Exhibit 10.2

 

EXECUTION COPY

 

 

 

AFN ABSPROP001, LLC
as an Issuer,

 

AFN ABSPROP001-A, LLC
as an Issuer,

 

AFN ABSPROP001-B, LLC
as an Issuer,

 

and

 

EACH JOINING PARTY
each, as an Issuer,

 

American Finance Properties, LLC
as Property Manager and Special Servicer,

 

KeyBank National Association

as Back-Up Manager

 

and

 

Citibank, N.A.

not individually but solely as Indenture Trustee

 

 

 

PROPERTY MANAGEMENT AND SERVICING AGREEMENT

Dated as of May 30, 2019

 

 

 

Net-Lease Mortgage Notes

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page       ARTICLE I DEFINITIONS 1       Section 1.01. Defined Terms 1
Section 1.02. Other Definitional Provisions 21 Section 1.03. Certain
Calculations in Respect of the Leases 21 Section 1.04. Fee Calculations 22      
ARTICLE II REPRESENTATIONS AND WARRANTIES; RECORDINGS AND FILINGS; BOOKS AND
RECORDS; DEFECT, BREACH, CURE, REPURCHASE AND SUBSTITUTION 22       Section
2.01. Representations and Warranties of AF Properties and the Back-Up Manager 22
Section 2.02. Representations and Warranties of the Issuer 25 Section 2.03.
Recordings and Filings; Books and Records 27 Section 2.04. Repurchase or
Transfer and Exchange for Collateral Defects and Breaches of Representations and
Warranties 28 Section 2.05. Non Petition Agreement 29       ARTICLE III
ADMINISTRATION AND SERVICING OF PROPERTIES AND LEASES 30       Section 3.01.
Administration of the Properties and Leases 30 Section 3.02. Collection of
Monthly Lease Payments; General Receipts Accounts; Collection Account; Release
Account; Servicing Account 31 Section 3.03. Advances 35 Section 3.04.
Withdrawals from the Collection Account 38 Section 3.05. Investment of Funds in
the Collection Account and the Release Account 39 Section 3.06. Maintenance of
Insurance Policies:  Errors and Omissions and Fidelity Coverage 41 Section 3.07.
DSCR Reserve Account 43 Section 3.08. Issuers, Custodian and Indenture Trustee
to Cooperate; Release of Lease Files 44 Section 3.09. Property Management
Compensation:  Interest on Advances 45 Section 3.10. Property Inspections;
Collection of Financial Statements; Delivery of Certain Reports 47 Section 3.11.
Statements as to Compliance 48 Section 3.12. Reports by Independent Public
Accountants 48 Section 3.13. Access to Certain Information; Delivery of Certain
Information 49 Section 3.14. Management of Properties Relating to Defaulted
Assets 49

 

i 

 

 

Section 3.15. Release, Sale and Exchange of Defaulted Assets and Terminated
Lease Properties 50 Section 3.16. Renewals, Modifications, Waivers, Amendments;
Consents and Other Matters 53 Section 3.17. Transfer of Servicing Between
Property Manager and Special Servicer; Record Keeping 56 Section 3.18.
Sub-Management Agreements 57 Section 3.19. Casualty 59 Section 3.20.
Condemnation 59 Section 3.21. Separateness Provisions 60 Section 3.22. Estoppels
61 Section 3.23. Environmental Matters 61 Section 3.24. Appraised Values 63    
  ARTICLE IV REPORTS 63       Section 4.01. Reports to the Issuers and the
Indenture Trustee 63 Section 4.02. Use of Agents 65       ARTICLE V THE PROPERTY
MANAGER, THE SPECIAL SERVICER AND THE BACK-UP MANAGER 66       Section 5.01.
Liability of the Property Manager, the Special Servicer and the Back-Up Manager
66 Section 5.02. Merger, Consolidation or Conversion of the Property Manager,
the Special Servicer and the Back-Up Manager 66 Section 5.03. Limitation on
Liability of the Property Manager, the Special Servicer and the Back-Up Manager
67 Section 5.04. Term of Service; Property Manager and Special Servicer Not to
Resign 67 Section 5.05. Rights of Certain Persons in Respect of the Property
Manager and the Special Servicer 69 Section 5.06. [Reserved] 69 Section 5.07.
Property Manager or Special Servicer as Owner of Notes 69       ARTICLE VI
SERVICER REPLACEMENT EVENTS 70       Section 6.01. Servicer Replacement Events
70 Section 6.02. Termination of Property Manager and Special Servicer and
appointment of Successor 72 Section 6.03. Back-Up Manager 74 Section 6.04.
Additional Remedies of Issuers and the Indenture Trustee upon a Servicer
Replacement Event 76       ARTICLE VII TRANSFERS AND EXCHANGES OF PROPERTIES BY
ISSUERS; RELEASE OF PROPERTIES BY ISSUERS 76       Section 7.01. Exchange of
Properties 76

 

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Section 7.02. Sale Pursuant to Third Party Purchase Option 79 Section 7.03.
Transfer of Lease to New Property 79 Section 7.04. Release of Property by an
Issuer 80 Section 7.05. Terminated Lease Property 80 Section 7.06. Risk-Based or
Credit Risk Substitution 80 Section 7.07. Disposition Period 80 Section 7.08.
[Reserved] 80 Section 7.09. [Reserved] 81 Section 7.10. Series Collateral
Release 81 Section 7.11. Qualified Deleveraging Event 82 Section 7.12. Triple A
Release Event 82       ARTICLE VIII TERMINATION 82       Section 8.01.
Termination 82       ARTICLE IX MISCELLANEOUS PROVISIONS 82       Section 9.01.
Amendment 82 Section 9.02. Counterparts 83 Section 9.03. Governing Law 83
Section 9.04. Notices 83 Section 9.05. Severability of Provisions 84 Section
9.06. Effect of Headings and Table of Contents 84 Section 9.07. Notices to the
Rating Agencies and Others 84 Section 9.08. Successors and Assigns:
 Beneficiaries 85 Section 9.09. Complete Agreement 85 Section 9.10. Consent to
Jurisdiction 86 Section 9.11. No Proceedings 86 Section 9.12. Cooperation 86
Section 9.13. Acknowledgment of Receipts by Indenture Trustee 86

 

iii 

 

 

EXHIBITS

 

EXHIBIT A FORM OF LIMITED POWERS OF ATTORNEY FROM ISSUER AND INDENTURE TRUSTEE  
  EXHIBIT B FORM OF JOINDER AGREEMENT     EXHIBIT C FORM OF CERTIFICATE UNDER
SECTION 7.01(b)     EXHIBIT D FORM OF DETERMINATION DATE REPORT     EXHIBIT E
CALCULATION OF FIXED CHARGE COVERAGE RATIOS

 

iv 

 

 

This PROPERTY MANAGEMENT AND SERVICING AGREEMENT, dated as of May 30, 2019 (this
“Agreement”), is made among AFN ABSPROP001, LLC, AFN ABSPROP001-A, LLC, AFN
ABSPROP001-B, LLC and each Joining Party, each as an issuer (each, an “Issuer”
and collectively, the “Issuers”), American Finance Properties, LLC (“AF
Properties”), as property manager and special servicer (together with its
successors in such capacities, the “Property Manager” and “Special Servicer,”
respectively), Citibank, N.A., not individually but solely as indenture trustee
(together with its successors in such capacity, the “Indenture Trustee”) and
KEYBANK NATIONAL ASSOCIATION (“KeyBank”), as back-up manager (together with its
successors in such capacity, the “Back-Up Manager”).

 

PRELIMINARY STATEMENT

 

As of the date hereof, the Issuers own the Properties and related Leases and, as
of each successive Series Closing Date, the applicable Issuer will own the
Properties and related Leases as set forth in the applicable Series Supplement,
and upon the issuance of the Notes under the Indenture, each Issuer will grant
or has granted a first priority security interest in its right, title and
interest in and to such Properties and Leases to the Indenture Trustee as
security for the indebtedness evidenced by the Indenture and the Notes issued
under the Indenture. The Property Manager has agreed to provide property
management services with respect to the Properties and to service the Leases in
accordance with this Agreement.

 

ARTICLE I

DEFINITIONS

 

Section 1.01.         Defined Terms.

 

Whenever used in this Agreement, including in the Preliminary Statement, the
capitalized terms, unless the context otherwise requires, shall have the
meanings specified in this Section 1.01. Capitalized terms used in this
Agreement, including the Preliminary Statement, and not defined herein, unless
the context otherwise requires, shall have the respective meanings specified in
Section 1.01 of the Indenture (as defined below).

 

“Additional Servicing Compensation”: Property Manager Additional Servicing
Compensation and Special Servicer Additional Servicing Compensation.

 

“Advance”: Any P&I Advance or Property Protection Advance.

 

“Advance Interest”: Interest accrued on any Advance at the Reimbursement Rate
and payable to the Property Manager, the Back-Up Manager or the Indenture
Trustee, as the case may be, each in accordance with Section 3.09(e).

 

“AF Properties”: As defined in the preamble.

 

“AFOP”: American Finance Operating Partnership, L.P., a limited partnership
formed under the laws of the State of Delaware.

 

 

 

 

“AFOP SPE”: A special purpose, bankruptcy remote subsidiary of AFOP.

 

“Aggregate Collateral Value”: On any date of determination, the sum of the
Collateral Values of the Properties in the Collateral Pool.

 

“Agreement”: This Property Management and Servicing Agreement and all amendments
hereof and supplements hereto.

 

“Allocated Loan Amount”: With respect to any Property at any time, the product
of (i) the Aggregate Series Principal Balance at such time and (ii) a fraction,
(a) the numerator of which is the Collateral Value of such Property at such time
and (b) the denominator of which is the Aggregate Collateral Value at such time.

 

“Allocated Release Amount”: With respect to a Released Property, an amount equal
to the lesser of (A) the Fair Market Value and (B) 115% of the Allocated Loan
Amount of such Released Property.

 

“ALTA”: American Land Title Association, or any successor thereto.

 

“Amendment”: As defined in Section 3.16(c)(i).

 

“Appraised Value”: With respect to any Property means an appraised value
obtained in accordance with the Indenture and determined pursuant to an
independent appraisal completed by an MAI certified appraiser in accordance with
the Uniform Standards of Professional Appraisal Practice and which takes into
account the leased fee value of the related buildings and land of such Property,
consistent with industry standards, and excludes the value of trade equipment
and other tangible personal property and business enterprise value, and (1) with
respect to any Property in the Collateral Pool added to the Collateral Pool on
an Issuance Date, is the most recent appraisal report completed by an MAI
certified appraiser obtained in connection with the related Issuance Date in
accordance with the requirements of FIRREA with respect to such Property as of
the related Issuance Date, and (2) with respect to any Qualified Substitute
Property added to the Collateral Pool since the most recent Issuance Date, is
the most recent appraisal report completed by an MAI certified appraiser and
obtained for such Qualified Substitute Property in conjunction with such
addition (which appraisal will not be obtained in accordance with the
requirements of FIRREA).

 

“Asbestos”: As defined in Section 3.23(b).

 

 2 

 

 

“Available Amount”: The Available Amount on any Payment Date will consist of (i)
all amounts received in respect of the Collateral Pool during the related
Collection Period, (ii) all amounts on deposit in the Collection Account on the
related Determination Date, including amounts earned, if any, on the investment
of funds on deposit in the Collection Account and the Release Account during the
related Collection Period, (iii) Unscheduled Proceeds, (iv) amounts received on
account of payments under any Lease Guaranties, (v) amounts received on account
of payments under the Guaranty, and (vi) amounts received in connection with a
Voluntary Prepayment or Early Refinancing Prepayment; provided, however, that
the following amounts will be excluded from Available Amount: (a) amounts on
deposit in the Release Account and not transferred to the Collection Account for
such Payment Date, (b) the amount of any Workout Fees, Liquidation Fees or
Additional Servicing Compensation, (c) amounts withdrawn from the Collection
Account to reimburse the Property Manager, the Indenture Trustee or the Back-Up
Manager, as applicable, for any unreimbursed Advances, including any
Nonrecoverable Advances (plus interest thereon) and to pay the Property
Management Fee, the Back- Up Fee, any Special Servicing Fee and any Emergency
Property Expenses, (d) amounts required to be paid by the related Issuer or any
Co-Issuer as lessor under the Leases in respect of franchise or similar taxes,
(e) any amount received from a Tenant as reimbursement for any cost paid by or
on behalf of the related Issuer or any applicable Co- Issuer as lessor under any
Lease, (f) any amounts collected by or on behalf of the Issuers or any
applicable Co-Issuer as lessor and held in escrow or impound to pay future
obligations due under a Lease, as applicable, and (g) amounts received in
connection with a Series Collateral Release.

 

“Back-Up Fee”: With respect to each Property, the monthly fee payable to the
Back-Up Manager pursuant to Section 3.09(f) in an amount equal to the product of
(i) the Back-Up Fee Rate and (ii) the aggregate Allocated Loan Amount of all
Properties in the Collateral Pool as of the related Determination Date.

 

“Back-Up Fee Rate”: With respect to each Property, a monthly rate equal to the
product of (i) one-twelfth and (ii) 0.10%.

 

“Back-Up Manager”: As defined in the preamble.

 

“Back-Up Servicing Transfer Date”: As defined in Section 6.03(c).

 

“Bankruptcy Code”: The federal Bankruptcy Code of 1978, Title 11 of the United
States Code, as amended from time to time.

 

“Collateral Defect”: As defined in Section 2.04(a).

 

“Collateral Value”: As of any date of determination with respect to each
Property, such Property’s Appraised Value.

 

“Collection Account”: As defined in Section 3.02(d) hereof.

 

“Collection Account Bank”: As defined in Section 3.02(d) hereof.

 

“Collection Period”: With respect to any Payment Date, the period commencing on
the day immediately following the Determination Date in the month immediately
preceding the month in which such Payment Date occurs (or, in the case of the
initial Payment Date, commencing on the Initial Closing Date) and ending on (and
including) the Determination Date related to such Payment Date.

 

“Condemnation”: As defined in Section 3.20(a) hereof.

 

“Condemnation Proceeds”: All proceeds received in connection with the
Condemnation of any Property or Improvements.

 

 3 

 

 

“Consolidated” (or “consolidated”) or “Consolidating” (or “consolidating”): When
used with reference to any financial term in this Agreement, the aggregate for
two or more Persons of the amounts signified by such term for all such Persons
determined on a consolidated basis in accordance with GAAP.

 

“Corrected Unit”: Any Property that had been a Specially Managed Unit but with
respect to which (a) as of the date of determination, no circumstance identified
in clauses (i) through (v) of the definition of the term “Specially Managed
Unit” then exists and (b) one or more of the following as are applicable occur:

 

(i)          if a circumstance described in clause (i) of the definition of the
term “Specially Managed Unit” previously existed with respect to such Property,
such condition shall have ceased to exist and (A) the related Tenant has made
two consecutive full and timely Monthly Lease Payments under the terms of the
related Lease (as such terms may be changed or modified in connection with a
bankruptcy or similar proceeding involving the related Tenant or by reason of a
modification, waiver or amendment granted or agreed to by the Special Servicer)
or (B) with respect to a Lease, such Lease has been terminated and the related
Property has been re-leased;

 

(ii)         if a default described in clause (ii) of the definition of the term
“Specially Managed Unit” previously existed with respect to such Property, such
default is cured in the good faith and reasonable judgment of the Special
Servicer;

 

(iii)        if a circumstance described in clause (iii) of the definition of
the term “Specially Managed Unit” previously existed with respect to such
Property, such circumstances cease to exist in the good faith and reasonable
judgment of the Special Servicer;

 

(iv)        if a circumstance described in clause (iv) of the definition of the
term “Specially Managed Unit” previously existed with respect to such Property,
such default is cured; and

 

(v)         if a circumstance described in clause (v) of the definition of the
term “Specially Managed Unit” previously existed with respect to such Property,
such circumstances no longer exist.

 

“Credit Risk”: As defined in Section 7.06.

 

“Custodian”: U.S. Bank National Association or its successor in interest.

 

“Custody Agreement”: The Custody Agreement, dated as of the Initial Closing
Date, among the Issuers, the Indenture Trustee, the Custodian and each joining
party thereto, as amended, restated, supplemented or otherwise modified from
time to time.

 

“Default Interest”: With respect to any Lease, any amounts collected thereon
(other than late payment charges or amounts representing the Third Party Option
Price paid by the related Tenant or any third party) that represent penalty
interest accrued at the rate specified in such Lease.

 

 4 

 

 

“Defaulted Asset”: Any Lease or Property included in the Collateral Pool (other
than a Delinquent Asset) with respect to which the related Tenant is in default
and such default continues unremedied for the applicable grace period under the
terms of the related Lease (or, if no grace period is specified, for 30 days).

 

“Defaulting Party”: As defined in Section 6.02(a).

 

“Delinquent Asset”: Any Lease in the Collateral Pool with respect to which any
Monthly Lease Payment becomes delinquent more than 60 consecutive days (without
taking into account the required giving of notices under such Lease) and which
Lease has not been rejected in any bankruptcy, insolvency or similar proceeding.

 

“Determination Date Report”: As defined in Section 4.01(a).

 

“Document Defect”: As defined in Section 2.03(c).

 

“Due Date”: With respect to any Lease, the day of each calendar month on which
the Monthly Lease Payment with respect thereto is due.

 

“Emergency Property Expenses”: As defined in Section 3.03(e).

 

“Environmental Insurer”: Any Qualified Insurer that issues Environmental
Policies relating to any of the Properties.

 

“Environmental Policy”: Any insurance policy issued by an Environmental Insurer,
together with any endorsements thereto, providing insurance coverage for losses,
with respect to certain Properties, caused by the presence of Hazardous
Substances on, or the migration of Hazardous Substances from, the related
Properties.

 

“Escrow Payment”: Any payment received by the Property Manager or the Special
Servicer for the account of any Tenant or otherwise deposited in the Servicing
Account for application toward the payment of real estate taxes, assessments,
insurance premiums, ground rents (if applicable) and similar items in respect of
the related Property.

 

“Exchanged Property”: A Property and the related Lease that is exchanged for a
Qualified Substitute Property subject to the conditions and limitations
described in this Agreement.

 

“Excess Proceeds”: As defined in Section 3.02(f).

 

“Fair Market Value”: At any time, a price determined by the Property Manager (or
by the Special Servicer with respect to a Specially Managed Unit) in accordance
with the Servicing Standard to be the most probable price that the related Lease
or Property should bring in a competitive and open market under all conditions
requisite to a fair sale, the buyer and seller each acting prudently and
knowledgeably, and assuming the price is not affected by undue stimulus. In
making any such determination, the Property Manager or Special Servicer may
obtain an MAI certified appraisal of the related Property and shall assume the
consummation of a sale as of a specified date (and with respect to Properties,
the passing of title from seller to buyer) under conditions whereby: (i) buyer
and seller are typically motivated; (ii) both parties are well informed or well
advised, and acting in what they consider their best interests; (iii) a
reasonable time is allowed for exposure in the open market; (iv) payment is made
in terms of cash in United States dollars or in terms of financial arrangements
comparable thereto; and (v) the price represents the normal consideration for
such Lease or Property unaffected by special or creative financing or sales
concessions granted by anyone associated with the sale.

 

 5 

 

 

“Financing Statement”: One or more financing statements filed or recorded or in
a form suitable for filing and recording under the UCC.

 

“FIRREA”: The Financial Institutions Reform, Recovery and Enforcement Act of
1989.

 

“Fixed Charge Coverage Ratio” or “FCCR”: The fixed charge coverage ratio for a
Tenant determined in accordance with the provisions of Exhibit E attached
hereto.

 

“GAAP”: Generally accepted accounting principles as in effect in the United
States, consistently applied, as of the date of such application.

 

“General Receipts Account”: As defined in Section 3.02(b).

 

“General Receipts Account Bank”: As defined in Section 3.02(b).

 

“Guaranty”: The Guaranty, dated as of May 30, 2019, executed by AFOP, as Support
Provider, in favor of the Indenture Trustee, for the benefit of the Noteholders.

 

“Hazardous Substances”: As defined in Section 3.23(a).

 

“Improvements”: As defined in the granting clause of the related Mortgage with
respect to each Property.

 

“Indenture”: The Master Indenture, dated as of May 30, 2019, among the Issuers
and the Indenture Trustee, and any supplement thereto relating to the issuance
of any series of Notes, including all amendments and supplements thereto.

 

“Indenture Trustee”: As defined in the preamble.

 

“Independent”: When used with respect to any specified Person, any such Person
who (i) is not an Issuer, an Issuer Member, the Indenture Trustee, the Property
Manager, the Special Servicer or an Affiliate thereof, (ii) does not have any
direct financial interest in or any material indirect financial interest in any
of the Issuers, the Issuer Members, the Indenture Trustee, the Property Manager,
the Special Servicer or any of their respective Affiliates, and (iii) is not
connected with the Issuers, the Issuer Members, the Indenture Trustee, the
Property Manager, the Special Servicer or any of their respective Affiliates as
an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions; provided, however, that a Person shall not
fail to be Independent of the Issuers, the Issuer Members, the Indenture
Trustee, the Property Manager, the Special Servicer or an Affiliate thereof
merely because such Person is the beneficial owner of 1% or less of any class of
securities issued by any Issuer, any Issuer Member, the Indenture Trustee, the
Property Manager, the Special Servicer or an Affiliate thereof, as the case may
be.

 

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“Insurance Proceeds”: All proceeds received under any Property Insurance Policy
that provides coverage with respect to any Property.

 

“Insured Casualty”: As defined in Section 3.19.

 

“Issuance Date”: With respect to any Series of Notes, the applicable Series
Closing Date.

 

“Issuer Interests”: With respect to (i) any Issuer that constitutes an Issuer as
of the date hereof, the limited liability company interests issued pursuant to
such Issuer’s limited liability company agreement and (ii) any other Issuer, as
indicated in the applicable Joinder Agreement, in each case as the same may be
amended from time to time in accordance with the terms thereto and the
Indenture.

 

“Issuer Member”: With respect to (i) any Issuer that constitutes an Issuer as of
the date hereof, the holder of the Issuer Interests with respect to such Issuer,
and (ii) any other Issuer, as indicated in the applicable Joinder Agreement.

 

“Joinder Agreement”: With respect to any Series of Notes, the Joinder Agreement,
dated as of the applicable Series Closing Date, among the applicable Joining
Party, the Property Manager, the Special Servicer, the Indenture Trustee and the
Back-Up Manager, substantially in the form of Exhibit B attached hereto.

 

“Joining Party”: Any AFOP SPE, as indicated in the applicable Joinder Agreement.

 

“KeyBank”: As defined in the preamble.

 

“Land and Building Lease”: A lease pursuant to which land, buildings and other
Improvements are leased by a Tenant from the related land and building lessor.

 

“Lease”: Each lease listed on the Property Schedule from time to time. As used
herein and in the other Transaction Documents, the term “Lease” includes the
related lease agreement and all amendments, modifications and waiver agreements
related thereto.

 

“Lease Documents”: Any related lease agreement, non-disturbance agreement,
guaranty or other agreement or instrument, to the extent made for the benefit of
the related Originator.

 

“Lease Expiration Date”: With respect to any Lease, the date specified in such
Lease (as in effect on the Initial Closing Date or, if later, the date such
Lease was first included in the Collateral Pool) on which the term of the Lease
expires or such earlier date on which the Tenant has an option to terminate the
Lease (as in effect on the Initial Closing Date or, if later, the date such
Lease was first included in the Collateral Pool), without regard to any
unexercised options to renew or extend such Lease or change in or modification
of such terms in connection with a bankruptcy or similar proceeding involving
the related Tenant or a modification, waiver, extension or amendment of such
Lease granted or agreed to by the Special Servicer pursuant to Section 3.16.

 

 7 

 

 

“Lease File”: With respect to each Property and the related Lease, the following
documentation:

 

(i)          the executed original or a copy of the Lease and any amendment
thereto;

 

(ii)         the executed original or a copy of any Lease Guaranty of the Lease
and any amendment, modification, waiver agreement or instrument related thereto;

 

(iii)        copies of any Financing Statements filed under the UCC relating to
the Lease and any amendments and continuation statements, if any are in the
possession of the related Originator or Issuer;

 

(iv)        the executed original recorded Mortgage and any assignment thereof
in favor of the Indenture Trustee with respect to the related Property or a
complete copy thereof delivered by the related Originator or the related Issuer
or any applicable title company that closed or is closing such Mortgage as a
true and complete copy of the original thereof submitted for recording (which
delivery shall be deemed to be a certification by such Originator and such
Issuer that such copy is a true and complete copy of the original submitted for
recording);

 

(v)         an original or copy of the lender’s title insurance policy relating
to the Mortgage for such Property, together with all riders thereto showing the
Indenture Trustee and its successors and assigns as the named insured; or, with
respect to each Property as to which a title insurance policy has not yet been
issued, a policy meeting the foregoing description as evidenced by either a
commitment for title insurance “marked up” by the title company or a proforma
title policy which the title company has agreed to issue pursuant to an email
from the title company or pursuant to a closing instruction letter or email
setting forth such requirements of the lender’s title insurance policy;
provided, that such email or closing instruction letter shall not be part of the
Lease File;

 

(vi)        a Tenant estoppel certificate, if any, to the extent in the
possession of the related Issuer or the related Originator, in which the Tenant
acknowledges that the Lease is in full force and effect, that the lessor is not
in default under the terms of the Lease, and that no circumstances currently
exist that would give the Tenant the right to abate or offset its rent;

 

(vii)       a copy of the appraisal (whether in hard copy, electronic copy or CD
ROM format) containing the appraisal information for such Property;

 

(viii)      Environmental Reports, if applicable;

 

(ix)         a copy of the environmental insurance policy, if applicable,
together with the original assignment thereof to the Indenture Trustee;

 

 8 

 

 

(x)          evidence of insurance showing the related Issuer or its affiliate
as the insured or an additional insured party under certain casualty insurance
policies, if any;

 

(xi)         with respect to any Lease to a franchisee, a copy of the related
franchise agreement, to the extent in the possession of the related Issuer or
the related Originator, if applicable;

 

(xii)        any purchase option agreements, to the extent not included in the
Lease;

 

(xiii)       a survey of the Property;

 

(xiv)      a property condition report, if applicable;

 

(xv)       any property zoning reports;

 

(xvi)      the related ground lease, if any, and any amendment, modification,
waiver agreement or instrument relating thereto, together with the applicable
ground lessor estoppel;

 

(xvii)     with respect to any ground lease, an assignment of ground lease, if
any, and a non-disturbance agreement from the ground lessor and the fee
mortgagee, if any;

 

(xviii)    all original letters of credit, if any;

 

(xix)       any subordination, non-disturbance, and attornment agreements; and

 

(xx)        a checklist of the foregoing documents;

 

provided, that (x) no assignment of any of the foregoing documents in favor of
the Indenture Trustee shall be considered to be effective until the applicable
Series Closing Date, notwithstanding any earlier date on any such assignment,
(y) whenever the term “Lease File” is used to refer to documents actually
received by the Custodian pursuant to this Agreement or the Custody Agreement,
such term shall not be deemed to include such documents required to be included
therein unless they are actually so received and (z) whenever the term “Lease
File” is used in connection with any receipt or certification by the Custodian
for documents described in clauses (ii), (vi), (ix), (xi), (xv), (xvi), (xvii),
(xviii) and (xix) of this definition, such term shall be deemed to include such
documents and any amendment, modification, waiver, agreement or instrument
related thereto, only to the extent that a Responsible Officer of the Custodian
has actual knowledge of their existence.

 

“Lease Guarantor”: Any guarantor under any Lease Guaranty.

 

“Lease Guaranty”: With respect to any Lease, the guaranty related to such Lease
executed by an Affiliate or parent of the Tenant in favor of the lessor.

 

“Lease Security Deposit”: As defined in Section 3.02(g).

 

“Lease Transfer Property”: As defined in Section 7.03.

 

 9 

 

 

“Leasehold Property”: A Property for which an Issuer does not own fee title to
the related property, but instead has entered into a ground lease with the owner
of the property and therefore possesses a leasehold estate in such property,
along with title to the buildings and other improvements located on such
property.

 

“Liquidated Lease”: A Defaulted Asset that is a Lease with respect to which the
related Property has been either re-leased or sold, or any Lease related to a
Property purchased from the applicable Issuer or disposed of by such Issuer
pursuant to an exchange, whether or not terminated because of a default by the
Tenant.

 

“Liquidation Fee”: As defined in Section 3.09(h).

 

“Liquidation Fee Rate”: A percentage equal to 0.50%.

 

“Liquidation Proceeds”: (i) All net cash proceeds and all other amounts (other
than Insurance Proceeds and Condemnation Proceeds) received by the applicable
Issuer, the Property Manager, or the Special Servicer and retained in connection
with the liquidation of any Lease or Property; (ii) all cash proceeds and all
other amounts (other than Insurance Proceeds and Condemnation Proceeds) from the
release or substitution of any Property other than to the extent deposited into
the Release Account; (iii) all proceeds from the investment of funds on deposit
in the Release Account; and (iv) all cash proceeds from the release or
substitution of any Property transferred from the Release Account to the
Collection Account pursuant to Section 7.01(e).

 

“MAI”: A designation signifying that the designee is a member of the Appraisal
Institute.

 

“Modified Collateral Detail and Realized Loss Report”: As defined in
Section 4.01(c).

 

“Monthly DSCR”: With respect to any Determination Date, the quotient, expressed
as a ratio, of (i) the sum of all Monthly Lease Payments and any income earned
from the investment of funds on deposit in the Collection Account and the
Release Account in Permitted Investments during the related Collection Period,
and (ii) the Total Debt Service for the related Payment Date; provided, that
with respect to the initial Collection Period for any Series, the amount in
clause (i) above will include the Property Manager’s good faith estimate (in
accordance with the Servicing Standard) of what such amount would have been if
such first Collection Period had commenced on the day immediately after the
Determination Date in the month immediately preceding the first Payment Date,
based on amounts actually received by the Property Manager during the initial
Collection Period. For purposes of determining the Monthly DSCR, the Total Debt
Service will be calculated on the basis of a 360-day year consisting of twelve
30-day months.

 

“Monthly Lease Payment”: With respect to any Lease, the fixed or “base” rent
monthly payment that is actually payable by the related Tenant from time to time
under the terms of such Lease (excluding any Percentage Rent), after giving
effect to any provision of such Lease providing for periodic increases in such
fixed or “base” rent by fixed percentages or dollar amounts or by percentages
based on increases in the Consumer Price Index.

 

 10 

 

 

“Mortgage”: A mortgage (or deed of trust or deed to secure debt), assignment of
leases and rents, security agreement and fixture filing or similar document
executed by the applicable Issuer, pursuant to which such Issuer grants a lien
on its interest in the related Property in favor of the Indenture Trustee.

 

“Net Default Interest”: With respect to any Lease, any Default Interest
collected thereon, net of any Advance Interest accrued on Advances made in
respect of such Lease and reimbursable from such Default Interest in accordance
with Section 2.11 of the Indenture.

 

“Net Investment Earnings”: The amount by which the aggregate of all interest and
other income realized during a Collection Period on funds held in the Collection
Account, the Release Account and any other accounts established under the
Indenture from time to time, if any, exceeds the aggregate of all losses, if
any, incurred during such Collection Period in connection with the investment of
such funds in accordance with Section 3.05.

 

“Net Worth”: With respect to any entity means the difference between (i) the
fair market value of such entity’s assets determined in accordance with GAAP,
but excluding accumulated depreciation, and (ii) such entity’s liabilities
determined in accordance with GAAP.

 

“Non-Renewal Risk”: As defined in Section 7.06.

 

“Nonrecoverable Advance”: Any portion of an Advance previously made or proposed
to be made which, in the case of an Advance previously made, has not been
previously reimbursed to the Property Manager or the Indenture Trustee, as
applicable, and which the Property Manager, in accordance with the terms hereof,
or the Indenture Trustee, in its sole discretion exercised in good faith, as
applicable, determines, taking into account amounts that may be collected or
realized on such Properties or Leases prior to final liquidation and Liquidation
Proceeds, will not, or, in the case of a proposed Advance, would not, be
ultimately recoverable together with interest thereon at the Reimbursement Rate
from amounts to be deposited in the Collection Account under the terms of this
Agreement with respect to such Properties or Leases (including, without
limitation, payments by the Tenants and collections under the related Leases,
Default Interest and late payment fees, Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds, and proceeds from the operation and servicing of
such Properties and Leases), as evidenced by an Officer’s Certificate pursuant
to Section 3.03(f). In making any determination as to nonrecoverability pursuant
to the provisions of the Transaction Documents following the occurrence and
continuance of an event of default under the Indenture, the Property Manager
(including the Back-Up Manager, as successor Property Manager, and the Indenture
Trustee, as applicable) may consider the limitations on its enforcement
remedies.

 

“Officer’s Certificate”: A certificate signed by a Servicing Officer of the
Property Manager or the Special Servicer or a Responsible Officer of the
Indenture Trustee or the applicable Issuer Member on behalf of an Issuer, as the
case may be, and with respect to any other Person, a certificate signed by the
Chairman of the Board, the President, a Vice President or Assistant Vice
President, the Treasurer, the Secretary, or one of the Assistant Treasurers or
Assistant Secretaries of such Person.

 

 11 

 

 

“Opinion of Counsel”: A written opinion of counsel (which shall be rendered by
counsel that is Independent of the Issuers, the Issuer Members, the Indenture
Trustee, the Property Manager and the Special Servicer) in form and substance
reasonably acceptable to and delivered to the addressees thereof.

 

“P&I Advance”: Any advance of principal and/or interest made by the Property
Manager or the Indenture Trustee, as applicable, pursuant to Section 3.03. Each
reference to reimbursement or payment of a P&I Advance shall be deemed to
include, whether or not specifically referred to, payments or reimbursement of
interest thereon at the Reimbursement Rate through the date of payments or
reimbursement.

 

“Payoff Amount”: With respect to any Released Property released or sold due to a
Collateral Defect, an amount equal to the Collateral Value of such Released
Property, plus any unpaid Monthly Lease Payments and any unreimbursed Advances,
Emergency Property Expenses, Liquidation Fees, Workout Fees, Special Servicing
Fees, Issuer Expenses, Back-Up Fees, Extraordinary Expenses and any fees and
expenses incurred in connection with such release (in each case, plus interest
thereon as applicable), in each case related to such Released Property or the
related Lease.

 

“Percentage Rent”: With respect to any Lease, the rent thereunder, if any,
calculated as a percentage of the total sales generated by the related Tenant at
the related Property in excess of or in lieu of, as applicable the Monthly Lease
Payments as provided in the applicable Lease.

 

“Permitted Leases”: Those Leases referenced on the Property Schedule and any
other Leases entered into in accordance with the terms and conditions of the
Indenture and this Agreement.

 

“Permitted Materials”: Hazardous Substances used or generated by any Tenant in
the ordinary course of business and treated in accordance with applicable
Environmental Laws.

 

“Primary Servicing Office”: (i) With respect to the Property Manager or the
Special Servicer, the office of the Property Manager or the Special Servicer, as
the context may require, that is primarily responsible for such party’s
servicing obligations hereunder and (ii) with respect to the Back-Up Manager,
the office of the Back-Up Manager, as the context may require, that is primarily
responsible for such party’s servicing obligations hereunder.

 

“Prime Rate”: The “prime rate” published in the “Money Rates” section of The
Wall Street Journal, as such “prime rate” may change from time to time. If The
Wall Street Journal ceases to publish the “prime rate,” then the Indenture
Trustee shall select an equivalent publication that publishes such “prime rate”;
and if such “prime rate” is no longer generally published or is limited,
regulated or administered by a governmental or quasi-governmental body, then the
Indenture Trustee shall select a comparable interest rate index. In either case,
such selection shall be made by the Indenture Trustee in its sole discretion and
the Indenture Trustee shall notify the Property Manager and the Special Servicer
in writing of its selection.

 

“Property”: Each parcel of real property listed on the Property Schedule and
from time to time included in the Collateral Pool.

 

 12 

 

 

“Property Insurance Policy”: With respect to any Property, any hazard insurance
policy, flood insurance policy, or other insurance policy that is maintained
from time to time in respect of such Property (including, without limitation,
any blanket insurance policy maintained by or on behalf of the applicable
Issuer).

 

“Property Management Fee”: With respect to each Property, the monthly fee
payable to the Property Manager pursuant to Section 3.09(a) in amount equal to
the product of: (i) the Property Management Fee Rate and (b) the aggregate
Allocated Loan Amount (as of the related Determination Date) of all Properties
in the Collateral Pool that did not relate to Specially Managed Units during the
related Collection Period.

 

“Property Management Fee Rate”: With respect to each Lease, a monthly rate equal
to the product of (i) one-twelfth and (ii) 0.25%.

 

“Property Manager”: AF Properties, in its capacity as property manager under
this Agreement, or any successor property manager appointed as herein provided.

 

“Property Manager Additional Servicing Compensation”: The additional servicing
compensation payable to the Property Manager pursuant to Section 3.09(b).

 

“Property Protection Advance”: With respect to the Leases and the Properties,
all customary, reasonable and necessary out-of-pocket costs and expenses
incurred by the Property Manager (or, if applicable, the Back-Up Manager), in
connection with servicing the Leases and the Properties, in accordance with the
Servicing Standard and this Agreement, for the purpose of paying real estate
taxes, premiums on Property Insurance Policies (not already paid pursuant to
Section 2.11 of the Indenture, as confirmed by the applicable Issuer), in the
case of Leasehold Properties, payments required to be made under the related
ground leases and other amounts necessary to preserve or maintain the security
interest and lien of the Indenture Trustee in, and value of, each related
Property (including any costs and expenses necessary to re-lease such Property),
Lease (including costs and expenses related to collection efforts), including,
but not limited to, amounts incurred by the Property Manager to (a) repair, or
make improvements to, a Property in order to re-lease such Property or to induce
a Tenant to extent, modify and/or renew the related Lease, and/or (b) provide to
an existing or proposed Tenant a tenant allowance to enable such existing or
proposed Tenant to repair, or make improvements to, a Property in connection
with a new Lease or the extension, modification and/or renewal of an existing
Lease. Notwithstanding anything to the contrary, “Property Protection Advances”
shall not include allocable overhead of the Property Manager or the Special
Servicer, such as costs for office space, office equipment, supplies and related
expenses, employee salaries and related expenses and similar internal costs and
expenses.

 

“Property Schedule”: The list of Properties and related Leases identified on an
exhibit or schedule to each applicable Series Supplement in connection with the
issuance of a related Series of Notes. Such list shall set forth the following
information with respect to each Lease:

 

(i)the identification number for the Property;

 

(ii)the related Issuer lease number and name of the related Tenant;

 

 13 

 

  

(iii)the Lease Expiration Date for such Lease;

 

(iv)the street address (including city, state and zip code) of such Property;

 

(v)the Appraised Value of such Property;

 

(vi)the concept operated on such Property; and

 

(vii)the Allocated Loan Amount.

 

“Property Transfer Agreement”: As defined in the Indenture.

 

“Qualified Deleveraging Event”: As defined in the Indenture.

 

“Qualified Insurer”: An insurance company or security or bonding company
qualified to write the related Property Insurance Policy in the relevant
jurisdiction, which company has a claims-paying ability rated at least “A:VIII”
by A.M. Best’s Key Rating Guide.

 

“Qualified Release Amount”: A portion of the Collateral Pool that may be
released in connection with an Early Refinancing Prepayment, applying a Release
Price for each asset to be released equal to the greater of Fair Market Value
and 115% of the Allocated Loan Amount of the Properties being released, that in
the aggregate is no greater than the dollar amount of the Notes being prepaid in
connection with such Early Refinancing Prepayment.

 

“Qualified Substitute Property”: A Property acquired by an Issuer (A) in
substitution for any Exchanged Property that, on the date such Qualified
Substitute Property is added to the Collateral Pool, (i) has a Collateral Value
that, when combined with the Collateral Value of all other Qualified Substitute
Properties acquired by the Issuers since the most recent Issuance Date, is at
least equal to the sum of the Fair Market Value of all Exchanged Properties
(each measured on the date of their respective removals), (ii) complies, in all
material respects, with all of the representations and warranties made with
respect to Properties under the Indenture, (iii) has, together with all other
Qualified Substitute Properties to be acquired by the Issuers on such date, the
same or greater aggregate Monthly Lease Payments as the Exchanged Properties,
(iv) is leased pursuant to a Lease, that when combined with the Leases of all
other Qualified Substitute Properties acquired since the most recent Issuance
Date, has a weighted average remaining term that equals or exceeds the weighted
average remaining term of the Leases associated with the Exchanged Properties
released since the most recent Issuance Date, (v) if the Tenant thereof or any
third party has an option to purchase such Qualified Substitute Property, the
contractual amount of such Third Party Option Price is not less than what the
Allocated Loan Amount of such Qualified Substitute Property would be after
giving effect to the substitution of such Property, (vi) when combined with all
other Qualified Substitute Properties acquired since the most recent Issuance
Date, does not cause the Weighted Average FCCR of such Qualified Substitute
Properties to be less than the Weighted Average FCCR (measured as of the date of
each respective substitution) of all Exchanged Properties released since the
most recent Issuance Date; provided, however, with respect to no more than
fifteen (15)% of the Aggregate Appraised Value of all Properties, the
requirement set forth in this clause (vi) will not apply so long as such
Qualified Substitute Properties (1) have a weighted average unit FCCR not less
than 2.0x and (2) the Property Manager, in accordance with the Servicing
Standard, has determined that such substitution is in the best interest of the
Issuers and the Noteholders, (vii) is leased pursuant to a “triple-net” or
“double-net” lease, and (viii) has an appraisal that meets the requirements set
forth in the definition of Appraised Value and was obtained no more than twelve
(12) months prior to such substitution or (B) with proceeds deposited in the
Release Account that, on the date of such acquisition, (i) complies, in all
material respects, with all of the representations and warranties made with
respect to Properties under the Indenture, (ii) is leased pursuant to a Lease
that has a remaining term that equals or exceeds the weighted average remaining
term of the Leases associated with the Released Properties released since the
most recent Issuance Date, (iii) if the Tenant thereof or any third party has an
option to purchase such Qualified Substitute Property, the contractual amount of
such Third Party Option Price is not less than what the Allocated Loan Amount of
such Qualified Substitute Property would be after being acquired by such Issuer;
(iv) is leased to the Tenant who leased the related Released Property, or to a
different Tenant whose FCCR is greater than or equal to the then-current FCCR,
(v) is leased pursuant to a “triple-net” or “double-net” lease and (vi) has an
appraisal meeting the requirements set forth in the definition of Appraised
Value that was obtained no more than twelve (12) months prior to such
substitution.

 

 14 

 

 

Notwithstanding the foregoing, with respect to a Risk-Based Substitution, the
related Qualified Substitute Property shall not be required to comply with
clauses (A) (iv),(v), or (vi) or (B) (ii), (iii) or (iv) above.

 

“Reimbursement Amounts”: Any amounts payable by a Tenant to the Property Manager
or the related Issuer pursuant to the terms of the related Lease as
reimbursement for the payment of taxes or other expenses made by the Property
Manager or such Issuer in connection with the Property.

 

“Reimbursement Rate”: The rate per annum applicable to the accrual of Advance
Interest, which rate per annum is equal to the Prime Rate plus 3%.

 

“Release Account”: As defined in Section 3.02(f).

 

“Release Price”: With respect to any Released Property, an amount equal to (i)
the Third Party Option Price, if the release occurs in connection with any Third
Party Purchase Option, (ii) with respect to any Delinquent Asset or Defaulted
Asset purchased by the Special Servicer or the Property Manager or any assignee
thereof, the greater of (A) the Fair Market Value, plus any unreimbursed
Advances, Emergency Property Expenses, Liquidation Fees, Workout Fees, Special
Servicing Fees and Extraordinary Expenses (plus interest thereon as applicable),
in each case related to such Lease or Property, and (B) 115% of the Allocated
Loan Amount, (iii) the Payoff Amount with respect to any Released Property
released due to a Collateral Defect, (iv) the greater of (A) the Fair Market
Value and plus any unreimbursed Advances, Emergency Property Expenses,
Liquidation Fees, Workout Fees, Special Servicing Fees and Extraordinary
Expenses (plus interest thereon as applicable) and (B) 115% of the Allocated
Loan Amount of the Properties being released, with respect to a Qualified
Deleveraging Event, or (v) other than with respect to clauses (i)-(iv) hereof,
the Fair Market Value, plus any unreimbursed Advances, Emergency Property
Expenses, Liquidation Fees, Workout Fees, Special Servicing Fees and
Extraordinary Expenses (plus interest thereon as applicable), in each case
related to such Lease or Property, for any Released Property sold.

 

 15 

 

 

“Released Property”: As defined in Section 7.04(a).

 

“Remedial Work”: As defined in Section 3.23(c).

 

“Remittance Date”: The Business Day preceding each Payment Date.

 

“Removed Property”: A Released Property or Exchanged Property that has either
been released or substituted pursuant to Section 2.04 and Article VII hereof.

 

“Request for Release”: A request signed by a Servicing Officer of the applicable
Issuer or the Property Manager in the form of Exhibit A-l attached hereto or of
such Issuer or the Special Servicer in the form of Exhibit A-2 attached hereto.

 

“Required Conditions”: Subject to any additional requirements set forth in any
applicable Series Supplement, with respect to any proposed substitution,
release, exchange or lease transfer of any Property, the Required Conditions
will be satisfied if:

 

(i)          the applicable Issuer shall submit to the Indenture Trustee all
documentation that is reasonably required to be delivered by any party hereto in
connection with such substitution, release, exchange or lease transfer, together
with an Officer’s Certificate certifying that such documentation (A) is in
compliance with all Legal Requirements, and (B) will effect such release in
accordance with the terms of this Agreement; and

 

(ii)         if the Property sought to be substituted, released, exchanged or
have its lease transferred is subject to a Lease that also covers any other
Property, such Lease shall be severed and amended so that, after giving effect
to such release, no Property shall be subject to a Lease that also affects any
Property that is not subject to a Mortgage.

 

“Risk-Based Substitution”: The meaning specified in Section 7.06.

 

“Sales Tax Deposit”: As defined in Section 3.02(g).

 

“Series Collateral Release”: The meaning specified in Section 7.10(a).

 

“Series Collateral Release Price”: With respect to a Released Property in
connection with a Series Collateral Release, an amount equal to the greater of
(i) 115% of the Allocated Loan Amount of such Released Property and (ii) the
Fair Market Value of such Released Property, plus any unreimbursed Advances,
Emergency Property Expenses, Liquidation Fees, Workout Fees, Special Servicing
Fees and Extraordinary Expenses (plus interest thereon as applicable), in each
case related to such Lease or Property.

 

“Servicer Replacement Event”: The meaning specified in Section 6.01(a).

 

“Servicing Accounts”: One or more accounts established and maintained by each of
the Property Manager and the Special Servicer relating to those Properties and
Leases each such party is obligated to service and administer hereunder pursuant
to Section 3.02(g).

 

 16 

 

 

“Servicing Fees”: With respect to each Property and the related Lease, the
Property Management Fee, the Back-Up Fee, the Property Manager Additional
Servicing Compensation, if any, the Special Servicing Fee, if any, and the
Special Servicer Additional Servicing Compensation, if any.

 

“Servicing File”: Any documents (other than documents required to be part of the
related Lease File) in the possession of the Property Manager or the Special
Servicer and relating to the origination and servicing of any Lease or the
administration of any Property.

 

“Servicing Officer”: Any officer or employee of the Property Manager or the
Special Servicer involved in, or responsible for, the administration, management
and servicing of the Properties or Leases, whose name and specimen signature
appear on a list of Servicing Officers furnished by such party to the applicable
Issuer Members, the applicable Issuer and the Indenture Trustee on the related
Series Closing Date, as such list may be amended from time to time.

 

“Servicing Standard”: To provide property management services for the Properties
and to service the Leases (a) in the same manner in which, and with the same
care, skill, prudence and diligence with which, the Property Manager or the
Special Servicer, as the case may be, services and administers similar leases
and properties, including, without limitation, the granting of certain Permitted
Encumbrances, for their own account and the account of their Affiliates or any
third-party portfolios, to the extent applicable, or (b) in a manner normally
associated with the prudent management and operation of similar properties,
whichever standard is highest, and in each such case, in material compliance
with all applicable laws, but without regard to: (i) any known relationship that
the Property Manager or Special Servicer, or an Affiliate of the Property
Manager or Special Servicer, may have with any Issuer, any Tenant, any of their
respective Affiliates or any other party to the Transaction Documents; (ii) the
ownership of any Note or Issuer Interest by the Property Manager or Special
Servicer or any Affiliate of the Property Manager or Special Servicer, as
applicable; (iii) the Property Manager’s obligation to make Advances, incur
servicing expenses or to direct the Indenture Trustee to withdraw funds from the
Collection Account to pay Emergency Property Expenses with respect to the Leases
and Properties; (iv) the Property Manager’s or Special Servicer’s right to
receive compensation for its services or reimbursements of the costs under this
Agreement; (v) the ownership, servicing or management for others, by the
Property Manager or Special Servicer of any other leases or commercial real
properties; (vi) the release, transfer or indemnification obligations of the
Property Manager or Special Servicer; or (vii) the existence of any loans made
to a Tenant by the Property Manager or Special Servicer or any Affiliate
thereof.

 

“Servicing Transfer Agreement”: As defined in Section 5.04.

 

“Servicing Transfer Date”: As defined in Section 5.04.

 

“Servicing Transfer Event”: With respect to any Property, the occurrence of any
of the events described in clauses (i) through (v) of the definition of
“Specially Managed Unit.”

 

 17 

 

 

“Special Servicer”: AF Properties, in its capacity as special servicer under
this Agreement, or any successor special servicer appointed as herein provided.

 

“Special Servicer Additional Servicing Compensation”: The additional servicing
compensation payable to the Special Servicer pursuant to Section 3.09(d).

 

“Special Servicer Report”: As defined in Section 4.01(b).

 

“Special Servicing Fee”: With respect to each Specially Managed Unit, the
monthly fee payable to the Special Servicer pursuant to the first paragraph of
Section 3.09(c) in amount equal to the product of (i) the Special Servicing Fee
Rate and (ii) the aggregate Allocated Loan Amount (as of the related
Determination Date) of all Properties in the Collateral Pool that did not relate
to Specially Managed Units during the related Collection Period.

 

“Special Servicing Fee Rate”: With respect to each Specially Managed Unit, a
monthly rate equal to the product of (i) one-twelfth and (ii) 0.75%.

 

“Specially Managed Unit”: Any Property as to which any of the following events
has occurred:

 

(i)          such Property is a Delinquent Asset; or

 

(ii)         such Property is a Defaulted Asset, with respect to which the
related default materially and adversely affects the interests of the applicable
Issuer; or

 

(iii)        there shall have been commenced in a court or agency or supervisory
authority having jurisdiction an involuntary action against the Tenant under any
present or future federal or state bankruptcy, insolvency or similar law or the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities, or similar
proceedings or for the winding up or liquidation of its affairs, which action
shall not have been dismissed for a period of 90 days, and the subject Lease has
not been rejected in any related proceeding; or the Tenant shall have consented
to the appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Tenant or of or relating to all or
substantially all of its property, and the subject Lease has not been rejected
in any related proceeding; or the Tenant shall have admitted in writing its
inability to pay its debts generally as they become due, filed a petition to
take advantage of any applicable insolvency or reorganization statute, made an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations, and the subject Lease has not been rejected in any related
proceeding; or

 

(iv)        the Lease has expired, been terminated, or rejected in any
bankruptcy or related proceeding; or

 

(v)         the Property Manager receives notice that a Tenant will no longer
make Monthly Lease Payments under such Tenant’s Lease.

 

 18 

 

 

“Sub-Manager”: Any Person with which the Property Manager or the Special
Servicer has entered into a Sub-Management Agreement.

 

“Sub-Management Agreement”: The written contract between the Property Manager or
the Special Servicer, on the one hand, and any Sub-Manager, on the other hand,
relating to servicing and administration of Leases and Properties, as provided
in Section 3.18.

 

“Successor Property Manager”: As defined in Section 6.02.

 

“Successor Special Servicer”: As defined in Section 6.02.

 

“Support Provider”: AFOP or any successor support provider.

 

“Tenant”: With respect to each Lease, the tenant under such Lease and any
successor or assign thereof.

 

“Terminated Lease Property”: A Property, the Lease with respect to which has
expired, has been terminated or has been rejected in a bankruptcy, insolvency or
similar proceeding of the Tenant or from which the Tenant has been evicted or
otherwise removed.

 

“Third Party Option Price”: With respect to any Property pursuant to which a
Third Party Purchase Option is exercised, the cash price that is set forth in
the related Lease.

 

“Third Party Purchase Option”: The option under a Lease, whether conditional or
otherwise, for the related Tenant or another third party to purchase the related
Property before or at the expiration of the term of the Lease for the Third
Party Option Price.

 

“Title Companies”: As defined in Section 2.03(a).

 

“Title Insurance Policies”: With respect to each Property, an ALTA mortgagee
title insurance policy in the customary form (or, if any Property is in a state
which does not permit the issuance of such ALTA policy, such form as shall be
permitted in such state) issued with respect to such Property and insuring the
lien of the Mortgage encumbering such Property.

 

“Total Debt Service”: The sum of (i) the Scheduled Principal Payments and all
Note Interest with respect to each Class of Notes, (ii) the scheduled principal
payment and note interest with respect to all classes of Related Series Notes
(in each case, less any scheduled principal payment due on the Anticipated
Repayment Date with respect to each Class of Notes or the applicable anticipated
repayment date with respect to any such Related Series Notes), (iii) the
Property Management Fee, (iv) the Special Servicing Fee, if any, (v) the Back-Up
Fee, and (vi) the Indenture Trustee Fee, each as accrued during the related
Collection Period. For the purpose of calculation “Monthly DSCR,” the Note
Interest component of Total Debt Service shall, for each Series, be computed on
the basis of a 360-day year consisting of twelve 30-day months. For the
avoidance of doubt, any Interest Carry-Forward Amount, Post-ARD Additional
Interest and Deferred Post-ARD Additional Interest will not be included in the
calculation of Total Debt Service.

 

 19 

 

 

“Transfer Date”: The date on which a Property is acquired by the applicable
Issuer.

 

“Triple A Notes”: Any Notes that have been issued pursuant to the Indenture and
have received a rating of “AAA(sf)” from the applicable Rating Agency.

 

“Triple A Release Date” With respect to any Triple A Notes, as defined in the
related Series Supplement.

 

“Triple A Release Event”: If any Triple A Notes are Outstanding on their related
Triple A Release Date and an Early Amortization Period is in effect the Property
Manager shall use commercially reasonable efforts to sell Properties in an
amount equal to 35% of the Aggregate Collateral Value, taking into account the
sum of the Collateral Value of all Released Properties released since the
Initial Closing Date.

 

“UCC”: The Uniform Commercial Code as in effect in any applicable jurisdiction.

 

“Unscheduled Proceeds”: Collectively, without duplication, (i) Liquidation
Proceeds and any other proceeds received by the Property Manager or the Special
Servicer with respect to the disposition of a Property that is a Defaulted
Asset, (ii) Proceeds in connection with a Condemnation or Insured Casualty to
the extent deposited in the Collection Account, (iii) any Third Party Option
Price received as a result of the exercise of a Third Party Purchase Option
(only up to the Collateral Value) to the extent deposited into the Collection
Account, (iv) Payoff Amounts received in connection with the release and sale of
a Lease or a Property in relation to a Collateral Defect, (v) any proceeds
(other than Release Prices) derived from each un-leased Property (exclusive of
related operating costs, including certain reimbursements payable to the
Property Manager in connection with the operation and disposition of such
un-leased Property), (vi) all amounts disbursed to the Payment Account from the
DSCR Reserve Account during an Early Amortization Period, (vii) any Release
Price collected in connection with a Triple A Release Event and (vii) amounts
disbursed from the Release Account to the Collection Account during the related
Collection Period.

 

“U.S. Credit Risk Retention Rules”: The final rules adopted by the FDIC, the
Federal Housing Finance Agency, the Office of the Comptroller of the Currency of
the Department of the Treasury, the SEC, the Board of Governors of the Federal
Reserve System and the U.S. Department of Housing and Urban Development
implementing the credit risk retention requirements of Section 15G of the
Securities Exchange Act of 1934, as amended, as added by Section 941 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

“U.S. Risk Retention Agreement”: The U.S. Credit Risk Retention Agreement, dated
as of May 30, 2019, entered into by AFOP in favor of the Indenture Trustee, as
amended, restated, supplemented or otherwise modified from time to time.

 

“Weighted Average FCCR”: An amount equal to the quotient of (i) the sum of the
products of the FCCRs and the Allocated Loan Amounts of each Property in the
Collateral Pool and (ii) the aggregate Allocated Loan Amount of all Properties
in the Collateral Pool.

 

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“Workout Fee”: As defined in Section 3.09(g).

 

Section 1.02.         Other Definitional Provisions.

 

(a)          All capitalized terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.

 

(b)          As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document, to the extent not defined, shall have the respective meanings given to
them under GAAP. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under GAAP, the definitions contained in this Agreement
or in any such certificate or other document shall control.

 

(c)          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; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; a reference to a subsection
or other subdivision without further reference to a Section is a reference to
such subsection or other subdivision as contained in the Section in which the
reference appears; and the words “include” and “including” shall mean without
limitation by reason of enumeration.

 

(d)          The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as the feminine and neuter genders of such terms.

 

(e)          Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted assignees.

 

Section 1.03.         Certain Calculations in Respect of the Leases.

 

(a)          All amounts collected in respect of any Lease in the form of
payments from the related Tenants, guaranties provided by related Lease
Guarantors, Unscheduled Proceeds or otherwise shall be applied to amounts due
and owing under the Lease in accordance with the express provisions of such
Lease; in the absence of such express provisions, all amounts collected shall be
applied for purposes of this Agreement: first, as a recovery of any related and
unreimbursed Advances; and second, in accordance with the Servicing Standard,
but subject to Section 1.03(c), as a recovery of any other amounts then due and
owing under such Lease, including, without limitation, Percentage Rent,
Reimbursement Amounts and Default Interest. Any proceeds derived from an
unleased Property (exclusive of related operating costs, including reimbursement
of Advances made by the Property Manager, the Special Servicer or the Indenture
Trustee in connection with the operation and disposition of such Property) shall
be applied by the Property Manager in the same manner as if they were Monthly
Lease Payments due on the previously existing Lease for such Property until such
Lease becomes a Liquidated Lease pursuant to the terms of such Lease and the
related Lease Documents.

 

 21 

 

 

(b)          [Reserved].

 

(c)          Insofar as amounts received in respect of any Lease and allocable
to fees and charges owing in respect of such Lease constituting Additional
Servicing Compensation payable to the Property Manager or Special Servicer are
insufficient to cover the full amount of such fees and charges, such amounts
shall be allocated between such of those fees and charges as are payable to the
Property Manager, on the one hand, and as are payable to the Special Servicer,
on the other, pro rata in accordance with their respective entitlements.

 

(d)          The foregoing applications of amounts received in respect of any
Lease shall be determined by the Property Manager and reflected in the
appropriate monthly Determination Date Report and any Modified Collateral Detail
and Realized Loss Report.

 

(e)          Notwithstanding the early termination of any Lease resulting from a
default by the related Tenant, such Lease will be treated for purposes of
determining Servicing Fees, Liquidation Fees, Workout Fees and Indenture Trustee
Fees as remaining in effect until such Lease becomes a Liquidated Lease.

 

Section 1.04.         Fee Calculations.

 

The calculation of the Servicing Fees shall be made in accordance with Section
3.09 and the payment of Indenture Trustee Fees shall be made pursuant to the
terms of the Indenture. All dollar amounts calculated hereunder shall be rounded
to the nearest penny with one-half of one penny being rounded up.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES; RECORDINGS
AND FILINGS; BOOKS AND RECORDS; DEFECT,
BREACH, CURE, REPURCHASE AND SUBSTITUTION

 

Section 2.01.         Representations and Warranties of AF Properties and the
Back-Up Manager.

 

(a)          AF Properties represents and warrants to the other parties hereto,
and for the benefit of the Issuers, and the Indenture Trustee for the benefit of
the Noteholders as of Series Closing Date:

 

(i)          AF Properties is a limited liability company duly organized,
validly existing, and in good standing under the laws of its state of
organization and is in compliance with the laws of each state (within the United
States of America) in which any Property is located to the extent necessary to
its performance under this Agreement;

 

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(ii)         The execution and delivery of this Agreement by AF Properties, and
the performance and compliance with the terms of this Agreement by AF
Properties, do not violate its organizational documents or constitute an event
that, with notice or lapse of time, or both, would constitute a default under,
or result in the breach of, any material agreement or other instrument to which
it is a party or by which it is bound;

 

(iii)        AF Properties has the limited liability company power and authority
to enter into and consummate all transactions to be performed by it contemplated
by this Agreement, has duly authorized the execution, delivery and performance
by it of this Agreement, and has duly executed and delivered this Agreement;

 

(iv)        This Agreement, assuming due authorization, execution and delivery
by each of the other parties hereto, constitutes a valid, legal and binding
obligation of AF Properties, enforceable against AF Properties in accordance
with the terms hereof, subject to (A) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, receivership, moratorium and other
similar laws affecting the enforcement of creditors’ rights generally and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;

 

(v)         AF Properties is not in violation of, and its execution and delivery
of this Agreement and its performance and compliance with the terms of this
Agreement will not constitute a violation of, any law, any order or decree of
any court or arbiter, or any order, regulation or demand of any federal, state
or local governmental or regulatory authority, which violation is likely to
affect materially and adversely either the ability of AF Properties to perform
its obligations under this Agreement or the financial condition of AF
Properties;

 

(vi)        No litigation is pending or, to AF Properties’ knowledge, threatened
against AF Properties that is reasonably likely to be determined adversely to AF
Properties and, if determined adversely to AF Properties, would prohibit AF
Properties from entering into this Agreement or that, in AF Properties’ good
faith and reasonable judgment, is likely to materially and adversely affect
either the ability of AF Properties to perform its obligations under this
Agreement or the financial condition of AF Properties;

 

(vii)       No consent, approval, authorization or order under any court or
governmental agency or body is required for the execution, delivery and
performance by AF Properties of, or the compliance by AF Properties with, this
Agreement or the consummation of the transactions of AF Properties contemplated
by this Agreement, except for any consent, approval, authorization or order that
has been obtained or that if not obtained would not have a material and adverse
effect on the ability of AF Properties to perform its obligations hereunder; and

 

(viii)      Each officer and employee of AF Properties that has responsibilities
concerning the management, servicing and administration of Properties and Leases
is covered by errors and omissions insurance and the fidelity bond as and to the
extent required by Section 3.06.

 

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(b)          The representations and warranties of AF Properties set forth in
Section 2.01(a) shall survive the execution and delivery of this Agreement and
shall inure to the benefit of the Persons to whom and for whose benefit they
were made until all amounts owed to the Noteholders under or in connection with
this Agreement, the Indenture and the Notes have been indefeasibly paid in full.
Upon discovery by any party hereto of any breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other parties.

 

(c)          Any successor Property Manager or Special Servicer shall be deemed
to have made, as of the date of its succession, each of the representations and
warranties set forth in Section 2.01(a), subject to such appropriate
modifications to the representation and warranty set forth in Section 2.01(a)(i)
to accurately reflect such successor’s jurisdiction of organization and whether
it is a corporation, partnership, bank, association or other type of
organization.

 

(d)          The Back-Up Manager represents and warrants to the other parties
hereto, and for the benefit of the Issuers, and the Indenture Trustee on behalf
of the Noteholders, as of each Series Closing Date:

 

(i)          The Back-Up Manager is a national banking association duly
organized, validly existing, and in good standing under the laws of the United
States of America and is in compliance with the laws of each state (within the
United States of America) in which any Property is located to the extent
necessary to its performance under this Agreement;

 

(ii)         The execution and delivery of this Agreement by the Back-Up
Manager, and the performance and compliance with the terms of this Agreement by
the Back-Up Manager, do not violate its organizational documents or constitute
an event that, with notice or lapse of time, or both, would constitute a default
under, or result in the breach of, any material agreement or other instrument to
which it is a party or by which it is bound;

 

(iii)        The Back-Up Manager has the corporate power and authority to enter
into and consummate all transactions to be performed by it contemplated by this
Agreement, has duly authorized the execution, delivery and performance by it of
this Agreement, and has duly executed and delivered this Agreement;

 

(iv)        This Agreement, assuming due authorization, execution and delivery
by each of the other parties hereto, constitutes a valid, legal and binding
obligation of the Back-Up Manager, enforceable against the Back-Up Manager in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, receivership, moratorium and
other similar laws affecting the enforcement of creditors’ rights generally and
(B) general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;

 

(v)         The Back-Up Manager is not in violation of, and its execution and
delivery of, this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order or decree
of any court or arbiter, or any order, regulation or demand of any federal,
state or local governmental or regulatory authority, which violation is likely
to affect materially and adversely either the ability of the Back-Up Manager to
perform its obligations under this Agreement or the financial condition of the
Back-Up Manager;

 

 24 

 

 

(vi)        No litigation is pending or, to the Back-Up Manager’s knowledge,
threatened (in writing received by the Back-Up Manager) against the Back-Up
Manager, which if determined adversely to the Back-Up Manager, would prohibit
the Back-Up Manager from entering into this Agreement or that, in the Back-Up
Manager’s good faith and reasonable judgment, is likely to materially and
adversely affect either the ability of the Back-Up Manager to perform its
obligations under this Agreement or the financial condition of the Back-Up
Manager;

 

(vii)       No consent, approval, authorization or order under any court or
governmental agency or body is required for the execution, delivery and
performance by the Back-Up Manager of, or the compliance by the Back-Up Manager
with, this Agreement or the consummation of the transactions contemplated by the
Back-Up Manager by this Agreement, except for any consent, approval,
authorization or order that has been obtained or that if not obtained would not
have a material and adverse effect on the ability of the Back-Up Manager to
perform its obligations hereunder; and

 

(viii)      Each officer and employee of the Back-Up Manager that has
responsibilities concerning the management, servicing and administration of
Properties and Leases is covered by errors and omissions insurance and the
fidelity bond as and to the extent required by Section 3.06.

 

Section 2.02.         Representations and Warranties of the Issuer.

 

(a)          Each Issuer hereby represents and warrants to each of the other
parties hereto and for the benefit of the Indenture Trustee, on behalf of the
Noteholders as of the related Series Closing Date on or after the date on which
such Issuer becomes a party to this Agreement:

 

(i)          Such Issuer is a limited liability company duly organized, validly
existing, and in good standing under the laws of the State of Delaware and is in
compliance with the laws of each state (within the United States of America) in
which any applicable Property is located to the extent necessary to its
performance under this Agreement;

 

(ii)         The execution and delivery of this Agreement by such Issuer, and
the performance and compliance with the terms of this Agreement by such Issuer,
do not violate its organizational documents or constitute an event that, with
notice or lapse of time, or both, would constitute a default under, or result in
the breach of, any material agreement or other instrument to which it is a party
or by which it is bound;

 

(iii)        Such Issuer has the limited liability company power and authority
to enter into and consummate all transactions to be performed by it contemplated
by this Agreement, has duly authorized the execution, delivery and performance
by it of this Agreement and any applicable Joinder Agreement, and has duly
executed and delivered this Agreement and any applicable Joinder Agreement;

 

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(iv)        This Agreement, assuming due authorization, execution and delivery
by each of the other parties hereto, constitutes a valid, legal and binding
obligation of such Issuer, enforceable against such Issuer in accordance with
the terms hereof, subject to (A) applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, receivership, moratorium and other similar laws
affecting the enforcement of creditors’ rights generally and (B) general
principles of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;

 

(v)         Such Issuer is not in violation of, and its execution and delivery
of, this Agreement or any applicable Joinder Agreement and its performance and
compliance with the terms of this Agreement will not constitute a violation of,
any law, any order or decree of any court or arbiter, or any order, regulation
or demand of any federal, state or local governmental or regulatory authority,
which violation is likely to affect materially and adversely either the ability
of such Issuer to perform its obligations under this Agreement or the financial
condition of such Issuer;

 

(vi)        No litigation is pending or, to such Issuer’s knowledge, threatened
against such Issuer that is reasonably likely to be determined adversely to such
Issuer and, if determined adversely to such Issuer, would prohibit such Issuer
from entering into this Agreement or that, in such Issuer’s good faith and
reasonable judgment, is likely to materially and adversely affect either the
ability of such Issuer to perform its obligations under this Agreement or the
financial condition of such Issuer;

 

(vii)       No consent, approval, authorization or order under any court or
governmental agency or body is required for the execution, delivery and
performance by such Issuer of, or the compliance by such Issuer with, this
Agreement or the consummation of the transactions of such Issuer contemplated by
this Agreement, except for any consent, approval, authorization or order that
has been obtained or that if not obtained would not have a material and adverse
effect on the ability of such Issuer to perform its obligations hereunder; and

 

(viii)      To such Issuer’s knowledge, each of the Properties owned by such
Issuer is a commercial property.

 

The representations and warranties of each Issuer set forth in this Section 2.02
shall survive the execution and delivery of this Agreement and shall inure to
the benefit of the Persons to whom and for whose benefit they were made for so
long as such Issuer remains in existence. Upon discovery by any party hereto of
any breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other parties.

 

 26 

 

 

Section 2.03.         Recordings and Filings; Books and Records.

 

(a)          In connection with the Grant made by each Issuer to the Indenture
Trustee pursuant to the granting clause of the Indenture, each Issuer shall
cause the delivery of the applicable Lease Files for the applicable Leases to
the Custodian in accordance with the Custody Agreement (which may provide for
electronic delivery with respect to certain items specified therein) for the
benefit of the Indenture Trustee in furtherance of such Grant and such Issuer
shall cause (with respect to the Properties owned by such Issuer): (A) each
Mortgage referred to in the definition of “Lease File” herein to be submitted to
the appropriate Title Company (as defined below) on or before the applicable
Series Closing Date or Transfer Date for recording or filing, as the case may
be, in the appropriate public office for real property records, at the expense
of such Issuer and (B) each title insurance binder or commitment referred to in
the definition of “Lease File” herein to be issued as a Title Insurance Policy
by the title companies (the “Title Companies”) issuing the same. Each Mortgage
shall reflect that, following recording, it should be returned by the public
recording office to the Custodian, on behalf of the Indenture Trustee (or to the
Property Manager (or its designee), who shall then deliver such recorded
document to the Custodian); provided, that delivery of a copy of each such
Mortgage with recording information within 30 days of the Property Manager’s
receipt of such recorded Mortgage shall satisfy the foregoing. Each of the Title
Companies issuing the Title Insurance Policies shall be instructed by the
applicable Issuer to deliver such policies to the Custodian (or to the Property
Manager (or its designee), who shall then deliver such recorded document to the
Custodian), in each case for the benefit of the Indenture Trustee. The Property
Manager, on behalf of the Indenture Trustee, shall use reasonable efforts to
diligently pursue with the Title Companies the return of each of the Mortgages
from the appropriate recording or filing offices and the delivery of the Title
Insurance Policies by the related Title Company. If any such document or
instrument is lost or returned unrecorded or unfiled, as the case may be,
because of a defect therein, the Indenture Trustee or the Custodian shall notify
the Property Manager and the Property Manager shall promptly prepare and cause
to be executed a substitute therefor or cure such defect, as the case may be,
and thereafter, the Property Manager shall cause the same to be duly recorded.
The Indenture Trustee and the related Issuer shall cooperate as necessary for
the Property Manager to perform such obligations.

 

(b)          Each Issuer shall deliver to and deposit with, or cause to be
delivered to and deposited with, the Property Manager all documents and records
in the possession of such Issuer or any related Originator that relate to the
applicable Properties and Leases and that are not required to be a part of a
Lease File in accordance with the definitions thereof, and the Property Manager
shall hold all such documents and records in trust on behalf of the Indenture
Trustee (in hard copy or electronic format). The Property Manager’s possession
of such documents and records shall be at the will of the related Issuer and the
Indenture Trustee for the sole purpose of facilitating the servicing of the
applicable Leases and Properties pursuant to this Agreement and such possession
by the Property Manager shall be in a custodial capacity only on behalf of the
Indenture Trustee. The ownership of such documents and records shall be vested
in each Issuer, as applicable, subject to the lien of the Indenture, and the
ownership of all documents and records with respect to the applicable Leases and
Properties that are prepared by or which come into possession of the Property
Manager or the Special Servicer shall immediately vest in such Issuer, subject
to the lien of the Indenture, and shall be delivered to and deposited with the
Property Manager, in the case of documents or records in the hands of the
Special Servicer, and retained and maintained in trust by the Property Manager
in such custodial capacity only on behalf of the Indenture Trustee, except as
otherwise provided herein. All such documents and records shall be appropriately
maintained in a manner to clearly reflect the ownership of such documents and
records by the applicable Issuer, subject to the lien of the Indenture, and that
such documents and records are being held on behalf of the Indenture Trustee,
and the Property Manager shall release such documents and records from its
custody only in accordance with this Agreement.

 

 27 

 

 

(c)          If any party hereto discovers that any document constituting a part
of a Lease File has not been properly executed, is missing, contains information
that does not conform in any respect with the corresponding information set
forth in the Property Schedule (and the terms of such document have not been
modified by written instrument contained in the Lease File) or does not appear
to be regular on its face (each, a “Document Defect”), such party shall give
prompt written notice thereof to the other parties thereto. Upon its discovery
or receipt of notice of any such Document Defect, the Property Manager shall
notify the Issuers and any applicable Rating Agency. If the applicable Issuer
does not correct any Document Defect within 60 days of its receipt of such
notice and such Document Defect materially and adversely affects the value of,
or the interests of such Issuer or any Noteholder in, the related Lease or
Property, the Property Manager shall, on behalf of such Issuer, and subject to
the provisions of Section 2.04, exercise such rights and remedies as such Issuer
may have under Section 2.04 with respect to such Document Defect in such manner
as it determines, in its good faith and reasonable judgment, is in the best
interests of such Issuer.

 

(d)          The Property Manager shall monitor the delivery of the Lease Files
to the Custodian, for the benefit of the Indenture Trustee.

 

Section 2.04.         Repurchase or Transfer and Exchange for Collateral Defects
and Breaches of Representations and Warranties.

 

(a)          If any party hereto discovers or receives notice of any Document
Defect (after the date the related document is required to be delivered) or that
there exists a breach of any representation or warranty relating to any Property
or Lease set forth in Section 2.20 of the Indenture and if such absence,
deficiency or breach materially and adversely affects (a) the value of the
related Property or Lease or (b) the interests of the Issuers or any Noteholders
in the related Property or Lease (any such document defect or breach, a
“Collateral Defect”), the party discovering such Collateral Defect shall give
prompt written notice thereof to the other parties hereto. Promptly upon
becoming aware of any such Collateral Defect, the Property Manager shall request
that such Issuer shall, not later than 60 days from the receipt by such Issuer
of such request, (i) cure such Collateral Defect in all material respects, (ii)
the Support Provider shall, pursuant to the Guaranty, purchase such Property and
the related Lease from the applicable Issuer in accordance with Section 7.04 of
this Agreement, or (iii) the Issuers (or the Support Provider pursuant to the
Guaranty) shall substitute one or more Qualified Substitute Properties for the
subject Property in accordance with the procedures set forth in Section 7.01 of
this Agreement; provided that if (i) such Collateral Defect is capable of being
cured (including by delivery of a missing document) but not within such 60-day
period, (ii) such Issuer has commenced and is diligently proceeding with the
cure of such Collateral Defect (which may including the delivery of a missing
document) within such 60-day period, and (iii) such Issuer shall have delivered
to the Property Manager and the Indenture Trustee a certification executed on
behalf of such Issuer by an officer thereof setting forth the reason such
Collateral Defect is not reasonably capable of being cured within an initial
60-day period and what actions such Issuer is pursuing in connection with the
cure thereof and stating that such Issuer anticipates that such Collateral
Defect will be cured within an additional 60-day period, then such Issuer shall
have an additional 60 days commencing on the 61st day from receipt by such
Issuer of such request to complete such cure.

 

 28 

 

 

(b)          If the Issuers have elected to substitute one or more of the
Properties and the Property Manager and/or such Issuer has complied with the
applicable provisions of Section 7.01, the Property Manager shall, and is hereby
authorized and empowered by such Issuer and the Indenture Trustee to, prepare,
execute and deliver in its own name, on behalf of such Issuer, the Indenture
Trustee or any of them, the endorsements, assignments and other documents
contemplated by Section 7.01 necessary to effectuate an exchange or release
pursuant to Section 2.04(a) and such Issuer and the Indenture Trustee shall
execute and deliver any limited powers of attorney substantially in the form of
Exhibit A prepared by the Property Manager and necessary to permit the Property
Manager to do so; provided, however, that none of the applicable Issuer, the
applicable Issuer Member, the applicable Issuer board of managers and the
Indenture Trustee shall be held liable for any misuse of any such power of
attorney by the Property Manager and the Property Manager hereby agrees to
indemnify such Issuer, such Issuer Member, such Issuer board of managers and the
Indenture Trustee against, and hold such Issuer, such Issuer Member, such Issuer
board of managers and the Indenture Trustee harmless from, any loss or liability
arising from any misuse of such power of attorney. In connection with any such
release or substitution by an Issuer, the Property Manager or the Special
Servicer, as appropriate, shall concurrently deliver the related Lease File to
or at the direction of such Issuer. For the avoidance of doubt, the Indenture
Trustee shall execute and deliver a limited power of attorney on or before June
30th of each year.

 

(c)          Subject to the terms of the Guaranty, this Section 2.04 provides
the sole remedies available to the Indenture Trustee and the Noteholders with
respect to any Collateral Defect. If both the applicable Issuer and the Support
Provider default on their obligations to cure, substitute or purchase as
contemplated by Section 2.04(a) or the Guaranty, as the case may be, such
default shall be deemed an Event of Default under the Indenture and the Property
Manager shall promptly notify the Issuers, the Back-Up Manager, the Indenture
Trustee and any applicable Rating Agency and shall take such actions with
respect to the enforcement of such obligations, including the institution and
prosecution of appropriate proceedings, as the Property Manager shall determine,
in its good faith and reasonable judgment, are in the best interests of the
applicable Issuer and the Noteholders, and the Property Manager shall notify the
Noteholders of each Series of any proposed action and, prior to the Property
Manager taking such action, the Requisite Global Majority shall consent to such
action. Any and all expenses incurred by the Property Manager or the Indenture
Trustee with respect to the foregoing shall constitute Property Protection
Advances in respect of the affected Property and neither the Property Manager
nor the Back-Up Manager shall have any obligation to advance any such expenses
if it determines that such amounts would constitute Nonrecoverable Advances.

 

Section 2.05.         Non Petition Agreement.

 

Each Issuer will cause each party to any Property Transfer Agreement to covenant
and agree that such party shall not institute against, or join any other Person
in instituting against, any Issuer, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or any other proceeding under any federal
or state bankruptcy or similar law.

 

 29 

 

 

ARTICLE III

ADMINISTRATION AND SERVICING OF PROPERTIES AND LEASES

 

Section 3.01.         Administration of the Properties and Leases.

 

(a)          Each of the Property Manager and the Special Servicer shall service
and administer the Properties and Leases that it is obligated to service and
administer pursuant to this Agreement on behalf of the Issuers and in the best
interests and for the benefit of the Noteholders and the holders of the Issuer
Interests (as a collective whole), in accordance with any and all applicable
laws and the terms of this Agreement, the Property Insurance Policies and the
respective Leases and, to the extent consistent with the foregoing, in
accordance with the Servicing Standard. Without limiting the foregoing, and
subject to Section 3.18, (i) the Property Manager shall service and administer
each Lease (and each related Property) as to which no Servicing Transfer Event
has occurred and each Corrected Unit and (ii) the Special Servicer shall service
and administer each Lease (and each related Property) as to which a Servicing
Transfer Event has occurred and that is not a Corrected Unit or has not been
released from the Lien of the related Mortgage in accordance with this Agreement
and the other Transaction Documents; provided, however, that the Property
Manager shall continue to collect information and prepare and deliver all
reports to the Indenture Trustee and each Issuer required hereunder with respect
to any Specially Managed Unit (and the related Leases), and further to render
such incidental services with respect to any Specially Managed Unit as are
specifically provided for herein. No direction, consent or approval or lack of
direction, consent or approval of any Controlling Party or the Requisite Global
Majority may (and the Special Servicer or the Property Manager will ignore and
act without regard to any such advice or approval or lack of approval that the
Special Servicer or the Property Manager has determined, in its reasonable, good
faith judgment, would) (A) require or cause the Special Servicer or the Property
Manager to violate applicable law, the Servicing Standard or the terms of any
Lease or (B) expand the scope of the Property Manager’s or Special Servicer’s
responsibilities under this Agreement. In addition, neither the Property Manager
nor the Special Servicer, acting in its individual capacity, shall take any
action or omit to take any action as lessor of any Property if such action or
omission would materially and adversely affect the interests of the Noteholders
or the Issuer Interests, or any Issuer. None of the Property Manager, the
Special Servicer or the Back-Up Manager shall be liable to the Indenture
Trustee, any Noteholder or any other Person for following any direction of a
Controlling Party hereunder, and any action taken in accordance with such
direction shall be deemed to be in accordance with the Servicing Standard and
deemed not to breach such party’s obligations hereunder.

 

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(b)          Subject to Section 3.01(a), the Property Manager and the Special
Servicer each shall have full power and authority, acting alone, to do or cause
to be done any and all things in connection with such servicing and
administration in accordance with the Servicing Standard. Without limiting the
generality of the foregoing, each of the Property Manager and the Special
Servicer, in its own name, with respect to each of the Properties and Leases it
is obligated to service or administer hereunder, is hereby authorized and
empowered by the applicable Issuer and the Indenture Trustee to execute and
deliver, on behalf of each such Issuer and the Indenture Trustee: (i) any and
all Financing Statements, continuation statements and other documents or
instruments necessary to maintain the lien created by any Mortgage or other
security document in the related Lease File on the related Collateral; (ii) in
accordance with the Servicing Standard and subject to Section 3.16, any and all
modifications, waivers, amendments or consents to or with respect to any
documents contained in the related Lease File, other than the Transaction
Documents; (iii) subject to the Servicing Standard, all documents to be executed
by the Indenture Trustee pursuant to the last sentence of the definition of
Permitted Encumbrances; and (iv) any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments. Subject to Section 3.08, each applicable Issuer and the
Indenture Trustee shall, at the written request of a Servicing Officer of the
Property Manager or the Special Servicer, execute and deliver to the Property
Manager or the Special Servicer, as the case may be, any limited powers of
attorney (substantially in the form of Exhibit A attached hereto) and other
documents furnished by the Property Manager or the Special Servicer, as
applicable, and necessary or appropriate to enable it to carry out its servicing
and administrative duties hereunder; provided, however, that none of the
Issuers, the Issuer Members or the Indenture Trustee shall be held liable for
any misuse of any such power of attorney by the Property Manager or the Special
Servicer and each of the Property Manager and the Special Servicer hereby agree
to indemnify each Issuer, the Issuer Members and the Indenture Trustee against,
and hold each Issuer, the Issuer Members and the Indenture Trustee harmless
from, any cost, loss or liability arising from any misuse of such power of
attorney. Notwithstanding anything contained herein to the contrary, the
Property Manager shall not, without the Indenture Trustee’s written consent:
(i) initiate any action, suit or proceeding solely under the Indenture Trustee’s
name without indicating the Indenture Trustee’s representative capacity or (ii)
take any action with the intent to cause, and which actually does cause, the
Indenture Trustee to be registered to do business in any state.

 

(c)          Promptly after any request therefor, the Property Manager shall
provide to the Indenture Trustee: (i) the most recent inspection report prepared
or obtained by the Property Manager or the Special Servicer in respect of each
Property pursuant to Section 3.10(a); (ii) the most recent available operating
statement and financial statements of the related Tenant collected by the
Property Manager or the Special Servicer pursuant to Section 3.10(d), together
with the accompanying written reports to be prepared by the Property Manager or
the Special Servicer, as the case may be, pursuant to Section 3.10(b); and (iii)
any and all notices and reports with respect to any Property as to which
environmental testing is contemplated by this Agreement or the other Transaction
Documents.

 

(d)          The relationship of each of the Property Manager and the Special
Servicer to each Issuer and the Indenture Trustee under this Agreement is
intended by the parties to be and shall be that of an independent contractor and
not that of a joint venturer, partner or agent.

 

Section 3.02.         Collection of Monthly Lease Payments; General Receipts
Accounts; Collection Account; Release Account; Servicing Account.

 

(a)          Each of the Property Manager and the Special Servicer shall
undertake reasonable efforts to collect all payments called for under the terms
and provisions of the Leases it is obligated to service hereunder and shall, to
the extent such procedures shall be consistent with this Agreement, follow such
collection procedures as it would follow were it the owner of such Leases.
Consistent with the foregoing and the Servicing Standard (and without regard to
Section 3.16), the Special Servicer or the Property Manager, as the case may be,
may waive any Net Default Interest or late payment charge it is entitled to in
connection with any delinquent payment on a Lease it is obligated to service
hereunder.

 

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(b)          The Property Manager shall establish and maintain, or cause to be
established and maintained, one or more accounts (each, a “General Receipts
Account”) with one or more banks (each, a “General Receipts Account Bank”). Each
General Receipts Account shall (i) be maintained at an institution that
satisfies the institutional requirements of clauses (i) or (ii) of the
definition of Eligible Account or (ii) is otherwise acceptable to the Rating
Agencies (as evidenced by written confirmation from such Rating Agencies) and
may be an account to which payments relating to other assets are paid; provided,
that such account shall be in the nature of a clearing account and, except as
otherwise expressly permitted by this Agreement, the Property Manager shall not
have access to such account. Each of the Property Manager and the Special
Servicer shall, on or prior to each Series Closing Date (or, if applicable, such
other date of acquisition), as to those Leases it is obligated to service
hereunder, instruct the related Tenant to make all Monthly Lease Payments to a
General Receipts Account. With respect to amounts contained in the General
Receipts Account, the Property Manager or the Back-Up Manager shall at all times
be able to readily identify any amounts that constitute Collateral.

 

(c)          [Reserved].

 

(d)          The Property Manager shall establish and maintain one segregated
account in the name of the Issuers for the benefit Indenture Trustee on behalf
of the Noteholders for the collection of payments on and other amounts received
in respect of the Leases and the Properties (collectively, the “Collection
Account”), which shall be established in such manner and with the type of
depository institution (the “Collection Account Bank”) specified in this
Agreement that permits the Collection Account to be an Eligible Account.
Initially, the Collection Account Bank shall be KeyBank. The Collection Account
shall be an Eligible Account. If the Collection Account Bank is not the same
depository institution as the Indenture Trustee, then the Collection Account
will be subject to an Account Control Agreement in form and substance reasonably
satisfactory to the Indenture Trustee pursuant to which the Collection Account
Bank agrees to follow the instructions of the Indenture Trustee with respect to
the Collection Account and the amounts on deposit therein. Prior to the
occurrence of an Event of Default, subject to Sections 3.03 and 3.04, neither
the Property Manager nor any Issuer will have any right of withdrawal from the
Collection Account, and the Property Manager hereby covenants and agrees that it
shall not withdraw, or direct any Person to withdraw, any funds from the
Collection Account. Following an Event of Default, neither the Property Manager
nor any Issuer will have any right of withdrawal from the Collection Account,
and the Property Manager hereby covenants and agrees that it shall not withdraw,
or direct any Person to withdraw, any funds from the Collection Account. The
Collection Account shall be maintained as a segregated account, separate and
apart from trust funds created for trust certificates or bonds of other series
serviced and the other accounts of the Property Manager.

 

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(e)          The Property Manager and the Special Servicer shall deposit or
cause to be deposited into the Collection Account, within two (2) Business Days
after receipt, the following payments and collections received or made by or on
behalf of the Property Manager on or after the later of the related Series
Closing Date and the applicable Transfer Date (other than payments due before
the applicable Series Closing Date or Transfer Date) or, in the case of
collections and payments to the General Receipts Account, on each Business Day,
the Property Manager shall instruct each General Receipts Account Bank to
transfer the following amounts deposited in the General Receipts Account prior
to the end of such Business Day directly into the Collection Account,
immediately after funds have been identified, cleared and become available in
accordance with the policies of the General Receipts Account Bank:

 

(i)          all payments on account of Monthly Lease Payments;

 

(ii)         all payments of other amounts payable by the Tenants on the Leases,
except with respect to Escrow Payments, Lease Security Deposits, Sales Tax
Deposits and amounts in respect of Additional Servicing Compensation pursuant to
Section 3.09;

 

(iii)        all Insurance Proceeds up to the Collateral Value of such Property
which shall not include (A) Insurance Proceeds applied to the restoration of
property or released to the related Tenant or related Issuer in accordance with
this Agreement, or (B) Excess Proceeds;

 

(iv)        all Condemnation Proceeds up to the Collateral Value of such
Property, which shall not include (A) Condemnation Proceeds applied to the
restoration of property or released to the related Tenant or the related Issuer
in accordance with this Agreement or (B) Excess Proceeds;

 

(v)         except as otherwise deposited into the Release Account as set forth
herein, (A) all proceeds from the purchase or substitution of any Released
Property or Exchanged Property, (B) all proceeds from the purchase of a Property
in connection with a Third Party Purchase Option, (C) all proceeds from the
purchase of Property related to a Defaulted Asset and (D) all proceeds received
in connection with a Voluntary Prepayment, Early Refinancing Prepayment or the
release of the Properties following the termination of the Indenture and the
redemption of the Notes;

 

(vi)        any amounts paid by any party to indemnify the Issuers pursuant to
any provision of this Agreement, the Indenture or the Guaranty;

 

(vii)       any Series Collateral Release Price received in connection with a
Series Collateral Release; provided, that any amounts in excess of the amount to
be paid to Noteholders in connection with a Series Collateral Release will be
deposited into the Release Account;

 

(viii)      any amounts received by the Issuers on account of payments under the
Guaranty or the Lease Guaranties; and

 

(ix)         any other amounts required to be so deposited under this Agreement.

 

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Upon direct receipt by the Special Servicer of any of the amounts described in
clauses (i) through (iii) above with respect to any Specially Managed Unit, the
Special Servicer shall promptly but in no event later than the second Business
Day after receipt remit such amounts to the Property Manager for deposit into
the Collection Account in accordance with this Section 3.02(e), unless the
Special Servicer determines, consistent with the Servicing Standard, that a
particular item should not be deposited because of a restrictive endorsement or
other reasonably appropriate reason. With respect to any such amounts paid by
check to the order of the Special Servicer, the Special Servicer shall endorse
such check to the order of the Property Manager and shall deliver promptly, but
in no event later than one (1) Business Day after receipt, any such check to the
Property Manager by overnight courier, unless the Special Servicer determines,
consistent with the Servicing Standard, that a particular item cannot be so
endorsed and delivered because of a restrictive endorsement or other reasonably
appropriate reason.

 

(f)          The Indenture Trustee shall establish and maintain, or cause to be
established and maintained, a segregated account (the “Release Account”) in the
name of the Indenture Trustee, held for the benefit of the Noteholders. The
Release Account shall be an Eligible Account. Initially, the Release Account
bank shall be Citibank, N.A. The funds held in the Release Account may be held
as cash or invested in Permitted Investments in accordance with the provisions
of Section 3.05(a). All right, title and interest of each Issuer in the Release
Account and the amounts on deposit therein will be pledged to the Indenture
Trustee under the Indenture. The Property Manager will deposit or cause to be
deposited in the Release Account, on the date of receipt, (i) the cash proceeds
from the sale or release of any Released Property (other than any Release Prices
obtained in connection with a Triple A Release Event, Liquidation Proceeds
received with respect to Defaulted Assets, or any Series Collateral Release
Prices) and (ii) to the extent that proceeds in connection with an Insured
Casualty or Condemnation exceeds the Collateral Value of the related Property,
such excess amounts (the “Excess Proceeds”). Pursuant to the Indenture, any
excess proceeds remaining after prepaying the applicable Series of Notes in
connection with a Series Collateral Release will be remitted to the Release
Account as a Release Price.

 

(g)          Each of the Property Manager and the Special Servicer shall, as to
those Leases it is obligated to service hereunder, establish and maintain, or
cause to be established and maintained, one or more accounts (the “Servicing
Accounts”), and shall cause to be deposited from the General Receipts Account or
otherwise into such Servicing Accounts all Escrow Payments, security deposits
received from Tenants pursuant to the Leases, subject to the Tenants’ rights to
such amounts (“Lease Security Deposits”), and amounts required to be paid by the
applicable Issuers as lessors under the Leases in respect of sales taxes (“Sales
Tax Deposits”). Notwithstanding the foregoing, no Servicing Accounts shall be
established and maintained with respect to those Properties or Leases pursuant
to which the Tenant is not required to make Escrow Payments, Lease Security
Deposit or Sales Tax Deposits. Each Servicing Account shall be an Eligible
Account. Withdrawals of amounts so collected from a Servicing Account (other
than Lease Security Deposits) may be made only to: (i) effect payment of real
estate or personal property taxes, sales taxes, assessments, insurance premiums,
ground rents (if applicable) and comparable items (including taxes or other
amounts that could constitute liens prior to or on parity with the lien of the
related Mortgage); (ii) refund to the related Tenant any sums as may be
determined to be overages; (iii) pay interest, if required and as described
below in clause (h), to Tenants on balances in the Servicing Account; (iv) clear
and terminate the Servicing Account at the termination of this Agreement in
accordance with Section 8.01; (v) withdraw any amounts deposited in error or
(vi) for any other purpose required by the applicable Lease; provided, however,
that Lease Security Deposits may not be withdrawn for such purposes and shall be
withdrawn only in accordance with the terms of the related Lease, to be repaid
to the related Tenant or applied in full or partial satisfaction of the
obligations of the related Tenant in accordance with the Servicing Standard (for
application in the same manner as payments in respect of such obligations). Any
remaining portion of such Lease Security Deposit (after no further allocations
could be required pursuant to clauses (i) through (vi) above) shall be withdrawn
by the Property Manager from the Servicing Account and deposited into the
Collection Account and shall constitute part of the Available Amount on the next
Payment Date.

 

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(h)          The Property Manager and the Special Servicer shall each pay or
cause to be paid to the applicable Tenant interest, if any, earned on the
investment of funds in Servicing Accounts maintained thereby, if required by law
or the terms of the related Lease. If the Property Manager or the Special
Servicer shall deposit in a Servicing Account any amount not required to be
deposited therein, it may at any time withdraw such amount from such Servicing
Account, any provision herein to the contrary notwithstanding.

 

Section 3.03.         Advances.

 

(a)          Each of the Property Manager and the Special Servicer shall, as to
those Properties it is obligated to service hereunder, maintain accurate records
with respect to each Property reflecting the status of real estate taxes, ground
rents, assessments and other similar items that are or may become a lien
thereon, and the status of insurance premiums payable in respect thereof that,
in each case, the related Tenant is contractually or legally obligated to pay
under the terms of the applicable Lease, and, subject to Section 3.03(c) below,
if any such amounts are not paid by the related Tenant, the Property Manager
shall effect payment thereof, as a Property Protection Advance or otherwise as
payment of an Emergency Property Expense from funds on deposit in the Collection
Account, as described below, to the extent that the Property Manager or Special
Servicer, as applicable, has received notice from any source of such non-payment
by such Tenant. For purposes of effecting any such payment, the Property Manager
or the Special Servicer, as the case may be, shall apply Escrow Payments as
allowed under the terms of the related Lease or, if such Lease does not require
the related Tenant to escrow for the payment of real estate taxes, assessments
and insurance premiums (or the amounts escrowed are insufficient), each of the
Property Manager and the Special Servicer shall, as to those Leases it is
obligated to service hereunder, enforce the requirement of the related Lease
that such Tenant make payments in respect of such items at the time they first
become due.

 

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(b)          In the event (i) a Monthly Lease Payment, or any portion thereof,
on any Lease, has not been made on the related Due Date, (ii) the Notes of any
Series are not paid in full on the related Rated Final Payment Date or (iii) any
Property has become untenanted, then the Property Manager, subject to its
determination that such amounts are not Nonrecoverable Advances, shall be
required to make a P&I Advance; provided, that the Property Manager will not be
required to make any advance to cover (A) any resulting shortfall in the
scheduled payment of principal on any Class of Notes on or after the related
Anticipated Repayment Date, (B) the Make Whole Amount, (C) Interest
Carry-Forward Amount, (D) Post-ARD Additional Interest or (E) Deferred Post-ARD
Additional Interest. The Property Manager will be required to deposit such P&I
Advance into the Payment Account not later than 11:00 a.m. New York time on the
Remittance Date, in an amount equal to the excess of (x) the scheduled monthly
amount required to be paid with respect to principal and interest on the Notes
on the related Payment Date, over (y) the amount on deposit in the Payment
Account prior to such deposit by the Property Manager, taking into account all
amounts on deposit in the Collection Account that are required to be transferred
to the Payment Account for such Payment Date. If a late payment of a Monthly
Lease Payment is received on or prior to the Remittance Date, the Property
Manager shall immediately set-off such late payment against such P&I Advance,
and no interest shall be payable on such P&I Advance unless such late payment
shall have been received too late on the date of its receipt for the Property
Manager to invest such funds. On or before 5:00 p.m. New York time on the
Remittance Date in the event that that the full amount of any P&I Advance
required to be made by the Property Manager has not been so made, the Indenture
Trustee shall provide notice of such failure to a Servicing Officer of the
Property Manager and the Back-Up Manager. The Back-Up Manager, as successor
Property Manager, will be required to make any required P&I Advance by 11:00
a.m. New York City time on the related Payment Date to the extent that any P&I
Advance required to be made by the Property Manager pursuant to the immediately
preceding sentence is not made and the Back-Up Manager, as successor Property
Manager, receives notice thereof, subject to the Back-Up Manager’s sole
discretion exercised in good faith and in accordance with Section 3.03(g) below,
that the P&I Advance will not be a Nonrecoverable Advance. If the Property
Manager (including the Back-Up Property Manager, as successor Property Manager)
fails to make such Advance, the Indenture Trustee will be required to make any
required P&I Advance by 3:00 p.m. New York City time on the related Payment Date
to the extent that any P&I Advance required to be made by the Property Manager
pursuant to the immediately preceding sentence is not made and the Indenture
Trustee receives notice thereof, subject to the Indenture Trustee’s sole
discretion exercised in good faith, that the P&I Advance will ultimately be
recoverable from subsequent payments or collections on or in respect of Leases
or the Properties.

 

(c)          In accordance with the Servicing Standard, the Property Manager
shall advance with respect to each Property any and all Property Protection
Advances; provided, that in no event shall the Property Manager be required to
make any Property Protection Advance that it determines would constitute a
Nonrecoverable Advance in accordance with Section 3.03(f). The Property Manager
shall not have any obligation under this Section 3.03(c) to advance any funds in
respect of real estate taxes or premiums on Insurance Policies that the related
Tenant or the applicable Issuer is not contractually or legally obligated to
pay, nor shall it have any obligation to monitor the timely payment of real
estate taxes and insurance premiums the payment of which is the responsibility
of a person other than such Tenant or Issuer, unless it has actual knowledge of
the non-payment of such items and would otherwise make such advance in
accordance with the Servicing Standard. The Back-Up Manager, as successor
Property Manager, will be required to make any required Property Protection
Advance, in accordance with the Servicing Standard, to the extent that any
Property Protection Advance required to be made by the Property Manager pursuant
to the immediately preceding sentence is not made and the Back-Up Manager, as
successor Property Manager, receives notice thereof, subject to the Back-Up
Manager’s determination (in its sole discretion exercised in good faith) that
the Property Protection Advance will not be a Nonrecoverable Advance. The
Indenture Trustee will be required to make any required Property Protection
Advance to the extent that any Property Protection Advance required to be made
by the Property Manager (or the Back-Up Manager, as successor Property Manager)
pursuant to the immediately preceding sentence is not made and the Indenture
Trustee receives notice thereof, subject to the Indenture Trustee’s
determination (in its sole discretion exercised in good faith) that the Property
Protection Advance will not be a Nonrecoverable Advance.

 

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(d)          All Advances, together with Advance Interest thereon, shall be
reimbursable from collections from the Leases and Properties as provided in
Section 2.11(b) of the Indenture.

 

(e)          If, prior to making any Property Protection Advance, the Property
Manager shall have determined, in its commercially reasonable, good faith
business judgment and in accordance with the Servicing Standard, (i) that such
Property Protection Advance, if made, would constitute a Nonrecoverable Advance
and (ii) that the payment of such cost, expense or other amount for which a
Property Protection Advance might be made is nonetheless in the best interest of
the Noteholders, the Property Manager shall, in accordance with the Servicing
Standard, instruct the Indenture Trustee to withdraw funds from the Collection
Account and use such funds in order to pay such costs, expenses and other
amounts (collectively, “Emergency Property Expenses”) to the extent necessary to
preserve the security interest in, and value of, any Property. Any such funds
withdrawn from the Collection Account to pay Emergency Property Expenses shall
not constitute part of the Available Amount on any Payment Date and shall not be
available to make payments to the Noteholders or to pay any other expenses or
obligations of the Issuers.

 

(f)          The determination by the Property Manager (or the Back-Up Manager
as successor Property Manager) that it has made a Nonrecoverable Advance or that
any proposed Advance, if made, would constitute a Nonrecoverable Advance, shall
be made in good faith and in accordance with (i) with respect to Property
Protection Advances, Section 3.03(g) below and the Servicing Standard and (ii)
with respect to P&I Advances, Section 3.03(h) below and the Servicing Standard,
and, in each case, shall be evidenced by an Officer’s Certificate delivered
promptly to each Issuer and to the Indenture Trustee setting forth the basis for
such determination. The determination by the Indenture Trustee that it has made
a Nonrecoverable Advance or that any proposed Advance, if made, would constitute
a Nonrecoverable Advance, shall be made in good faith. The Indenture Trustee may
conclusively rely on any determination by the Property Manager that an Advance,
if made, would be a Nonrecoverable Advance.

 

(g)          In making a nonrecoverability determination with respect to any
Property Protection Advance, the Property Manager (or, if applicable, the
Back-Up Manager or Indenture Trustee) shall be entitled to (a) consider (among
other things) the obligations of the Obligor under the terms of the related
Lease Documents as they may have been modified, (b) consider the related
Properties in their “as is” or then current conditions and occupancies, as
modified by such party’s assumptions (consistent with the Servicing Standard in
the case of the Property Manager or the Back-Up Manager) regarding the
possibility and effects of future adverse changes with respect to such
Properties, (c) estimate and consider (consistent with the Servicing Standard in
the case of the Property Manager or the Back-Up Manager) (among other things)
future expenses, and (d) estimate and consider (consistent with the Servicing
Standard in the case of the Property Manager or the Back-Up Manager) (among
other things) the timing of recoveries. In addition, any such Person may update
or change its recoverability determinations at any time (but not reverse any
other Person’s determination that a Property Protection Advance is a
Nonrecoverable Advance). The determination by the Property Manager, the Back-Up
Manager or the Indenture Trustee, as the case may be, that it has made a
Property Protection Advance that is a Nonrecoverable Advance or that any
proposed Property Protection Advance, if made, would constitute a Nonrecoverable
Advance, or any updated or changed recoverability determination, shall be
conclusive and binding on the applicable Issuer, the Property Manager, the
Noteholders the Back-Up Manager and the Indenture Trustee. The Special Servicer
shall promptly furnish any party required to make Property Protection Advances
hereunder with any information in its possession regarding the Specially
Serviced Assets, as such party required to make Property Protection Advances may
reasonably request for purposes of making recoverability determinations.

 

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(h)          In making a nonrecoverability determination with respect to any P&I
Advance, the Property Manager (or, if applicable, the Indenture Trustee or the
Back-Up Manager as successor Property Manager) may only consider the obligations
of the Issuers under the terms of the Transaction Documents as they may have
been modified, the related Collateral in its “as is” or then current conditions
and the timing and availability of anticipated cash flows as modified by such
party’s assumptions regarding the possibility and effect of future adverse
changes, together with such other factors, including but not limited to an
estimate of future expenses, timing of recovery, the inherent risk of a
protracted period to complete liquidation or the potential inability to
liquidate Collateral as a result of intervening creditor claims or of a
bankruptcy proceeding affecting any Issuer and the effect thereof on the
existence, validity and priority of any security interest encumbering the
Collateral, the direct and indirect equity interests in the Issuers, available
cash on deposit in the Collection Account, the future allocations and
disbursements of cash on deposit in the Collection Account, and the net proceeds
derived from any of the foregoing. Any such determination shall be conclusive
and binding on the applicable Issuer, the Property Manager, the Noteholders, the
Back-Up Manager and the Indenture Trustee.

 

(i)          In the event any Advances made by the Property Manager or the
Indenture Trustee shall at any time be outstanding, or any amounts of interest
thereon shall be accrued and unpaid, all amounts available to repay Advances and
interest hereunder shall be applied first entirely to Advances made by the
Indenture Trustee (and the accrued and unpaid interest thereon) until such
Advances made by the Indenture Trustee (and the accrued and unpaid interest
thereon) shall have been repaid in full and then to Advances made by the
Property Manager (and the accrued and unpaid interest thereon). Any costs or
expenses in connection with any actions to be taken by the Property Manager or
Special Servicer pursuant to this paragraph shall be borne by the Property
Manager or Special Servicer, as applicable.

 

Section 3.04.         Withdrawals from the Collection Account.

 

The applicable Account Control Agreement, if any, shall provide that on each
Remittance Date, the Collection Account Bank shall deliver the Available Amount
by wire transfer of immediately available funds for deposit into the Payment
Account for application by the Indenture Trustee to make payments in accordance
with the priorities set forth pursuant to Section 2.11(b) of the Indenture. The
Property Manager may instruct the Indenture Trustee to withdraw funds from the
Collection Account to (i) on each Remittance Date, pay the Property Management
Fee, Back-Up Fee, Workout Fees, Liquidation Fees, Additional Servicing
Compensation, any applicable Special Servicing Fee due and payable to the
Property Manager, Back-Up Manager and Special Servicer, and to reimburse any
Advances (including Nonrecoverable Advances) plus interest thereon (including to
reimburse the Indenture Trustee therefor); (ii) on any date, pay any Emergency
Property Expenses (pursuant to Section 3.03(e)) and (iii) on any date, to remove
amounts deposited in the Collection Account in error; provided, however, that no
other amounts may be withdrawn from the Collection Account by the Property
Manager, except as otherwise provided in this Agreement. Funds withdrawn by the
Property Manager for any of the purposes set forth in clauses (i) through (iii)
above shall not constitute part of the Available Amount on any Payment Date.

 

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Section 3.05.         Investment of Funds in the Collection Account and the
Release Account.

 

(a)          The Property Manager shall direct the Collection Account Bank to
invest the funds held in the Collection Account in one or more Permitted
Investments bearing interest or sold at a discount, and maturing, unless payable
on demand, not later than the Business Day immediately preceding the next
succeeding Remittance Date, which may be in the form of a standing direction.
The Property Manager may direct any institution maintaining the Release Account
to invest the funds held therein in one or more specific Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
not later than the Business Day immediately preceding the day such amounts are
required to be distributed pursuant to this Agreement, which may be in the form
of a standing direction. The Property Manager may direct any institution
maintaining the Servicing Accounts with respect to Lease Security Deposits to
invest the funds held therein in one or more specific Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
not later than the Business Day immediately preceding the day such amounts are
required to be distributed pursuant to this Agreement, which may be in the form
of a standing direction. The Property Manager shall promptly deliver to the
Indenture Trustee, and the Indenture Trustee shall maintain continuous
possession of, any Permitted Investment that is either (i) a “certificated
security,” as such term is defined in the Uniform Commercial Code, or (ii) other
property in which a secured party may perfect its security interest by
possession under the Uniform Commercial Code or any other applicable law. If
amounts on deposit in the Collection Account, the Servicing Accounts or the
Release Account are at any time invested in a Permitted Investment payable on
demand, the Property Manager shall:

 

(i)          consistent with any notice required to be given thereunder, demand
that payment thereon be made on the last day such Permitted Investment may
otherwise mature hereunder in an amount equal to the lesser of (x) all amounts
then payable thereunder and (y) the amount required to be withdrawn on such
date; and

 

(ii)         demand payment of all amounts due thereunder promptly upon
determination by the Property Manager that such Permitted Investment would not
constitute a Permitted Investment in respect of funds thereafter on deposit in
the Collection Account, the Servicing Accounts or the Release Account, as
applicable.

 

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(b)          In the event that (i) any Issuer elects to remove a Property from
the Collateral Pool under Section 2.04, 7.01 or 7.04, or (ii) amounts in
connection with a Series Collateral Release are deposited into the Release
Account pursuant to Section 7.10(c) and the Indenture, in each case, amounts
deposited in the Release Account shall be applied by the Property Manager (or
the Indenture Trustee based solely on the instructions of the Property Manager
if the Property Manager is AF Properties), first, to reimburse the Property
Manager, the Special Servicer and the Indenture Trustee any amounts owed with
respect to unreimbursed Extraordinary Expenses, Advances (plus Advance Interest
thereon) and Emergency Property Expenses related to such Lease or Property and
to pay the expenses related to such release and, second, either to (i) allow any
Issuer to acquire a Qualified Substitute Property within twelve (12) months
following the removal of the related Released Property, or (ii) at the option of
the Property Manager, be deposited as Unscheduled Proceeds into the Collection
Account. Any amounts remaining in the Release Account following the twelve (12)
month period described in clause (i) above shall be transferred as Unscheduled
Proceeds into the Collection Account; provided, that only the related Allocated
Release Amount will be applied as Unscheduled Principal Payments. During an
Early Amortization Period, all amounts in the Release Account shall be deposited
as Unscheduled Proceeds into the Collection Account and will be applied on the
Payment Date following the commencement of such Early Amortization Period.

 

(c)          Whether or not the Property Manager directs the investment of funds
in the Collection Account, the Release Account or the Servicing Accounts,
interest and investment income realized on funds deposited therein, to the
extent of the Net Investment Earnings, if any, for the Collection Account, the
Servicing Accounts or the Release Account for each Collection Period, shall be
added to the Available Amount for such Collection Period. Except as provided in
Section 5.03(a), the Property Manager shall have no liability for any investment
of funds in the Collection Account, the Release Account or Servicing Accounts.

 

(d)          Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Indenture Trustee may take such action as may be appropriate to
enforce such payment or performance, including the institution and prosecution
of appropriate proceedings.

 

(e)          Notwithstanding the investment of funds held in the Collection
Account or the Release Account, for purposes of the calculations hereunder,
including the calculation of the Available Amount, the amounts so invested shall
be deemed to remain on deposit in the Collection Account or the Release Account,
as applicable.

 

(f)          Any actual losses sustained on the liquidation of a Permitted
Investment in the Collection Account or the Release Account shall be deposited
by the applicable Issuer (out of funds not otherwise subject to the lien of the
indenture) immediately, but in no event later than one (1) Business Day
following such liquidation, into the Collection Account or the Release Account,
as applicable.

 

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Section 3.06.         Maintenance of Insurance Policies: Errors and Omissions
and Fidelity Coverage.

 

(a)          The Property Manager (other than with respect to Specially Managed
Units) and the Special Servicer (with respect to Specially Managed Units) shall
use reasonable efforts in accordance with the Servicing Standard to cause the
related Tenant to maintain for each Property all insurance coverage as is
required under the terms of the related Lease (including for the avoidance of
doubt, any Environmental Policy or compliance with state insurance fund
requirements); provided, that if and to the extent that any such Lease permits
the lessor thereunder any discretion (by way of consent, approval or otherwise)
as to the insurance coverage that the related Tenant is required to maintain,
the Property Manager or the Special Servicer, as the case may be, shall exercise
such discretion in a manner consistent with the Servicing Standard. If such
Tenant does not maintain the required insurance or, with respect to any
Environmental Policy in place as of the related Series Closing Date or Transfer
Date, the Property Manager will itself cause such insurance to be maintained
with Qualified Insurers; provided, that the Property Manager shall not be
required to maintain such insurance if the Indenture Trustee (as mortgagee of
record on behalf of the Noteholders) does not have an insurable interest or the
Property Manager has determined, in its reasonable judgment in accordance with
the Servicing Standard, that either (i) such insurance is not available at a
commercially reasonable rate and the subject hazards are at the time not
commonly insured against by prudent owners of properties similar to the Property
located in or around the region in which such Property is located or (ii) such
insurance is not available at any rate. The cost of any such insurance coverage
obtained by either the Property Manager or the Special Servicer shall be a
Property Protection Advance to be paid by the Property Manager. All such
insurance policies shall contain (if they insure against loss to property) a
“standard” mortgagee clause, with loss payable to the Property Manager or an
Emergency Protection Expense (subject to the limitations in Section 3.03), as
agent of and for the account of the applicable Issuer and the Indenture Trustee,
and shall be issued by an insurer authorized under applicable law to issue such
insurance. Any amounts collected by the Property Manager or the Special Servicer
under any such policies (other than amounts to be applied to the restoration or
repair of the related Property or amounts to be released to the related Tenant,
in each case in accordance with the Servicing Standard) shall be deposited in
the Collection Account, subject to withdrawal pursuant to Section 2.11 of the
Indenture.

 

(b)          The Property Manager or Special Servicer may satisfy its
obligations under Section 3.06(a) by obtaining, maintaining or causing to be
maintained a blanket or forced place insurance policy. If applicable, the
Property Manager or the Special Servicer shall obtain and maintain, or cause to
be obtained and maintained on behalf of each applicable Issuer, a master forced
place insurance policy or a blanket policy (or an endorsement to an existing
policy) insuring against hazard losses (not otherwise insured by a Tenant due to
a default by such Tenant under the insurance covenants of its Lease or because a
Tenant permitted to self-insure fails to pay for casualty losses) on the
applicable Properties that it is required to service and administer, which
policy shall (i) be obtained from a Qualified Insurer having a claims-paying
ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A”
by S&P and (ii) provide protection equivalent to the individual policies
otherwise required under Section 3.06(a). The Property Manager and the Special
Servicer shall bear the cost of any premium payable in respect of any such
blanket policy without right of reimbursement; provided, that if the Property
Manager or the Special Servicer, as the case may be, causes any Property to be
covered by such blanket policy, the incremental costs of such insurance
applicable to such Property shall constitute, and be reimbursable as, a Property
Protection Advance to the extent that such blanket policy provides insurance
that the related Tenant has failed to maintain. If the Property Manager or
Special Servicer, as applicable, causes any Property to be covered by a
force-placed insurance policy, the incremental costs of such insurance
applicable to such Property (which shall not include any minimum or standby
premium payable for such policy whether or not any Property is covered thereby)
shall be paid as a Property Protection Advance. Such policy may contain a
deductible clause (not in excess of a customary amount) in which case the
Property Manager or the Special Servicer, as appropriate, shall, if there shall
not have been maintained on the related Property a hazard insurance policy
complying with the requirements of Section 3.06(a) and there shall have been one
or more losses that would have been covered by such policy, promptly deposit
into the Collection Account from its own funds the amount not otherwise payable
under the blanket policy in connection with such loss or losses because of such
deductible clause. The Property Manager or the Special Servicer, as appropriate,
shall prepare and present, on behalf of itself, the Indenture Trustee and the
applicable Issuer, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy. Any payments on such policy shall be
made to the Property Manager as agent of and for the account of the applicable
Issuer, the Noteholders and the Indenture Trustee.

 

 41 

 

 

(c)          Each of the Property Manager and the Special Servicer shall at all
times during the term of this Agreement (or, in the case of the Special
Servicer, at all times during the term of this Agreement in which Specially
Managed Units exist as part of the Collateral) keep in force with a Qualified
Insurer having a claims paying ability rated at least “A:VIII” by A.M. Best’s
Key Rating Guide and at least “A” by S&P, a fidelity bond in such form and
amount as would not adversely affect any rating assigned by any Rating Agency to
the Notes (as evidenced in writing from each Rating Agency; which, as of the
Initial Closing Date, shall be evidenced by the assignment of ratings to the
Notes on the Initial Closing Date). Each of the Property Manager and the Special
Servicer shall be deemed to have complied with the foregoing provision if an
Affiliate thereof has such fidelity bond coverage and, by the terms of such
fidelity bond, the coverage afforded thereunder extends to the Property Manager
or the Special Servicer, as the case may be. Such fidelity bond shall provide
that it may not be canceled without 10 days’ prior written notice to each
Issuer.

 

Each of the Property Manager and the Special Servicer shall at all times during
the term of this Agreement (or, in the case of the Special Servicer, at all
times during the term of this Agreement in which Specially Managed Units exist
as part of the Collateral) also keep in force with a Qualified Insurer having a
claims-paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide
and at least “A” by S&P, a policy or policies of insurance covering loss
occasioned by the errors and omissions of its officers, employees and agents in
connection with its servicing obligations hereunder, which policy or policies
shall be in such form and amount as would not adversely affect any rating
assigned by any Rating Agency to the Notes (as evidenced in writing from each
Rating Agency; which, as of the Initial Closing Date, shall be evidenced by the
assignment of ratings to the Notes on the Initial Closing Date). Each of the
Property Manager and the Special Servicer shall be deemed to have complied with
the foregoing provisions if an Affiliate thereof has such insurance and, by the
terms of such policy or policies, the coverage afforded thereunder extends to
the Property Manager or the Special Servicer, as the case may be. Any such
errors and omissions policy shall provide that it may not be canceled without 10
days’ prior written notice to each Issuer.

 

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The Back-Up Manager (whether as Back-Up Manager, Property Manager or Special
Servicer) shall at all times during the term of this Agreement maintain
insurance in conformity with market requirements and shall keep in force with a
Qualified Insurer having a claims paying ability rated by at least one of the
following Rating Agencies of at least (a) “A3” by Moody’s Investor Services,
Inc., (b) “A-” by S&P, (c) “A-” by Fitch Ratings Inc. or (d) “A:X” by A.M. Best
Company, Inc., (i) a fidelity bond (employee dishonesty insurance) in such form
and amount as is consistent with the Servicing Standard and (ii) a policy or
policies of insurance covering loss occasioned by the errors and omissions of
its officers and employees in connection with its servicing obligations
hereunder, which policy or policies shall be in such form and amount as is
consistent with the Servicing Standard. The Back-Up Manager shall cause any
awards or other amounts payable under such policy or policies that result from
the errors or omissions of its officers and employees in connection with its
servicing obligations hereunder to be promptly remitted to the Indenture Trustee
for application in accordance with the Indenture. The Back-Up Manager shall be
deemed to have complied with the foregoing provision if an Affiliate thereof has
such fidelity bond and/or errors and omissions coverage and, by the terms of
such fidelity bond and/or errors and omissions policy, the coverage afforded
thereunder extends to the Property Manager or the Special Servicer, as the case
may be.

 

Each of the Property Manager and the Special Servicer shall at all times during
the term of this Agreement (or, in the case of the Special Servicer, at all
times during the term of this Agreement in which Specially Managed Units exist
as part of the Collateral) also, on behalf of each Issuer, keep in force with a
Qualified Insurer having a claims-paying ability rated at least “A:VIII” by A.M.
Best’s Key Rating Guide and at least “A” by S&P, a lessor’s general liability
insurance policy or policies, which policy or policies shall be in such form and
amount as would not adversely affect any rating assigned by any Rating Agency to
the Notes without giving effect to any Insurance Policy (as evidenced in writing
from each Rating Agency; which, as of the Initial Closing Date, shall be
evidenced by the assignment of ratings to the Notes on the Initial Closing
Date). Any payments on such policy shall be made to the Property Manager as
agent of and for the account of any applicable Issuer and the Indenture Trustee.

 

If the Property Manager (or its corporate parent), the Special Servicer (or its
corporate parent) or the Back-Up Manager (or its corporate parent), as
applicable, are rated not lower than “A” by S&P, the Property Manager, the
Special Servicer or the Back-Up Manager, as applicable, may self-insure with
respect to any insurance coverage or fidelity bond coverage required hereunder,
in which case it shall not be required to maintain an insurance policy with
respect to such coverage; provided, that AF Properties may not self-insure with
respect to any such insurance coverage or fidelity bond.

 

Section 3.07.         DSCR Reserve Account.

 

On each Payment Date occurring during any DSCR Sweep Period, the Indenture
Trustee shall deposit funds into the DSCR Reserve Account in accordance with
Sections 2.11(b) and 2.18 of the Indenture. The DSCR Reserve Account shall be an
Eligible Account. The Property Manager shall deliver to the Indenture Trustee a
calculation of the Monthly DSCR on or before each Remittance Date. The Issuers
grant to the Indenture Trustee a first-priority perfected security interest in
the DSCR Reserve Account and any and all monies now or hereafter deposited in
the DSCR Reserve Account as additional security for payment of the Notes. Until
disbursed or applied in accordance herewith, the DSCR Reserve Account shall
constitute additional security for the Notes. Upon the occurrence of an Event of
Default, the Indenture Trustee may, in addition to any and all other rights and
remedies available to the Indenture Trustee, apply any sums then present in the
DSCR Reserve Account to the payment of the Notes in such order and priority as
set forth in the Indenture.

 

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Section 3.08.         Issuers, Custodian and Indenture Trustee to Cooperate;
Release of Lease Files.

 

(a)          If from time to time, and as appropriate for servicing of any
Lease, assumption of a Lease, modification of a Lease or the re-lease or sale of
any Property, the Property Manager or the Special Servicer shall otherwise
require the use of any Lease File (or any portion thereof), the Custodian shall
release such Lease File (or portion thereof) in accordance with Section 3.5 of
the Custody Agreement.

 

(b)          Within seven (7) Business Days of the Special Servicer’s request
therefor (or, if the Special Servicer notifies each Issuer and the Indenture
Trustee of an exigency, within such shorter period as is reasonable under the
circumstances), each of the applicable Issuer and the Indenture Trustee shall
execute and deliver to the Special Servicer, in the reasonable form supplied to
such Issuer and the Indenture Trustee by the Special Servicer, any court
pleadings, leases, sale documents or other documents reasonably necessary to the
re-lease, foreclosure or sale in respect of any Property or to any legal action
brought to obtain judgment against any Tenant on the related Lease or to obtain
a judgment against a Tenant, or to enforce any other remedies or rights provided
by the Lease or otherwise available at law or in equity or to defend any legal
action or counterclaim filed against such Issuer, the Property Manager or the
Special Servicer; provided that each of such Issuer and the Indenture Trustee
may alternatively execute and deliver to the Special Servicer, in the form
supplied to such Issuer and the Indenture Trustee by the Special Servicer, a
limited power of attorney substantially in the form of Exhibit A issued in favor
of the Special Servicer and empowering the Special Servicer to execute and
deliver any or all of such pleadings or documents on behalf of such Issuer or
the Indenture Trustee, as the case may be; provided, however, that neither the
applicable Issuer nor the Indenture Trustee shall be held liable for any misuse
of such power of attorney by the Special Servicer and the Special Servicer
hereby agrees to indemnify such Issuer and the Indenture Trustee against, and
hold such Issuer and the Indenture Trustee harmless from, any loss or liability
arising from any misuse of such power of attorney. Notwithstanding anything to
the contrary, the Special Servicer shall not, without the Indenture Trustee’s
written consent (i) initiate any action, suit or proceeding solely under the
Indenture Trustee’s name without indicating its representative capacity or (ii)
take any action with the primary purpose of causing, and which actually does
cause, the Indenture Trustee to be registered to do business in any state.
Together with such pleadings or documents (or such power of attorney empowering
the Special Servicer to execute the same on behalf of such Issuer and the
Indenture Trustee), the Special Servicer shall deliver to each of the applicable
Issuer and the Indenture Trustee an Officer’s Certificate requesting that such
pleadings or documents (or such power of attorney empowering the Special
Servicer to execute the same on behalf of such Issuer or the Indenture Trustee,
as the case may be) be executed by such Issuer or the Indenture Trustee and
certifying as to the reason such pleadings or documents are required.

 

(c)          With respect to those Leases it is obligated to service hereunder,
each of the Property Manager and the Special Servicer, on behalf of the Issuers
and the Indenture Trustee for the benefit of the holders of the Notes, shall
enforce the restrictions contained in the related Lease or in any other document
in the related Lease File on transfers or further encumbrances of the related
Property and on transfers of interests in the related Tenant, unless it has
determined, consistent with the Servicing Standard, that waiver of such
restrictions would be in accordance with the Servicing Standard. After having
made any such determination, the Property Manager or the Special Servicer, as
the case may be, shall deliver to the Indenture Trustee (and the Property
Manager in the case of the Special Servicer) an Officer’s Certificate setting
forth the basis for such determination. In connection with any assignment or
sublet by a Tenant of its interest under a Lease, the applicable Issuer shall
not take any action to release such Tenant from its obligations under such Lease
unless a new Tenant approved by such Issuer assumes the obligations under such
Lease and any applicable requirements set forth in the applicable Lease have
been satisfied.

 

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Section 3.09.         Property Management Compensation: Interest on Advances.

 

(a)          As compensation for its activities hereunder, the Property Manager
shall be entitled to receive the Property Management Fee with respect to each
Property included in the Collateral Pool (excluding the Specially Managed Units,
if any); provided, that, for so long as AF Properties is the Property Manager,
AF Properties shall waive the portion of the Property Management Fee that is in
excess of the amount to be paid to the Sub-Manager pursuant to the
Sub-Management Agreement; provided, further, that AF Properties may revoke such
waiver of the Property Management Fee at any time. As to each such Property, the
Property Management Fee shall accrue daily at the related Property Management
Fee Rate on the basis of the Allocated Loan Amount (as of the related
Determination Date) of each such Property. The Property Management Fee with
respect to any Property shall cease to accrue if the Property becomes a
Specially Managed Unit. The right to receive the Property Management Fee may not
be transferred in whole or in part except in connection with the transfer of all
of the Property Manager’s responsibilities and obligations under this Agreement.
Earned but unpaid Property Management Fees shall be distributable monthly on the
Payment Date by the Indenture Trustee from the Available Amount pursuant to
Section 2.11(b) of the Indenture.

 

(b)          On each Payment Date, the Property Manager shall be entitled to
receive, and the Indenture Trustee shall distribute to the Property Manager from
the Payment Account (to the extent deposited therein), the Property Manager
Additional Servicing Compensation, consisting of (i) all transaction, returned
check fees, assumption, modification and similar fees and late payment charges
received with respect to Properties that are not Specially Managed Units; and
(ii) any Default Interest collected on a Lease, but only to the extent that (x)
such Default Interest is allocable to the period (not to exceed 60 days) when
the related Property did not constitute a Specially Managed Unit and (y) such
Default Interest is not allocable to cover interest payable to the Property
Manager, the Back-Up Manager or the Indenture Trustee with respect to any
Advances made in respect of the related Property.

 

(c)          As compensation for its activities hereunder, the Special Servicer
shall be entitled to receive the Special Servicing Fee with respect to each
Specially Managed Unit; provided, that, for so long as AF Properties is the
Special Servicer, AF Properties shall waive the Special Servicing Fee; provided,
further, that AF Properties may revoke such waiver of the Special Servicing Fee
at any time. As to each Specially Managed Unit, the Special Servicing Fee shall
accrue daily from time to time at the Special Servicing Fee Rate on the basis of
the Allocated Loan Amount (as of the related Determination Date) of each such
Specially Managed Unit. The Special Servicing Fee with respect to any Specially
Managed Unit shall cease to accrue if (i) the related Property is sold or
exchanged for a Qualified Substitute Property or (ii) such Specially Managed
Unit becomes a Corrected Unit. Earned but unpaid Special Servicing Fees shall be
distributable monthly on the Payment Date by the Indenture Trustee from the
Available Amount pursuant to Section 2.11(b) of the Indenture. The Special
Servicer’s right to receive the Special Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of the Special
Servicer’s responsibilities and obligations under this Agreement.

 

 45 

 

 

(d)          On each Payment Date, the Special Servicer shall be entitled to
receive, and the Indenture Trustee shall distribute to the Special Servicer from
the Payment Account (to the extent deposited therein), the Special Servicer
Additional Servicing Compensation, consisting of (i) all returned check fees,
assumption, modification and similar fees and late payment charges received on
or collected from Tenants on the Specially Managed Units; and (ii) any Default
Interest collected on or with respect to a Specially Managed Unit, but only to
the extent that such Default Interest is not allocable to reimburse Property
Protection Advances cover interest payable to the Property Manager or the
Indenture Trustee with respect to any Advances made in respect of the related
Property.

 

(e)          Except as otherwise set forth herein, the Property Manager, Back-Up
Manager and the Special Servicer shall each be required to pay all ordinary
expenses incurred by it in connection with its servicing activities under this
Agreement, including fees of any subservicers retained by it; provided, however,
that the Property Manager or Special Servicer, in accordance with the Servicing
Standard and the terms of this Agreement, shall be permitted to engage third
party valuation experts and other consultants to conduct appraisals at the cost
of the Issuers. As and to the extent permitted by Section 2.11(b) of the
Indenture, the Property Manager and the Indenture Trustee shall each be entitled
to receive interest at the Reimbursement Rate in effect from time to time,
accrued on the amount of each Advance and unreimbursed Extraordinary Expenses
made by it for so long as such Advance is outstanding.

 

(f)          As compensation for its activities hereunder, the Back-Up Manager
shall be entitled to receive the monthly Back-Up Fee with respect to each
Property included in the Collateral Pool. The right to receive the monthly
Back-Up Fee may not be transferred in whole or in part except in connection with
the transfer of all of the Back-Up Manager’s responsibilities and obligations
under this Agreement. Earned but unpaid Back-Up Fees shall be payable monthly
pursuant to Section 2.11(b) of the Indenture. For so long as KeyBank is the Sub-
Manager, KeyBank hereby waives its right to receive the Back-Up Fee.

 

(g)          A Workout Fee shall be payable to the Special Servicer with respect
to each Corrected Unit. As to each such Corrected Unit, the “Workout Fee” will
be payable out of, and will be calculated by application of 0.50% to, each
collection of rents, interest (other than any default interest) and principal
(including scheduled payments, prepayments and payments at maturity) received on
the related Lease, so long as it remains a Corrected Unit; provided, that no
Workout Fee will be payable from any Liquidation Proceeds collected in
connection with (i) the purchase of any Specially Managed Unit by the Property
Manager or the Special Servicer or (ii) the purchase of any Specially Managed
Unit by the Support Provider due to a Collateral Defect within the period
provided to cure such Collateral Defect. The Workout Fee with respect to any
related Lease will cease to be payable if such Lease again becomes a Specially
Managed Unit or the Property Manager determines in its good faith and reasonable
judgement that a default in making a Monthly Lease Payment is likely to occur
within 30 days and is not likely to be remedied for 60 days and no such default
actually occurs or, if such default has occurred, is remedied within the 60 days
provided; provided, that a new Workout Fee will become payable if and when such
Lease again ceases to be a Specially Managed Unit. For so long as AF Properties
is the Special Servicer, AF Properties shall waive any Workout Fee; provided,
that AF Properties may revoke such waiver of any Workout Fee at any time.

 

 46 

 

  

(h)          A “Liquidation Fee” shall be payable to the Special Servicer with
respect to (i) each Lease or Property purchased by the Support Provider due to a
Collateral Defect if purchased after the applicable cure period, and shall equal
the product of (a) the purchase price with respect to any such purchase and (b)
the Liquidation Fee Rate, (ii) any Specially Managed Unit as to which the
Special Servicer obtains a full, partial or discounted payoff for some or all of
the Allocated Loan Amount of the Property from the related Tenant, and shall
equal the product of (a) the amount of such payoff and (b) the Liquidation Fee
Rate, or (iii) any Specially Managed Unit as to which the Special Servicer
recovered any Liquidation Proceeds, and shall equal the product of (i) the
amount of such Liquidation Proceeds and (ii) the Liquidation Fee Rate; provided,
that no Liquidation Fee will be payable from any Liquidation Proceeds collected
in connection with the purchase of any Specially Managed Unit by the Property
Manager or the Special Servicer. For so long as AF Properties is the Special
Servicer, AF Properties shall waive any Workout Fee; provided, that AF
Properties may revoke such waiver of any Workout Fee at any time.

 

Section 3.10.         Property Inspections; Collection of Financial Statements;
Delivery of Certain Reports.

 

(a)          The Property Manager shall obtain a physical inspection with
respect to each Property (i) whose FCCR is below 1.5x on an annual basis or (ii)
with respect to which the Property Manager has received notice from the Tenant
or has actual knowledge that the Tenant is a non-renewal or termination risk,
within a reasonable amount of time from receipt of such notice or knowledge. If
a Lease becomes a Specially Managed Unit, the Special Servicer shall perform or
obtain a physical inspection of the related Property within six (6) months after
such Property becomes a Specially Managed Unit.

 

(b)          Following the completion of a physical inspection pursuant to
Section 3.10(a), if applicable, the Property Manager or the Special Servicer, as
applicable, shall prepare a written report of each such inspection performed by
it. Such written report prepared by the Property Manager or the Special Servicer
or written report obtain by the Property Manager or the Special Servicer, as
applicable, shall set forth in detail the condition of the related Property and
that specifies the condition of the related Property and the existence of (i)
any sale, transfer or abandonment of such Property, or (ii) any material change
in the condition or value of such Property. The Special Servicer shall deliver
to each Issuer, the Back-Up Manager, the Indenture Trustee and the Property
Manager a copy of each such written report prepared by it during each calendar
quarter within 15 days of the completion of each such inspection.

 

(c)          The Special Servicer (i) shall receive reimbursement for reasonable
out-of-pocket expenses related to any Property inspections and (ii) shall be
entitled to a reasonable inspection fee for any such inspection, in each case
from the applicable Issuer pursuant to Section 2.11(b) of the Indenture.

 

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(d)          The Special Servicer, in the case of any Specially Managed Unit,
and the Property Manager, in the case of all other Leases, shall make reasonable
efforts to collect promptly from each related Tenant and review annual and
quarterly financial statements of such Tenant and the Properties it operates as
the same are required to be delivered by the Tenant to the applicable Issuer
under its Lease.

 

Section 3.11.         Statements as to Compliance.

 

Each of the Property Manager and the Special Servicer shall deliver to the
Issuers, the Indenture Trustee and, in the case of the Special Servicer, the
Property Manager, within 60 days after the end of the first three calendar
quarters of each year and within 120 days after the end of the fiscal year, an
Officer’s Certificate stating, as to each signer thereof, that (i) a review of
the activities of the Property Manager and the Special Servicer throughout the
preceding reporting period, and of its performance under this Agreement, has
been made under such officer’s supervision, and (ii) to the best of such
officer’s knowledge, based on such review, the Property Manager or the Special
Servicer, as the case may be, complied in all material respects throughout such
period with the minimum servicing standards in this Agreement and fulfilled in
all material respects throughout such period its obligations under this
Agreement or, if there was noncompliance with such standards or a default in the
fulfillment of any such obligation in any material respect, such Officer’s
Certificate shall include a description of such noncompliance or specify each
such default, as the case may be, known to such officer and the nature and
status thereof.

 

Section 3.12.         Reports by Independent Public Accountants.

 

On or before September 30 of each year, beginning September 30, 2020, each of
the Property Manager and the Special Servicer, at its expense, shall cause an
independent, registered public accounting firm (which may also render other
services to the Property Manager or the Special Servicer, as the case may be) to
furnish to each Issuer and the Indenture Trustee and, in the case of the Special
Servicer, to the Property Manager, a report containing such firm’s opinion that,
on the basis of an examination conducted by such firm substantially in
accordance with standards established by the American Institute of Certified
Public Accountants, the assertion made pursuant to Section 3.11 regarding
compliance by the Property Manager or the Special Servicer, as the case may be,
with the minimum servicing standards identified in the Uniform Single
Attestation Program for Mortgage Bankers (to the extent applicable to the
servicing obligations set forth in this Agreement) during the preceding calendar
year (or from the date hereof through August 30, 2020, in the case of the first
such report) is fairly stated in all material respects, subject to such
exceptions and other qualifications that, in the opinion of such firm, such
institute’s standards require it to report. In rendering such statement, such
firm may rely, as to matters relating to direct servicing of Leases by
Sub-Managers, upon comparable reports for examinations conducted substantially
in accordance with such institute’s standards (rendered within one year of such
report) of independent public accountants with respect to the related
Sub-Managers.

 

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Section 3.13.         Access to Certain Information; Delivery of Certain
Information.

 

(a)          Each of the Property Manager and the Special Servicer shall afford
to the other, to the Issuers, the Indenture Trustee, the Back-Up Manager and the
Rating Agencies and to the Federal Deposit Insurance Corporation and any other
banking or insurance regulatory authority that may exercise authority over any
Noteholder or holder of Issuer Interests, reasonable access to any documentation
regarding the Leases and Properties and its servicing thereof within its
control, except to the extent it is prohibited from doing so by applicable law,
rule or regulation or contract or to the extent such information is subject to a
privilege under applicable law to be asserted on behalf of an Issuer, the
Noteholders or the holders of Issuer Interests. Such access shall be afforded
without charge but only upon reasonable prior written request and during normal
business hours at the offices of the Property Manager or the Special Servicer,
as the case may be, designated by it.

 

(b)          The Property Manager or the Special Servicer shall notify the
Indenture Trustee and the Back-Up Manager of any Property whose Tenant has
ceased to exercise its business activity on such Property within 30 days of
becoming aware of such a circumstance.

 

Section 3.14.         Management of Properties Relating to Defaulted Assets.

 

(a)          At any time that a Property is not subject to a Lease or is subject
to a Lease that is (or relates to) a Defaulted Asset, the Special Servicer’s
decision as to how such Property shall be managed and operated shall be based on
the good faith and reasonable judgment of the Special Servicer as to the best
interest of the applicable Issuer and the Noteholders by maximizing (to the
extent commercially feasible) the net after-tax revenues received by the
applicable Issuer with respect to such property and, to the extent consistent
with the foregoing, in the same manner as would commercial lease servicers and
asset managers operating property comparable to the respective Property under
the Servicing Standard. The applicable Issuer, the Indenture Trustee and the
Special Servicer may consult with counsel at the expense of the applicable
Issuer in connection with determinations required under this Section 3.14(a).
None of the Indenture Trustee, the Property Manager or the Special Servicer
shall be liable to any Issuer, the Noteholders, the other parties hereto or each
other, nor shall any Issuer be liable to any Noteholders or to the other parties
hereto, for errors in judgment made in good faith in the exercise of their
discretion while performing their respective responsibilities under this
Section 3.14(a). Nothing in this Section 3.14(a) is intended to prevent the
sale, release or re-lease of a Property pursuant to the terms and conditions
contained elsewhere in this Agreement.

 

(b)          With respect to any Property not subject to a Lease, the Special
Servicer shall manage, conserve, protect and operate such Property for the
benefit of the Issuers in accordance with the Servicing Standard. Subject to the
foregoing, however, the Special Servicer shall have full power and authority to
do any and all things in connection therewith as are consistent with the
Servicing Standard and, consistent therewith, shall direct that the Property
Manager make, and the Property Manager shall make, Property Protection Advances,
or pay Emergency Property Expenses from funds on deposit in the Collection
Account, necessary for the proper operation, management, maintenance and
disposition of such Property to the extent required pursuant to Section 3.03.

 

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(c)          The Special Servicer shall submit requests to make Property
Protection Advances to the Property Manager not more than once per month unless
the Special Servicer determines on an emergency basis in accordance with the
Servicing Standard that earlier payment is required to protect the interests of
each Issuer and the Noteholders. If the Property Manager fails to make any
Property Protection Advance pursuant to this Section 3.14(b), the Back-Up
Manager and the Indenture Trustee will have the same obligation to advance as
described in Section 3.03(c). Notwithstanding the foregoing, none of the
Property Manager, the Back-Up Manager or the Indenture Trustee shall have any
obligation to make any such Property Protection Advance if (as evidenced by an
Officer’s Certificate delivered to the applicable Issuer and the Indenture
Trustee) if such party determines, in accordance with the Servicing Standard,
that such payment would be a Nonrecoverable Advance.

 

Section 3.15.         Release, Sale and Exchange of Defaulted Assets and
Terminated Lease Properties.

 

(a)          Subject to any additional requirements set forth in any applicable
Series Supplement, the Property Manager, the Special Servicer and the applicable
Issuer may sell or purchase, or permit the release, sale or purchase of, a
Property only on the terms and subject to the conditions set forth in this
Section 3.15 and Section 7.07 or as otherwise expressly provided in or
contemplated by Section 2.04 and Article VII or elsewhere in this Agreement.

 

(b)          The Special Servicer and the Property Manager, as applicable, shall
exercise reasonable efforts, to the extent consistent with the Servicing
Standard, to enforce remedies with respect to a Defaulted Asset, including,
without limitation, the commencement and prosecution of any eviction or
foreclosure proceedings, as to which no satisfactory arrangements can be made
for collection of delinquent payments. In the event any Property becomes a
Terminated Lease Property, the Special Servicer shall use reasonable efforts,
consistent with the Servicing Standard, to (i) with respect to such Terminated
Lease Property, attempt to induce another Tenant to assume the obligations under
the existing Lease, with or without modification, (ii) lease the Terminated
Lease Property under a new Lease on economically desirable terms or (iii)
dispose of such Property. The decision to enter into a lease assumption or
re-lease the Terminated Lease Property shall be made by the Special Servicer in
accordance with the Servicing Standard. The Special Servicer shall pay all costs
and expenses (other than costs or expenses that would, if incurred, constitute a
Nonrecoverable Advance) incurred by it in connection with the foregoing as a
Property Protection Advance, and shall be entitled to reimbursement therefor as
provided herein. If the Special Servicer is successful in leasing the Terminated
Lease Property, a new Appraised Value will be obtained by the Special Servicer
for the Terminated Lease Property in the Special Servicer’s discretion, and the
costs of any such appraisal shall be a Property Protection Advance. If the
Special Servicer leases any Terminated Lease Property, the Property Manager
shall deliver to the applicable Rating Agency, the Indenture Trustee and the
Issuers an amended Property Schedule reflecting the addition of such Lease to
the Collateral Pool. Monthly Lease Payments on the modified or new Lease will be
applied pursuant to the Indenture. For the avoidance of doubt, if the Special
Servicer determines that a lease assumption with modification, or re-lease, of a
Defaulted Asset would maximize revenue received by the related Issuer, and the
terms of such new lease will produce rent that is 60% or less than the rent from
the Defaulted Asset, then the Special Servicer shall enter into any such lease
for no more than 10 years, so long as the Special Servicer determines that
entering into such reduced lease term would be in accordance with the Servicing
Standard and in the best interests of the Noteholders.

 

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(c)          If the Lease has not been assumed or the Terminated Lease Property
has not been leased to a new tenant and the Terminated Lease Property has not
been released from the lien of the Mortgage pursuant to Section 3.15(h) below
within twenty-four (24) months of becoming a Terminated Lease Property, the
Special Servicer may offer to sell the Terminated Lease Property pursuant to
this Section 3.15, for a fair price, free and clear of the lien of the related
Mortgage, if and when the Special Servicer determines, consistent with the
Servicing Standard, that such a sale would be in the best interests of the
Noteholders. No Interested Person shall be obligated to submit a bid to purchase
any such Terminated Lease Property. The Liquidation Proceeds shall be deposited
into the Collection Account and applied as set forth herein.

 

(d)          If and when the Special Servicer deems it necessary and prudent for
purposes of establishing a fair price for any Terminated Lease Property for
purposes of conducting a sale of such Terminated Lease Property pursuant to
subsection (c) above, the Special Servicer is authorized to have an appraisal
conducted by an Independent MAI-designated appraiser or other expert (the cost
of which appraisal shall constitute a Property Protection Advance).

 

(e)          Whether any cash bid constitutes a fair price for any Terminated
Lease Property for purposes of Section 3.15(c) shall be determined by the
Special Servicer or, if such cash bid is from an Interested Person, by the
Indenture Trustee or, if the expected Liquidation Proceeds with respect to such
Terminated Lease Property would be insufficient to provide reimbursement for all
unreimbursed Advances made with respect to the subject Terminated Lease
Property, together with any related Advance Interest thereon, by the Property
Manager. In determining whether any bid received from an Interested Person
represents a fair price for any Terminated Lease Property, the Indenture Trustee
shall be supplied with and may conclusively rely on the most recent appraisal
conducted in accordance with Section 3.15(d) within the preceding 12-month
period or, in the absence of any such appraisal, on a narrative appraisal
prepared by an Independent MAI-designated appraiser or other expert retained by
the Special Servicer, at Issuer’s cost or as a Property Protection Advance. Such
appraiser shall be selected by the Special Servicer if the Special Servicer is
not bidding with respect to a Terminated Lease Property and shall be selected by
the Property Manager if the Special Servicer is bidding, provided that if the
Property Manager and the Special Servicer are the same Person and such Person is
bidding, then such appraiser shall be selected by the Indenture Trustee. In
determining whether any bid constitutes a fair price for any such Terminated
Lease Property, the Special Servicer, the Indenture Trustee (if applicable) or
the Property Manager, as applicable, shall take into account, among other
factors, the occupancy status and physical condition of the Terminated Lease
Property, the state of the local economy, and, with respect to Terminated Lease
Properties, the period and amount of any delinquency on the effected Lease. In
connection therewith, the Special Servicer may charge prospective bidders fees
that approximate the Special Servicer’s actual costs in the preparation and
delivery of information pertaining to such sales or evaluating bids without
obligation to deposit such amounts into the Collection Account.

 

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(f)          The Special Servicer shall act on behalf of the applicable Issuer
and the Indenture Trustee in negotiating and taking any other action necessary
or appropriate in connection with the sale of any Terminated Lease Property and
the collection of all amounts payable in connection therewith. The Special
Servicer shall take such actions as it determines in accordance with the
Servicing Standard will be in the best interests of the applicable Issuer and
the Indenture Trustee on behalf of the Noteholders. Any sale of a Terminated
Lease Property shall be free and clear of the lien of the Indenture and shall be
final and without recourse to the applicable Issuer or the Indenture Trustee. If
such sale is consummated in accordance with the terms of this Agreement, none of
the Property Manager, the Special Servicer or the Indenture Trustee shall have
any liability to any Issuer or any Noteholder with respect to the purchase price
therefor accepted by the Property Manager, the Special Servicer or the Indenture
Trustee, as the case may be.

 

(g)          The Special Servicer shall accept the first (and, if multiple bids
are received contemporaneously, highest) cash bid received from any Person that
constitutes a fair price for such Terminated Lease Property. Notwithstanding the
foregoing, the Special Servicer shall not be obligated to accept the highest
cash bid if the Special Servicer determines, in accordance with the Servicing
Standard, that rejection of such bid would be in the best interests of the
Noteholders, and the Special Servicer may accept a lower cash bid if it
determines, in accordance with the Servicing Standard, that acceptance of such
bid would be in the best interests of the Noteholders (for example, if the
prospective buyer making the lower bid is more likely to perform its obligations
or the terms offered by the prospective buyer making the lower bid are more
favorable).

 

(h)          At any time that a Terminated Lease Property has not already been
sold or leased pursuant to the terms hereof, the related Issuer may at its
option (i) release the lien of the Indenture and the related Mortgage from such
Terminated Lease Property pursuant to Section 7.04 or (ii) exchange one or more
Qualified Substitute Properties for the subject Terminated Lease Property
pursuant to Section 7.01.

 

(i)          The Special Servicer shall, and is hereby authorized and empowered
by the Issuers and the Indenture Trustee to, prepare, execute and deliver in its
own name, on behalf of the Issuers and the Indenture Trustee or any of them, the
endorsements, assignments and other documents necessary to effectuate a sale of
a Terminated Lease Property pursuant to this Section 3.15, and the Issuers and
the Indenture Trustee shall execute and deliver any limited powers of attorney
substantially in the form of Exhibit A necessary to permit the Special Servicer
to do so; provided, however, that none of the Issuers, the Issuer Members or the
Indenture Trustee shall be held liable for any misuse of any such power of
attorney by the Special Servicer and the Special Servicer hereby agrees to
indemnify the Issuers, the Issuer Members and the Indenture Trustee against, and
hold the Issuers, the Managers and the Indenture Trustee harmless from, any loss
or liability arising from any misuse in the exercise of such power of attorney.

 

(j)          The Special Servicer shall give the applicable Issuer, the
Indenture Trustee and the Property Manager not less than five (5) Business Days’
prior written notice of its intention to sell any Terminated Lease Property
pursuant to this Section 3.15.

 

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Section 3.16.         Renewals, Modifications, Waivers, Amendments; Consents and
Other Matters.

 

(a)          The applicable Issuer and the Property Manager may enter into
renewals of Leases and new Leases that provide for rental rates comparable to
existing local market rates and are on commercially reasonable terms. All Leases
executed after the Initial Closing Date shall provide that they are subordinate
to the Mortgage encumbering the applicable Property and that the lessee agrees
to attorn to the Indenture Trustee or any purchaser at a sale by foreclosure or
power of sale. The Indenture Trustee shall, at the request of the related Issuer
or the Property Manager, enter into an SNDA with the Tenant under a Lease to the
extent such Lease does not contain provisions subordinating such Lease to the
lien of the related Mortgage and requiring the related Tenant to attorn and
recognize the holders of the beneficial interests under such Mortgage or such
other party as may acquire title to the related Property by foreclosure,
deed-in-lieu thereof or otherwise. The Property Manager shall observe and
perform the obligations imposed upon the lessor under the Leases in accordance
with the Servicing Standard. The applicable Issuer shall execute and deliver, or
cause to be executed and delivered, at the request of any party hereto all such
further assurances, confirmations and assignments in connection with the Leases
as may be required by such party.

 

(b)          Except as specifically set forth herein, the Property Manager
shall: (i) not (A) amend or modify in any material respect, or terminate (other
than in connection with a bona fide default by the Tenant thereunder beyond any
applicable notice or grace period or with respect to the Lease Transfer
Properties) any Lease; provided, however, a reduction in rent with respect to a
Lease will not be deemed to be a material modification if (1) the Monthly Lease
Payment following such reduction is consistent with market prices for similar
leases, (2) such reduction is in exchange for an extended lease term and (3) the
Property Manager reasonably determines that such modification will not
materially and adversely affect the interests of the applicable Issuer, (B)
unless permitted by the related Lease and remitted and initiated thereunder by
the related Tenant, collect rents more than one (1) month in advance (other than
security deposits), or (C) execute any other Tenant assignment; and (ii) execute
and deliver all such further assurances, confirmations and assignments as the
Indenture Trustee shall reasonably require.

 

(c)          Notwithstanding the foregoing:

 

(i)          Each of the Issuers, the Property Manager and the Special Servicer
may, consistent with the Servicing Standard, agree to any modification, waiver
or amendment of any term of, forgive any payment on, and permit the release of
the Tenant on or any Lease Guarantor, and approve of the assignment of a
Tenant’s interest in its Lease or the sublease of all or a portion of a Property
(each, an “Amendment”) without the consent of the Indenture Trustee, the Back-Up
Manager, any Noteholder or any other Person, provided that the Property Manager
certifies to the Indenture Trustee that:

 

(A)         such Amendment is entered into for a commercially reasonable purpose
in an arm’s-length transaction on market terms; and

 

(B)         subject to the provisions below, such Amendment shall not cause the
Monthly DSCR to be less than 1.35; and

 

(C)         in the reasonable judgment of the party agreeing to the Amendment,
such Amendment is in the best interest of the Noteholders and (other than in
connection with a Tenant default or with respect to Lease Transfer Properties)
will not have an adverse effect on the Collateral Value of the related Property;

 

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provided, that any such Amendment (x) in connection with a Delinquent Asset or
Defaulted Asset, (y) that is required by the terms of the applicable Lease or
(z) with respect to which the Rating Condition is satisfied, shall not be
subject to the foregoing restrictions set forth in (A), (B) or (C) above.

 

Any Amendment that would cause the Monthly DSCR to fall below 1.35 shall require
the approval of the Property Manager, if the Property Manager is not also the
Special Servicer, in accordance with the Servicing Standard after notice thereof
to the Indenture Trustee and Back-Up Manager. In the event that Property Manager
shall fail to respond to any request for approval hereunder within such ten (10)
Business Day period, the applicable Issuer may send a second notice, which shall
state in capitalized, bold faced 16 point type at the top of the first page
that: “If the Property Manager fails to approve or disapprove the proposed
Amendment within ten (10) Business Days, the Amendment shall be deemed approved,
and if the Property Manager shall fail to respond to such second request within
such ten (10) Business Day period, the Amendment shall be deemed approved by the
Property Manager.”

 

(ii)         Any Amendment (A) in connection with a bona fide default by the
Tenant, (B) that is required by the terms of any Lease or is solely within any
Tenant’s control or (C) with respect to which the Rating Condition is satisfied,
shall not be subject to the foregoing terms of this Section 3.16. The Property
Manager or Special Servicer shall endeavor to cause the costs related to
requesting and receiving any such Rating Condition to be paid by the Tenant;
provided, that if the Property Manager or the Special Servicer is unable to
cause the Tenant to pay such expenses, such expenses shall constitute an
Extraordinary Expense of the Issuers. Regardless of whether any Amendment is
material or not, the Property Manager will give the Indenture Trustee prompt
written notice thereof and shall indicate whether such action is being taken
pursuant to the preceding sentence and upon request will deliver a copy of any
documents executed in connection therewith to the Rating Agencies and the
Indenture Trustee.

 

(iii)        To the extent that the applicable Issuer is not entitled, under the
terms of any Lease, to withhold its consent to an assignment, subletting or
assumption thereunder, the granting of such consent shall not be restricted by
this Section 3.16.

 

(iv)        The limitations, conditions and restrictions set forth in Section
3.16(c)(i) above shall not apply to any Lease with respect to which there exists
a bona fide default by the related Tenant, any Amendment or other action with
respect to any Lease that is required under the terms of such Lease or that is
solely within the control of the related Tenant.

 

(v)         Neither the Property Manager nor the Special Servicer shall be
required to oppose the confirmation of a plan in any bankruptcy or similar
proceeding involving a Tenant if in their reasonable and good faith judgment
such opposition would not ultimately prevent the confirmation of such plan or
one substantially similar.

 

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(vi)        The limitations, conditions and restrictions set forth in Section
3.16(c)(i) above shall not apply to the Property Manager’s or the Special
Servicer’s ability to terminate a Lease in accordance with the terms thereof.

 

(d)          The Property Manager and the Special Servicer shall have no
liability to the Issuers, the Indenture Trustee, the Noteholders or to any other
Person if its analysis and determination that the Amendment or other action
contemplated by Section 3.16(c) would not materially reduce the likelihood of
timely payment of amounts due thereon, or that such Amendment or other action is
reasonably likely to produce a greater recovery to the related Issuer on a
present value basis than would liquidation, should prove to be wrong or
incorrect, so long as the analysis and determination were made on a reasonable
basis in accordance with the Servicing Standard in good faith by the applicable
Issuer, the Property Manager or the Special Servicer, as the case may be.

 

(e)          The Property Manager and the Special Servicer each may, as a
condition to its granting any request by a Tenant for consent, modification,
waiver or indulgence or any other matter or thing, the granting of which is
within the Property Manager’s or Special Servicer’s, as the case may be,
discretion pursuant to the terms of the instruments evidencing or securing the
related Lease and is permitted by the terms of this Agreement, require that such
Tenant, to the extent permitted by the subject Lease, or, if not so permitted,
the related Issuer, pay to the Property Manager or Special Servicer, as
applicable, as additional servicing compensation a reasonable or customary fee
for the additional services performed in connection with such request, together
with any related costs and expenses incurred by it.

 

(f)          All modifications, waivers, amendments and other actions entered
into or taken in respect of a Lease pursuant to this Section 3.16 shall be in
writing. Each of the Property Manager and the Special Servicer shall notify the
other such party and each Issuer, the Back-Up Manager, the applicable Rating
Agencies and the Custodian, in writing, of any modification, waiver, amendment
or other action entered into or taken in respect of any Lease pursuant to this
Section 3.16 and the date thereof, and shall deliver to the Custodian for
deposit in the related Lease File an original counterpart of the agreements
relating to such modification, waiver, amendment or other action, promptly (and
in any event within ten (10) Business Days) following the execution thereof. In
addition, following any Amendment or other action agreed to by the Property
Manager or the Special Servicer pursuant to Section 3.16(c) above, the Property
Manager or the Special Servicer, as the case may be, shall deliver to each
Issuer, to the Indenture Trustee and, in the case of the Special Servicer, to
the Property Manager, an Officer’s Certificate certifying compliance with such
subsection (c).

 

(g)          From time to time, subject to the Servicing Standard, the Property
Manager or Special Servicer, as applicable, shall be entitled (on behalf of the
Issuer and the Indenture Trustee) to release an immaterial portion of any
Property that it is then administering from the lien of the Indenture and the
Mortgage (and simultaneously release the Issuer’s interest in such portion of
such Property) or consent to, or make, an immaterial modification with respect
to any Property that it is then administering; provided, that, such Property
Manager or Special Servicer shall have delivered an Officer’s Certificate to the
Indenture Trustee (upon which the Indenture Trustee shall be entitled to
conclusively rely) that it reasonably believes that such release or modification
(both individually and collectively with any other similar releases or
modifications with respect to such Property) will not materially adversely
affect (i) the Appraised Value of such Property or (ii) the Noteholders’ or the
holders’ of the Related Series Notes interests in such Property. Following the
Indenture Trustee’s receipt of such Officer’s Certificate, the Indenture Trustee
shall execute and deliver such instruments of release, transfer or assignment,
in each case without recourse, as shall be provided to it and are reasonably
necessary to effect such release or modification.

 

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Section 3.17.         Transfer of Servicing Between Property Manager and Special
Servicer; Record Keeping.

 

(a)          Upon determining that a Servicing Transfer Event has occurred with
respect to any Lease and if the Property Manager is not also the Special
Servicer, the Property Manager shall immediately give notice thereof, and shall
deliver the related Servicing File, to the Special Servicer, the Indenture
Trustee and the Back-Up Manager and shall provide the Special Servicer with all
information, documents (or copies thereof) and records (including records stored
electronically on computer tapes, magnetic discs and the like) relating to such
Lease and reasonably requested by the Special Servicer to the extent in Property
Manager’s possession, to enable it to assume its functions hereunder with
respect thereto without acting through a Sub-Manager. The Property Manager shall
use its best efforts to comply with the preceding sentence within five (5)
Business Days of its receipt of Special Servicer’s request following the
occurrence of each related Servicing Transfer Event.

 

Upon determining that a Specially Managed Unit has become a Corrected Unit and
if the Property Manager is not also the Special Servicer, the Special Servicer
shall immediately give notice thereof, and shall return the related Servicing
File, to the Property Manager and, upon giving such notice and returning such
Servicing File, to the Property Manager, (i) the Special Servicer’s obligation
to service such Lease shall terminate, (ii) the Special Servicer’s right to
receive the Special Servicing Fee with respect to such Lease shall terminate and
(iii) the obligations of the Property Manager to service and administer such
Lease shall resume, in each case, effective as of the first day of the calendar
month following the calendar month in which such notice was delivered and
effected.

 

(b)          In servicing any Specially Managed Unit, the Special Servicer shall
provide to the Custodian, for the benefit of the Indenture Trustee, originals of
documents included within the definition of “Lease File” for inclusion in the
related Lease File (with a copy of each such original to the Property Manager)
to the extent any such documents come into its possession, and copies of any
additional related Lease information, including correspondence with the related
Tenant.

 

(c)          Notwithstanding anything in this Agreement to the contrary, in the
event that the Property Manager and the Special Servicer are the same Person,
all notices, certificates, information and consents required to be given by the
Property Manager to the Special Servicer or vice versa shall be deemed to be
given without the necessity of any action on such Person’s part.

 

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Section 3.18.         Sub-Management Agreements.

 

(a)          The Property Manager and the Special Servicer may enter into
Sub-Management Agreements to provide for the performance by third parties of any
or all of their respective obligations hereunder; provided, that, in each case,
the Sub-Management Agreement: (i) is consistent with this Agreement in all
material respects and requires the Sub-Manager to comply with all of the
applicable conditions of this Agreement; (ii) provides that if the Property
Manager or the Special Servicer, as the case may be, shall for any reason no
longer act in such capacity hereunder (including by reason of a Servicer
Replacement Event), the Back-Up Manager (or if the Back-Up Manager is then
terminated and another successor has not been named, the Indenture Trustee) may
thereupon assume all of the rights and, except to the extent they arose prior to
the date of assumption, obligations of the Property Manager or the Special
Servicer, as the case may be, under such agreement or, alternatively, may
terminate such Sub-Management Agreement without cause and without payment of any
penalty or termination fee; (iii) provides that each Issuer, the Back-Up
Manager, the Indenture Trustee, the other parties hereto and, as and to the
extent provided herein, the third party beneficiaries hereof shall be third
party beneficiaries under such agreement, but that (except to the extent the
Indenture Trustee, Back-Up Manager or their respective designees assume the
obligations of the Property Manager or the Special Servicer, as the case may be,
thereunder as contemplated by the immediately preceding clause (ii) and, in such
case, only from the date of such assumption) none of any Issuer, the Indenture
Trustee, the Back-Up Manager, any other party hereto, any successor Property
Manager or Special Servicer, as the case may be, any Noteholder or holder of
Issuer Interests or any other third party beneficiary hereof shall have any
duties under such agreement or any liabilities arising therefrom; (iv) permits
any purchaser of a Property pursuant to this Agreement to terminate such
agreement with respect to such purchased Property at its option and without
penalty; (v) does not permit the Sub-Manager to enter into or consent to any
modification, waiver or amendment or otherwise take any action on behalf of the
Property Manager or Special Servicer, as the case may be, contemplated by
Section 3.16 hereof without the written consent of the Property Manager or
Special Servicer, as the case may be; and (vi) does not permit the Sub-Manager
any rights of indemnification that may be satisfied out of the Collateral (it
being understood that any Sub-Manager shall be entitled to recover amounts in
respect of Property Protection Advances as described in the following
paragraph). In addition, each Sub-Management Agreement entered into by the
Property Manager shall provide that such agreement shall terminate with respect
to any Lease and Property serviced thereunder at the time such Property becomes
a Specially Managed Unit, and each Sub-Management Agreement entered into by the
Special Servicer shall relate only to Specially Managed Units and shall
terminate with respect to any such Property that ceases to be a Specially
Managed Unit.

 

The Property Manager and the Special Servicer shall each deliver to each Issuer
and the Indenture Trustee copies of all Sub-Management Agreements, and any
amendments thereto and modifications thereof, entered into by it promptly upon
its execution and delivery of such documents. References in this Agreement to
actions taken or to be taken by the Property Manager or the Special Servicer
include actions taken or to be taken by a Sub-Manager on behalf of the Property
Manager or the Special Servicer, as the case may be, and in connection
therewith, all amounts advanced by any Sub-Manager to satisfy the obligations of
the Property Manager or Special Servicer hereunder to make Advances shall be
deemed to have been advanced by the Property Manager or Special Servicer out of
its own funds and, accordingly, such Advances shall be recoverable by such
Sub-Manager in the same manner and out of the same funds as if such Sub-Manager
were the Property Manager or Special Servicer. For so long as they are
outstanding, Advances shall accrue Advance Interest in accordance with Sections
3.09(e), such interest to be allocable between the Property Manager and such
Sub-Manager as they may agree. For purposes of this Agreement, the Property
Manager and the Special Servicer each shall be deemed to have received any
payment, and shall be obligated to handle such payment in accordance with the
terms of this Agreement, when a Sub-Manager retained by it receives such
payment. The Property Manager and the Special Servicer each shall notify the
other, each Issuer, the Indenture Trustee and the Back-Up Manager in writing
promptly of the appointment by it of any Sub-Manager.

 

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(b)          The Property Manager shall have determined to its commercially
reasonable satisfaction that each Sub-Manager is authorized to transact
business, and has obtained all necessary licenses and approvals, in each
jurisdiction in which the failure to be so authorized or qualified or to have
obtained such licenses would adversely affect such Sub-Manager’s ability to
carry out its obligations under the Sub-Management Agreement to which it is a
party.

 

(c)          The Property Manager and the Special Servicer, for the benefit of
each Issuer, shall (at no expense to an Issuer or the Indenture Trustee) monitor
the performance and enforce the obligations of their respective Sub-Managers
under the related Sub-Management Agreements. Such enforcement, including the
legal prosecution of claims, termination of Sub-Management Agreements in
accordance with their respective terms and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Property Manager or the Special Servicer, as applicable, in its good
faith and reasonable judgment, would require were it the owner of the
Properties. Subject to the terms of the related Sub-Management Agreement, the
Property Manager and the Special Servicer shall each have the right to (in its
sole discretion and without the consent of any other person) remove a
Sub-Manager retained by it at any time it considers such removal to be in the
best interests of each Issuer.

 

(d)          In the event that the Back-Up Manager has succeeded to the rights
and assumed the obligations hereunder of the Property Manager or the Special
Servicer, then the Back-Up Manager shall succeed to the rights and assume the
obligations of the Property Manager or the Special Servicer, as applicable,
under any Sub-Management Agreement, unless the Back-Up Manager or the Indenture
Trustee elects to terminate any such Sub-Management Agreement in accordance with
its terms. In any event, if a Sub-Management Agreement is to be assumed by the
Back-Up Manager, then the Property Manager or the Special Servicer, as
applicable, at its expense shall, upon request of the Back-Up Manager or the
Indenture Trustee, deliver to the Back-Up Manager all documents and records
relating to such Sub-Management Agreement and the Properties then being serviced
thereunder and an accounting of amounts collected and held on behalf of it
thereunder, and otherwise use its commercially reasonable efforts to effect the
orderly and efficient transfer of the Sub-Management Agreement to the assuming
party.

 

(e)          Notwithstanding any Sub-Management Agreement, the Property Manager
and the Special Servicer shall remain obligated and liable to each Issuer, the
Noteholders, the Indenture Trustee and each other for the performance of their
respective obligations and duties under this Agreement in accordance with the
provisions hereof to the same extent and under the same terms and conditions as
if each alone were servicing and administering the Properties and Leases for
which it is responsible.

 

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(f)          Except as otherwise expressly provided for herein, the Property
Manager or the Special Servicer, as applicable, will be solely liable for all
fees owed by it to any Sub-Manager, irrespective of whether its compensation
pursuant to this Agreement is sufficient to pay such fees, and in no event shall
such Sub-Manager have any claim against the Collateral with respect to such
fees.

 

(g)          Each of the Property Manager and the Special Servicer shall have
all the limitations upon liability and all the indemnities for the actions and
omissions of any such Sub-Manager retained by it that it has for its own actions
hereunder.

 

Section 3.19.         Casualty.

 

(a)          If any Property or Improvements thereon shall be materially damaged
or destroyed, in whole or in part, by fire or other casualty (an “Insured
Casualty”), the Issuers shall give prompt written notice thereof to the
Indenture Trustee and the Property Manager and shall delivery any and all
related document to both parties.

 

(b)          Following the occurrence of an Insured Casualty, the Property
Manager shall (in its sole discretion and in accordance with the Servicing
Standard) either (i) make available or direct the Indenture Trustee to make
available all related Insurance Proceeds to the applicable Issuer for the
purposes of restoring, repairing, replacing or rebuilding to the extent required
by the Lease Documents, or (ii) deposit such Insurance Proceeds in the
Collection Account to be applied in accordance with the Indenture; provided,
that Excess Proceeds will instead be deposited into the Release Account.

 

(c)          If the Property Manager directs the Indenture Trustee to make
Insurance Proceeds available to the related Issuer, such Issuer may make
available to the related Tenant or the Property Manager such Insurance Proceeds
for the purposes of restoring, repairing, replacing or rebuilding the Property
or the portion thereof subject to an Insured Casualty.

 

Section 3.20.         Condemnation.

 

(a)          The Issuers shall promptly give the Indenture Trustee and the
Property Manager written notice of the actual or threatened commencement of any
condemnation or eminent domain proceeding of which any Issuer receives notice (a
“Condemnation”) and shall deliver to the Indenture Trustee and the Property
Manager copies of any and all papers served upon such Issuer in connection with
such Condemnation.

 

(b)          Following the occurrence of a Condemnation, the Property Manager
shall (in its sole discretion and in accordance with the Servicing Standard)
either (i) make available or direct the Indenture Trustee to make available all
related Condemnation Proceeds to the applicable Issuer for the purposes of
restoring, repairing, replacing or rebuilding to the extent required by the
Lease Documents, or (ii) deposit such Insurance Proceeds in the Collection
Account to be applied in accordance with the Indenture; provided, that Excess
Proceeds will instead be deposited into the Release Account.

 

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(c)          If the Property Manager directs the Indenture Trustee to make
Condemnation Proceeds available to the related Issuer, such Issuer may make
available to the related Tenant or the Property Manager such Condemnation
Proceeds for the purposes of restoring, repairing, replacing or rebuilding the
Property or the portion thereof subject to a Condemnation.

 

Section 3.21.         Separateness Provisions.

 

(a)          So long as AF Properties or an Affiliate of the Issuers is the
Property Manager, the Property Manager shall at all times take all steps
necessary and appropriate to maintain its own separateness from each Issuer, and
maintain the separateness of all Affiliates of the Property Manager and other
properties that the Property Manager manages from the Issuers and from the
Properties. Without limiting the foregoing: (i) the Property Manager will not
hold its credit out as available to pay or support (as guarantor or otherwise)
any of the Issuers’ obligations and it will not pay any such Issuer’s
obligations or expenses from the Property Manager’s funds (other than expenses
or advances required by this Agreement to be made by the Property Manager), (ii)
the Property Manager will not make any loans to or borrow any funds from any
Issuer (except as provided in clause (i) above), (iii) the Property Manager will
not permit the Issuers’ assets to be included in or consolidated within the
Property Manager’s financial statements without including a note indicating that
the assets and credit of the Issuers are not available to pay the debts of the
Property Manager and that its liabilities do not constitute obligations of any
Issuer. Notwithstanding the foregoing, the Property Manager or its Affiliates
may make capital contributions, on a non-regular basis, to any of the Issuers.

 

(b)          Notwithstanding any provisions to the contrary contained in the
Agreement and so long as AF Properties or an Affiliate of any Issuer is the
Property Manager, the Property Manager agrees that each Issuer is a “single
purpose entity” and that each Issuer must maintain such status so long as the
Notes remain outstanding as set forth in such Issuer’s organizational documents.
Accordingly, the Property Manager shall:

 

(i)           hold itself out to the public as the ultimate parent of each
Issuer, legally distinct from such Issuer, and shall conduct its duties and
obligations on behalf of such Issuer in its own name and shall correct any known
misunderstanding regarding its separate identity from such Issuer, and shall not
identify itself as a department or division of such Issuer or such Issuer as a
division or department of the Property Manager;

 

(ii)          in the management, servicing and administration of the Properties
and Leases, use the related Issuer’s separate stationery, invoices or checks for
letters, invoices or checks to be signed by such Issuer; and

 

(iii)         shall pay each Issuer’s liabilities solely from such Issuer’s
funds (except that the Property Manager shall make all Advances required to be
made by the Property Manager by this Agreement).

 

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(c)          So long as AF Properties or an Affiliate of any Issuer is the
Property Manager, the Property Manager shall bring any legal proceedings to
collect rent or other income from the Properties, or to oust or dispossess a
Tenant or other Person from a Property, only in the name of the related Issuer
and at such Issuer’s expense.

 

Section 3.22.         Estoppels.

 

(a)          The Property Manager shall deliver or cause to be delivered to the
Indenture Trustee, promptly upon request but in no event later than twenty (20)
days following receipt by Property Manager of any estoppel, from each applicable
Issuer, certifications, duly acknowledged and certified, setting forth (i) the
original Series Principal Balance of each Series of Notes, (ii) the outstanding
Series Principal Balance of each Series of Notes, (iii) the applicable Note Rate
of each Class of Notes in each Series, (iv) the last Payment Date, (v) any
offsets or defenses to the payment of the Notes, if any, and (vi) that the
Notes, this Indenture, the Mortgages, the organizational documents of such
Issuer and the other Transaction Documents are valid, legal and binding
obligations and have not been modified or, if modified, giving particulars of
such modification.

 

Section 3.23.         Environmental Matters.

 

(a)          So long as an Issuer owns or is in possession of each Property,
each such Issuer shall, or shall cause the Property Manager to, promptly notify
the Indenture Trustee in writing if such Issuer or the Property Manager shall
become aware of the presence of any hazardous and/or toxic, dangerous and/or
regulated, substances, wastes, materials, raw materials which include hazardous
constituents, pollutants or contaminants including without limitation,
petroleum, tremolite, anthlophylie, actinolite or polychlorinated biphenyls and
any other substances or materials which are included under or regulated by
Environmental Laws (collectively, “Hazardous Substances”) to the extent that
such Hazardous Substances are in violation of any Environmental Law. If such
Issuer or the Property Manager shall become aware that any such Property is in
direct violation of any Environmental Laws or if such Issuer or the Property
Manager shall become aware of any condition on or near any such Property which
violates any Environmental Laws, in each case the Property Manager shall cause
such Issuer to cure such violations of such Environmental Law as shall be
reasonably required by the Property Manager in accordance with reasonable
commercial lending standards and practices, at such Issuer’s sole expense.
Notwithstanding anything to the contrary in this paragraph, each such Issuer and
its related Tenants may use and store Hazardous Substances at each Property if
such use or storage is in connection with the ordinary operation, cleaning and
maintenance of each Property so long as such use and storage is in compliance
with any applicable Environmental Laws. Nothing herein shall prevent such Issuer
from recovering such expenses from any other party that may be liable for such
removal or cure.

 

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(b)          Each Issuer shall, or shall cause the Property Manager to, give
prompt written notices to the Indenture Trustee and the Property Manager, as the
case may be, of any of the following: (i) any demand, notice of any violation,
notice of any potential responsibility, proceeding or official inquiry by any
Governmental Authority with respect to the presence of any Hazardous Substance
or asbestos or any substance or material containing asbestos (“Asbestos”) on,
under, from or about any Property; (ii) all claims made by any third party
against such Issuer or any Property relating to any loss or injury resulting
from any Hazardous Substance or Asbestos; and (iii) such Issuer’s or the
Property Manager’s discovery of any occurrence or condition on any real property
adjoining or in the vicinity of any Property, in each case, that causes such
Property to be subject to any official investigation or cleanup pursuant to any
Environmental Law. Subject to the rights of the applicable Tenant under the
related Lease, each Issuer shall permit the Indenture Trustee to join and
participate in, as a party if it so elects, any legal proceedings or actions
initiated with respect to any Property in connection with any Environmental Law
or Hazardous Substance and in such an instance, the Issuers and the Indenture
Trustee shall be represented by the same counsel; provided, however, that, if a
conflict of interest arises between any Issuer and the Indenture Trustee because
potential claims could be brought against the Indenture Trustee, then the
Indenture Trustee shall be represented by its own counsel and such Issuer shall
pay all reasonable attorney’s fees and disbursements incurred by the Indenture
Trustee in connection therewith.

 

(c)          Upon the Property Manager’s request and subject to the rights of
the Tenants under the Leases, at any time and from time to time while this
Indenture is in effect, when (x) the Property Manager has determined (in the
exercise of its good faith judgment) that reasonable cause exists for the
performance of an environmental inspection or audit of any Property or (y) an
Event of Default exists, each Issuer shall, or shall cause the Property Manager
to, provide at such Issuer’s sole expense, (I) an inspection or audit of each
such Property prepared by a licensed hydrogeologist or licensed environmental
engineer indicating the presence or absence of Hazardous Substances on, in or
near each such Property, and (II) an inspection or audit of such Property
prepared by a duly qualified engineering or consulting firm, indicating the
presence or absence of Asbestos on such Property. If such Issuer fails to
provide such inspection or audit within 30 days after such request, the Property
Manager, at such Issuer’s sole expense, which shall be deemed a Property
Protection Advance, may order the same, and such Issuer hereby grants to the
Property Manager and its employees and agents access to each Property and a
license to undertake such inspection or audit in each case subject to the rights
of the Tenants under the Leases. In the event that any environmental site
assessment report prepared in connection with such inspection or audit
reasonably recommends that an operations and maintenance plan be implemented for
Asbestos or any Hazardous Substance, the related Issuer shall, to the extent
permitted under the related Lease, cause such operations and maintenance plan to
be prepared and implemented at such Issuer’s expense upon request of the
Property Manager. In the event that any investigation, site monitoring,
containment, cleanup, removal, restoration, or other work of any kind is
reasonably necessary under an applicable Environmental Law (the “Remedial
Work”), each Issuer shall, or shall cause the Property Manager to, promptly
commence and thereafter diligently prosecute, or cause any related Tenant to
commence and thereafter diligently prosecute, to completion all such Remedial
Work after written demand by the Property Manager for performance thereof. All
Remedial Work shall be performed by contractors, and under the supervision of a
consulting engineer. All costs and expenses of such Remedial Work shall be paid
by the related Issuer. In the event such Issuer shall fail to timely commence,
or cause to be commenced, or fail to diligently prosecute to completion, such
Remedial Work, the Property Manager may, but shall not be required to, cause
such Remedial Work to be performed, and all costs and expenses thereof, or
incurred in connection therewith, shall be deemed a Property Protection Advance.

 

(d)          The Property Manager shall enforce or pursue in accordance with the
Servicing Standard any claim for payment, indemnity or reimbursement available
to any of the Issuers or the Indenture Trustee in respect of any liabilities,
losses, claims, costs or expenses in respect of Hazardous Substances including,
without limitation, any right to payment under the Guaranty.

 

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Section 3.24.         Appraised Values. The Property Manager may, if directed by
the Issuers and if it determines in accordance with the Servicing Standard that
obtaining a new appraisal is necessary, obtain a new appraisal for any Property
following the Series Closing Date.

 

ARTICLE IV

REPORTS

 

Section 4.01.         Reports to the Issuers and the Indenture Trustee.

 

(a)          Not later than 3:00 p.m. (New York City time), three (3) Business
Days prior to each Payment Date, the Property Manager shall deliver to each
Issuer, the Indenture Trustee, the Back-Up Manager and each Rating Agency a
report containing the information specified on Exhibit D hereto, and such other
information with respect to the Leases and Properties as the Indenture Trustee
may reasonably request (such report, the “Determination Date Report”) in a
mutually agreeable electronic format, reflecting as of the close of business on
the last day of the related Collection Period, the information required for
purposes of making the payments required by Section 2.11(b) of the Indenture and
the calculations and reports referred to in Section 6.01 of the Indenture,
including, but not limited to, the maturity date and the required monthly rent
of each Lease. So long as AF Properties or another Affiliate of an Issuer is the
Property Manager, the Determination Date Report shall also contain a
certification by the Property Manager that each Issuer has not incurred any
indebtedness except indebtedness permitted by the Transaction Documents. The
initial Determination Date Report shall also contain information necessary to
comply with Section 4(c)(ii) of the U.S. Credit Risk Retention Rules. Such
information shall be delivered by the Property Manager to each Issuer and the
Indenture Trustee in such form as may be reasonably acceptable to each Issuer
and the Indenture Trustee, as applicable. The Special Servicer shall from time
to time (and, in any event, as may be reasonably required by the Property
Manager) provide the Property Manager with such information regarding the
Specially Managed Units as may be necessary for the Property Manager to prepare
each Determination Date Report and any supplemental information to be provided
by the Property Manager to each Issuer or the Indenture Trustee.

 

(b)          Not later than 3:00 p.m. (New York City time) three (3) Business
Days prior to each Payment Date, the Special Servicer shall deliver to the
Property Manager, the Indenture Trustee and each Rating Agency a report
containing such information relating to the Specially Managed Units and in such
form as the Indenture Trustee may reasonably request (such report, the “Special
Servicer Report”) reflecting information as of the close of business on the last
day of the immediately preceding Collection Period.

 

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(c)          Not later than the 45th day following the end of each calendar
quarter, commencing with the quarter ended June 30, 2019 the Special Servicer
shall deliver to the Indenture Trustee, the Rating Agencies and the Property
Manager with respect to each Specially Managed Unit (A) a report containing such
information and in such form as the Indenture Trustee may reasonably request
(such report, a “Modified Collateral Detail and Realized Loss Report”) with
respect to all renewals, modifications, waivers, security deposits paid or
rental concessions made pursuant to Section 3.16 as of such calendar quarter and
(B) subject to Section 6.03(a) of the Indenture, upon the reasonable request of
the Indenture Trustee, the Rating Agencies or the Property Manager, operating
statements and other financial information collected or otherwise obtained by
the Special Servicer during such calendar quarter (together with copies of the
operating statements and other financial information on which it is based) to
the extent such information is not prohibited from being disclosed or restricted
by confidentiality under the terms of the applicable Lease Documents.

 

(d)          The Property Manager or the Special Servicer, to the extent
received by such party, shall deliver to the Indenture Trustee and each
applicable Rating Agency:

 

(i)           within sixty (60) days after the end of each calendar quarter the
following items received by it, each executed by a Responsible Officer of each
applicable Issuer or the applicable Issuer Manager on behalf of such Issuer as
being true and correct: (A) a written statement dated as of the last day of each
such calendar quarter identifying to its knowledge any defaults under a Lease
which continues after the expiration of applicable cure periods and not
otherwise included in the Special Servicer Report, in each case as of the last
day of such calendar quarter, and (B) the principal amount, aggregate unfunded
loan commitments and maturity dates of all credit and loan facilities then in
place as of the last day of such calendar quarter relating to the Support
Provider or any of its subsidiaries so long as the maturity date of such
indebtedness is scheduled to occur within 365 days of the end of such calendar
quarter, which shall be calculated by the Support Provider; and

 

(ii)          within sixty (60) days after the end of each of the first three
fiscal quarters of each year the following items received by it, each executed
by a Responsible Officer of each applicable Issuer as being true and correct (A)
consolidated financial statements of the related Issuer’s (consolidated with any
co-Issuer) financial affairs and condition for each such fiscal quarter,
including a balance sheet and statement of profit and loss for the related
Issuers (prepared on a consolidated basis for all Issuers) in such detail as the
Indenture Trustee may request for the Issuers, in each case, for the immediately
preceding calendar quarter, which statements shall be prepared by such Issuers,
(B) consolidated financial statements of AF Properties’ financial affairs and
condition, including a balance sheet, a cash flow summary report for the Support
Provider and an operating statement including detailed income and expense
statement, in each case in such detail as the Indenture Trustee may request for
the Support Provider, in each case, for the immediately preceding calendar
quarter, which statements shall be prepared by the Support Provider, and (C) the
Net Worth of the Support Provider at the end of the immediately preceding
calendar quarter, which shall be calculated by the Support Provider; and

 

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(iii)        within one hundred fifty (150) days after the end of each calendar
year, (A) consolidated financial statements of the financial affairs and
condition of the related Issuer (consolidated with any co-Issuer), including a
balance sheet and statement of profit and loss prepared on a consolidated basis
for all Issuers, in such detail as the Indenture Trustee may reasonably request,
in each case, for the immediately preceding calendar year, audited in
conjunction with the audit of the Support Provider by a “Big Four” accounting
firm or other nationally recognized independent certified public accountant
reasonably acceptable to the Indenture Trustee and (B) consolidated financial
statements of the Support Provider’s financial affairs and condition and all
related footnotes, audited in conjunction with the audit of the Support Provider
by a “Big Four” accounting firm, or other nationally recognized independent
certified public accountant reasonably acceptable to the Indenture Trustee, for
the immediately preceding calendar year, and (C) the Net Worth of the Support
Provider at the end of the immediately preceding year, which shall be calculated
by the Support Provider; and

 

(iv)        within forty-five (45) days after the end of each calendar quarter
copies of notices of defaults under, or any material modifications to, any of
the Leases, in each case, for such calendar quarter; and

 

(v)         subject to Section 6.03(a) of the Indenture, at any time and from
time to time such other financial data as the Indenture Trustee or its agents
shall reasonably request with respect to the Support Provider or any of its
subsidiaries or the ownership, maintenance, use and operation of the Properties
and servicing and administration of the Leases, to the extent such information
is not prohibited from being disclosed or restricted by confidentiality under
the terms of the applicable Lease documents.

 

(e)          The Indenture Trustee and Property Manager shall have the right,
during the continuance of an Event of Default exists, upon reasonable notice to
the Issuers and during normal business hours at the Issuers’ principal place of
business, to conduct an inspection or review, at the Issuers’ expense, of the
Issuers’ books and records. Each Issuer shall cooperate, and shall cause its
agents and employees to cooperate in the conduct of any such inspection or
review.

 

(f)          The Indenture Trustee shall have no obligations or duties (i) to
monitor AFOP’s compliance with the U.S. Risk Retention Agreement or (ii) to
verify, recalculate or confirm any of the information contained in the
Determination Date Report with respect to the U.S. Risk Retention Agreement.

 

Section 4.02.         Use of Agents.

 

The Property Manager may at its own expense utilize agents or attorneys-in-fact,
including Sub-Managers, in performing any of its obligations under this Article
IV, but no such utilization shall relieve the Property Manager from any of such
obligations, and the Property Manager shall remain responsible for all acts and
omissions of any such agent or attorney-in-fact. The Property Manager shall have
all the limitations upon liability and all the indemnities for the actions and
omissions of any such agent or attorney-in-fact that it has for its own actions
hereunder pursuant to Article V hereof, and any such agent or attorney-in-fact
shall have the benefit of all the limitations upon liability, if any, and all
the indemnities provided to the Property Manager under Section 5.03. Such
indemnities shall be expenses, costs and liabilities of each Issuer, and any
such agent or attorney-in-fact shall be entitled to be reimbursed therefor (to
the same extent the Property Manager would be entitled to be reimbursed) as
provided in Section 2.11(b) of the Indenture.

 

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ARTICLE V

THE PROPERTY MANAGER, THE SPECIAL SERVICER AND THE BACK-UP MANAGER

 

Section 5.01.         Liability of the Property Manager, the Special Servicer
and the Back-Up Manager.

 

The Property Manager, the Special Servicer and the Back-Up Manager shall be
liable in accordance herewith only to the extent provided in Section 5.03 with
respect to the obligations specifically imposed upon and undertaken by the
Property Manager, the Special Servicer and the Back-Up Manager, respectively,
herein.

 

Section 5.02.         Merger, Consolidation or Conversion of the Property
Manager, the Special Servicer and the Back-Up Manager.

 

Subject to the following paragraph, the Property Manager, the Special Servicer
and the Back-Up Manager shall each keep in full effect its existence, rights and
franchises as a partnership, corporation, bank or association under the laws of
the jurisdiction of its formation, and each will obtain and preserve its
qualification to do business as a foreign partnership, corporation, bank or
association in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement or any of
the Leases and the Loans and to perform its respective duties under this
Agreement.

 

Each of the Property Manager, the Special Servicer and the Back-Up Manager may
be merged or consolidated with or into any Person, or may transfer all or
substantially all of its assets to any Person, in which case any Person
resulting from any merger or consolidation to which the Property Manager, the
Special Servicer or the Back-Up Manager is a party, or any Person succeeding to
the business of the Property Manager, the Special Servicer or the Back-Up
Manager, will be the successor Property Manager, the successor Special Servicer
or the successor Back-Up Manager, as the case may be, hereunder, and each of the
Property Manager, the Special Servicer and the Back-Up Manager may transfer any
or all of its rights and obligations under this Agreement to any Person;
provided, however, that no transferee (other than with respect to KeyBank, if
the transferee is affiliated with KeyBank) will succeed to the rights of the
Property Manager or the Special Servicer unless (i) the Rating Condition is
satisfied or (ii) such successor is (x) an affiliate of the Property Manager or
the Special Servicer, as applicable, (y) the obligations of such successor
hereunder are guaranteed by the Support Provider, and (z) such successor shall
furnish evidence to the Issuers and the Indenture Trustee that it is regularly
engaged in the management, ownership or operation of commercial real estate
properties and of comparable or better experience to the Property Manager or the
Special Servicer, as applicable.

 

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Section 5.03.         Limitation on Liability of the Property Manager, the
Special Servicer and the Back-Up Manager.

 

None of the Property Manager, the Special Servicer or the Back-Up Manager or any
director, officer, employee, agent or Control Person of any of them shall be
under any liability to the Issuers, the Indenture Trustee, the Custodian or the
Noteholders or the holders of the Issuer Interests or to any other Person for
any action taken, or not taken, in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that none of the Property Manager, the
Special Servicer or the Back-Up Manager shall be protected against any liability
that would otherwise be imposed by reason of misfeasance, bad faith or
negligence in the performance (including the failure to perform) of obligations
or duties hereunder. The Property Manager, the Special Servicer and the Back-Up
Manager and any director, officer, employee, agent or Control Person of any of
them shall be entitled to indemnification by the Issuers, payable, subject to
Section 2.11(b) of the Indenture, out of the Payment Account, against any claim,
loss, liability or expense incurred in connection with any legal action that
relates to this Agreement, the Issuer LLC Agreements, the Issuer Interests, the
Indenture or the Notes or any other Transaction Document; provided, however,
that such indemnification shall not extend to any loss, liability or expense
incurred by reason of misfeasance, bad faith or negligence in the performance
(including the failure to perform) of obligations or duties under this
Agreement. None of the Property Manager, the Back-Up Manager or the Special
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective responsibilities under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that each of the Property Manager, the Special
Servicer and the Back-Up Manager shall be permitted, at its sole discretion, to
undertake any such action necessary or desirable with respect to the enforcement
or protection of the rights and duties of the parties hereto or the interests of
the Issuers hereunder. In such event, the legal expenses and costs of such
action, and any liability resulting therefrom, shall be expenses, costs and
liabilities of the Issuers as an Extraordinary Expense and the Property Manager,
the Special Servicer, or the Back-Up Manager as the case may be, shall be
entitled to be reimbursed therefor from the Payment Account, pursuant to Section
2.11(b) of the Indenture.

 

Section 5.04.         Term of Service; Property Manager and Special Servicer Not
to Resign.

 

(a)          Each Issuer may, upon written consent by the Indenture Trustee
(acting at the direction of the Requisite Global Majority) and written notice
(without any requirement of consent) to the Property Manager and the Special
Servicer, transfer the servicing duties and obligations of the Property Manager
and the Special Servicer to a new servicer. The Indenture Trustee’s written
consent to any such transfer shall be contingent upon receipt by the Indenture
Trustee of: (1) satisfaction of the Rating Condition; (2) the replacement
Property Manager and Special Servicer of its acceptance of its appointment; and
(3) consent by the Requisite Global Majority. The Issuers and the replacement
Property Manager and Special Servicer shall execute and deliver a transfer
agreement (the “Servicing Transfer Agreement”) mutually agreed upon in advance
and effective on the transfer date (the “Servicing Transfer Date”), whereby the
replacement Property Manager and the Special Servicer will agree to perform all
of the duties and obligations of the Property Manager and the Special Servicer
under this Agreement. Each Servicing Transfer Agreement shall include any
additional terms and provisions that the parties to this Agreement reasonably
determine are necessary or appropriate and which additional terms and provisions
shall be approved by all the parties to the Servicing Transfer Agreement, which
approvals shall not be unreasonably withheld. The Transfer Agreement shall
contain a provision stating that the former Property Manager and Special
Servicer is relieved from all liability under this Agreement for acts or
omissions occurring after the Servicing Transfer Date.

 

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(b)          None of the Property Manager or the Special Servicer (subject to
Section 5.02) shall resign from the obligations and duties hereby imposed on it,
except upon determination that the performance of its duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it, the other activities
of the Property Manager or the Special Servicer, as the case may be, so causing
such a conflict being of a type and nature carried on by the Property Manager or
the Special Servicer, as the case may be, at the date of this Agreement. Any
such determination permitting the resignation of the Property Manager or the
Special Servicer, as applicable, shall be evidenced by an Opinion of Counsel to
such effect that shall be delivered to each Issuer and the Indenture Trustee. No
such resignation shall become effective until the Back-Up Manager or another
successor shall have assumed the responsibilities and obligations of the
resigning party hereunder. If within 120 days of the date of such determination,
no successor shall have assumed the applicable responsibilities and obligations
of the resigning party, Property Manager or Special Servicer, as applicable,
shall be permitted to petition a court of competent jurisdiction to appoint a
successor.

 

(c)          Notwithstanding the foregoing, each of the Property Manager and the
Special Servicer may cause all or part of the obligations and duties imposed on
it by this Agreement to be assumed by, and may assign part or all of its rights,
benefits or privileges hereunder to, with the prior written approval of each
Issuer and the Indenture Trustee, which approval shall not be unreasonably
withheld, conditioned or delayed, to any Person, upon its delivery to each
Issuer and the Indenture Trustee of evidence of satisfaction of the Rating
Condition, and the assumption by the assignee of all of the obligations and
duties of the Property Manager and/or the Special Servicer, as applicable. Upon
any such assignment and assumption by the assignee of all or a part of the
obligations of the Property Manager and/or the Special Servicer, the assignor
(or its successor acting prior to such assignment), shall be relieved from all
liability hereunder for acts or omissions of the Property Manager and/or the
Special Servicer, as applicable, occurring after the date of the assignment and
assumption.

 

(d)          Except as expressly provided herein, neither the Property Manager
nor the Special Servicer shall assign or transfer any of its rights, benefits or
privileges hereunder to any other Person or delegate to or subcontract with, or
authorize or appoint, any other Person to perform any of the duties, covenants
or obligations to be performed by it hereunder, or cause any other Person to
assume such duties, covenants or obligations. If, pursuant to any provision
hereof, the duties and obligations of the Property Manager or the Special
Servicer are transferred by an assignment and assumption to a successor thereto,
the entire amount of compensation payable to the Property Manager or the Special
Servicer, as the case may be, that accrues pursuant hereto from and after the
date of such transfer shall be payable to such successor.

 

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Section 5.05.         Rights of Certain Persons in Respect of the Property
Manager and the Special Servicer.

 

Each of the Property Manager and the Special Servicer shall afford to the other
and, also, to each Issuer, the Indenture Trustee and the Back-Up Manager, upon
reasonable notice, during normal business hours (a) access to all records
maintained by it relating to the Properties and Leases included in the
Collateral Pool and in respect of its rights and obligations hereunder, to the
extent not prohibited by confidentiality (including attorney-client privilege),
contract or applicable law, and (b) access to such of its officers as are
responsible for such obligations. Upon reasonable request, the Property Manager
and the Special Servicer shall each furnish the Issuers and the Indenture
Trustee with its most recent financial statements and such other information as
it possesses, and which it is not prohibited by confidentiality (including
attorney-client privilege), applicable law or contract from disclosing,
regarding its business, affairs, property and condition, financial or otherwise.
Each Issuer may, but is not obligated to, enforce the obligations of the
Property Manager and the Special Servicer hereunder and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted obligation
of the Property Manager or the Special Servicer hereunder, or, in connection
with any such defaulted obligation, exercise the related rights of the Property
Manager or the Special Servicer hereunder; provided, however, that neither the
Property Manager nor the Special Servicer shall be relieved of any of its
obligations hereunder by virtue of such performance by any such Issuer or its
designee. The Issuers shall not have any responsibility or liability for any
action or failure to act by or with respect to the Property Manager or the
Special Servicer.

 

Section 5.06.         [Reserved].

 

Section 5.07.         Property Manager or Special Servicer as Owner of Notes.

 

Subject to Section 3.17 herein and the terms of the Indenture, if, at any time
during which an Affiliate of the Property Manager or the Special Servicer is the
holder of any Note or Issuer Interests the Property Manager or the Special
Servicer proposes to take or omit to take action (i) which action or omission is
not expressly prohibited by the terms hereof and would not, in the Property
Manager or the Special Servicer’s good faith judgment, violate the Servicing
Standard, and (ii) which action, if taken, or omission, if made, might
nonetheless, in the Property Manager’s or the Special Servicer’s good faith
judgment, be considered by other Persons to violate the Servicing Standard, the
Property Manager or the Special Servicer may, but need not, seek the approval of
the Noteholders and the holders of the Issuer Interests to such action or
omission by delivering to each Issuer and the Indenture Trustee a written notice
that (a) states that it is delivered pursuant to this Section 5.07, (b)
identifies the portion of Notes and Issuer Interests beneficially owned by an
Affiliate Party, and (c) describes in reasonable detail the action that the
Property Manager or the Special Servicer, as the case may be, proposes to take
or omit. If, at any time, the holders of Issuer Interests representing greater
than 50% of the Issuer Interests and a Requisite Global Majority (calculated in
accordance with the terms of the Indenture) separately consent in writing to the
proposal described in the related notices, and if the Property Manager or the
Special Servicer, as the case may be, takes action or omits to take action as
proposed in such notices, such action or omission will be deemed to comply with
the Servicing Standard. It is not the intent of the foregoing provision that the
Property Manager or the Special Servicer be permitted to invoke the procedure
set forth herein with respect to routine servicing matters arising hereunder,
but rather in the case of unusual circumstances.

  

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ARTICLE VI

SERVICER REPLACEMENT EVENTS

 

Section 6.01.         Servicer Replacement Events.

 

(a)         “Servicer Replacement Event” wherever used herein with respect to
the Property Manager or Special Servicer, means any one of the following events:

 

(i)          any failure by the Property Manager or the Special Servicer to
remit to the Collection Account, the Release Account or the Payment Account (or
to the Indenture Trustee for deposit into the Payment Account) any amount as and
when required to be so remitted pursuant to the terms of this Agreement or the
Indenture, which failure remains unremedied for two (2) business days after the
earlier of (x) the date on which notice of such failure, requiring the same to
be remedied, is given to the Property Manager or Special Servicer, as
applicable, by the Indenture Trustee or (y) actual knowledge of such failure by
such Property Manager or Special Servicer, as applicable; or

 

(ii)         the Property Manager fails to make any P&I Advance as required by
the Indenture or this Agreement; or

 

(iii)        the Property Manager fails to make any Property Protection Advance
as required by the Indenture or this Agreement, which failure remains unremedied
for four (4) Business Days following the date on which Property Manager or
Special Servicer receives of notice of (or obtains actual knowledge of) any such
failure;

 

(iv)        any failure on the part of the Property Manager or the Special
Servicer to observe or perform in any material respect any other of the
covenants or agreements on the part of the Property Manager or the Special
Servicer, as the case may be, contained in this Agreement which failure
continues unremedied for a period of 30 days (or such longer period as is
reasonably required to cure the subject matter provided that (A) the Property
Manager or the Special Servicer shall diligently prosecute such cure, (B) such
extended cure period does not have a material adverse effect on the Issuers, the
Noteholders or the Properties and (C) such longer period shall not exceed 60
days) after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Property Manager and the Special
Servicer by any other party hereto or the Property Manager or the Special
Servicer otherwise has notice of such failure; or

 

(v)         any breach on the part of the Property Manager or the Special
Servicer of any representation or warranty contained in this Agreement that
materially and adversely affects the interests of the Issuers, which remains
unremedied for 30 days after the date on which written notice of such breach,
requiring the same to be remedied, shall have been given to the Property Manager
and the Special Servicer by any other party hereto; provided, however, that if
the breach is capable of being cured and such Property Manager or Special
Servicer is diligently pursuing that cure, the 30 day period will be extended
for another 30 days; or

 

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(vi)        there shall have been commenced before a court or agency or
supervisory authority having jurisdiction an involuntary proceeding against the
Property Manager or the Special Servicer under any present or future federal or
state bankruptcy, insolvency or similar law for the appointment of a
conservator, receiver, liquidator, trustee or similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, which action shall not have been dismissed for a period of 90 days;
provided, that if any decree or order cannot be discharged, dismissed or stayed
within the 90-day period, such Property Manager or Special Servicer will have an
additional 30 days to effect the discharge, so long as it commenced proceedings
to have the decree or order dismissed within the initial 90-day period and it is
continuing to pursue the discharge; or

 

(vii)       either the Property Manager or the Special Servicer shall consent to
the appointment of a conservator, receiver, liquidator, trustee or similar
official in any bankruptcy, insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to it or of or
relating to all or substantially all of its property; or

 

(viii)      either the Property Manager or the Special Servicer shall admit in
writing its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of its creditors; or

 

(ix)         either the Property Manager or the Special Servicer assigns any of
its obligations under this Agreement to any third party other than as permitted
under this Agreement or any other Transaction Document; or

 

(x)          either the Property Manager or the Special Servicer fails to
observe reporting requirements, which failure remains unremedied for five (5)
days after the date on which written notice of such breach, requiring the same
to be remedied, shall have been given to the Property Manager and the Special
Servicer; provided, that with respect to the delivery of the Determination Date
report, such period shall be for one (1) day after such notice; or

 

(xi)         (xi) AR Global Investments LLC, shall cease to own a majority of
the equity interests (whether directly or indirectly) of AF Properties or
American Finance Advisors, LLC without the consent of the Requisite Global
Majority, or AF Properties shall cease to be the property manager for AFOP; or

 

(xii)        the Issuers or the Indenture Trustee shall have received
confirmation in writing from any Rating Agency that the failure to remove the
Property Manager or the Special Servicer in such capacity would in and of itself
cause a downgrade, qualification or withdrawal of any of the ratings then
assigned by such Rating Agency to the Notes; or

 

(xiii)       an Event of Default under Section 4.01(a), (b), (c), (f), (g) or
(j) of the Indenture shall have occurred; or

 

(xiv)      any other Event of Default under the Indenture, other than an Event
of Default under Section 4.01(a), (b), (c), (f), (g) or (j) thereof, shall have
occurred and the Indenture Trustee shall have accelerated the Notes; or

 

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(xv)       the Monthly DSCR shall be less than 1.20x for three (3) consecutive
Payment Dates and such reduction in Monthly DSCR is reasonably determined by the
Back-Up Manager (unless the Back-Up Manager is then serving as Property Manager
or Special Servicer) or the Requisite Global Majority to be primarily
attributable to acts or omissions of the Property Manager.

 

(b)          Each of the Property Manager and the Special Servicer will notify
the Indenture Trustee and the Back-Up Manager in writing of the occurrence of a
Servicer Replacement Event or an event that, with the giving of notice or the
expiration of any cure period, or both, would constitute a Servicer Replacement
Event promptly upon obtaining actual knowledge thereof.

 

Section 6.02.         Termination of Property Manager and Special Servicer and
appointment of Successor.

 

(a)          If any Servicer Replacement Event (other than under clauses (ii) or
(iii) of Section 6.01 above) with respect to AF Properties as the initial
Property Manager or the initial Special Servicer (in either case, for purposes
of this Section 6.02, the “Defaulting Party”) of which a responsible officer of
the Indenture Trustee shall have actual knowledge shall occur and be continuing,
then, and in each and every such case, subject to the remainder of this Section
6.02, the Indenture Trustee shall deliver a notice in writing to the Noteholders
(with a copy of such notice to the Defaulting Party) advising the Noteholders of
their right to approve the removal of the Defaulting Party or to waive such
Servicer Replacement Event. In the event that the Noteholders representing the
Requisite Global Majority have either approved of the removal of the Defaulting
Party or not waived the occurrence of such Servicer Replacement Event within
thirty (30) days of such notice, the Indenture Trustee shall (by notice in
writing to the Defaulting Party and each other party hereto) cause such
Defaulting Party to be immediately replaced with the Back-Up Manager and
terminate all of the rights and obligations accruing from and after such notice
of the Defaulting Party under this Agreement and in and to the Collateral (other
than as a holder of any Note or Issuer Interest). All notices by the Indenture
Trustee of a Servicer Replacement Event shall be delivered to the Noteholders
together with a request that the Noteholders either waive such Servicer
Replacement Event or consent to the termination of the Property Manager or the
Special Servicer. Upon the occurrence of a Servicer Replacement Event under
clause (ii) or (iii) with respect to the Defaulting Party (provided that the
Defaulting Party is the initial Property Manager or Special Servicer), the
Indenture Trustee shall immediately terminate the Property Manager and/or the
Special Servicer and replace them with the Back-Up Manager. When a single entity
acts as Property Manager and Special Servicer, a Servicer Replacement Event in
one capacity shall constitute a Servicer Replacement Event in each capacity;
provided, however, that, subject to Section 6.01(b), the Indenture Trustee shall
upon direction from the Requisite Global Majority elect to terminate the
Property Manager or the Special Servicer in one or the other capacity rather
than both such capacities.

 

Except as provided in the immediately preceding paragraph, upon the occurrence
of a Servicer Replacement Event with respect to the Property Manager or the
Special Servicer, the Indenture Trustee (i) may (with the consent of the
Requisite Global Majority) cause the Property Manager and/or the Special
Servicer to be replaced with a successor Property Manager (the “Successor
Property Manager”) and/or successor Special Servicer (the “Successor Special
Servicer”), and (ii) shall (at the direction of the Requisite Global Majority)
cause the Property Manager and/or the Special Servicer to be replaced with a
Successor Property Manager and/or Successor Special Servicer.

 

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(b)          From and after the termination of the Property Manager or Special
Servicer, all authority and power of the terminated Property Manager or Special
Servicer under this Agreement, whether with respect to the Issuers (other than
as a holder of any Note or Issuer Interest) or the Leases or Properties or
otherwise, shall pass to and be vested in the Back-Up Manager or the applicable
Successor Property Manager or Successor Special Servicer pursuant to and under
this Section, and, without limitation, the Back-Up Manager or the applicable
Successor Property Manager or Successor Special Servicer is hereby authorized
and empowered to execute and deliver, on behalf of and at the expense of the
terminated Property Manager or Special Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Leases, Properties and related documents, or otherwise.

 

(c)          The appointment of a Successor Property Manager or Successor
Special Servicer will be subject to, among other things, (i) the satisfaction of
the Rating Condition and (ii) the written agreement of the Successor Property
Manager or Successor Special Servicer to be bound by the terms and conditions of
this Agreement, together with an Opinion of Counsel regarding the enforceability
of such agreement. Subject to the foregoing, any person, including any holder of
Notes or Issuer Interests or any Affiliate thereof, may be appointed as the
Successor Property Manager or Successor Special Servicer.

 

(d)          Each of the Property Manager and the Special Servicer agrees that,
if it is terminated pursuant to this Section 6.02, it shall promptly provide the
Indenture Trustee and the Back-Up Manager (or such other applicable successor)
with all documents and records in its possession requested thereby to enable the
Back-Up Manager (or such other applicable successor) to assume the Property
Manager or Special Servicer’s, as the case may be, functions hereunder, and
shall cooperate with the Back-Up Manager (or such other applicable successor) in
effecting the termination of the Property Manager or Special Servicer’s, as the
case may be, responsibilities and rights hereunder. The terminated Property
Manager or Special Servicer and its directors, officers, employees and agents
shall continue to be entitled to the benefits of Section 5.03 notwithstanding
any such termination). The Back-Up Manager (or such other applicable successor)
shall use reasonable efforts to diligently complete the physical transfer of
servicing from the terminated Property Manager or Special Servicer, as
applicable, with the cooperation of such Property Manager or Special Servicer.

 

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Section 6.03.         Back-Up Manager.

 

(a)          The Back-Up Manager shall maintain current servicing records and
systems concerning the Properties and the Leases in order to enable it to timely
and efficiently assume the responsibilities of the Property Manager and/or
Special Servicer in accordance with the Servicing Standard and otherwise in
accordance with the terms and conditions of this Agreement.

 

(b)          Subject to Section 6.02, following the appointment of the Back-Up
Manager as successor Property Manager, the initial Property Manager shall
arrange for the delivery to the Back-Up Manager of all Servicing Files related
to Properties that are not Specially Managed Units, which Servicing Files shall
contain sufficient data (as determined by the initial Property Manager in the
exercise of its good faith judgment) to permit the Back-Up Manager to assume the
duties of the Property Manager hereunder without delay. Subject to Section 6.02,
following the appointment of the Back-Up Manager as successor Special Servicer,
the initial Special Servicer shall arrange for the delivery to the Back-Up
Manager of all Servicing Files related to Specially Managed Units, which
Servicing Files shall contain sufficient data (as determined by the initial
Special Servicer in the exercise of its good faith judgment) to permit the
Back-Up Manager to assume the duties of the Property Manager hereunder without
delay.

 

(c)          Subject to Section 6.02, following a Servicer Replacement Event,
the Back-Up Manager shall use reasonable efforts to diligently complete the
physical transfer of servicing from the terminated Property Manager or Special
Servicer with the cooperation of such Defaulting Party. From and after the date
physical transfer of servicing is completed (the “Back-Up Servicing Transfer
Date”), the Back-Up Manager shall service and/or specially service the
Properties and Leases in accordance with the provisions of this Agreement with
all the rights and obligations of the Property Manager and the Special Servicer
and shall have no liability or responsibility with respect to any obligations of
each Defaulting Party, arising or accruing prior to the Back-Up Servicing
Transfer Date. Each Issuer, if it determines in its reasonable discretion that
enforcement rights and/or remedies are available to the Noteholders against the
terminated Property Manager or Special Servicer and it is prudent under the
circumstances to enforce such rights, agree to enforce their rights under this
Agreement against the terminated Property Manager or Special Servicer, including
any rights they have to enforce each Defaulting Party’s obligation to fully
cooperate in the orderly transfer and transition of servicing and otherwise
comply with the terms of this Agreement. In the event that the Back-Up Manager
discovers or becomes aware of any errors in any records or data of each
Defaulting Party which impairs its ability to perform its duties hereunder, the
Back-Up Manager shall notify each Issuer and the Indenture Trustee in writing of
such errors and shall, at each Defaulting Party’s expense (or, if not paid by
such party, as a Property Protection Advance) and upon the Issuers’ direction,
undertake to correct or reconstruct such records or data.

 

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(d)          From and after the date of this Agreement until the Back-Up
Servicing Transfer Date, the Property Manager shall provide or cause to be
provided to the Back-Up Manager on or before the 20th day of each month, in
electronic form, a complete data tape of the Loan Schedule, the Owned Property
Schedule and such other information as any Issuer may reasonably deem necessary,
including all information necessary to determine the Release Price and original
purchase price paid by the applicable Issuer, and shall make available to the
Back-Up Manager a copy of each Determination Date Report and any Special
Servicer Report. In addition, the Property Manager shall provide all other
documents and materials as are reasonably requested by the Back-Up Manager. The
Back-Up Manager will perform an initial comprehensive data integrity review and
a monthly review of this information to determine whether it provides adequate
information to enable the Back-Up Manager to perform its obligations hereunder
as the Back-Up Manager. To the extent that the Back-Up Manager determines within
ten (10) calendar days of its receipt of such information that such information
is inadequate for the Back-Up Manager to perform its obligations as the Back-Up
Manager, the Back-Up Manager will provide prompt written notice to each Issuer,
the Indenture Trustee and the Property Manager identifying any deficiencies in
such information that do not enable the Back-Up Manager to perform its
obligations as the Back-Up Manager. The Property Manager shall use its best
efforts to provide any such deficient information to the Back-Up Manager within
ten (10) calendar days of receipt of such notice from the Back-Up Manager.

 

(e)          Within ten (10) Business Days of the date of receipt from the
Property Manager, the Back-Up Manager shall, in order to understand the purpose
of each data field (and the interrelationships among such data fields), review
the form of Determination Date Report and the Special Servicer Report, each in
the form agreed to by the Property Manager, the Indenture Trustee and the
Back-Up Manager. Provided the data in the Determination Date Report and the
Special Servicer Report are in a format readable by the Back-Up Manager, the
Back-Up Manager shall create a set of conversion routines and database mapping
programs, as necessary, that will enable the Back-Up Manager to (i) receive such
data from the Property Manager on a monthly basis and to ensure that the data is
readable, and (ii) independently generate such Determination Date Reports and
Special Servicer Reports, as applicable, following the Back-Up Servicing
Transfer Date; provided, however, that the Back-Up Manager shall have no
obligations with respect to the information contained in the Determination Date
Report with respect to the U.S. Risk Retention Agreement.

 

(f)           On a monthly basis, the Back-Up Manager shall (x) verify receipt
of the Determination Date Report and the Special Servicer Report required to be
delivered by the Property Manager and (y) verify that such records and data are
in a readable format.

 

(g)          The Back-Up Manager (subject to Section 5.02) may resign from its
obligations under this Agreement (i) with the consent of the Requisite Global
Majority, (ii) upon determination that the performance of its duties hereunder
are no longer permissible under applicable law or are in material conflict by
reason of applicable law with any other activities carried on by it, the other
activities of the Back-Up Manager so causing such a conflict being of a type and
nature carried on by the Back-Up Manager at the date of this Agreement, (iii) if
the Back-Up Manager identifies a successor back-up manager who agrees to
undertake the obligations of the Back-Up Manager under this Agreement and
provides the Indenture Trustee with written confirmation of satisfaction of the
Rating Condition, and (iv) upon 60 day’s written notice to the Issuers, the
Support Provider and the Indenture Trustee, if at any time KeyBank is terminated
as Sub-Manager under the Sub-Management Agreement; provided, that no such
resignation pursuant to this clause (iv) shall become effective until a
successor shall have been appointed by the Issuers and assumed the
responsibilities and obligations of the resigning Back-Up Manager. If within 60
days of the date of such notice of resignation, no successor shall have assumed
the responsibilities and obligations of the resigning Back-Up Manager, the
resigning Back-Up Manager shall be permitted to petition a court of competent
jurisdiction to appoint a successor.

 

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(h)          Notwithstanding the foregoing, the Back-Up Manager may cause all or
part of the obligations and duties imposed on it by this Agreement to be assumed
by, and may assign part or all of its rights, benefits or privileges hereunder
to, with the prior written approval of each Issuer, which approval shall not be
unreasonably withheld, conditioned or delayed, to any Person, upon its delivery
to each Issuer and the Indenture Trustee of evidence of satisfaction of the
Rating Condition, and the assumption by the assignee of all of the obligations
and duties of the Back-Up Manager. Upon any such assignment and assumption by
the assignee of all or a part of the obligations of the Back-Up Manager, the
assignor (or its successor acting prior to such assignment), shall be relieved
from all liability hereunder for acts or omissions of the Back-Up Manager
occurring after the date of the assignment and assumption

 

Section 6.04.         Additional Remedies of Issuers and the Indenture Trustee
upon a Servicer Replacement Event.

 

During the continuance of any Servicer Replacement Event, so long as such
Servicer Replacement Event shall not have been remedied, in addition to the
rights specified in Section 6.01, each Issuer shall have the right, and the
Indenture Trustee shall have the right, in its own name and as trustee of an
express trust, to take all actions now or hereafter existing at law, in equity
or by statute to enforce its rights and remedies and to protect the interests,
and enforce the rights and remedies of the Noteholders (including the
institution and prosecution of all judicial, administrative and other
proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Servicer Replacement Event.

 

ARTICLE VII

TRANSFERS AND EXCHANGES OF PROPERTIES BY ISSUERS; RELEASE OF PROPERTIES BY
ISSUERS

 

Section 7.01.         Exchange of Properties.

 

(a)          Each Issuer may remove an Exchanged Property from the Collateral
Pool in exchange for the addition of one or more Qualified Substitute Properties
to the Collateral Pool; provided, that, after giving effect to a substitution or
exchange pursuant to this Section 7.01, (i) the sum of the Collateral Value of
all Released Properties and Exchanged Properties released or exchanged since the
most recent Series Closing Date shall not exceed 35% of the Aggregate Collateral
Value as of such Series Closing Date; and (ii) the sum of the Collateral Value
of all Released Properties released since the most recent Series Closing Date by
paying the Release Price shall not exceed 25% of the Aggregate Collateral Value
as of such Series Closing Date. Notwithstanding the foregoing, (i) a release or
exchange of a Property in connection with a Collateral Defect, a Third Party
Purchase Option, a Risk-Based Substitution or a Qualified Deleveraging Event,
(ii) the release or exchange of a Terminated Lease Property, Delinquent Asset or
Defaulted Asset, (iii) releases during the Disposition Period, (iv) releases as
a result of a Triple A Release, (v) releases in connection with a Series
Collateral Release or (vi) a transfer of lease terms to a Lease Transfer
Property shall not be taken into consideration for purposes of the 35% maximum
described in the prior sentence. No Property will constitute a Qualified
Substitute Property unless, after giving effect to the transfer of such Property
to the related Issuer, either (i) a Maximum Property Concentration is not
exceeded, or (ii) if, prior to such substitution, an existing Maximum Property
Concentration is already exceeded, the addition of such Qualified Substitute
Property will reduce the Maximum Property Concentration or such Maximum Property
Concentration will remain unchanged after giving effect to such substitution. In
addition, no exchange of a Property or Lease may occur (other than pursuant to a
Third Party Purchase Option or release due to a Collateral Defect) if an Early
Amortization Period would occur as a result of such exchange.

 

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(b)          In the event that any Issuer elects to substitute one or more
Qualified Substitute Properties pursuant to this Section 7.01, the Property
Manager shall require such Issuer to deliver to the Custodian all documents as
specified in the definition of “Lease File” in Section 1.01 with respect to each
Qualified Substitute Property in accordance with this Agreement. Monthly Lease
Payments due with respect to Qualified Substitute Properties in the month of
substitution shall not be part of the Collateral and will be retained by the
Property Manager and remitted by the Property Manager to such Issuer on the next
succeeding Payment Date. For the month of substitution, the Available Amount
shall include the Monthly Lease Payment due on the Lease for the Removed
Property for such month and, thereafter, the applicable Issuer designee shall be
entitled to retain all amounts received in respect of such Lease. On or prior to
the effective date of any such substitution, the Property Manager shall deliver
to the Custodian and each Issuer an amended Property Schedule reflecting the
addition to the Collateral of each new Qualified Substitute Property and related
Lease and the removal from the Collateral of each Removed Property and related
Lease. Upon such substitution, each Qualified Substitute Property shall be
subject to the terms of this Agreement in all respects, and the applicable
Issuer shall be deemed to have made the representations and warranties contained
in Section 2.20 of the Indenture with respect to each Qualified Substitute
Property, and the applicable Issuer shall deliver to the Indenture Trustee a
certificate in the form of Exhibit C attached hereto certifying to the Indenture
Trustee that such exceptions as have been proposed by the Property Manager or
the Issuers are materially consistent with the underwriting criteria for
existing Properties.

 

(c)          Each Issuer shall effect such substitution by having each Qualified
Substitute Property deeded (or, with respect to Qualified Substitute Properties,
having the leasehold interest in the ground lease therein assigned) to such
Issuer and distributing or otherwise transferring the Removed Property to a
designee of the Issuer Manager and delivering to and depositing with the
Custodian (i) the deed (or assignment of ground lease), if applicable, and any
other transfer documents transferring such Qualified Substitute Property (or
leasehold interest in the ground lease) to such designee, (ii) the deed (or
assignment of ground lease), if applicable, and any other transfer documents
transferring such Removed Property (or leasehold interest in the ground lease)
to a designee of the applicable Issuer Manager, or the entity purchasing the
Removed Property, (iii) the Lease Files for such Qualified Substitute
Properties, all of which shall meet the Lease File requirements for such
Qualified Substitute Property, and (iv) an Officer’s Certificate certifying that
all of the taxes (including transfer taxes with respect to Qualified Substitute
Property) in connection with the acquisition of the Qualified Substitute
Property and the transfer of the Removed Property have been paid.

 

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(d)          Upon receipt of an Officer’s Certificate from the Property Manager
or the applicable Issuer to the effect that all requirements with respect to any
substitution pursuant to the foregoing terms of this Section 7.01 have been
satisfied, which Officer’s Certificate shall be furnished by the Property
Manager upon becoming appropriate, and upon which the Indenture Trustee shall be
permitted to fully rely and shall have no liability for so relying without any
obligation to confirm or verify, (i) the Indenture Trustee shall release or
cause to be released to such Issuer’s designee the related Lease File for the
Removed Property (ii) each of the Indenture Trustee and such Issuer shall
execute and deliver such instruments of release, transfer or assignment, in each
case without recourse, as shall be provided to it and are reasonably necessary
to vest in such Issuer’s designee the ownership of the Removed Property and the
related Lease and to release any Mortgage or other lien or security interest in
such Removed Property or the related Lease. In connection with any such release
or transfer, the Special Servicer shall deliver the related Servicing File to
such Issuer’s designee. Simultaneously with any substitution made pursuant to
this Section 7.01, such Issuer shall distribute or transfer the Removed Property
and Lease at the direction of the applicable Issuer Manager.

 

(e)          Any Release Price received by the applicable Issuer in connection
with the release of a Released Property pursuant to this Section 7.01 or the
other terms and provisions of this Agreement (other than any Release Prices
obtained in connection with a Triple A Release Event, Liquidation Proceeds
received with respect to Defaulted Assets, or any Series Collateral Release
Prices) shall first be deposited into the Release Account and, after payment of
any unreimbursed Extraordinary Expenses, Advances and Emergency Protection
Expenses (plus Advance Interest thereon) related to such Released Property and
the expenses related to such release, shall either (i) be applied by such Issuer
to acquire a Qualified Substitute Property within twelve (12) months following
the related release or (ii) at the option of the Property Manager, be deposited
as Unscheduled Proceeds into the Collection Account. Any amounts relating to
such a Released Property remaining in the Release Account following such twelve
(12) month period will be transferred as Unscheduled Proceeds into the
Collection Account; provided, that only the related Allocated Release Amount
will be applied as Unscheduled Principal Payments. Notwithstanding the
foregoing, during an Early Amortization Period, all amounts on deposit in the
Release Account will be transferred as Unscheduled Proceeds into the Collection
Account and applied as Unscheduled Principal Payments on the Payment Date
following the commencement of such Early Amortization Period.

 

(f)          No exchange of a Property may occur if an Early Amortization Period
would commence as a result of such exchange.

 

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Section 7.02.         Sale Pursuant to Third Party Purchase Option.

 

(a)          If any Person shall exercise its Third Party Purchase Option prior
to the Rated Final Payment Date, the applicable Issuer shall, simultaneously
with the transfer of the applicable Property pursuant to the Third Party
Purchase Option, deposit the Third Party Option Price into the Release Account,
and upon receipt of an Officer’s Certificate from the Property Manager or the
Issuers to the effect that such deposit has been made (which the Property
Manager shall deliver to the Indenture Trustee and the Issuers promptly upon
such deposit being made and upon which Officer’s Certificate the Indenture
Trustee shall be permitted to fully rely and shall have no liability for so
relying without any obligation to confirm or verify), the Indenture Trustee
shall release to such Issuer or its designee the related Lease File and execute
and deliver such instruments of release, transfer or assignment, in each case
without recourse, that shall be provided by such Issuer or the Property Manager
and reasonably necessary to release the subject Mortgage and the other liens and
security interests in such Property and the related Lease.

 

(b)          After such release, the released Property shall not be deemed to be
a Property (except for the purposes of obligations under the Transaction
Documents that are expressly provided to survive repayment in full of the Notes
and satisfaction of the Mortgage).

 

Section 7.03.         Transfer of Lease to New Property.

 

In the event a Tenant under a Lease requests that such Lease be modified to
apply to a different Property (the “Lease Transfer Property”) owned by such
Tenant or substituted for a Lease on a different Property owned by such Tenant,
the related Issuer may, with the approval of the Property Manager or the Special
Servicer, as applicable, to the extent permitted under the subject Lease or
imposed by the Property Manager, approve such transfer. Each of the Property
Manager, the Special Servicer and the applicable Issuer has covenanted that it
will not give its consent to a transfer unless: (i) the substituted property is
a Qualified Substitute Property; (ii) all Advances, Extraordinary Expenses and
Emergency Property Expenses related to the Property being transferred are
reimbursed; and (iii) such Lease will not be treated as a new Lease but instead
will be treated as a modification of the original Lease. Such Qualified
Substitute Property will be included in the Collateral Pool and pledged to the
Indenture Trustee to secure the Notes. Upon the Indenture Trustee’s receipt of
an Officer’s Certificate (upon which the Indenture Trustee shall be entitled to
conclusively rely) from the Property Manager or the Special Servicer to the
effect that such modification or substitution has been completed in accordance
with the terms hereof, including satisfaction of the Required Conditions (which
shall include a certification that such Issuer has executed and delivered a
Mortgage or, within 60 days of the Property Manager’s receipt of the related
recorded Mortgage, will deliver a copy thereof with recording information) with
respect thereto to the Indenture Trustee), the Indenture Trustee shall execute
and deliver such instruments of release, transfer or assignment, in each case
without recourse, as shall be provided to it by such Issuer and are reasonably
necessary to release any lien or security interest in the original Property and
related Lease, whereupon such original Property shall be free and clear of the
lien of the Indenture and any Mortgage and the other Transaction Documents. Any
proceeds of such sale, transfer or other disposition shall not constitute part
of the Collateral and shall not be deposited in the Collection Account or the
Release Account, as applicable.

 

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Section 7.04.         Release of Property by an Issuer.

 

(a)          Except in connection with the release or encumbrance of an
immaterial portion of any Property pursuant to Section 3.16(g), and subject to
Section 7.08, 7.10 and 7.11, the applicable Issuer shall have the right to have
released from the lien of the related Mortgage and the Indenture any Property
and related Leases (following such release, a “Released Property”, as
applicable) by depositing or causing to be deposited in the Release Account an
amount equal to the Release Price in immediately available funds for the
Released Property and satisfying the Required Conditions. Upon the Indenture
Trustee’s receipt of an Officer’s Certificate by the applicable Issuer or
Property Manager certifying that all conditions set forth herein have been
satisfied, the Indenture Trustee shall release to such Issuer or its designee
the related Lease File and execute and deliver such instruments of release,
transfer or assignment, in each case without recourse, that shall be provided to
it by such Issuer and are reasonably necessary to release any Mortgage or other
lien or security interest in such Property and the related Lease from the lien
of the Indenture.

 

(b)          No release of a Property (other than pursuant to a Third Party
Purchase Option or release due to a Collateral Defect) may occur if an Early
Amortization Period would occur as a result of such release.

 

Section 7.05.         Terminated Lease Property.

 

An Issuer may remove a Terminated Lease Property from the Collateral Pool in
exchange for the addition of one or more Qualified Substitute Properties to the
Collateral Pool pursuant to the provisions of Section 7.01.

 

Section 7.06.         Risk-Based or Credit Risk Substitution.

 

Each applicable Issuer may, with respect to a Lease, remove a Property from the
Collateral Pool in exchange for the addition of one or more Qualified Substitute
Properties to the Collateral Pool; provided that: (i) the remaining term to
maturity of the related Lease is less than three (3) years from the date of the
proposed substitution and the Property Manager, in accordance with the Servicing
Standard, determines that there is a reasonable risk of non-renewal of such
Lease (“Non-Renewal Risk”); (ii) based on written communications from the Tenant
under such Lease, the Property Manager, in accordance with the Servicing
Standard, determines that there is a Non-Renewal Risk; (iii) the applicable
Issuer has received from the Tenant under the related Lease for such Property
written notice of the non-renewal of such Lease; or (iv) the Property Manager,
in accordance with the Servicing Standard, determines that there is a reasonable
risk of monetary default by the Tenant under such Lease (“Credit Risk” and any
substitution related to clauses (i), (ii), (iii) or (iv), collectively, a
“Risk-Based Substitution”). In addition, the Property Manager or the applicable
Issuer shall provide to the Indenture Trustee an explanation of the Non-Renewal
Risk or Credit Risk, including, if applicable, a copy of any written
communication from the Tenant related to such Non-Renewal Risk or Credit Risk,
as well as a summary description of the anticipated Qualified Substitute
Property.

 

Section 7.07.         Disposition Period.

 

During the Disposition Period, the Property Manager will be required to utilize
efforts consistent with the Servicing Standard to cause all of the Properties
and related Leases to be released from the Collateral Pool prior the Rated Final
Payment Date by receiving payment of the Release Price for such Properties and
Leases through the sale of such Properties.

 

Section 7.08.         [Reserved].

 

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Section 7.09.         [Reserved].

 

Section 7.10.         Series Collateral Release.

 

(a)          In accordance with Article VII of the Indenture and subject to
Section 7.01(a) and 7.10(b), one or more Issuers may sell any Property and the
related Lease in connection with a prepayment in full of a Series of Notes (a
“Series Collateral Release”). Any Series Collateral Release Price received in
connection with a Series Collateral Release shall be deposited into the
Collection Account and applied by the Indenture Trustee on the date of such
Series Collateral Release, in accordance with the terms of the Indenture. For
the avoidance of doubt, AFOP or an Affiliate may elect to make a capital
contribution to one or more Issuers for the purposes of paying the applicable
Series Collateral Release Price and the related Released Properties may be
distributed by the applicable Issuer to AFOP or an Affiliate.

 

(b)          No Series Collateral Release shall occur unless (i) the Rating
Condition is satisfied, (ii) no Early Amortization Period will occur following
such Series Collateral Release and (iii) no Maximum Property Concentration will
be exceeded (or, if prior to such Series Collateral Release, an existing Maximum
Property Concentration is already exceeded, the release of such Released
Properties will reduce such Maximum Property Concentration or such Maximum
Property Concentration will remain unchanged after giving effect to such
release).

 

(c)          Any Series Collateral Release Prices that are required to be
transferred from the Collection Account to the Release Account pursuant to the
Indenture shall be treated as a “Release Price” and applied in accordance with
Section 3.05(b).

 

(d)          Any Released Property sold in connection with a Series Collateral
Release shall not be taken into consideration for the purposes of the
limitations set forth in Section 7.01(a).

 

(e)          In connection with a release of Properties pursuant to
Section 7.10(a), upon the Indenture Trustee’s receipt of an Officer’s
Certificate by the applicable Issuer or Property Manager, certifying that all
conditions set forth herein have been satisfied, upon which the Indenture
Trustee shall be permitted to fully rely and shall have no liability for so
relying without any obligation to confirm or verify, the Indenture Trustee shall
release to such Issuer or its designee the related Lease File and execute and
deliver such instruments of release, transfer or assignment, in each case
without recourse, that shall be provided to it by such Issuer and are reasonably
necessary to release any Mortgage or other lien or security interest in such
Property and the related Lease from the lien of the Indenture.

 

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Section 7.11.         Qualified Deleveraging Event.

 

In connection with an Early Refinancing Prepayment as permitted pursuant to the
terms of any applicable Series Supplement, an Issuer may release Properties with
an aggregate Allocated Loan Amount not to exceed the Qualified Release Amount;
provided, that, after giving effect to a substitution or exchange pursuant to
this Section 7.11, (i) the sum of the Collateral Value of all Released
Properties and Exchanged Properties released or exchanged since the most recent
Series Closing Date shall not exceed 35% of the Aggregate Collateral Value as of
such Series Closing Date; and (ii) the sum of the Collateral Value of all
Released Properties released since the most recent Series Closing Date by paying
the Release Price shall not exceed 25% of the Aggregate Collateral Value as of
such Series Closing Date. Notwithstanding the foregoing, (i) a release or
exchange of a Property in connection with a Collateral Defect, a Third Party
Purchase Option, a Risk-Based Substitution or a Qualified Deleveraging Event,
(ii) the release or exchange of a Terminated Lease Property, Delinquent Asset or
Defaulted Asset, (iii) releases during the Disposition Period, (iv) releases as
a result of a Triple A Release, (v) releases in connection with a Series
Collateral Release or (vi) a transfer of lease terms to a Lease Transfer
Property shall not be taken into consideration for purposes of either maximum
described in the prior sentence. In addition, with respect to any release of
Properties in connection with a Qualified Deleveraging Event, no Make Whole
Amount shall be due with respect to such release.

 

Section 7.12.         Triple A Release Event.

 

Notwithstanding anything to the contrary herein, if any Triple A Notes are
Outstanding on their related Triple A Release Date, the Property Manager shall
use commercially reasonable efforts to sell Properties in an amount equal to 35%
of the Aggregate Collateral Value, taking into account the aggregate Collateral
Value of all Released Properties released since the Initial Closing Date. Any
Release Price collected in connection with a Triple A Release Event shall be
deposited as Unscheduled Proceeds into the Collection Account and shall be
included in the Available Amount on the following Payment Date.

 

ARTICLE VIII

TERMINATION

 

Section 8.01.         Termination.

 

The respective obligations and responsibilities under this Agreement of the
Property Manager, the Special Servicer, the Back-Up Manager and each Issuer
shall terminate upon the earlier of (i) liquidation or final payment under the
last remaining Lease with respect to a Property included in the Collateral Pool
and (ii) satisfaction of the indebtedness evidenced by the Notes, whereupon the
Indenture Trustee shall execute and deliver to the Issuers such instruments of
release, transfer or assignment, in each case without recourse, as shall be
provided to it by the Issuers and reasonably necessary to release any lien or
security interest in the subject Properties and Leases.

 

ARTICLE IX

MISCELLANEOUS PROVISIONS

 

Section 9.01.         Amendment.

 

Subject to the provisions of the Indenture governing amendments, supplements and
other modifications to this Agreement, this Agreement may be amended by the
parties hereto from time to time but only by the mutual written agreement signed
by the parties hereto. The Property Manager shall furnish to each party hereto
and to each Issuer a fully executed counterpart of each amendment to this
Agreement.

 

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The parties hereto agree that no modifications or amendments will be made to the
Indenture, any Series Supplement or other Transaction Documents without the
consent of the Property Manager, the Special Servicer or the Back-Up Manager, as
applicable, if such person would be materially adversely affected by such
modification or amendment, regardless of whether such person is a party to such
agreement. In addition, the parties hereto agree that no modifications or
amendments will be made to the definition of “Lease File” herein without the
written consent of the Custodian.

 

Section 9.02.         Counterparts.

 

This Agreement may be executed in several counterparts, each of which
counterparts shall be deemed an original instrument and all of which together
shall constitute a single Agreement. Delivery of an executed counterpart of a
signature page of this Agreement in Portable Document Format (PDF) or by
facsimile transmission shall be as effective as delivery of a manually executed
original counterpart of this Agreement.

 

Section 9.03.         Governing Law.

 

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH
STATE (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES), AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.

 

Section 9.04.         Notices.

 

All notices, requests and other communications hereunder shall be in writing
and, unless otherwise provided herein, shall be deemed to have been duly given
if delivered by courier or mailed by first class mail, postage prepaid, or if
transmitted by facsimile and confirmed in a writing delivered or mailed as
aforesaid, to:

 

(a)          in the case of AF Properties, as the initial Property Manager and
initial Special Servicer, 405 Park Avenue, 3rd Floor, New York, New York 10022,
Attention: Legal Department;

 

(b)          in the case of any Issuer, 7627 Little Avenue, Suite 200,
Charlotte, North Carolina 28226, Attention: Legal Department, or such address as
provided in any Joinder Agreement;

 

(c)          in the case of the Indenture Trustee, Citibank, N.A., 388 Greenwich
St., New York, New York 10013, Attention: Agency & Trust – AFIN 2019-1 or call
888-855-9695 to ask for the deal administrator’s E-mail address;

 

(d)          in the case of the applicable Rating Agency, as provided in each
outstanding Series Supplement; and

 

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(e)          in the case of the Back-Up Manager, KeyBank National Association,
11501 Outlook St., Suite 300, Overland Park, KS 66211, Attention: W. Todd
Reynolds, E-mail: Todd_Reynolds@keybank.com;

 

or, as to each such Person, to such other address and facsimile number as shall
be designated by such Person in a written notice to parties hereto. Any notice
required or permitted to be delivered to a holder of Issuer Interests or Notes
shall be deemed to have been duly given if mailed by first class mail, postage
prepaid, at the address of such holder as shown in the register maintained for
such purposes under the applicable Issuer LLC Agreement and the Indenture,
respectively. Any notice so mailed within the time prescribed in this Agreement
shall conclusively be presumed to have been duly given, whether or not such
holder receives such notice.

 

Section 9.05.         Severability of Provisions.

 

If any one or more of the covenants, agreements, provisions or terms of this
Agreement shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Agreement.

 

Section 9.06.         Effect of Headings and Table of Contents.

 

The article and section headings and the table of contents herein are for
convenience of reference only and shall not limit or otherwise affect the
construction hereof.

 

Section 9.07.         Notices to the Rating Agencies and Others.

 

(a)       The Indenture Trustee shall promptly provide notice to the applicable
Rating Agency with respect to each of the following of which the Indenture
Trustee has actual knowledge:

 

(i)          any material change or amendment to this Agreement;

 

(ii)         the occurrence of any Servicer Replacement Event that has not been
cured; and

 

(iii)        the resignation or termination of the Property Manager or the
Special Servicer and the appointment of a successor.

 

(b)          The Property Manager shall promptly provide notice to the
applicable Rating Agency with respect to each of the following of which it has
actual knowledge:

 

(i)          the resignation or removal of the Indenture Trustee and the
appointment of a successor;

 

(ii)         any change in the location of the Collection Account;

 

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(iii)        any change in the identity of a Tenant; and

 

(iv)        any addition or removal of a Property from the Collateral.

 

(c)         Each of the Property Manager and the Special Servicer, as the case
may be, shall furnish the applicable Rating Agency such information with respect
to the Leases and Properties as such Rating Agency shall reasonably request and
that the Property Manager or the Special Servicer, as the case may be, can
reasonably provide.

 

(d)         Each of the Property Manager and the Special Servicer, as the case
may be, shall promptly furnish the applicable Rating Agency and the Issuers with
copies of the following items:

 

(i)          each of its quarterly statements as to compliance described in
Section 3.11; and

 

(ii)         each report prepared by it pursuant to Section 4.01.

 

(e)         [Reserved]:

 

(f)          Any Officer’s Certificate, Opinion of Counsel, report, notice,
request or other material communication prepared by the Property Manager, the
Special Servicer, each Issuer, the Issuer Members on behalf of the Issuers, or
the Indenture Trustee, or caused to be so prepared, for dissemination to any of
the parties to this Agreement or any holder of Notes or Issuer Interests shall
also be concurrently forwarded by such Person to the Issuers and the Initial
Purchasers to the extent not otherwise required to be so forwarded. Any
Officer’s Certificate delivered under this Agreement or any other Transaction
Document shall be deemed to have been delivered by the Person which is a party
to this Agreement with respect to which the same was delivered, and under no
circumstances shall the officer or other person executing the same have any
personal liability under or in connection with any Officer’s Certificate
executed by it.

 

Section 9.08.         Successors and Assigns: Beneficiaries.

 

The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of each Issuer and
the Noteholders. No other person, including any Tenant, shall be entitled to any
benefit or equitable right, remedy or claim under this Agreement.

 

Section 9.09.         Complete Agreement.

 

This Agreement embodies the complete agreement among the parties with respect to
the subject matter hereof and may not be varied or, other than pursuant to
Section 8.01, terminated except by a written agreement conforming to the
provisions of Section 9.01. All prior negotiations or representations of the
parties are merged into this Agreement and shall have no force or effect unless
expressly stated herein.

 

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Section 9.10.         Consent to Jurisdiction.

 

Any action or proceeding against any of the parties hereto relating in any way
to this Agreement may be brought and enforced in the courts of the State of New
York sitting in the borough of Manhattan or of the United States District Court
for the Southern District of New York and each of the parties hereto irrevocably
submits to the jurisdiction of each such court in respect of any such action or
proceeding. Each of the parties hereto hereby waives, to the fullest extent
permitted by law, any right to remove any such action or proceeding by reason of
improper venue or inconvenient forum.

 

Section 9.11.         No Proceedings.

 

The Property Manager, the Special Servicer, each Issuer (with respect to any
other Issuer) and the Back-Up Manager hereby covenant and agree that, prior to
the date which is two years and thirty-one days after the payment in full of the
latest maturing Note, it will not institute against, or join with, encourage or
cooperate with any other Person in instituting, against an Issuer any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings, under any federal or state bankruptcy or similar law;
provided, however, that nothing in this Section 9.11 shall constitute a waiver
of any right to indemnification, reimbursement or other payment from the Issuer
pursuant to the Indenture. In the event that any such Person takes action in
violation of this Section 9.11, the applicable Issuer, shall file or cause to be
filed an answer with the bankruptcy court or otherwise properly contesting the
filing of such a petition by any such Person against such Issuer or the
commencement of such action and raising the defense that such Person has agreed
in writing not to take such action and should be estopped and precluded
therefrom and such other defenses, if any, as its counsel advises that it may
assert. The provisions of this Section 9.11 shall survive the termination of
this Agreement, and the resignation or removal of any party hereto. Nothing
contained herein shall preclude participation by any Person in the assertion or
defense of its claims in any such proceeding involving an Issuer.

 

The obligations of each Issuer under this Agreement are solely the obligations
of such Issuer. No recourse shall be had for the payment of any amount owing in
respect of any fee hereunder or any other obligation or claim arising out of or
based upon this Agreement against any member, employee, officer or director of
such Issuer. Fees, expenses, costs or other obligations payable by an Issuer
hereunder shall be payable by such Issuer solely to the extent that funds are
then available or thereafter become available for such purpose pursuant to
Section 2.11 of the Indenture. In the event that sufficient funds are not
available for their payment pursuant to Section 2.11 of the Indenture, the
excess unpaid amount of such fees, expenses, costs or other obligations shall in
no event constitute a claim (as defined in Section 101 of the Bankruptcy Code)
against, or corporate obligation of, such Issuer.

 

Section 9.12.         Cooperation.

 

Each party hereto hereby agrees to act diligently in responding to a request
made by any other party to this Agreement and agrees to reasonably cooperate
with the requesting party in connection with the subject matter.

 

Section 9.13.         Acknowledgment of Receipts by Indenture Trustee.

 

Upon request, within ten (10) Business Days after its receipt of any notice,
document or other delivery pursuant to any Transaction Document, the Indenture
Trustee shall acknowledge its receipt of the same in writing delivered to the
party that delivered the same to the Indenture Trustee. 

 

 86 

 

 

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

 

  American Finance Properties, LLC, as   Property Manager and Special Servicer  
        By: /s/ Michael R. Anderson     Name: Michael R. Anderson     Title:
Authorized Signatory

 

  AFN ABSPROP001, LLC, a Delaware limited liability company, as an Issuer      
        By:  American Finance Operating Partnership, L.P., a Delaware limited
partnership, its sole member           By: American Finance Trust, Inc., a
Maryland corporation, its general partner               By: /s/ Michael R.
Anderson         Name: Michael R. Anderson         Title: Authorized Signatory

 

  AFN ABSPROP001-A, LLC, a Delaware limited liability company, as an Issuer    
          By:  American Finance Operating Partnership, L.P., a Delaware limited
partnership, its sole member           By: American Finance Trust, Inc., a
Maryland corporation, its general partner               By: /s/ Michael R.
Anderson         Name: Michael R. Anderson         Title: Authorized Signatory

  

Signature Page to Property Management Agreement (AFIN 2019-1)

 

 

 

 

  AFN ABSPROP001-B, LLC, a Delaware limited liability company, as an Issuer    
          By:  American Finance Operating Partnership, L.P., a Delaware limited
partnership, its sole member           By: American Finance Trust, Inc., a
Maryland corporation, its general partner               By: /s/ Michael R.
Anderson         Name: Michael R. Anderson         Title: Authorized Signatory

 

  CITIBANK, N.A., not in its individual capacity but solely as Indenture Trustee
        By: /s/ James Polcari   Name: James Polcari     Senior Trust Officer    
Authorized Signatory

 

  KEYBANK NATIONAL ASSOCIATION,   as Back-Up Manager         By: /s/ W. Todd
Reynolds   Name: W. Todd Reynolds   Title: Vice President

 

Signature Page to Property Management Agreement (AFIN 2019-1)