taxes, and any other charges, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining any Individual Property, now or
hereafter levied or assessed or imposed against any Individual Property or any
part thereof.

 

“Other Connection Taxes” shall mean, with respect to any Recipient, Section 2.10
Taxes imposed as a result of a present or former connection between such
Recipient and the jurisdiction imposing such Section 2.10 Tax (other than
connections arising from such Recipient having executed, delivered, become a
party to, performed its obligations under, received payments under, received or
perfected a security interest under, engaged in any other transaction

 

 - 18 - 

 

 

pursuant to or enforced any Loan Document, or sold or assigned an interest in
any Loan or Loan Document).

 

“Other Taxes” shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Section 2.10 Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or
registration of, from the receipt or perfection of a security interest under, or
otherwise with respect to, any Loan Document, except any such Section 2.10 Taxes
that are Other Connection Taxes imposed with respect to an assignment or Section
2.10 Taxes that are the result of Barclays being a foreign lender with a loan
made in the United States.

 

“Overpaying Borrower” shall have the meaning set forth in Section 17.19 hereof.

 

“Overpayment Amount” shall have the meaning set forth in Section 17.19 hereof.

 

“Patriot Act” shall have the meaning set forth in Section 3.29 hereof.

 

“Permits” shall mean all necessary certificates, licenses, permits, franchises,
trade names, certificates of occupancy, consents, and other approvals
(governmental and otherwise) required under applicable Legal Requirements for
the operation of each Individual Property and the conduct of Borrower’s business
(including, without limitation, all required zoning, building code, land use,
environmental, public assembly and other similar permits or approvals).

 

“Permitted Encumbrances” shall mean, with respect to each Individual Property,
collectively, (a) the lien and security interests created by this Agreement and
the other Loan Documents, (b) all liens, encumbrances and other matters
disclosed in the applicable Title Insurance Policy, (c) liens, if any, for Taxes
imposed by any Governmental Authority not yet due or delinquent and (d) such
other title and survey exceptions as Lender has approved or may approve in
writing in Lender’s sole discretion.

 

“Permitted Fund Manager” means any Person that on the date of determination is
not subject to a case under the Bankruptcy Code and/or any Creditors Rights Laws
and is an entity that is a Qualified Lender pursuant to clauses (vii)(A), (B),
(C) or (D) of the definition thereof.

 

“Permitted Investments” shall mean any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, including
those issued by Servicer, or any trustee under any Securitization or any of
their respective Affiliates, payable on demand or having a maturity date not
later than the Business Day immediately prior to the first Monthly Payment Date
following the date of acquiring such investment and meeting one of the
appropriate standards set forth below:

 

(a)          obligations of, or obligations directly and unconditionally
guaranteed as to principal and interest by, the U.S. government or any agency or
instrumentality thereof, when such obligations are backed by the full faith and
credit of the United States of America and have maturities not in excess of one
year, provided that with respect to any such obligation guaranteed by any agency
or instrumentality of the U.S. government, such agency or instrumentality must
be either (i) rated by S&P and have a rating equal to at least the minimum
eligible rating by S&P or

 

 - 19 - 

 

 

(ii) are specifically approved by S&P as having the creditworthiness of the
senior obligations equal to that of the U.S. government;

 

(b)          federal funds, unsecured certificates of deposit, time deposits,
banker’s acceptances, and repurchase agreements having maturities of not more
than 90 days of any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia, the
short-term debt obligations of which are rated (a) “A-1+” (or the equivalent) by
S&P and, if it has a term in excess of three months, the long-term debt
obligations of which are rated “AAA” (or the equivalent) by S&P, and that (1) is
at least “adequately capitalized” (as defined in the regulations of its primary
Federal banking regulator) and (2) has Tier 1 capital (as defined in such
regulations) of not less than $1,000,000,000, (b) in one of the following
Moody’s rating categories: (1) for maturities less than one month, a long-term
rating of “A2” or a short-term rating of “P-1”, (2) for maturities between one
and three months, a long-term rating of “A1” and a short-term rating of “P-1”,
(3) for maturities between three months to six months, a long-term rating of
“Aa3” and a short-term rating of “P-1” and (4) for maturities over six months, a
long-term rating of “Aaa” and a short-term rating of “P-1”, or such other
ratings as confirmed in a Rating Agency Confirmation and (c) in one of the
following Fitch rating categories: (1) for maturities less than three months, a
long term rating of “A” and a short term rating of “F-1” and (2) for maturities
greater than three months, a long-term rating of “AA-” and a short term rating
of “F-1+”;

 

(c)          deposits that are fully insured by the Federal Deposit Insurance
Corp.;

 

(d)          commercial paper rated (a) “A–1+” (or the equivalent) by S&P and
having a maturity of not more than 90 days, (b) in one of the following Moody’s
rating categories: (i) for maturities less than one month, a long-term rating of
“A2” or a short-term rating of “P-1”, (ii) for maturities between one and three
months, a long-term rating of “A1” and a short-term rating of “P-1”, (iii) for
maturities between three months to six months, a long-term rating of “Aa3” and a
short-term rating of “P-1” and (iv) for maturities over six months, a long-term
rating of “Aaa” and a short-term rating of “P-1” and (c) in one of the following
Fitch rating categories: (1) for maturities less than three months, a long term
rating of “A” and a short term rating of “F-1” and (2) for maturities greater
than three months, a long-term rating of “AA-” and a short term rating of
“F-1+”;

 

(e)          any money market funds that (a) has substantially all of its assets
invested continuously in the types of investments referred to in clause (a)
above, (b) has net assets of not less than $5,000,000,000, and (c) has an S&P
rating of “AAAm” or better and the highest rating obtainable from Moody’s and
Fitch; and

 

(f)          such other investments as to which each Rating Agency shall have
delivered a Rating Agency Confirmation.

 

Notwithstanding the foregoing, “Permitted Investments” (i) shall exclude any
security with a qualified rating symbol (or any other Rating Agency’s
corresponding symbol) attached to the rating, as well as any mortgage-backed
securities and any security of the type commonly known as “strips”; (ii) shall
be limited to those instruments that have a predetermined fixed dollar of
principal due at maturity that cannot vary or change; (iii) shall only include
instruments

 

 - 20 - 

 

 

that qualify as “cash flow investments” (within the meaning of
Section 860G(a)(6) of the IRS Code); and (iv) shall exclude any investment where
the right to receive principal and interest derived from the underlying
investment provides a yield to maturity in excess of 120% of the yield to
maturity at par of such underlying investment. Interest may either be fixed or
variable, and any variable interest must be tied to a single interest rate index
plus a single fixed spread (if any), and move proportionately with that index.
No investment shall be made which requires a payment above par for an obligation
if the obligation may be prepaid at the option of the issuer thereof prior to
its maturity. All investments shall mature or be redeemable upon the option of
the holder thereof on or prior to the earlier of (x) three months from the date
of their purchase and (y) the Business Day preceding the day before the date
such amounts are required to be applied hereunder.

 

“Permitted Self-Management Property” shall mean, for so long as American Finance
Trust, Inc., a Maryland corporation (A) owns at least a 51% direct or indirect
interest in each Borrower and each SPE Component Entity and (B) Controls
Borrower and each SPE Component Entity, any Individual Property which pursuant
to the terms of the applicable Lease is maintained and operated by the
applicable Tenant.

 

“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 other entity and, in each case, any fiduciary acting in
such capacity on behalf of any of the foregoing.

 

“Personal Property” shall mean, individually and/or collectively (as the context
requires), the “Personal Property” as defined in each applicable Security
Instrument.

 

“Physical Conditions Report” shall mean those certain reports delivered to
Lender in connection with the closing of the Loan regarding the physical
condition of the Properties.

 

“PLL Policy” shall have the meaning set forth in Section 7.1 hereof.

 

“Policies” shall have the meaning specified in Section 7.1 hereof.

 

“Post Closing Agreement” shall mean that certain Post-Closing Obligations
Agreement by and between Borrower and Lender and dated as of the date hereof, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time

 

“Prohibited Transfer” shall have the meaning set forth in Section 6.2 hereof.

 

“Projections” shall have the meaning set forth in Section 11.9 hereof.

 

“Property” and “Properties” shall mean, individually and/or collectively (as the
context requires), each Individual Property which is subject to the terms hereof
and of the other Loan Documents.

 

“Property Document” shall mean, individually or collectively (as the context may
require), the following: (i) the REA and (ii) the Valdosta Bond Documents.

 

 - 21 - 

 

 

“Property Document Event” shall mean any event with respect to a violation of a
Property Document which would, directly or indirectly, cause a termination
right, right of first refusal, first offer or any other similar right, cause any
termination fees to be due or would cause a Material Adverse Effect to occur
with respect to a particular Individual Property under any Property Document (in
each case, beyond any applicable notice and cure periods under the applicable
Property Document); provided, however, any of the foregoing shall not be deemed
a Property Document Event to the extent Lender’s prior written consent is
obtained with respect to the same.

 

“Property Document Provisions” shall mean the representations, covenants and
other terms and conditions of this Agreement and the other Loan Documents
related to, in each case, any Property Document and/or other related matters
(including, without limitation, Sections 3.34 and 4.22 of this Agreement).

 

“Provided Information” shall mean any information provided by or on behalf of
any Borrower Party to Lender in writing (including by e-mail or electronic
means) in connection with the Loan, the Properties (or any portion thereof)
and/or such Borrower Party.

 

“Prudent Lender Standard” shall, with respect to any matter, be deemed to have
been met if the matter in question (i) prior to a Securitization, is reasonably
acceptable to Lender and (ii) after a Securitization, (A) if permitted by legal
requirements relating to any REMIC Trust formed pursuant to a Securitization
maintaining its status as a “real estate mortgage investment conduit” within the
meaning of Section 860D of the IRS Code applicable to such matter, would be
reasonably acceptable to Lender or (B) if the Lender discretion in the foregoing
subsection (A) is not permitted under such applicable legal requirements
relating to any REMIC Trust formed pursuant to a Securitization maintaining its
status as a “real estate mortgage investment conduit” within the meaning of
Section 860D of the IRS Code applicable to such matter, would be acceptable to a
prudent lender of securitized commercial mortgage loans similar to the Loan.

 

"Qualified Equityholder" shall mean (i) American Finance Trust, Inc., a Maryland
corporation, (ii) a bank, savings and loan association, investment bank,
insurance company, trust company, commercial credit corporation, pension plan,
pension fund or pension advisory firm, mutual fund, government entity or plan,
real estate company, investment fund or an institution substantially similar to
any of the foregoing, provided in each case under this clause (ii) that such
Person (x) has total assets (in name or under management) in excess of
$1,000,000,000 and (except with respect to a pension advisory firm or similar
fiduciary) capital/statutory surplus or shareholder's equity in excess of
$400,000,000 (in both cases, exclusive of the Properties), and (y) is regularly
engaged in the business of owning and operating comparable properties, or (iii)
any other Person reasonably approved by Lender.

 

“Qualified Insurer” shall have the meaning set forth in Section 7.1 hereof.

 

“Qualified Lender” means (i) Barclays, (ii) any Affiliate of Barclays, (iii) CF,
(iv) any Affiliate of CF, (v) UBS, (vi) any Affiliate of UBS, or (vii) one or
more of the following (in each of clauses (i) through (vi), either acting (1)
for itself or (2) as agent for itself and other lenders, provided that at least
fifty percent (50%) of such lenders pursuant to this clause (2) are Qualified
Lenders):

 

 - 22 - 

 

 

(A)        a real estate investment trust, bank, saving and loan association,
investment bank, insurance company, trust company, commercial credit
corporation, pension plan, pension fund or pension advisory firm, mutual fund,
government entity or plan, provided that any such Person referred to in this
clause (A) satisfies the Eligibility Requirements;

 

(B)         an investment company, money management firm or “qualified
institutional buyer” within the meaning of Rule 144A under the Securities Act or
an institutional “accredited investor” within the meaning of Regulation D under
the Securities Act, provided that any such Person referred to in this clause (B)
satisfies the Eligibility Requirements;

 

(C)         an institution substantially similar to any of the foregoing
entities described in clause (vii)(A), (vii)(B) or (vii)(E), or any other Person
which is subject to supervision and regulation by the insurance or banking
department of any state or of the United States, the Board of Governors of the
Federal Reserve System, the Comptroller of the Currency, the Federal Deposit
Insurance Corporation or the Federal Savings and Loan Insurance Corporation or
by any successor hereafter exercising similar functions, in each case, that
satisfies the Eligibility Requirements;

 

(D)         any entity Controlled by, Controlling or under common Control with
any of the entities described in clause (vii)(A), (vii)(B) or (vii)(C) above or
clause (vii)(E) below;

 

(E)         an investment fund, limited liability company, limited partnership
or general partnership (a “Permitted Investment Fund”) where a Permitted Fund
Manager or Qualified Lender (other than pursuant to this clause (vii)(E)) acts
as general partner, managing member or fund manager and at least fifty percent
(50%) of the equity interests in such investment vehicle are owned, directly or
indirectly, by one or more of the following: a Qualified Lender under (A), (B),
(C) or (D) above or (F) below, an institutional “accredited investor”, within
the meaning of Regulation D promulgated under the Securities Act, and/or a
“qualified institutional buyer” or both within the meaning of Rule 144A
promulgated under the Exchange Act, provided such institutional “accredited
investors” or “qualified institutional buyers” that are used to satisfy the
fifty percent (50%) test set forth above in this clause (E) satisfy the
financial tests in clause (i) of the definition of Eligibility Requirements; or

 

(F)         following a Securitization, any Person for which the Rating Agencies
have issued a Rating Agency Confirmation.

 

“Qualified Management Agreement” shall mean a management agreement with a
Qualified Manager with respect to the applicable Individual Property which is
approved by Lender in writing (which such approval is not to be unreasonably
withheld, conditioned or delayed except that it may be conditioned upon Lender's
receipt of a Rating Agency Confirmation with respect to such management
agreement).

 

 - 23 - 

 

 

“Qualified Manager” shall mean a Person approved by Lender in writing (which
such approval is not to be unreasonably withheld, conditioned or delayed except
that may be conditioned upon Lender's receipt of a Rating Agency Confirmation
with respect to such Person).

 

“Qualified Replacement Guarantor” shall mean a Person who (a) (i) is a United
States citizen and lives year round in the United States or (ii) is (to the
extent such Person is a corporation) incorporated or is (to the extent such
Person is a limited partnership or limited liability company) formed in the
United States and, in each instance, domiciled with its principal place of
business in the United States, (b)(i) has net worth of not less than
$655,000,000 (exclusive of the Properties) and (ii) liquidity of $30,000,000,
each as reasonably determined by Lender, (c) is one hundred percent (100%) owned
and Controlled by, or is, a Qualified Equityholder, and (d) (A) such Person has
not been the subject of a voluntary or involuntary bankruptcy proceeding in the
previous seven (7) years, (B) such Person has not been, and is not controlled by
any party which has ever been, convicted of a capital offense or fraud,
embezzlement or other financial crime felony, and (C) such Person has never
been, and is not affiliated with any person which has been, indicted or
convicted for a Patriot Act offense, is not on any anti-terrorism list and for
which Lender has otherwise received Satisfactory Search Results.

 

“Rating Agency” shall mean S&P, Moody’s, Fitch, Kroll Bond Rating Agency, Inc.,
Morningstar Credit Ratings, LLC, DBRS, Inc. or any other nationally-recognized
statistical rating agency which has assigned a rating to the Securities (and any
successor to any of the foregoing), but only to the extent any of the foregoing
have been engaged by one or more Lenders or their Affiliates in connection with
and/or in anticipation of any Securitization.

 

“Rating Agency Condition” shall be deemed to exist if (i) any Rating Agency
fails to respond to any request for a Rating Agency Confirmation with respect to
any applicable matter or otherwise elects (orally or in writing) not to consider
any applicable matter or (ii) Lender (or its Servicer) is not required to and/or
elects not to obtain (or cause to be obtained) a Rating Agency Confirmation with
respect to any applicable matter, in each case, pursuant to and in compliance
with any pooling and servicing agreement(s) or similar agreement(s), in each
case, relating to the servicing and/or administration of the Loan.

 

“Rating Agency Confirmation” shall mean (i) prior to a Securitization or if the
Rating Agency Condition exists, that Lender has (in consultation with the Rating
Agencies (if reasonably required by Lender)) approved the matter in question in
writing based upon Lender’s good faith determination of applicable Rating Agency
standards and criteria and (ii) from and after a Securitization (to the extent
the Rating Agency Condition does not exist), a written affirmation from each of
the Rating Agencies (obtained at Borrower’s sole cost and expense) that the
credit rating of the Securities 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.

 

“REA” shall mean, individually or collectively (as the context requires), each
reciprocal easement or similar agreement affecting the Properties (or any
portion thereof) as more

 

 - 24 - 

 

 

particularly described on Schedule IV hereto (if any), any amendment,
restatement, replacement or other modification thereof, any future reciprocal
easement or similar agreement affecting the Properties (or any portion thereof)
entered into in accordance with the applicable terms and conditions hereof and
any amendment, restatement, replacement or other modification thereof.

 

“Recipient” shall mean any Lender and Agent, as applicable.

 

“Register” shall have the meaning set forth in Section 11.9 hereof.

 

“Registrar” shall have the meaning set forth in Section 11.7 hereof.

 

“Registration Statement” shall have the meaning set forth in Section 11.2
hereof.

 

“Regulation AB” shall mean Regulation AB under the Securities Act and the
Exchange Act, as such Regulation may be amended from time to time.

 

“Related Loan” shall mean a loan to an Affiliate of Borrower or secured by a
Related Property, that is included in a Securitization with the Loan (or any
portion thereof or interest therein).

 

“Related Property” shall mean a parcel of real property, together with
improvements thereon and personal property related thereto, that is “related”
within the meaning of the definition of Significant Obligor, to the Properties
(or any portion thereof).

 

“Release” shall have the meaning set forth in Section 2.9 hereof.

 

“Release Amount” shall have the meaning set forth in Section 2.9 hereof.

 

“Release Approval Item” shall have the meaning set forth in Section 2.9 hereof.

 

“Release Notice Date” shall have the meaning set forth in Section 2.9 hereof.

 

“Release Price” shall mean (I) with respect to the Release pursuant to Section
2.9 of this Agreement to a Person that is not an Affiliate of Borrower, any SPE
Component Entity, Affiliated Manager and/or Guarantor (i) an amount equal to
110% of the Allocated Loan Amount with respect to such Individual Property until
the Loan has been prepaid in an aggregate amount equal to $65,500,000, (ii)
following such time as the Loan has been prepaid in the aggregate amount of
$65,500,000, an amount equal to 115% of the Allocated Loan Amount with respect
to such Individual Property until the Loan has been prepaid in an aggregate
amount equal to $98,250,000 and (iii) an amount equal to 120% of the Allocated
Loan Amount with respect to such Individual Property after the Loan has been
prepaid in an aggregate amount equal to $98,250,000 and (II) with respect to the
Release pursuant to Section 2.9 of this Agreement to a Person that is an
Affiliate of Borrower, any SPE Component Entity, Affiliated Manager and/or
Guarantor, an amount equal to 120% of the Allocated Loan Amount. With respect to
the foregoing, as an example for illustration purposes only, to the extent that
a prepayment of the Loan in connection with a Release pursuant to Section 2.9 of
this Agreement to a Person that is not an Affiliate of Borrower, any SPE
Component Entity, Affiliated Manager and/or Guarantor would result in a
prepayment of the Loan in an aggregate amount both below and above

 

 - 25 - 

 

 

$65,500,000, the Release Price of 110% of the Allocated Loan Amount shall apply
to such portion of the Allocated Loan Amount which results in the Loan being
prepaid up to an amount equal to $65,500,000 and the Release Price of 115% of
the Allocated Loan Amount shall apply to such portion of the Allocated Loan
Amount which results in the Loan being prepaid in excess of $65,500,000 (but
less than, or equal to, an amount equal to $98,250,000).

 

“Released Property” shall have the meaning set forth in Section 2.9 hereof.

 

“Remaining Loan” shall have the meaning set forth in Section 11.8 hereof.

 

“Remaining Loan Documents” shall have the meaning set forth in Section 11.8
hereof.

 

“REMIC Trust” shall mean any “real estate mortgage investment conduit” within
the meaning of Section 860D of the IRS Code that holds any interest in all or
any portion of the Loan.

 

“Rent Roll” shall have the meaning set forth in Section 3.18 hereof.

 

“Rent Loss Proceeds” shall have the meaning set forth in Section 7.1 hereof.

 

“Rents” shall have the meaning set forth in the Security Instrument.

 

“Replacement Reserve Account” shall have the meaning set forth in Section 8.2
hereof.

 

“Replacement Reserve Funds” shall have the meaning set forth in Section 8.2
hereof.

 

“Replacement Reserve Monthly Deposit” shall mean, for each date of
determination, one-twelfth (1/12th) of the amount equal to the Aggregate Square
Footage multiplied by twenty cents ($0.20).

 

“Replacements” for any period shall mean replacements and/or alterations to any
Individual Property; provided, that, the same are (i) required to be capitalized
according to the Approved Accounting Method and (ii) if a Trigger Period is then
continuing and such Replacements are not contained in an Approved Annual Budget,
reasonably approved by Lender.

 

“Reporting Failure” shall have the meaning set forth in Section 4.12 hereof.

 

“Required Financial Item” shall have the meaning set forth in Section 4.12
hereof.

 

“Required Rating” means (i) a rating of not less than “A-1” (or its equivalent)
from each of the Rating Agencies if the term of such Letter of Credit is no
longer than three (3) months or if the term of such Letter of Credit is in
excess of three (3) months, a rating of not less than “A+” (or its equivalent)
from each of the Rating Agencies, which rating in each instance shall exclude a
qualified rating symbol (or any other Rating Agency’s corresponding symbol)
attached to the rating or (ii) such other rating with respect to which Lender
shall have received a Rating Agency Confirmation.

 

 - 26 - 

 

 

“Reserve Accounts” shall mean the Tax Account, the Insurance Account, the
Replacement Reserve Account, the Immediate Repair Account, the Leasing Reserve
Account, the Excess Cash Flow Account, the Environmental Remediation Account,
the Unfunded Obligations Account, the Ground Rent Account, the Special Reserve
Account and any other escrow account established by this Agreement or the other
Loan Documents (but specifically excluding the Cash Management Account, the
Restricted Account and the Debt Service Account).

 

“Reserve Funds” shall mean the Tax and Insurance Funds, the Replacement Reserve
Funds, the Immediate Repair Funds, the Leasing Reserve Funds, the Excess Cash
Flow Funds, the Environmental Remediation Funds, the Unfunded Obligations Funds,
the Ground Rent Funds, the Special Reserve Funds and any other escrow funds
established by this Agreement or the other Loan Documents.

 

“Responsible Officer” means with respect to a Person, the chairman of the board,
president, chief operating officer, chief financial officer, treasurer or vice
president of such Person or such other similar officer of such Person reasonably
acceptable to Lender.

 

“Restoration” shall mean, following the occurrence of a Casualty or a
Condemnation which is of a type necessitating the repair of any Individual
Property (or any portion thereof), the completion of the repair and restoration
of any Individual Property (or applicable portion thereof) as nearly as possible
to the condition such Individual Property (or applicable portion thereof) was in
immediately prior to such Casualty or Condemnation, with such alterations as may
be reasonably approved by Lender.

 

“Restoration Retainage” shall have the meaning set forth in Section 7.4 hereof.

 

“Restoration Threshold” shall mean, with respect to each Individual Property, an
amount equal to 5% of the outstanding principal amount of the Allocated Loan
Amount attributable to such Individual Property.

 

“Restricted Account” shall have the meaning set forth in Section 9.1 hereof.

 

“Restricted Account Agreement” shall mean that certain Restricted Account
Agreement by and among Borrower, Lender and Wells Fargo Bank, National
Association dated as of the date hereof, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time in accordance
with the terms hereof.

 

“Restricted Party” shall have the meaning set forth in Section 6.1 hereof.

 

“Sale or Pledge” shall have the meaning set forth in Section 6.1 hereof.

 

“Sanctions” shall have the meaning set forth in Section 3.30 hereof.

 

“Satisfactory Search Results” shall mean the results of Lender’s customary “know
your customer”, credit history check, litigation, lien, bankruptcy and judgment
searches with respect to the applicable transferee and its applicable affiliates
that control the applicable transferee and/or have a twenty percent (20%) or
greater direct or indirect interest in such transferee, in

 

 - 27 - 

 

 

each case, (i) revealing no matters which would have a Material Adverse Effect
and (ii) yielding results which are otherwise acceptable to Lender in its
reasonable discretion. Borrower shall pay all of Lender’s reasonable out of
pocket costs, fees and expenses in connection with the foregoing.

 

“Secondary Market Transaction” shall have the meaning set forth in Section 11.1
hereof.

 

“Section 2.10 Taxes” shall mean all present or future taxes, levies, imposts,
duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Governmental Authority, including any
interest, additions to tax or penalties applicable thereto.

 

“Securities” shall have the meaning set forth in Section 11.1 hereof.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Securitization” shall have the meaning set forth in Section 11.1 hereof.

 

“Security Instrument” and “Security Instruments” shall mean individually and/or
collectively (as the context requires), each first priority Mortgage / Deed of
Trust/Deed to Secure Debt, Assignment of Leases and Rents, Security Agreement
and Fixture Filing dated the date hereof, executed and delivered by each
Borrower as security for the Loan and encumbering each Individual Property, as
each of the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.

 

“Security Instrument Taxes” shall have the meaning set forth in Section 15.2
hereof.

 

“Servicer” shall have the meaning set forth in Section 11.4 hereof.

 

“Severed Loan Documents” shall have the meaning set forth in Section 10.2(d)
hereof.

 

“Significant Obligor” shall have the meaning set forth in Item 1101(k) of
Regulation AB under the Securities Act.

 

“Single Purpose Entity” shall mean an entity whose structure and organizational
and governing documents are otherwise in form and substance in compliance with
Article 5 hereof.

 

“Special Member” is defined in Section 5.1 hereof.

 

“Special Reserve Account” shall have the meaning set forth in Section 8.9
hereof.

 

“Special Reserve Funds” shall have the meaning set forth in Section 8.9 hereof.

 

“Special Reserve Property” shall mean those certain Individual Properties set
forth on Schedule XIII hereof.

 

“Special Reserve Shortfalls” shall have the meaning set forth in Section 8.9
hereof.

 

 - 28 - 

 

 

“SPE Component Entity” shall have the meaning set forth in Section 5.1 hereof.

 

“S&P” shall mean Standard & Poor’s Ratings Services.

 

“State” shall mean the applicable state in which the applicable Individual
Property is located.

 

“Stated Maturity Date” shall mean the Monthly Payment Date occurring in
September, 2020.

 

“Survey” shall mean, individually or collectively (as the context requires),
each survey of each Individual Property certified and delivered to Lender in
connection with the closing of the Loan.

 

“Syndication” shall have the meaning set forth in Section 11.9 hereof.

 

“Tax Account” shall have the meaning set forth in Section 8.6 hereof.

 

“Tax and Insurance Funds” shall have the meaning set forth in Section 8.6
hereof.

 

“Taxes” shall mean all taxes, assessments, water rates, sewer rents, and other
governmental impositions, including, without limitation, vault charges and
license fees for the use of vaults, chutes and similar areas adjoining the Land,
now or hereafter levied or assessed or imposed against the Properties or any
part thereof.

 

“Tax Payment Date” shall mean, with respect to any applicable Taxes, the date
occurring 30 days prior to the date the same are due and payable.

 

“Tenant” shall mean any Person leasing, subleasing or otherwise occupying any
portion of any Individual Property under a Lease or other occupancy agreement.

 

“Tenant Direction Notice” shall have the meaning set forth in Section 9.2
hereof.

 

“Title Insurance Policy” shall mean those certain ALTA mortgagee title insurance
policies issued with respect to each Individual Property and insuring the lien
of the Security Instruments.

 

“Trigger Period” shall mean a period:

 

(A) commencing upon the earliest of:

 

(i) the occurrence and continuance of an Event of Default,

 

(ii) the Debt Service Coverage Ratio being less than 1.25 to 1.00,

 

(iii) the date that 25% or more of the aggregate total number of Tenants under
Leases (or any guarantor(s) of the applicable Lease with such Tenant, as
applicable) with respect to the Individual Properties secured by the Security
Instruments as of the time of calculation (I) have ceased operations (i.e.,
“gone

 

 - 29 - 

 

 

dark”) in the space demised to such Tenant and/or (II) are bankrupt or otherwise
subject to insolvency or similar proceedings; and

 

(iv) the date that 40% or less of the Gross Rents of the Individual Properties
secured by the Security Instruments as of the date of calculation are generated
by Tenants under Leases that are Investment Grade Tenants; and

 

(B) expiring upon:

 

(w) with regard to any Trigger Period commenced in connection with clause (A)(i)
above, the cure (if applicable) of such Event of Default,

 

(x) with regard to any Trigger Period commenced in connection with clause
(A)(ii) above, the date that the Debt Service Coverage Ratio is equal to or
greater than 1.25 to 1.00 for two (2) consecutive calendar quarters;

 

(y) with respect to any Trigger Period commenced in connection with clause
(A)(iii) above, the date that more than 75% of the aggregate total number of
such Tenants under Leases (or any guarantor(s) of the applicable Lease with such
Tenant, as applicable) with respect to the Individual Properties secured by the
Security Instruments as of the date of calculation are operating (i.e., “not
dark”) in the space demised under their Leases and not subject to any bankruptcy
or any insolvency or similar proceedings; and

 

(z) with regard to any Trigger Period commenced in connection with clause
(A)(iv) above, the date more than 40% of the Gross Rents of the Individual
Properties secured by the Security Instruments as of the time of calculation are
generated by Tenants that are Investment Grade Tenants.

 

Notwithstanding the foregoing, a Trigger Period shall not be deemed to expire in
the event that a Trigger Period pursuant to any of clauses (A)(i) through (iv)
above has occurred and is continuing.

 

“TRIPRA” shall have the meaning set forth in Section 7.1 hereof.

 

“True Up Payment” shall mean a payment into the applicable Reserve Account of a
sum which, together with any applicable monthly deposits into the applicable
Reserve Account, will be sufficient to discharge the obligations and liabilities
for which such Reserve Account was established as and when reasonably
appropriate. The amount of the True Up Payment shall be determined by Lender in
its reasonable discretion and shall be final and binding absent manifest error.

 

“UBS” shall have the meaning set forth in the preamble hereof.

 

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in the State.

 

“Unaffected Property” shall have the meaning set forth in Section 11.8 hereof.

 

 - 30 - 

 

 

“Uncrossed Loan” shall have the meaning set forth in Section 11.8 hereof.

 

“Uncrossed Loan Documents” shall have the meaning set forth in Section 11.8
hereof.

 

“Uncrossing Event” shall have the meaning set forth in Section 11.8 hereof.

 

“Underwritable Cash Flow” shall mean an amount calculated by Lender on a monthly
basis equal to the sum of Gross Rents plus the trailing twelve (12) months
Operating Income, less the trailing twelve (12) months Operating Expenses, each
of which shall be subject to Lender’s application of the Cash Flow Adjustments.
Lender’s calculation of Underwritable Cash Flow (including determination of
items that do not qualify as Operating Income or Operating Expenses) shall be
calculated by Lender in good faith based upon Lender’s reasonable determination
of Rating Agency criteria and shall be final absent manifest error.

 

“Underwriter Group” shall have the meaning set forth in Section 11.2 hereof.

 

“Unfunded Obligations” shall have the meaning set forth in Section 8.8 hereof.

 

“Unfunded Obligations Account” shall have the meaning set forth in Section 8.8
hereof.

 

“Unfunded Obligations Funds” shall have the meaning set forth in Section 8.8
hereof.

 

“Updated Information” shall have the meaning set forth in Section 11.1 hereof.

 

“U.S. Obligations” shall mean direct full faith and credit obligations of the
United States of America that are not subject to prepayment, call or early
redemption.

 

“U.S. Person” shall mean any Person that is a “United States Person” as defined
in Section 7701(a)(30) of the IRS Code.

 

“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section
2.10 hereof.

 

“Valdosta Bond” means that certain Valdosta-Lowndes County Industrial Authority
Taxable Industrial Development Revenue Bond (H.D. Warehouse Project), Series
2008), [No. R-3], issued by the Valdosta-Lowndes County Industrial Authority in
the maximum principal amount of $29,000,000.

 

“Valdosta Bond Documents” shall mean, individually and/or collectively, as the
context may require, the Valdosta Bond, the Valdosta Bond Lease, the Assumption
Agreement (as defined in the Valdosta Bond Lease), the Agency Agreement (as
defined in the Valdosta Bond Lease), the Security Document (as defined in the
Valdosta Bond Lease), the Bond Purchase Loan Agreement (as defined in the
Valdosta Bond Lease), the Economic Development Agreement (as defined in the
Valdosta Bond Lease) and any other documents now or hereafter executed by any
Borrower in connection with the Bond, as each of the same may be amended,
supplemented and/or modified from time to time in accordance with the terms and
conditions of this Agreement.

 

 - 31 - 

 

 

“Valdosta Bond Lease” shall mean that certain Lease Agreement, dated February 1,
2008, by and between Valdosta-Lowndes County Industrial Authority, as lessor,
and SMBC Leasing and Finance, Inc., as lessee, as assigned by that certain
Assignment of Lease, Deed to Secure Debt and Other Documents, dated December 17,
2008, by and between SMBC Leasing and Finance, Inc., as assignor, and Home Depot
U.S.A., Inc., as assignee, as assigned by that certain Assignment of Lease, Deed
to Secure Debt and Other Documents, dated December 31, 2008, by and between Home
Depot U.S.A., Inc., as assignor, and ARC HR5VAGA001, LLC (formerly known as
Inland America Valdosta NA Logistics Portfolio, L.L.C.), as assignee.

 

“Valdosta Property” shall have the meaning set forth in Section 8.9 hereof.

 

“Valdosta Power of Attorney” shall mean that certain Power of Attorney, dated as
of the date hereof, given by ARC HR5VAGA001, LLC, a Delaware limited liability
company, in favor of Lender, as the same may be amended, supplemented and/or
modified from time to time in accordance with the terms and conditions of this
Agreement.

 

“Valdosta Required Documents” shall have the meaning set forth in Section 8.9
hereof.

 

“Waived Tax Deposit Property” shall mean those certain Individual Properties
listed on Schedule VIII attached hereto.

 

“Withholding Agent” shall mean Borrower and Agent.

 

“Work Charge” shall have the meaning set forth in Section 4.16 hereof.

 

“Yield Maintenance Premium” shall mean an amount equal to the greater of (a) an
amount equal to 1% of the amount prepaid; or (b) an amount equal to the present
value as of the date on which the prepayment is made of the Calculated Payments
(as defined below) from the date on which the prepayment is made through the
first day of the Open Prepayment Period determined by discounting such payments
at the Discount Rate (as defined below). As used in this definition, the term
“Calculated Payments” shall mean the monthly payments of interest only which
would be due based on the principal amount of the Loan being prepaid on the date
on which prepayment is made and assuming an interest rate per annum equal to the
difference (if such difference is greater than zero) between (y) the Interest
Rate and (z) the Yield Maintenance Treasury Rate (as defined below). As used in
this definition, the term “Discount Rate” shall mean the rate which, when
compounded monthly, is equivalent to the Yield Maintenance Treasury Rate (as
defined below), when compounded semi-annually. As used in this definition, the
term “Yield Maintenance Treasury Rate” shall mean the yield calculated by Lender
by the linear interpolation of the yields, as reported in the Federal Reserve
Statistical Release H.15-Selected Interest Rates under the heading “U.S.
Government Securities/Treasury Constant Maturities” for the week ending prior to
the date on which prepayment is made, of U.S. Treasury Constant Maturities with
maturity dates (one longer or one shorter) most nearly approximating the first
day of the Open Prepayment Period. In the event Release H.15 is no longer
published, Lender shall select a comparable publication to determine the Yield
Maintenance Treasury Rate. In no event, however, shall Lender be required to
reinvest any prepayment proceeds in U.S. Treasury obligations or otherwise.
Lender shall notify Borrower of the amount and the basis of

 

 - 32 - 

 

 

determination of the required prepayment consideration. Lender’s calculation of
the Yield Maintenance Premium shall be conclusive absent manifest error.

 

"Zoning Reports" shall mean those certain zoning assessment reports provided to
Lender in connection with the closing of the Loan.

 

Section 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 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. References herein to “the Property or any portion thereof” and
words of similar import shall be deemed to refer, as applicable, to any portion
of the Property taken as a whole (including any Individual Property) and any
portion of any Individual Property.

 

ARTICLE 2.

GENERAL TERMS

 

Section 2.1.          Loan Commitment; Disbursement to Borrower. Except as
expressly and specifically set forth herein or in the other Loan Documents,
Lender has no obligation or other commitment to loan any funds to Borrower or
otherwise make disbursements to Borrower. Borrower hereby waives any right
Borrower may have to make any claim to the contrary.

 

Section 2.2.          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.

 

Section 2.3.          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 re-borrowed.

 

Section 2.4.          The Note and the other Loan Documents. The Loan shall be
evidenced by the Note and this Agreement and secured by this Agreement and the
other Loan Documents.

 

Section 2.5.          Interest Rate.

 

(a)          Interest on the outstanding principal balance of the Loan shall
accrue from the Closing Date at the Interest Rate until repaid in accordance
with the applicable terms and conditions hereof.

 

(b)          Intentionally Omitted.

 

 - 33 - 

 

 

(c)          In the event that, and for so long as, any Event of Default shall
have occurred and be continuing, (i) the then outstanding principal balance of
the Loan and shall accrue interest at the Default Rate, calculated from the date
the applicable Event of Default occurred, (ii) without limitation of any rights
or remedies contained herein and/or in any other Loan Document, any interest
accrued at the Default Rate in excess of the interest component of the Monthly
Debt Service Payment Amount shall, to the extent not already paid and/or due and
payable hereunder, be due and payable on each Monthly Payment Date and (iii) all
references herein and/or in any other Loan Document to the “Interest Rate” shall
be deemed to refer to the Default Rate (except with respect to interest paid at
the Interest Rate pursuant to clause (a) immediately above prior to the
occurrence and continuance of an Event of Default (and, as applicable, after the
cure of any Event of Default in accordance with the terms and conditions
hereof)).

 

(d)          Interest on the outstanding principal balance of the Loan shall be
calculated by multiplying (a) the actual number of days elapsed in the period
for which the calculation is being made by (b) a daily rate based on a three
hundred sixty (360) day year (that is, the Interest Rate or the Default Rate, as
then applicable, expressed as an annual rate divided by 360) by (c) the
outstanding principal balance. The accrual period for calculating interest due
on each Monthly Payment Date shall be the Interest Accrual Period immediately
prior to such Monthly Payment Date. Borrower understands and acknowledges that
such interest accrual requirement results in more interest accruing on the Loan
than if either a thirty (30) day month and a three hundred sixty (360) day year
or the actual number of days and a three hundred sixty-five (365) day year were
used to compute the accrual of interest on the Loan.

 

(e)          This Agreement and the other Loan Documents are subject to the
express condition that at no time shall Borrower be required to pay interest on
the principal balance of the Loan at a rate which could subject Lender to either
civil or criminal liability as a result of being in excess of the Maximum Legal
Rate. If by the terms of this Agreement or the other Loan Documents, Borrower is
at any time required or obligated to pay interest on the principal balance due
hereunder at a rate in excess of the Maximum Legal Rate, the Interest Rate or
the Default Rate, as the case may be, shall be deemed to be immediately reduced
to the Maximum Legal Rate and all previous payments in excess of the Maximum
Legal Rate shall be deemed to have been payments in reduction of principal and
not on account of the interest due hereunder. All sums paid or agreed to be paid
to Lender for the use, forbearance, or detention of the sums due under the Loan,
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Loan does not
exceed the Maximum Legal Rate from time to time in effect and applicable to the
Loan for so long as the Loan is outstanding.

 

Section 2.6.          Loan Payments.

 

(a)          Borrower shall make a payment to Lender of interest only on the
Closing Date for the period from (and including) the Closing Date through (but
excluding) the sixth (6th) day of either (i) the month in which the Closing Date
occurs (if such Closing Date is after the first day of such month, but prior to
the sixth (6th) day of such month) or (ii) if the Closing Date is after the
sixth (6th) day of the then current calendar month, the month following the
month in which the Closing Date occurs; provided, however, if the Closing Date
is the sixth (6th) day of a calendar month, no such separate payment of interest
shall be due. Borrower shall make a

 

 - 34 - 

 

 

payment to Lender of interest in the amount of the Monthly Debt Service Payment
Amount on the First Monthly Payment Date and on each Monthly Payment Date
occurring thereafter to and including the Maturity Date. Each payment shall be
applied first to accrued and unpaid interest and the balance to principal and
each payment shall be applied to each Note on a pro rata basis.

 

(b)          Intentionally Omitted.

 

(c)          Borrower shall pay to Lender on the Maturity Date the outstanding
principal balance of the Loan, all accrued and unpaid interest and all other
amounts due hereunder and under the Note, the Security Instrument and the other
Loan Documents.

 

(d)          If any principal, interest or any other sum due under the Loan
Documents, other than the payment of principal due on the Maturity Date, is not
paid by Borrower on the date on which it is due, Borrower shall pay to Lender
upon demand an amount equal to the lesser of four percent (4%) of such unpaid
sum or the maximum amount permitted by applicable law 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 the Security Instruments and the other Loan
Documents.

 

(e)          

 

(i)          Except as otherwise specifically provided herein, all payments and
prepayments under this Agreement and the Note shall be made to Lender not later
than 3:00 P.M., New York City time, on the date when due and shall be made in
lawful money of the United States of America in immediately available funds at
Lender’s office, and any funds received by Lender after such time shall, for all
purposes hereof, be deemed to have been paid on the next succeeding Business
Day.

 

(ii)         Whenever any payment to be made hereunder or under any other Loan
Document shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be deemed to be the immediately preceding Business Day.

 

(iii)        All payments required to be made by Borrower hereunder or under the
Note or the other Loan Documents shall be made irrespective of, and without
deduction for, any setoff, claim or counterclaim and shall be made irrespective
of any defense thereto.

 

Section 2.7.          Prepayments.

 

(a)          Except as otherwise provided in this Agreement (including, without
limitation, Section 2.9 and Section 7.4 hereof), Borrower shall not have the
right to prepay the Loan in whole or in part. Prior to June 6, 2020 (such period
from and after June 6, 2020, the “Open Prepayment Period”), Borrower may,
provided no Event of Default has occurred and is continuing, at its option and
upon thirty (30) days prior notice to Lender (or such shorter period of time as
may be permitted by Lender in its sole discretion), prepay the Debt in whole
(and not in part) on any Business Day together with payment to Lender of the
Yield Maintenance Premium. On and after the first Business Day of the Open
Prepayment Period, Borrower may, provided no Event of Default has occurred and
is continuing, at its option and upon ten (10) days

 

 - 35 - 

 

 

prior notice to Lender (or such shorter period of time as may be permitted by
Lender in its sole discretion or as otherwise may be provided herein), prepay
the Debt in whole or in part on any Business Day without payment of any
prepayment premium or penalty (including, without limitation, any Yield
Maintenance Premium). In addition, Borrower on any Business Day may, provided no
Event of Default has occurred and is continuing, at its option and upon thirty
(30) days prior notice to Lender (or such shorter period of time as may be
permitted by Lender in its sole discretion or as may otherwise be provided
herein), prepay the Debt in part in accordance with the express terms and
conditions of this Section 2.7 and Section 2.9 hereof in connection with a
Release of an Individual Property. Borrower shall have the right to make a
prepayment in accordance with the terms and conditions of this Section 2.7(a) in
order to cure a Trigger Period pursuant to clause (A)(ii) in the definition
thereof, but subject to the terms and conditions of the definition of Trigger
Period and other provisions of this Agreement. Any prepayment received by Lender
on a date other than a Monthly Payment Date shall include interest which would
have accrued thereon to the end of the Interest Accrual Period during which such
payment is made (such amounts, the “Interest Shortfall”) and such amounts (i.e.,
principal and interest prepaid by Borrower) shall be held by Lender as
collateral security for the Loan in an interest bearing Eligible Account at an
Eligible Institution, with interest accruing on such amounts to the benefit of
Borrower; such amounts prepaid shall be applied to the Loan on the next Monthly
Payment Date, with any interest on such funds paid to Borrower on such date
provided no Event of Default then exists.

 

(b)          On each date on which Lender actually receives a distribution of
Net Proceeds, and if Lender is not obligated to make such Net Proceeds available
to Borrower for Restoration or otherwise remit such Net Proceeds to Borrower
pursuant to Section 7.4 hereof, then either (I) Lender shall remit such Net
Proceeds to Borrower and Borrower shall prepay the Debt or (II) Lender shall
apply such Net Proceeds as a prepayment of the Debt, in each instance in an
amount up to the Release Price associated with the Individual Property to which
such Net Proceeds relate together with any applicable Interest Shortfall, if
any. In the event that Net Proceeds are sufficient to pay the Release Price
associated with the Individual Property to which such Net Proceeds relate
together with any applicable Interest Shortfall, if any, Lender shall release
such Individual Property upon delivery by Borrower to Lender of a release or
assignment of lien for execution and delivery by Lender in form and substance
consistent with that set forth in Section 2.9(b) hereof. All Net Proceeds in
excess of such Release Price and the applicable Interest Shortfall, if any,
shall (i) if an Event of Default has occurred and is continuing, be held and
applied by Lender in accordance with the terms of this Agreement and the other
Loan Documents and (ii) if no Event of Default has occurred and is continuing,
any remaining Net Proceeds shall be deposited into the Cash Management Account
and applied in accordance with Section 9.3 of this Agreement. Borrower shall
make the payment pursuant to Section 7.3(b) hereof as and to the extent required
therein. No prepayment premium or penalty (including, without limitation, any
Default Yield Maintenance Premium) shall be due in connection with any
prepayment made pursuant to this Section 2.7(b) (including, without limitation,
in connection with any payment pursuant to Section 7.3(b) hereof). Any
prepayment received by Lender pursuant to this Section 2.7(b) on a date other
than a Monthly Payment Date shall be held by Lender as collateral security for
the Loan in an interest bearing, Eligible Account at an Eligible Institution,
with such interest accruing to the benefit of Borrower, and shall be applied by
Lender on the next Monthly Payment Date, with any interest on such funds paid to
Borrower on such date provided no Event of Default then exists.

 

 - 36 - 

 

 

(c)          After the occurrence and during the continuance of an Event of
Default and notwithstanding any acceleration of the Debt in accordance with the
applicable terms and conditions hereof, the Default Yield Maintenance Premium
shall, in all cases, be deemed a portion of the Debt due and owing hereunder and
under the other Loan Documents. Without limitation of the foregoing, if, after
the occurrence and during the continuance of an Event of Default, (i) payment of
all or any part of the Debt is tendered by Borrower (voluntarily or
involuntarily), a purchaser at foreclosure or any other Person, (ii) Lender
obtains a recovery of all or a portion of the Debt (through an exercise of
remedies hereunder or under the other Loan Documents or otherwise) or (iii) the
Debt is deemed satisfied (in whole or in part) through an exercise of remedies
hereunder or under the other Loan Documents or at law, the Default Yield
Maintenance Premium, in addition to the outstanding principal balance, all
accrued and unpaid interest and other amounts payable under the Loan Documents,
shall be deemed due and payable hereunder. Notwithstanding anything to the
contrary contained herein or in any other Loan Document, any prepayment of the
Debt after an Event of Default has occurred and is continuing shall be applied
to the Debt in such order and priority as may be determined by Lender in its
sole discretion.

 

Section 2.8.          Intentionally Omitted.

 

Section 2.9.          Release of Individual Property. Provided no Event of
Default shall have occurred and be continuing, Borrower shall have the right at
any time prior to the Maturity Date to obtain the release (the “Release”) of one
or more Individual Properties (each such Individual Property, collectively, the
“Released Property”) from the lien of the applicable Security Instrument thereon
(and related Loan Documents) and the release of Borrower’s and, to the extent
permitted pursuant to the express terms and conditions of the Guaranty, the
Environmental Indemnity and this Agreement, Guarantor’s, obligations under the
Loan Documents with respect to such Released Property (other than those
expressly stated to survive), upon the satisfaction of each of the following
conditions precedent:

 

(a)          Borrower shall provide Lender with thirty (30) days (or a shorter
period of time if permitted by Lender in its sole discretion) prior written
notice of the proposed Release (the date of Lender’s receipt of such notice
shall be referred to herein as the “Release Notice Date”);

 

(b)          Borrower shall submit to Lender, not less than ten (10) days prior
to the date of such Release, a release or assignment of lien (and related Loan
Documents) and release of obligations under the Loan Documents for the Released
Property for execution by Lender. Such release or assignment shall be in a form
appropriate in each jurisdiction in which the Released Property is located and
shall contain reasonable and customary provisions, if any, protecting the rights
of Lender. In addition, Borrower shall provide all other documentation as may be
required to satisfy the Prudent Lender Standard in connection with such release
or assignment, together with an Officer’s Certificate certifying that such
documentation (i) is in compliance with all applicable Legal Requirements,
(ii) will effect such release in accordance with the terms of this Agreement,
and (iii) will not impair or otherwise adversely affect the liens, security
interests and other rights of Lender under the Loan Documents not being released
(or as to the parties to the Loan Documents and Properties subject to the Loan
Documents not being released). Any assignments made by Lender shall be without
recourse, representation or warranty by Lender (except Lender shall represent
and warrant that there are no pledges, liens or encumbrances on

 

 - 37 - 

 

 

Lender’s interest being so assigned) and comply with all applicable law.
Notwithstanding the foregoing, Lender and Borrower will cooperate in
implementing different requirements or procedures on such an assignment of the
Security Instrument to the extent (but only to the extent) necessary to
accommodate any Legal Requirements enacted or interpreted in a new manner
subsequent to the date hereof at the time of such release if and to the extent a
reasonably prudent Lender would implement such requirements or procedures;

 

(c)          Either (i) the Released Property shall be conveyed to a Person to
that is not Borrower, any SPE Component Entity, Affiliated Manager and/or
Guarantor or an Affiliate of Borrower, any SPE Component Entity, Affiliated
Manager and/or Guarantor or (ii) the Released Property shall be conveyed to a
Person that is an Affiliate of Borrower, any SPE Component Entity, Affiliated
Manager and/or Guarantor provided that in the case of this clause (ii) only
Borrower has delivered to Lender (A) a New Non-Consolidation Opinion or an
update to the existing Non-Consolidation Opinion reasonably acceptable to Lender
and acceptable to the Rating Agencies addressing such conveyance and (B)
evidence reasonably satisfactory to Lender that the transfer to such Affiliate
of Borrower, any SPE Component Entity, Affiliated Manager and/or Guarantor is on
commercially reasonable terms comparable to those of an arm’s-length transaction
with an unrelated third party and otherwise complies with Borrower’s obligations
pursuant to Article 5 hereof;

 

(d)          As of each of the Release Notice Date and as of the date of
consummation of the Release, after giving effect to the release of the lien of
the Security Instrument(s) encumbering the Released Property, the Debt Service
Coverage Ratio with respect to the remaining Individual Properties shall be
equal to or greater than the greater of (1) the Debt Service Coverage Ratio of
all Individual Properties encumbered by the Security Instruments immediately
prior to the consummation of the Release and (2) the Closing Date Debt Service
Coverage Ratio;

 

(e)          Borrower shall (A) partially prepay the Debt in accordance with
Section 2.7 hereof in an amount equal to the Release Price for the Released
Property (the “Release Amount”), (B) pay any applicable Interest Shortfall due
hereunder in connection therewith and (C) pay to Lender the Yield Maintenance
Premium to the extent that such prepayment occurs at any time other than during
the Open Prepayment Period;

 

(f)           Borrower shall deliver (or cause to be delivered) to Lender and
each Rating Agency an opinion of counsel in form and substance reasonably
acceptable to Lender that such Release would not cause a “significant
modification” of the Loan, as such term is defined in Treasury Regulations
Section 1.860G-2(b);

 

(g)          Lender shall have received a Rating Agency Confirmation with
respect to the Release;

 

(h)          Notwithstanding anything to the contrary contained herein or in any
other Loan Document, if the Loan is included in a REMIC Trust and the
Loan-to-Value Ratio (as Borrower shall have established to Lender’s reasonable
satisfaction based upon valuations obtained by Borrower at its sole cost and
expense using any commercially reasonable valuation method permitted to a REMIC
Trust (which may include an existing or updated appraisal or other written
determination of value using a commercially reasonable valuation method
reasonably

 

 - 38 - 

 

 

satisfactory to Lender)) (expressed as a percentage) exceeds or would exceed
125% immediately after giving effect to the release of the applicable Individual
Property, no release under any provision of this Agreement will be permitted
unless the principal balance of the Loan is prepaid by an amount not less than
the greater of (i) the applicable Release Price for the Released Property or
(ii) the least of the following amounts: (A) only if the Released Property is
sold to an unrelated Person, the net proceeds of an arm’s length sale of the
Released Property to an unrelated Person, (B) the fair market value of the
Released Property at the time of the Release and (C) an amount such that the
Loan-to-Value Ratio (as so determined by Lender in accordance with the
provisions of this clause (h)) after giving effect to the Release of the
applicable Released Property is not greater than the Loan-to-Value Ratio
immediately prior to such Release, unless Lender receives an opinion of counsel
for Borrower that is standard in commercial lending transactions and subject
only to customary qualifications, assumptions and exceptions opining that any
REMIC Trust formed pursuant to a Securitization will not fail to maintain its
status as a “real estate mortgage investment conduit” within the meaning of
Section 860D of the IRS Code as a result of the Release (provided, however, that
any such prepayment shall be deemed a voluntary prepayment but shall not be
subject to the Yield Maintenance Premium or to any other premium or penalty);

 

(i)           if such Release is a Release of the Individual Property owned by
ARC AAANGIN001, LLC and/or another Borrower whose tax identification number has
been assigned to the Restricted Account and/or the Cash Management Account,
Borrower shall have delivered to Lender evidence reasonably acceptable to Lender
that each of the Restricted Account and the Cash Management Account have been
assigned the tax identification number of a Borrower whose related Individual
Property and/or Properties is secured by the Security Instruments after giving
effect to such Release; and

 

(j)           Borrower shall pay all of Lender’s reasonable costs and expenses
and the costs and expenses of the Rating Agencies in connection with the
Release, including, without limitation, reasonable counsel fees.

 

Notwithstanding anything to the contrary contained in this Section 2.9, the
parties hereto hereby acknowledge and agree that after the Securitization of the
Loan (or any portion thereof or interest therein), with respect to any Lender
approval or similar discretionary rights over any matters contained in this
Section 2.9 (any such matter, an “Release Approval Item”), such rights shall be
construed such that Lender shall only be permitted to withhold its consent or
approval with respect to any Release Approval Item if the same fails to meet the
Prudent Lender Standard.

 

Section 2.10.         Withholding and Indemnified Taxes.

 

(a)          Defined Terms. For purposes of this Section 2.10, the term
“applicable law” includes FATCA and references to Agent only apply in the event
of Syndication pursuant to Section 11.9.

 

(b)          Payments Free of Taxes. Any and all payments by or on account of
any obligation of Borrower under any Loan Document shall be made without
deduction or withholding for any Section 2.10 Taxes, except as required by
applicable law. If any applicable law (as determined in the good faith
discretion of an applicable Withholding Agent) requires the deduction or

 

 - 39 - 

 

 

withholding of any Section 2.10 Taxes from any such payment by a Withholding
Agent, then the applicable Withholding Agent shall be entitled to make such
deduction or withholding and shall timely pay the full amount deducted or
withheld to the relevant Governmental Authority in accordance with applicable
law and, if such Section 2.10 Taxes is an Indemnified Tax, then the sum payable
by Borrower to Lender shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

(c)          Payment of Other Taxes by Borrower. Without duplication, Borrower
shall timely pay to the relevant Governmental Authority in accordance with
applicable law, or at the option of the Agent timely reimburse it for the
payment of, any Other Taxes.

 

(d)          Indemnification by Borrower. Borrower shall indemnify each
Recipient, within ten (10) days after written demand therefor, for the full
amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted
on or attributable to amounts payable under this Section) payable or paid by
such Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable out-of-pocket expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority, provided that if
such Indemnified Taxes were not correctly or legally imposed or asserted by the
relevant Governmental Authority then Borrower shall have the right to recover
such amounts or to sue the Governmental Authority therefore for reimbursement
thereof and be subrogated to the rights of Lender. A certificate as to the
amount of such payment or liability delivered to Borrower by a Lender (with a
copy to Agent), or by Agent, on its own behalf or on behalf of a Co-Lender,
shall be conclusive absent manifest error.

 

(e)          Evidence of Payments. As soon as practicable after any payment of
Section 2.10 Taxes by Borrower to a Governmental Authority pursuant to this
Section 2.10, Borrower shall deliver to Lenders or, following a Syndication,
Agent, the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to such recipient.

 

(f)           Status of Agent and Lenders.

 

(i)          Any Lender that is entitled to an exemption from or reduction of
any Section 2.10 Taxes imposed through withholding with respect to payments made
under any Loan Document shall deliver to Borrower and Agent on the Closing Date
and at the time or times reasonably requested by Borrower or Agent, such
properly completed and executed documentation reasonably requested by Borrower
or Agent as will permit such payments to be made without withholding or at a
reduced rate of withholding. In addition, any Lender, if reasonably requested by
Borrower or Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by Borrower or Agent as will enable
Borrower or Agent to determine whether or not such Lender is subject to backup
withholding or information reporting requirements and to satisfy any such
requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the completion, execution and submission of such documentation (other
than

 

 - 40 - 

 

 

such documentation set forth in Section 2.10(f)(ii)(A), (ii)(B) and (ii)(D)
below) shall not be required if in the Lender’s reasonable judgment such
completion, execution or submission would subject such Lender to any material
unreimbursed cost or expense or would materially prejudice the legal or
commercial position of such Lender.

 

(ii)         Without limiting the generality of the foregoing,

 

(A)                      any Lender that is a U.S. Person shall deliver to
Borrower and Agent on or prior to the date on which such Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the reasonable
request of Borrower or Agent), executed originals of IRS Form W-9 certifying
that such Lender is exempt from U.S. federal backup withholding tax;

 

(B)                       any Foreign Lender shall, to the extent it is legally
entitled to do so, deliver to Borrower and Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of Borrower or Agent), whichever of the
following is applicable:

 

(i) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN or IRS
Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of,
U.S. federal withholding tax pursuant to the “interest” article of such tax
treaty and (y) with respect to any other applicable payments under any Loan
Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an
exemption from, or reduction of, U.S. federal withholding tax pursuant to the
“business profits” or “other income” article of such tax treaty;

 

(ii) executed originals of IRS Form W-8ECI;

 

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the IRS Code, (x) a certificate
substantially in the form of Exhibit B-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the IRS Code, a
“10 percent shareholder” of Borrower within the meaning of Section 881(c)(3)(B)
of the IRS Code, or a “controlled foreign corporation” described in Section
881(c)(3)(C) of the IRS Code (a “U.S. Tax Compliance Certificate”) and (y)
executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or

 

(iv) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS

 

 - 41 - 

 

 

Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially
in the form of Exhibit B- 2 or Exhibit B-3, IRS Form W-9, and/or other
certification documents from each beneficial owner, as applicable; provided that
if the Foreign Lender is a partnership and one or more direct or indirect
partners of such Foreign Lender are claiming the portfolio interest exemption,
such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially
in the form of Exhibit B-4 on behalf of each such direct and indirect partner;

 

(C)                       any Foreign Lender shall, to the extent it is legally
entitled to do so, deliver to Borrower and Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of Borrower or Agent), executed originals
of any other form prescribed by applicable law as a basis for claiming exemption
from or a reduction in U.S. federal withholding tax, duly completed, together
with such supplementary documentation as may be prescribed by applicable law to
permit Borrower or Agent to determine the withholding or deduction required to
be made; and

 

(D)                       if a payment made to a Lender under any Loan Document
would be subject to U.S. federal withholding tax imposed by FATCA if such Lender
were to fail to comply with the applicable reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the IRS Code, as
applicable), such Lender shall deliver to Borrower and Agent at the time or
times prescribed by law and at such time or times reasonably requested by
Borrower or Agent such documentation prescribed by applicable law (including as
prescribed by Section 1471(b)(3)(C)(i) of the IRS Code) and such additional
documentation reasonably requested by Borrower or Agent as may be necessary for
Borrower and Agent to comply with their obligations under FATCA and to determine
that such Lender has complied with such Lender’s obligations under FATCA or to
determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (D), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.

 

(iii)        Agent shall deliver to Borrower, on or prior to the date on which
Agent becomes an Agent under this Agreement (and from time to time thereafter
upon the reasonable request of Borrower) such properly completed and executed
documentation reasonably requested by Borrower as will permit payments to be
made under any Loan Document to Agent without withholding. In addition, Agent,
if reasonably requested by Borrower, shall deliver such other documentation
prescribed by applicable law or reasonably requested by Borrower as will enable
Borrower to determine whether or not Agent is subject to information reporting
requirements and to satisfy any such requirements. Without limiting the
generality of the foregoing, Agent shall deliver to Borrower (A) executed
originals of IRS Form W-9 certifying that Agent is exempt from

 

 - 42 - 

 

 

U.S. federal backup withholding tax or (B) executed originals of IRS Form W-8IMY
certifying that Agent is acting as a “qualified intermediary” or a “nonqualified
intermediary” and accompanied by any required attachments (including
certification documents from each beneficial owner). For purposes of this
Section 2.10(iii), “Agent” shall mean Agent in its capacity as such and not in
any other capacity (such as a Lender).

 

Agent and each Lender agrees that if any form or certification it previously
delivered expires or becomes obsolete or inaccurate in any respect, it shall
update such form or certification or promptly notify Borrower and Agent in
writing of its legal inability to do so.

 

(g)          Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Section
2.10 Taxes as to which it has been indemnified pursuant to this Section 2.10
(including by the payment of additional amounts pursuant to this Section 2.10),
it shall pay to the indemnifying party an amount equal to such refund (but only
to the extent of indemnity payments made under this Section with respect to the
Section 2.10 Taxes giving rise to such refund), net of all reasonable
out-of-pocket expenses (including Section 2.10 Taxes) of such indemnified party
and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund less any Taxes payable by such party with
respect to such interest). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this paragraph (g) (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this paragraph (g), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this paragraph (g) the payment of which would
place the indemnified party in a materially less favorable net after-tax
position than the indemnified party would have been in if the Section 2.10 Tax
subject to indemnification and giving rise to such refund had not been deducted,
withheld or otherwise imposed and the indemnification payments or additional
amounts with respect to such Section 2.10 Tax had never been paid. This
paragraph shall not be construed to require any indemnified party to make
available its tax returns (or any other information relating to its Section 2.10
Taxes that it reasonably deems confidential) to the indemnifying party or any
other Person.

 

(h)          Survival. Each party’s obligations under this Section 2.10 shall
survive the resignation or replacement of Agent or any assignment of rights by,
or the replacement of, a Lender, and the repayment, satisfaction or discharge of
all obligations under any Loan Document.

 

ARTICLE 3.

REPRESENTATIONS AND WARRANTIES

 

Each Borrower represents and warrants as of the Closing Date that:

 

Section 3.1.          Legal Status and Authority. Each Borrower (a) is duly
organized, validly existing and in good standing under the laws of its state of
formation; (b) is duly qualified

 

 - 43 - 

 

 

to transact business and is in good standing in the State in which such
Borrower’s Individual Property is located; and (c) has all necessary approvals,
governmental and otherwise, and full power and authority to own, operate and
lease the applicable Individual Properties. Each Borrower has full power,
authority and legal right to mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey the related Individual Properties pursuant to the
terms hereof and to keep and observe all of the terms of this Agreement, the
Note, the Security Instruments and the other Loan Documents on Borrower’s part
to be performed.

 

Section 3.2.          Validity of Documents. (a) The execution, delivery and
performance of this Agreement, the Note, the Security Instruments and the other
Loan Documents by Borrower and Guarantor and the borrowing evidenced by the Note
and this Agreement (i) are within the power and authority of such parties; (ii)
have been authorized by all requisite organizational action of such parties;
(iii) have received all necessary approvals and consents, corporate,
governmental or otherwise; (iv) will not violate, conflict with, result in a
breach of or constitute (with notice or lapse of time, or both) a material
default under any provision of law, any order or judgment of any court or
Governmental Authority, any license, certificate or other approval required to
operate the Properties or any portion thereof, any applicable organizational
documents, or any applicable indenture, agreement or other instrument,
including, without limitation, the Management Agreement; (v) will not result in
the creation or imposition of any lien, charge or encumbrance whatsoever upon
any of its assets, except the lien and security interest created hereby and by
the other Loan Documents; and (vi) will not require any authorization or license
from, or any filing with, any Governmental Authority (except for the recordation
of each Security Instrument in appropriate land records in each applicable State
and UCC financing statements in Delaware), (b) this Agreement, the Note, the
Security Instrument and the other Loan Documents have been duly executed and
delivered by Borrower and Guarantor and (c) this Agreement, the Note, the
Security Instruments and the other Loan Documents constitute the legal, valid
and binding obligations of Borrower and Guarantor. The Loan Documents are not
subject to any right of rescission, set-off, counterclaim or defense by Borrower
or Guarantor, including the defense of usury, nor would the operation of any of
the terms of the Loan Documents, or the exercise of any right thereunder, render
the Loan Documents unenforceable (except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar Creditors
Rights Laws, and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law)). Neither
Borrower nor Guarantor has asserted any right of rescission, set-off,
counterclaim or defense with respect to the Loan Documents.

 

Section 3.3.          Litigation. There is no action, suit, proceeding or
governmental investigation, in each case, judicial, administrative or otherwise,
pending or, to the best of Borrower’s knowledge, threatened or contemplated
against Borrower or Guarantor or against or affecting any Individual Property or
any portion thereof that could have a Material Adverse Effect.

 

Section 3.4.          Agreements. Borrower is not a party to any agreement or
instrument or subject to any restriction which would have a Material Adverse
Effect. Borrower is not in default in any material respect in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party or by which
Borrower or the Properties (or any portion thereof) is bound. Borrower has no

 

 - 44 - 

 

 

material financial obligation under any agreement or instrument to which
Borrower is a party or by which Borrower or the Properties (or any portion
thereof) is otherwise bound, other than (a) obligations incurred in the ordinary
course of the operation of the Properties and (b) obligations under this
Agreement, the Security Instruments, the Note and the other Loan Documents.
There is no agreement or instrument to which Borrower is a party or by which
Borrower is bound that would require the subordination in right of payment of
any of Borrower’s obligations hereunder or under the Note to an obligation owed
to another party.

 

Section 3.5.          Financial Condition.

 

(a)          Each Borrower is solvent and each Borrower has received reasonably
equivalent value for the granting of the related Security Instrument. No
proceeding under Creditors Rights Laws with respect to any Borrower Party has
been initiated

 

(b)          In the last ten (10) years, no (i) petition in bankruptcy has been
filed by or against any Borrower Party and (ii) Borrower Party has ever made any
assignment for the benefit of creditors or taken advantage of any Creditors
Rights Laws.

 

(c)          No Borrower Party is contemplating either the filing of a petition
by it under any Creditors Rights Laws or the liquidation of its assets or
property and Borrower has no knowledge of any Person contemplating the filing of
any such petition against any Borrower Party.

 

(d)          With respect to any loan or financing in which any Borrower Party
or any Affiliate thereof has been directly or directly obligated for or has, in
connection therewith, otherwise provided any guaranty, indemnity or similar
surety, none of such loans or financings has ever been (i) more than 30 days in
default or (ii) transferred to special servicing.

 

Section 3.6.          Disclosure. Borrower has disclosed to Lender all material
facts and has not failed to disclose any material fact, in each case of which
Borrower has knowledge, that could cause any representation or warranty made
herein to be materially misleading.

 

Section 3.7.          No Plan Assets. As of the date hereof and until the Debt
is repaid in accordance with the applicable terms and conditions hereof, (a)
Borrower is not and will not be an “employee benefit plan,” as defined in
Section 3(3) of ERISA, subject to Title I of ERISA, (b) Borrower is not and will
not be, or be acting on behalf of or with assets of, a “governmental plan”
within the meaning of Section 3(32) of ERISA, and (c) none of the assets of
Borrower constitutes or will constitute “plan assets” of one or more such plans
within the meaning of 29 C.F.R. Section 2510.3-101, as modified by Section 3(42)
of ERISA. As of the date hereof, neither Borrower, nor any member of a
“controlled group of corporations” (within the meaning of Section 414 of the IRS
Code), maintains, sponsors or contributes to a “defined benefit plan” (within
the meaning of Section 3(35) of ERISA) or a “multiemployer pension plan” (within
the meaning of Section 3(37)(A) of ERISA).

 

Section 3.8.          Not a Foreign Person. Borrower is not a “foreign person”
within the meaning of § 1445(f)(3) of the IRS Code.

 

Section 3.9.          Intentionally Omitted.

 

 - 45 - 

 

 

Section 3.10.       Business Purposes. The Loan is solely for the business
purpose of Borrower, and is not for personal, family, household, or agricultural
purposes.

 

Section 3.11.       Borrower’s Principal Place of Business. Each Borrower’s
principal place of business and its chief executive office as of the date hereof
is 106 York Road, Jenkintown, Pennsylvania 19046. Each Borrower’s mailing
address, as set forth in the opening paragraph hereof or as changed in
accordance with the provisions hereof, is true and correct. Each Borrower’s
organizational identification number, if any, assigned by the state of its
incorporation or organization is as set forth on Schedule I attached hereto.
Each Borrower’s federal tax identification number is as set forth on Schedule I
attached hereto. No Borrower is subject to back-up withholding taxes.

 

Section 3.12.       Status of Property.

 

(a)          Borrower has obtained all Permits if any are required for the
operation of Borrower’s business, all of which are in full force and effect as
of the date hereof and not subject to revocation, suspension, forfeiture or
modification.

 

(b)          Except as set forth in the Zoning Reports, each Individual Property
and the present and contemplated use and occupancy thereof are in full
compliance with all applicable zoning ordinances, building codes, land use laws,
Environmental Laws and other similar Legal Requirements.

 

(c)          Each Individual Property is served by all utilities required for
the current or contemplated use thereof. All utility service is provided by
public utilities and each Individual Property has accepted or is equipped to
accept such utility service.

 

(d)          All public roads and streets necessary for service of and access to
each Individual Property for the current or contemplated use thereof have been
completed, are serviceable and all-weather and are physically and legally open
for use by the public. Each Individual Property has either direct access to such
public roads or streets or access to such public roads or streets by virtue of a
perpetual easement or similar agreement inuring in favor of Borrower and any
subsequent owners of the applicable Individual Property.

 

(e)          Each Individual Property is served by public water and sewer
systems.

 

(f)           Each Individual Property is free from damage caused by fire or
other casualty. Except as disclosed in the applicable Physical Condition Report,
each Individual 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, subject to reasonable wear and tear; there exists no
structural or other material defects or damages in any Individual Property,
whether latent or otherwise, and Borrower has not received notice from any
insurance company or bonding company of any defects or inadequacies in any
Individual 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.

 

 - 46 - 

 

 

(g)          All costs and expenses of any and all labor, materials, supplies
and equipment used in the construction of the Improvements have been paid in
full. Except as shown on the Title Insurance Policies, there are no mechanics’
or similar liens or claims which have been filed for work, labor or material
(and no rights are outstanding that under applicable Legal Requirements could
give rise to any such liens) affecting any Individual Property which are or may
be prior to or equal to the lien of the related Security Instrument.

 

(h)          Borrower has paid in full for, and is the owner of, all
furnishings, fixtures and equipment (other than Tenants’ property) used in
connection with the operation of the Properties, free and clear of any and all
security interests, liens or encumbrances, except the lien and security interest
created by this Agreement, the Note, the Security Instruments and the other Loan
Documents.

 

(i)           Except as shown in the Environmental Reports, all liquid and solid
waste disposal, septic and sewer systems located on each Individual Property are
in a good and safe condition and repair and in compliance with all Legal
Requirements.

 

(j)           Except as shown on the Survey, no portion of the Improvements is
located in an area identified by the Federal Emergency Management Agency or any
successor thereto as an area having special flood hazards pursuant to the Flood
Insurance Acts. Except as shown on the Survey, no part of any Individual
Property consists of or is classified as wetlands, tidelands or swamp and
overflow lands.

 

(k)          Except as set forth in the Title Insurance Policies or the Survey,
all the Improvements lie within the boundaries of the Land and any building
restriction lines applicable to the Land.

 

(l)           To Borrower’s knowledge after due inquiry, there are no pending or
proposed special or other assessments for public improvements or otherwise
affecting any Individual Property, nor are there any contemplated improvements
to any Individual Property that may result in such special or other assessments.

 

(m)          Except for certain striping of parking spaces as set forth in the
Post Closing Agreement, Borrower has not (i) made, ordered or contracted for any
construction, repairs, alterations or improvements to be made on or to any
Individual Property which have not been completed and paid for in full, (ii)
ordered materials for any such construction, repairs, alterations or
improvements which have not been paid for in full or (iii) attached any fixtures
to any Individual Property which have not been paid for in full. Except for
certain striping of parking spaces as set forth in the Post Closing Agreement,
(x) there is no such construction, repairs, alterations or improvements ongoing
at any Individual Property as of the Closing Date and (y) there are no
outstanding or disputed claims for any Work Charges and there are no outstanding
liens or security interests in connection with any Work Charges.

 

(n)          No Borrower has any direct employees.

 

Section 3.13.        Financial Information. All financial data, including,
without limitation, the balance sheets, statements of cash flow, statements of
income and operating expense and rent rolls, that have been delivered to Lender
in respect of Borrower, Guarantor and/or each

 

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Individual Property (a) are true, complete and correct in all material respects
as of the date set forth on each item of financial data, (b) accurately
represent the financial condition of Borrower, Guarantor or such Individual
Property, as applicable, as of the date of such reports, and (c) to the extent
prepared or audited by an independent certified public accounting firm, have
been prepared in accordance with the Approved Accounting Method throughout the
periods covered, except as disclosed therein. Borrower does not have any
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments
that are known to Borrower and reasonably likely to have a Material Adverse
Effect, except as referred to or reflected in said financial statements. Since
the date of such financial statements, there has been no materially adverse
change in the financial condition, operations or business of Borrower or
Guarantor from that set forth in said financial statements.

 

Section 3.14.         Condemnation. Except as set forth on Schedule XIV, no
Condemnation or other proceeding has been commenced or, to Borrower’s knowledge,
is threatened or contemplated with respect to all or any portion of any
Individual Property or for the relocation of the access to any Individual
Property.

 

Section 3.15.         Separate Lots. Each Individual Property is assessed for
real estate tax purposes as one or more wholly independent tax lot or lots,
separate from any adjoining land or improvements not constituting a part of such
lot or lots, and no other land or improvements is assessed and taxed together
with any Individual Property or any portion thereof.

 

Section 3.16.         Insurance. Borrower has obtained and has delivered to
Lender certified copies of all Policies (or such other evidence reasonably
acceptable to Lender) reflecting the insurance coverages, amounts and other
requirements set forth in this Agreement. There are no present claims of any
material nature under any of the Policies, and to Borrower’s knowledge, no
Person, including Borrower, has done, by act or omission, anything which would
impair the coverage of any of the Policies.

 

Section 3.17.         Use of Property. Each Individual Property is used
exclusively as retail space (including bank branches) and/or commercial office
space and other appurtenant and related uses.

 

Section 3.18.         Leases and Rent Roll. Except as disclosed in the rent roll
for the each Individual Property delivered to, certified to and approved by
Lender in connection with the closing of the Loan and attached hereto on
Schedule IX hereto (the “Rent Roll”) and except as set forth on Schedule XV
attached hereto, (a) each applicable Borrower is the sole owner of the entire
lessor’s interest in the Leases; (b) the Leases are valid and enforceable and in
full force and effect; (c) all of the Leases are arms-length agreements with
bona fide, independent third parties; (d) no party under any Lease is in default
under any Lease beyond any applicable notice and cure periods set forth therein;
(e) all Rents due have been paid in full and no Tenant is in arrears in its
payment of Rent; (f) the terms of all alterations, modifications and amendments
to the Leases have been disclosed to Lender in writing; (g) none of the Rents
reserved in the Leases have been assigned or otherwise pledged or hypothecated
except pursuant to the Loan Documents; (h) none of the Rents have been collected
for more than one (1) month in advance (except a security deposit shall not be
deemed rent collected in advance); (i) the premises demised under the Leases
have been completed, all improvements, repairs, alterations or other

 

 - 48 - 

 

 

work required to be furnished on the part of Borrower under the Leases have been
completed, the Tenants under the Leases have accepted the premises demised
thereunder and have taken possession of the same on a rent-paying basis and any
payments, credits or abatements required to be given by Borrower to the Tenants
under the Leases have been made in full; (j) there exist no offsets or defenses
to the payment of any portion of the Rents of which Borrower has knowledge and
Borrower has no monetary obligation to any Tenant under any Lease; (k) Borrower
has received no notice from any Tenant challenging the validity or
enforceability of any Lease; (l) there are no agreements with the Tenants under
the Leases other than expressly set forth in each Lease; (m) intentionally
omitted; (n) no Lease contains an option to purchase, right of first refusal to
purchase, right of first offer to purchase or other similar provision that
applies to a foreclosure of any Individual Property, a deed-in-lieu of
foreclosure with respect to any Individual Property or any other exercise of
Lender’s rights and remedies hereunder and under the other Loan Documents; (o)
no Person has any possessory interest in, or right to occupy, any Individual
Property except under and pursuant to a Lease; (p) all security deposits
relating to the Leases are reflected on the Rent Roll and have been collected by
Borrower; (q) no brokerage commissions or finders fees are due and payable
regarding any Lease; (r) each Tenant is in actual, physical occupancy of the
premises demised under its Lease; (s) to Borrower’s knowledge, there are no
actions or proceedings (voluntary or otherwise) pending against any Tenants or
guarantors under Leases, in each case, under bankruptcy or similar insolvency
laws or regulations; and (t) no event has occurred giving any Tenant the right
to cease operations at its leased premises (i.e., “go dark”), terminate its
Lease or pay reduced or alternative Rent to Borrower under any of the terms of
such Lease, such as a co-tenancy provision.

 

Section 3.19.         Filing and Recording Taxes. 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 this Agreement, the Security Instruments, the Note and the
other Loan Documents have been paid or will be paid, and, under current Legal
Requirements, the Security Instruments and the other Loan Documents are
enforceable in accordance with their terms by Lender (or any subsequent holder
thereof), except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar Creditors Rights Laws, and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

Section 3.20.         Management Agreement. The Management Agreement is in full
force and effect and there is no default thereunder after expiration of
applicable notice and cure periods by any party thereto and, to Borrower’s
knowledge, no event has occurred that, with the passage of time and/or the
giving of notice would constitute a default thereunder. As of the date hereof,
no management fees under the Management Agreement are due and payable.

 

Section 3.21.         Illegal Activity/Forfeiture.

 

(a)          No portion of any Individual Property has been or will be
purchased, improved, equipped or furnished by Borrower with proceeds of any
illegal activity and to Borrower’s knowledge, there are no illegal activities or
activities relating to controlled substances at any Individual Property.

 

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(b)          There has not been committed by Borrower or its Affiliates or, to
Borrower’s knowledge, by any other Person in occupancy of or involved with the
operation or use of any Individual Property and there shall never be committed
by Borrower or its Affiliates, any act or omission affording the federal
government or any state or local government the right of forfeiture as against
such Individual Property or any part thereof or any monies paid in performance
of Borrower’s obligations under this Agreement, the Note, the Security
Instruments or the other Loan Documents. Borrower hereby covenants and agrees
not to commit any act or omission affording such right of forfeiture.

 

Section 3.22.        Taxes. Borrower has filed all federal, state, county,
municipal, and city income, personal property and other tax returns required to
have been filed by it and has paid all taxes and related liabilities which have
become due pursuant to such returns or pursuant to any assessments received by
it. Borrower knows of no basis for any additional assessment in respect of any
such taxes and related liabilities for prior years.

 

Section 3.23.        Permitted Encumbrances. None of the Permitted Encumbrances,
individually or in the aggregate, materially and adversely affects the value or
marketability of any Individual Property, materially impairs the use or the
operation of any Individual Property or materially impairs Borrower’s ability to
pay and/or perform its obligations in a timely manner.

 

Section 3.24.        Third Party Representations. Each of the representations
and the warranties made by Guarantor in the other Loan Documents (if any) are
true, complete and correct in all material respects.

 

Section 3.25.       Non-Consolidation Opinion Assumptions. All of the factual
assumptions made in the Non-Consolidation Opinion, including, but not limited
to, any exhibits attached thereto and/or certificates delivered in connection
therewith, are true, complete and correct in all material respects.

 

Section 3.26.        Federal Reserve Regulations. No part of the proceeds of the
Loan will be used for the purpose of purchasing or acquiring any “margin stock”
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement, the Security Instruments, the Note or the other Loan Documents.

 

Section 3.27.        Investment Company Act. Borrower is not (a) an “investment
company” or a company “controlled” by an “investment company,” within the
meaning of the Investment Company Act of 1940, as amended; (b) a “holding
company” or a “subsidiary company” of a “holding company” or an “affiliate” of
either a “holding company” or a “subsidiary company” within the meaning of the
Public Utility Holding Company Act of 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.

 

Section 3.28.        Fraudulent Conveyance. Borrower (a) has not entered into
the Loan or any Loan Document with the actual intent to hinder, delay, or
defraud any creditor and (b) received reasonably equivalent value in exchange
for its obligations under the Loan Documents.

 

 - 50 - 

 

 

Giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds
and will, immediately following the execution and delivery of the Loan
Documents, exceed Borrower’s total liabilities, including, without limitation,
subordinated, unliquidated, disputed or contingent liabilities. The fair
saleable value of Borrower’s assets is and will, immediately following the
execution and delivery of the Loan Documents, be greater than Borrower’s
probable liabilities, including the maximum amount of its contingent liabilities
or its debts as such debts become absolute and matured. Borrower’s assets do not
and, immediately following the execution and delivery of the Loan Documents will
not, constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. Borrower does not intend to, and does
not believe that it will, incur debts and liabilities (including, without
limitation, contingent liabilities and other commitments) beyond its ability to
pay such debts as they mature (taking into account the timing and amounts to be
payable on or in respect of obligations of Borrower).

 

Section 3.29.         Embargoed Person. As of the date hereof, (a) none of the
funds or other assets of any Borrower Party or any Affiliated Manager constitute
property of, or are beneficially owned, directly or indirectly, by any Person or
government that is the subject of economic sanctions under U.S. law, including
but not limited to, the USA PATRIOT Act of 2001, 107 Public Law 56 (October 26,
2001) (including the anti-terrorism provisions thereof) and in other statutes
and all orders, rules and regulations of the United States government and its
various executive departments, agencies and offices related to applicable
anti-money laundering laws and regulations, the International Emergency Economic
Powers Act, 50 U.S.C. §§ 1701 et seq., the Trading with the Enemy Act, 50 U.S.C.
App. 1 et seq., and any Executive Orders or regulations promulgated thereunder
(collectively referred as the “Patriot Act”) with the result that transactions
involving or the investment in any such Borrower Party or any such Affiliated
Manager (whether directly or indirectly) is prohibited by applicable law or the
Loan made by Lender is in violation of applicable law (“Embargoed Person”);
(b) none of the funds or other assets of any Borrower Party or any Affiliated
Manager constitute property of, or are beneficially owned, directly or
indirectly, by any Embargoed Person; (c) no Embargoed Person has any interest of
any nature whatsoever in any Borrower Party or any Affiliated Manager, with the
result that transactions involving or the investment in any such Borrower Party
(whether directly or indirectly), is prohibited by applicable law or the Loan is
in violation of applicable law; and (d) none of the funds of any Borrower Party
or any Affiliated Manager have been derived from, or are the proceeds of, any
unlawful activity with the result that transactions involving or the investment
in any such Borrower Party or any such Affiliated Manager (whether directly or
indirectly), is prohibited by applicable law or the Loan is in violation of
applicable law; provided, that, the representations and warranties above are
made only to Borrower’s knowledge with respect to the direct and/or indirect
ownership of any shares of stock in American Finance Trust, Inc., a Maryland
corporation that are listed on the New York Stock Exchange, NASDAQ Global Select
Market or another nationally recognized stock exchange. Any violation of the
foregoing shall, at Lender’s option, constitute an Event of Default hereunder.

 

Section 3.30.          Intentionally Omitted.

 

Section 3.31.         Organizational Chart. The organizational chart attached as
Schedule III hereto (the “Organizational Chart”), relating to Borrower and
certain Affiliates and other parties, is true, complete and correct on and as of
the date hereof.

 

 - 51 - 

 

 

Section 3.32.         Bank Holding Company. Borrower is not a “bank holding
company” or a direct or indirect subsidiary of a “bank holding company” as
defined in the Bank Holding Company Act of 1956, as amended, and Regulation Y
thereunder of the Board of Governors of the Federal Reserve System.

 

Section 3.33.         Ground Lease Representations.

 

(a)          Each Ground Lease is in full force and effect and has not been
modified or amended in any manner whatsoever except by amendment previously
provided to Lender, (ii) there are no defaults under any Ground Lease by
Borrower, or, to Borrower’s knowledge, the applicable landlord thereunder, and,
to the best of Borrower’s knowledge, no event has occurred which but for the
passage of time, or notice, or both would constitute a default under any Ground
Lease, (iii) all rents, additional rents and other sums due and payable under
each Ground Lease have been paid in full, (iv) neither Borrower nor the landlord
under any Ground Lease has commenced any action or given or received any notice
terminating any Ground Lease, (v) each Fee Owner, as debtor in possession or by
a trustee for such Fee Owner, has not given any notice of, and Borrower has not
consented to, any attempt to transfer any Fee Estate free and clear of the
Ground Lease under section 363(f) of the Bankruptcy Code, and (vi) to Borrower’s
knowledge, each Fee Owner under each Ground Lease is not subject to any
voluntary or involuntary bankruptcy, reorganization or insolvency proceeding and
the applicable Fee Estate under each Ground Lease is not an asset in any
voluntary or involuntary bankruptcy, reorganization or insolvency proceeding;

 

(b)          Each Ground Lease or a memorandum thereof has been duly recorded,
each Ground Lease permits the interest of the lessee thereunder to be encumbered
by the related Security Instrument and does not restrict the use of the related
Individual Property by such lessee, its successors or assigns in a manner that
would adversely affect the security provided by the related Security Instrument
and there has not been any modifications, amendments or other changes in the
terms of any Ground Lease since its recordation other than those that have been
previously provided to Lender;

 

(c)          Except as indicated in the related Title Insurance Policy, the
applicable Borrower’s interest in each Ground Lease is not subject to any lien
superior to, or of equal priority with, the related Security Instrument;

 

(d)          Each Ground Lease itself provides and/or the related Fee Owner has
agreed in a writing for the benefit of Lender, its successors and assigns that
such Ground Lease may not be amended, modified, canceled, surrendered or
terminated without the prior written consent of Lender and that any such action
without such consent is not binding on Lender, its successors or assigns;

 

(e)          Borrower’s interest in each Ground Lease is assignable upon notice
to, but without the consent of, the related Fee Owner and, in the event that it
is so assigned, it is further assignable upon notice to, but without the need to
obtain the consent of, the related Fee Owner;

 

(f)          Each Ground Lease requires the related Fee Owner to give notice of
any default by Borrower to Lender and each Ground Lease further provides that
notice of default or

 

 - 52 - 

 

 

termination given under such Ground Lease is not effective against Lender unless
a copy of the notice has been delivered to Lender in the manner described in
such Ground Lease, and requires that the related Fee Owner will supply an
estoppel certificate to Lender in form and substance acceptable to Lender;

 

(g)          Lender is permitted a reasonable opportunity (including, where
necessary, sufficient time to gain possession of the interest of Borrower under
each Ground Lease) to cure any default under such Ground Lease, which is curable
after the receipt of notice of any default before the related Fee Owner may
terminate such Ground Lease;

 

(h)          Each Ground Lease has a term which extends not less than twenty
(20) years beyond the Maturity Date (including any extensions thereof in
accordance with the terms and conditions of this Agreement);

 

(i)           Each Ground Lease requires the related Fee Owner to enter into a
new lease upon termination of such Ground Lease for any reason, including
rejection of such Ground Lease in a bankruptcy proceeding;

 

(j)           Under the terms of each Ground Lease and the applicable Loan
Documents, taken together, any Net Proceeds will be applied either to the
Restoration of all or part of the related Individual Property, with Lender or a
trustee appointed by Lender having the right to hold and disburse such Net
Proceeds as the Restoration progresses, or to the payment of the outstanding
principal balance of the Loan together with any accrued interest thereon; and

 

(k)          Each Ground Lease does not impose restrictions on subletting that
would be viewed as commercially unreasonable by a prudent commercial mortgage
lender.

 

Section 3.34.         Property Document Representations.

 

(a)          With respect to each Property Document, Borrower hereby represents
that (a) each Property Document is in full force and effect and has not been
amended, restated, replaced or otherwise modified (except, in each case, as
expressly set forth herein or as set forth in an amendment provided to Lender
prior to the date hereof), (b) to Borrower’s knowledge, there are no defaults
beyond any applicable notice and cure periods under any Property Document by any
party thereto and, to Borrower’s knowledge, no event has occurred which, but for
the passage of time, the giving of notice, or both, would constitute a default
under any Property Document, and (c) no party to any Property Document has
commenced any action or given or received any notice for the purpose of
terminating any Property Document.

 

(b)          (i) The Valdosta-Lowndes County Industrial Authority, as debtor in
possession or by a trustee for the Valdosta-Lowndes County Industrial Authority,
has not given any notice of, and Borrower has not consented to, any attempt to
transfer the fee interest of the Valdosta-Lowndes County Industrial Authority
under the Valdosta Bond Documents free and clear of the Valdosta Bond Documents
under section 363(f) of the Bankruptcy Code, and (ii) to Borrower’s knowledge,
the Valdosta-Lowndes County Industrial Authority is not subject to any voluntary
or involuntary bankruptcy, reorganization or insolvency proceeding and the fee
interest of the Valdosta-Lowndes County Industrial Authority under the Valdosta
Bond Documents is not an asset in any voluntary or involuntary bankruptcy,
reorganization or insolvency proceeding.

 

 - 53 - 

 

 

(c)          The Valdosta Bond Lease or a memorandum thereof has been duly
recorded, the Valdosta Bond Documents permit the interest of the lessee
thereunder to be encumbered by the related Security Instrument and does not
restrict the use of the related Individual Property by such lessee, its
successors or assigns in a manner that would adversely affect the security
provided by the related Security Instrument and there has not been any
modifications, amendments or other changes in the terms of the Valdosta Bond
Documents since the recordation of the Valdosta Bond Lease other than those that
have been previously provided to Lender.

 

(d)          Except as indicated in the related Title Insurance Policy, the
applicable Borrower’s interest in the Valdosta Bond Documents is not subject to
any lien superior to, or of equal priority with, the related Security
Instrument.

 

(e)          The Valdosta Bond Documents themselves provide and/or the
Valdosta-Lowndes County Industrial Authority has agreed in a writing for the
benefit of Lender, its successors and assigns that such Valdosta Bond Documents
may not be amended, modified, canceled, surrendered or terminated without the
prior written consent of Lender and that any such action without such consent is
not binding on Lender, its successors or assigns.

 

(f)          Borrower’s interest in the Valdosta Bond Documents is assignable
upon notice to, but without the consent of, the Valdosta-Lowndes County
Industrial Authority and, in the event that it is so assigned, it is further
assignable upon notice to, but without the need to obtain the consent of, the
Valdosta-Lowndes County Industrial Authority.

 

(g)          Under the terms of the Valdosta Bond Documents and the applicable
Loan Documents, taken together, any Net Proceeds will be applied either to the
Restoration of all or part of the related Individual Property, with Lender or a
trustee appointed by Lender having the right to hold and disburse such Net
Proceeds as the Restoration progresses, or to the payment of the outstanding
principal balance of the Loan together with any accrued interest thereon.

 

(h)          The Valdosta Bond Documents do not impose restrictions on
subletting that would be viewed as commercially unreasonable by a prudent
commercial mortgage lender.

 

Section 3.35.         No Change in Facts or Circumstances; Disclosure.

 

As of the date hereof, there has been no material adverse change in any
condition, fact, circumstance or event that would make any written financial
information provided to Lender inaccurate, incomplete or otherwise misleading in
any material respect or that otherwise have a Material Adverse Effect.

 

Borrower agrees that, unless expressly provided otherwise, all of the
representations and warranties of Borrower set forth in this Article 3 and
elsewhere in this Agreement and the other Loan Documents shall survive for so
long as any portion of the Debt remains owing to Lender. All representations,
warranties, covenants and agreements made in this Agreement and in the other
Loan Documents shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.

 

 - 54 - 

 

 

ARTICLE 4.

 

BORROWER COVENANTS

 

From the date hereof and until payment and performance in full of all
obligations of Borrower under this Agreement, the Security Instruments, the Note
and the other Loan Documents or the earlier release of the lien of the Security
Instruments (and all related obligations) in accordance with the terms of this
Agreement, the Security Instrument, the Note and the other Loan Documents, each
Borrower hereby covenants and agrees with Lender that:

 

Section 4.1.          Existence. Each Borrower will continuously maintain (a)
its existence and shall not dissolve or permit its dissolution, (b) its rights
to do business in the State and (c) its franchises and trade names, if any.

 

Section 4.2.          Legal Requirements.

 

(a)          Borrower shall promptly comply and shall cause each Individual
Property to comply with all Legal Requirements affecting such Individual
Property or the use thereof (which such covenant shall be deemed to (i) include
Environmental Laws and (ii) require Borrower to keep all Permits required for
the ownership, operation, leasing or maintenance of the Individual Property in
full force and effect).

 

(b)          Borrower shall from time to time, upon Lender’s reasonable request,
provide Lender with evidence reasonably satisfactory to Lender that each
Individual Property complies with all Legal Requirements or is exempt from
compliance with applicable Legal Requirements.

 

(c)          Borrower shall give prompt notice to Lender of the receipt by
Borrower of any notice related to a violation of any applicable Legal
Requirements and of the commencement of any proceedings or investigations by any
Governmental Authority for violation by an Individual Property or Borrower of
any applicable Legal Requirements.

 

(d)          After prior written notice to Lender, Borrower, at its own expense,
may contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the validity of any Legal Requirement, the
applicability of any Legal Requirement to Borrower or any Individual Property or
any alleged violation of any Legal Requirement, provided that (i) no Event of
Default has occurred and remains uncured; (ii) such proceeding shall be
permitted, if applicable, under and be conducted in accordance with the
provisions of any instrument to which Borrower is subject and shall not
constitute a default thereunder and such proceeding shall be permitted by and
conducted in accordance with all applicable Legal Requirements; (iii) neither
the applicable Individual Property nor any part thereof or interest therein will
be in danger of being sold, forfeited, terminated, cancelled or lost as a result
of such contest by Borrower; (iv) Borrower shall promptly upon final
determination thereof comply with any such Legal Requirement determined to be
valid or applicable or cure any violation of any Legal Requirement determined by
the proceeding to have been violated; (v) such proceeding shall suspend the
enforcement of the contested Legal Requirement against Borrower or the
applicable Individual Property; and (vi) Borrower shall furnish such security as
may be required in the proceeding, or as may be reasonably requested by Lender,
to insure compliance with such

 

 - 55 - 

 

 

Legal Requirement, together with all interest and penalties payable in
connection therewith. Lender may apply any such security or part thereof, as
necessary to cause compliance with such Legal Requirement at any time when, in
the judgment of Lender, the validity, applicability or violation of such Legal
Requirement is finally established or the applicable Individual Property (or any
part thereof or interest therein) shall be in danger of being sold, forfeited,
terminated, cancelled or lost.

 

Section 4.3.          Maintenance and Use of Property. Borrower shall cause each
Individual Property to be maintained in a good and safe condition and repair,
reasonable wear and tear excepted. The Improvements and the Personal Property
shall not be removed, demolished or materially altered (except for normal
replacement of the Personal Property) without the consent of Lender or as
otherwise permitted pursuant to Section 4.21 hereof. Subject to Borrower’s
ability to release an Individual Property in accordance with Sections 7.4(c) and
(d) hereof, Borrower shall perform (or shall cause to be performed) the prompt
repair, replacement and/or rebuilding of any part of any Individual Property
which may be destroyed by any casualty, or become damaged, worn or dilapidated
or which may be affected by any proceeding of the character referred to in
Section 3.14 hereof and shall complete and pay for (or cause the completion and
payment for) any structure at any time in the process of construction or repair
on the Land. Borrower shall operate each Individual Property for the same uses
as such Individual Property is currently operated and Borrower shall not,
without the prior written consent of Lender, (i) change the use of any
Individual Property or (ii) initiate, join in, acquiesce in, or consent to any
change in any private restrictive covenant, zoning law or other public or
private restriction, limiting or defining the uses which may be made of any
Individual Property or any part thereof. If under applicable zoning provisions
the use of all or any portion of any Individual Property is or shall become a
nonconforming use, Borrower will not cause and, subject to the terms of the
applicable Lease, will use commercially reasonable efforts to not permit Tenants
to cause a nonconforming use to be discontinued or the nonconforming Improvement
to be abandoned without the express written consent of Lender.

 

Section 4.4.          Waste. Borrower shall not commit or suffer any waste of
any Individual Property or make any change in the use of any Individual Property
which will in any way materially increase the risk of fire or other hazard
arising out of the operation of such Individual Property, or take any action
that might invalidate or give cause for cancellation of any Policy, or do or
permit to be done thereon anything that may in any way impair the value of such
Individual Property or the security for the Loan. Borrower will not, without the
prior written consent of Lender, permit any drilling or exploration for or
extraction, removal, or production of any minerals from the surface or the
subsurface of any Individual Property, regardless of the depth thereof or the
method of mining or extraction thereof.

 

Section 4.5.          Taxes and Other Charges.

 

(a)          Subject to Section 4.5(b), Borrower shall pay (or cause to be paid)
all Taxes and Other Charges now or hereafter levied or assessed or imposed
against each Individual Property or any part thereof as the same become due and
payable (except with respect to any Waived Tax Deposit Property whenever there
is not a Borrower Tax Period with respect to such Waived Tax Deposit Property);
provided, however, prior to the occurrence and continuance of an Event of
Default, Borrower’s obligation to directly pay Taxes shall be suspended for so
long as Borrower

 

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complies with the terms and provisions of Section 8.6 hereof. Except with
respect to the Waived Tax Deposit Properties whenever there is not a Borrower
Tax Period with respect to such Waived Tax Deposit Property, Borrower shall
furnish to Lender receipts for the payment of the Taxes and the Other Charges
prior to the date the same shall become delinquent (provided, however, that
Borrower is not required to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Lender pursuant to Section 8.6 hereof).
Subject to Section 4.5(b), Borrower shall not suffer and shall promptly cause to
be paid and discharged any lien or charge relating to or arising from Taxes or
Other Charges which may be or become a lien or charge against any Individual
Property (or any portion thereof) (except with respect to any Waived Tax Deposit
Property whenever there is not a Borrower Tax Period with respect to such Waived
Tax Deposit Property), and shall promptly pay for all utility services provided
to each Individual Property (or any portion thereof) (except with respect to
those Properties with Leases that require the Tenants to pay such utility
services). Borrower shall use commercially reasonable efforts to cause the
Tenant with respect to any Waived Tax Deposit Property (whenever there is not a
Borrower Tax Period with respect to such Waived Tax Deposit Property) to pay and
discharge any lien or charge relating to or arising from Taxes or Other Charges
which may be or become a lien or charge against such Waived Tax Deposit Property
(or portion thereof) (whenever there is not a Borrower Tax Period with respect
to such Waived Tax Deposit Property) and shall use commercially reasonable
efforts to cause each Tenant with respect to each of those Properties with
Leases that require the Tenants to pay such utility services to promptly pay all
utility services provided to each such Property.

 

(b)          After prior written notice to Lender, Borrower, at its own expense,
may contest (or permit to be contested) by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any Taxes or Other
Charges, provided that (i) no Event of Default has occurred and remains uncured;
(ii) such proceeding shall be permitted under and be conducted in accordance
with the provisions of any other instrument to which Borrower is subject and
shall not constitute a default thereunder and such proceeding shall be permitted
by and conducted in accordance with all applicable Legal Requirements; (iii)
neither the applicable Individual Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, canceled or lost
as a result of such contest of any such Taxes or Other Charges; (iv) Borrower
shall promptly upon final determination thereof pay the amount of any such Taxes
or Other Charges, together with all costs, interest and penalties which may be
payable in connection therewith; (v) such proceeding shall suspend the
collection of such contested Taxes or Other Charges from the applicable
Individual Property; and (vi) Borrower shall furnish such security as may be
required in the proceeding, or deliver to Lender such reserve deposits as may be
reasonably requested by Lender, to insure the payment of any such Taxes or Other
Charges, together with all interest and penalties thereon, if applicable. Lender
may pay over any such cash deposit or part thereof held by Lender to the
claimant entitled thereto at any time when, in the reasonable judgment of
Lender, the entitlement of such claimant is established or the applicable
Individual Property (or part thereof or interest therein) shall be in danger of
being sold, forfeited, terminated, canceled or lost or there shall be any danger
of the lien of the Security Instrument being primed by any related lien.

 

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Section 4.6.            Litigation. Borrower shall give prompt written notice to
Lender of any litigation or governmental proceedings pending or threatened in
writing against Borrower which might have a Material Adverse Effect.

 

Section 4.7.           Access to Property. Subject to the rights of Tenants,
Borrower shall permit agents, representatives and employees of Lender to inspect
each Individual Property or any part thereof at reasonable hours upon reasonable
advance notice.

 

Section 4.8.           Notice of Default. Borrower shall promptly advise Lender
of any material adverse change in Borrower’s and/or Guarantor’s financial
condition or of the occurrence of any Event of Default of which Borrower has
knowledge.

 

Section 4.9.            Cooperate in Legal Proceedings. Borrower shall cooperate
fully with Lender with respect to any proceedings before any court, board or
other Governmental Authority which may in any way affect the rights of Lender
hereunder or any rights obtained by Lender under any of the Note, the Security
Instruments or the other Loan Documents and, in connection therewith, permit
Lender, at its election, to participate in any such proceedings.

 

Section 4.10.        Performance by Borrower. Borrower hereby acknowledges and
agrees that Borrower’s observance, performance and fulfillment of each and every
material covenant, term and provision to be observed and performed by Borrower
under this Agreement, the Security Instruments, the Note and the other Loan
Documents is a material inducement to Lender in making the Loan.

 

Section 4.11.          Intentionally Omitted.

 

Section 4.12.          Books and Records.

 

(a)          Borrower shall furnish to Lender:

 

(i)          quarterly certified rent rolls for each Individual Property, sales
reports with respect to each Individual Property (to the extent provided by the
Tenants with respect to such Individual Property) and occupancy reports with
respect to each Individual Property, in each instance within thirty (30) days
after the end of each calendar quarter;

 

(ii)         within sixty (60) days after the end of each calendar quarter, (A)
with respect to Borrower, a quarterly balance sheet (which shall (I) not include
any Person other than Borrower and (II) shall show each Borrower individually
and on a combined, aggregate basis) and (B) a quarterly operating statement
(showing both each Individual Property individually and all Individual
Properties in the aggregate), in each case, detailing the revenues received, the
expenses incurred and the components thereof (i.e. Gross Rents, Operating Income
and Operating Expenses) and major capital improvements for the period of
calculation and containing appropriate monthly, quarterly and year-to-date
information;

 

(iii)        within one hundred and fifteen (115) days after the close of each
fiscal year of Borrower, (A) with respect to Borrower, an annual balance sheet
(which shall (I)

 

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not include any Person other than Borrower and (II) shall show each Borrower
individually and on a combined, aggregate basis) and (B) an annual operating
statement (showing both each Individual Property individually and all Individual
Properties in the aggregate), in each case, detailing the revenues received, the
expenses incurred and the components thereof (i.e. Gross Rents, Operating Income
and Operating Expenses) and major capital improvements for the period of
calculation and containing appropriate monthly, quarterly and year-to-date
information;

 

(iv)        upon the occurrence and during the continuance of a Trigger Period,
an annual operating budget for the current calendar year presented on a monthly
basis consistent with the annual operating statement described above for each
Individual Property, including cash flow projections for the current year and
all proposed capital replacements and improvements and upon the occurrence and
during the continuance of a Trigger Period, by no later than December 1 of each
calendar year, an annual operating budget for the next succeeding calendar year
presented on a monthly basis consistent with the annual operating statement
described above for each Individual Property, including cash flow projections
for the upcoming year and all proposed capital replacements and improvements,
which such budgets, in each instance, shall not take effect until approved by
Lender, such approval not be unreasonably withheld (after such approval has been
given in writing, each such approved budget shall be referred to herein,
individually or collectively (as the context requires), as the “Approved Annual
Budget”). Until such time that Lender approves a proposed Annual Budget that
requires Lender approval pursuant to this paragraph (iv), (1) to the extent that
an Approved Annual Budget does not exist for the immediately preceding calendar
year, all operating expenses of the Properties for the then current calendar
year shall be deemed extraordinary expenses of the Properties and shall be
subject to Lender’s prior written approval (not to be unreasonably withheld or
delayed) and (2) to the extent that an Approved Annual Budget exists for the
immediately preceding calendar year, such Approved Annual Budget shall apply to
the then current calendar year; provided, that such Approved Annual Budget shall
be adjusted to reflect actual increases in Taxes, Insurance Premiums and
utilities expenses;

 

(v)         by no later than thirty (30) days after and as of the end of each
calendar month during the period prior to Securitization (if required by
Lender), and thereafter by no later than thirty (30) days after and as of the
end of each calendar quarter, a calculation of the then current Debt Service
Coverage Ratio, together with such back-up information as Lender shall
reasonably require with respect to such calculation of Debt Service Coverage
Ratio.

 

(b)          Upon request from Lender, Borrower shall furnish in a timely manner
to Lender:

 

(i)          an accounting of all security deposits held in connection with any
Lease of any part of any Individual Property, including the name and
identification number of the accounts in which such security deposits are held,
the name and address of the financial institutions in which such security
deposits are held and the name of the Person to contact at such financial
institution; and

 

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(ii)         evidence reasonably acceptable to Lender of compliance with the
terms and conditions of Articles 5 and 9 hereof.

 

(c)          Borrower shall, within ten (10) Business Days of request, furnish
Lender (and shall cause Guarantor to furnish to Lender) with such other
additional financial or management information (including State and Federal tax
returns) as may, from time to time, be reasonably requested by Lender if
Borrower and/or Guarantor prepare the same in the ordinary course or the same
are reasonably obtainable using systems of Borrower and/or Guarantor that are
currently in place. Borrower shall furnish to Lender and its agents space for
the examination and audit of any such books and records.

 

(d)          Borrower agrees that (i) Borrower shall keep adequate books and
records of account and (ii) all Required Financial Items (defined below) to be
delivered to Lender pursuant to Section 4.12 shall: (A) be complete and correct;
(B) present fairly the financial condition of the applicable Person; (C)
disclose all liabilities that are required to be reflected or reserved against;
and (D) be prepared (1) in the form required by Lender and certified by a
Responsible Officer of Borrower (2) in electronic format and (3) to the extent
applicable, in accordance with the Approved Accounting Method. Borrower agrees
that all Required Financial Items shall not contain any intentional
misrepresentation or omission of a material fact.

 

(e)          Borrower acknowledges the importance to Lender of the timely
delivery of each of the items required by this Section 4.12 and the other
financial reporting items required by this Agreement (each, a “Required
Financial Item” and, collectively, the “Required Financial Items”). Borrower
shall pay to Lender the sum of $2,500.00 per occurrence for each failure by
Borrower to deliver any of the Required Financial Items to Lender within ten
(10) Business Days after the due date specified herein (a “Reporting Failure”).
It shall be an Event of Default hereunder if any such payment is not received by
Lender within thirty (30) days of the date on which such payment is due, and
Lender shall be entitled to the exercise of all of its rights and remedies
provided hereunder.

 

Section 4.13.         Estoppel Certificates.

 

(a)          After request by Lender, Borrower, within ten (10) Business Days of
such request, shall furnish Lender or any proposed assignee with a statement,
duly acknowledged and certified, setting forth (i) the original principal amount
of the Loan, (ii) the unpaid principal amount of the Loan, (iii) the rate of
interest of the Loan, (iv) the terms of payment and maturity date of the Loan,
(v) the date installments of interest and/or principal were last paid, (vi)
that, except as provided in such statement, no Event of Default exists, (vii)
that this Agreement, the Note, the Security Instruments and the other Loan
Documents are valid, legal and binding obligations and have not been modified or
if modified, giving particulars of such modification, (viii) whether, to
Borrower’s knowledge, any offsets or defenses exist against the obligations
secured hereby and, if any are alleged to exist, a detailed description thereof,
(ix) that all Leases are in full force and effect and have not been modified or
terminated (or if modified or terminated, setting forth all modifications or
terminations), (x) the date to which the Rents thereunder have been paid
pursuant to the Leases, (xi) whether or not, to the knowledge of Borrower, any
of the lessees under the Leases are in default under the Leases, and, if any of
the lessees are in default, setting forth the specific nature of all such
defaults, (xii) the amount of

 

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security deposits held by Borrower under each Lease, and (xiii) as to any other
matters reasonably requested by Lender and reasonably related to the obligations
created and evidenced hereby and by the Security Instruments or the Properties
(or any portion thereof); provided, that, so long as no Event of Default has
occurred and is continuing, Borrower shall not be required to deliver such
statement to Lender more frequently than once in any twelve month period.

 

(b)          Borrower shall use its commercially reasonable efforts to deliver
to Lender, promptly upon request, duly executed estoppel certificates from any
one or more Tenants as reasonably required by Lender attesting to such facts
regarding the Lease as Lender may reasonably request, including, but not limited
to, attestations that each Lease covered thereby is in full force and effect
with no defaults beyond applicable notice and cure periods thereunder on the
part of any party except only to Tenant’s knowledge as to Borrower defaults (or
identifying any defaults beyond applicable notice and cure periods there may
be), that none of the Rents have been paid more than one month in advance,
except as security, identifying any free rent or other concessions due lessee
(if any) and identifying, to Tenant’s knowledge, any defense or offset against
the full and timely performance of its obligations under the Lease, provided,
that, so long as no Event of Default has occurred and is continuing, Borrower
shall not be required to use commercially reasonable efforts to deliver such
certificates to Lender more frequently than once in any twelve month period.
Notwithstanding the foregoing, if Tenant provides an estoppel in the same form
as the one delivered in connection with the closing of the Loan, Lender shall
accept the same and Borrower shall be deemed to have satisfied the requirements
of this subparagraph (b).

 

(c)          Borrower shall use commercially reasonable efforts to deliver to
Lender, within ten (10) Business Days of written request from Lender (or such
longer period for delivery of estoppels set forth in such Property Document
and/or such Ground Lease), estoppel certificates from each party under any
Property Document and/or any Ground Lease in form and substance reasonably
acceptable to Lender or in such form required by the applicable Property
Document and/or Ground Lease if the applicable Property Document and/or Ground
Lease provides a form therefor or in the form delivered in connection with the
closing of the Loan, provided, that, so long as no Event of Default has occurred
and is continuing, Borrower shall not be required to use commercially reasonable
efforts to deliver such certificates to Lender more frequently than once in any
twelve month period.

 

Section 4.14.         Leases and Rents.

 

(a)          All Leases and all renewals of Leases executed after the date
hereof shall (i) provide for rental rates comparable to existing local market
rates for similar properties (except for renewals pursuant to the terms and
conditions of Leases executed prior to the date hereof, the rental rates for
which shall be consistent with the terms of the applicable Lease), (ii) be on
commercially reasonable terms with unaffiliated, third parties (unless otherwise
consented to by Lender or for renewals pursuant to the terms and conditions of
Leases executed prior to the date hereof), and (iii) with respect to Leases
entered into after the Closing Date, provide that such Lease is subordinate to
the Security Instruments and that the lessee will attorn to Lender and any
purchaser at a foreclosure sale, provided, that such subordination and
attornment may be contingent on Lender’s agreement not to disturb the Tenant’s
use of such premises so long as no event of default under such Lease has
occurred and is continuing. Notwithstanding anything to

 

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the contrary contained herein, Borrower shall not, without the prior written
approval of Lender (which approval shall not be unreasonably withheld,
conditioned or delayed), enter into, renew, extend, amend, modify, permit any
assignment of or subletting under (to the extent Borrower consent is required
under the terms of the applicable Lease for the applicable assignment and/or
subletting), waive any economic provisions or other material provisions of,
release any party to, terminate (except in the case of default by the Tenant
thereunder), reduce rents under, accept a surrender of space under (unless
required pursuant to the terms and conditions of the applicable Lease), or
shorten the term of, in each case, any Major Lease. To the extent that the
Deemed Approval Requirements are fully satisfied in connection with any Borrower
request for Lender consent under this subparagraph (a) and Lender thereafter
fails to approve or disapprove the same, Lender’s approval shall be deemed given
with respect to the matter for which approval was requested.

 

(b)          Without limitation of subsection (a) above, Borrower (i) shall
observe and perform the material obligations imposed upon the lessor under the
Leases in a commercially reasonable manner; (ii) shall enforce the terms,
covenants and conditions contained in the Leases upon the part of the lessee
thereunder to be observed or performed in a commercially reasonable manner;
(iii) shall not collect any of the Rents more than one (1) month in advance
(other than security deposits); (iv) shall not execute any assignment of
lessor’s interest in the Leases or the Rents (except as contemplated by the Loan
Documents); (v) shall not, without Lender’s prior written consent (not to be
unreasonably withheld, conditioned or delayed), alter, modify or change any
Lease to the extent the same would, individually or in the aggregate, (A) cause
any such Lease to violate 4.14(a)(i) through (iii) above or (B) have a Material
Adverse Effect; and (vi) shall hold all security deposits under all Leases in
accordance with Legal Requirements. Upon request, Borrower shall furnish Lender
with executed copies of all Leases.

 

(c)          Notwithstanding anything contained herein to the contrary, Borrower
shall not willfully withhold from Lender any information reasonably required
regarding renewal, extension, amendment, modification, waiver of provisions of,
termination, rental reduction of, surrender of space of, or shortening of the
term of, any Lease during the term of the Loan. Borrower further agrees to
provide Lender with written notice of a Tenant “going dark” under such Tenant’s
Lease within ten (10) Business Days after Borrower’s knowledge that such Tenant
has “gone dark”.

 

(d)          Borrower shall notify Lender in writing, within two (2) Business
Days following receipt thereof, of Borrower’s receipt of any early termination
fee or payment or other termination fee or payment paid by any Tenant under any
Lease, and Borrower shall cause such fee or payment to be deposited into an
Eligible Account with Lender to be disbursed by Lender for tenant improvement
and leasing commission costs with respect to the Property within ten (10)
Business Days after Borrower’s request therefor, provided no Event of Default is
continuing. After the entirety of the space demised under the Lease to which
such early termination fee or payment or other termination fee or payment
relates has been leased to a replacement Tenant in accordance with the terms and
conditions of this Agreement and the Tenant thereunder is open for business and
paying full and unabated rent under such Lease, Lender shall deposit any
remaining early termination fee or payment or other termination fee or payment
held by Lender pursuant to this subclause (d) in the Cash Management Account for
application in accordance with Section 9.3 hereof. During the continuance of an
Event of

 

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Default, any such fee or payment may also be held as collateral for the Debt or
applied towards payment of the Debt, as so determined by Lender.

 

(e)          Lender agrees to reasonably cooperate with any request by Borrower
to deliver a subordination and non-disturbance agreement in favor of a Tenant
under a Major Lease, on Lender’s then current form of subordination and
non-disturbance agreement; provided that Lender will cooperate reasonably in
connection with reasonable changes requested thereto. Borrower shall pay all
reasonable out-of-pocket costs and expenses incurred by Lender in connection
with such request.

 

Section 4.15.         Management Agreement.

 

(a)          As of the Closing Date, there are no Management Agreements other
than that certain Property Management Agreement dated as of October 23, 2013
between ARC AMWNRKY001, LLC, a Delaware limited liability company and CBRE,
Inc., a Delaware corporation. If, at any time, Borrower desires to enter into a
Management Agreement with respect to any Individual Property or extend the
existing Management Agreements to apply to any additional Individual Property,
Borrower shall do so in accordance with the terms and conditions of Section
4.15(g) and (i) hereof.

 

(b)          Borrower shall (i) diligently and promptly perform, observe and
enforce all of the terms, covenants and conditions of each Management Agreement
on the part of Borrower to be performed, observed and enforced to the end that
all things shall be done which are necessary to keep unimpaired the rights of
Borrower under such Management Agreement, (ii) promptly notify Lender of any
default under any Management Agreement beyond applicable notice and cure periods
thereunder; (iii) promptly deliver to Lender a copy of any written notice of
default or other material notice received by Borrower under the Management
Agreement; (iv) promptly give notice to Lender of any written notice that
Borrower receives which provides that Manager is terminating the Management
Agreement or that Manager is otherwise discontinuing its management of the
Property; and (v) promptly use commercially reasonable efforts to enforce the
performance and observance of all of the covenants required to be performed and
observed by Manager under the Management Agreement.

 

(c)          Borrower shall not, without the prior written consent of Lender
(which shall not be unreasonably withheld, conditioned or delayed), (i)
surrender, terminate or cancel any Management Agreement, consent to any
assignment of any Manager’s interest under the related Management Agreement or
otherwise replace Manager or renew or extend any Management Agreement (exclusive
of, in each case, any automatic renewal or extension in accordance with its
terms) or enter into any other new or replacement management agreement with
respect to any Individual Property; provided, however, that Borrower may replace
a Manager and/or consent to the assignment of a Manager’s interest under a
Management Agreement, in each case to the extent permitted by and in accordance
with the applicable terms and conditions hereof and of the other Loan Documents;
(ii) reduce or consent to the reduction of the term of a Management Agreement;
(iii) increase or consent to the increase of the amount of any charges under a
Management Agreement; or (iv) otherwise modify, change, alter or amend, in any
material respect, or waive or release any of its material rights and remedies
under, a Management Agreement in any material respect. To the extent that the
Deemed Approval Requirements are

 

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fully satisfied in connection with any Borrower request for Lender consent under
this subparagraph (c) and Lender fails to approve or disapprove the same
pursuant thereto, Lender’s approval shall be deemed given with respect to the
matter for which approval was requested.

 

(d)          If Borrower shall default after applicable notice and cure periods
in the performance or observance of any material term, covenant or condition of
a Management Agreement on the part of Borrower to be performed or observed,
then, without limiting the generality of the other provisions of this Agreement,
and without waiving or releasing Borrower from any of its obligations hereunder,
Lender shall have the right, but shall be under no obligation, to pay any sums
and to perform any act or take any action as may be appropriate to cause all the
terms, covenants and conditions of the Management Agreement on the part of
Borrower to be performed or observed to be promptly performed or observed on
behalf of Borrower, to the end that the rights of Borrower in, to and under the
Management Agreement shall be kept unimpaired and free from default. Lender and
any Person designated by Lender shall have, and are hereby granted, the right to
enter upon the Property, subject to the rights of tenants, at any time and from
time to time for the purpose of taking any such action. If Manager shall deliver
to Lender a copy of any notice sent to Borrower of default under the Management
Agreement, such notice shall constitute full protection to Lender for any action
taken or omitted to be taken by Lender in good faith, in reliance thereon,
subject to the rights of tenants. Borrower shall notify Lender if Manager
sub-contracts to a third party or an Affiliate any or all of its management
responsibilities under the Management Agreement (which sub-contract shall be
subject to Lender’s reasonable consent).

 

(e)          Borrower shall, from time to time, use commercially reasonable
efforts to obtain from Manager under the Management Agreement such certificates
of estoppel with respect to compliance by Borrower with the terms of the
Management Agreement as may be reasonably requested by Lender.

 

(f)          In the event that the Management Agreement is scheduled to expire
at any time during the term of the Loan, Borrower shall submit to Lender by no
later than 30 days prior to such expiration a draft replacement management
agreement for approval in accordance with the terms and conditions hereof.

 

(g)          Borrower shall have the right to replace Manager or consent to the
assignment of Manager’s rights under the Management Agreement, in each case, to
the extent that (i) no Event of Default has occurred and is continuing, (ii)
Lender receives at least thirty (30) days prior written notice of the same,
(iii) such replacement or assignment (as applicable) will not result in a
Property Document Event and/or any termination or cancellation of any Ground
Lease or any default thereunder and (iv) the applicable New Manager is a
Qualified Manager engaged pursuant to a Qualified Management Agreement.

 

(h)          Without limitation of the foregoing, if the Management Agreement is
terminated or expires (including, without limitation, pursuant to the Assignment
of Management Agreement), comes up for renewal or extension (exclusive of, in
each case, any automatic renewal or extension in accordance with its terms),
ceases to be in full force or effect or is for any other reason no longer in
effect (including, without limitation, in connection with any Sale or Pledge),
then Lender, at its option, may require Borrower to engage, in accordance with
the

 

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terms and conditions set forth herein and in the Assignment of Management
Agreement, a New Manager to manage the Property, which such New Manager shall
(i) to the extent an Event of Default has occurred and is continuing and if
opted by Lender, selected by Lender and subject to the reasonable approval of
Borrower if Lender has not foreclosed on the Property and (ii) be a Qualified
Manager and shall be engaged pursuant to a Qualified Management Agreement.

 

(i)           As conditions precedent to any engagement of a New Manager
hereunder, (i) New Manager and Borrower shall execute an Assignment of
Management Agreement (with such changes thereto as may be required by the Rating
Agencies), (ii) to the extent that such New Manager is an Affiliated Manager,
Borrower shall deliver to Lender a New Non-Consolidation Opinion with respect to
such New Manager and new management agreement and (iii) if requested by Lender,
Borrower shall deliver to Lender evidence that the engagement of such New
Manager will not result in a Property Document Event and/or any termination or
cancellation of any Ground Lease or any default thereunder.

 

(j)           Borrower shall notify Lender in writing, within ten (10) Business
Days following receipt thereof, of Borrower’s receipt of any early termination
fee or similar payment or other termination fee or similar payment paid by any
Manager, and Borrower further covenants and agrees that Borrower shall cause any
such termination fee or payment to be promptly deposited into the Cash
Management Account.

 

(k)          In the event that an Event of Default has occurred and is
continuing and if American Finance Trust, Inc., a Maryland corporation no longer
(A) owns at least a 51% direct or indirect interest in each Borrower and each
SPE Component Entity and/or (B) Controls Borrower and each SPE Component Entity,
then Lender shall have the right to require Borrower to appoint a Qualified
Manager, which is not an Affiliate of Borrower, to manage all Permitted
Self-Management Properties pursuant to a Qualified Management Agreement in
accordance with the terms and conditions of this Agreement. In addition, in the
event that an Individual Property or Properties shall cease to be a Permitted
Self-Management Property, Lender shall have the right to require Borrower to
appoint a Qualified Manager to manage all Permitted Self-Management Properties
self-managed by Borrower pursuant to a Qualified Management Agreement in
accordance with the terms and conditions of this Agreement.

 

(l)           Lender’s consent (not to be unreasonably withheld, conditioned or
delayed) shall be required with respect to any Sale or Pledge of any Affiliated
Manager over which Borrower, any SPE Component Entity and/or their respective
Affiliates has Control, which consent may be conditioned upon receipt of a New
Non-Consolidation Opinion to the extent such Sale or Pledge is to an Affiliate
of Borrower, any SPE Component Entity and/or Guarantor.

 

(m)         Any sums expended by Lender pursuant to this Section shall be deemed
to constitute a portion of the Debt, shall be secured by the lien of the
Security Instrument and the other Loan Documents and shall be immediately due
and payable upon demand by Lender therefor (and to the extent not paid within
five (5) Business Days of demand therefor by Lender shall bear interest at the
Default Rate).

 

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Section 4.16.         Payment for Labor and Materials.

 

(a)          Subject to Section 4.16(b) below, Borrower will promptly pay (or
cause to be paid) when due all bills and costs for labor, materials, and
specifically fabricated materials incurred by or on behalf of Borrower in
connection with each Individual Property (any such bills and costs, a “Work
Charge”) and not permit to exist in respect of any Individual Property or any
part thereof any lien or security interest with respect to such Work Charges,
even though inferior to the liens and the security interests hereof, and in any
event never permit to be created or exist in respect of any Individual Property
or any part thereof any other or additional lien or security interest other than
the liens or security interests created hereby and by the Security Instruments,
except for the Permitted Encumbrances.

 

(b)          After prior written notice to Lender, Borrower, at its own expense,
may contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the validity of any Work Charge, the
applicability of any Work Charge to Borrower or to any Individual Property or
any alleged non-payment of any Work Charge and defer paying the same, provided
that (i) no Event of Default has occurred and is continuing; (ii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any instrument to which Borrower is subject and shall not
constitute a default thereunder and such proceeding shall be conducted in
accordance with all applicable Legal Requirements; (iii) neither the applicable
Individual Property nor any part thereof or interest therein will be in imminent
danger of being sold, forfeited, terminated, cancelled or lost as a result of
the contest of the same; (iv) Borrower shall promptly upon final determination
thereof pay (or cause to be paid) any such contested Work Charge determined to
be valid, applicable and unpaid; (v) such proceeding shall suspend the
collection of such contested Work Charge from the applicable Individual Property
or Borrower shall have paid the same (or shall have caused the same to be paid)
under protest; and (vi) Borrower shall furnish (or cause to be furnished) such
security as may be required in the proceeding, or as may be reasonably requested
by Lender, to insure payment of such Work Charge, together with all interest and
penalties payable in connection therewith. Lender may apply any such security or
part thereof, as necessary to pay for such Work Charge at any time when, in the
reasonable judgment of Lender, the validity, applicability and non-payment of
such Work Charge is finally established or the applicable Individual Property
(or any part thereof or interest therein) shall be in present danger of being
sold, forfeited, terminated, cancelled or lost.

 

Section 4.17.          Performance of Other Agreements. Borrower shall observe
and perform each and every material term to be observed or performed by Borrower
pursuant to the terms of any agreement or recorded instrument affecting or
pertaining to each Individual Property (or any portion thereof) and any
amendments, modifications or changes thereto.

 

Section 4.18.         Debt Cancellation. Borrower shall not cancel or otherwise
forgive or release any claim or debt (other than termination of Leases in
accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower’s business.

 

Section 4.19.          ERISA.

 

(a)          Assuming none of the assets of Lender being used in connection with
the Loan constitute “plan assets” within the meaning of 29 C.F.R. Section
2510.3-101 and Section 3(42) of ERISA, Borrower shall not engage in any
transaction which would cause any obligation, or

 

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action taken or to be taken, hereunder (or the exercise by Lender of any of its
rights hereunder or under the other Loan Documents) to be a non-exempt
prohibited transaction under ERISA.

 

(b)          Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Security Instruments, as requested by Lender in its reasonable discretion, that
(i) Borrower is not an “employee benefit plan” as defined in Section 3(3) of
ERISA, or other retirement arrangement, which is subject to Title I of ERISA or
Section 4975 of the IRS Code, or a “governmental plan” within the meaning of
Section 3(32) of ERISA; (ii) Borrower is not subject to state statutes
regulating investments and fiduciary obligations with respect to governmental
plans (except where a government plan is a counterparty); and (iii) one or more
of the following circumstances is true; provided, that, so long as no Event of
Default has occurred and is continuing, Borrower shall not be required to
deliver such certifications or other evidence more frequently than once in any
twelve month period:

 

(A)                       Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. § 2510.3 101(b)(2);

 

(B)                        Less than 25 percent of each outstanding class of
equity interests in Borrower are held by “benefit plan investors” within the
meaning of 29 C.F.R.§ 2510.3 101(f)(2); or

 

(C)                        Borrower qualifies as an “operating company” or a
“real estate operating company” within the meaning of 29 C.F.R § 2510.3 101(c)
or (e) or an investment company registered under The Investment Company Act of
1940, as amended.

 

(c)          Borrower shall not maintain, sponsor, contribute to or become
obligated to contribute to, or suffer or permit any member of Borrower’s
“controlled group of corporations” to maintain, sponsor, contribute to or become
obligated to contribute to a “defined benefit plan” or a “multiemployer pension
plan”. The terms in quotes above are defined in Section 3.7 of this Agreement.

 

Section 4.20.         No Joint Assessment. Borrower shall not suffer, permit or
initiate the joint assessment of any Individual Property with (a) any other real
property constituting a tax lot separate from the applicable Individual
Property, or (b) any portion of the applicable Individual 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 the applicable Individual Property.

 

Section 4.21.         Alterations. Notwithstanding anything contained herein
(including, without limitation, Article 8 hereof) to the contrary, Lender’s
prior approval shall be required in connection with (I) any alterations by
Borrower to any Improvements with respect to any Individual Property (the
“Landlord Alterations”) and (II) any alterations to any Improvements with
respect to any Individual Property by any Tenant under any Lease to the extent
that Borrower has the right to consent to, or approve, such alterations, in each
instance (a) that may have a Material Adverse Effect, (b) the cost of which
(including any related alteration,

 

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improvement or replacement) is reasonably anticipated to exceed the applicable
Alteration Threshold or (c) that are structural in nature, which approval, with
respect to each of the preceding clauses (a) through (c) may be granted or
withheld in Lender’s reasonable discretion. If the total unpaid amounts incurred
and to be incurred with respect to any such Landlord Alterations to the
Improvements shall at any time exceed the applicable Alteration Threshold,
Borrower shall promptly deliver to Lender as security for the payment of such
amounts and as additional security for Borrower’s obligations under the Loan
Documents any of the following: (i) cash, (ii) U.S. Obligations, (iii) other
security reasonably acceptable to Lender, (provided that Lender shall have
received a Rating Agency Confirmation as to the form and issuer of same), (iv) a
completion guaranty from Guarantor (provided that Lender shall have received a
New Non-Consolidation Opinion and a Rating Agency Confirmation with respect to
the same) or (v) a completion bond (provided that Lender shall have received a
Rating Agency Confirmation as to the form and issuer of same). Such security
shall be in an amount equal to the excess of the total unpaid amounts incurred
and to be incurred with respect to such alterations to the Improvements over the
applicable Alteration Threshold. To the extent that the Deemed Approval
Requirements are fully satisfied in connection with any Borrower request for
Lender consent under this Section 4.21 and Lender thereafter fails to approve or
disapprove the same, Lender’s approval shall be deemed given with respect to the
matter for which approval was requested.

 

Notwithstanding anything to the contrary in this Section 4.21, in the event that
Borrower must perform any Emergency Alteration, Lender shall be deemed to have
approved each such Emergency Alteration provided that (i) it would be
impracticable, as reasonably determined by Borrower, under the circumstances to
obtain Lender’s prior approval thereof despite Borrower using its commercially
reasonable efforts to contact Lender to obtain such approval, or (ii) Lender
shall have failed to respond to any request for such approval made by Borrower
using its commercially reasonable efforts to contact Lender prior to the date on
which such Emergency Alteration is required, as reasonably determined by
Borrower, under the circumstances to be made. Borrower acknowledges and agrees
to the extent that such Emergency Alteration exceeds the Alteration Threshold,
Borrower shall comply with the second sentence of the paragraph immediately
above. “Emergency Alteration” shall mean any alteration to an Individual
Property required to be made by any Borrower by reason of the occurrence of an
unexpected event that is reasonably likely to cause imminent harm to persons or
property at an Individual Property or that is reasonably likely to cause a
default beyond all applicable notice and cure periods by a Borrower under a
Lease.

 

Section 4.22.         Property Document Covenants.

 

(a)          Without limiting the other provisions of this Agreement and the
other Loan Documents, Borrower shall (i) promptly perform and/or observe, in all
material respects, all of the material covenants and agreements required to be
performed and observed by it under the REAs and do all things reasonably
necessary to preserve and to keep unimpaired its material rights thereunder;
(ii) promptly notify Lender of any material default by Borrower under the REAs
of which it is aware; (iii) enforce the performance and observance of all of the
material covenants and agreements required to be performed and/or observed under
the REAs in a commercially reasonable manner; (iv) cause the applicable
Individual Property to which a REA applies to be operated, in all material
respects, in accordance with the REAs; and (v) not, without the prior written
consent of Lender (not to be unreasonably withheld, conditioned or delayed),

 

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(A) enter into any new REA or replace or execute modifications to any existing
REA or renew or extend the same (exclusive of, in each case, any automatic
renewal or extension in accordance with its terms), (B) surrender, terminate or
cancel the REAs, (C) reduce or consent to the reduction of the term of the REAs,
(D) increase or consent to the increase of the amount of any charges payable by
Borrower under the REAs, (E) otherwise modify, change, supplement, alter or
amend, or waive or release any of its rights and remedies under, the REAs in any
material respect or (F) following the occurrence and during the continuance of
an Event of Default, exercise any rights, make any decisions, grant any
approvals or otherwise take any material action under the Property Documents.

 

(b)          Borrower shall (i) pay (or cause to be paid) all rents, additional
rents and other sums required to be paid by Borrower, as tenant under and
pursuant to the provisions of each of the Valdosta Bond Documents when due and
payable thereunder, (ii) diligently perform and observe (or cause to be
performed and observed) all of the terms, covenants and conditions of the
Valdosta Bond Documents on the part of Borrower, as tenant thereunder, (iii)
promptly notify Lender of the giving of any notice by the Valdosta-Lowndes
County Industrial Authority under the Valdosta Bond Documents to Borrower of any
default by Borrower and deliver to Lender a true copy of each such notice within
seven (7) Business Days of receipt, and (iv) promptly notify Lender of any
bankruptcy, reorganization or insolvency of the Valdosta-Lowndes County
Industrial Authority or of any notice thereof, and deliver to Lender a true copy
of such notice within seven (7) Business Days of Borrower’s receipt.

 

(c)          Except in connection with Borrower’s acquisition of fee title to
the Individual Property demised pursuant to the Valdosta Bond Documents in
accordance with subclause (d) below, Borrower shall not, without the prior
consent of Lender, surrender the leasehold estate created by the Valdosta Bond
Documents or terminate or cancel the Valdosta Bond Documents or modify, change,
supplement, alter or amend the Valdosta Bond Documents, either orally or in
writing, and if Borrower shall default in the performance or observance of any
term, covenant or condition of the Valdosta Bond Documents on the part of
Borrower and shall fail to cure the same prior to the expiration of any
applicable cure period provided thereunder, Lender shall have the right, but
shall be under no obligation, to pay any sums and to perform any act or take any
action as may be appropriate to cause all of the terms, covenants and conditions
of the Valdosta Bond Documents on the part of Borrower to be performed or
observed on behalf of Borrower, to the end that the rights of Borrower in, to
and under the Valdosta Bond Documents shall be kept unimpaired and free from
default.

 

(d)          Borrower shall purchase the fee title to the Individual Property
demised pursuant to the Valdosta Bond Documents as and when required pursuant to
the Valdosta Bond Documents and in connection therewith, Borrower shall pay all
amounts due under the Valdosta Bond Documents, including, without limitation,
rent payments, reasonable attorney’s fees and principal and interest payments on
the Valdosta Bond. Borrower agrees, at its sole cost and expense, including
without limitation, Lender’s reasonable attorneys’ fees, to provide to Lender a
new Title Insurance Policy (or an endorsement to the Title Insurance Policy) for
the Individual Property demised pursuant to the Valdosta Bond Documents insuring
that the lien of the Security Instrument is a first lien on such fee title and
deliver such other certificates, opinions, documents and instruments as Lender
may reasonably request in connection therewith.

 

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(e)          Notwithstanding anything contained in the Valdosta Bond Documents
to the contrary, Borrower shall not, without the prior written consent of
Lender, sublet any portion of the leasehold estate created by the Valdosta Bond
Documents except in accordance with the express terms and conditions of this
Agreement.

 

Section 4.23.         Ground Lease Covenants. Without limitation of the other
provisions herein, each Borrower makes the following covenants with respect to
each Ground Lease:

 

(a)          Borrower shall (i) pay (or cause to be paid) all rents, additional
rents and other sums required to be paid by Borrower, as tenant under and
pursuant to the provisions of each Ground Lease when due and payable thereunder,
(ii) diligently perform and observe (or cause to be performed and observed) all
of the terms, covenants and conditions of each Ground Lease on the part of
Borrower, as tenant thereunder, (iii) promptly notify Lender of the giving of
any notice by the landlord under any Ground Lease to Borrower of any default by
Borrower and deliver to Lender a true copy of each such notice within seven (7)
Business Days of receipt, and (iv) promptly notify Lender of any bankruptcy,
reorganization or insolvency of the landlord under any Ground Lease or of any
notice thereof, and deliver to Lender a true copy of such notice within seven
(7) Business Days of Borrower’s receipt.

 

(b)          Borrower shall not, without the prior consent of Lender, surrender
the leasehold estate created by any Ground Lease or terminate or cancel any
Ground Lease or modify, change, supplement, alter or amend any Ground Lease,
either orally or in writing, and if Borrower shall default in the performance or
observance of any term, covenant or condition of any Ground Lease on the part of
Borrower and shall fail to cure the same prior to the expiration of any
applicable cure period provided thereunder, Lender shall have the right, but
shall be under no obligation, to pay any sums and to perform any act or take any
action as may be appropriate to cause all of the terms, covenants and conditions
of such Ground Lease on the part of Borrower to be performed or observed on
behalf of Borrower, to the end that the rights of Borrower in, to and under such
Ground Lease shall be kept unimpaired and free from default.

 

(c)          Borrower shall exercise each individual option, if any, to extend
or renew the term of each Ground Lease within sixty (60) days prior to the
expiration of such Ground Lease (the “Renewal Deadline”), and Borrower hereby
expressly authorizes and appoints Lender its attorney-in-fact to exercise any
such option in the name of and upon behalf of Borrower exercisable upon an Event
of Default, which power of attorney shall be irrevocable and shall be deemed to
be coupled with an interest.

 

(d)          Notwithstanding anything contained in any Ground Lease to the
contrary, Borrower shall not, without prior written consent of Lender, sublet
any portion of the leasehold estate created by the Ground Lease except in
accordance with the express terms and conditions of this Agreement.

 

Section 4.24.         Embargoed Person. Each Borrower Party and each Affiliated
Manager has performed and shall perform reasonable due diligence to insure that
at all times throughout the term of the Loan, including after giving effect to
any Sale or Pledge or other transfer permitted pursuant to the Loan Documents,
(a) none of the funds or other assets of any Borrower Party and/or any
Affiliated Manager constitute property of, or are beneficially owned, directly
or

 

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indirectly, by any Embargoed Person; (b) no Embargoed Person has any interest of
any nature whatsoever in any Borrower Party or any Affiliated Manager, as
applicable, with the result that the investment in any Borrower Party or any
Affiliated Manager, as applicable (whether directly or indirectly), is
prohibited by law or the Loan is in violation of law; and (c) none of the funds
of any Borrower Party or any Affiliated Manager, as applicable, have been
derived from, or are the proceeds of, any unlawful activity, including money
laundering, terrorism or terrorism activities, with the result that the
investment in any Borrower Party or any such Affiliated Manager, as applicable
(whether directly or indirectly), is prohibited by law or the Loan is in
violation of law, or may cause any Individual Property (or any portion thereof)
to be subject to forfeiture or seizure. Notwithstanding the foregoing, the
representations, warrants and covenants above are made only to Borrower’s
knowledge with respect to the direct or indirect ownership of any shares of
stock in American Finance Trust, Inc., a Maryland corporation that are listed on
the New York Stock Exchange, NASDAQ Global Select Market or another nationally
recognized stock exchange. Any violation of the foregoing shall, at Lender’s
option, constitute an Event of Default hereunder.

 

ARTICLE 5.

 

ENTITY COVENANTS

 

Section 5.1.          Single Purpose Entity/Separateness.

 

(a)          Each Borrower has not since its formation and will not:

 

(i)           engage in any business or activity other than the leasing,
ownership, operation and maintenance of the applicable Individual Property, and
activities incidental thereto;

 

(ii)          acquire or own any assets other than (A) the applicable Individual
Property and/or Individual Properties, and (B) such incidental Personal Property
as may be necessary for the ownership, leasing, maintenance and operation of
such applicable Individual Property or Individual Properties, as applicable;

 

(iii)         merge into or consolidate with any Person, or dissolve, terminate,
liquidate in whole or in part, transfer or otherwise dispose of all or
substantially all of its assets or change its legal structure;

 

(iv)         fail to observe all organizational formalities, or fail to comply
with the provisions of its organizational documents, or fail to preserve its
existence as an entity duly organized, validly existing and in good standing (if
applicable) under the applicable Legal Requirements of the jurisdiction of its
organization or formation, or amend, modify, terminate or fail to comply with
the special purpose entity/bankruptcy remote provisions of its organizational
documents (provided, that, such organizational documents may be amended or
modified to the extent that, in addition to the satisfaction of the requirements
related thereto set forth therein, Lender’s prior written consent and, if
required by Lender, a Rating Agency Confirmation are first obtained);

 

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(v)         own any subsidiary, or make any investment in, any Person (other
than, with respect to any SPE Component Entity, in the applicable Borrower);

 

(vi)        commingle its funds or assets with the funds or assets of any other
Person (except for one or more other Borrowers);

 

(vii)       incur any Indebtedness, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than (A) the Debt, and/or (B)
trade and operational indebtedness incurred in the ordinary course of business
with trade creditors or in the routine administration of its affairs, provided
such indebtedness is (1) unsecured, (2) not evidenced by a note and (3) due not
more than sixty (60) days past the date incurred and paid on or prior to such
date and/or (C) such other liabilities as are permitted pursuant to this
Agreement; provided however, the aggregate amount of the indebtedness described
in (B) shall not exceed (I) at any time with respect to any Individual Property
with an Allocated Loan Amount less than $5,000,000, five percent (5%) of the
Allocated Loan Amount with respect to such Individual Property, (II) at any time
with respect to any Individual Property with an Allocated Loan Amount equal to
or greater than $5,000,000, two percent (2%) of the Allocated Loan Amount with
respect to such Individual Property and (III) at any time with respect to all
Properties in the aggregate, two percent (2%) of the outstanding amount of the
Loan.  No Indebtedness other than the Debt may be secured (senior, subordinate
or pari passu) by any Individual Property;

 

(viii)      fail to maintain all of its books, records, financial statements and
bank accounts separate from those of any other Person (except for one or more
other Borrowers). Borrower’s assets will not be listed as assets on the
financial statement of any other Person (except for one or more other
Borrowers); provided, however, that Borrower’s assets may be included in a
consolidated financial statement of its Affiliates. Borrower has maintained and
will maintain its books, records, resolutions and agreements as official
records;

 

(ix)         except for capital contributions and distributions permitted under
the terms and conditions of its organizational documents and properly reflected
in its books and records, enter into any contract or agreement with any partner,
member, shareholder, principal or Affiliate, except, in each case, upon terms
and conditions that are substantially similar to those that would be available
on an arm’s-length basis with unaffiliated third parties;

 

(x)          maintain its assets in such a manner that it will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person;

 

(xi)         assume or guaranty the debts of any other Person, hold itself out
to be responsible for the debts of any other Person, or otherwise pledge its
assets for the benefit of any other Person or hold out its credit as being
available to satisfy the obligations of any other Person;

 

(xii)        make any loans or advances under any loan to any Person;

 

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(xiii)       fail to file its own tax returns, separate from those of any other
Person, except (A) to the extent that Borrower is treated as a “disregarded
entity” for tax purposes and is not required to file any tax return by
applicable Legal Requirements, or (B) if Borrower is required to file
consolidated tax returns by applicable Legal Requirements;

 

(xiv)      fail to (A) hold itself out to the public and identify itself, in
each case, as a legal entity separate and distinct from any other Person and not
as a division or part of any other Person, (B) conduct its business solely in
its own name, (C) hold its assets in its own name (provided that it may
commingle its assets with one or more other Borrowers) or (D) correct any known
misunderstanding regarding its separate identity;

 

(xv)       fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations (to the extent there exists sufficient cash
flow from the applicable Individual Property to do so); provided, however, that
the foregoing shall not require any owners of Borrower to make additional
capital contributions to Borrower;

 

(xvi)      without the prior unanimous written consent of all of its partners,
shareholders or members, as applicable, the prior unanimous written consent of
its board of directors or managers, as applicable, and the prior written consent
of each Independent Director (regardless of whether such Independent Director is
engaged at the Borrower or SPE Component Entity level), take any Bankruptcy
Action with respect to Borrower or any SPE Component Entity (provided, that,
none of any member, shareholder or partner (as applicable) of Borrower or any
SPE Component Entity or any board of directors or managers (as applicable) of
Borrower or any SPE Component Entity may vote on or otherwise authorize the
taking of any of the foregoing actions unless, in each case, there are at least
two (2) Independent Directors then serving in such capacity in accordance with
the terms of the applicable organizational documents and each of such
Independent Directors has consented to such foregoing action);

 

(xvii)     fail to allocate shared expenses (including, without limitation,
shared office space) or fail to use separate stationery, invoices and checks;

 

(xviii)    fail to pay its own liabilities (including, without limitation,
salaries of its own employees and a fairly allocated portion of any personnel
and overhead expenses that it shares with any Affiliate) from its own funds or
fail to maintain a sufficient number of employees in light of its contemplated
business operations (in each case to the extent there exists sufficient cash
flow from the applicable Individual Property to do so and except for payment of
any Borrower’s liabilities by one or more other Borrowers and sharing of
employees, personnel or overhead expenses by one or more Borrowers); provided,
however, that the foregoing shall not require any owners of Borrower to make
additional capital contributions to Borrower;

 

(xix)       acquire obligations or securities of its partners, members,
shareholders or other Affiliates, as applicable;

 

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(xx)        identify its partners, members, shareholders or other Affiliates, as
applicable, as a division or part of it; or

 

(xxi)       fail to conduct its business so that the material factual
assumptions made with respect to Borrower in the Non-Consolidation Opinion or in
any New Non-Consolidation Opinion cease to be materially true.

 

(b)          If Borrower is a partnership or limited liability company (other
than an Acceptable LLC), each general partner (in the case of a partnership) and
at least one member (in the case of a limited liability company) of Borrower, as
applicable, shall be a corporation or an Acceptable LLC (each an “SPE Component
Entity”) whose sole asset is its interest in Borrower (and personal property
incidental, ancillary or related to, or necessary or appropriate for, its
ownership of such interest). Each SPE Component Entity (i) will at all times
comply with each of the covenants, terms and provisions contained in Section
5.1(a)(iii) - (vi) (inclusive) and (viii) – (xxi) (inclusive) and, if such SPE
Component Entity is an Acceptable LLC, Section 5.1(c) and (d) hereof, as if such
representation, warranty or covenant was made directly by such SPE Component
Entity; (ii) will not engage in any business or activity unrelated to owning an
interest in Borrower (and personal property incidental, ancillary or related to,
or necessary or appropriate for, its ownership of such interest); (iii) will not
acquire or own any assets other than its partnership, membership, or other
equity interest in Borrower (and personal property incidental, ancillary or
related to, or necessary or appropriate for, its ownership of such interest);
(iv) will at all times continue to own no less than a 0.5% direct equity
ownership interest in Borrower; (v) will not incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any obligation), except
for trade payables not to exceed $10,000 which are incurred in the routine
administration of its affairs, are unsecured, are not evidenced by a note and
are due not more than ninety (90) days past the date incurred and are either
paid on or prior to such date or are being contested in good faith; and (vi)
will cause Borrower to comply with the provisions of this Section 5.1. Lender
acknowledges that as of the Closing Date each Borrower (other than ARC
HR5HOTX001, LP) is an Acceptable LLC and there are no SPE Component Entities
other than ARC HR5HOTX001 GP, LLC.

 

(c)          In the event Borrower or the SPE Component Entity is an Acceptable
LLC, the limited liability company agreement of Borrower or the SPE Component
Entity (as applicable) (the “LLC Agreement”) shall provide that (i) upon the
occurrence of any event that causes the last remaining member of Borrower or the
SPE Component Entity (as applicable) (“Member”) to cease to be the member of
Borrower or the SPE Component Entity (as applicable) (other than (A) upon an
assignment by Member of all of its limited liability company interest in
Borrower or the SPE Component Entity (as applicable) and the admission of the
transferee in accordance with the Loan Documents and the LLC Agreement, or (B)
the resignation of Member and the admission of an additional member of Borrower
or the SPE Component Entity (as applicable) in accordance with the terms of the
Loan Documents and the LLC Agreement), any person acting as Independent Director
of Borrower or the SPE Component Entity (as applicable) shall, without any
action of any other Person and simultaneously with the Member ceasing to be the
member of Borrower or the SPE Component Entity (as applicable) automatically be
admitted to Borrower or the SPE Component Entity (as applicable) as a member
with a 0% economic interest (“Special Member”) and shall continue Borrower or
the SPE Component Entity (as applicable) without dissolution and (ii) Special
Member may not resign from Borrower or the SPE Component Entity

 

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(as applicable) or transfer its rights as Special Member unless (A) a successor
Special Member has been admitted to Borrower or the SPE Component Entity (as
applicable) as a Special Member in accordance with requirements of Delaware law
and (B) after giving effect to such resignation or transfer, there remains at
least two (2) Independent Directors of the SPE Component Entity or Borrower (as
applicable) in accordance with Section 5.2 below. The LLC Agreement shall
further provide that (i) Special Member shall automatically cease to be a member
of Borrower or the SPE Component Entity (as applicable) upon the admission to
Borrower or the SPE Component Entity (as applicable) of the first substitute
member, (ii) Special Member shall be a member of Borrower or the SPE Component
Entity (as applicable) that has no interest in the profits, losses and capital
of Borrower or the SPE Component Entity (as applicable) and has no right to
receive any distributions of the assets of Borrower or the SPE Component Entity
(as applicable), (iii) pursuant to the applicable provisions of the limited
liability company act of the State of Delaware (the “Act”), Special Member shall
not be required to make any capital contributions to Borrower or the SPE
Component Entity (as applicable) and shall not receive a limited liability
company interest in Borrower or the SPE Component Entity (as applicable), (iv)
Special Member, in its capacity as Special Member, may not bind Borrower or the
SPE Component Entity (as applicable) and (v) except as required by any mandatory
provision of the Act, Special Member, in its capacity as Special Member, shall
have no right to vote on, approve or otherwise consent to any action by, or
matter relating to, Borrower or the SPE Component Entity (as applicable)
including, without limitation, the merger, consolidation or conversion of
Borrower or the SPE Component Entity (as applicable); provided, however, such
prohibition shall not limit the obligations of Special Member, in its capacity
as Independent Director, to vote on such matters required by the Loan Documents
or the LLC Agreement. In order to implement the admission to Borrower or the SPE
Component Entity (as applicable) of Special Member, Special Member shall execute
a counterpart to the LLC Agreement. Prior to its admission to Borrower or the
SPE Component Entity (as applicable) as Special Member, Special Member shall not
be a member of Borrower or the SPE Component Entity (as applicable), but Special
Member may serve as an Independent Director of Borrower or the SPE Component
Entity (as applicable).

 

(d)          The LLC Agreement shall further provide that (i) upon the
occurrence of any event that causes the Member to cease to be a member of
Borrower or the SPE Component Entity (as applicable) to the fullest extent
permitted by law, the personal representative of Member shall, within ninety
(90) days after the occurrence of the event that terminated the continued
membership of Member in Borrower or the SPE Component Entity (as applicable)
agree in writing (A) to continue Borrower or the SPE Component Entity (as
applicable) and (B) to the admission of the personal representative or its
nominee or designee, as the case may be, as a substitute member of Borrower or
the SPE Component Entity (as applicable) effective as of the occurrence of the
event that terminated the continued membership of Member in Borrower or the SPE
Component Entity (as applicable), (ii) any action initiated by or brought
against Member or Special Member under any Creditors Rights Laws shall not cause
Member or Special Member to cease to be a member of Borrower or the SPE
Component Entity (as applicable) and upon the occurrence of such an event, the
business of Borrower or the SPE Component Entity (as applicable) shall continue
without dissolution and (iii) each of Member and Special Member waives any right
it might have to agree in writing to dissolve Borrower or the SPE Component
Entity (as applicable) upon the occurrence of any action initiated by or brought
against Member or Special Member under any Creditors Rights Laws, or the
occurrence of an event that causes

 

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Member or Special Member to cease to be a member of Borrower or the SPE
Component Entity (as applicable).

 

(e)          With respect to each Borrower, (i) such Borrower is and always has
been duly formed, validly existing and in good standing in the state in which it
was formed and in any other jurisdictions where it is qualified to do business;
(ii) such Borrower has no outstanding judgments or liens of any nature against
it; (iii) such Borrower is in compliance in all material respects with all laws,
regulations and orders applicable to such Borrower and has received all material
permits necessary for such Borrower to operate and for which a failure to
possess would materially and adversely affect the condition, financial or
otherwise, of Borrower; (iv) no Borrower is aware of any pending or threatened
litigation involving such Borrower that, if adversely determined, might
materially adversely affect the condition (financial or otherwise) of such
Borrower, or the condition or ownership of the property owned by such Borrower;
(v) such Borrower is not involved in any material dispute with any taxing
authority; (vi) such Borrower has paid or has caused to be paid all real estate
taxes that are due and payable with respect to its applicable Individual
Property except as otherwise permitted pursuant to this Agreement; (vii) such
Borrower is not now, a party to any lawsuit, arbitration, summons or legal
proceeding that, if adversely determined, might materially adversely affect the
condition (financial or otherwise) of such Borrower or the condition or
ownership of the property owned by such Borrower nor has Borrower ever been a
party to any lawsuit, arbitration, summons or legal proceeding that resulted in
a judgment against it that has not been paid in full or otherwise resolved;
(viii) all financial statements that Borrower has provided to Lender are true,
correct and complete in all material respects and reflect an accurate view of
the financial condition of Borrower (taken as a whole) as of the date hereof;
(ix) except as set forth in the Environmental Reports, the most recent Phase One
environmental audit for the applicable Individual Property owned by such
Borrower recommended no action; (x) such Borrower has no material contingent or
actual obligations not related to its applicable Individual Property and (xi) at
all times since its formation to the date hereof, such Borrower has complied
with the separateness covenants set forth in its organizational documents and
has been a single purpose entity.

 

Section 5.2.          Independent Director.

 

(a)          The organizational documents of each Borrower (to the extent such
Borrower is a corporation or an Acceptable LLC) or the SPE Component Entity, as
applicable, shall provide that at all times there shall be at least two duly
appointed independent directors or managers of such entity (each, an
“Independent Director”) who each shall (I) not have been at the time of each
such individual’s initial appointment, and shall not have been at any time
during the preceding five years, and shall not be at any time while serving as
Independent Director, either (i) a shareholder (or other equity owner) of, or an
officer, director (other than in its capacity as Independent Director), partner,
member or employee of, any Borrower or any of its respective shareholders,
partners, members, subsidiaries or Affiliates, (ii) a customer of, or supplier
to, or other Person who derives any of its purchases or revenues from its
activities with, any Borrower or any of its respective shareholders, partners,
members, subsidiaries or Affiliates, (iii) a Person who Controls or is under
common Control with any such shareholder, officer, director, partner, member,
employee supplier, customer or other Person, or (iv) a member of the immediate
family of any such shareholder, officer, director, partner, member, employee,
supplier, customer or other Person (II) shall have, at the time of their
appointment, had at least three (3) years

 

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experience in serving as an independent director and (III) be employed by, in
good standing with and engaged by Borrower in connection with, in each case, an
Approved ID Provider.

 

(b)          The organizational documents of each Borrower and the SPE Component
Entity shall further provide that (I) the board of directors or managers of
Borrower and the SPE Component Entity and the constituent equity owners of such
entities (constituent equity owners, the “Constituent Members”) shall not take
any action set forth in Section 5.1(a)(xvi) or any other action which, under the
terms of any organizational documents of Borrower or the SPE Component Entity,
requires the vote of the Independent Directors unless, in each case, at the time
of such action there shall be at least two Independent Directors engaged as
provided by the terms hereof and such Independent Directors vote in favor of or
otherwise consent to such action; (II) any resignation, removal or replacement
of any Independent Director shall not be effective without (1) prior written
notice to Lender and the Rating Agencies (which such prior written notice must
be given on the earlier of five (5) days or three (3) Business Days prior to the
applicable resignation, removal or replacement) and (2) evidence that the
replacement Independent Director satisfies the applicable terms and conditions
hereof and of the applicable organizational documents (which such evidence must
accompany the aforementioned notice); (III) to the fullest extent permitted by
applicable law, including Section 18-1101(c) of the Act and notwithstanding any
duty otherwise existing at law or in equity, the Independent Directors shall
consider only the interests of the Constituent Members and Borrower and any SPE
Component Entity (including Borrower’s and any SPE Component Entity’s respective
creditors) in acting or otherwise voting on the matters provided for herein and
in Borrower’s and SPE Component Entity’s organizational documents (which such
fiduciary duties to the Constituent Members and Borrower and any SPE Component
Entity (including Borrower’s and any SPE Component Entity’s respective
creditors), in each case, shall be deemed to apply solely to the extent of their
respective economic interests in Borrower or SPE Component Entity (as
applicable) exclusive of (x) all other interests (including, without limitation,
all other interests of the Constituent Members), (y) the interests of other
Affiliates of the Constituent Members, Borrower and SPE Component Entity and (z)
the interests of any group of Affiliates of which the Constituent Members,
Borrower or SPE Component Entity is a part)); (IV) other than as provided in
subsection (III) above, the Independent Directors shall not have any fiduciary
duties to any Constituent Members, any directors of Borrower or SPE Component
Entity or any other Person; (V) the foregoing shall not eliminate the implied
contractual covenant of good faith and fair dealing under applicable law; and
(VI) to the fullest extent permitted by applicable law, including Section
18-1101(e) of the Act, an Independent Director shall not be liable to Borrower,
SPE Component Entity, any Constituent Member or any other Person for breach of
contract or breach of duties (including fiduciary duties), unless the
Independent Director acted in bad faith or engaged in willful misconduct.

 

Section 5.3.          Change of Name, Identity or Structure. Borrower shall not
change (or permit to be changed) Borrower’s or the SPE Component Entity’s (a)
name, (b) identity (including its trade name or names), (c) principal place of
business set forth on the first page of this Agreement or (d) if not an
individual, Borrower’s or the SPE Component Entity’s corporate, partnership or
other structure or state of formation, without, in each case, notifying Lender
of such change in writing at least thirty (30) days prior to the effective date
of such change and, in the case of a change in Borrower’s or the SPE Component
Entity’s structure or state of formation, without first obtaining the prior
written consent of Lender (not to be unreasonably

 

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withheld, conditioned or delayed) and, if required by Lender, a Rating Agency
Confirmation with respect thereto. Borrower shall execute and deliver to Lender,
prior to or contemporaneously with the effective date of any such change, any
financing statement or financing statement change required by Lender to
establish or maintain the validity, perfection and priority of the security
interest granted herein. At the request of Lender, Borrower shall execute a
certificate in form reasonably satisfactory to Lender listing the trade names
under which Borrower or the SPE Component Entity intends to operate the
applicable Individual Property, and representing and warranting that Borrower or
the SPE Component Entity does business under no other trade name with respect to
the applicable Individual Property.

 

Section 5.4.          Business and Operations. Borrower will continue to engage
in the businesses now conducted by it as and to the extent the same are
necessary for the ownership, maintenance, leasing, management and operation of
each Individual Property. Borrower will qualify to do business and will remain
in good standing under the laws of the State and each other applicable
jurisdiction in which each Individual Property is located, in each case, as and
to the extent the same are required for the ownership, maintenance, leasing,
management and operation of each Individual Property.

 

ARTICLE 6.

 

NO SALE OR ENCUMBRANCE

 

Section 6.1.          Transfer Definitions. As used herein and in the other Loan
Documents, “Restricted Party” shall mean Borrower, Guarantor, any SPE Component
Entity or any shareholder, partner, member or non-member manager, or any direct
or indirect legal or beneficial owner of Borrower, Guarantor or any SPE
Component Entity; and a “Sale or Pledge” shall mean a voluntary or involuntary
sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment,
grant of any options with respect to, or any other transfer or disposition of
(directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) of a legal or
beneficial interest.

 

Section 6.2.          No Sale/Encumbrance.

 

(a)          It shall be an Event of Default hereof if, without the prior
written consent of Lender, a Sale or Pledge of the Property or any part thereof
or any legal or beneficial interest therein (including, without limitation, the
Loan and/or Loan Documents) occurs, a Sale or Pledge of an interest in any
Restricted Party occurs and/or Borrower shall acquire any real property in
addition to the real property owned by Borrower as of the Closing Date (each of
the foregoing, collectively, a “Prohibited Transfer”), other than pursuant (i)
to Leases of space in the Improvements to Tenants in accordance with the
provisions of Section 4.14 and (ii) as permitted pursuant to the express terms
of this Article 6.

 

(b)          A Prohibited Transfer shall include, but not be limited to, (i) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (ii) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a Tenant thereunder or a sale, assignment or other transfer of, or
the grant of a security interest in, Borrower’s right, title and interest in and
to any (A) Leases or

 

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any Rents, (B) Property Documents or (C) Ground Leases; (iii) if a Restricted
Party is a corporation, any merger, consolidation or Sale or Pledge of such
corporation’s stock or the creation or issuance of new stock in one or a series
of transactions; (iv) if a Restricted Party is a limited or general partnership
or joint venture, any merger or consolidation or the change, removal,
resignation or addition of a general partner or the Sale or Pledge of the
partnership interest of any general or limited partner or any profits or
proceeds relating to such Sale or Pledge or the creation or issuance of new
limited partnership interests; (v) if a Restricted Party is a limited liability
company, any merger or consolidation or the change, removal, resignation or
addition of a managing member or non-member manager (or if no managing member,
any member) or the Sale or Pledge of the membership interest of any member or
any profits or proceeds relating to such Sale or Pledge; (vi) if a Restricted
Party is a trust or nominee trust, any merger, consolidation or the Sale or
Pledge of the legal or beneficial interest in a Restricted Party or the creation
or issuance of new legal or beneficial interests; (vii) the removal or the
resignation of Manager (including, without limitation, an Affiliated Manager) or
the engagement of a New Manager, in each case, other than in accordance with
Section 4.15; (viii) any action for partition of the Property (or any portion
thereof or interest therein) or any similar action instituted or prosecuted by
Borrower or by any other Person, pursuant to any contractual agreement or other
instrument or under applicable law (including, without limitation, common law)
and/or any other action instituted by (or at the behest of) Borrower or its
Affiliates or consented to or acquiesced in by Borrower or its Affiliates which
results in a Property Document Event and/or any termination or cancellation of
any Ground Lease or any default thereunder beyond all applicable notice and cure
periods and/or (ix) the incurrence of any property-assessed clean energy loans
or similar indebtedness with respect to Borrower and/or the Property, including,
without limitation, if such loans or indebtedness are made or otherwise provided
by any Governmental Authority and/or secured or repaid (directly or indirectly)
by any taxes or similar assessments.

 

Section 6.3.          Permitted Equity Transfers.

 

(a)          Notwithstanding the restrictions contained in this Article 6, the
following equity transfers shall be permitted without Lender’s consent: (i) a
transfer (but not a pledge) by devise or descent or by operation of law upon the
death of a Restricted Party or any member, partner or shareholder of a
Restricted Party, (ii) the transfer (but not the pledge), in one or a series of
transactions, of the stock, partnership interests or membership interests (as
the case may be) in a Restricted Party, (iii) (A) the sale, transfer or issuance
of shares of stock in Guarantor or in any Restricted Party that, in each
instance, is a publicly traded entity, provided such shares of stock are listed
on the New York Stock Exchange, NASDAQ Global Select Market or another
nationally recognized stock exchange or (B) the sale, transfer or issuance of
shares of stock in American Finance Trust, Inc., a Maryland corporation provided
that such shares of stock are sold, transferred or issued in the ordinary course
of business through licensed broker dealers in accordance with all applicable
Legal Requirements to third party investors in a manner consistent with previous
offerings conducted by American Finance Trust, Inc., a Maryland corporation or
its Affiliates as of the Closing Date, (iv) the transfer (but not the pledge),
in one or a series of transactions, of the stock, partnership interests or
membership interests (as the case may be) by Guarantor or any direct or indirect
legal or beneficial owner of Guarantor for estate planning purposes to the
transferor’s spouse, child, parent, grandparent, grandchild, niece, nephew,
aunt, uncle or other immediate family members of such owner, or to a trust for
the

 

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benefit of such spouse, child, parent, grandparent, grandchild, niece, nephew,
aunt, uncle or other immediate family members and (v) the pledge to a Qualified
Lender of the right of Guarantor or any direct or indirect legal or beneficial
owner of Guarantor to receive distributions, and the granting of a security
interest to such Qualified Lender in such distributions, in an amount such that
Guarantor shall continue to comply with the net worth and liquidity requirements
provided in the Guaranty (provided, that, such pledge to a Qualified Lender
shall not include the transfer or pledge of any direct and/or indirect stock,
partnership, membership and/or other equity interests in any Restricted Party;
and provided, further, that, the foregoing provisions of clauses (i), (ii),
(iii), (iv) and (v) above shall not be deemed to waive, qualify or otherwise
limit Borrower’s obligation to comply (or to cause the compliance with) the
other covenants set forth herein and in the other Loan Documents (including,
without limitation, the covenants contained herein relating to ERISA matters));
provided, further, that, with respect to the transfers listed in clauses (i),
(ii), (iii), (iv) and/or (v) above, (A) Lender shall receive not less than
thirty (30) days prior written notice of (y) such transfers and (z) with respect
to the pledge set forth in clause (v) above, the exercise of any rights or
remedies by such Qualified Lender with respect to such pledge (provided, that,
for purposes of clarification, with respect to the transfers contemplated in
subsection (i) above, the aforesaid notice shall only be deemed to be required
thirty (30) days following Borrower’s knowledge thereof and with respect to the
transfers contemplated in subsection (iii) above, no notice of such transfer is
required); (B) no such transfers shall result in a change in Control of
Guarantor or Affiliated Manager; (C) after giving effect to such transfers,
Guarantor shall (I) own at least a 51% direct or indirect equity ownership
interest in each of each Borrower and each SPE Component Entity and (II) Control
each Borrower and each SPE Component Entity; (D) after giving effect to such
transfers, each Individual Property which has a Manager as of the date of such
transfer shall continue to be managed by Manager or a New Manager approved in
accordance with the applicable terms and conditions hereof; (E) such transfers
shall be conditioned upon continued compliance with the relevant provisions of
Article 5 hereof; (F) in the case of (1) the transfer of the management of any
Individual Property to a new Affiliated Manager in accordance with the
applicable terms and conditions hereof, or (2) if after giving effect to such
transfer more than forty-nine percent (49%) in the aggregate of the direct or
indirect interests in Borrower or any SPE Component Entity are owned by any
Person and/or its Affiliates that owned less than forty-nine percent (49%) of
the direct or indirect interests in Borrower or any SPE Component Entity as of
the Closing Date, Borrower shall deliver to Lender a New Non-Consolidation
Opinion or an update to the original Non-Consolidation Opinion delivered in
connection with the closing of the Loan reasonably acceptable to Lender and
acceptable to the Rating Agencies addressing such transfer; (G) after giving
effect to the equity transfer in question (I) the representations contained
herein relating to ERISA matters shall be true and correct as if made as of the
date of such transfer (and, upon Lender’s request, Borrower shall deliver to
Lender an Officer’s Certificate containing such updated representations
effective as of the date of the consummation of the applicable equity transfer)
and (II) Borrower shall remain in compliance with the covenants contained herein
relating to ERISA matters; (H) to the extent that any transfer results in the
transferee (either itself or collectively with its affiliates) owning a 20% or
greater equity interest (directly or indirectly) in Borrower or in any SPE
Component Entity, Lender’s receipt of the Satisfactory Search Results shall be a
condition precedent to such transfer, (I) such transfers shall be permitted
pursuant to the terms of the Property Documents and the Ground Leases; (J) after
giving effect to such transfers, the Guarantor Control Condition shall continue
to be satisfied, (K) with respect to

 

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a pledge to a Qualified Lender and any exercise of remedies by such Qualified
Lender with respect to the transfer set forth in clause (v) above, in each
instance, Lender shall have received a Rating Agency Confirmation with respect
to such transfer, (L) other than a transfer pursuant to clause (i) and/or
subclause (iii)(A) or (B) above, no Event of Default has occurred and is
continuing and (M) Borrower shall have paid to Lender, concurrently with the
closing of such transfer (I) all out-of-pocket costs and expenses, including
reasonable attorneys’ fees, incurred by Lender in connection therewith and (II)
all fees, costs and expenses of all third parties and the Rating Agencies
incurred in connection therewith. For the avoidance of doubt, any listing of the
shares of stock in Guarantor on the New York Stock Exchange, NASDAQ Global
Select Market or another nationally recognized stock exchange or market in
accordance with this Section 6.3(a) shall not be a Prohibited Transfer.

 

(b)          Notwithstanding the restrictions contained in this Article 6, so
long as no Event of Default has occurred and shall be continuing, transfers of
direct or indirect interests in American Finance Operating Partnership, L.P.
(“AFOP”) shall be permitted without the consent of Lender provided that: (i)
Lender receives thirty (30) days prior written notice with respect to such
transfer and in connection therewith, Borrower shall pay to Lender a
non-refundable processing fee of $10,000, (ii) after giving effect to such
transfers, (I) to the extent that Guarantor shall not, after giving effect to
such transfer, (A) own at least a 51% direct or indirect interest in each
Borrower, AFOP and each SPE Component Entity and/or (B) Control Borrower, AFOP
and each SPE Component Entity, each Individual Property shall be managed by
Manager or a New Manager approved in accordance with the applicable terms and
conditions hereof and (II) to the extent that Guarantor shall, after giving
effect to such transfer, (A) own at least a 51% direct or indirect interest in
each Borrower, AFOP and each SPE Component Entity and (B) Control Borrower, AFOP
and each SPE Component Entity, each Individual Property that has a Manager as of
the date of such transfer shall continue to be managed by a Manager or a New
Manager approved in accordance with the applicable terms and conditions hereof,
(iii) after giving effect to the equity transfer in question (I) the
representations contained herein relating to ERISA matters shall be true and
correct as if made as of the date of such transfer (and, upon Lender’s request,
Borrower shall deliver to Lender an Officer’s Certificate containing such
updated representations effective as of the date of the consummation of the
applicable equity transfer) and (II) Borrower shall remain in compliance with
the covenants contained herein relating to ERISA matters, (iv) to the extent
that such transfer results in the transferee (either itself or collectively with
its affiliates) owning a 20% or greater equity interest (directly or indirectly)
in Borrower or in any SPE Component Entity, Lender’s receipt of the Satisfactory
Search Results shall be a condition precedent to such transfer; (v) such
transfer shall be permitted pursuant to the terms of the Property Documents and
the Ground Leases, (vi) after giving effect to such transfer, Borrower shall
remain in compliance with the relevant provisions of Article 5 hereof, (vii)
after giving effect to such transfer, either (A) Guarantor shall (I) own at
least a 51% direct or indirect equity ownership interest in each of each of
AFOP, each Borrower and each SPE Component Entity and (II) Control each of AFOP,
each Borrower and each SPE Component Entity or (B) a Qualified Equityholder
shall (I) own at least a 51% direct or indirect equity ownership interest in
each of the Qualified Replacement Guarantor described in the immediately
succeeding clause (B)(IV) (unless such Qualified Replacement Guarantor is also
such Qualified Equityholder), each Borrower, AFOP and each SPE Component Entity,
(II) Control each of the Qualified Replacement Guarantor described in the
immediately succeeding clause (B)(IV) (unless such Qualified Replacement
Guarantor is also such Qualified Equityholder), each

 

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Borrower, AFOP and each SPE Component Entity; and (III) shall deliver to Lender
a replacement limited recourse guaranty in form and substance substantially
identical to the Guaranty and a replacement environmental indemnity agreement in
form and substance substantially identical to the Environmental Indemnity, each
executed by a Qualified Replacement Guarantor with respect to actions or
omissions first occurring on or after the date of such transfer; (viii) to the
extent that Guarantor shall not, after giving effect to such transfer, (A) own
at least a 51% direct or indirect interest in each Borrower, AFOP and each SPE
Component Entity and/or (B) Control Borrower, AFOP and each SPE Component
Entity, Lender shall have received a Rating Agency Confirmation with respect to
such transfer, (ix) such Qualified Replacement Guarantor shall have furnished to
Lender all appropriate papers evidencing such Person’s organization and good
standing, and the qualification of the signers to execute the documents
referenced in clause (vii)(B)(IV) above, which papers shall include certified
copies of all relevant documents relating to the organization and formation of
such Qualified Replacement Guarantor and of the entities, if any, which are
partners or members of the Qualified Replacement Guarantor, (x) (A) if, after
giving effect to such transfer, more than forty-nine percent (49%) in the
aggregate of the direct or indirect interests in Borrower or any SPE Component
Entity are owned by any Person and/or its Affiliates that owned less than
forty-nine percent (49%) of the direct or indirect interests in Borrower or any
SPE Component Entity as of the Closing Date, Borrower shall deliver to Lender a
New Non-Consolidation Opinion addressing such transfer and (B) Borrower shall
furnish to Lender an opinion of counsel for Borrower that is standard in
commercial lending transactions and subject only to customary qualifications,
assumptions and exceptions opining that any REMIC Trust formed pursuant to a
Securitization will not fail to maintain its status as a “real estate mortgage
investment conduit” within the meaning of Section 860D of the IRS Code with
respect to the transfer and the transactions related thereto and an additional
opinion of counsel reasonably satisfactory to Lender and its counsel (I) that
Qualified Replacement Guarantor’s good standing and due authorization to execute
the documents required herein and that the documents referenced in (vii)(3)
above are valid, binding and enforceable against the Qualified Replacement
Guarantor and Borrower, as applicable, in accordance with their terms, and (II)
that the Qualified Replacement Guarantor and any entity which is a controlling
stockholder, member or general partner of the Qualified Replacement Guarantor
have been duly organized, and are in existence and good standing, and (xi)
Borrower shall have paid to Lender, concurrently with the closing of such
transfer (I) all reasonable out-of-pocket costs and expenses, including
reasonable attorneys’ fees, incurred by Lender in connection therewith and (II)
all fees, costs and expenses of all third parties and the Rating Agencies
incurred by Borrower and Lender in connection therewith.

 

(c)          Upon request from Lender in connection with any transfer set forth
above and otherwise no more than once each calendar quarter, Borrower shall
promptly provide Lender with a revised version of the organizational chart
delivered to Lender in connection with the Loan reflecting any equity transfer
consummated in accordance with this Section 6.3.

 

Section 6.4.          Lender’s Rights. Lender reserves the right to condition
the consent to a Prohibited Transfer requested hereunder upon (a) a modification
of the terms hereof and on assumption of this Agreement and the other Loan
Documents as so modified by the proposed Prohibited Transfer, (b) payment of a
transfer fee of 1% of outstanding principal balance of the Loan and all of
Lender’s expenses incurred in connection with such Prohibited Transfer, (c)
receipt of a Rating Agency Confirmation with respect to the Prohibited Transfer,
(d) the

 

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proposed transferee’s continued compliance with the covenants set forth in this
Agreement, including, without limitation, the covenants in Article 5, (e)
receipt of a New Non-Consolidation Opinion with respect to the Prohibited
Transfer and/or (f) such other conditions and/or legal opinions as Lender shall
determine in its sole discretion to be in the interest of Lender. All
out-of-pocket expenses incurred by Lender shall be payable by Borrower whether
or not Lender consents to the Prohibited Transfer. Lender shall not be required
to demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable upon
a Prohibited Transfer without Lender’s consent. This provision shall apply to
every Prohibited Transfer, whether or not Lender has consented to any previous
Prohibited Transfer.

 

Section 6.5.          Economic Sanctions, Anti-Money Laundering and Transfers.
Borrower shall (a) at all times comply with the representations and covenants
contained in Sections 3.29 and 4.24 such that the same remain true, correct and
not violated or breached and (b) not permit a Prohibited Transfer to occur and
shall cause the ownership requirements specified in this Article 6 (including,
without limitation, those stipulated in Section 6.3 hereof) to be complied with
at all times. Borrower hereby represents that, other than in connection with the
Loan, the Loan Documents and any Permitted Encumbrances, as of the date hereof,
there exists no Sale or Pledge of Borrower and/or any SPE Component Entity.

 

ARTICLE 7.

 

INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

 

Section 7.1.          Insurance.

 

(a)          Each Borrower shall obtain and maintain, or cause to be obtained
and maintained, insurance for each Borrower and each Individual Property
providing at least the following coverages:

 

(i)          insurance with respect to the Improvements and the Personal
Property insuring against any peril now or hereafter included within the
classification “All Risk” or “Special Perils” (including, without limitation,
fire, lightning, windstorm/named storm, hail, terrorism and similar acts of
sabotage, explosion, riot, riot attending a strike, civil commotion, vandalism,
aircraft, vehicles and smoke), in each case (A) in an amount equal to 100% of
the “Full Replacement Cost,” which for purposes of this Agreement shall mean
actual replacement value exclusive of costs of excavations, foundations,
underground utilities and footings, with a waiver of depreciation; (B) written
on a no co-insurance form; (C) providing for no deductible in excess of $10,000
except (I) with respect to earthquake and windstorm/named storms, which such
insurance shall provide for no deductible in relation to such coverage in excess
of 5% of the total insurable value of the Property, subject to a minimum of
$250,000 for Florida locations and $100,000 for all other Tier 1 locations and
(II) as otherwise expressly and specifically permitted herein; (D) at all times
insuring against at least those hazards that are commonly insured against under
a “special causes of loss” form of policy, as the same shall exist on the date
hereof, and together with any increase in the scope of coverage provided under
such form after the date hereof; and (E) providing coverage for contingent
liability from Operation

 

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of Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements together with an “Ordinance or Law Coverage” endorsement in amounts
acceptable to Lender. The Full Replacement Cost shall be re-determined from time
to time (but not more frequently than once in any twelve (12) calendar months)
at the reasonable request of Lender by an appraiser or contractor designated and
paid by Borrower and reasonably approved by Lender, or by an engineer or
appraiser in the regular employ of the insurer. After the first appraisal,
additional appraisals may be based on construction cost indices customarily
employed in the trade. No omission on the part of Lender to request any such
ascertainment shall relieve Borrower of any of its obligations under this
Subsection;

 

(ii)         commercial general liability insurance against all claims for
personal injury, bodily injury, death or property damage occurring upon, in or
about the applicable Individual Property, including “Dram Shop” or other liquor
liability coverage if alcoholic beverages are sold, manufactured or distributed
from the applicable Individual Property, such insurance (A) to be on the
so-called “occurrence” form with a general aggregate limit of not less than
$2,000,000 and a per occurrence limit of not less than $1,000,000, with no
deductible or self-insured retention; (B) to continue at not less than the
aforesaid limit until required to be changed by Lender in writing by reason of
changed economic conditions making such protection inadequate; and (C) to cover
at least the following hazards: (1) premises and operations; (2) products and
completed operations on an “if any” basis; (3) independent contractors; (4)
contractual liability for all insured contracts; (5) contractual liability
covering the indemnities contained in Article 13 hereof to the extent the same
is available; and (6) acts of terrorism and similar acts of sabotage;

 

(iii)        loss of rents and/or business interruption insurance (A) with loss
payable to Lender; (B) covering all risks required to be covered by the
insurance provided for in Subsection 7.1(a)(i), (iv) and (vi) through (viii);
(C) in an amount equal to 100% of the projected gross income from the applicable
Individual Property (on an actual loss sustained basis) for a period continuing
until the Restoration of the applicable Individual Property is completed; the
amount of such business interruption/loss of rents insurance shall be determined
prior to the Closing Date and at least once each year thereafter based on
Lender’s determination of the projected gross income from the applicable
Individual Property for a eighteen (18) month period; and (D) containing an
extended period of indemnity endorsement which provides that after the physical
loss to the Improvements and the Personal Property has been repaired, the
continued loss of income will be insured until such income either returns to the
same level it was at prior to the loss, or the expiration of twelve (12) months
from the date that the applicable Individual Property is repaired or replaced
and operations are resumed, whichever first occurs, and notwithstanding that the
policy may expire prior to the end of such period. Notwithstanding anything to
the contrary contained herein or in any other Loan Documents, to the extent that
insurance proceeds are payable to Lender pursuant to this Subsection (the “Rent
Loss Proceeds”) and Borrower is entitled to disbursement of Net Proceeds for
Restoration in accordance with the terms hereof, such Rent Loss Proceeds shall
be deposited by Lender in the Cash Management Account and disbursed as provided
in Article 9 hereof; provided, however, that (I) nothing herein contained shall
be deemed to relieve Borrower of its obligations to pay the obligations secured
hereunder on the respective dates of payment provided for in the Note except to
the extent such

 

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amounts are actually paid out of the Rent Loss Proceeds and (II) in the event
the Rent Loss Proceeds are paid in a lump sum in advance and Borrower is
entitled to disbursement of such Rent Loss Proceeds in accordance with the terms
hereof, Lender or Servicer shall hold such Rent Loss Proceeds in a segregated
interest-bearing Eligible Account (which shall deemed to be included within the
definition of the “Accounts” hereunder) and Lender or Servicer shall estimate
the number of months required for Borrower to restore the damage caused by the
applicable Casualty, shall divide the applicable aggregate Rent Loss Proceeds by
such number of months and shall disburse such monthly installment of Rent Loss
Proceeds from such Eligible Account into the Cash Management Account each month
during the performance of such Restoration;

 

(iv)        at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements (A) owner’s
contingent or protective liability insurance covering claims not covered by or
under the terms or provisions of the above mentioned commercial general
liability insurance policy; and (B) the insurance provided for in Subsection
7.1(a)(i) written in a so-called builder’s risk completed value form (1) on a
non-reporting basis, (2) against all risks insured against pursuant to
Subsection 7.1(a)(i), (3) including permission to occupy the applicable
Individual Property, and (4) with an agreed amount endorsement waiving
co-insurance provisions;

 

(v)         if and when Borrower has any employees, workers’ compensation,
subject to the statutory limits of the state in which the applicable Individual
Property is located, and employer’s liability insurance with a limit of at least
$1,000,000 per accident and per disease per employee, and $1,000,000 for disease
aggregate in respect of any work or operations on or about the applicable
Individual Property, or in connection with the applicable Individual Property or
its operation (if applicable);

 

(vi)        comprehensive boiler and machinery insurance covering all mechanical
and electrical equipment and pressure vessels and boilers in an amount not less
than their replacement cost or in such other amounts as shall be reasonably
required by Lender;

 

(vii)       if any portion of the Improvements is at any time located in an area
identified by (A) the Federal Emergency Management Agency in the Federal
Register as an area having special flood hazards and/or (B) the Secretary of
Housing and Urban Development or any successor thereto as an area having special
flood hazards pursuant to the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of
1994, as each may be amended, or any successor law (the “Flood Insurance Acts”),
flood hazard insurance in an amount equal to the maximum limit of coverage
available for the applicable Individual Property under the Flood Insurance Acts
or its equivalent as determined by Lender (plus such higher amount as Lender may
require in its sole discretion);

 

(viii)      earthquake, for any Individual Property located in seismic zone 3 or
4 with PML/SEL exceeding 20%, in amounts equal to one times (1x) the probable
maximum loss of the applicable Individual Property plus loss of rents/business
interruption as required pursuant to subsection (iii) above as determined by
Lender in its sole discretion and in form and substance satisfactory to Lender,
provided that the insurance pursuant to

 

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this Subsection (viii) shall be otherwise on terms consistent with the all risk
insurance policy required under Section 7.1(a)(i);

 

(ix)         umbrella liability insurance, including acts of terrorism and
similar acts of sabotage, in an amount not less than $100,000,000 per occurrence
on terms consistent with the commercial general liability insurance policy
required under subsection (ii) above;

 

(x)          subject to the last sentence of Section 8.7(c), environmental
liability insurance coverage for claims for clean-up costs and third party legal
liability related to the Properties listed on Schedule XVI (“PLL Policy”) with
the following terms and conditions : (A) such coverage shall be written on
claims made form for a term of eight years, (B) such coverage shall have limits
of liability of One Million and No/100 Dollars ($1,000,000) individually for
each pollution condition and Five Million and No/100 Dollars ($5,000,000) in the
aggregate, and a deductible of Fifty Thousand and No/100 Dollars ($50,000), (C)
the Lender shall be named an insured pursuant to a Mortgagee Assignment
endorsement providing automatic rights of assignment in the event of default,
(D) the PLL Policy shall not be cancelled without Lender’s consent, (E) the PLL
Policy shall be dedicated solely to the Properties listed on Schedule XVI and no
additional Properties shall be added during the PLL term; and (F) other than to
increase coverage, the PLL Policy shall not be materially changed by Borrower,
(including, without limitation, to remove a Property from coverage) without
Lender’s prior written consent;

 

(xi)         motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits per
occurrence, including umbrella coverage, of One Million and No/100 Dollars
($1,000,000) (if applicable); and

 

(xii)        such other insurance and in such amounts as (A) may be required
pursuant to the terms of the Property Documents and the Ground Leases and (B)
Lender from time to time may reasonably request against such other insurable
hazards which at the time are commonly insured against for property similar to
the applicable Individual Property located in or around the region in which the
applicable Individual Property is located.

 

(b)          All insurance provided for in Subsection 7.1(a) hereof shall be
obtained under valid and enforceable policies (the “Policies” or in the
singular, the “Policy”), in such forms and, from time to time after the date
hereof, in such amounts as may be satisfactory to Lender, issued by financially
sound and responsible insurance companies authorized to do business in the state
in which the applicable Individual Property is located and approved by Lender.
The insurance companies must have a general policy rating of A or better and a
financial class of X or better by A.M. Best Company, Inc., and a claims paying
ability/financial strength rating of “A” or better by S&P and “A2” by Moody’s if
they are rating the Securities (each such insurer shall be referred to below as
a “Qualified Insurer”). Notwithstanding anything to the contrary contained
herein, if Moody’s rates the Securities, for the purposes of determining
satisfaction of the foregoing required Moody’s rating for the insurance
companies, it is agreed that Borrower may maintain the insurance coverage
described in and required by Section 7.1(a) with the insurance

 

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companies under the Policies that are not rated with Moody’s as of the Closing
Date, provided that such insurance companies maintain no less than the claims
paying ability rating applicable thereto with AM Best and the Rating Agencies
other than Moody’s in effect on the Closing Date. For so long the Terrorism Risk
Insurance Program Reauthorization Act of 2015 or subsequent statute, extension
or reauthorization (“TRIPRA”) is in effect and continues to cover both foreign
and domestic acts of terrorism, Lender shall accept terrorism insurance with
coverage against acts which are “certified” within the meaning of TRIPRA.
Notwithstanding anything to the contrary herein, if TRIPRA or a similar or
subsequent statute, extension or reauthorization thereof is not in effect, then
provided that terrorism insurance is commercially available, Borrower shall be
required carry terrorism insurance throughout the term of the Loan as required
by the preceding sentence, but in such event Borrower shall not be required to
spend on terrorism insurance coverage more than two times the amount of the
insurance premium that is payable at such time in respect of the property and
business interruption/rental loss insurance required hereunder (without giving
effect to the cost of the terrorism components of such casualty and business
interruption/rental loss insurance), and if the cost of terrorism insurance
exceeds such amount, Borrower shall purchase the maximum amount of terrorism
insurance available with funds equal to such amount. Not less than fifteen (15)
days prior to the expiration dates of the Policies theretofore furnished to
Lender pursuant to Subsection 7.1(a), Borrower shall deliver complete copies of
the Policies marked “premium paid” or accompanied by evidence satisfactory to
Lender of payment of the premiums due thereunder (the “Insurance Premiums”),
provided, however, that in the case of renewal Policies, Borrower may furnish
Lender with binders and Acord Form 28 Certificates therefor to be followed by
the original Policies when issued.

 

(c)          Borrower shall not obtain (or permit to be obtained) (i) any
umbrella or blanket liability or casualty Policy unless, in each case, such
Policy is approved in advance in writing by Lender, Lender’s interest is
included therein as provided in this Agreement, such Policy is issued by a
Qualified Insurer and such Policy includes such changes to the coverages and
requirements set forth herein as may be required by Lender (including, without
limitation, increases to the amount of coverages required herein) or (ii)
separate insurance concurrent in form or contributing in the event of loss with
that required in Subsection 7.1(a) to be furnished by, or which may be
reasonably required to be furnished by, Borrower. In the event Borrower obtains
(or causes to be obtained) separate insurance or an umbrella or a blanket
Policy, Borrower shall notify Lender of the same and shall cause complete copies
of each Policy to be delivered as required in Subsection 7.1(a). Notwithstanding
Lender’s approval of any umbrella or blanket liability or casualty Policy
hereunder, Lender reserves the right, in its reasonable discretion, to require
Borrower to obtain a separate Policy in compliance with this Section 7.1.
Without limitation of any provision hereof, (i) Lender’s consent required
hereunder with respect to any umbrella or blanket policy shall be subject to
receipt of the schedule of locations and values with respect to the same,
portfolio PML reports for the catastrophic perils of earthquake and
windstorm/named storm, and such other information as requested by Lender or the
Rating Agencies and (ii) any umbrella or blanket Policy shall otherwise provide
the same protection as would a separate Policy insuring only such Individual
Property in compliance with the provisions of Section 7.1(a) as determined by
Lender. Borrower shall notify Lender of any material changes to the blanket
policy, including changes to the limits under the policy as of Closing Date or
an aggregation of the insured values covered under the blanket policy, including
the reduction of flood or wind/named storm limits or the addition of locations
that are subject to the perils of flood (special flood hazard area locations) or
Tier 1 wind/named storm, and such

 

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changes shall be subject to Lender’s approval, which shall not be unreasonably
withheld. Lack of a written response by Lender within five (5) Business Days of
receipt by Lender of all requested information shall be deemed approval of such
changes.

 

(d)          All Policies of insurance provided for or contemplated by
Subsection 7.1(a) shall name Borrower as a named insured and, in the case of
liability Policies (except for the Policies referenced in Subsections 7.1(a)(v)
and (xi) and for Subsection 7.1(a)(x) for which Lender shall also be a named
insured ), shall name Lender as an additional insured, as their respective
interests may appear, and, in the case of property damage Policies (including,
but not limited to, terrorism, rent loss, business interruption, boiler and
machinery, earthquake and flood insurance), such Policies shall contain a
standard noncontributing mortgagee clause in favor of Lender providing that the
loss thereunder shall be payable to Lender. Borrower shall promptly forward to
Lender a copy of each written notice received by Borrower of any modification,
reduction or cancellation of any of the Policies or of any of the coverages
afforded under any of the Policies. Notwithstanding the foregoing, the Borrower
shall be named as Loss Payee, Additional Interest or the equivalent thereof, as
it pertains to the flood hazard insurance provided through the National
Insurance Flood Program, when such policy is provided by a Tenant.

 

(e)          All Policies of insurance provided for in Subsection 7.1(a) shall:

 

(i)          with respect to property damage Policies, provide that (1) the
following shall in no way affect the validity or enforceability of the Policy
insofar as Lender is concerned: (A) any act or negligence of Borrower, of anyone
acting for Borrower or of any other Person named as an insured, additional
insured and/or loss payee, (B) any foreclosure or other similar exercise of
remedies and (C) the failure to comply with the provisions of the Policy which
might otherwise result in a forfeiture of the insurance or any part thereof; and
(2) the Policy shall not be cancelled without at least 30 days’ written notice,
except for ten (10) days’ written notice for cancellation due to non-payment of
premium;

 

(ii)         with respect to all other Policies, if available using commercially
reasonable efforts, provide that the Policy shall not be materially changed
(other than to increase the coverage provided thereby), terminated or cancelled
without at least 30 days’ written notice, except for ten (10) days’ written
notice for cancellation due to non-payment of premium, to Lender and any other
party named therein as an insured;

 

(iii)        if available using commercially reasonable efforts, provide that
the issuer(s) of the Policy shall give ten (10) days’ written notice to Lender
if the issuers elect not to renew the Policy prior to its expiration; and

 

(iv)        not contain any provision which would make Lender liable for any
Insurance Premiums thereon or subject to any assessments or commissions
thereunder provided that, Lender shall, at its option and with no obligation to
do so, have the right to directly pay Insurance Premiums in order to avoid
cancellation, expiration and/or termination of the Policy due to non-payment of
Insurance Premiums.

 

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(f)           Borrower shall promptly forward to Lender a copy of each written
notice received by any Borrower Party of any modification, reduction or
cancellation of any of the Policies or of any of the coverages afforded under
any of the Policies.

 

(g)          If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right, with ten (10) days’ notice to Borrower (or at any time Lender deems
necessary, regardless of prior notice to Borrower, to avoid the lapse of any
such insurance) to take such action as Lender deems necessary to protect its
interest in the Property, including, without limitation, the obtaining of such
insurance coverage as Lender in its sole discretion deems appropriate, and all
expenses incurred by Lender in connection with such action or in obtaining such
insurance and keeping it in effect shall be paid by Borrower to Lender upon
demand and until paid shall be secured by the Security Instrument and shall bear
interest at the Default Rate.

 

(h)          In the event of a foreclosure of the Security Instrument or other
transfer of title to any Individual Property (or any portion thereof) in
extinguishment in whole or in part of the Debt, all right, title and interest of
Borrower in and to the Policies then in force concerning the applicable
Individual Property (or any portion thereof) and all proceeds payable thereunder
shall thereupon vest exclusively in Lender.

 

(i)           As an alternative to the Policies required to be maintained
pursuant to the preceding provisions of this Section 7.1, Borrower will not be
in default under this Section 7.1 if Borrower maintains (or causes to be
maintained) Policies which (i) have coverages, deductibles and/or other related
provisions other than those specified above and/or (ii) are provided by
insurance companies not meeting the credit ratings requirements set forth above
(any such Policy, a “Non-Conforming Policy”), provided, that, prior to obtaining
such Non-Conforming Policies (or permitting such Non-Conforming Policies to be
obtained), Borrower shall have (1) received Lender’s prior written consent
thereto not to be unreasonably withheld, delayed or conditioned and (2)
confirmed that Lender has received a Rating Agency Confirmation with respect to
any such Non-Conforming Policy. Notwithstanding the foregoing, Lender hereby
reserves the right to deny its consent to any Non-Conforming Policy regardless
of whether or not Lender has consented to the same on any prior occasion.

 

(j)           Borrower shall cooperate with Lender in obtaining for Lender the
benefits of any Awards or insurance proceeds lawfully or equitably payable in
connection with any Individual Property (or any portion thereof), and Lender
shall be reimbursed for any expenses incurred in connection therewith (including
reasonable, actual attorneys’ fees and disbursements, and the payment by
Borrower of the expense of an appraisal on behalf of Lender in case of a
Casualty or Condemnation affecting any Individual Property or any part thereto)
out of such Awards or insurance proceeds.

 

Section 7.2.          Casualty. Subject to Borrower’s ability to release an
Individual Property in accordance with Sections 7.4(c) and (d) hereof, if any
Individual Property shall be damaged or destroyed, in whole or in part, by fire
or other casualty (a “Casualty”), Borrower shall give prompt notice of such
damage to Lender and shall promptly commence and diligently prosecute the
completion of the Restoration of the applicable Individual Property and
otherwise comply with the provisions of Section 7.4. Borrower shall pay all
costs of any such Restoration

 

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(including, without limitation, any applicable deductibles under the Policies)
whether or not such costs are covered by the Net Proceeds. Lender may, but shall
not be obligated to, make proof of loss if not made promptly by Borrower

 

Section 7.3.          Condemnation.

 

(a)          Borrower shall promptly give Lender notice of the actual or
threatened commencement of any proceeding for the Condemnation of any Individual
Property (or portion thereof) of which Borrower has written knowledge and shall
deliver to Lender copies of any and all material papers served in connection
with such proceedings. Lender may participate in any such proceedings, and
Borrower shall from time to time deliver to Lender all instruments requested by
it to permit such participation. Borrower shall, at its expense, diligently
prosecute any such proceedings, and shall consult with Lender, its attorneys and
experts, and cooperate with them in the carrying on or defense of any such
proceedings. Notwithstanding any taking by any public or quasi-public authority
through Condemnation or otherwise (including but not limited to any transfer
made in lieu of or in anticipation of the exercise of such taking), Borrower
shall continue to pay the Debt at the time and in the manner provided for its
payment in the Note and in this Agreement and the Debt shall not be reduced
until any Award shall have been actually received and applied by Lender, after
the deduction of expenses of collection, to the reduction or discharge of the
Debt. Lender shall not be limited to the interest paid on the Award by the
condemning authority but shall be entitled to receive out of the Award interest
at the rate or rates provided herein or in the Note. If any Individual Property
or any portion thereof is taken by a condemning authority, Borrower shall
promptly commence and diligently prosecute the Restoration of the Property and
otherwise comply with the provisions of Section 7.4. Borrower shall pay all
costs of Restoration whether or not such costs are covered by the Net Proceeds.
If any Individual Property (or any portion thereof) is sold, through foreclosure
or otherwise, prior to the receipt by Lender of the Award, Lender shall have the
right, whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the Award, or a portion thereof sufficient to
pay the Debt.

 

(b)          Notwithstanding anything to the contrary contained herein or in any
other Loan Document, if the Loan or any portion thereof is included in a REMIC
Trust and, immediately following a release of any portion of the lien of the
Security Instrument in connection with a Condemnation of an Individual Property
(but taking into account any proposed Restoration on the remaining portion of
such Individual Property) (based solely on real property and excluding any
personal property or going concern value), the Loan-to-Value Ratio (as
determined in Lender’s reasonable discretion, by any commercially reasonable
method permitted to a REMIC Trust) is greater than 125%, the principal balance
of the Loan must be paid down by an amount not less than the least of the
following amounts: (i) the net amount of the Award, after deduction of Lender’s
and Borrower’s reasonable costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting same (“Condemnation Proceeds”),
(ii) the fair market value of the released property at the time of the release,
or (iii) an amount such that the Loan-to-Value Ratio (as determined in Lender’s
reasonable discretion, by any commercially reasonable method permitted to a
REMIC Trust) does not increase after the release, unless Lender receives an
opinion of counsel that if such amount is not paid, the Securitization will not
fail to maintain its status as a REMIC Trust as a result of the related release
of such portion of the lien of the Security Instrument. Any such prepayment
shall be deemed a voluntary

 

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prepayment and shall be subject to Section 2.7(a) hereof (other than the
requirements to provide ten (10) days’ notice to Lender and other than payment
of any Yield Maintenance Premium or other prepayment premium or penalty (as
applicable)).

 

Section 7.4.          Restoration. The following provisions shall apply in
connection with the Restoration of any Individual Property:

 

(a)          If the Net Proceeds shall be less than the Restoration Threshold
and the costs of completing the Restoration shall be less than the Restoration
Threshold, the Net Proceeds will be disbursed by Lender to Borrower upon
receipt, provided that all of the conditions set forth in Section 7.4(b)(i)
(other than clause (F) thereof) are met and Borrower delivers to Lender a
written undertaking to expeditiously commence and to satisfactorily complete
with due diligence the Restoration in accordance with the terms of this
Agreement.

 

(b)          If the Net Proceeds are equal to or greater than the Restoration
Threshold or the costs of completing the Restoration are equal to or greater
than the Restoration Threshold, Lender shall make the Net Proceeds available for
the Restoration in accordance with the provisions of this Section 7.4(b).

 

(i)          The Net Proceeds shall be made available for Restoration provided
that each of the following conditions are met:

 

(A)         no Event of Default shall have occurred and be continuing;

 

(B)         (1) in the event the Net Proceeds are insurance proceeds, less than
thirty percent (30%) of each of (i) fair market value of the applicable
Individual Property as reasonably determined by Lender, and (ii) rentable area
of the applicable Individual Property has been damaged, destroyed or rendered
unusable as a result of a Casualty or (2) in the event the Net Proceeds are
condemnation proceeds, less than ten percent (10%) of each of (i) the fair
market value of the applicable Individual Property as reasonably determined by
Lender and (ii) rentable area of the applicable Individual Property is taken,
such land is located along the perimeter or periphery of the applicable
Individual Property, no portion of the Improvements is located on such land and
such taking does not materially impair the existing access to the applicable
Individual Property;

 

(C)         Leases demising in the aggregate a percentage amount equal to or
greater than 70% of the total rentable space in the applicable Individual
Property which has been demised under executed and delivered Leases in effect as
of the date of the occurrence of such fire or other casualty or taking,
whichever the case may be, shall remain in full force and effect during and
after the completion of the Restoration, notwithstanding the occurrence of any
such Casualty or Condemnation, whichever the case may be, and Borrower furnishes
to Lender evidence reasonably satisfactory to Lender that all Tenants under
Major Leases

 

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shall continue to operate their respective space at the applicable Individual
Property after the completion of the Restoration;

 

(D)         Borrower shall commence (or shall cause the commencement of) the
Restoration as soon as reasonably practicable (but in no event later than sixty
(60) days after the issuance of a building permit with respect thereto) and
shall diligently pursue the same to reasonably satisfactory completion in
compliance with all applicable Legal Requirements, including, without
limitation, all applicable Environmental Laws, and the applicable requirements
of the Property Documents and the Ground Leases, if any;

 

(E)         Lender shall be reasonably satisfied that any operating deficits
which will be incurred with respect to the applicable Individual Property as a
result of the occurrence of any such fire or other casualty or taking will be
covered out of (1) the Net Proceeds, (2) the insurance coverage referred to in
Section 7.1(a)(iii) above, or (3) by other funds of Borrower;

 

(F)         Lender shall be reasonably satisfied that the Net Proceeds together
with any cash or cash equivalent deposited by Borrower with Lender are
sufficient to cover the cost of the Restoration;

 

(G)         Lender shall be reasonably satisfied that the Restoration will be
completed on or before the earliest to occur of (1) six (6) months prior to the
Maturity Date, (2) the earliest date required for such completion under the
terms of any Leases, the Ground Leases and the Property Documents, (3) such time
as may be required under applicable Legal Requirements or (4) the expiration of
the insurance coverage referred to in Section 7.1(a)(iii) above;

 

(H)         the applicable Individual Property and the use thereof after the
Restoration will be in compliance with and permitted under all applicable Legal
Requirements, the Ground Leases and the Property Documents;

 

(I)          the Restoration shall be done and completed in an expeditious and
diligent fashion and in compliance with all applicable Legal Requirements, the
Ground Leases and the Property Documents; and

 

(J)          the Ground Leases and the Property Documents will remain in full
force and effect during and after the Restoration and a Property Document Event
shall not occur as a result of the applicable Casualty, Condemnation and/or
Restoration.

 

(ii)         The Net Proceeds shall be held by Lender and, until disbursed in
accordance with the provisions of this Section 7.4(b), shall constitute
additional security for the Debt and other obligations under this Agreement, the
Security Instrument, the Note and the other Loan Documents. The Net Proceeds
(other than the Rent Loss Proceeds) shall be disbursed by Lender to, or as
directed by, Borrower from time to time during the course of the Restoration,
upon receipt of evidence reasonably satisfactory to Lender that (A) all
materials installed and work and labor performed (except to the extent

 

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that they are to be paid for out of the requested disbursement) in connection
with the related Restoration item have been paid for in full, and (B) there
exist no notices of pendency, stop orders, mechanic’s or materialman’s liens or
notices of intention to file same, or any other liens or encumbrances of any
nature whatsoever on the Property which have not either been fully bonded to the
satisfaction of Lender and discharged of record or in the alternative fully
insured to the satisfaction of Lender by the title company issuing the Title
Insurance Policy.

 

(iii)        All plans and specifications required in connection with the
Restoration shall be subject to prior review and acceptance in all respects by
Lender and by an independent consulting engineer reasonably selected by Lender
(the “Casualty Consultant”), in each case not to be unreasonably withheld,
conditioned or delayed. Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained in
connection with the Restoration. The identity of the contractors engaged in the
Restoration shall be subject to prior review and acceptance by Lender and the
Casualty Consultant, in each case not to be unreasonably withheld, conditioned
or delayed. All reasonable out-of-pocket costs and expenses incurred by Lender
in connection with making the Net Proceeds available for the Restoration
including, without limitation, reasonable counsel fees and disbursements and the
Casualty Consultant’s fees, shall be paid by Borrower. Borrower shall have the
right to settle all claims under the Policies jointly with Lender, provided that
(a) no Event of Default exists, (b) Borrower promptly and with commercially
reasonable diligence negotiates a settlement of any such claims and (c) the
insurer with respect to the Policy under which such claim is brought has not
raised any act of the insured as a defense to the payment of such claim. If an
Event of Default exists, Lender shall, at its election, have the exclusive right
to settle or adjust any claims made under the Policies in the event of a
Casualty.

 

(iv)        In no event shall Lender be obligated to make disbursements of the
Net Proceeds in excess of an amount equal to the costs actually incurred from
time to time for work in place as part of the Restoration, as certified by the
Casualty Consultant, minus the Restoration Retainage. The term “Restoration
Retainage” as used in this Subsection 7.4(b) shall mean an amount equal to 10%
of the costs actually incurred for work in place as part of the Restoration, as
certified by the Casualty Consultant, until such time as the Casualty Consultant
certifies to Lender that Net Proceeds representing 50% of the required
Restoration have been disbursed. There shall be no Restoration Retainage with
respect to costs actually incurred by Borrower for work in place in completing
the last 50% of the required Restoration. The Restoration Retainage shall in no
event, and notwithstanding anything to the contrary set forth above in this
Subsection 7.4(b), be less than the amount actually held back by Borrower from
contractors, subcontractors and materialmen engaged in the Restoration. The
Restoration Retainage shall not be released until the Casualty Consultant
certifies to Lender that the Restoration has been completed (subject only to
non-material punch list items) in accordance with the provisions of this
Subsection 7.4(b) and that all approvals necessary for the re-occupancy and use
of the applicable Individual Property have been obtained from all appropriate
governmental and quasi-governmental authorities, and Lender receives evidence
reasonably satisfactory to Lender that the costs of the Restoration have been
paid in full or will be paid in full out of the Restoration Retainage, provided,
however, that Lender will release the portion of the

 

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Restoration Retainage being held with respect to any contractor, subcontractor
or materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed (subject only to non-material punch list items) all
work and has supplied all materials in accordance with the provisions of the
contractor’s, subcontractor’s or materialman’s contract, and the contractor,
subcontractor or materialman delivers the lien waivers and evidence of payment
in full of all sums due to the contractor, subcontractor or materialman as may
be reasonably requested by Lender or by the title company insuring the lien of
the Security Instrument. If required by Lender, the release of any such portion
of the Restoration Retainage shall be approved by the surety company, if any,
which has issued a payment or performance bond with respect to the contractor,
subcontractor or materialman.

 

(v)         Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.

 

(vi)        If at any time the Net Proceeds or the undisbursed balance thereof
shall not, in the reasonable opinion of Lender in consultation with the Casualty
Consultant, be sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the “Net
Proceeds Deficiency”) with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 7.4(b) shall constitute additional security for the Debt and other
obligations under this Agreement, the Security Instrument, the Note and the
other Loan Documents.

 

(vii)       The excess, if any, of the Net Proceeds and the remaining balance,
if any, of the Net Proceeds Deficiency deposited with Lender after the Casualty
Consultant certifies to Lender that the Restoration has been completed (subject
only to non-material punch list items) in accordance with the provisions of this
Section 7.4(b), and the receipt by Lender of evidence reasonably satisfactory to
Lender that all costs incurred in connection with the Restoration have been paid
in full, shall be remitted by Lender to Borrower, provided no Event of Default
shall have occurred and shall be continuing under this Agreement, the Security
Instrument, the Note or any of the other Loan Documents.

 

(c)          Provided that no Event of Default has occurred and is continuing,
all Net Proceeds not required (i) to be made available for the Restoration or
(ii) to be returned to Borrower as excess Net Proceeds pursuant to Subsection
7.4(b)(vii) shall be retained and applied by Lender toward the payment of the
Debt whether or not then due and payable pro rata among the Notes (without Yield
Maintenance Premium or other penalty or prepayment fee). If Lender shall receive
and retain Net Proceeds, the lien of the Security Instruments shall be reduced
only by the amount thereof received and retained by Lender and actually applied
by Lender in reduction of the Debt.

 

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(d)          In addition to the foregoing, in connection with any partial
Condemnation or any Casualty, if (i) any Net Proceeds shall be equal to or
greater than sixty percent (60%) of the Allocated Loan Amount in respect of the
applicable Individual Property or (ii) provided no Event of Default shall be
continuing, any Net Proceeds shall be equal to or greater than the Restoration
Threshold and after Borrower shall have used commercially reasonable efforts to
satisfy each of the other conditions set forth in Section 7.4(b)(i) Borrower
shall be unable to satisfy all such conditions and Lender does not disburse the
Net Proceeds to Borrower for Restoration, then Borrower shall have the right,
but not the obligation to elect not to proceed with a Restoration and to prepay
the Loan in an amount equal to the Release Price of the applicable Individual
Property and any Interest Shortfall associated therewith (a
“Casualty/Condemnation Prepayment”) utilizing the Net Proceeds (together with
other funds of the Borrower if such Net Proceeds are less than the Release Price
and any Interest Shortfall associated therewith) and obtain the release of the
applicable Individual Property from the lien of the Security Instrument thereon
(and related Loan Documents), provided that (i) Borrower shall have satisfied
the requirements of Section 2.9 hereof (including, without limitation, Section
2.9(h) hereof), (ii) Borrower shall consummate the Casualty/Condemnation
Prepayment on or before the second Monthly Payment Date occurring following date
the Net Proceeds shall be available to Borrower for such Casualty/Condemnation
Prepayment and (iii) Borrower shall pay to Lender, concurrently with making such
Casualty/Condemnation Prepayment, any other amounts required pursuant to Section
2.9 hereof (without duplication of the Release Price and Interest Shortfall
payable pursuant to this subclause (d)). For the avoidance of doubt, unless such
payment is made during the continuance of an Event of Default, no Yield
Maintenance Premium or other premium or penalty or charge shall be due with
respect to a Casualty/Condemnation Prepayment.

 

ARTICLE 8.

RESERVE FUNDS

 

Section 8.1.          Immediate Repair Funds.

 

(a)          Borrower shall perform the repairs at the Property as set forth on
Schedule II hereto (all such repairs are hereinafter referred to as “Immediate
Repairs”) and shall complete each of the Immediate Repairs on or before (i)
three (3) months following the Closing Date with respect to the items identified
as “Immediate Repairs” on Schedule II attached hereto and (ii) one (1) year
following the Closing Date with respect to the items identified as “Immediate
Repair Remaining Costs” as set forth on Schedule II attached hereto. On the
Closing Date, Borrower shall deposit into an Eligible Account held by Cash
Management Bank (the “Immediate Repair Account”) an amount equal to $7,630,065,
such amount representing 115% of the estimated costs of the Immediate Repairs.
Amounts deposited pursuant to this Section 8.1 are referred to herein as the
“Immediate Repair Funds”.

 

(b)          Lender shall cause the disbursement to Borrower of the Immediate
Repair Funds upon satisfaction by Borrower of each of the following conditions:
(i) Borrower shall submit a request for payment to Lender at least ten (10) days
prior to the date on which Borrower requests such payment be made and specifies
the Immediate Repairs to be paid; (ii) on the date such request is received by
Lender and on the date such payment is to be made, no Event of Default shall
exist and remain uncured; (iii) Lender shall have received a certificate from
Borrower (A)

 

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stating that all Immediate Repairs to be funded by the requested disbursement
have been completed in a good and workmanlike manner and in accordance with all
applicable Legal Requirements, such certificate to be accompanied by a copy of
any license, permit or other approval by any Governmental Authority, if any,
required in connection with the Immediate Repairs, (B) identifying each Person
that supplied materials or labor in connection with the Immediate Repairs to be
funded by the requested disbursement, and (C) stating that each such Person has
been paid in full or will be paid in full upon such disbursement (or for ongoing
work, such Person has been or will be paid upon such disbursement for the work
identified in such certificate from Borrower with respect to such disbursement),
such certificate to be accompanied by, as applicable, partial (with respect to
such ongoing work) or complete lien waivers, invoices and/or other evidence of
payment reasonably satisfactory to Lender; (iv) at Lender’s option, if (A) the
Allocated Loan Amount of the Individual Property to which such Immediate Repair
relates is less than $5,000,000 and the cost of the Immediate Repairs exceeds
$25,000 or (B) the Allocated Loan Amount of the Individual Property to which
such Immediate Repair relates is equal to or greater than $5,000,000 and the
cost of the Immediate Repairs exceeds $100,000, a title search for the
applicable Individual Property indicating that the applicable Individual
Property is free from all liens, claims and other encumbrances other than
Permitted Encumbrances; (v) at Lender’s option, if (A) the Allocated Loan Amount
of the Individual Property to which such Immediate Repair relates is less than
$5,000,000 and the cost of the Immediate Repairs exceeds $25,000 or (B) the
Allocated Loan Amount of the Individual Property to which such Immediate Repair
relates is equal to or greater than $5,000,000 and the cost of the Immediate
Repairs exceeds $100,000, Lender shall have received a report reasonably
satisfactory to Lender in its reasonable discretion from an architect or
engineer reasonably approved by Lender in respect of such architect or
engineer’s inspection of the required repairs; and (vi) Lender shall have
received such other evidence as Lender shall reasonably request that the
Immediate Repairs to be funded by the requested disbursement have been completed
(or, if the work is ongoing, are in the process of being completed). Lender
shall not be required to disburse Immediate Repair Funds more frequently than
once each calendar month nor in an amount less than the Minimum Disbursement
Amount (or a lesser amount if the total Immediate Repair Funds is less than the
Minimum Disbursement Amount, in which case only one disbursement of the amount
remaining in the account shall be made). Following the completion of all
Immediate Repairs as reasonably determined by Lender, so long as no Event of
Default has occurred and is continuing, Lender shall cause any Immediate Repair
Funds remaining in the Immediate Repair Account to be deposited into the Cash
Management Account to be applied in accordance with Section 9.3 hereof.

 

Section 8.2.          Replacement Reserve Funds.

 

(a)          Borrower shall deposit (to the extent not deposited pursuant to
Section 9.3(f) hereof) into an Eligible Account held by Cash Management Bank
(the “Replacement Reserve Account”) on each Monthly Payment Date following the
occurrence and during the continuance of a Trigger Period an amount equal to the
Replacement Reserve Monthly Deposit for the Replacements. Amounts deposited
pursuant to this Section 8.2 are referred to herein as the “Replacement Reserve
Funds”.

 

(b)          Lender shall cause the disbursement of Replacement Reserve Funds
only for Replacements. Lender shall cause the disbursement to Borrower of the
Replacement Reserve

 

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Funds upon satisfaction by Borrower of each of the following conditions: (i)
Borrower shall submit a request for payment to Lender at least ten (10) days
prior to the date on which Borrower requests such payment be made and specifies
the Replacements to be paid; (ii) on the date such request is received by Lender
and on the date such payment is to be made, no Event of Default shall exist and
remain uncured, (iii) Lender shall have received a certificate from Borrower (A)
stating that the items to be funded by the requested disbursement are
Replacements, (B) stating that all Replacements at the applicable Individual
Property to be funded by the requested disbursement have been completed (or, for
ongoing work, are in the process of being completed) in a good and workmanlike
manner and in accordance with all applicable Legal Requirements, such
certificate to be accompanied by a copy of any license, permit or other approval
required by any Governmental Authority, if any, in connection with the
Replacements, (C) identifying each Person that supplied materials or labor in
connection with the Replacements to be funded by the requested disbursement and
(D) stating that each such Person has been paid in full or will be paid in full
upon such disbursement (or for ongoing work, such Person has been or will be
paid upon such disbursement for the work identified in such certificate from
Borrower with respect to such disbursement), such certificate to be accompanied
by, as applicable, partial (with respect to such ongoing work) or complete lien
waivers, invoices and/or other evidence of payment reasonably satisfactory to
Lender; (iv) at Lender’s option, if (A) the Allocated Loan Amount of the
Individual Property to which such individual Replacement relates is less than
$5,000,000 and the cost of such individual Replacement exceeds $25,000 or (B)
the Allocated Loan Amount of the Individual Property to which such individual
Replacement relates is equal to or greater than $5,000,000 and the cost of the
individual Replacement exceeds $100,000, a title search for the applicable
Individual Property indicating that the applicable Individual Property is free
from all liens, claims and other encumbrances other than Permitted Encumbrances;
(v) at Lender’s option, if (A) the Allocated Loan Amount of the Individual
Property to which such individual Replacement relates is less than $5,000,000
and the cost of such individual Replacement exceeds $25,000 or (B) the Allocated
Loan Amount of the Individual Property to which such individual Replacement
relates is equal to or greater than $5,000,000 and the cost of the individual
Replacement exceeds $100,000, Lender shall have received a report reasonably
satisfactory to Lender in its reasonable discretion from an architect or
engineer reasonably approved by Lender in respect of such architect or
engineer’s inspection of the required repairs; and (vi) Lender shall have
received such other evidence as Lender shall reasonably request that the
Replacements at the Property to be funded by the requested disbursement have
been completed (or, for ongoing work, are in the process of being completed).
Lender shall not be required to cause the disbursement of Replacement Reserve
Funds more frequently than once each calendar month nor in an amount less than
the Minimum Disbursement Amount (or a lesser amount if the total amount of
Replacement Reserve Funds is less than the Minimum Disbursement Amount, in which
case only one disbursement of the amount remaining in the account shall be
made).

 

(c)          Nothing in this Section 8.2 shall (i) make Lender responsible for
making or completing the Replacements; (ii) require Lender to expend funds in
addition to the Replacement Reserve Funds to complete any Replacements; (iii)
obligate Lender to proceed with the Replacements; or (iv) obligate Lender to
demand from Borrower additional sums to complete any Replacements.

 

(d)          Borrower shall permit Lender and Lender’s agents and
representatives (including, without limitation, Lender’s engineer, architect, or
inspector) or third parties to enter onto the

 

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Property during normal business hours (subject to the rights of Tenants under
their Leases) to inspect the progress of any Replacements and all materials
being used in connection therewith and to examine all plans and shop drawings
relating to such Replacements. Borrower shall cause all contractors and
subcontractors to cooperate with Lender or Lender’s representatives or such
other Persons described above in connection with inspections described in this
Section.

 

(e)          Provided no Event of Default has occurred and is continuing, Lender
shall cause any Replacement Reserve Funds remaining in the Replacement Reserve
Account to be disbursed to Borrower provided that no Trigger Period pursuant to
any of clauses (A)(i) through (iv) in the definition thereof is continuing.

 

Section 8.3.          Leasing Reserve Funds.

 

(a)          Borrower shall deposit (to the extent not deposited pursuant to
Section 9.3(g) hereof) into an Eligible Account held by Cash Management Bank
(the “Leasing Reserve Account”) on each Monthly Payment Date following the
occurrence and during the continuance of a Trigger Period the Leasing Reserve
Monthly Deposit for tenant improvements and leasing commissions that may be
incurred following the date hereof (but not including any tenant improvements or
leasing commissions already reserved for pursuant to Section 8.8 hereof).
Amounts deposited pursuant to this Section 8.3 are referred to herein as the
“Leasing Reserve Funds”.

 

(b)          Lender shall cause the disbursement to Borrower of the Leasing
Reserve Funds upon satisfaction by Borrower of each of the following conditions:
(i) Borrower shall submit a request for payment to Lender at least ten (10) days
prior to the date on which Borrower requests such payment be made and specifies
the tenant improvement costs and leasing commissions to be paid; (ii) on the
date such request is received by Lender and on the date such payment is to be
made, no Event of Default shall exist and remain uncured; (iii) Lender shall
have reviewed and approved the Lease (to the extent that Lender’s approval is
required under the provisions of this Agreement) and related leasing commissions
in respect of which Borrower is obligated to pay or reimburse certain tenant
improvement costs and leasing commissions, which approval shall not be
unreasonably withheld, conditioned or delayed; (iv) Lender shall have received
and approved a budget for tenant improvement costs and a schedule of leasing
commissions payments and the requested disbursement will be used to pay all or a
portion of such costs and payments; (v) Lender shall have received a certificate
from Borrower (A) stating that all tenant improvements at the applicable
Individual Property to be funded by the requested disbursement have been
completed (or, for ongoing work, are in the process of being completed) in good
and workmanlike manner and in accordance with all applicable federal, state and
local laws, rules and regulations, such certificate to be accompanied by a copy
of any license, permit or other approval, if any, by any Governmental Authority
required in connection with the tenant improvements, (B) identifying each Person
that supplied materials or labor in connection with the tenant improvements to
be funded by the requested disbursement and (C) stating that each such Person
has been paid in full or will be paid in full upon such disbursement (or for
ongoing work, such Person has been or will be paid upon such disbursement for
the work identified in such certificate from Borrower with respect to such
disbursement), such certificate to be accompanied by lien waivers, invoices
and/or other evidence of payment reasonably satisfactory to Lender; (vi) at
Lender’s option, if (A) the Allocated Loan Amount of the Individual Property

 

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to which such individual tenant improvement relates is less than $5,000,000 and
the cost of such individual tenant improvement exceeds $25,000 or (B) the
Allocated Loan Amount of the Individual Property to which such individual tenant
improvement relates is equal to or greater than $5,000,000 and the cost of the
individual tenant improvement exceeds $100,000, a title search for the
applicable Individual Property indicating that the applicable Individual
Property is free from all liens, claims and other encumbrances not previously
approved by Lender; and (vii) Lender shall have received such other evidence as
Lender shall reasonably request that the tenant improvements at the applicable
Individual Property to be funded by the requested disbursement have been
completed (to the extent applicable) and/or leasing commissions to be funded by
the requested disbursement are due and payable and are paid for or will be paid
upon such disbursement to Borrower. Lender shall not be required to disburse
Leasing Reserve Funds more frequently than once each calendar month nor in an
amount less than the Minimum Disbursement Amount (or a lesser amount if the
total amount of Leasing Reserve Funds is less than the Minimum Disbursement
Amount, in which case only one disbursement of the amount remaining in the
account shall be made).

 

(c)          Provided no Event of Default has occurred and is continuing, Lender
shall cause any Leasing Reserve Funds remaining in the Leasing Reserve Account
to be disbursed to Borrower provided that no Trigger Period pursuant to any of
clauses (A)(i) through (iv) in the definition thereof is continuing.

 

Section 8.4.          Ground Rent Funds. On each Monthly Payment Date occurring
on and after the occurrence and continuance of a Trigger Period (to the extent
not deposited pursuant to Section 9.3(a) hereof), Borrower shall pay (or cause
to be paid) to Lender one-twelfth of an amount which would be sufficient to pay
the Ground Rent payable, or estimated by Lender, in its reasonable discretion,
to be payable during the ensuing twelve (12) months with respect to each
Individual Property under each related Ground Lease in order to pay installments
of Ground Rent at least thirty (30) days prior to the due date for such Ground
Rent (the “Monthly Ground Rent Deposit”), which deposits shall be held in an
Eligible Account by Cash Management Bank and hereinafter referred to as the
“Ground Rent Account” (amounts held in the Ground Rent Account are hereinafter
referred to as the “Ground Rent Funds”). Additionally, if, at any time, Lender
determines, in its reasonable discretion, that amounts on deposit in or
scheduled to be deposited in the Ground Rent Account will be insufficient to pay
all Ground Rent due under the Ground Lease at least thirty (30) days prior to
the due date for such Ground Rent, Borrower shall make a True Up Payment with
respect to such insufficiency into the Ground Rent Account. Borrower agrees to
promptly notify Lender of any changes to the amounts, schedules and instructions
for payment of any Ground Rent of which it has or obtains knowledge and
authorizes Lender or its agent to obtain the bills for Ground Rent directly from
the landlord under such applicable Ground Lease. Provided there are sufficient
amounts in the Ground Rent Account and no Event of Default exists, Lender shall
be obligated to pay the Ground Rent as it becomes due on its respective due
dates on behalf of Borrower by applying the Ground Rent Funds to the payment of
such Ground Rent.

 

Section 8.5.          Excess Cash Flow Funds. After the occurrence and during
the continuance of a Trigger Period, all amounts required to be deposited
pursuant to Section 9.3(j) hereof shall be deposited on each Business Day into
an Eligible Account with Cash Management Bank (the “Excess Cash Flow Account”)
in an amount equal to the Excess Cash Flow as set

 

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forth in Section 9.3(j) hereof (each such deposit being herein referred to as
the “Monthly Excess Cash Flow Deposits” and the amounts on deposit in the Excess
Cash Flow Account being herein referred to as the “Excess Cash Flow Funds”).
Provided no Event of Default has occurred and is continuing, Lender shall cause
any Excess Cash Flow Funds remaining in the Excess Cash Flow Account to be
disbursed to Borrower provided that no Trigger Period pursuant to any of clauses
(A)(i) through (iv) in the definition thereof is continuing.

 

Section 8.6.          Tax and Insurance Funds. Borrower shall pay (or cause to
be paid) to Lender on each Monthly Payment Date occurring on and after the
occurrence and continuance of a Trigger Period (to the extent not deposited
pursuant to Section 9.3(b) and (c) hereof) (a) (i) with respect to each
Individual Property other than a Waived Tax Deposit Property, one-twelfth of an
amount which would be sufficient to pay the Taxes payable, or estimated by
Lender to be payable, during the next ensuing twelve (12) months assuming that
said Taxes are to be paid in full on the Tax Payment Date and (ii) upon the
occurrence and following a Borrower Tax Period with respect to any Waived Tax
Deposit Property, one-twelfth of an amount which would be sufficient to pay the
Taxes payable, or reasonably estimated by Lender to be payable, during the next
ensuing twelve (12) months with respect to each Waived Tax Deposit Property that
is subject to a Borrower Tax Period assuming that said Taxes are to be paid in
full on the Tax Payment Date (the “Monthly Tax Deposit”), each of which such
deposits shall be held in an Eligible Account with Cash Management Bank (the
“Tax Account”), and (b) at the option of Lender, if the liability or casualty
Policy maintained by Borrower covering the Property (or any portion thereof)
shall not constitute an approved blanket or umbrella Policy pursuant to
Subsection 7.1(c) hereof, or Lender shall require Borrower to obtain a separate
Policy pursuant to Subsection 7.1(c) hereof, one-twelfth of an amount which
would be sufficient to pay the Insurance Premiums due for the renewal of the
coverage afforded by the Policies upon the expiration thereof (the “Monthly
Insurance Deposit”), each of which such deposits shall be held in an Eligible
Account with Cash Management Bank (the “Insurance Account”; amounts held in the
Tax Account and the Insurance Account are collectively herein referred to as the
“Tax and Insurance Funds”). Additionally, if, at any time after the occurrence
and during the continuance of a Trigger Period, Lender reasonably determines
that amounts on deposit in or scheduled to be deposited in (i) the Tax Account
will be insufficient to pay all applicable Taxes in full on the Tax Payment Date
and/or (ii) the Insurance Account will be insufficient to pay all applicable
Insurance Premiums in full on the Insurance Payment Date, Borrower shall make a
True Up Payment with respect to such insufficiency into the applicable Reserve
Account. Borrower agrees to notify Lender immediately of any changes to the
amounts, schedules and instructions for payment of any Taxes and Insurance
Premiums of which it has or obtains knowledge and authorizes Lender or its agent
to obtain the bills for Taxes directly from the appropriate taxing authority.
Provided there are sufficient amounts in the Tax Account and Insurance Account,
respectively, and no Event of Default exists, Lender shall be obligated to pay
the Taxes and Insurance Premiums as they become due on their respective due
dates on behalf of Borrower by applying the Tax and Insurance Funds to the
payment of such Taxes and Insurance Premiums. If the amount of the Tax and
Insurance Funds shall exceed the amounts due for Taxes and Insurance Premiums
pursuant to Sections 4.5 and 7.1 hereof, Lender shall, in its discretion, return
any excess to Borrower or credit such excess against future payments to be made
to the Tax and Insurance Funds. Provided no Event of Default has occurred and is
continuing, Lender shall cause any Tax and Insurance Funds remaining in the Tax
Account

 

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and/or the Insurance Account to be disbursed to Borrower provided that no
Trigger Period pursuant to any of clauses (A)(i) through (iv) in the definition
thereof is continuing.

 

Section 8.7.          Environmental Remediation Funds.

 

(a)          Borrower shall (i) perform or cause the performance of the
environmental investigation and/or Remediation (as defined in the Environmental
Indemnity) work at the Properties as set forth on Schedule VI hereto and (ii)
complete or cause the completion of any further investigation and/or Remediation
work determined to be legally required and/or or necessary and appropriate by an
environmental consultant or engineer reasonably satisfactory to Lender based on
the investigation and remediation activities set forth on Schedule VI; provided
all work performed pursuant to each of the preceding clauses (i) and (ii), shall
be performed in compliance with all Environmental Laws (as defined in the
Environmental Indemnity) and other applicable Legal Requirements and to the
extent necessary and appropriate in order for the Borrower to obtain or
otherwise produce written documentation of regulatory closure from an applicable
Governmental Authority with jurisdiction over such investigation and remediation
in form and substance reasonably satisfactory to Lender, documenting the
completion of such investigation and/or remediation such that no further action
is required to protect human health and safety with respect to the identified
environmental conditions and in order to comply with applicable Environmental
Laws (provided, however, in the event that it is not the custom or practice of
the Governmental Authority to oversee such work or to issue such letter or
documentation under such circumstances, such requirement shall be deemed
satisfied by delivery of documentation in form and substance reasonably
satisfactory to Lender from an environmental consultant or engineer reasonably
acceptable to Lender evidencing completion of such work and concluding that no
further action is required to protect human health and safety with respect to
the identified environmental conditions in compliance with Environmental Laws
and consistent with applicable regulatory requirements) (all such environmental
investigation and/or Remediation work are hereinafter referred to as the
“Environmental Remediation”). Borrower shall complete each of the Environmental
Remediation on or before the respective deadline, if any, for each item of
environmental investigation and Remediation work as set forth on Schedule VI
hereto. On the Closing Date, Borrower shall deposit into an Eligible Account
held by Cash Management Bank (the “Environmental Remediation Account”) an amount
equal to $5,281,950, such amount representing 115% of the estimated costs of the
Environmental Remediation. Amounts deposited pursuant to this Section 8.7 are
referred to herein as the “Environmental Remediation Funds”.

 

(b)          Borrower shall or shall cause the Person performing the
Environmental Remediation to provide Lender the reports and other results of the
Environmental Remediation at the same time Borrower receives such reports and
results and Lender shall be entitled to rely on such reports and other results.
Borrower shall promptly notify Lender of any material change in the scope,
anticipated duration, timing or cost of the Environmental Remediation.

 

(c)          Lender shall cause the disbursement to Borrower of the
Environmental Remediation Funds upon satisfaction by Borrower of each of the
following conditions: (i) Borrower shall submit a request for payment to Lender
at least ten (10) days prior to the date on which Borrower requests such payment
be made and either (I) specifies the Environmental Remediation to be paid or
(II) provides evidence reasonably acceptable to Lender that ongoing

 

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investigation or Remediation in accordance with the terms and conditions of
Section 8.7(a) above shall have disclosed that the amounts reserved with respect
to an Individual Property for Environmental Remediation are no longer necessary;
(ii) on the date such request is received by Lender and on the date such payment
is to be made, no Event of Default shall exist and remain uncured; (iii) Lender
shall have received a certificate from Borrower (A) stating that all
Environmental Remediation to be funded by the requested disbursement has been
completed in a good and workmanlike manner and in accordance with all applicable
Legal Requirements and in accordance with the terms and conditions of Section
8.7(a) above, such certificate to be accompanied by a copy of any license,
permit or other approval by any Governmental Authority, if any, required in
connection with the Environmental Remediation, (B) identifying each Person that
supplied materials or labor in connection with the Environmental Remediation to
be funded by the requested disbursement, and (C) stating that each such Person
has been paid in full or will be paid in full upon such disbursement (or for
ongoing work, such Person has been or will be paid upon such disbursement for
the work identified in such certificate from Borrower with respect to such
disbursement), such certificate to be accompanied by, as applicable, partial
(with respect to such ongoing work) or complete lien waivers, invoices and/or
other evidence of payment reasonably satisfactory to Lender; (iv) at Lender’s
option, if (A) the Allocated Loan Amount of the Individual Property to which
such Environmental Remediation relates is less than $5,000,000 and the cost of
such individual Environmental Remediation exceeds $25,000 or (B) the Allocated
Loan Amount of the Individual Property to which such Environmental Remediation
relates is equal to or greater than $5,000,000 and the cost of the individual
Environmental Remediation exceeds $100,000, a title search for the applicable
Individual Property indicating that the applicable Individual Property is free
from all liens, claims and other encumbrances other than Permitted Encumbrances;
(v) at Lender’s option, if (A) the Allocated Loan Amount of the Individual
Property to which such Environmental Remediation relates is less than $5,000,000
and the cost of such individual Environmental Remediation exceeds $25,000 or (B)
the Allocated Loan Amount of the Individual Property to which such Environmental
Remediation relates is equal to or greater than $5,000,000 and the cost of the
individual Environmental Remediation exceeds $100,000, Lender shall have
received a report reasonably satisfactory to Lender in its reasonable discretion
from an environmental consultant or engineer reasonably approved by Lender in
respect of such consultant or engineer’s inspection of the required
Environmental Remediation; and (vi) Lender shall have received such other
evidence as Lender shall reasonably request that the Environmental Remediation
to be funded by the requested disbursement has been completed and are paid for
or will be paid upon such disbursement to Borrower. Lender shall not be required
to disburse Environmental Remediation Funds more frequently than once each
calendar month nor in an amount less than the Minimum Disbursement Amount (or a
lesser amount if the total Environmental Remediation Funds is less than the
Minimum Disbursement Amount, in which case only one disbursement of the amount
remaining in the account shall be made). Following the completion of all
Environmental Remediation as reasonably determined by Lender, so long as no
Event of Default has occurred and is continuing, Lender shall cause any
Environmental Remediation Funds remaining in the Environmental Remediation
Account to be deposited into the Cash Management Account to be applied in
accordance with Section 9.3 hereof. In addition, if Borrower shall deliver to
Lender a PLL Policy meeting the requirements of this Agreement and in form and
substance reasonably acceptable to Lender on or before August 14, 2015, so long
as no Event of Default has occurred and is continuing, Lender shall promptly
cause any

 

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Environmental Remediation Funds to be disbursed to Borrower and in the event
that Borrower shall not deliver a PLL Policy meeting the requirements of this
Agreement and in form and substance reasonably acceptable to Lender on or before
August 14, 2015, Borrower shall not be required to obtain such PLL Policy.

 

Section 8.8.          Unfunded Obligations Funds.

 

(a)          On the Closing Date Borrower shall deposit into an Eligible Account
held by Cash Management Bank (the “Unfunded Obligations Account”) the sum of
$256,141.98 for security deposits and rent credits and other credits, and other
obligations of Borrower to Tenants under Leases that are outstanding on the
Closing Date as set forth on Schedule VII hereto (the “Unfunded Obligations”).
Borrower represents and warrants that Schedule VII is a true, correct and
complete list of all security deposits and rent credits and other credits, and
other obligations of Borrower to Tenants under Leases that are outstanding on
the Closing Date. Amounts deposited pursuant to this Section 8.8 are referred to
herein as the “Unfunded Obligations Funds”. Borrower shall pay and/or perform
the Unfunded Obligations when due.

 

(b)          Lender shall cause the disbursement to Borrower the Unfunded
Obligations Funds (or portions thereof) upon satisfaction by Borrower of each of
the following conditions: (i) Borrower shall submit a request for payment to
Lender at least ten (10) days prior to the date on which Borrower requests such
payment be made and, if such request relates to a disbursement of Unfunded
Obligations Funds for rent credits and/or other credits and/or security
deposits, such request shall provide evidence reasonably satisfactory to Lender
that such rent and/or other credits and/or security deposits under the
applicable Lease for which Borrower is requesting disbursement of Unfunded
Obligations Funds has expired and/or have been paid to the Tenant, (ii) on the
date such request is received by Lender and on the date such payment is to be
made, no Event of Default shall exist and remain uncured; (iii) to the extent
the amount of the requested disbursement for any item set forth on Schedule VII
(together with any previous disbursements for such item) exceeds the amount set
forth on Schedule VII, Lender shall have reasonably approved such disbursement;
(iv) Lender shall have received a certificate from Borrower (A) stating that (I)
with respect to disbursements of Unfunded Obligations Funds for credits for
tenant improvements, all tenant improvements at the Property to be funded by the
requested disbursement have been completed in good and workmanlike manner and in
accordance with all applicable federal, state and local laws, rules and
regulations, such certificate to be accompanied by a copy of any license, permit
or other approval by any Governmental Authority, if any, required in connection
with the tenant improvements and (II) with respect to disbursement of Unfunded
Obligations Funds for rent credits and/or other credits and/or security
deposits, the applicable rent credits and/or other credits and/or security
deposits under the Lease for which disbursement is sought by Borrower has
expired and/or have been paid to Tenant, (B) with respect to disbursements of
Unfunded Obligations Funds for credits for tenant improvements, identifying each
Person that supplied materials or labor in connection with the tenant
improvements to be funded by the requested disbursement and (C) with respect to
disbursements of Unfunded Obligations Funds for credits for tenant improvements,
stating that each such Person has been paid in full with respect to all amounts
then due or will be paid in full with respect to all amounts then due upon such
disbursement (or for ongoing work, such Person has been or will be paid upon
such disbursement for the work identified in such certificate from Borrower with
respect to such disbursement), such certificate to be accompanied by, as

 

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applicable, partial (with respect to such ongoing work) or complete lien
waivers, invoices and/or other evidence of payment reasonably satisfactory to
Lender; (v) at Lender’s option, if (A) the Allocated Loan Amount of the
Individual Property to which such credits for individual tenant improvement
relates is less than $5,000,000 and the cost of such individual tenant
improvement exceeds $25,000 or (B) the Allocated Loan Amount of the Individual
Property to which such credits for individual tenant improvement relates is
equal to or greater than $5,000,000 and the cost of the individual tenant
improvement exceeds $100,000, a title search for the applicable Individual
Property indicating that the applicable Individual Property is free from all
liens, claims and other encumbrances other than Permitted Encumbrances, and (vi)
at Lender’s option, if (A) the Allocated Loan Amount of the Individual Property
to which such credits for individual tenant improvement relates is less than
$5,000,000 and the cost of such individual tenant improvement exceeds $25,000 or
(B) the Allocated Loan Amount of the Individual Property to which such
individual tenant improvement relates is equal to or greater than $5,000,000 and
the cost of the individual tenant improvement exceeds $100,000, Lender shall
have received a report reasonably satisfactory to Lender in its reasonable
discretion from an architect or engineer reasonably approved by Lender in
respect of such architect or engineer’s inspection of such tenant improvement.
Lender shall not be required to disburse Unfunded Obligations Funds more
frequently than once each calendar month nor in an amount less than the Minimum
Disbursement Amount (or a lesser amount if the total amount of Unfunded
Obligations Funds remaining, is less than the Minimum Disbursement Amount, in
which case only one disbursement of the amount remaining in the account shall be
made). Notwithstanding the foregoing, any disbursement of Unfunded Obligations
Funds with respect to rent credits and/or other credits shall instead of being
disbursed to Borrower be deposited into the Cash Management Account for
application in accordance with the Cash Management Agreement on the next Monthly
Payment Date. Following the completion of all Unfunded Obligations as reasonably
determined by Lender, so long as no Event of Default has occurred and is
continuing, Lender shall cause any Unfunded Obligations Funds remaining in the
Unfunded Obligations Account to be deposited into the Cash Management Account to
be applied in accordance with Section 9.3 hereof.

 

Section 8.9.          Special Reserve Funds.

 

(a)          On the Closing Date, Borrower shall deposit into an Eligible
Account held by Cash Management Bank (the “Special Reserve Account”) an amount
equal to $30,055,664, such amount representing, in the aggregate, the Allocated
Loan Amounts of the Special Reserve Properties for which as of the Closing Date
(i) Lender has not received a Ground Lease and a Ground Lease estoppel in form
and substance reasonably acceptable to Lender (not including the Individual
Property located at 1189 St. Augustine Road, Valdosta, Georgia (the “Valdosta
Property”) which is governed pursuant to the immediately succeeding clause (ii))
and (ii) Lender has not received the Valdosta Bond Documents, the Valdosta Power
of Attorney, the Assignment of Bond and Deed, the Security Instrument executed
by Valdosta-Lowndes County Industrial Authority and an estoppel and UCC
financing statement in connection therewith (and Title Insurance Policy related
thereto), a New York opinion with respect to the creation of the lien under New
York law with respect to the Article 9 UCC collateral under the Security
Instrument related to the Valdosta Property, a Georgia enforceability opinion
with respect to the Security Instrument related to the Valdosta Property, the
Valdosta Power of Attorney and the Assignment of Bond and Deed, a Delaware
capacity opinion with respect to Borrower’s

 

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execution of the Valdosta Power of Attorney, Assignment of Bond and Deed and the
Security Instrument related to the Valdosta Property and a Delaware
enforceability opinion with respect to the grant and perfection of the personal
property security interest created by the Security Instrument related to the
Valdosta Property and the Assignment of Bond and Deed and the UCC financing
statements filed in connection therewith, in each instance in form and substance
reasonably acceptable to Lender (collectively, the “Valdosta Required Documents”
and clauses (i) and (ii), collectively, the “Special Reserve Shortfalls”).
Amounts deposited pursuant to this Section 8.9 are referred to herein as the
“Special Reserve Funds.”

 

(b)          Provided that no Event of Default has occurred and is continuing,
if (x) with respect to the Special Reserve Properties referenced in clause
(a)(i) immediately above, Borrower shall deliver to Lender a Ground Lease and a
Ground Lease estoppel with respect to a Special Reserve Property in form and
substance reasonably acceptable to Lender, (y) with respect to the Special
Reserve Property referenced in clause (a)(ii) immediately above, Borrower shall
deliver to Lender the Valdosta Required Documents and (z) each Rating Agency
shall confirm (I) with respect to the Special Reserve Properties referenced in
clause(a)(i) immediately above, that such Ground Lease and such Ground Lease
estoppel shall not reduce any rated mortgage proceeds or reduce the underwritten
income associated with such Special Reserve Property related thereto and (II)
with respect to the Special Reserve Property referenced in clause (a)(ii)
immediately above, that such Valdosta Required Documents shall not reduce any
rated mortgage proceeds or reduce the underwritten income associated with such
Special Reserve Property related thereto, then, as applicable, Lender shall
cause the disbursement of an amount equal to the Allocated Loan Amount of such
Special Reserve Property on deposit in the Special Reserve to Borrower promptly
upon written request from Borrower therefor.

 

(c)          If (I) with respect to the Special Reserve Property referenced in
Section 8.9(a)(i) immediately above, a Ground Lease and Ground Lease estoppel
shall have been delivered to Lender for which any Rating Agency shall have
reduced any rated mortgage proceeds, have reduced the underwritten income
associated with such Special Reserve Property and/or have given zero credit to
such Special Reserve Property and/or (II) with respect to the Special Reserve
Property referenced in Section 8.9(a)(ii) immediately above, the Valdosta
Required Documents shall have been delivered to Lender for which any Rating
Agency shall have reduced any rated mortgage proceeds, have reduced the
underwritten income associated with such Special Reserve Property and/or have
given zero credit to such Special Reserve Property, then automatically and
without any notice to Borrower, Lender shall apply funds on deposit in the
Special Reserve Account related to such Special Reserve Property to pay down
(without any Yield Maintenance Premium or penalty provided that no Event of
Default has occurred and is continuing and/or no Securitization has occurred)
the Loan by (x) with respect to a reduction in any rated mortgage proceeds or
reduction in the underwritten income associated with such Special Reserve
Property, an amount determined by Lender in good faith to correct such reduction
in any rated mortgage proceeds or reduction in the underwritten income
associated with such Special Reserve Property and (y) with respect to a Special
Reserve Property for which any Rating Agency shall have given zero credit to
such Special Reserve Property, the Allocated Loan Amount of such Special Reserve
Property and, provided that no Event of Default has occurred and is continuing
and Lender exercised such right, Lender shall disburse the amount remaining in
the Special Reserve Account and allocated to such Special Reserve Property (if
any) to Borrower promptly upon written request from Borrower therefor. In the
event that Lender shall pay down the Loan by the

 

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Allocated Loan Amount of which Special Reserve Property, Lender shall promptly
deliver to Borrower, at Borrower’s cost and expense, a release of lien for such
Special Reserve Property (to the extent a Security Instrument was recorded
against such Special Reserve Property) and Lender shall release the Security
Instrument on such Special Reserve Property. Such release shall be in a form
appropriate in each jurisdiction in which such Special Reserve Property is
located and shall contain standard provisions satisfactory to a prudent lender
acting reasonably and Borrower shall prepare the initial draft of such release
for Lender to review. In addition to Lender applying the Special Reserve Funds
to pay down the Loan as set forth in this Section 8.9(c), if an Event of Default
shall have occurred and be continuing and/or if a Securitization shall have
occurred, Borrower shall pay to Lender within three (3) Business Days of notice
from Lender the applicable Interest Shortfall associated with such pay down by
Lender.

 

(d)          If (I) with respect to the Special Reserve Properties referenced in
Section 8.9(a)(i) immediately above, Borrower shall fail to deliver to Lender a
Ground Lease and a Ground Lease estoppel with respect to each Special Reserve
Property in form and substance reasonably acceptable to Lender on or prior
August 31, 2015 and/or (II) with respect to the Special Reserve Property
referenced in Section 8.9(a)(ii) immediately above, Borrower shall fail to
deliver to Lender the Valdosta Required Documents to Lender on or prior to
August 31, 2015, then, automatically and without the requirement of notice to
Borrower, on August 31, 2015, Lender shall apply an amount equal to the
Allocated Loan Amount for such Special Reserve Property to pay down the Loan
(without any Yield Maintenance Premium or penalty provided that no Event of
Default has occurred) and shall promptly deliver to Borrower, at Borrower’s cost
and expense, a release of lien for each Special Reserve Property (to the extent
a Security Instrument was recorded against such Special Reserve Property) and
Lender shall release the Security Instrument on such Special Reserve Property.
Such release shall be in a form appropriate in each jurisdiction in which each
Special Reserve Property is located and shall contain standard provisions
satisfactory to a prudent lender acting reasonably and Borrower shall prepare
the initial draft of such release for Lender to review. In addition to Lender
applying the Special Reserve Funds to pay down the Loan on such agreed date, if
an Event of Default shall have occurred and be continuing and/or if a
Securitization shall have occurred, Borrower shall pay to Lender within three
(3) Business Days of notice from Lender the applicable Interest Shortfall
associated with such pay down by Lender.

 

(e)          With respect to each pay down of the Loan pursuant to this Section
8.9, Borrower acknowledges and agrees that, promptly upon Lender’s request,
Borrower shall, at its sole cost and expense, cooperate and enter into an
amendment to this Agreement, in form and substance reasonably acceptable to
Lender, to revise the definition of “Closing Date Debt Service Coverage Ratio”
to reflect the Debt Service Coverage Ratio after giving effect to such
prepayment of the Loan pursuant to this Section 8.9 and to amend the terms and
conditions of this Agreement with respect to Ground Leases and the Valdosta Bond
Documents, the Valdosta Power of Attorney and the Assignment of Bond and Deed to
reflect the removal (if applicable) of such Special Reserve Property.

 

Section 8.10.         The Accounts Generally.

 

(a)          Borrower grants to Lender a first-priority perfected security
interest in each of the Accounts and any and all sums now or hereafter deposited
in the Accounts as additional security

 

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for payment of the Debt. Until expended or applied or disbursed in accordance
herewith, the Accounts and the funds deposited therein shall constitute
additional security for the Debt. The provisions of this Section 8.10 (together
with the other related provisions of the other Loan Documents) are intended to
give Lender and/or Servicer “control” of the Accounts and the Account Collateral
and serve as a “security agreement” and a “control agreement” with respect to
the same, in each case, within the meaning of the UCC. Borrower acknowledges and
agrees that the Accounts are subject to the sole dominion, control and
discretion of Lender, its authorized agents or designees, subject to the terms
hereof, and Borrower shall have no right of withdrawal with respect to any
Account except with the prior written consent of Lender or as otherwise provided
herein. The funds on deposit in the Accounts shall not constitute trust funds
and (other than funds in the Cash Management Account and/or the Restricted
Account) may be commingled with other monies held by Cash Management Bank.
Notwithstanding anything to the contrary contained herein, unless otherwise
consented to in writing by Lender, Borrower shall only be permitted to request
(and Lender shall only be required to disburse) Reserve Funds on account of the
liabilities, costs, work and other matters (as applicable) for which said sums
were originally reserved hereunder, in each case, in accordance with the terms
of this Agreement.

 

(b)          Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in the Accounts or
the sums deposited therein or permit any lien to attach thereto, or any levy to
be made thereon, or any UCC-1 Financing Statements, except those naming Lender
as the secured party, to be filed with respect thereto. Subject to the Security
Instruments, Borrower hereby authorizes Lender to file a financing statement or
statements under the UCC in connection with any of the Accounts and the Account
Collateral in the form required to properly perfect Lender’s security interest
therein. Borrower agrees that at any time and from time to time, at the expense
of Borrower, Borrower will promptly execute and deliver all further instruments
and documents, and take all further action, that may be reasonably necessary or
desirable, or that Lender may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby
(including, without limitation, any security interest in and to any Permitted
Investments) or to enable Lender to exercise and enforce its rights and remedies
hereunder with respect to any Account or Account Collateral.

 

(c)          Notwithstanding anything to the contrary contained herein or in any
other Loan Document, upon the occurrence and during the continuance of an Event
of Default, without notice from Lender or Servicer (i) Borrower shall have no
rights in respect of the Accounts, (ii) Lender may liquidate and transfer any
amounts then invested in Permitted Investments pursuant to the applicable terms
hereof to the Accounts 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 pursuant to the
other Loan Documents or to enable Lender to exercise and enforce Lender’s rights
and remedies hereunder or under any other Loan Document with respect to any
Account or any Account Collateral, and (iii) Lender shall have all rights and
remedies with respect to the Accounts and the amounts on deposit therein and the
Account Collateral as described in this Agreement and in the Security
Instrument, in addition to all of the rights and remedies available to a secured
party under the UCC, and, notwithstanding anything to the contrary contained in
this Agreement or in the Security

 

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Instruments, may apply the amounts of such Accounts as Lender determines in its
sole discretion including, but not limited to, payment of the Debt.

 

(d)          The insufficiency of funds on deposit in the Accounts shall not
absolve Borrower of the obligation to make any payments, as and when due
pursuant to this Agreement and the other Loan Documents, and such obligations
shall be separate and independent, and not conditioned on any event or
circumstance whatsoever.

 

(e)          Borrower shall indemnify Lender and hold Lender harmless from and
against any and all actions, suits, claims, demands, liabilities, losses,
damages (excluding consequential, special and punitive damages), obligations and
costs and expenses (including litigation costs and reasonable attorneys fees and
expenses) arising from or in any way connected with the Accounts, the sums
deposited therein or the performance of the obligations for which the Accounts
were established, except to the extent arising from the gross negligence or
willful misconduct of Lender, its agents or employees. Borrower shall assign to
Lender all rights and claims Borrower may have against all Persons supplying
labor, materials or other services which are to be paid from or secured by the
Accounts; provided, however, that Lender may not pursue any such right or claim
unless an Event of Default has occurred and remains uncured.

 

(f)          Borrower and Lender (or Servicer on behalf of Lender) shall
maintain (or cause to be maintained) each applicable Account as an Eligible
Account, except as otherwise expressly agreed to in writing by Lender. In the
event that Cash Management Bank no longer satisfies the criteria for an Eligible
Institution, Borrower shall cooperate with Lender in transferring the applicable
Accounts to an institution that satisfies such criteria. Borrower hereby grants
Lender power of attorney (irrevocable for so long as the Loan is outstanding)
with respect to any such transfers and the establishment of accounts with a
successor institution, which power of attorney Lender may exercise only during
the continuation of an Event of Default.

 

(g)          Interest accrued on any Account other than an Interest Bearing
Account shall not be required to be remitted either to Borrower or to any
Account and may instead be retained by Lender. Funds deposited in the Interest
Bearing Accounts shall be invested in Permitted Investments as provided for in
Section 8.10(h) hereof. Interest accrued, if any, on sums on deposit in the
Interest Bearing Accounts shall be remitted to and become part of the applicable
Account. All such interest that so becomes part of the applicable Account shall
be disbursed in accordance with the disbursement procedures contained herein
applicable to such Account; provided, however, that Lender may, at its election,
retain any such interest for its own account during the occurrence and
continuance of an Event of Default.

 

(h)          Sums on deposit in the Interest Bearing Accounts shall, upon
Borrower’s written request, be invested in Permitted Investments selected by
Lender or Servicer provided (i) such investments are then regularly offered by
Lender (or Servicer on behalf of Lender) for accounts of this size, category and
type (Borrower acknowledges that the Servicer or Lender may only offer as an
investment opportunity the right to place funds on deposit in the applicable
Accounts in an interest bearing account (bearing interest at the money market
rate)), (ii) such investments are permitted by applicable federal, State and
local rules, regulations and laws, (iii) the maturity date of the Permitted
Investment is not later than the date on which sums in the Interest Bearing
Accounts are required to be disbursed pursuant to the terms hereof, and (iv) no
Event of Default

 

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shall have occurred and be continuing. All income earned from the aforementioned
Permitted Investments shall be property of Borrower and Borrower hereby
irrevocably authorizes and directs Lender (or Servicer on behalf of Lender) to
hold any income earned from the aforementioned Permitted Investments as part of
the applicable Interest Bearing Account. Borrower shall be responsible for
payment of any federal, State or local income or other tax applicable to income
earned from Permitted Investments. No other investments of the sums on deposit
in the Interest Bearing Accounts shall be permitted. Lender shall not be liable
for any loss sustained on the investment of any funds in the Interest Bearing
Accounts unless due to the gross negligence or willful misconduct of Lender.

 

(i)          Borrower acknowledges and agrees that it solely shall be, and shall
at all times remain, liable to Lender, Servicer and Cash Management Bank, as
applicable, for all fees, charges, costs and expenses in connection with the
Accounts, the execution and delivery of this Agreement and the enforcement
hereof, including, without limitation, any monthly or annual fees or charges as
may be assessed by Lender, Servicer or Cash Management Bank in connection with
the administration of the Accounts (but subject to Section 17.6 hereof) and the
reasonable fees and expenses of legal counsel to Lender, Cash Management Bank
and Servicer as needed to enforce, protect or preserve the rights and remedies
of Lender and/or Servicer under this Agreement.

 

Section 8.11.         Letters of Credit.

 

(a)          Following the Closing Date and Borrower’s deposit of funds into the
Immediate Repair Account on the Closing Date in accordance with Section 8.1
hereof, Borrower may from time to time deliver to Lender a Letter of Credit in
accordance with the provisions of this Section 8.11 in replacement of such
amounts then on deposit in the Immediate Repair Account. Any Letter of Credit
from time to time delivered in replacement of funds on deposit in the Immediate
Repair Reserve Account shall be in an amount equal to the amount of Immediate
Repair Reserve Funds held by Cash Management Bank in cash on the date such
Letter of Credit is delivered to Lender and Borrower shall give Lender no less
than ten (10) days written notice of Borrower’s election to deliver a Letter of
Credit together with a draft of the proposed Letter of Credit and Borrower shall
pay to Lender all of Lender’s reasonable out-of-pocket costs and expenses in
connection therewith. Upon such delivery to Lender of a Letter of Credit in the
amount equal to the amount of Immediate Repairs Funds held by Cash Management
Bank in cash on the date of delivery of such Letter of Credit and provided that
no Event of Default has occurred and is continuing, Lender shall promptly cause
the Cash Management Bank to disburse any funds held by the Cash Management Bank
in cash in the Immediate Repair Account to Borrower. No party other than Lender
shall be entitled to draw on any such Letter of Credit. In the event that any
disbursement of any Immediate Repairs Funds relates to a portion thereof
provided through a Letter of Credit, any “disbursement” of said funds as
provided above shall be deemed to refer to (i) Borrower providing Lender a
replacement Letter of Credit in an amount equal to the original Letter of Credit
posted less the amount of the applicable disbursement provided hereunder and
(ii) Lender, after receiving such replacement Letter of Credit, returning such
original Letter of Credit to Borrower; provided, that, no replacement Letter of
Credit shall be required with respect to the final disbursement of the Immediate
Repair Funds such that no further sums are required to be on deposit in the
Immediate Repair Account.

 

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(b)          Each Letter of Credit delivered hereunder shall be additional
security for the payment of the Debt. Upon the occurrence and during the
continuance of an Event of Default, Lender shall have the right, at its option,
to draw on any Letter of Credit and to apply all or any part thereof to the
payment of the items for which such Letter of Credit was established or to apply
each such Letter of Credit to payment of the Debt in such order, proportion or
priority as Lender may determine. Any such application to the Debt shall be
subject to the terms and conditions hereof relating to application of sums to
the Debt. Lender shall have the additional rights to draw in full any Letter of
Credit: (i) if Lender has received a notice from the issuing bank that the
Letter of Credit will not be renewed and a substitute Letter of Credit is not
provided at least forty five (45) days prior to the date on which the
outstanding Letter of Credit is scheduled to expire; (ii) if Lender has not
received a notice from the issuing bank that it has renewed the Letter of Credit
at least forty five (45) days prior to the date on which such Letter of Credit
is scheduled to expire and a substitute Letter of Credit is not provided at
least forty five (45) days prior to the date on which the outstanding Letter of
Credit is scheduled to expire; (iii) upon receipt of notice from the issuing
bank that the Letter of Credit will be terminated (except if the termination of
such Letter of Credit is permitted pursuant to the terms and conditions hereof
or a substitute Letter of Credit is provided by no later than forty five (45)
days prior to such termination); (iv) if Lender has received notice that the
bank issuing the Letter of Credit shall cease to be an Approved Bank and
Borrower has not substituted a Letter of Credit from an Approved Bank within
fifteen (15) days after notice; and/or (v) if the bank issuing the Letter of
Credit shall fail to (A) issue a replacement Letter of Credit in the event the
original Letter of Credit has been lost, mutilated, stolen and/or destroyed or
(B) consent to the transfer of the Letter of Credit to any Person designated by
Lender in connection with a Secondary Market Transaction. If Lender draws upon a
Letter of Credit pursuant to the terms and conditions of this Agreement,
provided no Event of Default exists, Lender shall apply all or any part thereof
for the purposes for which such Letter of Credit was established.
Notwithstanding anything to the contrary contained in the above, Lender is not
obligated to draw any Letter of Credit upon the happening of an event specified
in (i), (ii), (iii), (iv) or (v) above and shall not be liable for any losses
sustained by Borrower due to the insolvency of the bank issuing the Letter of
Credit if Lender has not drawn the Letter of Credit.

 

ARTICLE 9.

CASH MANAGEMENT

 

Section 9.1.          Establishment of Certain Accounts.

 

(a)          Borrower shall, simultaneously herewith, establish an Eligible
Account with Wells Fargo Bank, National Association (the “Restricted Account”)
pursuant to the Restricted Account Agreement in the name of ARC AAANGIN001, LLC
for the sole and exclusive benefit of Lender into which Borrower shall deposit,
or cause to be deposited, all revenue generated by the Property. Pursuant to the
Restricted Account Agreement, funds on deposit in the Restricted Account shall
be transferred on each Business Day to the Cash Management Account.

 

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(b)          Simultaneously herewith, Lender, on Borrower’s behalf, shall
establish an Eligible Account (the “Cash Management Account”) with Wells Fargo
Bank, National Association, in the name of Borrower for the sole and exclusive
benefit of Lender in accordance with that certain Cash Management Agreement,
dated as of the date hereof, by and among Wells Fargo Bank, National
Association, Borrower and Lender (as the same may be amended, restated or
modified from time to time, the “Cash Management Agreement”). Simultaneously
herewith, Lender, on Borrower’s behalf, shall also establish with Lender, Cash
Management Bank or Servicer an Eligible Account into which Borrower shall
deposit, or cause to be deposited the amounts required for the payment of Debt
Service under the Loan (the “Debt Service Account”).

 

Section 9.2.          Deposits into the Restricted Account; Maintenance of
Restricted Account.

 

(a)          Borrower represents, warrants and covenants that, so long as the
Debt remains outstanding, (i) Borrower shall, and shall cause Manager to,
immediately deposit all revenue derived from the Properties and received by
Borrower or Manager, as the case may be, into the Restricted Account; (ii)
Borrower shall instruct Manager to immediately deposit (A) all revenue derived
from the Properties collected by Manager, if any, pursuant to the Management
Agreement (or otherwise) into the Restricted Account and (B) all funds otherwise
payable to Borrower by Manager pursuant to the Management Agreement (or
otherwise in connection with the Properties) into the Restricted Account; (iii)
(A) on or before the Closing Date, Borrower shall have sent (and hereby
represents that it has sent) a notice, substantially in the form of Exhibit A
attached hereto, to all Tenants now occupying space at the Properties directing
them to pay all rent and other sums due under the Lease to which they are a
party into the Restricted Account (such notice, the “Tenant Direction Notice”),
(B) simultaneously with the execution of any Lease entered into on or after the
date hereof in accordance with the applicable terms and conditions hereof,
Borrower shall furnish each Tenant under each such Lease the Tenant Direction
Notice and (C) Borrower shall continue to send the aforesaid Tenant Direction
Notices until each addressee thereof complies with the terms thereof; (iv) there
shall be no other accounts maintained by Borrower or any other Person into which
revenues from the ownership and operation of the Properties (or any portion
thereof) are directly deposited; and (v) neither Borrower nor any other Person
shall open any other such account with respect to the direct deposit of income
in connection with the Properties (or any portion thereof). Until deposited into
the Restricted Account, any Rents and other revenues from the Properties held by
Borrower shall be deemed to be collateral and shall be held in trust by it for
the benefit, and as the property, of Lender pursuant to the Security Instruments
and shall not be commingled with any other funds or property of Borrower.
Borrower warrants and covenants that it shall not rescind, withdraw or change
any notices or instructions required to be sent by it pursuant to this Section
9.2 without Lender’s prior written consent not to be unreasonably withheld,
conditioned or delayed.

 

(b)          Borrower shall maintain the Restricted Account for the term of the
Loan, which Restricted Account shall be under the sole dominion and control of
Lender (subject to the terms hereof and of the Restricted Account Agreement).
The Restricted Account shall have a title evidencing the foregoing in a manner
reasonably acceptable to Lender. Borrower hereby grants to Lender a
first-priority security interest in the Restricted Account and all deposits at
any time contained therein and the proceeds thereof and will take all
commercially reasonable actions

 

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necessary to maintain in favor of Lender a perfected first priority security
interest in the Restricted Account. Borrower hereby authorizes Lender to file
UCC Financing Statements and continuations thereof to perfect Lender’s security
interest in the Restricted Account and all deposits at any time contained
therein and the proceeds thereof. All reasonable costs and expenses for
establishing and maintaining the Restricted Account (or any successor thereto)
shall be paid by Borrower. All monies now or hereafter deposited into the
Restricted Account shall be deemed additional security for the Debt while such
funds are in the Restricted Account. Borrower shall pay all sums due from
Borrower under and otherwise comply with the Restricted Account Agreement.
Borrower shall not alter or modify either the Restricted Account or the
Restricted Account Agreement, in each case without the prior written consent of
Lender. The Restricted Account Agreement shall permit (and Borrower shall
provide) Lender online access to bank and other financial statements relating to
the Restricted Account (including, without limitation, a listing of the receipts
being collected therein). In connection with any Secondary Market Transaction,
Lender shall have the right to cause the Restricted Account to be entitled with
such other designation as Lender may select to reflect an assignment or transfer
of Lender’s rights and/or interests with respect to the Restricted Account.
Lender shall provide Borrower with prompt written notice of any such renaming of
the Restricted Account. Borrower shall not further pledge, assign or grant any
security interest in the Restricted Account or the monies deposited therein or
permit any lien or encumbrance to attach thereto, or any levy to be made
thereon, or any UCC Financing Statements, except those naming Lender as the
secured party, to be filed with respect thereto. The Restricted Account (i)
shall be an Eligible Account and (ii) shall not be commingled with other monies
held by Borrower or Bank. Upon (A) Bank ceasing to be an Eligible Institution,
(B) the Restricted Account ceasing to be an Eligible Account, (C) any
resignation by Bank or termination of the Restricted Account Agreement by Bank
or Lender and/or (D) the occurrence and continuance of an Event of Default,
Borrower shall, within fifteen (15) days of Lender’s request, (1) terminate the
existing Restricted Account Agreement, (2) appoint a new Bank (which such Bank
shall (I) be an Eligible Institution, (II) other than during the continuance of
an Event of Default, be selected by Borrower and approved by Lender and (III)
during the continuance of an Event of Default, be selected by Lender), (3) cause
such Bank to open a new Restricted Account (which such account shall be an
Eligible Account) and enter into a new Restricted Account Agreement with Lender
and Borrower on substantially the same terms and conditions as the previous
Restricted Account Agreement and (4) send new Tenant Direction Notices and the
other notices required pursuant to the terms hereof relating to such new
Restricted Account Agreement and Restricted Account. Borrower constitutes and
appoints Lender its true and lawful attorney-in-fact with full power of
substitution to complete or undertake any action required of Borrower under this
Section 9.2 in the name of Borrower in the event Borrower fails to do the same.
Such power of attorney shall be deemed to be a power coupled with an interest
and cannot be revoked.

 

Section 9.3.          Disbursements from the Cash Management Account. On each
Business Day, Lender or Servicer, as applicable, shall allocate all funds, if
any, on deposit in the Cash Management Account and disburse such funds in the
following amounts and order of priority:

 

(a)          First, to the extent that a Trigger Period has occurred and is
continuing, funds sufficient to pay the Monthly Ground Rent Deposit due for the
Monthly Payment Date on or immediately succeeding the date of such deposit, if
any, shall be deposited in the Tax Account;

 

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(b)          Second, to the extent that a Trigger Period has occurred and is
continuing, funds sufficient to pay the Monthly Tax Deposit due for the Monthly
Payment Date on or immediately succeeding the date of such deposit, if any,
shall be deposited in the Tax Account;

 

(c)          Third, to the extent that a Trigger Period has occurred and is
continuing, funds sufficient to pay the Monthly Insurance Deposit due for the
Monthly Payment Date on or immediately succeeding the date of such deposit, if
any, shall be deposited in the Insurance Account;

 

(d)          Fourth, funds sufficient to pay any interest accruing at the
Default Rate and late payment charges, if any, shall be deposited into the Debt
Service Account;

 

(e)          Fifth, funds sufficient to pay the Debt Service due for the Monthly
Payment Date on or immediately succeeding the date of such deposit shall be
deposited in the Debt Service Account;

 

(f)          Sixth, to the extent that a Trigger Period has occurred and is
continuing, funds sufficient to pay the Replacement Reserve Monthly Deposit due
for the Monthly Payment Date on or immediately succeeding the date of such
deposit, if any, shall be deposited in the Replacement Reserve Account;

 

(g)          Seventh, to the extent that a Trigger Period has occurred and is
continuing, funds sufficient to pay the Leasing Reserve Monthly Deposit due for
the Monthly Payment Date on or immediately succeeding the date of such deposit,
if any, shall be deposited in the Leasing Reserve Account;

 

(h)          Eighth, funds sufficient to pay any other amounts due and owing to
Lender and/or Servicer pursuant to the terms hereof and/or of the other Loan
Documents, if any, shall be deposited with or as directed by Lender;

 

(i)          Ninth, to the extent that a Trigger Period has occurred and is
continuing, to Borrower, funds in an amount equal to the Op Ex Monthly Amount;
and

 

(j)          Tenth, all amounts remaining in the Cash Management Account after
deposits for items (a) through (i) above (“Excess Cash Flow”) shall (i) to the
extent that a Trigger Period has occurred and is continuing, be deposited into
the Excess Cash Flow Account and (ii) to the extent that no Trigger Period
exists, be disbursed to Borrower each Business Day.

 

Section 9.4.          Withdrawals from the Debt Service Account. Prior to the
occurrence and continuance of an Event of Default, funds on deposit in the Debt
Service Account, if any, shall be used to pay Debt Service when due, together
with any late payment charges or interest accruing at the Default Rate.

 

Section 9.5.          Payments Received Under this Agreement. Notwithstanding
anything to the contrary contained in this Agreement or the other Loan
Documents, provided no Event of Default has occurred and is continuing,
Borrower’s obligations with respect to the monthly payment of Debt Service and
amounts due for the Reserve Accounts shall (provided Lender is not prohibited
from withdrawing or applying any funds in the applicable Accounts by operation

 

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of law) be deemed satisfied to the extent sufficient amounts are deposited in
applicable Accounts to satisfy such obligations on the dates each such payment
is required, regardless of whether any of such amounts are so applied by Lender.

 

ARTICLE 10.

EVENTS OF DEFAULT; REMEDIES

 

Section 10.1.          Event of Default.

 

The occurrence of any one or more of the following events shall constitute an
“Event of Default”:

 

(a)          if (A) any monthly Debt Service payment or the payment due on the
Maturity Date is not paid when due, (B) any deposit to any of the Accounts
required hereunder or under the other Loan Documents is not paid when due or (C)
any other portion of the Debt is not paid when due and such non-payment
continues for five (5) Business Days following notice to Borrower that the same
is due and payable; except, in each case, to the extent sums sufficient to pay
such Debt Service or any other portion of the Debt have been deposited with
Lender for such specific purpose in accordance with the terms of this Agreement
and Lender’s access to such sums is not restricted or constrained by Borrower or
its Affiliates;

 

(b)          if any of the Taxes or Other Charges are not paid prior to the date
on which penalties and interest would be due except to the extent (A) sums
sufficient to pay the Taxes or Other Charges in question had been reserved
hereunder prior to the applicable due date for the Taxes or Other Charges in
question for the express purpose of paying the Taxes or Other Charges in
question and Lender failed to pay the Taxes or Other Charges in question when
required hereunder, (B) Lender’s access to such sums was not restricted or
constrained by Borrower or its Affiliates and (C) no other Event of Default was
continuing;

 

(c)          if the Policies are not kept in full force and effect or if
evidence of the same is not delivered to Lender as provided in Section 7.1
hereof;

 

(d)          intentionally omitted;

 

(e)          if any of the representations or covenants contained in Article 5
are breached or violated; provided, that, (A) with respect to any failure to
comply with the requirements relating to trade and operational indebtedness set
forth in Section 5.1(a)(vii) hereof, it shall only be an Event of Default if
Borrower does not cure such failure within fifteen (15) days after notice
thereof from Lender to Borrower and (B) except as provided in (A) of this clause
(e) with respect to trade and operational indebtedness, any such breach or
violation shall not constitute an Event of Default (1) if such breach or
violation is inadvertent and non-recurring, (2) if such breach or violation is
curable, Borrower shall promptly cure such breach within thirty (30) days from
the earlier of (I) Borrower’s knowledge of such breach or violation or (II)
notice thereof from Lender and (3) Borrower shall have within such thirty (30)
day period delivered to Lender a New Non-Consolidation Opinion or an update from
the law firm under the most recent Non-Consolidation Opinion previously
delivered to Lender to the effect that such breach or violation does not negate
or impair the Non-Consolidation Opinion previously delivered to Lender;

 

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(f)          if (A) a Prohibited Transfer shall occur in violation of this
Agreement or (B) any representation or covenants contained in Section 6.5 hereof
is breached or violated in any material respect unless, with respect to this
clause (B), (I) such breach or violation was immaterial, inadvertent and
non-recurring and (II) Borrower corrects (or causes to be corrected) such
failure within thirty (30) days of obtaining knowledge thereof;

 

(g)          if there is a breach of any of the covenants contained within any
of Section 4.22 and Section 4.23 in any material respect, which breach continues
for a period of thirty (30) days after Borrower’s receipt of notice from Lender;

 

(h)          if any representation or warranty made herein (other than the
representations or warranties described in clause (e) of this Section 10.1), in
the Guaranty or in the Environmental Indemnity or in any other guaranty, or in
any certificate, report, financial statement or other instrument or document
furnished to Lender by or on behalf of Borrower in connection with the Loan
shall have been false or misleading in any material adverse respect when made;
provided that if such untrue representation or warranty is susceptible of being
cured, Borrower shall have the right to cure such representation or warranty
within thirty (30) days of receipt of notice from Lender;

 

(i)          if (i) Borrower, any SPE Component Entity or Guarantor shall
commence any case, proceeding or other action (A) under any Creditors Rights
Laws seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization, liquidation
or dissolution, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or substantially all of
its assets, or Borrower, any SPE Component Entity or Guarantor shall make a
general assignment for the benefit of its creditors; (ii) there shall be
commenced against Borrower, any SPE Component Entity or Guarantor any case,
proceeding or other action of a nature referred to in clause (i) above (other
than any case, action or proceeding already constituting an Event of Default by
operation of the other provisions of this subsection) which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of ninety (90) days;
(iii) there shall be commenced against Borrower, any SPE Component Entity or
Guarantor any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or substantially
all of its assets (other than any case, action or proceeding already
constituting an Event of Default by operation of the other provisions of this
subsection) which results in the entry of any order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within ninety (90) days from the entry thereof; (iv) Borrower, any SPE Component
Entity, any Affiliated Manager or Guarantor shall collude with respect to,
approve of, or acquiesce in, any of the actions set forth in clause (i), (ii),
or (iii) above; (v) Borrower, any SPE Component Entity or Guarantor shall admit
in writing its inability to pay its debts as they become due; (vi) Borrower or
any SPE Component Entity is substantively consolidated with any other entity in
connection with any proceeding under the Bankruptcy Code or any other Creditors
Rights Laws involving Guarantor or its subsidiaries and/or Affiliates; or (vii)
a Bankruptcy Event occurs (provided, that if there is any inconsistency between
the other provisions of this subclause (i) and the definition of Bankruptcy
Event, the other provisions of this subclause (i) shall control);

 

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(j)          if Borrower shall be in default beyond applicable notice and grace
periods under any other mortgage, deed of trust, deed to secure debt or other
security agreement covering any part of the Property whether it be superior or
junior in lien to the Security Instruments;

 

(k)          if any Individual Property becomes subject to any mechanic’s,
materialman’s or other lien other than a lien for any Taxes not then due and
payable and the lien shall remain undischarged of record (by payment, bonding or
otherwise) for a period of thirty (30) days after Borrower first receives notice
of the same;

 

(l)          if any federal tax lien is filed against Borrower, any SPE
Component Entity, Guarantor or any Individual Property and same is not
discharged of record (by payment, bonding or otherwise) within thirty (30) days
after Borrower first receives notice of the same;

 

(m)          if Borrower shall fail to deliver to Lender, within ten (10)
Business Days after request by Lender, the estoppel certificates required by
Section 4.13(a) hereof and such failure continues for five (5) Business Days
after Borrower’s receipt of notice thereof from Lender;

 

(n)          if any default occurs under any guaranty or indemnity executed in
connection herewith (including, without limitation, the Environmental Indemnity
and/or the Guaranty) and such default continues after the expiration of
applicable grace periods, if any;

 

(o)          if any of the factual assumptions as to Borrower and/or any SPE
Component Entity contained in the Non-Consolidation Opinion, or in any New
Non-Consolidation Opinion (including, without limitation, in any schedules
thereto and/or certificates delivered in connection therewith) are untrue or
shall become untrue as a result of Borrower’s and/or any SPE Component Entity’s
violation of Article 5 hereof in any material respect and, provided no action
has been filed with respect to Borrower or any SPE Component Entity under any
Creditor Rights Law prior to the time that Lender becomes aware of the untrue
assumption, Borrower shall fail to deliver to Lender within ten (10) Business
Days after Lender’s request a New Non-Consolidation Opinion without such
assumption;

 

(p)          if Borrower defaults under the Management Agreement beyond the
expiration of applicable notice and grace periods, if any, thereunder (and the
Manager terminates the same) or if the Management Agreement is canceled,
terminated or surrendered, expires pursuant to its terms or otherwise ceased to
be in full force and effect, unless, in each such case, Borrower, within thirty
(30) days of such cancellation, termination, surrender, expiration or cessation,
enters into a Qualified Management Agreement with a Qualified Manager in
accordance with the applicable terms and provisions hereof;

 

(q)          if Borrower fails to appoint a New Manager within ten (10) Business
Days of the request of Lender and/or fails to comply with any limitations on
instructing the Manager and such failure continues for more than ten (10)
Business Days after notice from Lender, each as required by and in accordance
with, as applicable, the terms and provisions of, this Agreement, the Assignment
of Management Agreement and the Security Instrument;

 

(r)          if (A) Borrower shall fail (beyond any applicable notice or grace
period) to pay any rent, additional rent or other charges payable under any
Ground Lease as and when payable thereunder (unless funds are on deposit with
Lender for such purpose and Lender’s access to

 

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such funds is not restricted or constrained by Borrower or its Affiliates), (B)
Borrower defaults under any Ground Lease beyond the expiration of applicable
notice and grace periods, if any, thereunder, (C) any Ground Lease is amended,
supplemented, replaced, restated or otherwise modified by Borrower without
Lender’s prior written consent, in each instance, to the extent that Lender’s
consent is required pursuant to this Agreement, (D) any Ground Lease and/or the
estate created thereunder is canceled, rejected, terminated, surrendered or
expires pursuant to its terms without Lender’s consent (to the extent that
Lender’s consent is required pursuant to this Agreement), or (E) a Property
Document Event occurs which results in a Material Adverse Effect;

 

(s)          With respect to any default or breach of any term, covenant or
condition of this Agreement not specified in subsections (a) through (r) above
or not otherwise specifically specified as an Event of Default in this
Agreement, if the same is not cured (i) within ten (10) days after notice from
Lender (in the case of any default which can be cured by the payment of a sum of
money) or (ii) for thirty (30) days after notice from Lender (in the case of any
other default or breach); provided, that, with respect to any default or breach
specified in subsection (ii), if the same cannot reasonably be cured within such
thirty (30) day period and Borrower shall have commenced to cure the same within
such thirty (30) day period and thereafter diligently and expeditiously proceeds
to cure the same, such thirty (30) day period shall be extended for so long as
it shall require Borrower in the exercise of due diligence to cure the same, it
being agreed that no such extension shall be for a period in excess of one
hundred twenty (120) days; or

 

(t)          if any default not specified above exists under any of the other
Loan Documents beyond any applicable cure periods contained in such Loan
Documents or if any other such event shall occur or condition shall exist, if
the effect of such event or condition is to accelerate the maturity of any
portion of the Debt or to permit Lender to accelerate the maturity of all or any
portion of the Debt.

 

Section 10.2.          Remedies.

 

(a)          Upon the occurrence and during the continuance of an Event of
Default (other than an Event of Default described in Section 10.1(f) above with
respect to Borrower or any SPE Component Entity) and at any time thereafter
Lender may, in addition to any other rights or remedies available to it pursuant
to this Agreement, the Security Instruments, the Note and the other Loan
Documents or at law or in equity, take such action, without notice or demand,
that Lender deems advisable to protect and enforce its rights against Borrower
and in the Properties, including, without limitation, declaring the Debt to be
immediately due and payable, and Lender may enforce or avail itself of any or
all rights or remedies provided in this Agreement, the Security Instruments, the
Note and the other Loan Documents against Borrower and the Property, including,
without limitation, all rights or remedies available at law or in equity. Upon
any Event of Default described in Section 10.1(f) above with respect to Borrower
or any SPE Component Entity, the Debt and all other obligations of Borrower
under this Agreement, the Security Instruments, the Note and the other Loan
Documents shall immediately and automatically become due and payable, without
notice or demand, and Borrower hereby expressly waives any such notice or
demand, anything contained herein or in the Security Instruments, the Note and
the other Loan Documents to the contrary notwithstanding.

 

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(b)          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 under this Agreement, the Security
Instruments, the Note or the other Loan Documents executed and delivered by, or
applicable to, Borrower or at law or in equity may be exercised by Lender at any
time and from time to time, whether or not all or any of the Debt shall be
declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under this Agreement, the Security Instruments, the Note or the other
Loan Documents with respect to the Properties. Any such actions taken by Lender
shall be cumulative and concurrent and may be pursued independently, singularly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by
applicable law, without impairing or otherwise affecting the other rights and
remedies of Lender permitted by applicable law, equity or contract or as set
forth herein or in the Security Instruments, the Note or the other Loan
Documents. No delay or omission to exercise any remedy, right or power accruing
upon an Event of Default shall impair any such remedy, right or power or shall
be construed as a waiver thereof, but any such remedy, right or power may be
exercised from time to time and as often as may be deemed expedient. A waiver of
one Default or Event of Default with respect to Borrower shall not be construed
to be a waiver of any subsequent Default or Event of Default by Borrower or to
impair any remedy, right or power consequent thereon.

 

(c)          With respect to Borrower and the Properties, nothing contained
herein or in any other Loan Document shall be construed as requiring Lender to
resort to any Individual Property for the satisfaction of any of the Debt in
preference or priority to any other Individual Property, and Lender may seek
satisfaction out of all of the Properties or any part thereof, in its absolute
discretion in respect of the Debt. In addition, Lender shall have the right from
time to time to partially foreclose the Security Instruments in any manner and
for any amounts secured by the Security Instruments then due and payable as
determined by Lender in its sole discretion including, without limitation, the
following circumstances: (i) in the event Borrower defaults beyond any
applicable grace period in the payment of one or more scheduled payments of
principal and interest, Lender may foreclose one or more of the Security
Instruments 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 one or more of the Security Instruments to recover so
much of the principal balance of the Loan as Lender may accelerate and such
other sums secured by one or more of the Security Instruments as Lender may
elect. Notwithstanding one or more partial foreclosures, the Properties shall
remain subject to the Security Instruments to secure payment of sums secured by
the Security Instruments and not previously recovered.

 

(d)          Upon the occurrence and during the continuance of an Event of
Default, Lender shall have the right from time to time to sever the Note and the
other Loan Documents into one or more separate notes, security instruments and
other security documents (the “Severed Loan Documents”) in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney,

 

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coupled with an interest, in its name and stead to make and execute all
documents necessary or desirable to effect the aforesaid severance, Borrower
ratifying all that its said attorney shall do by virtue thereof; provided,
however, Lender shall not make or execute any such documents under such power
until five (5) Business Days after notice has been given to Borrower by Lender
of Lender’s intent to exercise its rights under such power. Borrower shall not
be obligated to pay any costs or expenses incurred in connection with the
preparation, execution, recording or filing of the Severed Loan Documents and
the Severed Loan Documents shall not contain any representations, warranties or
covenants not contained in the Loan Documents and any such representations and
warranties contained in the Severed Loan Documents will be given by Borrower
only as of the Closing Date.

 

(e)          Notwithstanding anything to the contrary contained herein or in any
other Loan Document, any amounts recovered from the Property (or any portion
thereof) or any other collateral for the Loan and/or paid to or received by
Lender may, after an Event of Default, be applied by Lender toward the Debt in
such order, priority and proportions as Lender in its sole discretion shall
determine.

 

(f)          Upon the occurrence and during the continuance of an Event of
Default, Lender may, but without any obligation to do so and without notice to
or demand on Borrower and without releasing Borrower from any obligation
hereunder or being deemed to have cured any Event of Default hereunder, make, do
or perform any such obligation of Borrower hereunder in such manner and to such
extent as Lender may deem necessary. Upon the occurrence and during the
continuance of an Event of Default, Lender is authorized to enter upon the
Properties and/or any Individual Property for such purposes, or appear in,
defend, or bring any action or proceeding to protect its interest in the
Properties and/or any Individual Property for such purposes, and the cost and
expense thereof (including reasonable attorneys’ fees to the extent permitted by
applicable law), with interest as provided in this Section, shall constitute a
portion of the Debt and shall be due and payable to Lender upon demand. All such
costs and expenses incurred by Lender in remedying such Event of Default or such
failed payment or act or in appearing in, defending, or bringing any action or
proceeding shall bear interest at the Default Rate, for the period after such
cost or expense was incurred into the date of payment to Lender. All such costs
and expenses incurred by Lender together with interest thereon calculated at the
Default Rate shall be deemed to constitute a portion of the Debt and be secured
by the liens, claims and security interests provided to Lender under the Loan
Documents and shall be immediately due and payable upon demand by Lender
therefore.

 

ARTICLE 11.

SECONDARY MARKET

 

Section 11.1.          Securitization.

 

(a)          Lender shall have the right (i) to sell or otherwise transfer the
Loan (or any portion thereof and/or interest therein), (ii) to sell
participation interests in the Loan (or any portion thereof and/or interest
therein) or (iii) to securitize the Loan (or any portion thereof and/or interest
therein) in a single asset securitization or a pooled asset securitization. The
transactions referred to in clauses (i), (ii) and (iii) above shall hereinafter
be referred to

 

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to collectively as “Secondary Market Transactions” and the transactions referred
to in clause (iii) shall hereinafter be referred to as a “Securitization”. Any
certificates, notes or other securities issued in connection with a
Securitization are hereinafter referred to as “Securities”.

 

(b)          If requested by Lender, Borrower and Guarantor shall assist Lender
in satisfying the market standards to which Lender customarily adheres or which
may be reasonably required in the marketplace or by the Rating Agencies in
connection with any Secondary Market Transactions (but in no event shall such
cooperation result in any increase in any obligations of Borrower or rights of
Lender or decrease in any rights of Borrower or obligations of Lender under the
Loan Documents or change in any of the economic or monetary provisions of the
Loan or the Loan Documents and not result in any “rate creep” under the Loan
Agreement (other than due to the occurrence and continuance of an Event of
Default), Borrower acknowledging and agreeing that Borrower and/or Guarantor
complying with requests by Lender pursuant to, and in accordance with, this
Section 11.1 in and of itself shall not be deemed to increase any obligations of
Borrower or decrease any rights of Borrower)) which cooperation shall, include,
without limitation, to:

 

(i)      (A) provide updated financial and other information with respect to the
Properties, the business operated at the Properties, Borrower, Guarantor, SPE
Component Entity and any Affiliated Manager, and updated budgets relating to the
Properties, which (in each case) are available or reasonably obtainable using
systems of Borrower that are currently in place (the “Updated Information”),
together, if customary, with appropriate verification of the Updated Information
through letters of auditors or opinions of counsel reasonably acceptable to
Lender and acceptable to the Rating Agencies, (B) cooperate with Lender in
obtaining updated appraisals, market studies, environmental reviews (Phase I’s
and, if appropriate, Phase II’s), property condition reports and other due
diligence investigations of the Properties and (C) use commercially reasonable
efforts to obtain revisions with respect to the Property Documents and Ground
Leases as requested by the Rating Agencies in form and substance reasonably
acceptable to Lender and acceptable to the Rating Agencies;

 

(ii)     provide new and/or updated opinions of counsel, which may be relied
upon by Lender and the Rating Agencies, as to substantive non-consolidation,
matters of Delaware and federal bankruptcy law relating to limited liability
companies with respect to Borrower and SPE Component Entities and due execution
and enforceability of the Loan Documents, customary in Secondary Market
Transactions or required by the Rating Agencies, which counsel and opinions
shall be reasonably satisfactory in form and substance to Lender and
satisfactory in form and substance to the Rating Agencies;

 

(iii)    provide updated, as of the closing date of the Secondary Market
Transaction, representations and warranties made in the Loan Documents
consistent with the facts covered by such representations and warranties as they
exist on the date thereof; and

 

(iv)    execute such amendments to the Loan Documents and Borrower’s or any SPE
Component Entity’s organizational documents as may be reasonably requested by
Lender or requested by the Rating Agencies in order to effect any Secondary
Market

 

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Transaction, including, without limitation, (A) to amend and/or supplement the
Independent Director provisions provided herein and therein, in each case, in
accordance with the applicable requirements of the Rating Agencies, (B)
bifurcating the Loan into two or more components, re-allocating the Loan among
existing components or existing Notes, reducing the number of components of the
Loan or of any Note and/or creating additional separate notes and/or creating
additional senior/subordinate note structure(s), including, without limitation,
re-allocating the principal amounts of the Loan (any of the foregoing, a “Loan
Bifurcation”) and (C) to modify all operative monthly payment dates (including
but not limited to payment dates, interest period start dates and end dates,
etc.) under the Loan Documents, by up to ten (10) days; provided, however, that
(I) Borrower and/or Guarantor shall not be required to so modify or amend any
Loan Document if such modification or amendment would change any economic or
non-economic term, including the interest rate or the stated maturity (except as
would not have an adverse effect on Borrower, Guarantor and/or any of their
Affiliates) or otherwise increase the obligations or decrease the rights of
Borrower pursuant to the Loan Documents or increase the rights or reduce the
obligations of Lender, except in connection with a Loan Bifurcation which may
result in varying fixed interest rates but will have the same weighted average
coupon of the original Note throughout the term (i.e., there shall be no “rate
creep”) (except following an Event of Default) and (II) none of Borrower nor any
SPE Component Entity shall be required to modify its organizational structure or
make any other modification, if such modification would cause it or any of its
Affiliates or direct or indirect owners to incur any additional tax liability or
suffer other adverse consequences. Borrower and Lender acknowledge and agree
that the execution of any Loan Bifurcation in accordance with terms and
conditions hereof shall not in itself increase the obligations or decrease the
rights of Borrower pursuant to the Loan Documents.

 

(c)          If, at the time a Disclosure Document is being prepared for a
Securitization, Lender reasonably expects that Borrower alone or Borrower and
one or more Affiliates of Borrower collectively, or the Properties alone or the
Properties and Related Properties collectively, will be a Significant Obligor,
Borrower shall furnish to Lender upon reasonable request the following financial
information:

 

(i)      If Lender reasonably expects that the principal amount of the Loan
together with any Related Loans, as of the cut-off date for such Securitization,
may equal or exceed ten percent (10%), but be less than twenty percent (20%), of
the aggregate principal amount of all mortgage loans included or expected to be
included in the Securitization, net operating income for the Property and the
Related Properties or selected financial data as required under Item 1112(b)(1)
of Regulation AB, or

 

(ii)     If Lender reasonably expects that the principal amount of the Loan
together with any Related Loans, as of the cut-off date for such Securitization,
may equal or exceed twenty percent (20%) of the aggregate principal amount of
all mortgage loans included or expected to be included in the Securitization,
the financial statements required under Item 1112(b)(2) of Regulation AB.

 

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(d)          In the event all or a portion of the Loan is included in a
securitization involving a registered public offering of Securities pursuant to
the Securities Act, and if Lender reasonably determines that Borrower alone or
Borrower and one or more Affiliates of Borrower collectively, or the Properties
alone or the Properties and the Related Properties, collectively, are a
Significant Obligor, then Borrower shall furnish to Lender, on an ongoing basis,
net operating income for the Property or Related Properties or selected
financial data or financial statements meeting the requirements of Item
1112(b)(1) or (2) of Regulation AB, as specified by Lender, but only for so long
as such entity or entities are a Significant Obligor and either (x) filings
pursuant to the Exchange Act in connection with or relating to the
Securitization (an “Exchange Act Filing”) are required to be made under
applicable Legal Requirements or (y) comparable information is required to
otherwise be “available” to holders of Securities under Regulation AB or
applicable Legal Requirements.

 

(e)          Any financial data or financial statements required pursuant to
Section 11.1(d) above shall be furnished to Lender (1) with respect to quarterly
reporting, not later than forty-one (41) days after the end of the fiscal
quarter of Borrower and (2) with respect to all other reporting, no later than
five (5) Business Days prior to the date required pursuant to Regulation AB.

 

(f)          If requested by Lender, Borrower shall provide Lender, promptly
following Lender’s request therefor, and in any event within the time periods
required to comply with Regulation AB or other Legal Requirements relating to a
Securitization (but no earlier than five (5) Business Days following notice from
Lender), with any other or additional financial statements, or financial,
statistical or operating information, as Lender shall reasonably determine to be
required pursuant to Regulation AB, or any amendment, modification or
replacement thereto or other Legal Requirements relating to a Securitization.

 

(g)          All financial data and statements provided by Borrower hereunder in
connection with a Securitization shall meet (and shall be accompanied by such
auditors’ reports or consents and such certificates as may be necessary to
comply with) the requirements of Regulation AB and other Legal Requirements, in
each case to the extent applicable and as specified by Lender.

 

Section 11.2.   Disclosure.

 

(a)          Borrower (on its own behalf and on behalf of each other Borrower
Party) understands that information provided to Lender by Borrower, any other
Borrower Party and/or their respective agents, counsel and representatives may
be (i) included in (A) the Disclosure Documents and (B) filings under the
Securities Act and/or the Exchange Act and (ii) made available to Investors, the
Rating Agencies and service providers, in each case, in connection with any
Secondary Market Transaction.

 

(b)          Borrower and Guarantor shall indemnify Lender and its officers,
directors, partners, employees, representatives, agents and affiliates against
any losses, claims, damages (other than special, consequential or punitive
damages) or liabilities (collectively, the “Liabilities”) to which Lender and/or
its officers, directors, partners, employees, representatives, agents and/or
affiliates may become subject in connection with any Disclosure Document and/or
any Covered Rating Agency Information, in each case, insofar as such Liabilities
arise out of or

 

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are based upon any untrue statement of any material fact in the Provided
Information and/or arise out of or are based upon the omission to state a
material fact in the Provided Information required to be stated therein or
necessary in order to make the statements in the applicable Disclosure Document
and/or Covered Rating Agency Information, in light of the circumstances under
which they were made, not misleading.

 

(c)          Borrower and Guarantor shall provide in connection with each of (i)
a preliminary and a final private placement memorandum, offering memorandum or
offering circular, (ii) a free writing prospectus, (iii) a preliminary and final
prospectus or prospectus supplement and (iv) a structural and collateral term
sheet, as applicable, an agreement (A) certifying that Borrower has examined the
portions of such Disclosure Documents specified by Lender and that each such
Disclosure Document, as it relates to Borrower, Borrower Affiliates, the
Properties (or any portion thereof), any Affiliated Manager, Guarantor, the
Ground Leases, the Management Agreements, the terms of the Loan Documents and
the use of Loan proceeds (but excluding any forward-looking budgets and
projections) (collectively, with the Provided Information, the “Covered
Disclosure Information”), does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
made, in the light of the circumstances under which they were made, not
misleading, (B) indemnifying Lender (and for purposes of this Section 11.2(c),
Lender hereunder shall include its officers and directors), the Affiliate of
Lender (“Lender Affiliate”) that has filed the registration statement relating
to the Securitization (the “Registration Statement”), each of its directors,
each of its officers who have signed the Registration Statement or Affiliate of
Lender that has acted as sponsor or depositor in connection with the
Securitization, and each Person that controls the Affiliate within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act
(collectively, the “Lender Group”), and Lender Affiliate, and any other
placement agent, initial purchaser or underwriter with respect to the
Securitization, each of their respective directors and each Person who controls
Lender Affiliate or any other placement agent or underwriter within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act
(collectively, the “Underwriter Group”) for any Liabilities to which Lender, the
Lender Group or the Underwriter Group may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Covered Disclosure
Information or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated in the Covered Disclosure
Information or necessary in order to make the statements in the Covered
Disclosure Information, in light of the circumstances under which they were
made, not misleading and (C) agreeing to reimburse Lender, the Lender Group
and/or the Underwriter Group for any out-of-pocket legal or other expenses
reasonably incurred by Lender, the Lender Group and the Underwriter Group in
connection with investigating or defending the Liabilities; provided, however,
that (I) Borrower and Guarantor will be liable in any such case under Section
11.2(b) or clauses (B) or (C) above only to the extent that any such loss claim,
damage or liability arises out of or is based upon any such untrue statement or
omission made therein in reliance upon and in conformity with information
furnished to Lender by or on behalf of Borrower in connection with the
preparation of the Disclosure Document or in connection with the underwriting or
closing of the Loan, including, without limitation, financial statements of
Borrower, operating statements and rent rolls with respect to the Properties, or
is contained in the Disclosure Documents with respect to the matters referenced
in clause (A) above (but, in each case, excluding forward-looking budgets and
projections), (II) Borrower and Guarantor shall not be obligated to provide the
certification

 

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set forth in clause (A) above or be liable under Section 11.2(b) or clause (B)
or (C) above if Borrower has not been afforded five (5) Business Days to review
and comment on the applicable sections of the applicable Disclosure Document,
and (III) Borrower and Guarantor shall not be liable under Section 11.2(b) or
clause (B) or (C) above with respect to any statement or omission or any failure
of Lender to accurately transcribe any portion of the Covered Disclosure
Information provided by Borrower if Borrower shall have notified Lender as to
the existence of such untrue statement, omission or inaccuracy within a
reasonable period of time prior to pricing of the securities and Lender shall
have failed to cause such Disclosure Document to be revised accordingly. The
indemnification provided for in clauses (B) and (C) above shall be effective
(subject to the proviso set forth in the immediately preceding sentence) whether
or not the indemnification agreement described above is provided. The aforesaid
indemnity will be in addition to any liability which Borrower and Guarantor may
otherwise have subject to Section 13.1.

 

(d)          In connection with filings under Exchange Act and/or the Securities
Act, Borrower and Guarantor shall (i) indemnify Lender, the Lender Group and the
Underwriter Group for Liabilities to which Lender, the Lender Group or the
Underwriter Group may become subject insofar as the Liabilities arise out of or
are based upon the omission or alleged omission to state in the financial
reporting required to be provided pursuant to Section 11.1(d) hereof a material
fact required to be stated in such financial reporting in order to make the
statements in connection with such filings under Exchange Act and/or the
Securities Act, in light of the circumstances under which they were made, not
misleading and (ii) reimburse Lender, the Lender Group or the Underwriter Group
for any out-of-pocket legal or other expenses reasonably incurred by Lender, the
Lender Group or the Underwriter Group in connection with defending or
investigating the Liabilities; provided, however, that Borrower and Guarantor
will be liable in any such case under this Section 11.2(d) only to the extent
that any such loss claim, damage or liability arises out of or is based upon any
such untrue statement or omission made therein in reliance upon and in
conformity with information furnished to Lender by or on behalf of Borrower in
connection with the preparation of such filings under Exchange Act and/or the
Securities Act or in connection with the underwriting or closing of the Loan,
including, without limitation, financial statements of Borrower, operating
statements and rent rolls with respect to the Properties, or is contained in the
Disclosure Documents with respect to the matters referenced in Section
11.2(c)(A) above (but, in each case, excluding forward-looking budgets and
projections).

 

(e)          Promptly after receipt by an Indemnified Person under this Section
11.2 of notice of the commencement of any action, such Indemnified Person will,
if a claim in respect thereof is to be made against the Indemnifying Person
under this Section 11.2, notify the Indemnifying Person in writing of the
commencement thereof (but the omission to so notify the Indemnifying Person will
not relieve the Indemnifying Person from any liability which the Indemnifying
Person may have to any Indemnified Person hereunder except to the extent that
failure to notify causes prejudice to the Indemnifying Person). In the event
that any action is brought against any Indemnified Person, and it notifies the
Indemnifying Person of the commencement thereof, the Indemnifying Person will be
entitled, jointly with any other Indemnifying Person, to participate therein
and, to the extent that it (or they) may elect by written notice delivered to
the Indemnified Person promptly after receiving the aforesaid notice from such
Indemnified Person, to assume the defense thereof with counsel reasonably
satisfactory to such Indemnified Person. After

 

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notice from the Indemnifying Person to such Indemnified Person under this
Section 11.2, such Indemnifying Person shall pay for any legal or other expenses
subsequently incurred by such Indemnifying Person in connection with the defense
thereof; provided, however, if the defendants in any such action include both
the indemnified party and the Indemnifying Person and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to the Indemnifying Person, the 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 at the cost of the Indemnifying Person.

 

After notice from such Indemnifying Person to such Indemnified Person of its
election to so assume the defense of such claim or action, such Indemnifying
Person shall not be liable to such Indemnified Person for any legal or other
expenses subsequently incurred by such Indemnified Person in connection with the
defense thereof, unless, (1) if the defendants in any such action include both
an Indemnified Person and any of the Indemnifying Persons and an Indemnified
Person shall have reasonably concluded that there are any legal defenses
available to it and/or other Indemnified Persons that are different from or
additional to those available to an Indemnifying Person, the Indemnified Person
or Persons 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 Person at the expense of the Indemnifying Persons, (2) the
Indemnifying Person shall not have employed counsel reasonably satisfactory to
the Indemnified Person to represent the Indemnified Person within a reasonable
time after notice of commencement of the action (provided that the Indemnified
Person has provided the Indemnifying Person with ten (10) days prior written
notice that it intends to exercise its rights pursuant to this clause (2) and
the Indemnifying Person has not employed counsel reasonably satisfactory to the
Indemnified Person within such 10-day period), or (3) the Indemnifying Person
has authorized in writing the employment of counsel of the Indemnified Person at
the expense of the Indemnifying Person.

 

Without the prior written consent of the applicable Indemnified Persons (which
consent shall not be unreasonably withheld), no Indemnifying Person shall settle
or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not any Indemnified Person is an actual or
potential party to such claim, action, suit or proceeding) unless (i) such
Indemnifying Person shall have given the Indemnified Persons reasonable prior
written notice thereof and shall have obtained an unconditional release of each
Indemnified Person from all liability arising out of such claim, action, suit or
proceedings and (ii) such settlement, compromise or judgment does not include a
statement as to, or admission of, fault, culpability or a failure to act by or
on behalf of any Indemnified Person. As long as an Indemnifying Person has
complied with its obligations to defend and indemnify hereunder, such
Indemnifying Person shall not be liable for any settlement made by any
Indemnified Person(s) without the consent of such Indemnifying Person (which
consent shall not be unreasonably withheld or delayed). Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and
expenses of counsel to which the Indemnified Person is entitled pursuant to this
Agreement, the Indemnifying Person shall be liable for any settlement,
compromise or entry of a judgment in connection with any proceeding effected
without its written consent if (i) such

 

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settlement, compromise or judgment is entered into or entered, as applicable,
more than ninety (90) days after receipt by the Indemnifying Person of such
request, (ii) the Indemnifying Person shall not have reimbursed the Indemnified
Person in accordance with such request prior to the date of such settlement,
compromise or judgment, and (iii) such settlement, compromise or judgment does
not include a statement as to, or an admission of, fault, culpability or failure
to act by or on behalf of any such Indemnifying Person; provided, that the
Indemnified Person has provided the Indemnifying Person with five (5) Business
Days prior notice of its intent to exercise its rights under this sentence.

 

The Indemnifying Person agrees that if any indemnification or reimbursement
sought pursuant to this Agreement is judicially determined to be unenforceable
for any reason or is insufficient to hold any Indemnified Person harmless (with
respect only to the Liabilities from which such Indemnified Person is entitled
to be held harmless under this Agreement), then the Indemnifying Persons, on the
one hand, and such Indemnified Person, on the other hand, shall contribute to
the Liabilities for which such indemnification or reimbursement is held
unavailable or is insufficient: (x) in such proportion as is appropriate to
reflect the relative benefits to the Indemnifying Persons, on the one hand, and
such Indemnified Person, on the other hand, from the transactions to which such
indemnification or reimbursement relates; or (y) if the allocation provided by
clause (x) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (x)
but also the relative faults of the Indemnifying Persons, on the one hand, and
all Indemnified Persons, on the other hand, as well as any other equitable
considerations. Notwithstanding the foregoing, no party found liable for a
fraudulent misrepresentation shall be entitled to contribution from any other
party who is not also found liable for such fraudulent misrepresentation, and
the Indemnifying Persons agree that in no event shall the amount to be
contributed by the Indemnified Persons collectively pursuant to this paragraph
exceed the amount of the fees (by underwriting discount or otherwise) actually
received by such Indemnified Persons in connection with the closing of the Loan
or the Securitization.

 

The Indemnifying Persons agree that the indemnification, contribution and
reimbursement obligations set forth in this Agreement shall apply whether or not
any Indemnified Person is a formal party to any lawsuits, claims or other
proceedings. The Indemnifying Persons further agree that the Indemnified Persons
are intended third party beneficiaries under this Agreement.

 

(f)          The liabilities and obligations of each of Borrower, Guarantor and
Lender under this Section 11.2 (subject in each case to Article 13) shall
survive the termination of this Agreement and the satisfaction and discharge of
the Debt. Failure by Borrower and/or any Borrower Party to comply with the
provisions of Section 11.1 and/or Section 11.2 within the timeframes specified
therein and/or as otherwise required by Lender shall, at Lender’s option,
constitute a breach of the terms thereof and/or an Event of Default. Borrower
(on its own behalf and on behalf of each Borrower Party) hereby expressly
authorizes and appoints Lender its attorney-in-fact to take any actions required
of any Borrower Party under Sections 11.1, 11.2, 11.6 and/or 11.8 in the event
any Borrower Party fails to do the same, which power of attorney shall be
irrevocable and shall be deemed to be coupled with an interest. Notwithstanding
anything to the contrary contained in Sections 11.1, 11.2, 11.6, 11.8 and 11.9
hereof, (i) each Borrower Party shall bear its own cost of compliance with (a)
Sections 11.1(c) though (e) and,

 

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with respect to the Regulation AB requirements therein only, (f) and (g)
(including, without limitation, the costs of any ongoing financial reporting or
similar provisions contained therein), (b) Section 11.2, (c) Section 11.6 and
(d) prior to a Securitization, Section 11.8, (ii) each Borrower Party shall bear
its own cost of compliance with (a) Section 11.1(b) and, to the extent not
related to Regulation AB requirements, Sections 11.1(f) and (g), (b) following a
Securitization, Section 11.8  and (c) Section 11.9, provided, that, (I) Lender
acknowledges and agrees that Lender shall reimburse Borrower for the reasonable,
out-of-pocket costs and expenses of Borrower’s external legal counsel with
respect to compliance with this subclause (ii) which exceed $200,000 in the
aggregate and (II) Lender shall pay for the cost of obtaining any updated
appraisals, market studies, environmental reviews (Phase I’s and, if
appropriate, Phase II’s), property condition reports and other due diligence
investigations of the Properties pursuant to Section 11.1(b)(i)(B) hereof and
(iii) to the extent that the timeframes for compliance with such ongoing
financial reporting and similar provisions are shorter than the timeframes
allowed for comparable reporting obligations under Section 4.12 hereof (if any),
the timeframes under this Article 11 shall control.

 

Section 11.3.   Reserves/Escrows. In the event that Securities are issued in
connection with the Loan, all funds held by Lender in escrow or pursuant to
reserves in accordance with this Agreement and the other Loan Documents shall be
deposited in “eligible accounts” at “eligible institutions” and, to the extent
applicable, invested in “permitted investments” as then defined and required by
the Rating Agencies.

 

Section 11.4.   Servicer. At the option of Lender, the Loan may be serviced by a
servicer/special servicer/trustee selected by Lender (collectively, the
“Servicer”) and Lender may delegate all or any portion of its responsibilities
under this Agreement and the other Loan Documents to such Servicer pursuant to a
servicing agreement between Lender and such Servicer; provided, however, Lender
shall remain liable hereunder regardless of any such delegation. The initial
master servicer of a standalone Securitization of the Loan shall be Wells Fargo
Bank, National Association.

 

Section 11.5.    Rating Agency Costs. In connection with any Rating Agency
Confirmation or other Rating Agency consent, approval or review required
hereunder (other than the initial review of the Loan by the Rating Agencies in
connection with a Securitization), Borrower shall pay all of the costs and
expenses of Lender, Servicer and each Rating Agency in connection therewith,
and, if applicable, shall pay any fees imposed by any Rating Agency in
connection therewith.

 

Section 11.6.    Mezzanine Option. Lender shall have the option (the “Mezzanine
Option”) at any time prior to Securitization to divide the Loan into two parts,
a mortgage loan and a mezzanine loan, provided, that (i) the total loan amounts
for such mortgage loan and such mezzanine loan shall equal the then outstanding
amount of the Loan immediately prior to Lender’s exercise of the Mezzanine
Option, and (ii) the weighted average interest rate of such mortgage loan and
mezzanine loan shall at all times equal the Interest Rate and there shall be no
rate creep (except, with respect to such mezzanine loan, following an event of
default under such mezzanine loan and with respect to a prepayment of the
mortgage loan in connection with the Casualty and/or Condemnation and except,
with respect to such mortgage loan, following an event of default under such
mortgage loan). Borrower shall cooperate with Lender in Lender’s

 

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exercise of the Mezzanine Option in good faith and in a timely manner, which
such cooperation shall include, but not be limited to, (i) executing such
amendments to the Loan Documents and Borrower or any SPE Component Entity’s
organizational documents as may be reasonably requested by Lender or requested
by the Rating Agencies (provided, that any such amendment shall not change any
economic or non-economic term, including the interest rate or the stated
maturity, or otherwise have an adverse effect on Borrower, Guarantor and/or any
of their Affiliates or increase the obligations or decrease the rights of
Borrower pursuant to the Loan Documents and will not increase the rights or
decrease the obligations of Lender, except as provided in clause (ii) of the
immediately preceding sentence), (ii) creating one or more Single Purpose
Entities (the “Mezzanine Borrower”), which such Mezzanine Borrower shall (A)
own, directly or indirectly, 100% of the equity ownership interests in Borrower
(the “Equity Collateral”), and (B) execute such agreements, instruments and
other documents as may be required by Lender in connection with the mezzanine
loan (including, without limitation, a promissory note evidencing the mezzanine
loan and a pledge and security agreement pledging the Equity Collateral to
Lender as security for the mezzanine loan); and (iii) delivering such opinions,
title endorsements, UCC title insurance policies, documents and/or instruments
relating to the Property Documents, Ground Leases and other diligence materials
as may be reasonably required by Lender or required by the Rating Agencies, but
none of the foregoing shall increase the obligations of Borrower or rights of
Lender or decrease the rights of Borrower or obligations of Lender under the
Loan Documents or change any of the economic or monetary provisions of the Loan
or the Loan Documents. Borrower and Lender acknowledge and agree that the
execution of any documents in connection with Lender’s exercise of the Mezzanine
Option in accordance with terms and conditions hereof shall not in itself
increase the obligations or decrease the rights of Borrower pursuant to the Loan
Documents.

 

Section 11.7.    Conversion to Registered Form. At the request of Lender,
Borrower shall appoint, as its agent, a registrar and transfer agent (the
“Registrar”) reasonably acceptable to Lender which shall maintain, subject to
such reasonable regulations as it shall provide, such books and records as are
necessary for the registration and transfer of the Note in a manner that shall
cause the Note to be considered to be in registered form for purposes of Section
163(f) of the IRS Code. The option to convert the Note into registered form once
exercised may not be revoked. Any agreement setting out the rights and
obligation of the Registrar shall be subject to the reasonable approval of
Lender. Borrower may revoke the appointment of any particular person as
Registrar, effective upon the effectiveness of the appointment of a replacement
Registrar. The Registrar shall not be entitled to any fee from Borrower or
Lender or any other lender in respect of transfers of the Note and other Loan
Documents.

 

Section 11.8.    Uncross of Properties.

 

(a)          Borrower agrees that at any time Lender shall have the unilateral
right to elect to, from time to time, uncross any of the Properties (such
uncrossed Property or Properties, collectively, the “Affected Property” and the
remaining Property or Properties, collectively, the “Unaffected Property”) in
order to separate the Loan from the portion of the Debt to be secured by the
Affected Property (such portion of the Debt to be secured by the Affected
Property, the “Uncrossed Loan” and the remaining portion of the Debt secured by
the Unaffected Property, the “Remaining Loan”). In furtherance thereof, Lender
shall have the right to (i) sever and/or divide the Note and the other Loan
Documents so that (A) the original Loan Documents

 

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(collectively, the “Remaining Loan Documents”) evidence and secure only the
Remaining Loan and relate only to the Unaffected Property and (B) amended and/or
new documents and other instruments (collectively, the “Uncrossed Loan
Documents”) evidence and secure only the Uncrossed Loan and relate only to the
Affected Property, (ii) allocate the applicable portion of each of the Reserve
Funds relating to the Affected Property to the Uncrossed Loan, (iii) release any
cross-default and/or cross-collateralization provisions applicable to such
Affected Property (but such Affected Property shall be cross-defaulted an
cross-collateralized with each other Affected Property) and (iv) take such
additional reasonable actions consistent therewith (including, without
limitation, requiring delivery of the Uncrossed Loan Documents and amendments to
the Loan Documents, in each case, to give effect to the foregoing); provided,
that the Uncrossed Loan Documents and the Remaining Loan Documents, shall not,
in the aggregate, increase (A) any monetary obligation of Borrower under the
Loan Documents or (B) any other obligation of Borrower under the Loan Documents;
provided, however, none of the foregoing shall increase the obligations or
decrease the rights of Borrower pursuant to the Loan Documents nor increase the
rights or decrease the obligations of Lender (Borrower acknowledging and
agreeing that Borrower complying with requests by Lender pursuant to, and in
accordance with, this Section 11.8 in and of itself shall not be deemed to
increase any obligations of Borrower or decrease any rights of Borrower). In
connection with the uncrossing of any such Affected Property as provided for in
this Section 11.8 (an “Uncrossing Event”), the Remaining Loan shall be reduced
by an amount equal to amount of the Uncrossed Loan and the Uncrossed Loan shall
be in an amount equal to the Allocated Loan Amount applicable to the Affected
Property.

 

(b)          Borrower shall (and shall cause each Borrower Party to) fully
cooperate with Lender to effectuate each Uncrossing Event. Without limitation of
the foregoing, upon Lender’s request, Borrower shall (and shall cause each
Borrower Party to), among other things, (i) deliver evidence to Lender that the
single purpose nature and bankruptcy remoteness of the Borrower(s) owning
Properties other than the Affected Property following such Uncrossing Event have
not been adversely affected and are in accordance with the terms and provisions
of the Remaining Loan Documents; (ii) deliver evidence to Lender that the single
purpose nature and bankruptcy remoteness of the Borrower(s) owning the Affected
Property following such release have not been adversely affected and are in
accordance with the terms and provisions of the Uncrossed Loan Documents; (iii)
deliver to Lender such legal opinions and updated legal opinions as Lender
reasonably shall require or the Rating Agencies shall require (including,
without limitation, an update to the Non-Consolidation Opinion acceptable to the
Rating Agencies and reasonably acceptable to Lender or a New Non-Consolidation
Opinion and Borrower shall use commercially reasonable efforts to deliver an
opinion of counsel for Borrower that is standard in commercial lending
transactions and subject only to customary qualifications, assumptions and
exceptions opining that any REMIC Trust formed pursuant to a Securitization will
not fail to maintain its status as a “real estate mortgage investment conduit”
within the meaning of Section 860D of the IRS Code); (iv) take the actions
contemplated in subsection (a) above (including, without limitation, executing
the Uncrossed Loan Documents and amendments to the Loan Documents); and (v)
deliver such title endorsements, title insurance policies, documents and/or
instruments relating to the Property Documents, Ground Leases and other
materials as may be required by Lender or the Rating Agencies.

 

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Section 11.9.    Syndication. Without limiting Lender’s rights under Section
11.1, the provisions of this Section 11.9 shall only apply prior to a
Securitization and following a Securitization of the Loan, the provisions of
this Section 11.9 (and the related terms defined herein and used elsewhere in
the Loan Documents) shall be deemed deleted in their entirety.

 

(a)          Sale of Loan, Co-Lenders, Participations and Servicing.

 

(i)      Lender and any Co-Lender may, at their option, without Borrower’s
consent (but with notice to Borrower), sell with novation all or any part of
their right, title and interest in, and to, and under the Loan (the
“Syndication”), to one or more additional lenders (each a “Co-Lender”). Each
additional Co-Lender shall enter into an assignment and assumption agreement
(the “Assignment and Assumption”) assigning a portion of Lender’s or Co-Lender’s
rights and obligations under the Loan, and pursuant to which the additional
Co-Lender accepts such assignment and assumes the assigned obligations. From and
after the effective date specified in the Assignment and Assumption (i) each
Co-Lender shall be a party hereto and to each Loan Document to the extent of the
applicable percentage or percentages set forth in the Assignment and Assumption
and, except as specified otherwise herein, shall succeed to the rights and
obligations of Lender and the Co-Lenders hereunder and thereunder in respect of
the Loan, and (ii) Lender, as lender and each Co-Lender, as applicable, shall,
to the extent such rights and obligations have been assigned by it pursuant to
such Assignment and Assumption, relinquish its rights and be released from its
obligations hereunder and under the Loan Documents from and after the date of
such transfer.

 

(ii)      The liabilities of Lender and each of the Co-Lenders shall be several
and not joint, and Lender’s and each Co-Lender’s obligations to Borrower under
this Agreement shall be reduced by the amount of each such Assignment and
Assumption. Neither Lender nor any Co-Lender shall be responsible for the
obligations of any other Co-Lender. Lender and each Co-Lender shall be liable to
Borrower only for their respective proportionate shares of the Loan.

 

(iii)     Borrower agrees that it shall, in connection with any sale of all or
any portion of the Loan, whether in whole or to an additional Co-Lender or
Participant, within ten (10) Business Days after requested by Agent, furnish
Agent with the certificates required under Sections 4.12 and 4.13 hereof and
such other information as reasonably requested by any additional Co-Lender or
Participant in performing its due diligence in connection with its purchase of
an interest in the Loan.

 

(iv)    As of the Closing Date, Barclays (or an Affiliate of Barclays) shall act
as administrative agent for itself and the Co-Lenders (together with any
successor administrative agent, the “Agent”) pursuant to this Section 11.9.
Borrower acknowledges that Barclays, as Agent, shall have the sole and exclusive
authority to execute and perform this Agreement and each Loan Document on behalf
of itself, as a Lender and as agent for itself and the Co-Lenders subject to the
terms of the Co-Lending Agreement. Each Lender acknowledges that Barclays, as
Agent, shall retain the exclusive right to grant approvals and give consents
with respect to all matters requiring consent hereunder. Except as otherwise
provided herein, Borrower shall have no

 

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obligation to recognize or deal directly with any Co-Lender, and no Co-Lender
shall have any right to deal directly with Borrower with respect to the rights,
benefits and obligations of Borrower under this Agreement, the Loan Documents or
any one or more documents or instruments in respect thereof. Borrower may rely
conclusively on the actions of Barclays as Agent to bind Barclays and the
Co-Lenders, notwithstanding that the particular action in question may, pursuant
to this Agreement or the Co-Lending Agreement be subject to the consent or
direction of some or all of the Co-Lenders. Barclays may resign as Agent of the
Co-Lenders, in its sole discretion, or if required to by the Co-Lenders in
accordance with the term of the Co-Lending Agreement, in each case without the
consent of but upon prior written notice to Borrower. Upon any such resignation,
a successor Agent shall be determined pursuant to the terms of the Co-Lending
Agreement. The term Agent shall mean any successor Agent.

 

(v)     Notwithstanding any provision to the contrary in this Agreement, the
Agent (as Agent only) shall not have any duties or responsibilities except those
expressly set forth herein (and in the Co-Lending Agreement) and except as
expressly set forth herein and in the Co-Lending Agreement, no covenants,
functions, responsibilities, duties, obligations or liabilities of Agent shall
be implied by or inferred from this Agreement, the Co-Lending Agreement, or any
other Loan Document, or otherwise exist against Agent.

 

(vi)    Except to the extent its obligations hereunder and its interest in the
Loan have been assigned pursuant to one or more Assignments and Assumption,
Barclays, as Agent, shall have the same rights and powers under this Agreement
as any other Co-Lender and may exercise the same as though it were not Agent,
respectively. The term “Co-Lender” or “Co-Lenders” shall, unless otherwise
expressly indicated, include Barclays in its individual capacity. Barclays and
the other Co-Lenders and their respective Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, Borrower, or any Affiliate of Borrower and any Person who
may do business with or own securities of Borrower or any Affiliate of Borrower,
all as if they were not serving in such capacities hereunder and without any
duty to account therefor to each other.

 

(vii)     If required by any Co-Lender, Borrower hereby agrees to execute
supplemental notes in the principal amount of such Co-Lender’s pro rata share of
the Loan substantially in the form of the Note, and such supplemental note shall
(i) be payable to order of such Co-Lender, (ii) be dated as of the Closing Date,
and (iii) mature on the Maturity Date. Such supplemental note shall provide that
it evidences a portion of the existing indebtedness hereunder and under the Note
and not any new or additional indebtedness of Borrower. The term “Note” as used
in this Agreement and in all the other Loan Documents shall include all such
supplemental notes.

 

(viii)    Barclays, as Agent, shall maintain at its domestic lending office or
at such other location as Barclays, as Agent, shall designate in writing to each
Co-Lender and Borrower a copy of each Assignment and Assumption delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Co-Lenders, the amount of each Co-Lender’s proportionate share of the Loan
and the name and address of each

 

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Co-Lender’s agent for service of process (the “Register”). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and Borrower, Barclays, as Agent, and the Co-Lenders may treat each
person or entity whose name is recorded in the Register as a Co-Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection and copying by Borrower or any Co-Lender during normal business hours
upon reasonable prior notice to the Agent. A Co-Lender may change its address
and its agent for service of process upon written notice to Lender, as Agent and
to Borrower which notice shall only be effective upon actual receipt by
Barclays, as Agent and Borrower, which receipt will be acknowledged by Barclays,
as Agent and Borrower upon request.

 

(ix)     Notwithstanding anything herein to the contrary, any financial
institution or other entity may be sold a participation interest in the Loan by
Lender or any Co-Lender without Borrower’s consent (such financial institution
or entity, a “Participant”). No Participant shall have any rights under this
Agreement, the Note or any of the Loan Documents and the Participant’s rights in
respect of such participation shall be solely against Lender or Co-Lender, as
the case may be, as set forth in the participation agreement executed by and
between Lender or Co-Lender, as the case may be, and such Participant. Borrower
may rely conclusively on the actions of Lender as Agent to bind Lender and any
Participant, notwithstanding that the particular action in question may,
pursuant to this Agreement or any participation agreement be subject to the
consent or direction of some or all of the Participants. No participation shall
relieve Lender or Co-Lender, as the case may be, from its obligations hereunder
or under the Note or the Loan Documents and Lender or Co-Lender, as the case may
be, shall remain solely responsible for the performance of its obligations
hereunder.

 

(x)      Notwithstanding any other provision set forth in this Agreement, Lender
or any Co-Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation,
amounts owing to it in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System).

 

(b)          Cooperation in Syndication.

 

(i)      Each of Borrower and Guarantor agree to assist Lender in completing a
Syndication. Such assistance shall include (i) direct contact between senior
management and advisors of Borrower and Guarantor and the proposed Co-Lenders,
(ii) assistance in the preparation of a confidential information memorandum and
other marketing materials to be used in connection with the Syndication, (iii)
the hosting, with Lender, of one or more meetings of prospective Co-Lenders or
with the Rating Agencies, and (iv) assisting Lender in Lender’s attempt to
procure a rating for the Loan by the Rating Agencies.

 

(ii)      Lender shall manage all aspects of the Syndication of the Loan,
including decisions as to the selection of institutions to be approached and
when they will be approached, when their commitments will be accepted, which
institutions will participate, the allocations of the commitments among the
Co-Lenders and the amount and distribution of fees among the Co-Lenders. To
assist Lender in its Syndication efforts,

 

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Borrower agrees promptly to prepare and provide to Lender all information with
respect to Borrower, Affiliated Manager, Guarantor, any SPE Component Entity (if
any) and the Properties contemplated hereby, including all financial information
and projections (the “Projections”), as Lender may reasonably request in
connection with the Syndication of the Loan. Borrower hereby represents and
covenants that (i) all information other than the Projections (the
“Information”) that has been or will be made available to Lender by Borrower or
any of their representatives is or will be, when furnished, complete and correct
in all material respects and does not or will not, when furnished, contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein not materially misleading in
light of the circumstances under which such statements are made and (ii) the
Projections that have been or will be made available to Lender by Borrower or
any of their representatives have been or will be prepared in good faith based
upon reasonable assumptions. Borrower understands that in arranging and
syndicating the Loan, Lender, the Co-Lenders and, if applicable, the Rating
Agencies, may use and rely on the Information and Projections without
independent verification thereof

 

(iii)     If required in connection with the Syndication, Borrower hereby agrees
that, in addition to complying with the other provisions of this Section 11.9,
it shall use commercially reasonable efforts to obtain and deliver reliance
letters reasonably satisfactory to Lender with respect to the environmental
assessments and reports delivered to Lender prior to the Closing Date, which
will run to Lender, any Co-Lender and their respective successors and assigns.

 

(c)          Limitation of Liability. No claim may be made by Borrower, or any
other Person against Agent, Lender or any Co-Lenders or the Affiliates,
directors, officers, employees, attorneys or agent of any of such Persons for
any special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or any act, omission
or event occurring in connection therewith; and Borrower hereby waives, releases
and agrees not to sue upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.

 

(d)          No Joint Venture. Notwithstanding anything to the contrary herein
contained, neither Agent, Lender nor any Co-Lender by entering into this
Agreement or by taking any action pursuant hereto, will be deemed a partner or
joint venturer with Borrower.

 

ARTICLE 12.

 

INDEMNIFICATIONS

 

Section 12.1.     General Indemnification. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Persons from and against any and all Losses imposed upon or incurred by or
asserted against any Indemnified Persons and arising out of or in any way
relating to any one or more of the following: (a) any accident, injury to or
death of persons or loss of or damage to property occurring in, on or about any
Individual Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent

 

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parking areas, streets or ways; (b) any use, nonuse or condition in, on or about
any Individual Property or any part thereof or on the adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or ways; (c)
performance of any labor or services or the furnishing of any materials or other
property in respect of any Individual Property or any part thereof; (d) any
failure of any Individual Property (or any portion thereof) to be in compliance
with any applicable Legal Requirements; (e) any and all claims and demands
whatsoever which may be asserted against Lender by reason of any alleged
obligations or undertakings on its part to perform or discharge any of the
terms, covenants, or agreements contained in any Lease, management agreement,
any Ground Lease or any Property Documents; (f) the payment of any brokerage
commission, charge or fee to anyone (other than a broker or other agent retained
by Lender) which may be payable in connection with the funding of the Loan
evidenced by the Note and secured by the Security Instruments; and/or (g) the
holding or investing of the funds on deposit in the Accounts or the performance
of any work or the disbursement of funds in each case in connection with the
Accounts; provided, however, that the foregoing covenant shall not apply to any
matter to the extent arising from (x) the gross negligence, fraud, illegal acts
or willful misconduct of an Indemnified Person or (y) any Losses first arising
after foreclosure of the lien of the Loan Documents or deed-in-lieu of such
foreclosure, or Lender exercising any remedy which results in Lender or its
successors or assigns or their respective agents or appointees controlling the
Properties (or any Individual Property, if applicable) solely with respect to
those Properties which are no longer controlled by Borrower and solely with
respect to actions, events or conditions which are not caused by Borrower or any
of its Affiliates. Any amounts payable to Lender by reason of the application of
this Section 12.1 shall become due and payable immediately after demand therefor
by Lender and shall bear interest at the Default Rate from the date loss or
damage is sustained by Lender until paid.

 

Section 12.2.    Mortgage and Intangible Tax Indemnification. Subject to Article
13, Borrower shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless the Indemnified Persons from and against any and all
Losses imposed upon or incurred by or asserted against any Indemnified Persons
and directly or indirectly arising out of or in any way relating to any tax on
the making and/or recording of the Security Instruments, the Note or any of the
other Loan Documents.

 

Section 12.3.    ERISA Indemnification. Subject to Article 13, Borrower shall,
at its sole cost and expense, protect, defend, indemnify, release and hold
harmless the Indemnified Persons from and against any and all Losses (including,
without limitation, reasonable attorneys’ fees and costs incurred in the
investigation, defense, and settlement of Losses incurred in correcting any
prohibited transaction or in the sale of a prohibited loan, and in obtaining any
individual prohibited transaction exemption under ERISA that may be required, in
Lender’s sole discretion) that Lender may incur, directly or indirectly, as a
result of a default under Sections 3.7 or 4.19 of this Agreement.

 

Section 12.4.    Duty to Defend, Legal Fees and Other Fees and Expenses. Upon
written request by any Indemnified Person, Borrower shall defend such
Indemnified Person (if requested by any Indemnified Person, in the name of the
Indemnified Person) by attorneys and other professionals selected by Borrower
and reasonably approved by the Indemnified Persons. Notwithstanding the
foregoing, any Indemnified Persons may, in their sole discretion and at the
Indemnified Persons’ sole cost and expense, engage their own attorneys and other
professionals

 

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to defend or assist them, and, at the option of Indemnified Persons, their
attorneys shall control the resolution of any claim or proceeding, provided,
however, that Borrower shall have the right to reasonably approve any settlement
such Indemnified Persons desire to enter into with respect to such matter and
any such settlement shall provide a full release of Borrower with respect to
such matter. Upon demand if Borrower is not defending the Indemnified Persons in
accordance with this Section 12.4, Borrower shall pay or, in the sole discretion
of the Indemnified Persons, reimburse, the Indemnified Persons for the payment
of reasonable fees and disbursements of attorneys, engineers, environmental
consultants, laboratories and other professionals in connection therewith.

 

Section 12.5.    Survival. The obligations and liabilities of Borrower under
this Article 12 (in each case, subject to Article 13) shall fully survive
indefinitely notwithstanding any termination, satisfaction, assignment, entry of
a judgment of foreclosure, exercise of any power of sale, or delivery of a deed
in lieu of foreclosure of the Security Instrument.

 

Section 12.6.     Environmental Indemnity. Simultaneously herewith, Borrower and
Guarantor have executed and delivered the Environmental Indemnity to Lender,
which Environmental Indemnity is not secured by the Security Instrument.

 

ARTICLE 13.

 

EXCULPATION

 

Section 13.1.     Exculpation.

 

(a)          Subject to the qualifications below, Lender shall not enforce the
liability and obligation of Borrower to perform and observe the obligations
contained in the Note, this Agreement, the Security Instruments or the other
Loan Documents by any action or proceeding wherein a money judgment or any
deficiency judgment or other judgment establishing personal liability shall be
sought against Borrower or any principal, director, officer, employee,
beneficiary, shareholder, partner, member, trustee, agent, or affiliate of
Borrower or any legal representatives, successors or assigns of any of the
foregoing (collectively, the “Exculpated Parties”), except that Lender may bring
a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon
its interest under the Note, this Agreement, the Security Instruments and the
other Loan Documents, or in the Properties (or any portion thereof), the Rents,
or any other collateral given to Lender pursuant to the Loan Documents;
provided, however, that, except as specifically provided herein, any judgment in
any such action or proceeding shall be enforceable against Borrower only to the
extent of Borrower’s interest in the Property, in the Rents and in any other
collateral given to Lender, and Lender, by accepting the Note, this Agreement,
the Security Instruments and the other Loan Documents, shall not sue for, seek
or demand any deficiency judgment against Borrower or any of the Exculpated
Parties in any such action or proceeding under or by reason of or under or in
connection with the Note, this Agreement, the Security Instruments or the other
Loan Documents. The provisions of this Section shall not, however, (1)
constitute a waiver, release or impairment of any obligation evidenced or
secured by any of the Loan Documents; (2) impair the right of Lender to name
Borrower as a party defendant in any action or suit for foreclosure and sale
under the Security Instruments; (3) affect the validity or enforceability of the

 

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Guaranty, the Environmental Indemnity and/or any guaranty set forth in Section
11.2 hereof or any of the rights and remedies of Lender thereunder (including,
without limitation, Lender’s right to enforce said rights and remedies against
Borrower and/or Guarantor (as applicable) personally and without the effect of
the exculpatory provisions of this Article 13); (4) impair the rights of Lender
to (A) obtain the appointment of a receiver and/or (B) enforce its security
interest in the Accounts as provided in Articles 8 and 9 hereof; (5) impair the
enforcement of the assignment of leases and rents contained in the Security
Instruments and in any other Loan Documents; (6) constitute a prohibition
against Lender to seek a deficiency judgment against Borrower in order to fully
realize the security granted by the Security Instruments or to commence any
other appropriate action or proceeding in order for Lender to exercise its
remedies against the Properties (or any portion thereof); or (7) constitute a
waiver of the right of Lender to enforce the liability and obligation of
Borrower, by money judgment or otherwise, to the extent of any Loss incurred by
Lender (including reasonable attorneys’ fees and costs reasonably incurred)
arising out of or in connection with the following:

 

(i)      fraud or material willful misrepresentation by any Borrower Party in
connection with the Loan;

 

(ii)      the willful misconduct of any Borrower Party;

 

(iii)     any intentional act or omission of any Borrower Party made frivolously
or in bad faith, including any assertion of defenses or counterclaims by any
Borrower Party, which hinders, delays or interferes in any material respect with
the Lender’s enforcement of its rights under the Loan Documents or the
realization of the collateral;

 

(iv)     (A) material physical waste to the Property (or any portion thereof)
and/or (B) after the occurrence and during the continuance of an Event of
Default, removal or disposal of any portion of any Individual Property other
than in the ordinary course;

 

(v)      the misapplication, misappropriation or conversion by (I) any Borrower
Party and/or (II) any Affiliated Manager that is Controlled by Borrower, any SPE
Component Entity and/or any of their respective Affiliates, in each instance, of
(A) any insurance proceeds paid by reason of any loss, damage or destruction to
the Property (or any portion thereof), (B) any Awards or other amounts received
in connection with the Condemnation of all or a portion of the Property, (C) any
Rents, (D) any Tenant security deposits or Rents collected in advance or (E) any
other monetary collateral for the Loan (including, without limitation, any
Reserve Funds and/or any portion thereof disbursed to (or at the direction of)
Borrower);

 

(vi)     failure to pay Taxes in accordance with the terms and provisions hereof
to the extent that the Properties have generated sufficient net operating income
for the immediately preceding twelve (12) month period to pay the same, unless
such charges are the subject to a bona fide dispute in which the Borrower is
contesting the amount or validity thereof in accordance with the terms and
conditions set forth herein; and/or

 

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(vii)    any material amendment, material modification or voluntary termination
or cancellation of any Ground Lease by any Borrower without Lender’s consent
other than as expressly permitted pursuant to the terms hereof.

 

(b)          Notwithstanding anything to the contrary in this Agreement, the
Note or any of the Loan Documents, (A) Lender shall not be deemed to have waived
any right which Lender may have under Section 506(a), 506(b), 1111(b) or any
other provisions of the Bankruptcy Code to file a claim for the full amount of
the Debt or to require that all collateral shall continue to secure all of the
Debt owing to Lender in accordance with the Loan Documents, and (B) the Debt
shall be fully recourse to Borrower in the event that: (i) any Borrower and/or
any SPE Component Entity fails to obtain Lender’s prior written consent to any
indebtedness or voluntary lien encumbering any Individual Property to the extent
required by this Agreement or the other Loan Documents, (ii) any Borrower and/or
any SPE Component Entity fails to obtain Lender’s prior written consent to any
transfer in violation of Article 6 hereof to the extent required by this
Agreement or the other Loan Documents; (iii) a Bankruptcy Event occurs; or (iv)
any representation, warranty or covenant contained in Article 5 is violated or
breached and such breach or violation is cited as a contributing factor by the
applicable bankruptcy court in the substantive consolidation of Borrower and/or
any SPE Component Entity with any other Person.

 

ARTICLE 14.

 

NOTICES

 

Section 14.1.     Notices. All notices or other written communications hereunder
shall be deemed to have been properly given (a) upon delivery, if delivered in
person or by facsimile transmission with receipt acknowledged by the recipient
thereof and confirmed by telephone by sender, (b) one (1) Business Day after
having been deposited for overnight delivery with any reputable overnight
courier service, or (c) three (3) Business Days after having been deposited in
any post office or mail depository regularly maintained by the U.S. Postal
Service and sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:

 

If to Borrower: c/o American Finance Trust, Inc.   c/o American Finance
Advisors, LLC   405 Park Avenue, 7th Floor   New York, NY 10022   Attn:  Asset
Management   E-Mail:  AFINAssetManagement@arlcap.com       with a copy to:      
American Finance Trust, Inc.   c/o American Finance Advisors, LLC   405 Park
Avenue, 14th Floor   New York, NY 10022   Attn:  Marc A. Tolchin, Esq.  
E-Mail:  mtolchin@arlcap.com

 

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With a copy to: Arnold & Porter LLP   399 Park Avenue   New York, New
York  10022   Attention:  John Busillo Esq.   Facsimile No.:  (212) 715-1399    
If to Lender: Barclays Bank PLC   745 Seventh Avenue   New York, New York 10019
  Attention:  Michael S. Birajiclian   Facsimile No.:  (646) 531-5391     And
to: Column Financial, Inc.   Eleven Madison Avenue   New York, New York  10010  
Attention:  Legal and Compliance Department/FID Securitized Product   Facsimile
No.: (212) 322-1730     And to: UBS Real Estate Securities Inc.   1285 Avenue of
the Americas   New York, New York 10019   Attention:  Transaction Management  
Facsimile No.: (212) 821-2943     With a copy to: Dechert LLP   Cira Centre  
2929 Arch Street   Philadelphia, Pennsylvania 19104-2808   Attention:  David W.
Forti, Esq.   Facsimile No.:  (215) 655-2647

 

or addressed as such party may from time to time designate by written notice to
the other parties.

 

Either party by notice to the other may designate additional or different
addresses for subsequent notices or communications.

 

ARTICLE 15.

 

FURTHER ASSURANCES

 

Section 15.1.     Replacement Documents. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of the Note,
this Agreement or any of the other Loan Documents which is not of public record,
and, in the case of any such mutilation, upon surrender and cancellation of the
Note, this Agreement or such other Loan Document,

 

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Borrower will issue, in lieu thereof, a replacement thereof, dated the date of
the Note, this Agreement or such other Loan Document, as applicable, in the same
principal amount thereof and otherwise of like tenor.

 

Section 15.2.     Recording of Security Instrument, etc.

 

(a)           Borrower forthwith upon the execution and delivery of the Security
Instruments and thereafter, from time to time, will cause the Security
Instruments and any of the other Loan Documents creating a lien or security
interest or evidencing the lien hereof upon the Properties and each instrument
of further assurance to be filed, registered or recorded in such manner and in
such places as may be required by any present or future law in order to publish
notice of and fully to protect and perfect the lien or security interest hereof
upon, and the interest of Lender in, the Properties. Borrower will pay all
taxes, filing, registration or recording fees, and all expenses incident to the
preparation, execution, acknowledgment and/or recording of the Note, the
Security Instruments, this Agreement, the other Loan Documents, any note, deed
of trust or mortgage supplemental hereto, any security instrument with respect
to the Properties and any instrument of further assurance, and any modification
or amendment of the foregoing documents, and all federal, state, county and
municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of the Security Instruments, any deed
of trust or mortgage supplemental hereto, any security instrument with respect
to the Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by applicable law
so to do. The foregoing taxes, fees, expenses, duties, imposts, assessments and
charges, as applicable, are herein referred to as the “Security Instrument
Taxes”.

 

(b)           Borrower represents that it has paid all Security Instrument Taxes
imposed upon the execution and recordation of each Security Instrument.

 

Section 15.3.    Further Acts, etc. Borrower will, at the cost of Borrower, and
without expense to Lender, do, execute, acknowledge and deliver all and every
further acts, deeds, conveyances, deeds of trust, mortgages, assignments,
notices of assignments, transfers and assurances as Lender shall, from time to
time, reasonably require, for the better assuring, conveying, assigning,
transferring, and confirming unto Lender the property and rights hereby
mortgaged, deeded, granted, bargained, sold, conveyed, confirmed, pledged,
assigned, warranted and transferred or intended now or hereafter so to be, or
which Borrower may be or may hereafter become bound to convey or assign to
Lender, or for carrying out the intention or facilitating the performance of the
terms of this Agreement or for filing, registering or recording the Security
Instruments, or for complying in all material respects with all Legal
Requirements. Borrower, on demand, will execute and deliver, and in the event it
shall fail to so execute and deliver, hereby authorizes Lender to execute in the
name of Borrower or without the signature of Borrower to the extent Lender may
lawfully do so, one or more financing statements to evidence more effectively
the security interest of Lender in the Property. Borrower grants to Lender an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Lender
pursuant to this Section 15.3, exercisable, in each case, to the extent that
Borrower fails to take the necessary actions within ten (10) days after
Borrower’s receipt of written request therefor from Lender.

 

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Section 15.4.     Changes in Tax, Debt, Credit and Documentary Stamp Laws.

 

(a)           If any law is enacted or adopted or amended after the date of this
Agreement which deducts the Debt from the value of the Properties (or any
portion thereof) for the purpose of taxation and which imposes a tax, either
directly or indirectly, on the Debt or Lender’s interest in the Properties (or
any portion thereof) (other than an Excluded Tax), Borrower will pay the tax,
with interest and penalties thereon, if any. If Lender is advised by counsel
chosen by it that the payment of tax by Borrower would be unlawful or taxable to
Lender or unenforceable or provide the basis for a defense of usury then Lender
shall have the option by written notice of not less than one hundred eighty
(180) days to declare the Debt immediately due and payable (without payment of
any Yield Maintenance Premium or other fee, payment or penalty).

 

(b)           Borrower will not claim or demand or be entitled to any credit or
credits on account of the Debt for any part of the Taxes or Other Charges
assessed against the Property, or any part thereof, and no deduction shall
otherwise be made or claimed from the assessed value of the Properties, or any
part thereof, for real estate tax purposes by reason of the Security Instruments
or the Debt. If such claim, credit or deduction shall be required by applicable
law, Lender shall have the option, by written notice of not less than one
hundred eighty (180) days, to declare the Debt immediately due and payable
(without payment of any Yield Maintenance Premium or other fee, payment or
penalty).

 

(c)           If at any time the United States of America, any State thereof or
any subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, the Security Instruments, or any of the other Loan
Documents or impose any other tax or charge on the same (other than an Excluded
Tax or income tax of Lender), Borrower will pay for the same, with interest and
penalties thereon, if any.

 

ARTICLE 16.

 

WAIVERS

 

Section 16.1.     Remedies Cumulative; Waivers.

 

The rights, powers and remedies of Lender under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower pursuant to this Agreement, the Security Instruments,
the Note or the other Loan Documents, or existing at law or in equity or
otherwise. Lender’s rights, powers and remedies may be pursued singularly,
concurrently or otherwise, at such time and in such order as Lender may
determine in Lender’s 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 shall not be construed to be a waiver of any subsequent Default or
Event of Default by Borrower or to impair any remedy, right or power consequent
thereon.

  

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Section 16.2.    Modification, Waiver in Writing.

 

No modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement, the Security Instrument, the Note and the other
Loan Documents, nor consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in a writing signed by the party
against whom enforcement is sought, and then such waiver or consent shall be
effective only in the specific instance, and for the purpose, for which given.
Except as otherwise expressly provided herein, no notice to, or demand on
Borrower, shall entitle Borrower to any other or future notice or demand in the
same, similar or other circumstances.

 

Section 16.3.     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 under this Agreement, the Security
Instruments, the Note or the other Loan Documents, 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 Security Instruments, the Note or the other
Loan Documents, 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 Security Instruments, the Note and the other Loan Documents, or to declare a
default for failure to effect prompt payment of any such other amount.

 

Section 16.4.     Waiver of Trial by Jury.

 

BORROWER AND LENDER, BY ACCEPTANCE OF THIS AGREEMENT, HEREBY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE,
RELATING DIRECTLY OR INDIRECTLY TO THE LOAN, THE APPLICATION FOR THE LOAN, THIS
AGREEMENT, THE NOTE, THE SECURITY INSTRUMENT OR THE OTHER LOAN DOCUMENTS OR ANY
ACTS OR OMISSIONS OF LENDER OR BORROWER.

 

Section 16.5.     Waiver of Notice.

 

Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except (a) with respect to matters for which this Agreement specifically
and expressly provides for the giving of notice by Lender to Borrower and (b)
with respect to matters for which Lender is required by applicable law to give
notice, and Borrower hereby expressly waives the right to receive any notice
from Lender with respect to any matter for which this Agreement does not
specifically and expressly provide for the giving of notice by Lender to
Borrower.

 

Section 16.6.     Remedies of Borrower.

 

In the event that a claim or adjudication is made that Lender or its agents have
acted unreasonably or unreasonably delayed acting in any case where by
applicable law or under this Agreement, the Security Instruments, the Note and
the other Loan Documents, Lender or such agent, as the case may be, has an
obligation to act reasonably or promptly, Borrower agrees that

 

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neither Lender nor its agents shall be liable for any monetary damages, and
Borrower’s sole remedies shall be limited to commencing an action seeking
injunctive relief or declaratory judgment. The parties hereto agree that any
action or proceeding to determine whether Lender has acted reasonably shall be
determined by an action seeking declaratory judgment. Lender agrees that, in
such event, it shall cooperate in expediting any action seeking injunctive
relief or declaratory judgment.

 

Section 16.7.     Marshalling and Other Matters.

 

Borrower hereby waives, to the extent permitted by applicable Legal
Requirements, the benefit of all appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale under the Security Instrument of the
Property or any part thereof or any interest therein. Further, Borrower hereby
expressly waives any and all rights of redemption from sale under any order or
decree of foreclosure of the Security Instrument on behalf of Borrower, and on
behalf of each and every person acquiring any interest in or title to the
Property subsequent to the date of the Security Instruments and on behalf of all
persons to the extent permitted by applicable Legal Requirements.

 

Section 16.8.     Intentionally Omitted.

 

Section 16.9.     Waiver of Counterclaim. Borrower hereby waives the right to
assert a counterclaim, other than a compulsory counterclaim, in any action or
proceeding brought against it by Lender or its agents.

 

Section 16.10.     Sole Discretion of Lender. Wherever pursuant to this
Agreement (a) Lender exercises any right given to it to approve or disapprove,
(b) any arrangement or term is to be satisfactory to Lender, or (c) any other
decision or determination is to be made by Lender, the decision to approve or
disapprove all decisions that arrangements or terms are satisfactory or not
satisfactory, and all other decisions and determinations made by Lender, shall
be in the sole discretion of Lender, except as may be otherwise expressly and
specifically provided herein.

 

ARTICLE 17.

 

MISCELLANEOUS

 

Section 17.1.      Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by Lender of the Loan and the execution
and delivery to Lender of the Note, and shall continue in full force and effect
so long as all or any of the Debt is outstanding and unpaid unless a longer
period is expressly set forth in this Agreement, the Security Instruments, the
Note or the other Loan Documents. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the legal
representatives, successors and assigns of such party. All covenants, promises
and agreements in this Agreement, by or on behalf of Borrower, shall inure to
the benefit of the legal representatives, successors and assigns of Lender.

 

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Section 17.2.      Governing Law. 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, AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED
FROM 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,
THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND
THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF
THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS
CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE, IT BEING UNDERSTOOD
THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE
STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF
ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.
TO THE FULLEST EXTENT PERMITTED BY LAW (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW), EXCEPT AS PROVIDED IN THE PREVIOUS SENTENCE WITH RESPECT TO
THE SECURITY INSTRUMENTS, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES
ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE
AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW.

 

ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS WILL BE INSTITUTED IN
(OR, IF PREVIOUSLY INSTITUTED, MOVED TO) ANY FEDERAL OR STATE COURT DESIGNATED
BY LENDER IN THE CITY OF NEW YORK, COUNTY OF NEW YORK. BORROWER HEREBY (I)
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 (II) IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. BORROWER AND LENDER HEREBY ACKNOWLEDGE AND AGREE THAT THE FOREGOING
AGREEMENT, WAIVER AND SUBMISSION ARE MADE PURSUANT TO SECTION 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.

 

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BORROWER DOES HEREBY DESIGNATE AND APPOINT:

 

CORPORATION SERVICES COMPANY
80 STATE STREET
ALBANY, NEW YORK 12207

 

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 NOTICE OF SAID SERVICE MAILED OR
DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY
TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

 

Section 17.3.    Headings. The Article and/or Section headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.

 

Section 17.4.     Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable Legal Requirements, but if any provision of this Agreement shall be
prohibited by or invalid under applicable Legal Requirements, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

 

Section 17.5.     Preferences. After the occurrence and during the continuance
of an Event of Default or in connection with any proceedings under the
Bankruptcy Code and/or any other Creditors Rights Laws, Lender shall have the
continuing and exclusive right to apply or reverse and reapply any and all
payments by Borrower to any portion of the obligations of Borrower hereunder. To
the extent Borrower makes a payment or payments to Lender, which payment or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any Creditors Rights Laws, 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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Section 17.6.          Expenses. Except as otherwise provided herein, Borrower
covenants and agrees to pay its own costs and expenses in connection with the
Loan and pay, or, if Borrower fails to pay, to reimburse, Lender, upon receipt
of written notice from Lender, for Lender’s reasonable costs and expenses
(including reasonable, actual attorneys’ fees and disbursements) in each case,
incurred by Lender in accordance with this Agreement in connection with (i) the
preparation, negotiation, execution and delivery of this Agreement, the Security
Instruments, the Note 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 as to any legal matters arising under this Agreement, the
Security Instruments, the Note and the other Loan Documents with respect to the
Properties); (ii) Borrower’s ongoing performance of and compliance with
Borrower’s respective agreements and covenants contained in this Agreement, the
Security Instruments, the Note and the other Loan Documents on its part to be
performed or complied with after the Closing Date, including, without
limitation, confirming compliance with environmental and insurance requirements;
(iii) Lender’s ongoing performance and compliance with all Borrower requests
pursuant to this Agreement, the Security Instruments, the Note and the other
Loan Documents; (iv) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Agreement, the Security Instruments, the Note and the other Loan Documents
and any other documents or matters requested by Borrower; (v) securing
Borrower’s compliance with any requests made pursuant to the provisions of this
Agreement; (vi) the filing and recording fees and expenses, title insurance and
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, the Security
Instruments, the Note and the other Loan Documents; (vii) enforcing or
preserving any rights, in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation, in each case against,
under or affecting Borrower, this Agreement, the Security Instruments, the Note,
the other Loan Documents, the Property, or any other security given for the
Loan; (viii) enforcing any obligations of or collecting any payments due from
Borrower under this Agreement, the Security Instruments, the Note and 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 (with respect to Borrower, any SPE Component Entity or Guarantor);
and (ix) the preparation, negotiation, execution, delivery, review, filing,
recording or administration of any documentation associated with the exercise of
any of Borrower’s rights hereunder and/or under the other Loan Documents
regardless of whether or not any such right is consummated (including, without
limitation, Borrower’s rights hereunder to Release an Individual Property and/or
permit or undertake transfers (including under Sections 2.9, 6.3 and 6.4
hereof), in each case, in accordance with the applicable terms and conditions
hereof); provided, however, that, with respect to each of subsections (i) though
(ix) above, (A) none of the foregoing subsections shall be deemed to be mutually
exclusive or limit any other subsection, (B) the same shall be deemed to (I)
include the following fees and expenses: any related appraisal costs if the Loan
is a specially serviced loan, special servicing fees if the Loan is a specially
serviced loan, liquidation fees, modification fees, work-out fees, special
servicer inspection costs if the Loan is a specially serviced loan, operating
advisor consulting fees and other similar costs or expenses payable to any
Servicer, trustee, operating advisor and/or special servicer (if the Loan is a
specially serviced

 

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loan) (or any portion thereof and/or interest therein) and interest payable on
advances made by the Servicer with respect to delinquent debt service payments
or expenses of curing Borrower’s and/or any other Borrower Party’s defaults
under the Loan Documents  and (II) exclude any requirement that Borrower pay the
servicing fees due to any master servicer on account of the day to day, routine
servicing of the Loan (provided, further, that the foregoing subsection (II)
shall not be deemed to otherwise limit any fees, costs, expenses or other sums
required to be paid to Lender under this Section, the other terms and conditions
hereof and/or of the other Loan Documents) and (C) 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 or its agents, employees, trustees or any Servicer or special servicer.

 

Section 17.7.          Cost of Enforcement. In the event (a) that any Security
Instrument is foreclosed in whole or in part, (b) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of Borrower or any of its
constituent Persons or an assignment by Borrower or any of its constituent
Persons for the benefit of its creditors, or (c) Lender exercises any of its
other remedies under this Agreement, the Security Instruments, the Note and the
other Loan Documents, Borrower shall be chargeable with and agrees to pay all
costs of collection and defense, including 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.

 

Section 17.8.          Schedules Incorporated. The Schedules annexed hereto are
hereby incorporated herein as a part of this Agreement with the same effect as
if set forth in the body hereof.

 

Section 17.9.         Offsets, Counterclaims and Defenses. Any assignee of
Lender’s interest in and to this Agreement, the Security Instruments, the Note
and the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to such documents which Borrower
may otherwise have against any assignor of such documents, and no such unrelated
counterclaim or defense shall be interposed or asserted by Borrower in any
action or proceeding brought by any such assignee upon such documents and any
such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.

 

Section 17.10.        No Joint Venture or Partnership; No Third Party
Beneficiaries.

 

(a)          Borrower and Lender intend that the relationships created under
this Agreement, the Security Instruments, the Note and the other Loan Documents
be solely that of borrower and lender. Nothing herein or therein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Borrower and Lender nor to grant Lender any interest in the
Property other than that of mortgagee, beneficiary or lender.

 

(b)          This Agreement, the Security Instruments, the Note and the other
Loan Documents are solely for the benefit of Lender and Borrower and Guarantor
(as applicable) and nothing contained in this Agreement, the Security
Instruments, the Note or the other Loan Documents shall be deemed to confer upon
anyone other than Lender and Borrower and Guarantor, as applicable, any right to
insist upon or to enforce the performance or observance of

 

 - 146 - 

 

  

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.

 

(c)          The general partners, members, principals and (if Borrower is a
trust) beneficial owners of Borrower are experienced in the ownership and
operation of properties similar to the Properties, and Borrower and Lender are
relying solely upon such expertise and business plan in connection with the
ownership and operation of the Properties. Borrower is not relying on Lender’s
expertise, business acumen or advice in connection with the Properties (or any
portion thereof).

 

(d)          Notwithstanding anything to the contrary contained herein, Lender
is not undertaking the performance of (i) any obligations related to the
Properties (or any portion thereof) (including, without limitation, under the
Leases); or (ii) any obligations with respect to any agreements, contracts,
certificates, instruments, franchises, permits, trademarks, licenses and other
documents (other than the Loan Documents) to which any Borrower Party and/or the
Properties (or any portion thereof) is subject.

 

(e)          By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Lender pursuant to this Agreement, the
Security Instruments, the Note or the other Loan Documents, including, without
limitation, any officer’s certificate, balance sheet, statement of profit and
loss or other financial statement, survey, appraisal, or insurance policy,
Lender shall not be deemed to have warranted, consented to, or affirmed the
sufficiency, the legality or effectiveness of same, and such acceptance or
approval thereof shall not constitute any warranty or affirmation with respect
thereto by Lender.

 

(f)          Borrower recognizes and acknowledges that in accepting this
Agreement, the Note, the Security Instruments and the other Loan Documents,
Lender is expressly and primarily relying on the truth and accuracy of the
representations and warranties set forth in Article 3 of this Agreement without
any obligation to investigate the Properties (or any portion thereof) and
notwithstanding any investigation of the Properties (or any portion thereof) by
Lender; that such reliance existed on the part of Lender prior to the date
hereof, that the warranties and representations are a material inducement to
Lender in making the Loan; and that Lender would not be willing to make the Loan
and accept this Agreement, the Note, the Security Instruments and the other Loan
Documents in the absence of the warranties and representations as set forth in
Article 3 of this Agreement

 

Section 17.11.        Publicity.

 

(a)          All news releases, publicity or advertising by Borrower or its
Affiliates through any media intended to reach the general public which refers
to this Agreement, the Note, the Security Instruments or the other Loan
Documents, the financing evidenced by this Agreement,

 

 - 147 - 

 

  

the Note, the Security Instrument or the other Loan Documents, Lender or any of
its Affiliates shall be subject to the prior written approval of Lender, not to
be unreasonably withheld. Nothing in this Section 17.11 shall prevent Borrower
or any of its Affiliates from disclosing any information in connection with any
statutory reporting requirement or other reporting requirements required by any
governmental agency or other Legal Requirements applicable to Borrower or any of
its Affiliates.

 

(b)          Except in connection with an actual or a potential Secondary Market
Transaction or other sale, or syndication of the Loan or any mezzanine loan
entered into after the Closing Date and except for any “tombstone” in a format
typically used by Lender (in any one or more such instances, Lender’s and/or
Lender’s Affiliate’s rights shall not be limited by the terms of this Section
17.11), all news releases, publicity or advertising by Lender or its Affiliates
through any media intended to reach the general public which refers to this
Agreement, the Note, the Security Instruments or the other Loan Documents, the
financing evidenced by this Agreement, the Note, the Security Instruments or the
other Loan Documents, Borrower or any of its Affiliates shall be subject to the
prior written approval of Borrower, not to be unreasonably withheld. 

 

Section 17.12.         Limitation of Liability. No claim may be made by
Borrower, or any other Person against Lender or its Affiliates, directors,
officers, employees, attorneys or agents of any of such Persons for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any act, omission or event
occurring in connection therewith; and Borrower hereby waives, releases and
agrees not to sue upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.

 

Section 17.13.       Conflict; Construction of Documents; Reliance. In the event
of any conflict between the provisions of this Agreement and the Security
Instruments, the Note or 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 this Agreement, the Note, the Security Instruments and the
other Loan Documents and this Agreement, the Note, the Security Instruments and
the other 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 this
Agreement, the Note, the Security Instruments and the other Loan Documents or
any other agreements or instruments which govern the Loan by virtue of the
ownership by it or any parent, subsidiary or Affiliate of Lender of any equity
interest any of them may acquire in Borrower, and Borrower hereby irrevocably
waives the right to raise any defense or take any action on the basis of the
foregoing with respect to Lender’s exercise of any such rights or remedies.
Borrower acknowledges that Lender engages in the business of real estate
financings and other real estate transactions and investments which may be
viewed as adverse-to or competitive with the business of Borrower or its
Affiliates.

 

 - 148 - 

 

  

Section 17.14.       Entire Agreement. This Agreement, the Note, the Security
Instrument and the other Loan Documents contain the entire agreement of the
parties hereto and thereto in respect of the transactions contemplated hereby
and thereby, and all prior agreements among or between such parties, whether
oral or written between Borrower and Lender are superseded by the terms of this
Agreement, the Note, the Security Instruments and the other Loan Documents.

 

Section 17.15.        Liability. If Borrower consists of more than one Person,
the obligations and liabilities of each such Person hereunder shall be joint and
several. This Agreement shall be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns forever.

 

Section 17.16.        Duplicate Originals; Counterparts. This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original. The failure of any party hereto to execute this
Agreement, or any counterpart hereof, shall not relieve the other signatories
from their obligations hereunder.

 

Section 17.17.        Brokers. Borrower agrees (i) to pay any and all fees
imposed or charged by all brokers, mortgage bankers and advisors (each a
“Broker”) hired or contracted by any Borrower Party or their Affiliates in
connection with the transactions contemplated by this Agreement and (ii) to
indemnify and hold Lender harmless from and against any and all claims, demands
and liabilities for brokerage commissions, assignment fees, finder’s fees or
other compensation whatsoever arising from this Agreement or the making of the
Loan which may be asserted against Lender by any Person except any Persons
claiming to be retained by or on behalf of Lender. The foregoing indemnity shall
survive the termination of this Agreement and the payment of the Debt. Borrower
hereby represents and warrants that no Broker was engaged by any Borrower Party
in connection with the transactions contemplated by this Agreement. Lender
hereby agrees to pay any and all fees imposed or charged by any Broker hired
solely by Lender and agrees to indemnify and hold Borrower harmless from and
against any and all claims, demands and liabilities for brokerage commissions,
assignment fees, finder’s fees or other compensation whatsoever arising from
this Agreement or the making of the Loan which may be asserted against Borrower
by any Person except any Persons claiming to be retained by or on behalf of
Borrower. Borrower acknowledges and agrees that (a) any Broker is not an agent
of Lender and has no power or authority to bind Lender, (b) Lender is not
responsible for any recommendations or advice given to any Borrower Party by any
Broker, (c) Lender and the Borrower Parties have dealt at arms-length with each
other in connection with the Loan, (d) no fiduciary or other special
relationship exists or shall be deemed or construed to exist among Lender and
the Borrower Parties and (e) none of the Borrower Parties shall be entitled to
rely on any assurances or waivers given, or statements made or actions taken, by
any Broker which purport to bind Lender or modify or otherwise affect this
Agreement or the Loan, unless Lender has, in its sole discretion, agreed in
writing with any such Borrower Party to such assurances, waivers, statements,
actions or modifications. Borrower acknowledges and agrees that Lender may, in
its sole discretion, pay fees or compensation to any Broker in connection with
or arising out of the closing and funding of the Loan. Such fees and
compensation, if any, (i) shall be in addition to any fees which may be paid by
any Borrower Party to such Broker and (ii) create a potential conflict of
interest for Broker in its relationship with the Borrower Parties. Such fees and
compensation, if applicable, may include a direct, one-time payment, servicing
fees and/or incentive payments based on volume and size of financings involving
Lender and such Broker.

 

 - 149 - 

 

  

Section 17.18.       Set-Off. In addition to any rights and remedies of Lender
provided by this Agreement and by law, Lender shall have the right in its sole
discretion, without prior notice to Borrower, any such notice being expressly
waived by Borrower to the extent permitted by applicable law, upon any amount
becoming due and payable by Borrower hereunder (whether at the stated maturity,
by acceleration or otherwise), to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by Lender or any Affiliate
thereof to or for the credit or the account of Borrower; provided however,
Lender may only exercise such right during the continuance of an Event of
Default. Lender agrees promptly to notify Borrower after any such set-off and
application made by Lender; provided that the failure to give such notice shall
not affect the validity of such set-off and application.

 

Section 17.19.       Contributions and Waivers.

 

(a)          In the event of (a) any payment by any one or more of Borrowers of
any amount in excess of the principal amount set forth for each Borrower in
Schedule XII attached hereto (each such amount, an “Allocable Principal
Balance”) together with interest thereon and its proportionate share (based on
its Allocable Principal Balance) of any other amounts payable with respect
thereto (the “Overpayment Amount”), or (b) the foreclosure of, or the delivery
of deeds in lieu of foreclosure, or private sale or other means by which Lender
realizes on the Collateral, relating to, any of the Individual Properties owned
by one or more Borrowers, (the “Overpaying Borrower”) whose Individual Property
or Individual Properties or assets have been utilized to satisfy obligations
under the Loan or otherwise for the benefit of one or more other Borrowers (each
a “Benefitted Borrower”) and such Overpaying Borrower shall be entitled to
contribution from each of the Benefited Borrowers in an amount equal to each
such Benefitted Borrower’s allocable portion of the Overpayment Amount paid by
such Overpaying Borrower (“Contribution Payment”). In no event shall a
Benefitted Borrower be required to make a Contribution Payment that would cause
the Benefited Borrower to become an Overpaying Borrower. Any such contribution
payments shall be made within ten (10) days after demand therefor

 

(b)          If a Benefitted Borrower (a “Defaulting Borrower”) shall have
failed to make a Contribution Payment as hereinabove provided, the Overpaying
Borrower shall be subrogated to the rights of Lender against such Defaulting
Borrower, including the right to receive a portion of such Defaulting Borrower’s
Individual Property or Properties in an amount equal to the Contribution Payment
required hereunder that such Defaulting Borrower failed to make; provided,
however, if Lender returns any payments in connection with a bankruptcy of a
Borrower, or amounts are otherwise disgorged from Lender, all subrogated
Overpaying Borrowers shall jointly and severally repay Lender all such amounts
returned or disgorged until Lender shall have been paid in full thereof.

 

(c)          At the request of any Borrower or Borrowers, upon full payment and
satisfaction of the Loan, Lender shall, at Borrowers’ expense, assign the
Individual Property or Individual Properties it then holds title to, without
recourse, to such Borrower or Borrowers; provided, that, if Lender shall have
received conflicting requests from more than one Borrower to receive or

 

 - 150 - 

 

  

release its security interest in such Individual Property or Individual
Properties and such requesting Borrowers cannot agree as to the disposition of
such Individual Property or Individual Properties, Lender shall have no
obligation to deliver such Individual Property or Individual Properties to such
requesting Borrowers unless and until such requesting Borrowers shall have
agreed as to the disposition of such Individual Property or Individual
Properties and so authorized Lender. Provided Lender shall have received such
authorization, Lender shall assign the Individual Property or Individual
Properties in question, without recourse, to the Borrower entitled to receive
such Individual Property or Individual Properties within seven (7) Business Days
thereafter. Prior to delivering such Individual Property or Individual
Properties, Lender shall be entitled to receive from the requesting Borrower or
Borrowers such other assurances and agreements as may be reasonably requested by
Lender.

 

Section 17.20.        Cross-Default; Cross-Collateralization.

 

(a)          Borrower acknowledges that Lender has made the Loan to Borrower
upon the security of its collective interest in the Properties and in reliance
upon the aggregate of the Properties taken together being of greater value as
collateral security than the sum of each Individual Property taken separately.
Borrower agrees that each of the Loan Documents (including, without limitation,
the Security Instruments) are and will be cross collateralized and cross
defaulted with each other so that (i) an Event of Default under any of Loan
Documents shall constitute an Event of Default under each of the other Loan
Documents; (ii) an Event of Default hereunder shall constitute an Event of
Default under each Security Instrument; (iii) each Security Instrument shall
constitute security for the Note as if a single blanket lien were placed on all
of the Properties as security for the Note; and (iv) such cross
collateralization shall in no event be deemed to constitute a fraudulent
conveyance and Borrower waives any claims related thereto.

 

(b)          To the fullest extent permitted by law, Borrower, for itself and
its successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower’s partners and others with interests in Borrower, and of the
Properties, or to a sale in inverse order of alienation in the event of
foreclosure of all or any of the Security Instruments, 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 Properties for the
collection of the Debt without any prior or different resort for collection or
of the right of Lender to the payment of the Debt out of the net proceeds of the
Properties in preference to every other claimant whatsoever. In addition,
Borrower, for itself and its successors and assigns, waives in the event of
foreclosure of any or all of the Security Instruments, any equitable right
otherwise available to Borrower which would require the separate sale of the
Properties or require Lender to exhaust its remedies against any Individual
Property or any combination of the Properties before proceeding against any
other Individual Property or combination of Properties; and further in the event
of such foreclosure Borrower does hereby expressly consent to and authorize, at
the option of Lender, the foreclosure and sale either separately or together of
any combination of the Properties.

 

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 - 151 - 

 

  

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:           [   ]        

  By:         Name:       Title:  

 

 

 

  

  LENDER:       BARCLAYS BANK PLC       By:       Name:     Title:

 

 

 

  

  COLUMN FINANCIAL, INC.       By:       Name:     Title:

 

 

 

  

  UBS REAL ESTATE SECURITIES INC.         By:       Name:     Title:         By:
      Name:     Title:

 

[NO FURTHER TEXT ON THIS PAGE]

 

 

 

  

SCHEDULE I

 

BORROWER/FEDERAL TAX IDENTIFICATION NUMBER/ORGANIZATIONAL IDENTIFICATION NUMBER

 

[See Attached]

 

 

 

  

SCHEDULE II

 

IMMEDIATE REPAIRS

     

[See Attached]

 

 

 

  

SCHEDULE III

 

ORGANIZATIONAL CHART

 

(attached hereto)

 

 

 

  

SCHEDULE IV

 

DESCRIPTION OF REA’S

 

1.Amended and Restated Declaration of Restrictive Covenants for Jefferson
Metropolitan Park, McCalla, Alabama made by the Jefferson County Economic and
Industrial Development Authority (“Declarant”) recorded in Instrument No.
9963/6916, as amended by First Amendment to Amended and Restated Declaration of
Restrictive Covenants for Jefferson Metropolitan Park, McCalla, Alabama recorded
in Book LR200864, Page 26675 in Jefferson County, Alabama.

 

2.Declaration of Easements and Agreement for Common Area Maintenance for
Jefferson Metropolitan Park, McCalla, Alabama made by Declarant recorded in
Instrument No. 9963/6917, as amended by First Amendment to Declaration of
Easements and Agreement for Common Area Maintenance for Jefferson Metropolitan
Park, McCalla, Alabama recorded in Book LR200864, Page 26671 in Jefferson
County, Alabama.

 

3.Declaration of Covenants, Restrictions, and Easements by and between Boulevard
East Limited Liability Company (“Boulevard”) and Judson Beshore, Trustee of the
David L. Beshore Revocable Trust Dated October 7, 1997 and Phyllis J. Davis
(collectively, “Beshore”) dated as of August 19, 1998 and recorded August 20,
1998, in Book 5437 at Page 663 and Amendment to Declaration of Covenants,
Restrictions, and Easements by and between Boulevard and Garden Fresh Restaurant
Corp., successor in interest to Beshore, dated as of November 12, 1998 and
recorded November 24, 1998 in Book 5549 at Page 18 in Adams County, Colorado.

 

4.Reciprocal Easement and Operation Agreement by and between Route 83, LLC,
Waymax, LLC and Amigos 3, LLC dated as of June 6, 2012 and recorded June 27,
2012, in Volume 2229 at Page 108 in Toland County, Connecticut.

 

5.Cross Access and Easement Agreement by and between Bunnell Commons Property
Management Association, Inc. and AJDC, LLC recorded 7/9/2008, in Official
Records 1670, Page 883 in Flagler County, Florida.

 

6.Declaration of Covenants, Easements and Restrictions for Benchmark Corporate
Park recorded on 2/17/1988, in Book 2050, Pag2 952, together with First
Amendment recorded in Book 2152, Page2165 and Second Amendment recorded on Book
2152, Page 2168 in Lee County, Florida.

 

7.Reciprocal Easement Agreement with Covenants, Conditions, and Restrictions
recorded in Book 6079, Page 2392, as affected by First Amendment recorded in
Book 7916, Page 2210 in Orange County, Florida.

 

8.Declaration, Covenants, conditions, easements and restrictions recorded in
Book 4427, Page 1645, as amended in Book 4551, Page 696 in Leon County, Florida.

 

 

 

  

9.Declaration of Covenants, Restrictions and Easements recorded in Deed Book
1494, Page 620 in Cobb County, Georgia.

 

10.Reciprocal Easement and Operating Agreement dated February 22, 1995, by and
between The Baseball Kart Corporation and Carrollton Federal Bank, recorded in
Book 864, Page 93 in Carroll County, Georgia.

 

11.Reciprocal Easement Agreement, Declaration of Restrictive Covenants and
Maintenance Agreement dated November 30, 2001 between O’Charley’s Inc and
TownPark Plaza, LLC, recorded December 11, 2001 in Deed Book 13457, Page 5464 in
Cobb County, Georgia.

 

12.Common Area Maintenance Agreement by and between Argonaut Associates, Ltd.
and O’Charley’s Inc. recorded December 11, 2001 in Deed Book 13487, Page 5449 in
Cobb County, Georgia.

 

13.REA and Agreement Regarding Shared Driveway between South Point Exchange and
Hickman & Williams Properties, LLC, recorded May 27, 2008 in Document No. 016094
in Henry County, Georgia.

 

14.Declaration of Easements and Restrictions dated February 14, 2013 between
Shack 20 Properties, LLC and OTS Capital Partners, LLC, recorded February 26,
2013 in Deed Book 12963, Page 145 in Henry County, Georgia.

 

15.Reciprocal Easement and Operation Agreement between Richard B. Goodsell and
Home Depot U.S.A., Inc., recorded April 13, 2000 in Deed Book 3667, Page 230; as
amended by First Amendment recorded April 19, 2001 in Deed Book 4137, Page 136;
as affected by Partial Release recorded April 18, 2002 in Deed Book 4935, Page
264; as amended by Second Amendment recorded November 22, 2002 in Deed Book
5475, Page 328; as amended by Third Amendment recorded September 30, 2004 in
Deed Book 7460, Page 249 in Henry County, Georgia.

 

16.Operation and Easement Agreement between Target Corporation and Sembler
Family Partnership #22, Ltd. Recorded April 19. 2001 in Instrument No. 013419,
Book 04137 in Henry County, Georgia.

 

17.Declaration of Restrictions, Covenants and Conditions and Grant of Easements
by Sembler Family Partnership #22, Ltd., recorded 4/19/2001 in Instrument No.
013421, Book 4137 in Henry County, Georgia.

 

18.Master Declaration of Protective Covenants, Conditions, Restrictions and
Easements for Temple Crossing by Messier Properties, Inc., recorded January 31,
2008 in Deed Book 4222, Page 1 in Carroll County, Georgia.

 

 

 

  

19.Declaration of Restrictive Covenants dated July 31, 1997 by Valdosta-Lowndes
County Industrial Authority, recorded in Deed Book 1445, Page 212 in Lowndes
County, Georgia.

 

20.Construction, Operation and Reciprocal Easement Agreement dated May 5, 1995
by and between Kings Highway Commerce Center and Erial Williamstown NJ Limited
Partnership recorded at Book 4755, Pg 19 in Camden County, New Jersey.

 

21.Covenants and Restrictions Affecting Land between Wal-Mart Stores, Inc. and
MV RG I recorded at Book 688, pg 47 and amended by First Amendment at Book 3244,
Pg 723 in Green County, Ohio.

 

22.Reciprocal Construction, Operating and Easement Agreement dated 5/28/1976 by
and between Fred A. Beshara and Nicholas Manos recorded in Mahoning County in
Volume 180, Pg 325 in Mahonig County, Ohio.

 

23.Reciprocal Easement and Operation Agreement dated by and betwen O’Charley’s
Inc. and Credit Suites Leasing 92A, L.P. at Instrument 199908160208216 in
Franklin County, Ohio.

 

24.Declaration of Standards, Covenants, Easements, Conditions and Restrictions
recorded in Volume 456, Page 639 amended by Amendment to Declaration of
Standards, Covenants, Easements, Conditions and Restrictions recorded in Volume
2095, Page 420 in Greene County, Ohio.

 

25.Declaration of Reciprocal Easement Agreement recorded in Volume 1290, Page
589 in Greene County, Ohio.

 

26.Declaration of Covenants, Conditions and Restrictions and Reservation of
Easements for Valle Greene North Association, Inc. recorded in Volume 1299, Page
296 in Greene County, Ohio.

 

27.Declaration of Restrictions and Easements Regarding Outlots recorded in
Instrument No. 2003031800078904 amended by First Amendment recorded in
Instrument No. 200311140365767 and affected by Waiver and Variance recorded in
Instrument No. 200509090187379 in Franklin County, Ohio.

 

28.Joint Drive and Access Easement recorded in Instrument No. 2004060126138 in
Franklin County, Ohio.

 

29.Reciprocal Easement and Operation Agreement by and between Leslie Development
Company, Inc. and Home Depot U.S.A., Inc., dated as of October 5, 2001 and
recorded October 9, 2001 in OR Volume 1495, Page 934 in Clark County, Ohio.

 

30.Reciprocal Easement Agreement recorded in Book 574, Page 046 in Providence
County, Rhode Island.

 

 

 

  

31.Construction, Operation and Reciprocal Easement Agreement for Fairview Market
recorded in Book 1950, Page 001 amended by First Amendment recorded in Book
2092, Page 169 and further amended by Second Amendment recorded in Book 2151,
Page 1912 in Greenville County, South Carolina.

 

32.Reciprocal Easement Agreement recorded in Book 1808, Page 306 in Knox County,
Tennessee.

 

33.Declaration of CCRs at Bk 4591, pg 211, amended by First Amendment at Book
5609, Page 253 in Bibb County, Georgia.

 

34.Reciprocal Easement Agreement, Declaration and Agreement with Covenants,
Conditions and Restrictions dated 10/27/2006 by LaVista 29, LLC recorded at Deed
Book 19493, Page 530 in DeKalb County, Georgia.

 

35.Operation and Easement Agreement between Target Corporation and Mundelein 83,
L.L.C. dated on or about August 20, 2003 and recorded at Document 5353854,
amended by First Amendment to Operation and Easement Agreement recorded at
Document 5792301 and Second Amendment to Operation and Easement Agreement
recorded at Document 6545898 in Lake County, Illinois.

 

36.Declaration of Covenants, Conditions, Restrictions and Easements by and
between RHS, LLC (“RHS”), Bill Properties (“Bill”), Joseph R. Riddle, III, and
his wife, Trina T. Riddle, George H. Armstrong and his wife, Carolyn R.
Armstrong, Robert J. Williams, IV and his wife, Sharlene R. Williams and the
J.P. Riddle Family Limited Partnership (collectively, “Riddle”) and Lowe’s Home
Centers, Inc. (“Lowes”) dated January 11, 2000, and recorded January 13, 2000,
in Book 5219, Page 103, as amended by Amendment to Riddle Ground Lease and
Amendment to Declaration of Covenants, Conditions, Restrictions and Easements by
and between RHS, Faylo, LLC, Bill, Riddle and Lowes dated March 30, 2001 and
recorded July 30, 2001, in Book 5527, 718 Page 18 in Cumberland County, North
Carolina.

 

37.Easements, Covenants, Conditions and Restrictions recorded in Book 4455, page
2211 in Aiken County, South Carolina.

 

38.Mutual Cross-Access Easement Agreement recorded at Instrument No. 113080271
in Ada County, Idaho.

 

39.Declaration of Covenants, Easements and Restrictions recorded at Instrument
No. 113134169 in Ada County, Idaho.

 

 

 

  

SCHEDULE V

 

ALLOCATED LOAN AMOUNTS

 

[See Attached]

 

 

 

  

SCHEDULE VI

 

ENVIRONMENTAL REMEDIATION

 

[See Attached]

 

 

 

  

SCHEDULE VII

 

UNFUNDED OBLIGATIONS

  

[See Attached]

 

 

 

  

SCHEDULE VIII

 

WAIVED TAX DEPOSIT PROPERTY

 

[See Attached]

 

 

 

  

SCHEDULE IX

 

RENT ROLL

 

[See Attached]

 

 

 

  

SCHEDULE X

 

MASTER LEASE

 

1.Krystal Burger Master Leases:

 

a.Master Land and Building Lease (Portfolio A), between ARC DB5PROP001, LLC as
Landlord and The Krystal Company as Tenant, dated March 21, 2012, as amended
from time to time to release certain properties that are not Individual
Properties under the Agreement.

 

b.Master Land and Building Lease (Portfolio C) between ARC DB5PROP001, LLC as
Landlord and The Krystal Company as Tenant, dated March 21, 2012, as amended
from time to time to release certain properties that are not Individual
Properties under the Agreement.

 

2.Mac’s Convenience (Circle K) Master Lease

 

a.Master Lease, dated as of October 30, 2003, by and between ARC CKMST19001, LLC
as Lessor and Mac’s Convenience Stores LLC as Lessee, as amended by that certain
Amendment to Master Lease, made and executed April 29, 2004, as further amended
by that certain Second Amendment to Master Lease, entered into as of June 22,
2004, as further amended by that certain Third Amendment to Master Lease, dated
as of July 23, 2013.

 

3.O’Charley’s Master Leases

 

a.Master Lease Agreement (Pool 2), dated as of October 17, 2011, by and between
ARC DB5PROP001, LLC, as Lessor and O’Charley’s LLC as Lessee, as amended by that
certain Addendum to Master Lease Agreement attached thereto.

 

b.Master Lease Agreement (Pool 4), dated as of October 17, 2011, by and between
ARC DB5PROP001, LLC, as Lessor and O’Charley’s LLC as Lessee, as amended by that
certain Addendum to Master Lease Agreement attached thereto.

 

4.SunTrust Master Agreements

 

a.Master Agreement regarding Leases (Pool No. 1), made and entered into as of
December 10, 2007, by and between SunTrust Bank, as tenant, and Inland American
ST Portfolio, L.L.C. and Inland American ST Florida Portfolio, L.L.C.
collectively as landlord, as subsequently assigned to the applicable Borrower.

 

b.Master Agreement regarding Leases (Pool No. 2), made and entered into as of
December 10, 2007, by and between SunTrust Bank, as tenant, and Inland

 

 

 

  

American ST Portfolio, L.L.C. as landlord, as subsequently assigned to the
applicable Borrower.

 

c.Master Agreement regarding Leases (Pool No. 4), made and entered into as of
December 10, 2007, by and between SunTrust Bank, as tenant, and Inland American
ST Portfolio, L.L.C. and Inland American ST Florida Portfolio, L.L.C.
collectively as landlord, as subsequently assigned to the applicable Borrower.

 

d.Master Agreement regarding Leases (Pool No. 5), made and entered into as of
December 10, 2007, by and between SunTrust Bank, as tenant, and Inland American
ST Portfolio, L.L.C. and Inland American ST Florida Portfolio, L.L.C.
collectively as landlord, as subsequently assigned to the applicable Borrower.

 

e.Master Agreement regarding Leases (Pool No. 6), made and entered into as of
December 10, 2007, by and between SunTrust Bank, as tenant, and Inland American
ST Portfolio, L.L.C. and Inland American ST Florida Portfolio, L.L.C.
collectively as landlord, as subsequently assigned to the applicable Borrower.

 

f.Master Agreement regarding Leases (Pool No. 7), made and entered into as of
December 10, 2007, by and between SunTrust Bank, as tenant, and Inland American
ST Portfolio, L.L.C. as landlord, as subsequently assigned to the applicable
Borrower.

 

g.Master Agreement regarding Leases (Pool No. 8), made and entered into as of
December 10, 2007, by and between SunTrust Bank, as tenant, and Inland American
ST Portfolio, L.L.C. and Inland American ST Florida Portfolio, L.L.C.
collectively as landlord, as subsequently assigned to the applicable Borrower.

 

h.Master Agreement regarding Leases (Pool No. 9), made and entered into as of
December 10, 2007, by and between SunTrust Bank, as tenant, and Inland American
ST Portfolio, L.L.C. and Inland American ST Florida Portfolio, L.L.C.
collectively as landlord, as subsequently assigned to the applicable Borrower.

 

i.Master Agreement regarding Leases (Pool No. 10), made and entered into as of
December 10, 2007, by and between SunTrust Bank, as tenant, and Inland American
ST Portfolio, L.L.C. as landlord, as subsequently assigned to the applicable
Borrower.

 

j.Master Agreement regarding Leases (Pool No. 1), made and entered into as of
December 20, 2007, by and between SunTrust Bank, as tenant, and Inland American
ST Portfolio II, L.L.C. and Inland American ST Florida Portfolio II, L.L.C.
collectively as landlord, as subsequently assigned to the applicable Borrower.

 

k.Master Agreement regarding Leases (Pool No. 2), made and entered into as of
December 20, 2007, by and between SunTrust Bank, as tenant, and Inland

 

 

  

American ST Portfolio II, L.L.C. and Inland American ST Florida Portfolio II,
L.L.C. collectively as landlord, as subsequently assigned to the applicable
Borrower.

 

l.Master Agreement regarding Leases (Pool No. 10), made and entered into as of
December 20, 2007, by and between SunTrust Bank, as tenant, and Inland American
ST Portfolio II, L.L.C. and Inland American ST Florida Portfolio II, L.L.C.
collectively as landlord, as subsequently assigned to the applicable Borrower.

 

m.Master Agreement regarding Leases (Pool No. 5), made and entered into as of
March 28, 2008, by and between SunTrust Bank, as tenant, and Inland American ST
Portfolio IV, L.L.C. and Inland American ST Florida Portfolio IV, L.L.C.
collectively as landlord, as subsequently assigned to the applicable Borrower.

 

n.Master Agreement regarding Leases (Pool No. 6), made and entered into as of
March 28, 2008, by and between SunTrust Bank, as tenant, and Inland American ST
Portfolio IV, L.L.C. and Inland American ST Florida Portfolio IV, L.L.C.
collectively as landlord, as subsequently assigned to the applicable Borrower.

 

o.Master Agreement regarding Leases (Pool No. 7), made and entered into as of
March 28, 2008, by and between SunTrust Bank, as tenant, and Inland American ST
Portfolio V, L.L.C. and Inland American ST Florida Portfolio V, L.L.C.
collectively as landlord, as subsequently assigned to the applicable Borrower.

 

 

 

  

SCHEDULE XI

 

GROUND LEASE ESTOPPELS

 

1.Ground Lessor Estoppel Certificate by Louella Holley, as lessor for the
benefit of ARC LWAKNSC001, LLC and Barclays Bank PLC, Column Financial, Inc. and
UBS Real Estate Securities, Inc., date July 28, 2015.

 

2.Ground Lessor Estoppel Certificate by The Patricia A. Mansfield Trust dated
May 15, 2003 and Joseph W. Hohol, Jr., as lessor for the benefit of ARC
CVHYKMA001, LLC, and Barclays Bank PLC, Column Financial, Inc. and UBS Real
Estate Securities, Inc., date July 30, 2015.

 

3.Ground Lessor Estoppel Certificate by SPP Investments, LLC, as lessor for the
benefit of ARC LWMCNGA001, LLC and Barclays Bank PLC, Column Financial, Inc. and
UBS Real Estate Securities, Inc., date July 30, 2015.

 

 

 

  

SCHEDULE XII

 

ALLOCATED LOAN AMOUNTS PER BORROWER

 

[See Attached]

 

 

 

  

SCHEDULE XIII

 

SPECIAL RESERVE PROPERTIES

 

1.That certain Individual Property located at 6201 Peterson Road, Valdosta,
Georgia;

 

2.That certain Individual Property located at 5201 LaVista Road, Tucker, Georgia

 

3.That certain Individual Property located at 3242 West Route 60, Mundelein,
Illinois

 

4.That certain Individual Property located at 3909 Ramsey Street, Fayetteville,
North Carolina

 

 

 

  

SCHEDULE XIV

 

PENDING CONDEMNATION

 

ARC BKMST41001, LLC (“ARC Owner”): - 414 Water Street, Chardon, OH, occupied by
(the “Chardon Property”)

 

There is minor condemnation matter in effect for the Chardon Property leased to
Tom’s King (Ohio) Lessee (“Lessee”). The City of Chardon (the “City”) is
creating a paved walkway through the Chardon Property as part of its “Maple
Highlands Trail Connector Project” (the “Trail Project”). Carol A. Jacoby of
Duane Morris is overseeing the matter of behalf of ARC Owner. ARC Owner has
accepted the City’s offer of $5,285.00 (the “Chardon Award”) in connection with
the taking of 0.0188 acres from the Chardon Property to be used for the Trail
Project. The Chardon Award has already been paid to ARC Owner by the City.
Construction of the Trail Project is underway and Duane Morris is monitoring
ongoing construction progress. ARC Owner is not obligated to share the award
with the Lessee nor is there any obligation on behalf of ARC Owner or Lessee
with respect to the construction of the Trail Project or any ongoing maintenance
following completion of such construction.

 

 

 

  

SCHEDULE XV

 

SECTION 3.18 EXCEPTIONS

 

With respect to Section 3.18(j), the tenant on the Individual Property located
at 2226 Park Road, Charlotte North Carolina has advised that it is withholding
from rent $500.00 month and paying to another occupant in the shopping center
pursuant to certain documents identified in the estoppel certificate issued to
Lender.

 

With respect to Section 3.18(o), the Individual Properties identified below are
subject to subleases permitted under the Leases:

 

1785 the Exchange Atlanta GA       7701 Airport Center Greensboro NC       70
Mendon Road Cumberland RI       542 Berlin-Cross Key Sicklerville NJ

 

With respect to Section 3.18(r), the Individual Properties identified below are
currently “dark” permitted under the Leases:

 

2178 N Church Street Burlington NC       10233 Rogers Road Nassawadox VA      
192 West Street Pittsboro NC       422 Birmingham Street Birmingham AL       5
St. Andrews Road Hyde Park NY       4400 Highland Road Waterford MI

 

 

 

  

SCHEDULE XVI

 

PLL POLICY PROPERTIES

 

1.Atlas Cold Storage

6765 Imron Drive

Belvidere, IL

 

2.Burger King

1100 Village Plaza

Columbiana, OH

 

3.C&S Wholesale Grocers

422 Industrial Drive

Birmingham, AL

 

4.Citizens

10650 Bustleton Avenue

Philadelphia, PA

 

5.Citizens

15 Newtown Richboro Road

Richboro, PA

 

6.Family Dollar

10720 Path Valley Road

Fannetsburg, PA

 

7.SunTrust

1022 Prince Avenue

Athens, GA

 

8.SunTrust

2178 N Church Street

Burlington, NC

 

9.SunTrust

10233 Rogers Road

Nassawadox, VA

 

10.SunTrust

135 N Main St

Waynesville, NC

 

11.Walgreens

1011 Peoria St

 

 

 

  

Washington, IL

 

12.Circle K

26003 Broadway Avenue

Bedford, OH

 

13.Circle K

1200 West Market Street

Bloomington, IL

 

14.Circle K

1012 Maple Street

Burlington, IA

 

15.Circle K

1530 North 2nd Street

Clinton, IA

 

16.Circle K

877 East Main Street

Galesburg, IL

 

17.Circle K

3112 Ferry Street

Lafayette, IN

 

18.Circle K

425 W. Jackson

Morton, IL

 

19.Circle K

802 Cypress Street

Muscatine, IA

 

20.Circle K

300 South Main

Paris, IL

 

21.Circle K

121 So. Hibbard, Box 57

Staunton, IL

 

22.Circle K

1000 North Springfield

Virden, IL

 

 

 

  

23.Circle K

1524 State St., Rt 303

Streetsboro, OH

 

 

 

 

EXHIBIT A

 

[Form of Notice Letter - Tenants]

 

  ___________, 20[__]

 

[TENANT]

 

Re:[Describe Lease] (the “Lease”)

 

To Whom it May Concern:

 

A new cash management system has been adopted in connection with our loan from
[_________________], its successors and/or assigns (“Lender”). Consequently,
from and after the date of this letter, all payments due under the Lease should
be delivered as follows:

 

(i)If by check, money order, or its equivalent, please mail such items to:

 

  [INSERT RESTRICTED ACCT. INFO]         Attention:   Facsimile No.:  

 

(c)If by wire transfer to:

 

[INSERT RESTRICTED ACCT. INFO]

 

Payee:   ABA Routing #:   For Account:   Account #:   Bank Contact:      

 

This payment direction may not be rescinded or altered, except by a written
direction signed by the Lender or its agent.

 

We appreciate your cooperation.

 

Very truly yours,

 

[BORROWER]

 

 

 

  

Exhibit B-1

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Loan Agreement dated as of August 7, 2015 (as
amended, supplemented or otherwise modified from time to time, the “Agreement”),
among BARCLAYS BANK PLC, COLUMN FINANCIAL, INC. and UBS REAL ESTATE SECURITIES
INC., collectively as Lender and each of the entities listed on Schedule I
attached hereto, collectively as Borrower.

 

Pursuant to the provisions of Section 2.10 of the Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the Loan
(as well as any Note(s) evidencing such Loan) in respect of which it is
providing this certificate, (ii) it is not a bank within the meaning of Section
881(c)(3)(A) of the IRS Code, (iii) it is not a ten percent shareholder of
Borrower within the meaning of Section 871(h)(3)(B) of the IRS Code and (iv) it
is not a controlled foreign corporation related to Borrower as described in
Section 881(c)(3)(C) of the IRS Code.

 

The undersigned has furnished Agent and Borrower with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform Borrower and Agent, and (2)
the undersigned shall have at all times furnished Borrower and Agent with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Agreement and used herein
shall have the meanings given to them in the Agreement.

 

[NAME OF LENDER]       By:       Name:       Title:    

 

Date: ________ __, 20[ ]

 

 

 

  

Exhibit B-2

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Loan Agreement dated as of August 7, 2015 (as
amended, supplemented or otherwise modified from time to time, the “Agreement”),
among BARCLAYS BANK PLC, COLUMN FINANCIAL, INC. and UBS REAL ESTATE SECURITIES
INC., collectively as Lender and each of the entities listed on Schedule I
attached hereto, collectively as Borrower.

 

Pursuant to the provisions of Section 2.10 of the Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the
participation in respect of which it is providing this certificate, (ii) it is
not a bank within the meaning of Section 881(c)(3)(A) of the IRS Code, (iii) it
is not a ten percent shareholder of Borrower within the meaning of Section
871(h)(3)(B) of the IRS Code, and (iv) it is not a controlled foreign
corporation related to Borrower as described in Section 881(c)(3)(C) of the IRS
Code.

 

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing, and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Agreement and used herein
shall have the meanings given to them in the Agreement.

 

[NAME OF PARTICIPANT]         By:       Name:       Title:    

 

Date: ________ __, 20[ ]

 

 EXHIBIT C-2 

 

  

Exhibit B-3

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Loan Agreement dated as of August 7, 2015 (as
amended, supplemented or otherwise modified from time to time, the “Agreement”),
among BARCLAYS BANK PLC, COLUMN FINANCIAL, INC. and UBS REAL ESTATE SECURITIES
INC., collectively as Lender and each of the entities listed on Schedule I
attached hereto, collectively as Borrower.

 

Pursuant to the provisions of Section 2.10 of the Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the participation in
respect of which it is providing this certificate, (ii) its direct or indirect
partners/members are the sole beneficial owners of such participation, (iii)
with respect such participation, neither the undersigned nor any of its direct
or indirect partners/members is a bank extending credit pursuant to a loan
agreement entered into in the ordinary course of its trade or business within
the meaning of Section 881(c)(3)(A) of the IRS Code, (iv) none of its direct or
indirect partners/members is a ten percent shareholder of Borrower within the
meaning of Section 871(h)(3)(B) of the IRS Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to
Borrower as described in Section 881(c)(3)(C) of the IRS Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner's/member's beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Agreement and used herein
shall have the meanings given to them in the Agreement.

  

[NAME OF PARTICIPANT]       By:       Name:       Title:    

 

Date: ________ __, 20[ ]

 

 EXHIBIT C-3 

 

  

Exhibit B-4

 

[FORM OF]

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax Purposes
and Are Providing a U.S. Tax Certificate on Behalf of Their Partners)

 

Reference is hereby made to the Loan Agreement dated as of August 7, 2015 (as
amended, supplemented or otherwise modified from time to time, the “Agreement”),
among BARCLAYS BANK PLC, COLUMN FINANCIAL, INC. and UBS REAL ESTATE SECURITIES
INC., collectively as Lender and each of the entities listed on Schedule I
attached hereto, collectively as Borrower.

 

Pursuant to the provisions of Section 2.10 of the Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the Loan (as well as
any Note(s) evidencing such Loan) in respect of which it is providing this
certificate, (ii) its direct or indirect partners/members are the sole
beneficial owners of such Loan (as well as any Note(s) evidencing such Loan),
(iii) with respect to the extension of credit pursuant to this Agreement or any
other Loan Document, neither the undersigned nor any of its direct or indirect
partners/members is a bank extending credit pursuant to a loan agreement entered
into in the ordinary course of its trade or business within the meaning of
Section 881(c)(3)(A) of the IRS Code, (iv) none of its direct or indirect
partners/members is a ten percent shareholder of Borrower within the meaning of
Section 871(h)(3)(B) of the IRS Code and (v) none of its direct or indirect
partners/members is a controlled foreign corporation related to Borrower as
described in Section 881(c)(3)(C) of the IRS Code.

 

The undersigned has furnished the Agent and Borrower with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner's/member's beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform Borrower and Agent, and (2) the undersigned shall have at all times
furnished Borrower and Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Agreement and used herein
shall have the meanings given to them in the Agreement.

 

[NAME OF LENDER]         By:       Name:       Title:    

 

Date: ________ __, 20[  ]