Exhibit
10.4


 


	
   

  
	
   

  
	
  LOAN AGREEMENT

  
	
   

  
	
  Dated as of December 8, 2006

  
	
   

  
	
  Between

  
	
   

  
	
  ART MORTGAGE BORROWER PROPCO 2006-1C L.P.

  
	
  and

  
	
  ART MORTGAGE BORROWER OPCO 2006-1C L.P.,

  
	
  collectively, as Borrower

  
	
   

  
	
  and

  
	
   

  
	
  UBS REAL ESTATE SECURITIES INC.,

  
	
  as Lender

  
	
   

  
	
   

  



 

















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  I.

  	
  DEFINITIONS;
  PRINCIPLES OF CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
  1

  
	
  Section 1.2

  	
  Principles
  of Construction

  	
  23

  
	
   

  	
   

  	
   

  
	
  II.

  	
  THE
  LOAN

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  The
  Loan

  	
  23

  
	
   

  	
  2.1.1

  	
  Agreement
  to Lend and Borrow

  	
  23

  
	
   

  	
  2.1.2

  	
  Single
  Disbursement to Borrower

  	
  24

  
	
   

  	
  2.1.3

  	
  The
  Note

  	
  24

  
	
   

  	
  2.1.4

  	
  Use
  of Proceeds

  	
  24

  
	
  Section 2.2

  	
  Interest
  Rate

  	
  24

  
	
   

  	
  2.2.1

  	
  Applicable
  Interest Rate

  	
  24

  
	
   

  	
  2.2.2

  	
  Interest
  Calculation

  	
  24

  
	
   

  	
  2.2.3

  	
  Intentionally
  Omitted

  	
  24

  
	
   

  	
  2.2.4

  	
  Usury
  Savings

  	
  24

  
	
  Section 2.3

  	
  Loan
  Payments

  	
  25

  
	
   

  	
  2.3.1

  	
  Payment
  Before Maturity Date

  	
  25

  
	
   

  	
  2.3.2

  	
  Payment
  on Maturity Date

  	
  25

  
	
   

  	
  2.3.3

  	
  Interest
  Rate and Payment after Default

  	
  25

  
	
   

  	
  2.3.4

  	
  Late
  Payment Charge

  	
  25

  
	
   

  	
  2.3.5

  	
  Method
  and Place of Payment

  	
  25

  
	
  Section 2.4

  	
  Prepayments

  	
  26

  
	
   

  	
  2.4.1

  	
  Voluntary
  Prepayments

  	
  26

  
	
   

  	
  2.4.2

  	
  Mandatory
  Prepayments

  	
  29

  
	
   

  	
  2.4.3

  	
  Prepayments
  After Default

  	
  30

  
	
  Section 2.5

  	
  Defeasance

  	
  30

  
	
   

  	
  2.5.1

  	
  Total
  Defeasance

  	
  30

  
	
   

  	
  2.5.2

  	
  Partial
  Defeasance

  	
  33

  
	
   

  	
  2.5.3

  	
  Defeasance
  Collateral Account

  	
  36

  
	
   

  	
  2.5.4

  	
  Successor
  Borrower

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Borrower
  Representations

  	
  37

  
	
   

  	
  3.1.1

  	
  Organization

  	
  37

  
	
   

  	
  3.1.2

  	
  Proceedings

  	
  37

  
	
   

  	
  3.1.3

  	
  No
  Conflicts

  	
  38

  
	
   

  	
  3.1.4

  	
  Litigation

  	
  38

  
	
   

  	
  3.1.5

  	
  Orders
  and Decrees

  	
  38

  
	
   

  	
  3.1.6

  	
  Consents

  	
  38

  
	
   

  	
  3.1.7

  	
  Title

  	
  38

  
	
   

  	
  3.1.8

  	
  No
  Plan Assets

  	
  39

  



 


i

















 


	
   

  	
  3.1.9

  	
  Compliance

  	
  39

  
	
   

  	
  3.1.10

  	
  Financial
  Information

  	
  39

  
	
   

  	
  3.1.11

  	
  Condemnation

  	
  39

  
	
   

  	
  3.1.12

  	
  Utilities
  and Public Access

  	
  39

  
	
   

  	
  3.1.13

  	
  Separate
  Lots

  	
  40

  
	
   

  	
  3.1.14

  	
  Assessments

  	
  40

  
	
   

  	
  3.1.15

  	
  Enforceability

  	
  40

  
	
   

  	
  3.1.16

  	
  Assignment
  of Leases

  	
  40

  
	
   

  	
  3.1.17

  	
  Insurance

  	
  40

  
	
   

  	
  3.1.18

  	
  Licenses

  	
  40

  
	
   

  	
  3.1.19

  	
  Flood
  Zone

  	
  40

  
	
   

  	
  3.1.20

  	
  Physical
  Condition

  	
  41

  
	
   

  	
  3.1.21

  	
  Boundaries

  	
  41

  
	
   

  	
  3.1.22

  	
  Leases

  	
  41

  
	
   

  	
  3.1.23

  	
  Filing
  and Recording Taxes

  	
  41

  
	
   

  	
  3.1.24

  	
  Single
  Purpose

  	
  42

  
	
   

  	
  3.1.25

  	
  Tax
  Filings

  	
  47

  
	
   

  	
  3.1.26

  	
  Solvency

  	
  47

  
	
   

  	
  3.1.27

  	
  Federal
  Reserve Regulations

  	
  47

  
	
   

  	
  3.1.28

  	
  Organizational
  Chart

  	
  47

  
	
   

  	
  3.1.29

  	
  Bank
  Holding Company

  	
  48

  
	
   

  	
  3.1.30

  	
  No
  Other Debt

  	
  48

  
	
   

  	
  3.1.31

  	
  Investment
  Company Act

  	
  48

  
	
   

  	
  3.1.32

  	
  Intentionally
  Omitted

  	
  48

  
	
   

  	
  3.1.33

  	
  No
  Bankruptcy Filing

  	
  48

  
	
   

  	
  3.1.34

  	
  Full
  and Accurate Disclosure

  	
  48

  
	
   

  	
  3.1.35

  	
  Foreign
  Person

  	
  48

  
	
   

  	
  3.1.36

  	
  Intentionally
  Omitted

  	
  48

  
	
   

  	
  3.1.37

  	
  No
  Change in Facts or Circumstances; Disclosure

  	
  48

  
	
   

  	
  3.1.38

  	
  Property
  Management

  	
  48

  
	
   

  	
  3.1.39

  	
  Perfection
  of Accounts

  	
  49

  
	
   

  	
  3.1.40

  	
  Agreements

  	
  49

  
	
   

  	
  3.1.41

  	
  Intentionally
  Omitted

  	
  49

  
	
   

  	
  3.1.42

  	
  SPE
  Separateness Covenants

  	
  49

  
	
  Section 3.2

  	
  Survival
  of Representations

  	
  49

  
	
   

  	
   

  	
   

  
	
  IV.

  	
  BORROWER
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Borrower
  Affirmative Covenants

  	
  50

  
	
   

  	
  4.1.1

  	
  Existence;
  Compliance with Legal Requirements

  	
  50

  
	
   

  	
  4.1.2

  	
  Taxes
  and Other Charges

  	
  50

  
	
   

  	
  4.1.3

  	
  Litigation

  	
  50

  
	
   

  	
  4.1.4

  	
  Access
  to Property

  	
  50

  
	
   

  	
  4.1.5

  	
  Further Assurances;
  Supplemental Mortgage Affidavits

  	
  51

  
	
   

  	
  4.1.6

  	
  Financial Reporting

  	
  51

  
	
   

  	
  4.1.7

  	
  Title to the
  Property

  	
  54

  
	
   

  	
  4.1.8

  	
  Estoppel Statement

  	
  54

  



 


ii

















 


	
   

  	
  4.1.9

  	
  Leases

  	
  55

  
	
   

  	
  4.1.10

  	
  Alterations

  	
  56

  
	
   

  	
  4.1.11

  	
  Intentionally Omitted

  	
  58

  
	
   

  	
  4.1.12

  	
  Material Agreements

  	
  58

  
	
   

  	
  4.1.13

  	
  Performance by Borrower

  	
  58

  
	
   

  	
  4.1.14

  	
  Costs of
  Enforcement/Remedying Defaults

  	
  58

  
	
   

  	
  4.1.15

  	
  Business and
  Operations

  	
  58

  
	
   

  	
  4.1.16

  	
  Intentionally Omitted

  	
  59

  
	
   

  	
  4.1.17

  	
  Intentionally Omitted

  	
  59

  
	
   

  	
  4.1.18

  	
  Cash
  Management Agency Agreement

  	
  59

  
	
  Section 4.2

  	
  Borrower
  Negative Covenants

  	
  59

  
	
   

  	
  4.2.1

  	
  Due on Sale and
  Encumbrance; Transfers of Interests

  	
  59

  
	
   

  	
  4.2.2

  	
  Liens

  	
  59

  
	
   

  	
  4.2.3

  	
  Dissolution

  	
  59

  
	
   

  	
  4.2.4

  	
  Change in Business

  	
  59

  
	
   

  	
  4.2.5

  	
  Debt Cancellation

  	
  59

  
	
   

  	
  4.2.6

  	
  Affiliate Transactions

  	
  60

  
	
   

  	
  4.2.7

  	
  Zoning

  	
  60

  
	
   

  	
  4.2.8

  	
  Assets

  	
  60

  
	
   

  	
  4.2.9

  	
  No
  Joint Assessment

  	
  60

  
	
   

  	
  4.2.10

  	
  Principal Place of
  Business

  	
  60

  
	
   

  	
  4.2.11

  	
  ERISA

  	
  60

  
	
   

  	
  4.2.12

  	
  Material Agreements

  	
  61

  
	
   

  	
  4.2.13

  	
  Intentionally Omitted

  	
  61

  
	
   

  	
  4.2.14

  	
  Intentionally Omitted

  	
  61

  
	
   

  	
  4.2.15

  	
  Intentionally Omitted

  	
  61

  
	
   

  	
  4.2.16

  	
  Cash Management
  Agency Agreement

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  INSURANCE, CASUALTY
  AND CONDEMNATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Insurance

  	
  61

  
	
   

  	
  5.1.1

  	
  Insurance Policies

  	
  61

  
	
   

  	
  5.1.2

  	
  Insurance Company

  	
  66

  
	
   

  	
  5.1.3

  	
  Current Insurance

  	
  67

  
	
  Section 5.2

  	
  Casualty
  and Condemnation

  	
  67

  
	
   

  	
  5.2.1

  	
  Casualty

  	
  67

  
	
   

  	
  5.2.2

  	
  Condemnation

  	
  67

  
	
   

  	
  5.2.3

  	
  Casualty Proceeds

  	
  68

  
	
  Section 5.3

  	
  Delivery
  of Net Proceeds

  	
  68

  
	
   

  	
  5.3.1

  	
  Minor
  Casualty or Condemnation

  	
  68

  
	
   

  	
  5.3.2

  	
  Major
  Casualty or Condemnation

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  RESERVE
  FUNDS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Required
  Repairs

  	
  72

  
	
   

  	
  6.1.1

  	
  Required
  Repairs and Deposits of Required Repair Funds

  	
  72

  
	
   

  	
  6.1.2

  	
  Release
  of Required Repair Funds

  	
  72

  



 


iii

















 


	
  Section 6.2

  	
  Tax
  Funds

  	
  73

  
	
   

  	
  6.2.1

  	
  Deposits
  of Tax Funds

  	
  73

  
	
   

  	
  6.2.2

  	
  Release
  of Tax Funds

  	
  74

  
	
  Section 6.3

  	
  Insurance
  Funds

  	
  74

  
	
   

  	
  6.3.1

  	
  Deposits
  of Insurance Funds

  	
  74

  
	
   

  	
  6.3.2

  	
  Release
  of Insurance Funds

  	
  75

  
	
  Section 6.4

  	
  Capital
  Expenditure Funds

  	
  75

  
	
   

  	
  6.4.1

  	
  Deposits
  of Capital Expenditure Funds

  	
  75

  
	
   

  	
  6.4.2

  	
  Release
  of Capital Expenditure Funds

  	
  75

  
	
  Section 6.5

  	
  Borrower
  Cash Collateral Funds

  	
  77

  
	
   

  	
  6.5.1

  	
  Deposits
  of Borrower Cash Collateral Funds

  	
  77

  
	
   

  	
  6.5.2

  	
  Release
  of Borrower Cash Collateral Funds

  	
  77

  
	
  Section 6.6

  	
  Intentionally
  Omitted

  	
  77

  
	
  Section 6.7

  	
  Intentionally
  Omitted

  	
  77

  
	
  Section 6.8

  	
  Application
  of Reserve Funds

  	
  77

  
	
  Section 6.9

  	
  Security
  Interest in Reserve Funds

  	
  78

  
	
   

  	
  6.9.1

  	
  Grant
  of Security Interest

  	
  78

  
	
   

  	
  6.9.2

  	
  Income
  Taxes

  	
  78

  
	
   

  	
  6.9.3

  	
  Prohibition
  Against Further Encumbrance

  	
  78

  
	
  Section 6.10

  	
  Intentionally
  Omitted

  	
  78

  
	
  Section 6.11

  	
  Provisions
  Regarding Letters of Credit

  	
  78

  
	
   

  	
  6.11.1

  	
  Security
  for Debt

  	
  78

  
	
   

  	
  6.11.2

  	
  Additional
  Rights of Lender

  	
  78

  
	
  Section 6.12

  	
  Guaranty
  or Letter of Credit in Lieu of Cash Deposit

  	
  79

  
	
   

  	
   

  	
   

  
	
  VII.

  	
  PROPERTY
  MANAGEMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  The
  Management Agreement

  	
  80

  
	
  Section 7.2

  	
  Prohibition
  Against Termination or Modification

  	
  80

  
	
  Section 7.3

  	
  Replacement
  of Manager

  	
  81

  
	
  Section 7.4

  	
  The
  Cash Management Agency Agreement

  	
  81

  
	
   

  	
   

  	
   

  
	
  VIII.

  	
  PERMITTED
  TRANSFERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Permitted
  Transfer of Property

  	
  81

  
	
  Section 8.2

  	
  Permitted
  Transfers of Interest in Borrower

  	
  83

  
	
   

  	
   

  	
   

  
	
  IX.

  	
  SALE
  AND SECURITIZATION OF MORTGAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Sale
  of Mortgage and Securitization; Loan Components; Mezzanine Loans

  	
  84

  
	
  Section 9.2

  	
  Securitization
  Indemnification

  	
  86

  
	
   

  	
   

  	
   

  
	
  X.

  	
  DEFAULTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Event
  of Default

  	
  89

  
	
  Section 10.2

  	
  Remedies

  	
  91

  
	
  Section 10.3

  	
  Right
  to Cure Defaults

  	
  93

  
	
  Section 10.4

  	
  Remedies
  Cumulative

  	
  93

  



 


iv

















 


	
  XI.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Successors
  and Assigns

  	
  93

  
	
  Section 11.2

  	
  Lender’s
  Discretion

  	
  93

  
	
  Section 11.3

  	
  Governing
  Law

  	
  94

  
	
  Section 11.4

  	
  Modification,
  Waiver in Writing

  	
  95

  
	
  Section 11.5

  	
  Delay
  Not a Waiver

  	
  95

  
	
  Section 11.6

  	
  Notices

  	
  96

  
	
  Section 11.7

  	
  Trial
  by Jury

  	
  97

  
	
  Section 11.8

  	
  Headings

  	
  97

  
	
  Section 11.9

  	
  Severability

  	
  97

  
	
  Section 11.10

  	
  Preferences

  	
  97

  
	
  Section 11.11

  	
  Waiver
  of Notice

  	
  98

  
	
  Section 11.12

  	
  Remedies
  of Borrower

  	
  98

  
	
  Section 11.13

  	
  Expenses;
  Indemnity

  	
  98

  
	
  Section 11.14

  	
  Schedules
  Incorporated

  	
  99

  
	
  Section 11.15

  	
  Offsets,
  Counterclaims and Defenses

  	
  99

  
	
  Section 11.16

  	
  No
  Joint Venture or Partnership; No Third Party Beneficiaries

  	
  99

  
	
  Section 11.17

  	
  Publicity

  	
  100

  
	
  Section 11.18

  	
  Waiver
  of Marshalling of Assets

  	
  100

  
	
  Section 11.19

  	
  Waiver
  of Offsets/Defenses/Counterclaims

  	
  100

  
	
  Section 11.20

  	
  Conflict;
  Construction of Documents; Reliance

  	
  100

  
	
  Section 11.21

  	
  Brokers
  and Financial Advisors

  	
  101

  
	
  Section 11.22

  	
  Exculpation

  	
  101

  
	
  Section 11.23

  	
  Prior
  Agreements

  	
  103

  
	
  Section 11.24

  	
  Servicer

  	
  103

  
	
  Section 11.25

  	
  Joint
  and Several Liability

  	
  104

  
	
  Section 11.26

  	
  Creation
  of Security Interest

  	
  104

  
	
  Section 11.27

  	
  Assignments
  and Participations

  	
  104

  
	
  Section 11.28

  	
  Cross
  Default; Cross Collateralization

  	
  106

  
	
  Section 11.29

  	
  Substitution

  	
  106

  
	
  Section 11.30

  	
  Partial
  Release – Expansion

  	
  113

  
				



 


v

















 


SCHEDULES


 


	
  Schedule
  I -

  	
   

  	
  Major
  Customer List

  
	
  Schedule
  II -

  	
   

  	
  Required
  Repairs

  
	
  Schedule
  III -

  	
   

  	
  Organizational
  Chart

  
	
  Schedule
  IV -

  	
   

  	
  Form of
  Subordination, Non-Disturbance and Attornment Agreement

  
	
  Schedule
  V -

  	
   

  	
  Reserved

  
	
  Schedule
  VI -

  	
   

  	
  List
  of Properties, Allocated Loan Amounts, Allocated UCF Amounts, Allocated
  Capital Expenditure Amounts and Title

  
	
  Schedule
  VII -

  	
   

  	
  Proposed
  Annual Budget

  
	
  Schedule
  VIII -

  	
   

  	
  Leases
  with Major Tenants

  
	
  Schedule
  IX -

  	
   

  	
  List
  of Properties with no Certificate of Occupancy

  
	
  Schedule
  X -

  	
   

  	
  Reserved

  
	
  Schedule
  XI -

  	
   

  	
  Excluded
  Lender Transferees

  
	
  Schedule
  XII -

  	
   

  	
  Form of
  Alteration Guaranty

  
	
  Schedule
  3.1 -

  	
   

  	
  Disclosure
  Schedule

  



 


vi














 


LOAN AGREEMENT


 


THIS LOAN
AGREEMENT, dated as of December 8, 2006 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”),
between UBS REAL ESTATE SECURITIES INC., a
Delaware corporation, having an address at 1285 Avenue of the Americas, New
York, New York 10019 (“Lender”), and ART
MORTGAGE BORROWER PROPCO 2006-1C L.P., a Delaware limited
partnership (“Propco Borrower”), and ART
MORTGAGE BORROWER OPCO 2006-1C L.P., a Delaware limited partnership
(“Opco Borrower”, and together with Propco Borrower, individually or
collectively, as the context may require, “Borrower”), each having an
address at 10 Glenlake Parkway, Suite 800, Atlanta, Georgia 30328.


 


All capitalized
terms used herein shall have the respective meanings set forth in Article I
hereof.


 


W I T N E S S E T H:


 


WHEREAS, Borrower
desires to obtain the Loan (as hereinafter defined) from Lender; and


 


WHEREAS, Lender is
willing to make the Loan to Borrower, subject to and in accordance with the
terms of this Agreement and the other Loan Documents (as hereinafter defined).


 


NOW, THEREFORE, in
consideration of the covenants set forth in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree, represent and warrant as
follows:


 


I.              DEFINITIONS;
PRINCIPLES OF CONSTRUCTION


 


Section 1.1            Definitions.  For all purposes of this Agreement,
except as otherwise expressly provided:


 


“Accounts” shall have
the meaning set forth in the Cash Management Agreement.


 


“Affiliate” shall
mean, as to any Person, any other Person that, directly or indirectly, owns
forty percent (40%) or more of, is in control of, is controlled
by or is under common ownership or control with such Person or is a director,
trustee or officer of such Person or of an Affiliate of such Person. As used in
this definition, the term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management,
policies or activities of a Person, whether through ownership of voting
securities, by contract or otherwise.


 


“Agent” shall mean
U.S. Bank National Association or any successor Eligible Institution thereto
acting as Agent under the Cash Management Agreement.


 


1

















 


“Allocated Capital
Expenditure Amount” shall mean the portion of the Capital Expenditure
Maximum Amount allocated to each Individual Property, as set forth on Schedule
VI.


 


“Allocated Loan Amount”
shall mean the portion of the Loan allocated to each Individual Property, as
set forth on Schedule VI as the same may be reduced pursuant to Section 2.4.2.


 


“Allocated UCF Amount”
shall mean, with respect to any Individual Property, one hundred percent (100%)
of the portion of the Underwritable Cash Flow allocated to such Individual
Property as of the date hereof; as set forth on Schedule VI.


 


“Allocated UCF Cash Trap
Amount” shall mean, with respect to any Individual Property, eighty percent
(80.0%) of the Allocated UCF Amount for such Individual Property, as set forth
on Schedule VI.


 


“Allocated UCF Trigger
Amount” shall mean, with respect to any Individual Property, eighty-five
percent (85.0%) of the
Allocated UCF Amount for such Individual Property, as set forth on Schedule
VI.


 


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


 


“Alteration” shall
mean any demolition, alteration, installation, improvement or decoration of or
to any Improvements at any Individual Property or any part thereof (it being
agreed that any expansion of the Improvements at any Individual Property shall
not be deemed to be an “Alteration” hereunder so long as such expansion is
undertaken and completed in accordance with Legal Requirements and this
definition shall specifically exclude Required Repairs).


 


“Alteration Collateral”
shall have the meaning set forth in Section 4.1.10(a).


 


“Alteration Guaranty”
shall have the meaning set forth in Section 4.1.10(a).


 


“Alteration Security”
shall have the meaning set forth in Section 4.1.10(a).


 


“Alteration Threshold”
shall mean the lesser of (i) five percent (5%) of the aggregate
outstanding principal amount of the Loan with respect to all Alterations at any
time to all of the  Properties or, (ii) with
respect to any affected Individual Property, fifteen percent (15%) of the
Allocated Loan Amount for such Individual Property.


 


“Annual Budget” shall
mean the operating and capital budget for the Property setting forth Borrower’s
good faith estimate of Gross Revenue, Operating Expenses, and Capital
Expenditures for the applicable Fiscal Year.


 


“Applicable Interest Rate”
shall mean 5.4335% per annum.


 


“Appraisal” shall
mean an M.A.I. appraisal of the Property in its then “as is” condition,
prepared not more than ninety (90) days (or such longer period as shall be
acceptable 


 


2

















 


to
Lender) prior to the date delivered to Lender or Servicer in connection with
the relevant event or approval; which appraisal (i) shall meet the minimum
appraisal standards for national banks promulgated by the Comptroller of the
Currency pursuant to Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, as amended (FIRREA), and (ii) otherwise shall
be in both form and substance (including with respect to methods, procedures
and scope of services) reasonably
satisfactory to Lender.


 


“Approved Annual Budget”
shall have the meaning set forth in Section 4.1.6(e).


 


“Assignment of Leases”
shall mean, with respect to each Individual Property, that certain first
priority Assignment of Leases and Rents, dated as of the date hereof, from
Propco Borrower, as assignor, to Lender, as assignee, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.


 


“Assignment of Management
Agreement” shall mean that certain Assignment of Management Agreement and Subordination of Management Fees, dated as of
the date hereof, among Lender, Propco Borrower and Manager, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.


 


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


 


“Bankruptcy Action”
shall have the meaning set forth in Section 3.1.24(y).


 


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


 


“Basic Carrying Costs”
shall mean the sum of the following costs associated with the Property for the
relevant Fiscal Year or payment period: (i) Taxes and (ii) Insurance
Premiums.


 


“Borrower” shall
mean, individually or collectively as the context may require, Propco Borrower
and/or Opco Borrower.


 


“Borrower Cash Collateral
Funds” shall have the meaning set forth in Section 6.5.1.


 


“Borrower Excess Cash
Flow” shall have the meaning set forth in the Cash Management Agreement.


 


“Borrower
GP” shall have the meaning set forth in Section 3.1.24(z).


 


“Business Day” shall
mean any day other than a Saturday, a Sunday or a legal holiday on which
national banks are not open for general business in (i) the State of New
York, (ii) the state where the corporate trust office of the Trustee is
located, or (iii) the state where the servicing offices of the Servicer
are located.


 


3

















 


“Capital Expenditure
Funds” shall have the meaning set forth in Section 6.4.1.


 


“Capital Expenditure
Maximum Amount” shall mean, as of any date, an amount equal to Six Hundred
Fifty-Six Thousand and No/100 Dollars ($656,000.00) the Allocated Capital
Expenditure Amount of each Individual Property previously released from the
lien of the Mortgage (or, in lieu of such release, which Mortgage is assigned
by Lender) pursuant to Section 2.4 or Section 2.5, and less the
Allocated Capital Expenditure Amount of a Substituted Property pursuant to Section 11.29,
but plus the Allocated Capital Expenditure Amount of a Substitute Property
pursuant to Section 11.29, subject in all cases to a maximum
aggregate of $656,000.00.


 


“Capital Expenditures”
for any period shall mean amounts expended for replacements and alterations to
the Property and required to be capitalized according to GAAP.


 


“Capital Expenditures
Work” shall mean any labor performed or materials installed in connection
with any Capital Expenditure.


 


“Cash Management Agency
Agreement” shall mean, collectively, (i) that certain Cash Management
Agency Agreement, dated as of the date hereof, between Propco Borrower and
Guarantor, (ii) that certain Cash Management Sub-Agency Agreement dated as
of the date hereof between Guarantor and Logistics and (iii) that certain
Administrative Services and Cost Allocation Agreement dated as of the date
hereof between Opco Borrower and Logistics,  in  each case as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time in accordance with the terms of this Agreement.


 


“Cash Management
Agreement” shall mean that certain Cash Management Agreement, dated as of
the date hereof, among Lender, Borrower, Manager and Agent.


 


“Cash Trap Event”
shall mean, on the relevant date, the fact that the annual Underwritable Cash
Flow for the Property determined by Lender as of the end of each fiscal quarter
(based on Borrower’s Fiscal Year) on a trailing four (4) quarter basis is
less than the Cash Trap UCF Amount.


 


“Cash Trap Period”
shall mean a period commencing on the first (1st) Business Day after a Cash Trap Event has occurred
to the first (1st) Business Day
after the related Cash Trap Event has not existed for a period of two (2) consecutive
fiscal quarters.


 


“Cash Trap UCF Amount”
shall mean, as of any date, an amount equal to the aggregate of the Allocated
UCF Cash Trap Amounts of all Individual Properties less the Allocated UCF Cash
Trap Amount of each Individual Property previously released from the lien of
the Mortgage (or, in lieu of such release, which Mortgage was assigned by
Lender) pursuant to Section 2.4 or Section 2.5.


 


“Casualty” shall mean
the occurrence of any casualty, damage or injury, by fire or otherwise, to any
Individual Property or any part thereof.


 


“Casualty Consultant”
shall mean an independent architect selected by Lender.


 


“Casualty Retainage”
shall have the meaning set forth in Section 5.3.2(d).


 


4

















 


“CEI” shall mean
Crescent Real Estate Equities Company, a Texas real estate investment trust,
and its permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of CEI, subject to any terms, covenants and/or
conditions of this Agreement.


 


“Closing Date” shall
mean the date hereof.


 


“Code” shall mean the
Internal Revenue Code of 1986, as amended, and as it may be further amended
from time to time, any successor statutes thereto, and applicable U.S.
Department of Treasury regulations issued pursuant thereto in temporary or
final form.


 


“Condemnation” shall
mean a temporary or permanent taking by any Governmental Authority as the
result or in lieu or in anticipation of the exercise of the right of
condemnation or eminent domain, of all or any part of any Individual Property,
or any interest therein or right accruing thereto, including any right of
access thereto or any change of grade affecting any Individual Property or any
part thereof.


 


“Confidential” shall
mean that, prior to the occurrence of an Event of Default or special servicing
of the Loan for any reason whatsoever, such information shall not be
disseminated by Lender to the general public unless such information is already
in the public domain or unless Lender is otherwise required by law, legal requirement
or order, writ, subpoena or other directive of any Governmental Authority.
Notwithstanding the foregoing, Lender shall not be restricted or prohibited in
any manner whatsoever from providing such information to its consultants,
attorneys or accountants, the Servicer, any Rating Agencies or any potential
participants or assignees (other than any Excluded Lender Transferee) of all or
any portion of the Loan or in connection with a Securitization of all or any
portion of the Loan.


 


“CRE” shall mean Crescent
Real Estate Equities Limited Partnership, a Delaware limited partnership, and
its permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of CRE, subject to any terms, covenants and/or
conditions of this Agreement.


 


“Cross Borrower”
shall mean, collectively. ART Mortgage Borrower Opco 2006-1B L.P., a Delaware
limited partnership, and ART Mortgage Borrower Propco 2006-1B L.P., a Delaware
limited partnership, and their respective successors by merger, consolidation
or transfer of all or substantially all of the assets of such Person (except to
the extent that any such merger, consolidation or transfer may be prohibited
hereunder).


 


“Cross Event of Default”
shall mean an “Event of Default” under and as defined in the Cross Loan
Agreement.


 


“Cross Guaranty”
shall mean that certain Cross Guaranty Agreement of even date herewith made by
Cross Borrower in favor of Lender, as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.


 


“Cross Lender” shall
mean the “Lender” under and as defined in the Cross Loan Agreement.


 


5

















 


“Cross Loan” shall
mean that certain loan in the
original maximum principal amount of One Hundred Twelve Million and No/100
Dollars ($112,000,000.00) made by Cross Lender to Cross Borrower pursuant to
the Cross Loan Agreement.


 


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


 


“Cross Mortgage”
shall mean the “Mortgage” under and as defined in the Cross Loan Agreement.


 


“Cross Security Agreement”
shall mean the “Security Agreement” under and as defined in the Cross Loan
Agreement.


 


“Debt” shall mean the
outstanding principal amount of the Loan together with all interest accrued and
unpaid thereon and all other sums (including, without limitation, any Yield
Maintenance Premium) due to Lender in respect of the Loan under the Note, this
Agreement, the Mortgage, the Environmental Indemnity or any other Loan
Document.


 


“Debt Service” shall
mean, with respect to any particular period of time, scheduled principal and
interest payments under the Note.


 


“Debt Service Coverage
Ratio” shall mean, as of any date of calculation, the ratio of (i) Underwritable
Cash Flow for the twelve (12) calendar month period immediately preceding such
date to (ii) the projected Debt Service that would be due for the twelve
(12) calendar month period immediately following such date based upon an
assumed loan constant for such period equal to the Applicable interest Rate.


 


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


 


“Default Rate” shall
mean, with respect to the Loan, a rate per annum equal to the lesser of (i) the
maximum rate permitted by applicable law, or (ii) three percent (3%) above
the Applicable Interest Rate.


 


“Defeasance Collateral”
shall mean the Total Defeasance Collateral or the Partial Defeasance Collateral
as the context may require.


 


“Defeasance Collateral
Account” shall have the meaning set forth in Section 2.5.3.


 


“Defeasance Date”
shall mean the Total Defeasance Date or the Partial Defeasance Date as the
context may require.


 


“Defeasance Event”
shall the Total Defeasance Event or the Partial Defeasance Event as the context
may require.


 


6

















 


“Defeasance Security
Agreement” shall mean a security agreement in form and substance that would
be reasonably satisfactory to a reasonably prudent lender originating
commercial loans for securitization similar to the Loan pursuant to which
Borrower grants Lender a perfected, first priority security interest in the
Defeasance Collateral Account and the Defeasance Collateral.


 


“Defeased Note” shall
have the meaning set forth in Section 2.5.2(a)(iv).


 


“Disclosure Document”
shall have the meaning set forth in Section 9.2(a).


 


“Disqualified Transferee”
shall mean any Person that (i) has (within the past seven (7) years)
defaulted, or is now in default, beyond any applicable cure period, of its
material obligations, under any written agreement with Lender, any affiliate of
Lender, any financial institution or other Person providing or arranging
financing; (ii) has been convicted in a criminal proceeding for a felony
or a crime involving moral turpitude or that is an organized crime figure or is
reputed (as determined by Lender in its sole discretion) to have substantial
business or other affiliations with an organized crime figure; (iii) has
at any time filed a voluntary petition under the Bankruptcy Code or any other
federal or state bankruptcy or insolvency law; (iv) as to which an
involuntary petition has at any time been filed under the Bankruptcy Code or
any other federal or state bankruptcy or insolvency law; (v) has at any
time filed an answer consenting to or acquiescing in any involuntary petition
filed against it by any other person under the Bankruptcy Code or any other
federal or state bankruptcy or insolvency law; (vi) has at any time
consented to or acquiesced in or joined in an application for the appointment
of a custodian, receiver, trustee or examiner for itself or any of its
property; (vii) has at any time made a general assignment for the benefit
of creditors, or has at any time admitted its insolvency or inability to pay
its debts as they become due; or (viii) has been found by a court of
competent jurisdiction or other governmental authority in a comparable
proceeding to have violated any federal or state securities laws or regulations
promulgated thereunder.


 


“Downgrade Event”
shall have the meaning set forth in Section 10.1(a)(xvi).


 


“Eligible
Account” shall mean an identifiable account which is
separate from all other funds held by the holding institution that is either (a) an
account or accounts maintained with the corporate trust department of a federal
or state-chartered depository institution or trust company which complies with
the definition of Eligible Institution or (b) a segregated trust account
or accounts maintained with the corporate trust department of a federal or
state chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or
trust company is subject to regulations substantially similar to 12 C.F.R §
9.10(b), having in either case a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.


 


“Eligible Institution”
shall mean a federal or state chartered depository institution or trust company
insured by the Federal Deposit Insurance Corporation the short-term unsecured
debt obligations or commercial paper of which are rated at least “A-1” (or
the equivalent) by S&P, Moody’s and Fitch in the case of accounts in which
funds are held for thirty (30) days or less or, in the case of accounts in
which funds are held for more than thirty (30) days, the long-


 


7

















 


term
unsecured debt obligations of which are rated at least “AA-” (or the
equivalent) by S&P, Fitch and Moody’s.


 


“Environmental Indemnity”
shall mean that certain Environmental Indemnity Agreement dated as of the date
hereof executed by Borrower and Guarantor in connection with the Loan for the
benefit of Lender.


 


“Equipment” shall
have the meaning set forth in the granting clause of the Mortgage.


 


“ERISA” shall have
the meaning set forth in Section 3.1.8.


 


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


 


“Exchange Act” shall
have the meaning set forth in Section 9.2(a).


 


“Excess Alteration Amount”
shall have the meaning set forth in Section 4.1.10(a).


 


“Excluded Lender
Transferee” shall mean any Person listed on Schedule XI and its
Affiliates.


 


“Excusable Delay”
shall mean a delay due to acts of God, governmental restrictions, stays,
judgments, orders, decrees, enemy actions, civil commotion, fire, casualty,
strikes, work stoppages, shortages of labor or materials or other causes beyond
the reasonable control of Borrower, but lack of funds in and of itself shall
not be deemed a cause beyond the control of Borrower.


 


“Expansion Date”
shall have the meaning set forth in Section 11.30(a)(i).


 


“Expansion Parcel”
shall mean an unimproved area or areas of any Individual Property on which Rents are not payable and Improvements (other
than utilities and the like that are permitted pursuant to a recorded
agreement) are not situated, which area or areas are not necessary for the use
and operation of the remainder of such Individual Property (except to the
extent such use or operation is permitted pursuant to a separate agreement),
are designated by Borrower for expansion or any other reasonable business
purpose in order to service any customer or prospective customer of Borrower or
any Affiliate of Borrower, the transfer and separate development of which would
not, in Borrower’s judgment (provided Borrower has certified the same)
materially adversely affect the value of the remaining portion of such
Individual Property or the Underwritable Cash Flow from the remaining portion
of such Individual Property (taking into account, to the extent applicable, any
potential loss of revenue resulting if the transfer and development of the
Expansion Parcel were not to occur).


 


“Fiscal Year” shall
mean each twelve month period commencing on January 1 and ending on December 31
during each year of the term of the Loan.


 


“Fitch” shall mean
Fitch, Inc.


 


8














 


“GAAP” shall mean
generally accepted accounting principles in the United States of America set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such entity as may be in general
use by significant segments of the U.S. accounting profession.


 


“Governmental Authority”
shall mean any court, board, agency, commission, office or authority of any
nature whatsoever or any governmental unit (federal, state,, county, district,
municipal, city, foreign or otherwise) whether now or hereafter in existence.


 


“Gross Revenue” shall
mean all revenue, derived from the ownership and operation of the Property from
whatever source, including, but not limited to, Rents, but excluding receipts,
revenues and other income generated from transportation operations conducted or
performed by Borrower or any of its Affiliates from or with respect to any one
or more Individual Properties, sales, use and occupancy or other taxes on
receipts required to be accounted for by the owner or operator of the Property
to any Governmental Authority, non-recurring revenues as reasonably determined
by Lender, proceeds from the sale or refinancing of any Individual Property,
security deposits (except to the extent determined by Lender to be properly
utilized to offset a loss of Rent), refunds and uncollectible accounts,
proceeds of casualty insurance and Awards (other than business interruption or
other loss of income insurance related to business interruption or loss of
income for the period in question), and any disbursements to Borrower or any
operator of the Property from the Reserve Funds or any other fund established
by the Loan Documents.


 


“Guarantor” shall
mean Americold Realty Trust, a Maryland real estate investment trust, and its
permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of Americold Realty Trust, subject to any
terms, covenants and/or conditions of this Agreement.


 


“Guaranty” shall mean
that certain Recourse Guaranty dated as of the date hereof executed by the
Guarantor in connection with the Loan for the benefit of Lender.


 


“Improvements” with
respect to each Individual Property, shall have the meaning set forth in the
granting clause of the applicable Mortgage.


 


“Indebtedness” shall
mean, for any Person, without duplication: (i) all indebtedness of such
Person for borrowed money, for amounts drawn under a letter of credit, or for
the deferred purchase price of property for which such Person or its assets is
liable, (ii) all unfunded amounts under a loan agreement, letter of
credit, or other credit facility for which such Person would be liable if such
amounts were advanced thereunder, (iii) all amounts required to be paid by
such Person as a guaranteed payment to partners or a preferred or special
dividend, including any mandatory redemption of shares or interests, (iv) all
indebtedness guaranteed by such Person, directly or indirectly, (v) all
obligations under leases that constitute capital leases for which such Person
is liable, and (vi) all obligations of such Person under interest rate
swaps, caps, floors, collars and other interest hedge agreements, in each case
whether such Person is 


 


9

















 


liable
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against loss.


 


“Indemnified Liabilities” shall have
the meaning set forth in Section 11.13(b).


 


“Independent Director”
shall have the meaning set forth in Section 3.1.24(p).


 


“Individual Loan-to-Value
Ratio” shall mean, with respect to an Individual Property, as of any date
of determination, a ratio (as reasonably determined by Lender), (x) the
numerator of which is equal to the Allocated Loan Amount for such Individual
Property, and (y) the denominator of which is equal to the “as-is” fair
market value of such Individual Property, determined with respect to the
Closing Date by the Appraisals delivered to Lender on or prior to the date
hereof, and with respect to future dates, on the basis of Lender’s reasonable
determination of the fair market value of such Individual Property, or, if
Borrower disputes Lender’s valuation or otherwise elects to deliver an
Appraisal, on the basis of an Appraisal commissioned by the Lender and at
Borrower’s expense.


 


“Individual Property”
shall mean the parcel of real property located at each address listed on
Schedule VI other than any Release Property or Expansion Parcel released
pursuant to Section 2.4, 2.5 or 11.30, the Improvements
thereon and all personal property owned by Borrower and encumbered by a
Mortgage, together with all of Borrower’s rights pertaining to such property
and Improvements, all as more particularly described in the Granting Clauses of
the applicable Mortgage.


 


“Insolvency Opinion”
shall mean that certain bankruptcy nonconsolidation opinion letter dated the
date hereof delivered by Arnall Golden Gregory LLP in connection with the Loan.


 


“Insurance Funds”
shall have the meaning set forth in Section 6.3.1.


 


“Insurance Premiums”
shall have the meaning set forth in Section 5.1.1(b).


 


“Interest Period”
shall mean, with respect to any Monthly Payment Date, the period commencing on
the eleventh (11th) day of the preceding calendar month and terminating
on the tenth (10th) day of the
calendar month in which such Monthly Payment Date occurs; provided that the
initial Interest Period shall begin on the Closing Date and shall end on the
immediately following tenth (10th) day of a calendar month.


 


“Investment Grade Rating”
shall mean a long-term unsecured debt rating of at least “BBB-” (or the
equivalent) by S&P, Fitch and Moody’s.


 


“Lease” shall mean
any lease, sublease or subsublease, letting, license, concession or other
agreement (whether written or oral and whether now or hereafter in effect)
pursuant to which any Person is granted a possessory interest in, or right to
use or occupy all or any portion of any space in any individual Property, and
every modification, amendment or other agreement relating to such lease, sublease,
subsublease, or other agreement entered into in connection with such lease,
sublease, subsublease, or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by 


 


10

















 


the
other party thereto. As used herein and in the other Loan Documents, the term “Lease”
shall be deemed to include any Warehouse Agreements.


 


“Legal Requirements”
shall mean all federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions of Governmental Authorities affecting Borrower, Manager or any
Individual Property or any part thereof or the construction, use, alteration or
operation thereof, or any part thereof, whether now or hereafter enacted and in
force, including, without limitation, the Americans with Disabilities Act of
19907 and all permits, licenses and authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments, either of record or known to Borrower, at any time in force
affecting the Borrower or any Individual Property or any part thereof,
including, without limitation, any which may (i) require repairs,
modifications or alterations in or to any Individual Property or any part
thereof, or (ii) in any way limit the use and enjoyment thereof.


 


“Lender” shall mean
UBS Real Estate Securities Inc., a Delaware corporation, together with its
successors, assigns, and, subject to and for the purposes set forth in Section 11.27,
Participants.


 


“Lender Group” shall
have the meaning set forth in Section 9.2(b).


 


“Lender Indemnitees”
shall have the meaning set forth in Section 11.13).


 


“Letter of Credit”
shall mean an irrevocable, unconditional, transferable, clean sight draft
letter of credit acceptable to Lender and the Rating Agencies in favor of
Lender and entitling Lender to draw thereon in New York, New York, issued by a
domestic Eligible Institution or the U.S. agency or branch of a foreign
Eligible Institution. The Letter of Credit shall have a term of at least one (1) year
(or such shorter period of time necessary for such Letter of Credit to have a
term which does not expire until at least thirty (30) days after the Maturity
Date); provided, however, that any such Letter of Credit which is
in effect upon the Maturity Date shall not expire until at least thirty (30)
days after the Maturity Date. If Borrower has not provided Lender with a new
Letter of Credit at least ten (10) Business Days prior to the expiration
of any Letter of Credit, then Lender shall have the right to immediately draw
down the same in full and hold the proceeds of such draw as cash security in
accordance with the applicable provisions hereof. If at any time the bank
issuing any such Letter of Credit shall cease to be an Eligible Institution and
Borrower does not replace such Letter of Credit with a Letter of Credit issued
by an institution that is an Eligible Institution prior to the earlier to occur
of (i) five (5) days after
Borrower has knowledge of such event or (ii) five (5) days after
Lender has provided Borrower with notice thereof; then Lender shall have the
right immediately to draw down the same in full and hold the proceeds of such
draw in accordance with the applicable provisions hereof.


 


“Liabilities” shall
have the meaning set forth in Section 9.2(b).


 


“Lien” shall mean any
mortgage, deed of trust, lien, pledge, hypothecation, assignment, security
interest, or any other encumbrance, charge or transfer of, on or affecting the
Property or any portion thereof or Borrower, or any interest therein,
including, without 


 


11

















 


limitation,
any conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, the
filing of any financing statement, and mechanic’s, materialmen’s and other
similar liens and encumbrances.


 


“Loan” shall mean the loan
in the original principal amount of Sixty-One Million Five Hundred Thousand and
No/100 Dollars ($61,500,000.00) made by Lender to Borrower pursuant to this
Agreement.


 


“Loan Documents”
shall mean, collectively, this Agreement, the Note, the Mortgage, the
Assignment of Leases, the Cash Management Agreement, the Environmental
Indemnity, the Guaranty, the Assignment of Management Agreement, the Security
Agreement, the Cross Guaranty and any other document pertaining to the Property
as well as all other documents now or hereafter executed and/or delivered in
connection with the Loan, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.


 


“Loan-to-Value Ratio”
shall mean, as of any date of determination, a ratio (as reasonably determined
by Lender), (x) the numerator of which is equal to (i) the
outstanding principal balance of the Loan, and (y) the denominator of
which is equal to the “as-is” fair market value of the Property, determined on
the basis of Lender’s reasonable determination of the fair market value of the
Property, or, if Borrower disputes Lender’s valuation, on the basis of an
Appraisal commissioned by the Lender and at Borrower’s expense.


 


“Logistics” shall
mean AmeriCold Logistics LLC, a Delaware limited liability company, and its
permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of AmeriCold Logistics LLC, subject to any
terms, covenants and/or conditions of this Agreement.


 


“Major Customer List”
shall mean a list of those customers each of which, pursuant to one or more
Leases or Service Contracts for space at one or more of the Individual
Properties, is required to make aggregate annual payments to the Borrowers of
not less than 4,000,000. The Major Customer List as of the date hereof is
attached hereto as Schedule I.


 


“Major Lease” shall
mean any Lease covering all or substantially all of the Property.


 


“Major Tenant” shall
mean (i) any Tenant occupying all or substantially all of any Individual
Property pursuant to a Lease (other than any month-to-month Lease) and (ii) any
Tenant under any Lease listed on Schedule VIII.


 


“Management Agreement”
shall mean (a) that certain Management Agreement, dated as of the date
hereof, between Propco Borrower and Manager, as the same may be amended or
otherwise modified from time to time in accordance with the terms of this
Agreement, or (b) if the context requires, a replacement management
agreement entered into by and between Borrower and a Qualified Manager in accordance
with the terms of this Agreement.


 


“Manager” shall mean (a) ART
Manager L.L.C. or (b) if the context requires, any other Qualified Manager
which becomes manager of the Property in accordance with
the terms of this Agreement.


 


12

















 


“Material Adverse Effect”
shall mean any event or condition that has a material and adverse effect, in
each case, taken as a whole on (a) the business operations, economic
performance, assets, financial condition, equity, contingent liabilities,
prospects, material agreements or results of operations of Borrower, Guarantor
or the Property, (b) the ability of Borrower or Guarantor to perform, in
all material respects, its respective obligations under the Loan Documents, (c) the
enforceability or validity of any Loan Document, the perfection or priority of
any Lien created under any Loan Document or the remedies of Lender under any
Loan Document, (d) the value of, or cash flow (other than cash flow from
transportation operations conducted or performed by Borrower or any of its
Affiliates from or with respect to any one or more Individual Properties) from,
the Property or the operations thereof or (e) the value of the Loan.


 


“Material Agreements”
means each contract and agreement relating to the ownership, management,
development, use, operation, leasing, maintenance, repair or improvement of any
one (1) or more Individual Properties, other than the Management Agreement
and the Leases, under which there is an obligation of Borrower to pay more than
One Million and No/TOO Dollars ($1,000,000.00) per annum.


 


“Maturity Date” shall
mean December 11, 2016 or such other date on which the final payment of
principal of the Note becomes due and payable as therein or herein provided,
whether at such stated maturity date, by declaration of acceleration, or
otherwise.


 


“Maximum Legal Rate”
shall mean the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the indebtedness evidenced by the Note and as
provided for herein or the other Loan Documents, under the laws of such state
or states whose laws are held by any court of competent jurisdiction to govern
the interest rate provisions of the Loan.


 


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


 


“Monthly Debt Service
Payment Amount” shall mean, with respect to any Monthly Payment Date, the
interest amount determined in accordance with Section 2.2.2 of this
Agreement.


 


“Monthly Payment Date”
shall mean the eleventh (11th) calendar day of each calendar month during the term  of the Loan,
and if such day is not a Business Day, then the Business Day immediately
preceding Business Day, commencing on January 11, 2007, and continuing to
and including the Maturity Date.


 


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


 


“Mortgage” shall
mean, with respect to each Individual Property, that certain first priority
Mortgage, Deed of Trust or Deed to Secure Debt, dated as of the date hereof,
executed and delivered by Propco Borrower and encumbering the applicable
Individual Property, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.


 


13

















 


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


 


“Net Proceeds Deficiency”
shall have the meaning set forth in Section 5.3.2(f).


 


“Note” shall mean
that certain Promissory Note dated as of the date hereof made by Borrower in
the original principal amount of Sixty-One Million Five Hundred Thousand and
No/100 Dollars ($61,500,000.00), and, if applicable, the Defeased Note and the
Undefeased Note, in each case as the same may be amended, restated, replaced,
supplemented, increased, extended, consolidated or otherwise modified from time
to time.


 


“Notice” shall have
the meaning set forth in Section 11.6.


 


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


 


“Opco Borrower” shall
mean ART Mortgage Borrower Opco 2006-1C L.P., a Delaware limited partnership,
and its successors by merger, consolidation or transfer of all or substantially
all of the assets of such Person (except to the extent that any such merger,
consolidation or transfer may be prohibited hereunder).


 


“Opco Borrower GP”
shall have the meaning set forth in Section 3.1.24(z).


 


“Operating Agreements”
shall mean any covenants, restrictions or agreements of record relating to the
construction, operation or use of the Property.


 


“Operating Expenses”
shall mean all costs and expenses incurred by or on behalf of Borrower relating
to the operation, maintenance and management of the Property, including,
without limitation, utilities, repairs and maintenance, insurance, property
taxes and assessments, advertising expenses, payroll and related taxes, lease
payments (for leases treated as operating leases in accordance with GAAP), the
greater of actual management salaries and other compensation and related taxes
and 2% of annual Gross Revenues and $0.03 per gross cubic foot of the
Improvements per annum with respect to capital costs, but excluding actual
Capital Expenditures, lease payments (for leases treated as capital leases
in-accordance with GAAP), depreciation, amortization, obligations to post
security to secure workers’ compensation obligations, deposits required to be
made to the Reserve Funds, sales, use and occupancy or other taxes on receipts
required to be accounted for by the owner or operator of the Property to any
Governmental Authority, interest expense and income tax expense; provided,
however such costs and expenses shall be subject to adjustment by Lender
in its reasonable discretion to normalize such costs and expenses.  Notwithstanding the foregoing, “Operating
Expenses” shall exclude all costs and expenses incurred in connection with
transportation operations conducted or performed by Borrower or any of its
Affiliates from or with respect to any one or more Individual Properties.


 


14

















 


“Other Charges” shall
mean all ground rents, maintenance charges, impositions other than Taxes, and
any other charges, including, without limitation, vault charges and license
fees for the use of vaults, chutes and similar areas adjoining any Individual
Property, now or hereafter levied or assessed or imposed against any Individual
Property or any part thereof.


 


“Otherwise Rated Insurer”
shall have the meaning set forth in Section 5.1.2.


 


“Partial Defeasance
Collateral” shall mean U.S. Obligations which provide payments (i) on
or prior to, but as close as possible to, the Business Day immediately
preceding all Monthly Payment Dates, under the Defeased Note after the
Defeasance Date and up to and including the Monthly Payment Date which Borrower
shall specify occurring concurrently with or after the Permitted Prepayment
Date, and (ii) in amounts equal to or greater than the Scheduled
Defeasance Payments relating to such Monthly Payment Dates.


 


“Partial Defeasance Date”
shall have the meaning set forth in Section 2.5.2(a)(i).


 


“Partial Defeasance Event”
shall have the meaning set forth in Section 2.5.2(a).


 


“Participant” shall
mean any Person that has purchased a participation in this Loan Agreement
pursuant to Section 11.27.


 


“Pasco Event” shall
mean that Simplot, a Nevada corporation (“Simplot”), has exercised its
purchase option pursuant to Exhibit A to that certain Facility Use
Agreement dated March 18, 1995 by
and between Simplot and Borrower (as successor-in-interest to Americold
Corporation, an Oregon corporation), pursuant to which Simplot has the right to
purchase the Pasco Property.


 


“Pasco Property”
shall mean the Individual Property located in Pasco, Washington.


 


“Permitted Encumbrances”
shall mean, collectively, (i) the Liens and security interests created by
the Loan Documents, (ii) all Liens, encumbrances and other matters
disclosed in the Title Insurance Policy, (iii) Liens, if any, for Taxes
imposed by any Governmental Authority not yet due or delinquent, (iv) mechanics’,
materialmen’s or other similar Liens for delinquent Taxes being contested in good
faith if permitted by and in accordance with the terms and provisions of the
Loan Documents and (v) such other title and survey exceptions as Lender
has approved or may approve in writing in Lender’s sole discretion.


 


“Permitted Investments”
shall have the meaning set forth in the Cash Management Agreement.


 


“Permitted Prepayment
Date” shall mean the Monthly Payment Date occurring in August 2016.


 


“Person” shall mean
any individual, corporation, partnership, limited liability company, joint
venture, estate, trust, unincorporated association, any other entity, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of
the foregoing.


 


15

















 


“Physical Conditions
Report” shall mean, with respect to each. Individual Property, a report
prepared by a company satisfactory to Lender regarding the physical condition
of such Individual Property, satisfactory in form and substance to Lender in
its sole discretion, which report shall, among other things, (i) confirm
that the applicable Individual Property and its use comply, in all material
respects, with all applicable Legal Requirements (including, without
limitation, zoning, subdivision and building laws) and (ii) include a copy
of a final certificate of occupancy with respect to all Improvements.


 


“Plan Assets Regulation”
shall have the meaning specified in Section 3.1.8.


 


“Policies” shall have
the meaning specified in Section 5.1.1(b).


 


“Prepayment Date”
shall mean the date on which the Loan is prepaid in whole or in part in
accordance with the terms hereof.


 


“Prescribed Laws”
shall mean, collectively, (a) the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (Public Law 107-56) (The U.S.A.
PATRIOT Act), (b) Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001, and relating to Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism, (c) the International Emergency Economic Power Act, 50
U.S.C. § 1701 et  seq. and (d) all other Legal Requirements
relating to money laundering or terrorism.


 


“Primary Servicer”
shall have the meaning set forth in Section 11.24(d).


 


“Propco Borrower”
shall mean ART Mortgage Borrower Propco 2006-1 C L.P., a Delaware limited
partnership, and its successors by merger, consolidation or transfer of all or
substantially all of the assets of such Person (except to the extent that any
such merger, consolidation or transfer may be prohibited hereunder).


 


“Propco Borrower GP”
shall have the meaning set forth in Section 3.1.24(z).


 


“Property” shall
mean, collectively, the Individual Properties.


 


“Public Company”
shall mean a Person whose stock or ownership interests are publicly traded on
the New York Stock Exchange or other nationally recognized stock exchange.


 


“Qualified Appraiser”
means any member of the American Institute of Real Estate Appraisers selected by
Borrower and reasonably acceptable to the Lender.


 


“Qualified Transferee”
shall mean any one of the following Persons:


 


(i)            a
corporation, partnership or limited liability company acceptable to Lender in
its sole discretion;


 


(ii)           a
pension fund, pension trust or pension account that immediately prior to such
transfer owns, directly or indirectly, total real estate assets of at least
$1,000,000,000;


 


16

















 


(iii)          a
pension fund advisor who (a) immediately
prior to such transfer, controls, directly or indirectly, at least
$1,000,000,000 of real estate assets and (b) is acting on behalf of one or
more pension funds that, in  the aggregate, satisfy the requirements of clause (ii) of
this definition;


 


(iv)          an
insurance company which is subject to supervision by the insurance
commissioner, or a similar official or agency, of a state or territory of the
United States (including the District of Columbia) (a) with a net worth,
determined under GAAP as of a date no more than six (6) months prior to
the date of the transfer of at least $500,000,000 and (b) who, immediately
prior to such transfer, controls, directly or indirectly, real estate assets of
at least $1,000,000,000;


 


(v)           a
corporation organized under the banking laws of the United States or any state
or territory of the United States (including the District of Columbia) (a) with
a combined capital and surplus of at least $500,000,000 and (b) who,
immediately prior to such transfer, controls, directly or indirectly, real
estate assets of at least $1,000,000,000; or


 


(vi)          any
Person in which fifty-one percent (51%)
of the ownership
interests are owned directly or indirectly by any of the entities listed in
subsections (i) through (v) of this definition of “Qualified Transferee”,
or any combination of more than one such entity, and which is controlled
directly or indirectly by such entity or entities; provided, in each
case, that such Person (a) qualifies as a bankruptcy remote entity under
criteria established by the Rating Agencies and (b) has delivered to
Lender a non-consolidation opinion reasonably acceptable to Lender and
acceptable the Rating Agencies in their sole discretion.


 


“Qualified Manager”
shall mean (a) ART Manager L.L.C., (b) any other Affiliate of Borrower,
(c) any other Person as to which Borrower shall have obtained a Rating
Agency Confirmation or (d) any Person designated by Lender, provided
that in the case of (a), (b) and (c) Lender has not required Borrower
to replace such Person (or any Affiliate of such Person) as Manager pursuant to
Section 7.3.


 


“Rating Agencies”
shall mean, prior to the final Securitization of the Loan, each of S&P,
Moody’s and Fitch, or any other nationally recognized statistical rating agency
which has been designated by Lender and, after the final Securitization of the
Loan, shall mean any of the foregoing that have rated any of the Securities.


 


“Rating Agency
Confirmation” shall mean a written affirmation from each of the Rating
Agencies that the credit rating of the Securities by such Rating Agency
immediately prior to the occurrence of the event with respect to which such
Rating Agency Confirmation is sought will not be qualified, downgraded or
withdrawn as a result of the occurrence of such event, which affirmation may be
granted or withheld in such Rating Agency’s sole and absolute discretion.


 


“Register” shall have
the meaning set forth in Section 11.27(e).


 


“Registration Statement”
shall have the meaning set forth in Section 9.2(2).


 


17

















 


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


 


“Regulation D” shall
mean Regulation D of the Board of Governors of the Federal Reserve System from
time to time in effect, including any successor or other Regulation or official
interpretation of said Board of Governors relating to reserve requirements
applicable to member banks of the Federal Reserve System.


 


“Related Loan” shall
mean a loan made to an Affiliate of Borrower or secured by a Related Property,
that is included in a Securitization with the Loan.


 


“Related
Persons” shall have the meaning set forth in Section 8.1.


 


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


 


“Release Amount”
shall mean, in connection with the release of any Individual Property from the
Lien of the Mortgage (or, in lieu of such release, the assignment of the
Mortgage encumbering any Individual Property), (a) one hundred five
percent (105%) of the Allocated Loan Amount
of the applicable Individual Property, which, when taken together with the
Allocated Loan Amount of each Individual Property previously released from the
Lien of the Mortgage (or, with respect to which Individual Property, Lender
previously assigned the applicable Mortgage), is less than or equal to the
Tranche I Release Percentage Threshold Amount, (b) one hundred ten percent
(110%) of the Allocated Loan Amount of the applicable Individual Property,
which, when taken together with the Allocated Loan Amount of each Individual
Property previously released from the Lien of the Mortgage (or, with respect to
which Individual Property, Lender previously assigned the applicable Mortgage),
is greater than the Tranche I Release Percentage Threshold Amount and less than
or equal to the Tranche II Release Percentage Threshold Amount, or (e) one
hundred fifteen percent (115%) of the
Allocated Loan Amount of the applicable Individual Property, which, when taken
together with the Allocated Loan Amount of each Individual Property previously
released from the Lien of the Mortgage (or, with respect to which Individual
Property, Lender previously assigned the applicable Mortgage), equals an amount
which is greater than the Tranche II Release Percentage Threshold Amount; provided
that, in each case, the Release Amount shall not be greater than the amount of
the Debt outstanding on the date the applicable Individual Property is released
from the Lien of the Mortgage (or, in lieu of such release, the applicable
Mortgage is assigned) in accordance with the terms of this Agreement and the
other Loan Documents.


 


“Release Date” shall
mean the earlier to occur of (a) the third anniversary of the Closing Date
and (b) the date that is two (2) years from the “startup day” (within
the meaning of Section 860G(a)(9) of the Code) of the REMIC Trust established
in connection with the last Securitization involving any portion of this Loan.


 


“Release Property”
shall mean any Individual Property (other than a Substituted Property) with
respect to which the Lien of the related Mortgage has been released (or
assigned) by Lender in accordance with the terms of this Agreement.


 


18














 


“REMIC Trust” shall
mean a “real estate mortgage investment conduit” within the meaning of Section 860D
of the Code that holds the Note.


 


“Rents” shall mean
all rents, moneys payable as damages or in lieu of rent, revenues, deposits
(including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower, Manager or any of their agents or employees
from any and all sources arising from or attributable to the Property.
Notwithstanding the foregoing, “Rents” shall exclude all receipts, revenues and
other income generated from transportation operations conducted or performed by
Borrower or any of its Affiliates from or with respect
to any one or more Individual Properties.


 


“Required Repair Funds”
shall have the meaning, set forth in Section 6.1.1.


 


“Required Repairs”
shall have the meaning set forth in Section 6.1.1.


 


“Reserve Funds” shall
mean, collectively, the Capital Expenditure Funds, the Insurance Funds, the
Required Repair Funds, if any, the Tax Funds and the Borrower Cash Collateral
Funds.


 


“Reserve Guaranty”
shall have the meaning set forth in Section 6.12(a).


 


“Resizing Event”
shall have the meaning set forth in
Section 9.1(c).


 


“Restoration” shall
have the meaning set forth in Section 5.2.1.


 


“Restoration Threshold”
shall mean, with respect to each individual Property, five percent (5%) of the Allocated Loan Amount for each such Individual Property.


 


“S&P” shall mean
Standard & Poor’s Ratings Services, a division of the McGraw-Hill
Companies, Inc.


 


“Scheduled Defeasance
Payments” shall mean scheduled payments of interest and principal under the
Note in the case of a Total Defeasance Event and under the Defeased Note in the
case of a Partial Defeasance Event for all Monthly Payment Dates occurring
after the Defeasance Date and up to and including the Monthly Payment Date
referred to in clause (i) of the definition of Partial Defeasance
Collateral or Total Defeasance Collateral, as applicable (including, in the
case of a total defeasance, the outstanding principal balance on the Note as of
such Monthly Payment Date and, in the case of a partial defeasance, the
outstanding principal balance on the Defeased Note as of such Monthly Payment
Date),


 


“Secondary Market
Transaction” shall have the meaning set forth in Section 9.1(a).


 


“Securities” shall
have the meaning set forth in Section 9.1(a).


 


“Securities Act”
shall have the meaning set forth in Section 9.2(a).


 


“Securitization”
shall have the meaning set forth in Section 9.1(a).


 


19

















 


“Security Agreement”
shall mean that certain Security Agreement, dated as of the date hereof, made
by Borrower in favor of Lender and Cross Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.


 


“Service Contract”
shall have the meaning set forth in  Section 5.3.2(i).


 


“Servicer” shall have
the meaning set forth in Section 11.24.


 


“Servicing Agreement”
shall have the meaning set forth in Section 11.24.


 


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


 


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


 


“Simplot” shall have
the meaning set forth in the definition of “Pasco Event” contained herein.


 


“SPC Party” shall
have the meaning set forth in Section 3.1.24(o).


 


“State” shall mean,
with respect to any Individual Property, the State or Commonwealth in which
such Individual Property or any part thereof is located.


 


“Substitute Allocated
Loan Amount” shall have the meaning set forth in Section 11.29.


 


“Substitute Property”
and “Substitute Properties” shall have the respective meanings set forth
in Section 11.29.


 


“Substituted Property”
shall have meaning set forth in Section 11.29.


 


“Successor Borrower”
shall have the meaning set forth in Section 2.5.4.


 


“Survey” shall mean,
with respect to each Individual Property, a survey of such Individual Property
prepared by a surveyor licensed in the State and satisfactory to Lender and the
company or companies issuing the Title Insurance Policy, and containing a
certification of such surveyor satisfactory to Lender.


 


“Tax
Funds” shall have the meaning set forth in Section 6.2.1.


 


“Taxes” shall mean
all real estate and personal property taxes, assessments, water rates or sewer
rents, now or hereafter levied or assessed or imposed against any Individual
Property or part thereof; together with all interest and penalties thereon.


 


“Tenant” shall mean
any Person obligated by contract or otherwise to pay monies (including a
percentage of gross income, revenue or profits) under any Lease now or
hereafter affecting all or any part of any
Individual Property.


 


20

















 


“Title Insurance Policy”
shall mean, with respect to each Individual Property, an ALTA mortgagee title insurance policy in the form acceptable to
Lender issued with respect to such Individual Property and insuring the lien of
the Mortgage encumbering such Individual Property.


 


“Total Defeasance
Collateral” shall mean U.S. Obligations, which provide payments (i) on
or prior to, but as close as possible to, the Business Day immediately
preceding all Monthly Payment Dates under the Note after the Defeasance Date
and up to and including the Monthly Payment
Date which Borrower shall specify occurring concurrently with or after the Permitted Prepayment Date, and (ii) in amounts
equal to or greater than the Scheduled Defeasance Payments relating to such
Monthly Payment Dates.


 


“Total Defeasance Date”
shall have the meaning set forth in Section 2.5.1(a).


 


“Total Defeasance Event”
shall have the meaning set forth in Section 2.5.1(a).


 


“Tranche I Release
Percentage Threshold Amount” shall mean the product of the original
principal amount of the Loan and twelve and one-half percent (12.5%).


 


“Tranche II Release
Percentage Threshold Amount” shall mean the product of the original principal amount of the Loan and
twenty-five percent (25%).


 


“Transfer” shall have
the meaning set forth in the Mortgage.


 


“Transferee” shall
mean a Person to whom a Transfer is being effected.


 


“Treasury Rate” shall
mean, as of the Business Day immediately prior to
the Prepayment Date, the yield, calculated by Lender by linear
interpolation (rounded to the nearest one-thousandth of one percent (i.e.,
0.001%) of the yields of non-inflation adjusted noncallable United States
Treasury obligations with terms (one longer and one shorter) most nearly
approximating the period from such date of determination to the Permitted
Prepayment Date, as determined by Lender on the basis of Federal Reserve
Statistical Release H.15-Selected Interest Rates under the heading U.S.
Governmental Security/Treasury Constant Maturities, or another recognized
source of financial market information selected by Lender. Lender’s
determination of the Treasury Rate shall be final absent manifest error.


 


“TRIA” shall mean the
Terrorism Risk Insurance Act of 2002, as heretofore amended and as the same may
be further amended or otherwise modified; provided that it provides
substantially the same benefits to insurance companies and insureds as are
provided by TRIA as in effect on the Closing Date.


 


“Trigger Event” shall
mean, on the relevant date, the fact that the annual Underwritable Cash Flow
for the Property determined by Lender as of the end of each
fiscal quarter (based on Borrower’s Fiscal Year) on a trailing four (4) quarter
basis is less than the Trigger UCF Amount.


 


21

















 


“Trigger Period”
shall mean a period commencing on the first (1st ) Business
Day after a Trigger Event has occurred to the first (1st ) Business Day after the related Trigger Event
has not existed for a period of two (2) consecutive fiscal quarters.


 


“Trigger UCF Amount”
shall mean, as of any date, an amount equal to the aggregate of the Allocated
UCF Trigger Amounts of all the Individual Properties less the Allocated UCF
Trigger Amount of each Individual Property previously released from the lien of
the Mortgage (or, in lieu of such release, which Mortgage was assigned by
Lender) pursuant to Section 2.4 or Section 2.5.


 


“Trustee” shall mean
any trustee holding the Loan in a Securitization.


 


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


 


“Underwritable Cash Flow”
shall mean the excess of Gross Revenue over Operating Expenses.


 


“Underwriter Group”
shall have the meaning set forth in Section 9.2(b).


 


“Updated Information”
shall have the meaning set forth in Section 9.1(b)(i).


 


“U.S. Obligations”
shall mean (i) direct fill faith and credit obligations of the United
States of America and (ii) other government securities’ within the meaning
of section 1.860G-2(a)(8)(1) of the Treasury Regulations that are
acceptable to the Rating Agencies and in each case that are not subject to
prepayment, call or early redemption.


 


“VNO” shall mean
Vornado Realty Trust, a Maryland real estate investment trust, and its
permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of VNO, subject to any terms, covenants and/or
conditions of this Agreement.


 


“VRLP” shall mean
Vornado Realty L.P., a Delaware limited partnership, and its permitted
successors by merger, consolidation or transfer of all or substantially all of
the assets of VRLP, subject to any terms, covenants and/or conditions of this
Agreement.


 


“Warehouse Agreements”
shall mean warehousing agreements, logistics and services agreements,
distribution agreements, handling agreements and other similar agreements in
connection with the use of one or more Individual Properties as a dry and/or
cold storage warehousing facility and for such other uses as may be necessary
or incidental to such use (including, without limitation, the provision of
distribution services), in each case, to the extent (but only to the extent)
the same are for goods stored or services rendered at an Individual Property
(excluding transportation services), together with any and all
amendments and modifications to such agreements.


 


“YAA” shall mean
Yucaipa American Alliance Fund I, LP, a Delaware limited partnership, and its
permitted successors by merger, consolidation or transfer of all or substantially
all of the assets of YAA, subject to any terms, covenants and/or conditions of
this Agreement.


 


22

















 


“YAP” shall mean
Yucaipa American Alliance (Parallel) Fund I, LP, a Delaware limited
partnership, and its permitted successors by merger, consolidation or transfer
of all or substantially all of the assets of YAP, subject to any terms,
covenants and/or conditions of this Agreement.


 


“YCI” shall mean
Yucaipa Corporate Initiatives Fund I, LP, a Delaware limited partnership, and
its permitted successors by merger, consolidation or transfer of all or
substantially all of the assets of YCI, subject to any terms, covenants and/or
conditions of this Agreement.


 


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


 


Section 1.2            Principles of Construction.  All references to
sections and schedules are to sections and schedules in or to this Agreement
unless otherwise specified. Unless otherwise specified, the words “hereof,” “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined.


 


II.            THE LOAN


 


Section 2.1            The
Loan.


 


2.1.1       Agreement to Lend and Borrow.  Subject to and upon the terms and conditions set forth
herein, Lender shall make the Loan to Borrower and Borrower shall accept the
Loan from Lender on the Closing Date.


 


23

















 


2.1.2       Single Disbursement to Borrower.  Borrower shall receive only one borrowing hereunder in
respect of the Loan and any amount borrowed and repaid hereunder in respect of
the Loan may not be reborrowed.


 


2.1.3       The Note.  The Loan shall be evidenced by the Note and shall be
repaid in accordance with the terms of this Agreement and the Note.


 


2.1.4       Use of Proceeds.  Borrower shall use  proceeds of the Loan to (i) pay
and discharge any existing loans relating to the Property, (ii) pay all
past due Basic Carrying Costs, if any, in respect of the Property, (iii) deposit
the Reserve Funds (to the extent required hereunder and not previously
deposited), (iv) pay costs and expenses incurred in connection with the
closing of the Loan, (v) fund any working capital requirements of the
Property, (vi) distribute to its parent entities and (vii) retain
and/or distribute the balance, if any.


 


Section 2.2            Interest
Rate.


 


2.2.1       Applicable Interest Rate.  Except as herein provided with respect to interest
accruing at the Default Rate, interest on the principal balance of the Loan
outstanding from time to time shall accrue from the Closing Date up to, but
excluding, the Maturity Date at the Applicable Interest Rate.


 


2.2.2       Interest Calculation.  Interest on the outstanding principal balance of the
Loan shall be calculated by multiplying (a) the actual number of days
elapsed in the period for which the calculation is being made by (b) a
daily rate based on a three hundred sixty (360) day year (that is, the
Applicable Interest Rate or the Default Rate, as then applicable, expressed as
an annual rate divided by 360) by (c) the outstanding principal balance.
Notwithstanding the foregoing, prior to a Securitization of the Loan, Lender
shall have the right to adjust the Interest Period; provided that, after giving
effect to such adjustment, Borrower shall not be obligated hereunder or under
any other Loan Document to pay interest on any prepaid or repaid principal of
the Loan for any period from and after the Monthly Payment Date concurrent with
or subsequent to such prepayment or repayment. If requested by Lender, Borrower
shall promptly execute an amendment to this Agreement and any other Loan
Documents to evidence such change.


 


2.2.3       Intentionally Omitted.


 


2.2.4       Usury Savings.  This Agreement and the other Loan Documents are
subject to the express condition that at no time shall Borrower be required
to pay interest on the principal balance of the
Loan at a rate which
could subject Lender to either civil or criminal liability as a result of being
in excess of the Maximum Legal Rate. If by the terms of this Agreement or the
other Loan Documents, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of the
Maximum Legal Rate, the Applicable Interest Rate or the Default Rate, as the
case may be, shall be deemed to be immediately reduced to the Maximum Legal
Rate and all previous payments in excess of the Maximum Legal Rate shall be
deemed to have been payments in reduction of principal and not on account of the
interest due hereunder. All sums paid or agreed to be paid to Lender for the
use, forbearance, or detention of the sums due under the Loan, shall, to the
extent permitted by 


 


24

















 


applicable law, be
amortized, prorated, allocated, and spread throughout the frill stated term of
the Loan until payment in full so that the rate or amount of interest on
account of the Loan does not exceed the Maximum Legal Rate from time to time in
effect and applicable to the Loan for so long as the Loan is outstanding.


 


Section 2.3            Loan
Payments.


 


2.3.1       Payment Before Maturity Date.  Borrower shall make a payment to Lender of interest
only on the Closing Date for the initial Interest Period. Borrower shall make a
payment to Lender of interest only in the amount of the Monthly Debt Service
Payment Amount on the Monthly Payment Date occurring in January 2007 and
on each Monthly Payment Date thereafter to and including the Maturity Date. Each payment
shall be applied first to accrued and unpaid interest and the balance to
principal.


 


2.3.2       Payment on Maturity Date.  Borrower shall pay to Lender on the Maturity Date the
outstanding principal balance of the Loan, all accrued and unpaid interest and
all other amounts due hereunder and under the Note, the Mortgage and the other
Loan Documents.


 


2.3.3       Interest Rate and Payment after
Default.  In the event that, and for so long as,
any Event of Default shall have occurred and be continuing, the outstanding
principal balance of the Loan shall accrue interest at the Default
Rate, calculated from the date the Event of Default occurred. If all or any
part of the principal amount of the Loan is prepaid upon acceleration of the
Loan following the occurrence of an Event of Default, Borrower shall be
required to pay Lender, in addition
to all other amounts then payable hereunder (including, without limitation, (i) in
the event that such prepayment is received on a Monthly Payment Date, interest
which has accrued on such amount through such Monthly Payment Date, or (ii) in  the
event that such prepayment is received on a date other than a Monthly Payment
Date, interest which would have accrued on
such amount through
the last day of the Interest Period during which such prepayment Occurs).


 


2.3.4       Late Payment Charge.  If any principal, interest or any other sum due under
the Loan Documents, other than the payment of principal due on the Maturity
Date, is not paid by Borrower on the date on which it is due such. that the
same would constitute an Event of Default hereunder, Borrower shall pay to
Lender upon demand an amount equal to the lesser of five percent (5%) of such
unpaid sum or the maximum amount permitted by applicable law in order to defray
the expense incurred by Lender in handling and processing such delinquent
payment and to compensate Lender for the loss of the use of such delinquent
payment. Any such amount shall be secured by the Mortgage and the other Loan
Documents.


 


2.3.5       Method and
Place of Payment.  (a) Except as otherwise specifically provided
herein, all payments and prepayments under this Agreement and the Note shall be
made to Lender not later than 1:00 P.M., New York City time, on the date
when due and shall be made in lawful money of the United States of America in
immediately available funds at Lender’s office, and any funds received by
Lender after such time shall, for all purposes hereof, be deemed to have been
paid on the next succeeding Business Day. Notwithstanding the foregoing,
amounts due for the payment of Debt Service under the Loan Documents shall be
deemed paid 


 


25

















 


so long as there are
sufficient sums on deposit in the Deposit Account (as defined in the Cash
Management Agreement) for payment of such amounts and Lender’s access to such
funds has not been inhibited or prevented in  any manner whatsoever due to circumstances or events
which are directly or indirectly caused by or otherwise relate to any actions
or omissions of Borrower or any of its Affiliates.


 


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


 


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


 


Section 2.4            Prepayments.


 


2.4.1       Voluntary
Prepayments. 
(a) On
and after the Permitted Prepayment Date, Borrower may, at its option, prepay
the Debt in whole but not in part on any Business Day, without payment of any
Yield Maintenance Premium, provided, the following conditions are satisfied:


 


(i)            Borrower
shall provide prior written notice to Lender specifying the date upon which the
prepayment is to be made, which notice shall be delivered to Lender not less
than ten (10) Business Days prior to such Prepayment Date (or such shorter
period of time as may be permitted by Lender in its sole discretion). Borrower’s
notice of prepayment shall create an obligation of Borrower to prepay the Loan
or a portion thereof as set forth therein, but may be rescinded by a written
notice to Lender prior to the applicable Prepayment Date. Borrower agrees to
indemnify Lender and to hold Lender harmless from and against any and all costs
and expenses Lender sustains or incurs as a consequence of any such rescission
of a notice of prepayment; and


 


(ii)           If
such prepayment is made on a day other than a Monthly Payment Date, then in
connection with such prepayment Borrower shall pay to Lender, simultaneously
with such prepayment, all interest on the principal balance of this Note then
being prepaid which would have accrued through the last day of the Interest
Period during which such prepayment occurs. Any prepayment received by Lender
on a date other than a Monthly Payment Date shall be held by Lender (and the
interest shall accrue for the benefit of Borrower) as collateral security for
the Loan and shall be applied to the Debt on the next Monthly Payment Date.


 


(b)           Upon payment in full of all principal
and interest due on the Loan and all other amounts due and payable under the
Note and the other Loan Documents in accordance with the terms and provisions
of the Loan Documents, upon the written request of Borrower, Lender shall (i) release
the Lien of the Mortgages and all other security interests granted
herein and under the other Loan Documents pursuant to an instrument or other
document. in form and substance reasonably satisfactory to Lender or (ii)(A) assign,
or sever into two (2) or more 


 


26

















 


separate loans and
assign, the Mortgages and the other Loan Documents to any Person designated by
Borrower, which assignment and severance documents shall be in recordable form,
(B) deliver to or as directed by Borrower the original executed Note and
all originally executed other notes which may have been consolidated, amended
and/or restated in connection with the execution of the Note or, with respect
to any note where the original has been lost, destroyed or mutilated, a lost
note affidavit for the benefit of the assignee lender and the title insurance
company insuring the Mortgages, as assigned, in form sufficient to pen-nit such
title insurance company to insure the lien of the Mortgages as assigned to and
held by the assignee without exception for any matter relating to the lost,
destroyed or mutilated note; provided that in no event shall Lender be
required to deliver any indemnity with respect thereto, (C) execute and
deliver an allonge with respect to the Note and any other note(s) described
in the clause (B) above, (D) deliver the original recorded copies of
the Mortgages in Lender’s possession or, at Borrower’s sole cost and expense,
certified copies of record, and (E) execute and deliver such other
instruments of conveyance, assignment, termination, severance and release
(including appropriate UCC statements) in recordable form as may reasonably be
requested by Borrower to evidence such assignment and/or severance, provided,
in each case, without covenant, recourse, representation (other than
representations that such assignment has been duly authorized and that Lender
has not otherwise assigned or encumbered the Mortgages or the other Loan
Documents except as expressly contemplated therein) or warranty by Lender and
notwithstanding anything to the contrary contained herein, pursuant to
instruments or other documents in form and substance reasonably satisfactory to
Lender. Concurrently with the payment to Lender of all principal and interest
on, and all other amounts due and payable under the Note and the other Loan
Documents, and whether or not Borrower shall request a release or an assignment
as set forth in this Section 2.4.1(b), Lender shall deliver to
Borrower (1) a payoff letter in customary form, (2) all original
insurance policies relating to the Property held by or on behalf of Lender, (3) any
amounts held in escrow or in any reserve account pursuant to the Loan Documents
or otherwise, (4) any other collateral that may have been delivered to
Lender in connection with the Loan, and (5) a termination (subject to customary “clawback”
provisions) of any guaranties delivered to Lender in connection with the Loan
(except to the extent of any obligations thereunder that are expressly intended
to survive pursuant to the terms thereof), duly executed by Lender, in each
case with respect to clause (1) or (5), in form and substance reasonably
satisfactory to Lender. In connection with any transaction contemplated by this Section 2.4.1(b),
Borrower shall submit to Lender for its review, not less than ten (10) Business
Days prior to the date of any release or assignment of the Mortgages or the
payment in full of the Debt (or such shorter period of time as may be permitted
by Lender in its sale discretion), all instruments and documents to be executed
by Lender (other than a payoff letter under clause (1) above). All
reasonable out-of-pocket costs and expenses incurred by Lender pursuant to this
Section 2.4.1 (b) shall be paid by Borrower (other than any
costs and expenses incurred by Lender in connection with the preparation and
delivery of a lost note affidavit in accordance with clause (ii)(B) above
or a payoff letter as contemplated by clause (1) above and provided that
in no event shall Borrower be required to pay any fee or premium in connection
herewith).


 


(c)           Following (I) either the
occurrence and during the continuance of (x) a Default (other than a
monetary Default) for which Lender has given written notice to Borrower or (y) an
Event of Default which, in either case, cannot be cured despite Borrower’s
commercially reasonable efforts (but which Default or Event of Default would be
cured or eliminated by the release of any Individual Property (or, in lieu of
such release, an assignment of 


 


27

















 


the Mortgage encumbering such individual
Property)), or (II) the occurrence of the Pasco Event, Borrower shall have
the right, prior to the Release Date, to prepay a portion of the Debt and
obtain the release of such affected Individual Property from the Lien of the
applicable Mortgage (or, in lieu of such release, obtain an assignment of the
Mortgage encumbering such Individual Property); provided the following
conditions are satisfied:


 


(i)            Borrower
shall provide prior written notice to Lender specifying the date upon which the
prepayment is to be made, which notice shall be delivered to Lender not less
than ten (10) Business Days prior to such Prepayment Date (or such shorter
period of time as may be permitted by Lender in its sole discretion). Borrower’s
notice of prepayment shall create an obligation of Borrower to prepay the Loan
or a portion thereof as set forth therein, but may be rescinded by a written
notice to Lender prior to the applicable Prepayment Date. Borrower agrees to
indemnify Lender and to hold Lender harmless from and against any and all costs
and expenses Lender sustains or incurs as a consequence of any such rescission
of a notice of prepayment;


 


(ii)           If
such prepayment is made on a day other than a Monthly Payment Date, then in
connection with such prepayment Borrower shall pay to Lender, simultaneously
with such prepayment, all interest on the principal balance of the Note then
being prepaid which would have accrued through the last day of the Interest
Period during which such prepayment occurs. Any prepayment received by Lender
on a date other than a Monthly Payment Date shall be held by Lender (and the ‘interest
shall accrue for the benefit of and shall be payable to Borrower) as collateral
security for the Loan and shall be applied to the Debt on the next Monthly
Payment Date;


 


(iii)          In
connection with the release of any Individual Property (or the assignment of
the Mortgage encumbering such individual Property), Lender shall have received (A) payment
of the applicable Release Amount, (B) payment of the Yield Maintenance
Premium with respect to the portion of the Loan to be prepaid and (C) payment
of any other amounts then due and owing to Lender pursuant to this Agreement
and the other Loan Documents;


 


(iv)          Immediately
after giving effect to such prepayment and the release of the applicable
Individual Property from the Lien of the related Mortgage (or, in lieu of such
release, the assignment of the Mortgage encumbering such individual Property),
no Default or Event of Default shall have occurred and be continuing (excluding
any Default or Event of Default arising from the released Individual Property);


 


(v)           In
connection with the release of an Individual Property pursuant to this Section 2.4.1(c),
Borrower shall submit to Lender for its review, not less than ten (10) Business
Days prior to the date of such release (or such shorter period of time as may
be permitted by Lender in its sole discretion), a partial release of the
applicable Mortgage and the related Loan Documents to be executed by Lender.
Such release shall be in a form appropriate for the jurisdiction in which such
Individual Property is located and otherwise reasonably acceptable to Lender;


 


28














 


(vi)          In
lieu of a release of an Individual Property in accordance with clause (v), upon
Borrower’s written request not less than ten (10) Business Days prior to
the date of the proposed assignment (or such shorter period of time as may be
permitted by Lender in its sole discretion), Lender shall (A) sever the
Note and assign or endorse over a severed note in the amount equal to the
Release Amount for such Individual Property and assign the applicable Mortgage
to any Person designated by Borrower, which assignment and severance documents
shall be in recordable form, (B) deliver to or as directed by Borrower the
original executed severed note, (C) deliver the original recorded copy of
the applicable Mortgage in Lender’s possession or, at Borrower’s sole cost and
expense, a certified copy of record, and (D) execute and deliver such
other instruments of conveyance, assignment, termination, severance and release
(including appropriate UCC statements) in recordable form as may reasonably be
requested by Borrower to evidence such assignment and/or severance, provided,
in each case, without covenant, recourse, representation (other than
representations that such assignment has been duly authorized and that Lender
has not otherwise assigned or encumbered the applicable Mortgage except as
expressly contemplated therein) or warranty by Lender and notwithstanding
anything to the contrary contained herein, pursuant to instruments or other
documents in form and substance reasonably satisfactory to Lender. Borrower
shall provide all other documentation Lender reasonably requires to be
delivered by Borrower in connection with such severance and assignment
(including, without limitation, a severed note in the amount equal to the
principal balance of the Loan after giving effect to such assignment), together
with an Officer’s Certificate certifying that such severance and assignment
will not impair or otherwise adversely affect the Liens, security interests and
other rights of Lender under the Loan Documents not being assigned (or as to
the parties to the Loan Documents and the Individual Properties subject to the
Loan Documents not being assigned). In connection with any transaction
contemplated by this Section 2.4.1(c)(vi), Borrower shall submit to
Lender for its review, not less than ten (10) Business Days prior to the
date of any assignment of a Mortgage (or such shorter period of time as may be
permitted by Lender in its sole discretion), all instruments and documents to
be executed by Lender;


 


(vii)         Simultaneously
with the release (or assignment), (A) Borrower shall convey its title to
the applicable Individual Property to a Person other than Borrower and (B) Borrower
and Manager shall execute an amendment to the Management Agreement effective as
of such release (or assignment) deleting the applicable Individual Property
from the list of properties managed thereunder;


 


(viii)        Borrower
shall deliver an Officer’s Certificate certifying that the requirements set
forth in this Section 2.4.1(c) have been satisfied; and


 


(ix)           All
reasonable out-of-pocket costs and expenses incurred by Lender pursuant to this
Section 2.4.1(c) shall be paid by Borrower.


 


2.4.2       Mandatory Prepayments.  (a) On each date on which Lender actually
receives a distribution of Net Proceeds, and if Lender exercises its right
provided for herein not to make such Net Proceeds available to Borrower for a
Restoration, one hundred percent (100%) of such Net Proceeds shall be applied
to the outstanding principal balance of the Loan, together 


 


29

















 


with interest accruing on
such amount calculated through the next Monthly Payment Date. Any prepayment
received by Lender pursuant to this Section 2.4.2 on a date other
than a Monthly Payment Date shall be held by Lender as collateral security for
the Loan in an interest bearing account, with such interest accruing to the
benefit of and payable to Borrower, and shall be applied by Lender on the next
Monthly Payment Date. The Allocated Loan Amount of an applicable Individual Property
shall be reduced by an amount equal to such prepayment of principal upon such
application of Net  Proceeds pursuant to this Section 2.4.2.  Notwithstanding the foregoing and anything
else herein to the contrary, if in connection with any Casualty or Condemnation
at any individual Property Lender exercises its right provided for herein not
to make the Net Proceeds available to Borrower for a Restoration, then at
Borrower’s option, Lender shall release the applicable Individual Property from
the lien of the Mortgage and related Loan Documents (or, in lieu of such
release, the assignment of the related Mortgage by Lender on substantially the
same terms as are provided in Section 2.4.1(c)), provided
that (i) Borrower shall pay Lender an amount which, when added to the
amount of Net Proceeds received in connection with such Casualty or
Condemnation, equals the Allocated Loan Amount of the Individual Property for
which the Net Proceeds were obtained together with interest on such amount
calculated for the same periods as Net Proceeds in the first sentence of this Section 2.4.2,
(ii) no Event of Default shall have occurred and be continuing (except for
any Event of Default which would be cured or eliminated by the release or
assignment. of the Individual Property, (iii) Borrower shall provide to
Lender a release of the Mortgage as it relates to such Individual Property and
related Loan Documents in a form appropriate for the jurisdiction in which the
applicable Individual Property is located and reasonably satisfactory to Lender
for execution by Lender and (iv) simultaneously with the release, Borrower
shall convey fee simple title to the Release Property to a Person other than
Borrower.


 


(b)           Any prepayment of the Loan pursuant
to this Section 2.4.2 shall be without premium (including Yield
Maintenance Premium) or penalty of any kind.


 


2.4.3       Prepayments After Default.  Subject to the terms set forth in Section 2.4.1(c),
if, after an Event of Default, payment of all or any part of the principal of
the Loan is tendered by Borrower, a purchaser at foreclosure or any other
Person, such tender shall be deemed an attempt to circumvent the prohibition
against prepayment set forth in Section 2.4.1 and Borrower, such
purchaser at foreclosure or other Person shall pay, in addition to the
outstanding principal balance, all accrued and unpaid interest and other
amounts payable under the Loan Documents, an amount equal to the applicable
Yield Maintenance Premium, if any.


 


Section 2.5            Defeasance.


 


2.5.1       Total Defeasance.  (a) Provided no Event of Default shall have
occurred and remain uncured, Borrower shall have the right at any time after
the Release Date and prior to the Permitted Prepayment Date to voluntarily
defease the entire Loan and obtain a release of the lien of the Mortgage by
providing Lender with the Total Defeasance Collateral (hereinafter, a “Total
Defeasance Event”), subject to the satisfaction of the following conditions
precedent:


 


(i)            Borrower
shall provide Lender not less than fifteen (15) Business Days’ notice (or such
shorter period of time as may be permitted by Lender in its sole discretion)
specifying a date (the “Total Defeasance Date”) on which the Total 


 


30

















 


Defeasance Event is to occur. Borrower’s notice of defeasance shall
create an obligation of Borrower to defease
the entire Loan as
set forth therein, but may be rescinded by a written notice to Lender prior to
the applicable Total Defeasance Date. Borrower agrees to indemnify Lender and
to hold Lender harmless from and against any and all costs and expenses Lender
sustains or incurs as a consequence of any such rescission of a notice of
defeasance;


 


(ii)           Borrower
shall pay to Lender (A) all payments of principal and interest due on the
Loan to and including the Total Defeasance Date and (B) all other sums,
then due under the Note, this Agreement, the Mortgage and the other Loan
Documents;


 


(iii)          Borrower
shall deposit the Total Defeasance Collateral into the Defeasance Collateral
Account and otherwise comply with the provisions of Sections 2.5.3  and 2.5.4 hereof;


 


(iv)          Borrower
shall execute and deliver to Lender a Defeasance Security Agreement in respect
of the Defeasance Collateral Account and the Total Defeasance Collateral;


 


(v)           Borrower
shall deliver to Lender an opinion of counsel for Borrower that is standard in
commercial lending transactions and subject only to customary qualifications,
assumptions and exceptions opining, among other things, (A) that Lender
has a legal and valid perfected first priority security interest in the
Defeasance Collateral Account and the Total Defeasance Collateral, (B) that,
if a Securitization has occurred, the REMIC Trust formed pursuant to such
Securitization will not fail to maintain its status as a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code as a
result of a Total Defeasance Event pursuant to this Section 2.5  (assuming a “startup day” (within the
meaning of Section 8600(a)(9) of the Code) that is the earlier of the
actual start-up date and the date specified in clause (a) of the
definition of “Release Date” contained herein), and (C) a
non-consolidation opinion with respect to the Successor Borrower;


 


(vi)          If
a Securitization has occurred, Borrower shall deliver to Lender a Rating Agency
Confirmation as to the Total Defeasance Event;


 


(vii)         Borrower
shall deliver an Officer’s Certificate certifying that the requirements set
forth in this Section 2.5 have been satisfied;


 


(viii)        Borrower
shall deliver a certificate of a “big four” or other nationally recognized
public accounting firm acceptable to Lender certifying that the Total
Defeasance Collateral will generate monthly amounts equal to or greater than
the Scheduled Defeasance Payments;


 


(ix)           Intentionally
omitted;


 


(x)            Borrower
shall deliver such other certificates, opinions, documents and instruments as
Lender may reasonably request; and


 


31

















 


(xi)           Borrower
shall pay all reasonable out-of-pocket costs and expenses of Lender incurred in
connection with the Total Defeasance Event, including Lender’s reasonable
attorneys’ fees and expenses and Rating Agencies’ fees and expenses.


 


(b)           If Borrower has elected to defease
the entire Note and the requirements of this Section 2.5  have been satisfied, the Property shall
be released from the lien of the Mortgage and the Total Defeasance Collateral
pledged pursuant to the Defeasance Security Agreement shall be the sole source
of collateral securing the Note. In connection with the release of the Lien,
Borrower shall submit to Lender for its review, not less than fifteen (15) days
prior to the Defeasance Date (or such shorter period of time as may be
permitted by Lender in its sole discretion), a release of Lien (and related
Loan Documents) to be executed by Lender. Such release shall be in a form
appropriate in the applicable jurisdiction(s) in which the Property is
located and that contains standard provisions protecting the rights of the
releasing lender. In addition, Borrower shall provide all other documentation
that a reasonably prudent lender originating commercial loans for
securitization similar to the Loan would require to be delivered by Borrower in
connection with such release, together with an Officer’s Certificate certifying
that such documentation (i) is in compliance with all Legal Requirements,
and (ii) will effect such release in accordance with the terms of this
Agreement. Borrower shall pay all costs, taxes and expenses associated with the
release of the lien of the Mortgage, including Lender’s reasonable attorneys’
fees. Except as set forth in Section 2.4 or this Section 2.5, no repayment, prepayment or defeasance of
all or any portion of the Note shall cause, give rise to a right to require, or
otherwise result in, the release of the lien of the Mortgage on the Property.


 


(c)           If Borrower has elected to defease
the entire Note and the requirements of this Section 2.5  have been satisfied, in lieu of the
release of the Property in accordance with Section 2.5.1(b), upon
Borrower’s written request not less than fifteen (15)
days prior to the
date of the proposed assignment (or such shorter period of time as may be
permitted by Lender in its sole discretion), Lender shall (i) assign, or
sever into two (2) or more separate loans and assign, the Mortgages and
the other Loan Documents to any Person designated by Borrower, which assignment
and severance documents shall be in recordable form, (ii) deliver to or as
directed by Borrower the original executed Note and all originally executed other
notes which may have been consolidated, amended and/or restated in connection
with the execution of the Note or, with
respect to any note
where the original has been lost, destroyed or mutilated, a lost note affidavit
for the benefit of the assignee lender and the title insurance company insuring
the Mortgages, as assigned, in form sufficient to permit such title insurance
company to insure the lien of the Mortgages as assigned to and held by the
assignee without exception for any matter relating to the lost, destroyed or
mutilated note; provided that in no event shall Lender be required to deliver
any indemnity with respect thereto, (iii) execute and deliver an allonge
with respect to the Note and any other note(s) described in the clause (ii) above, (iv) deliver the original recorded copies of the Mortgages
in Lender’s possession or, at Borrower’s sole cost and expense,
certified copies of record, and (v) execute and deliver such other
instruments of conveyance, assignment, termination, severance and release
(including appropriate UCC statements) in recordable form as may reasonably be
requested by Borrower to evidence such assignment and/or severance, provided,
in each case, without covenant, recourse, representation (other than
representations that such assignment has been duly authorized and that Lender
has not otherwise assigned or encumbered the Mortgages or the other Loan
Documents except as expressly contemplated therein) or warranty by Lender and
notwithstanding anything to the contrary contained herein, 


 


32

















 


pursuant to instruments
or other documents in form and substance reasonably satisfactory to Lender.
Concurrently with the delivery of the Total Defeasance Collateral to Lender,
and whether or not Borrower shall request a release or an assignment as set
forth in this Section 2.5.1, Lender shall deliver to Borrower (1) a
payoff letter in customary form, (2) all original insurance policies
relating to the Property held by or on behalf of Lender, (3) any amounts
held in escrow or in any reserve account pursuant to the Loan Documents or
otherwise, (4) any other collateral that may have been delivered to Lender
in connection with the Loan, and (5) a termination (subject to customary “clawback”
provisions) of any guaranties delivered to Lender in connection with the Loan
(except to the extent of any obligations thereunder that are expressly intended
to survive pursuant to the terms thereof), duly executed by Lender, in each
case with respect to clause (1) or (5), in form and substance reasonably
satisfactory to Lender. In connection with any transaction contemplated by this
Section 2..5.1(c), Borrower shall submit to Lender for its review,
not less than fifteen (15) days prior to the Defeasance Date (or such shorter
period of time as may be permitted by Lender in its sole discretion), all
instruments and documents to be executed by Lender (other than a payoff letter
under clause (1) above). All reasonable out-of-pocket costs and expenses
incurred by Lender pursuant to this Section 2.5.1(c) shall be paid by Borrower (other than any
costs and expenses incurred by Lender in connection with the preparation and
delivery of a lost note affidavit in accordance with clause (ii) above or
a payoff letter as contemplated by clause (1) above and provided that in
no event shall Borrower be required to pay any fee or premium to the Lender or
the Servicer in connection herewith).


 


2.5.2       Partial
Defeasance. (a) Provided no Event of Default shall have
occurred and remain uncured, Borrower shall have the right at any time after
the Release Date and prior to Permitted Prepayment Date to voluntarily defease
a portion of the Loan and obtain a release of the lien of the Mortgage as to
any Individual Property by providing Lender with the Partial Defeasance
Collateral (hereinafter, a “Partial Defeasance Event”) upon satisfaction
of the following conditions precedent:


 


(i)            Borrower
shall provide Lender not less than fifteen (15) Business Days notice (or such
shorter period of time as may be permitted by Lender in its sole discretion)
specifying a date (the “Partial Defeasance Date”) on which the Partial
Defeasance is to occur. Borrower’s notice of defeasance shall create an
obligation of Borrower to defease a portion of the Loan as set forth therein,
but may be rescinded by a written notice to Lender prior to the applicable
Partial Defeasance Date. Borrower agrees to indemnify Lender and to hold Lender
harmless from and against any and all costs and expenses Lender sustains or
incurs as a consequence of any such rescission of a notice of defeasance;


 


(ii)           Borrower
shall pay to Lender (A) all payments of principal arid interest due on the
Loan to and including the Partial Defeasance Date and (B) all other sums
then due under the Note, this Agreement, the Mortgage and the other Loan
Documents;


 


(iii)          Borrower
shall deposit the Partial Defeasance Collateral into the Defeasance Collateral
Account and otherwise comply with the provisions of Sections 2.5.3 and 2.5.4 hereof;


 


33

















 


(iv)          Borrower
shall prepare all necessary documents to modify this Agreement and to amend and
restate the Note and issue two substitute notes, one note having an aggregate
principal balance equal to Release Amount for the subject Individual Property
(collectively, the “Defeased Note”), and the other note having a
principal balance equal to the excess of (A) the original principal amount
of the Loan, over (B) the amount of the Defeased Note (collectively, the “Undefeased
Note”). The Defeased Note and Undefeased Note shall have identical terms as
the Note except for the principal balance. The Defeased Note and the Undefeased
Note shall not be cross defaulted or cross collateralized unless the Rating
Agencies shall require otherwise. A Defeased Note may not be the subject of any
further defeasance (but maybe prepaid on the same terms as the Note);


 


(v)           Borrower
shall execute and deliver to Lender a Defeasance Security Agreement in respect
of the Defeasance Collateral Account and the Partial Defeasance Collateral;


 


(vi)          Borrower
shall deliver to Lender an opinion of counsel for Borrower that is standard in
commercial lending transactions and subject only to customary qualifications,
assumptions and exceptions opining, among other things, (A) that Lender
has a legal and valid perfected first priority security interest in the
Defeasance Collateral Account and the Partial Defeasance Collateral, (B) that,
if a Securitization has occurred, the REMIC Trust formed pursuant to such
Securitization will not fail to maintain its status as a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code as a
result of the Partial Defeasance Event pursuant to this Section 2.5.2 (assuming a “startup day” (within the meaning of Section 860G(a)(9) of
the Code) that is the earlier of the actual start-up date and the date
specified in clause (a) of the definition of “Release Date” contained
herein), and (C) a non-consolidation opinion with respect to the Successor
Borrower;


 


(vii)         Borrower
shall deliver to Lender a Rating Agency Confirmation as to the Partial
Defeasance Event;


 


(viii)        Borrower
shall deliver to Lender a certificate of a “big four’ or other nationally
recognized public accounting firm acceptable to Lender certifying that the
Partial Defeasance Collateral will generate monthly amounts equal to or greater
than the Scheduled Defeasance Payments;


 


(ix)           Borrower
shall deliver to Lender an Officer’s Certificate certifying that the
requirements set forth in this Section 2.5.2(a) have been
satisfied;


 


(x)            After
giving effect to the release of any Individual Properties (including the amount
prepaid in Section 2.5.2(a)(ii) above and including any amount
so paid in excess of 100% of the Allocated Loan Amount for any such Release
Properties), the Debt Service Coverage Ratio for the Loan for the Individual
Properties (excluding the Released Property) shall not be less than the greater
of (i) the Debt Service Coverage Ratio as of the Closing Date for the
Property as of the Closing Date and (ii) the Debt Service Coverage Ratio
for the trailing twelve (12) full calendar months as of the date 


 


34

















 


immediately preceding the release of the Release Properties for the
Property as of such date; provided that, in order to meet the Debt
Service Coverage Ratio Test set forth in this clause (x), Borrower may defease
a portion of the Loan in excess of the Release Amounts of the
affected Individual Properties;


 


(xi)           Borrower
shall continue to comply with the terms and provisions of Section 3.1.24;


 


(xii)          Borrower
shall pay all reasonable out-of-pocket costs and expenses of Lender incurred in
connection with the Partial Defeasance Event, including Lender’s reasonable
attorneys’ fees and expenses, the Rating Agencies’ fees and expenses and any
fees assessed by the Servicer in connection with such Partial Defeasance Event.


 


(b)           If Borrower has elected to make a
partial defeasance and the requirements of this Section 2.5 have
been satisfied, the individual Property shall be
released from the
lien of the Mortgage. In connection with the release of the Lien, Borrower
shall submit to Lender for its review, not less than fifteen (15) days
prior to the Partial Defeasance Date (or such shorter period of time as may be
permitted by Lender in its sole discretion), a release of Lien (and related
Loan Documents) to be executed by Lender. Such release shall be in a form
appropriate in the jurisdiction in which the Property is located and that
contains standard provisions protecting the rights of the releasing lender. In
addition, Borrower shall provide all other documentation that a reasonably
prudent lender originating commercial loans for securitization similar to the
Loan would reasonably require to be delivered by Borrower in connection with
such release, together with an Officer’s Certificate certifying that such
documentation (i) is in compliance with all Legal Requirements, and (ii) will
effect such release in accordance with the terms of this Agreement. Borrower
shall pay all taxes and all reasonable costs and expenses associated with the
release of the lien of the Mortgage, including Lender’s reasonable attorneys’
fees. Borrower shall cause title to the Individual Property so released from
the lien of the Mortgage to be transferred to and held by a Person other than
Borrower. Except as set forth in Section 2.4 or this Section 2.5
no repayment, prepayment or defeasance of all or any portion of the Note shall
cause, give rise to a right to require, or otherwise result in, the release of
the lien of the Mortgage from the Property or any part thereof.


 


(c)           If Borrower has elected to make a
partial defeasance and the requirements of this Section 2.5  have been satisfied, in lieu of the
release of the Individual Property in accordance with Section 2.5.2(b),
upon Borrower’s written request not less than fifteen (15) days
prior to the date of the proposed assignment (or such shorter period of time as
may be permitted by Lender in its sole discretion), Lender shall (i) sever
the Note and assign or endorse over a severed note in the amount equal to the
Release Amount for such Individual Property and assign the applicable Mortgage
to any Person designated by Borrower, which assignment and severance documents
shall be in recordable form, (ii) deliver to or as directed by Borrower
the original executed severed note, (iii) deliver the original recorded
copy of the applicable Mortgage in Lender’s possession or, at Borrower’s sole
cost and expense, a certified copy of record, and (iv) execute and deliver
such other instruments of conveyance, assignment, termination, severance and
release (including appropriate UCC statements) in recordable form as may
reasonably be requested by Borrower to evidence such assignment and/or
severance, provided, in each case, without covenant, recourse,
representation (other than representations that such assignment has 


 


35

















 


been duly authorized and
that Lender has not otherwise assigned or encumbered the applicable Mortgage
except as expressly contemplated therein) or warranty by Lender and
notwithstanding anything to the contrary contained herein, pursuant to
instruments or other documents in form and substance reasonably satisfactory to
Lender. in connection with any transaction contemplated by this Section 2.5.2(c),
Borrower shall submit to Lender for its review, not less than fifteen (15) days
prior to the date of any assignment of a Mortgage (or such shorter period of
time as may be permitted by Lender in its sole discretion), all instruments and
documents to be executed by Lender. In addition, Borrower shall provide all
other documentation Lender reasonably requires to be delivered by Borrower in
connection with such severance and assignment (including, without limitation, a
severed note in the amount equal to the principal balance of the Loan after
giving effect to such assignment), together with an Officer’s Certificate
certifying that such severance and assignment will not impair or otherwise
adversely affect the Liens, security interests and other rights of Lender under
the Loan Documents not being assigned (or as to the parties to the Loan
Documents and the Individual Properties subject to the Loan Documents not being
assigned). All reasonable out-of-pocket costs and expenses incurred by Lender
pursuant to this Section 2.5.2(c) shall be paid by Borrower; provided
that in no event shall Borrower be required to pay any fee or premium to the
Lender or the Servicer in connection therewith.


 


2.5.3       Defeasance
Collateral Account. On or before the date on which Borrower
delivers the Total Defeasance Collateral or Partial Defeasance Collateral,
Borrower shall open at any Eligible Institution the defeasance collateral
account (the “Defeasance Collateral Account”) which shall at all times
be an Eligible Account. The Defeasance Collateral Account shall contain only (a) Total
Defeasance Collateral or the applicable Partial Defeasance Collateral, and (b) cash
from interest and principal paid on the Total Defeasance Collateral or the
applicable Partial Defeasance Collateral. All cash from interest and principal
payments paid on the Total Defeasance Collateral or Partial Defeasance
Collateral shall be paid over to Lender on each Monthly Payment Date and
applied first to accrued and unpaid interest and then to principal. Following
the payment of all Scheduled Defeasance Payments, any cash from interest and
principal paid on the Total Defeasance Collateral or Partial Defeasance
Collateral in excess of the amounts necessary to pay the Scheduled Defeasance
Payments shall be paid to Borrower or, if there is a Successor Borrower, to
Successor Borrower. Borrower shall cause the Eligible Institution at which the
Total Defeasance Collateral or Partial Defeasance Collateral is deposited to
enter into an agreement with Borrower or Successor Borrower, as applicable, and
Lender, satisfactory to Lender in its reasonable discretion, pursuant to which
such Eligible Institution shall agree to hold and distribute the Total
Defeasance Collateral or Partial Defeasance Collateral in accordance with this
Agreement. Borrower or Successor Borrower, as applicable, shall be the owner of
the Defeasance Collateral Account and shall report all income accrued on Total
Defeasance Collateral or Partial Defeasance Collateral for federal, state and
local income tax purposes in its income tax return. Borrower shall prepay or
cause to be prepaid all costs and expenses associated with opening and
maintaining the Defeasance Collateral Account. Lender shall not in any way be
liable by reason of any insufficiency in the Defeasance Collateral Account. At
Borrower’s election, different Defeasance Collateral Accounts may be
established for each defeasance consummated pursuant to Section 2.5.1 or Section 2.5.2.


 


2.5.4       Successor Borrower. In connection with a Defeasance Event
under this Section 2.5, Borrower shall, if required by the Rating
Agencies or if Borrower elects to do so, 


 


36

















 


establish or designate a
successor entity (the “Successor Borrower”) which shall be a single
purpose bankruptcy remote entity and which shall be approved by the Rating
Agencies. Any such Successor Borrower may, at Borrower’s option, be an
Affiliate of Borrower. Borrower shall transfer and assign all obligations,
rights and duties under and to the Note or the Defeased Note, as applicable,
together with the Total Defeasance Collateral or Partial Defeasance Collateral,
as applicable, to such Successor Borrower. Such Successor Borrower shall assume
the obligations under the Note or the Defeased Note, as applicable, and the
Defeasance Security Agreement and Borrower shall be relieved of its obligations
under such documents except to the extent of any cross-collateralization
required hereunder. Borrower shall pay all reasonable out-of-pocket costs and
expenses incurred by Lender, including Lender’s attorney’s fees and expenses,
incurred in connection therewith.


 


III.           REPRESENTATIONS AND
WARRANTIES


 


Section 3.1            Borrower
Representations.  Borrower represents
and warrants as of the date hereof, except as described on Schedule 3.1
attached hereto, that:


 


3.1.1       Organization.  (a) Each
of Borrower and each SPC Party is duly organized, validly existing and in good
standing with full power and authority to own its assets and conduct its
business, and is duly qualified in all jurisdictions in which the ownership or
lease of its property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a material
adverse effect on its ability to perform its obligations hereunder, and
Borrower has taken all necessary action to authorize the execution, delivery
and performance of this Agreement and the other Loan Documents by it, and has
the power and authority to execute, deliver and perform under this Agreement,
the other Loan Documents and all the transactions contemplated hereby.


 


(b)           Borrower’s exact legal name is
correctly set forth in the first paragraph of this Agreement. Borrower is an
organization of the type specified in the first paragraph of this Agreement.
Borrower is incorporated or organized under the laws of the state specified in
the first paragraph of this Agreement. Borrower’s principal place of business
and chief executive office, and the place where Borrower keeps its books and
records, including recorded data of any kind or nature, regardless of the
medium of recording, including software, writings, plans, specifications and
schematics will be the address of Borrower set forth in the first paragraph of
this Agreement (unless Borrower notifies Lender in writing at least thirty (30)
days prior to the date of such change). Propco Borrower’s organizational
identification number, if any, assigned by the state of its incorporation or
organization is 4256054. Propco
Borrower’s federal tax identification number is 20-5881050. Opco Borrower’s
organizational identification number, if any, assigned by the state of its
incorporation or organization is 4256056. Opco Borrower’s federal tax
identification number is 20-5879806. Borrower is not subject to back-up
withholding taxes.


 


3.1.2       Proceeding.  This Agreement and the other Loan Documents have been
duly authorized, executed and delivered by Borrower and constitute a legal,
valid and binding obligation of Borrower, enforceable against Borrower in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally, and by 


 


37

















 


general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).


 


3.1.3       No Conflicts.  The execution and delivery of this Agreement and the
other Loan Documents by Borrower and the performance of its obligations
hereunder and thereunder will not conflict with any provision of any law or
regulation to which Borrower is subject, or conflict with, result in a breach
of, or constitute a default under, any of the terms, conditions or provisions
of any of Borrower’s organizational documents or any agreement or instrument to
which Borrower is a party or by which it is bound, or any order or decree
applicable to Borrower, or result in the creation or imposition of any lien on
any of Borrower’s assets or property (other than pursuant to the Loan
Documents).


 


3.1.4       Litigation.  There is no action, suit, proceeding or investigation
pending or, to Borrower’s knowledge, threatened against Borrower in any court
or by or before any other Governmental Authority which would materially and
adversely affect the ability of Borrower to carry out the transactions
contemplated by this Agreement.


 


3.1.5       Orders and Decrees.  Borrower is not in default with respect to any order
or decree of any court or any order, regulation or demand of any Governmental
Authority, which default might have consequences that would materially and
adversely affect the condition (financial or other) or operations of Borrower
or its properties or might have consequences that would adversely affect its
performance hereunder.


 


3.1.6       Consents.  No consent, approval, authorization or order of any
court or Governmental Authority is required for the execution, delivery and
performance by Borrower of, or compliance by Borrower with, this Agreement or
the consummation of the transactions contemplated hereby, other than those
which have been obtained by Borrower.


 


3.1.7       Title.  (a) Borrower has good, marketable and
insurable fee simple title to the real property comprising part of each
Individual Property and good title to the balance of each Individual Property
owned by it, free and clear of all Liens whatsoever except the Permitted
Encumbrances. The Mortgage, when properly recorded in the appropriate records,
together with any Uniform Commercial, Code financing statements required to be
filed in connection therewith, will create (i) a valid, first priority,
perfected lien on the Property, subject only to Permitted Encumbrances and (ii) perfected
security interests in and to, and perfected collateral assignments of, all
personalty comprising the Property (including the Leases), all in accordance
with the terms thereof, in each case subject only to any Permitted
Encumbrances. Except as indicated on the Title Insurance Policy for each
Individual Property if insured over by the title company issuing the Title
Insurance Policy for each individual Property or those that are contested in
accordance with the terms of this Agreement, there are no mechanics’, materialman’s
or other similar liens or claims which have been filed for work, labor or
materials affecting the Property which are or may be liens prior to, or equal
or coordinate with, the lien of the Mortgage. To Borrower’s knowledge, none of
the Permitted Encumbrances, individually or in the aggregate, materially
interfere with the benefits of the security intended to be provided by the
Mortgage and this Loan Agreement, materially and adversely affect the value of
the Property in light of the manner in  which the same is currently being
used, impair the use or operations of the Property or impair Borrower’s ability
to pay its obligations in a timely manner.


 


38














 


(b)           The Security Agreement, together with
any Uniform Commercial Code financing statements required to’ be filed in
connection therewith, will create a valid perfected lien and security interest
in, and a perfected collateral assignment of, all personalty of Opco Borrower,
all in accordance with the terms thereof; subject only to any Permitted
Encumbrances.


 


3.1.8       No Plan Assets. 
As of the date hereof and throughout the term of the Loan (a) Borrower
is not and will not be an “employee benefit plan,” as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
whether or not subject to Title I of ERISA, or a “plan” as defined in Section 4975
of the Code, (b) none of the assets of Borrower constitutes or will constitute
“plan assets” of one or more such plans within the meaning of U.S. Department
of Labor Regulation 29 C.F.R. Section 25103101 (the “Plan Assets
Regulation”) and (c) transactions by or with Borrower are not and will
not be prohibited transactions under ERISA.


 


3.1.9       Compliance.  Borrower and each Individual Property and the use
thereof comply in all material respects with all applicable Legal Requirements,
including, without limitation, building and zoning ordinances and codes and
Prescribed Laws. To Borrower’s knowledge, Borrower is not in default or
violation of any order, writ, injunction, decree or demand of any Governmental
Authority, the violation of which would materially adversely affect the
condition (financial or otherwise) or business of Borrower.  To Borrower’s knowledge, Borrower has not
committed any act which may give any Governmental Authority the right to cause
Borrower to forfeit the Property or any part thereof or any monies paid in
performance of Borrower’s obligations under any of the Loan Documents. With
respect to those Individual Properties listed on Schedule IX, Borrower
hereby represents that no certificate of occupancy is available or required in
order for each such Individual Property to be in compliance with local zoning rules and
regulations in the jurisdiction where each such Individual Property is located.


 


3.1.10     Financial Information.  All financial data taken as a whole, including,
without limitation, the statements of cash flow and income and operating
expense, that have been delivered to Lender in respect of the Property (other
than financial forecasts) fairly present in all material respects the financial
condition of the Property as of the date of such reports; the financial
forecasts delivered to Lender were prepared in good faith by Borrower for its
own use in the ordinary course of business. Borrower does not have any
contingent liabilities other than its liabilities under the Loan Documents,
liabilities for taxes, unusual forward or long-term commitments or unrealized
or anticipated losses from any unfavorable commitments that are known to
Borrower and reasonably likely to have a materially adverse effect on the
Property or the operation thereof; except as referred to or reflected in said
financial statements. Since the date of the financial statements, there has
been no material adverse change in the financial condition, operations or
business of Borrower or the Property from that set forth in said financial
statements.


 


3.1.11     Condemnation.  No Condemnation or other proceeding has been commenced
or, to Borrower’s best knowledge, is contemplated with respect to all or any
portion of the Property or for the relocation of roadways providing access to
the Property.


 


3.1.12     Utilities and Public Access.  Each Individual Property has rights of access to
public ways and is served by water, sewer, sanitary sewer and storm drain
facilities 


 


39

















 


adequate to service such
Individual Property for its intended uses. All roads necessary for the current
utilization of the Property for its current purpose have been dedicated to
public use and accepted by all governmental authorities or are the subject of
access easements for the benefit of the Property.


 


3.1.13     Separate Lots.  Each Individual Property is comprised of one (1) or
more parcels which constitute separate tax lots and do not constitute a portion
of any other tax lot not a part of the Property.


 


3.1.14     Assessments. To Borrower’s knowledge, there are no
pending or proposed special or other assessments for public improvements or
otherwise affecting any Individual Property, nor are there any contemplated
improvements to any Individual Property that may result in such special or
other assessments which, in any such case, would have a material adverse effect
on Borrower’s ability to perform its obligations under the Loan Documents.


 


3.1.15     Enforceability.  The Loan Documents are not subject to any right of
rescission, set-off, counterclaim or defense by Borrower, including the defense
of usury, nor would the operation of any of the terms of the Loan Documents, or
the exercise of any right thereunder, render the Loan Documents unenforceable,
and Borrower has not asserted any right of rescission, set-off, counterclaim or
defense with respect thereto.


 


3.1.16     Assignment of Leases.  The Assignment of Leases creates a valid assignment
of, or a valid security interest in, certain rights under the Leases, subject
only to a license granted to Borrower to exercise certain rights and to perform
certain obligations of the lessor under the Leases, including the right to
operate the Property. No Person other than Lender, Cross Lender or Borrower has
any interest in or assignment of the Leases or any portion of the Rents due and
payable or to become due and payable thereunder.


 


3.1.17     Insurance.  Borrower has obtained and has delivered to Lender
acceptable evidence of the existence of all of the Policies, with all premiums
due and payable prepaid thereunder, reflecting the insurance coverages, amounts
and other requirements set forth in this Agreement. No Person, including
Borrower, has done, by act or omission, anything which would impair the
coverage of any of the Policies.


 


3.1.18     Licenses.  All permits and approvals, including without
limitation, certificates of occupancy required by any Governmental Authority
for the use, occupancy and operation of the Property in the manner in which the
Property is currently being used, occupied and operated have been obtained and
are in full force and effect except for such permits and approvals the absence
of which would not result in a material adverse
effect on the financial condition of Borrower or the Individual Property
for which Borrower failed to obtain such permit or approval.


 


3.1.19     Flood Zone.  Except as shown on the Survey, none of the
Improvements on any Individual Property are located in an area identified by the Federal Emergency
Management Agency as a special flood hazard area.


 


40

















 


3.1.20     Physical Condition. To Borrower’s knowledge and except as set
forth in the applicable Physical Conditions Report, each Individual Property,
including, without limitation, all buildings, improvements, parking facilities,
sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire
protection systems, electrical systems, equipment, elevators, exterior sidings
and doors, landscaping, irrigation systems and all structural components, are
in good condition, order and repair in all material respects; there exists no structural or other material defects
or damages in any Individual Property, whether latent or otherwise, and
Borrower has not received notice from any insurance company or bonding company
of any defects or inadequacies in any Individual Property, or any part thereof,
which would adversely affect the insurability of the same or cause the imposition of extraordinary
premiums or charges thereon or of any termination or threatened termination of
any policy of insurance or bond.


 


3.1.21     Boundaries.  Except as shown on the Survey, all of the improvements
which were included in determining the appraised value of the Property lie wholly within the boundaries and
building restriction lines of each Individual Property, and no improvements on
adjoining properties encroach upon any Individual Property, and no easements or
other encumbrances affecting any Individual Property encroach upon any of the
improvements, so as to affect the value or marketability of any Individual
Property except those which are insured against by title insurance.


 


3.1.22     Leases.  Borrower represents and warrants to Lender with
respect to the Leases that: (a) the “Major Customer List” attached hereto
as Schedule I is true, complete and correct in all material respects, (b) the
Leases identified on Schedule I are in full force and effect and there
are no material defaults thereunder by either party, (c) Borrower has
delivered to Lender copies of all Leases with terms in excess of one (1) year
or which generate revenue in excess of Five Hundred Thousand and No/100 Dollars
($500,000.00) annually, (d) there are no Leases which contain rights or
options of the Tenant thereunder to purchase all or any part of the Property or
require the Borrower to purchase any of the Improvements other than as set
forth on Schedule I, (e) the copies of the Leases delivered to
Lender are true and complete, and there are no oral agreements with respect
thereto, (f) no Rent (including security deposits) has been paid more than
one (1) month in advance of its due date, (g) all alterations or
improvements at each Individual Property to be performed by Borrower under each
Lease has been performed as required and has been accepted by the applicable
Tenant, (h) any payments, free rent, partial rent, rebate of rent or other
payments, credits, allowances or abatements required to be given by Borrower to
any Tenant has already been received by such Tenant and (i) all security
deposits are being held in accordance with Legal Requirements.


 


3.1.23     Filing and Recording Taxes.  All transfer taxes, deed stamps, intangible taxes or
other amounts in the nature of transfer taxes required to be paid under
applicable Legal Requirements in connection with the transfer of the Property
to Borrower have been paid or are being submitted for payment simultaneously
herewith. All mortgage, mortgage recording, stamp, intangible or other similar
tax required to be paid under applicable Legal Requirements in connection with
the execution, delivery, recordation. registration, perfection or enforcement
of any of the Loan Documents, including, without limitation, the Mortgage, have
been paid or are being submitted for payment simultaneously herewith. All taxes
and governmental assessments due and owing in respect of the Property have been
paid, or an escrow of funds in an amount 


 


41

















 


sufficient to cover such
payments has been established hereunder or are insured against by the title
insurance policy to be issued in connection with the Mortgage.


 


3.1.24     Single Purpose.  Borrower hereby represents and warrants to, and
covenants with, Lender that as of the date hereof and until such time as the
Debt shall be paid in full:


 


(a)           (1) Propco Borrower does not own
and will not own any asset or property other than (i) the Property, and (ii) incidental
personal property necessary for the ownership or operation of the Property and (2) Opco
Borrower does not own and will not own any asset or property other than the
personalty and other assets owned by it necessary for the operation of the
Property.


 


(b)           (1) Propco Borrower will not
engage in any business other than the ownership, management and operation of
the Property and (2) Opco Borrower will not engage in any business other
than the management and operation of the Property, and each Borrower will
conduct and operate its business as presently conducted and operated.


 


(c)           Borrower will not enter into any
contract or agreement with any Affiliate of Borrower, any constituent party of
Borrower or any Affiliate of any constituent party, except upon terms and
conditions that are commercially reasonable (taking into account all facts and
circumstances) and either substantially similar to those that would be
available on an arm’s-length basis with third parties other than any such party
or a capital contribution or distribution.


 


(d)           Borrower has not incurred and will
not incur any Indebtedness other than (i) the Debt, (ii) unsecured
trade payables and operational debt not evidenced by a note and (iii) Indebtedness
incurred in the financing of equipment and other personal property used on the
Property; provided that any indebtedness incurred pursuant to subclauses
(ii) and (iii) shall be (x) not in excess of 5% of the
outstanding principal amount of the Loan in the aggregate, (y) paid not
more than sixty (60) days from the date incurred as to the matters in subclause
(ii) above and not more than sixty (60) days from the date due as to the
matters in subclause (iii) above and (z) incurred in the ordinary
course of business. No Indebtedness other than the Debt may be secured
(subordinate or pari  passu) by the Property other than
Indebtedness of the type described in and subject to the requirements of clause
(iii) of this clause (d).


 


(e)           Except as expressly contemplated by
the Loan Documents with respect to the other Borrower and the Cross Borrower,
Borrower has not made and will not make any loans or advances to any third
party (including any Affiliate or constituent party), and shall not acquire
obligations or securities of any of its Affiliates.


 


(f)            Borrower is and will remain solvent
and Borrower will pay all of its debts and liabilities (including, as
applicable, a fairly allocated portion of shared personnel and overhead
expenses) only from its own assets and as the same shall become due.


 


(g)           Borrower has done or caused to be
done and will do all things necessary to observe organizational formalities
applicable to Borrower and preserve Borrower’s existence, and Borrower will
not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement,
articles of incorporation and 


 


42

















 


bylaws, operating
agreement, trust or other organizational documents of Borrower without the
prior consent of Lender in any manner that (i) violates or makes such
organizational documents inconsistent with the single purpose covenants set
forth in this Section 3.1.24, or (ii) amends, modifies or
otherwise changes any provision thereof that by its terms cannot be modified at
any time when the Loan is outstanding or by its terms cannot be modified
without Lender’s consent.


 


(h)           Borrower will maintain all of its
books, records, financial statements (it being acknowledged that the agent under
the Cash Management Agency Agreement shall be continuously able to produce
separate balance sheets of the Borrowers) and (except as contemplated in the
Cash Management Agency Agreement) bank accounts separate from those of its
Affiliates and from those of any other Person. Borrower’s assets will not be
listed as assets on the financial statement of any other Person, provided,
however, that Borrower’s assets may be included in a consolidated
financial statement of its Affiliates provided that (i) appropriate
notation shall be made on such consolidated financial statements (and/or in
Annual Reports on Form 10-K filed with U.S. Securities and Exchange
Commission in which such financial statements are contained) to indicate the
separateness of Borrower and such Affiliates and to indicate that Borrower’s
assets and credit are not available to satisfy the debts and other obligations
of such Affiliates or any other Person and (ii) such assets are
continuously able to be listed on Borrower’s own separate balance sheet.
Borrower will file its own tax returns (to the extent Borrower is required to
file tax returns). Borrower shall maintain its books, records, resolutions and
agreements as official records.


 


(i)            Borrower will be, and at all times
will hold itself out to the public as, a legal entity separate and distinct
from any other entity (including any Affiliate of Borrower or any constituent
party of Borrower), shall correct any known misunderstanding regarding its
status as a separate entity, shall conduct business in its own name, shall not
identify itself or any of its Affiliates as a division or part of the other and
shall maintain and utilize separate stationery, invoices and checks bearing its
own name (except with respect to payments or communications
made on behalf of the Borrower by the counterparty to the Cash Management
Agency Agreement, in which event, such counterparty shall nevertheless identify
the Borrower as the party on whose behalf the payment or communication is being
made).


 


(j)            Borrower will maintain adequate
capital for the normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business operations.


 


(k)           Neither Borrower nor any constituent
party will seek or effect the liquidation, dissolution, winding up,
consolidation or merger, in whole or in part, of Borrower.


 


(l)            Except as expressly contemplated by
the Loan Documents and the Cash Management Agency Agreement, Borrower will not
commingle the funds or other assets of Borrower with those of any Affiliate or
constituent party or any other Person, and will hold all of its assets in its
own name.


 


(m)          Borrower has and will maintain its
assets in such a manner that it will not be costly or difficult to segregate,
ascertain or identify its individual assets from those of any Affiliate or
constituent party or any other Person.


 


43

















 


(n)           Except as expressly contemplated by
the Loan Documents with respect to the other Borrower and the Cross Borrower,
Borrower will not guarantee or become obligated for the debts of any other
Person and does not and will not hold itself out to be responsible for or have
its credit available to satisfy or hold out its credit as being available to
satisfy the debts or obligations of any other Person.


 


(o)           (i) If Borrower is a limited
partnership or a limited liability company, (other than a single member limited
liability company that satisfies all of the requirements of Section 3.1
..24(o)(ii)), each general partner or managing member (each, an “SPC
Party”) of Borrower shall be a corporation or single member limited
liability company that satisfies all of the requirements of Section 3.1
..24(o)(ii) whose sole asset is a direct interest in Borrower of at
least 0.5% (or 0.1% if Borrower
is an entity formed under the laws of Delaware) and each such SPC Party will at
all times comply with each of the representations, warranties, and covenants
contained in this Section 3.1.24 as if such representation,
warranty or covenant was made directly by such SPC Party (substituting the term
“SPC Party” for the term ‘Borrower” throughout) and will cause Borrower to
comply with this Section 3.1.24 (except for subsections (a), (b),
(d), (n) and (x)). Upon the withdrawal or the disassociation of an SPC
Party from Borrower, Borrower shall immediately appoint a new SPC Party whose
constituent documents are substantially similar to those of the withdrawing or
disassociating SPC Party and deliver a new non-consolidation opinion to the
Rating Agency or Rating Agencies, as applicable, with respect to the new SPC
Party and its equity owners. If Borrower is a limited partnership, Borrower
shall have at least one genera] partner. If Borrower is a limited liability
company (other than a single-member limited liability company that satisfies
all of the requirements of Section 3.1 .24(o)(ii)), Borrower shall
have at least one (1) managing member. An SPC Party shall be organized for
the sole purpose of owning a direct interest in the Borrower, shall own no other
interests in any entity, and shall not incur indebtedness except as it may be
liable for the debts of the Borrower in its capacity as general partner of the
Borrower.


 


(ii)           If
Borrower is a single member limited liability company (“single member limited
liability company” meaning a limited liability company having only one
equity member), Borrower shall be a limited liability company organized under
the laws of Delaware and shall have either (A) two (2) non-equity
members or (B) at least two springing members, one of which, upon the
dissolution of such sole member or the withdrawal or the disassociation of the
sole member from Borrower, shall immediately become the sole member of
Borrower, and the other of which shall become the sole member of Borrower if
the first such springing member no longer is available to serve as such sole
member.


 


(p)           Borrower or its SPC Party shall at
all times cause there to be at least two duly appointed Independent Directors,
who are provided by a nationally recognized company that provides professional
independent directors, of each SPC Party and of Borrower if Borrower is a
single member limited liability company. As used herein, “Independent
Director” shall mean a natural person serving as a director of a
corporation or manager of a limited liability company who is not at the time of
initial appointment, or at any time while serving, and has not been at any time
during the preceding five (5) years: (a) a stockholder or director
(with the exception of serving as the Independent Director of Borrower or any
SPC Party that is an SPC Party or managing member of Borrower), trustee,
officer, employee, partner, member, attorney or counsel 


 


44

















 


of SPC Party, Borrower or
any affiliate of either of them; (b) a creditor, customer, supplier or
other person who derives any of its purchases or revenues from its activities
with SPC Party, Borrower or any affiliate of either of them; (c) a person
or other entity controlling or under common control with any Person excluded
from serving as Independent Director under subparagraph (a) or (b); or (d) a
member of the immediate family of any Person excluded from serving as
Independent Director under subparagraph (a) or (b). As used in this definition, the term “affiliate” means
any person controlling, under common control with, or controlled by the person
in question; and the term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of management,
policies or activities of a person or entity, whether through ownership of
voting securities, by contract or otherwise. A natural person who satisfies the
foregoing definition other than subparagraph (b) shall not be disqualified
from serving as an Independent Director if such individual has been provided by
a nationally-recognized company that provides professional independent
directors. A natural person who otherwise satisfies the foregoing definition
except for being the Independent Director of a “special purpose entity”
affiliated with Borrower or SPC Party shall not be disqualified from serving as
an Independent Director of Borrower or SPC Party if such “special purpose
entity” does not own a direct or indirect equity interest in Borrower or in any
co-borrower of Borrower and if such individual is an independent director
provided by a nationally-recognized company that provides professional
independent directors. For purposes of this paragraph, a “special purpose
entity” is an entity, whose organizational documents contain restrictions on
its activities substantially similar to those set forth in Section 3.1.24
of this Agreement.


 


(q)           Borrower shall not cause or permit
the board of directors, trustees or managers of any SPC Party or of Borrower to
take any action which, under the terms of any certificate of incorporation,
bylaws or any voting trust agreement with respect to any common stock or under
any organizational document of Borrower or SPC Party, requires the vote or
consent of such Independent Directors unless at the time of such action there
shall be at least two independent Directors then serving in such capacity who
have provide the required vote or consent.


 


(r)            Borrower shall conduct its business
so that the assumptions made with respect to Borrower in the insolvency Opinion
shall be true and correct in all respects. In connection with the foregoing,
Borrower hereby covenants and, agrees that it will comply with or cause the
compliance with, (i) all of the facts and assumptions (whether regarding
the Borrower or any other Person) set forth in the Insolvency Opinion, (ii) all
the representations, warranties and covenants in this Section 3.1.24,
and (iii) all the organizational documents of the Borrower and any SPC
Party.


 


(s)           Borrower will not permit any Affiliate
or constituent party independent access to its bank accounts (subject to the
requirements hereof, and except with respect to the agency relationships
contemplated by the Cash Management Agency Agreement and the Cash Management
Agreement).


 


(t)            Borrower will pay the salaries of
its own employees (if any) from its own funds and maintain a sufficient number
of employees in light of its contemplated business operations; provided,
however, that zero employees may be sufficient for such operations given



 


45

















 


the services provided to
Borrower by other entities and that Borrower may lease employees on a full or
part-time basis pursuant to arms-length terms.


 


(u)           Borrower will compensate each of its
consultants and agents from its funds for services provided to it and pay from
its own assets all obligations of any kind that it incurs.


 


(v)           Borrower will not buy or hold
indebtedness issued by any other Person (other than cash and investment grade
securities).


 


(w)          Except as expressly contemplated by
the Loan Documents with respect to the other Borrower and the Cross Borrower,
Borrower will not pledge its assets to secure the obligations of any other
Person.


 


(x)            Borrower will not form, acquire or
hold any subsidiary or own any equity interest in any other entity.


 


(y)           Borrower will not engage in any
Bankruptcy Action without the written consent of two Independent Directors of
Borrower or SPC Party. As used herein, “Bankruptcy Action” shall mean, with
respect to any Person, to institute proceedings to have such Person be
adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against such Person or file a petition seeking, or
consent to, reorganization or relief with respect to such Person under any
applicable federal or state law relating to bankruptcy or insolvency, or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Person or a substantial part
of its property, or make any assignment for the benefit of creditors of such
Person, or admit in writing such Person’s inability to pay its debts generally
as they become due, or take action in furtherance of any such action.


 


(z)            Neither (a) ART Mortgage
Borrower Propco GP 2006-1C LLC, a Delaware limited liability company (the “Propco
Borrower GP”), the general partner of Propco Borrower, nor (b) ART
Mortgage Borrower Opco GP 2006-1C LLC, a Delaware limited liability company
(the “Opco Borrower GP”, and together with Propco Borrower GP,
individually or collectively, as the context may require, “Borrower GP”),
the general partner of Opco Borrower, will own any asset or property other than
(A) its respective general partnership interest in Propco Borrower or Opco
Borrower, as the case may be, and (B) incidental personal property
necessary for the ownership of such interest or operation of Propco Borrower or
Opco Borrower, as applicable.


 


(aa)         Neither Borrower GP will engage in any
business other than being and acting as general partner of Propco Borrower or
Opco Borrower, as the case may be, and will conduct and operate its business as
presently conducted.


 


(bb)         Neither Borrower GP has incurred or
will incur any Indebtedness except as it may be liable for the debts of Propco
Borrower or Opco Borrower, as the case may be, in its capacity as general
partner of the Propco Borrower or Opco Borrower, as the case may be.


 


(cc)         Except as it is liable in its capacity
as general partner of Propco Borrower or Opco Borrower, as the case may be,
neither Borrower GP will guarantee or become obligated 


 


46

















 


for the debts of any
other Person and does not and will not hold itself out to be responsible for or
have its credit available to satisfy or hold its credit as being available to
satisfy the debts or obligations of any other Person.


 


(dd)         Neither Borrower GP will form, acquire
or hold any subsidiary or own any equity interest in any other entity other
than Propco Borrower or Opco Borrower, as the case may be.


 


Notwithstanding
the foregoing, none of the covenants, representations or warranties set forth
in this Section 3.1.24, elsewhere in this Agreement or in any other
Loan Document shall be violated by reason of the Cross Guaranty or the fact
that the Borrower and Cross Borrower have obligated themselves, and encumbered
their respective Properties (as defined herein and in the Cross Loan Agreement)
and other assets, for the Loan and the Cross Loan, respectively.


 


3.1.25     Tax Filings.  To the extent required, Borrower timely has filed (or
has obtained effective extensions for filing) all federal, state and local tax
returns required to be filed and has paid or made adequate provision for the
payment of all federal, state and local taxes, charges and assessments payable
by Borrower.


 


3.1.26     Solvency. 
Borrower (a) has not entered into the transaction or any Loan
Document with the actual intent to hinder, delay, or defraud any creditor and (h) has
received reasonably equivalent value in exchange for its obligations under the
Loan Documents. Giving effect to the Loan, the fair saleable value of Borrower’s
assets exceeds and will, immediately following the making of the Loan, exceed
Borrower’s total liabilities, including, without limitation, subordinated,
unliquidated, disputed and contingent liabilities. The fair saleable value of
Borrower’s assets is and will, immediately following the making of the Loan, be
greater than Borrower’s probable liabilities, including the maximum amount of
its contingent liabilities on its debts as such debts become absolute and
matured. Borrower’s assets do not and, immediately following the making of the
Loan will not, constitute unreasonably small capital to carry out its business
as conducted or as proposed to be conducted. Borrower does not intend to, and
does not believe that it will, incur Indebtedness and liabilities (including
contingent liabilities and other commitments) beyond its ability to pay such
Indebtedness and liabilities as they mature (taking into account the timing and
amounts of cash to be received by Borrower and the amounts to be payable on or
in respect of obligations of Borrower).


 


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


 


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


 


47














 


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


 


3.1.30     No Other Debt.  Borrower has not borrowed or received debt financing
(other than permitted pursuant to this Agreement) that has not been heretofore
repaid in full.


 


3.1.31     Investment Company Act.  Borrower is not (1) an “investment company” or a
company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended or (2) subject to any other
federal or state law or regulation which purports to restrict or regulate its
ability to borrow money.


 


3.1.32     Intentionally Omitted.


 


3.1.33     No Bankruptcy Filing.  Borrower is not contemplating either the filing of a
petition by it under any state or federal bankruptcy or insolvency laws or the
liquidation of its assets or property, and Borrower does not have any knowledge
of any Person contemplating the filing of any such petition against it.


 


3.1.34     Full and Accurate Disclosure.  To the best of Borrower’s knowledge, no information
contained in this Agreement, the other Loan Documents, or any written statement
furnished by or on behalf of Borrower pursuant to the terms of this Agreement,
when considered together, contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained herein
or therein not misleading in light of the circumstances under which they were
made. There is no fact or circumstance presently known to Borrower which has
not been disclosed to Lender and which materially adversely affects, or is
reasonably likely to materially adversely affect, the Property, Borrower or its
business, operations or condition (financial or otherwise).


 


3.1.35     Foreign Person.  Borrower is not a “foreign person” within the meaning
of Section 1445(fl(3) of the Code.


 


3.1.36     Intentionally Omitted.


 


3.1.37     No Change in Facts or Circumstances;
Disclosure.  To Borrower’s knowledge, there has been
no material adverse change in any condition, fact, circumstance or event that
would make the financial statements, reports, certificates or other documents
submitted in connection with the Loan inaccurate, incomplete or otherwise
misleading in any material respect or that otherwise materially and adversely
affects the business operations or the financial condition of Borrower or the
Property.


 


3.1.38     Property Management.  (a) Each agreement comprising the Cash
Management Agency Agreement is in full force and effect and there is no default
by any party thereto and no event has occurred that, with the passage of time
and/or the giving of notice, would constitute a default thereunder.


 


48

















 


(b)           The Management Agreement is in full
force and effect and there is no default by any party thereto and no event has
occurred that, with the passage of time and/or the giving of notice, would
constitute a default thereunder.


 


3.1.39     Perfection of Accounts.  Borrower hereby represents and warrants to Lender
that:


 


(a)           This Agreement, together with the
other Loan Documents, create a valid and continuing security interest (as
defined in the Uniform Commercial Code) in the Accounts in favor of Lender,
which security interest is prior to all other Liens, other than Permitted
Encumbrances, and is enforceable as such against creditors of and purchasers
from Borrower. Other than in connection with the Loan Documents and except for
Permitted Encumbrances, Borrower has not sold or otherwise conveyed the
Accounts;


 


(b)           The Accounts constitute “deposit
accounts” or “securities accounts” within the meaning of the Uniform Commercial
Code, as set forth in the Cash Management Agreement;


 


(c)           Pursuant and subject to the terms
hereof, Agent has agreed to comply with all instructions originated by Lender,
without further consent by Borrower, directing disposition of the Accounts and
all sums at any time held, deposited or invested therein, together with any
interest or other earnings thereon, and all proceeds thereof (including
proceeds of sales and other dispositions), whether accounts, general
intangibles, chattel paper, deposit accounts, instruments, documents or
securities; and


 


(d)           The Accounts are not in the name of
any Person other than Borrower, as pledgor, or Lender, as pledgee. Borrower has
not consented to Agent’s complying with instructions with respect to the
Accounts from any Person other than Lender.


 


3.1.40     Agreements.  Borrower is not in default in any material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument
to which it is a party or by which Borrower or the Property is bound which
default is reasonably likely to materially and adversely effect Borrower or its
business, properties or assets, operations or financial condition, financial or
otherwise.


 


3.1.41     Intentionally Omitted.


 


3.1.42     SPE Separateness Covenants.  Borrower hereby represents that it has complied with
the separateness covenants contained in its organizational documents since its
formation and in place from time to time.


 


Section 3.2            Survival of
Representations.  The representations
and warranties set forth in Section 3.1 shall survive (but shall be
deemed made only as of the date hereof), and any covenants contained in Section 3.1
shall continue, for so long as any amount remains payable to Lender under this
Agreement or any of the other Loan Documents.


 


49

















 


IV.           BORROWER COVENANTS


 


Section 4.1            Borrower
Affirmative Covenants.  Borrower hereby
covenants and agrees with Lender that:


 


4.1.1       Existence Compliance with Legal Requirements.  Borrower shall do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its existence,
rights, licenses, permits and franchises and comply in all material respects
with all Legal Requirements applicable to it and the Property, including,
without limitation, Prescribed Laws.


 


4.1.2       Taxes and Other Charges.  Borrower shall pay all Taxes and Other Charges now or
hereafter levied or assessed or imposed against the Property or any part
thereof as the same become due and payable; provided, however,
Borrower’s obligation to directly pay Taxes shall, during the continuance of a
Trigger Period, be suspended for so long as Borrower complies with the terms
and provisions of Section 6.2 hereof Borrower shall furnish to
Lender receipts for the payment of the Taxes and the Other Charges prior to the
date the same shall become delinquent; provided, however, that
Borrower is not required to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Lender pursuant to Section 6.2
hereof.  Borrower shall not permit or
suffer and shall promptly discharge any lien or charge against the Property
(but subject to the foregoing provisions of this Section 4.1.2).  After prior notice to Lender (unless subclause
(v)(y) of this Section 4.1.2 is applicable), Borrower, at its
own expense, may contest by appropriate legal proceeding, conducted in good
faith and with due diligence, the amount or validity of any Taxes or Other
Charges, provided that (i) no Event of Default has occurred and
remains uncured; (ii) such proceeding shall be permitted under and be
conducted in accordance with all applicable statutes, laws and ordinances; (iii) neither
the Property nor any part thereof or interest therein will be in danger of
being sold, forfeited, terminated, canceled or lost during the pendency of such
contest; (iv) unless subclause (v)(y) of this Section 4.1.2
is applicable, Borrower shall promptly upon final determination thereof pay the
amount of any such Taxes or Other Charges, together with all costs, interest
and penalties which may be payable in connection therewith; (v) either (x) such
proceeding shall suspend the collection of Taxes or Other Charges from the
Property or (y) Borrower shall have paid or discharged by bond or
otherwise all of the Taxes or Other Charges under protest; and (vi) unless
subclause (v)(y) of this Section 4.1.2  is applicable, Borrower
shall have furnished such security (if any) as may be required in the
proceeding, or as may be reasonably requested by Lender to insure the payment
of any contested Taxes or Other Charges, together with all interest and
penalties thereon. Lender may pay over any such cash or other security held by
Lender to the claimant entitled thereto at any time when, in the judgment of
Lender, the entitlement of such claimant is established.


 


4.1.3       Litigation.  Borrower shall give prompt notice to Lender of any
litigation or governmental proceedings pending or threatened against Borrower
which is not covered by insurance and could reasonably be expected to
materially adversely affect the Property or Borrower’s ability to perform its
obligations hereunder or under the other Loan Documents.


 


4.1.4       Access to Property.  Borrower shall permit agents, representatives and
employees of Lender, at Lender’s sole cost and expense (unless an Event of
Default shall have 


 


50

















 


occurred and be
continuing, in which case such inspection shall be at Borrower’s sole cost and
expense), to inspect the Property or any part thereof at reasonable hours upon
reasonable advance notice subject to the terms of the Leases, and provided such
entry and inspection shall not unreasonably interfere with the usual operation
and conduct of business at the Property or the use and enjoyment of the
Property by Borrower or its tenants, customers and guests.


 


4.1.5       Further Assurances; Supplemental
Mortgage Affidavits.  Borrower shall, at Borrower’s
sole cost and expense:


 


(a)           execute and deliver to Lender such
documents, instruments, certificates, assignments and other writings, and do
such other acts necessary or desirable, to evidence, preserve and/or protect
the collateral at any time securing or intended to secure the obligations of
Borrower under the Loan Documents, as Lender may reasonably require; and


 


(b)           do and execute all and such further
lawful and reasonable acts, conveyances and assurances for the better and more
effective carrying out of the intents and purposes of this Agreement and the
other Loan Documents, as Lender shall reasonably require from time to time.


 


4.1.6       Financial Reporting.  (a) Borrower shall keep and maintain or will
cause to be kept and maintained proper and accurate books and records, in
accordance with GAAP, reflecting the financial affairs of Borrower. Lender
shall have the right from time to time during normal business hours upon
reasonable notice to Borrower to examine such books and records at the office
of Borrower or other Person maintaining such books and records and to make such
copies or extracts thereof as Lender shall desire.


 


(b)           Borrower shall furnish Lender
annually, within one hundred twenty (120) days following the end of each Fiscal
Year, a complete copy of Guarantor’s annual financial statements audited by a “Big
Four” accounting firm or other independent certified public accountant
acceptable to Lender prepared in accordance with GAAP, which audited financial
statements shall include a balance sheet for Guarantor and shall be
supplemented by schedules covering the Property which include statements of
income and expense for the Property and the so-called “key performance
indicators” utilized by Borrower (which shall be prepared in a manner
consistent with Borrower’s then-current practices). Such schedules shall set
forth gross revenue and operating expenses for the Property. Guarantor’s annual
financial statements (as supplemented pursuant to the preceding sentence) shall
be accompanied by (x) a certificate executed by the chief financial
officer (or its equivalent) of Guarantor stating that such annual financial
statement presents fairly the financial condition and the results of operations
of Guarantor and (y) a certificate executed by the chief financial officer
(or its equivalent) of Borrower stating that the schedules attached to such
annual financial statement presents fairly the financial operating condition
and the results of operations of Borrower and the Property. Together with such
annual financial statements, Borrower shall furnish to Lender an Officer’s
Certificate certifying as of the date thereof whether to the best of Borrower’s
knowledge there exists an event or circumstance which constitutes a Default or
Event of Default by Borrower under the Loan Documents and if such Default or
Event of Default exists, the nature thereof, the period of time it has existed
and the action then being taken to remedy the same.


 


51

















 


(c)           Borrower will furnish Lender on or
before the forty-fifth (45th) day after the end of each fiscal quarter
(based on Borrower’s Fiscal Year), the following items, accompanied by
certificate from the chief financial officer (or its equivalent) of Borrower,
certifying that such items are true, correct, accurate and complete and fairly
present the financial condition and results of the operations of Borrower and the Property in
accordance with GAAP as applicable:


 


(i)            quarterly
and year-to-date statements of income and expense prepared for such quarter
with respect to the Property;


 


(ii)           a
calculation reflecting the Underwritable Cash Flow as of the last day of such
quarter, for such quarter and the last four quarters;


 


(iii)          a “Major
Customer List” for the Property, and such other reasonable information
requested by Lender with respect to such “Major Customers” and listing all
newly-leased space or customers at each Individual Property and such
information as Lender may reasonably request regarding same;


 


(iv)          from
and after the occurrence of an Event of Default or special servicing of the
Loan for any reason whatsoever, a reconciliation of the budgeted income and
expenses and the actual income and expenses for such quarter and year-to-date
for the Property, prepared by Borrower in a manner consistent with its past
practices; and


 


(v)           any
notice received from a Tenant threatening non-payment of an amount of Rent that
is material in light of the Underwritable Cash Flow of the Individual Property
to which such threatened non-payment relates or other default, alleging or
acknowledging a default by landlord, requesting a termination of a Lease or a
material modification of any Lease or notifying Borrower of the exercise or
non-exercise of any material option provided for in such Tenant’s Lease, or any
other similar material correspondence received by Borrower from Tenants during
the subject fiscal quarter, in each case only if the same is material in light
of the Underwritable Cash Flow of the Individual Property to which it relates.


 


(d)           Intentionally Omitted.


 


(e)           Borrower shall submit the Annual
Budget to Lender within thirty (30) days following the commencement of each
Fiscal Year (or as soon thereafter as the Board of Trustees of Guarantor has
approved the same). During the continuation of a Cash Trap Period or an Event
of Default only, discretionary operating and capital expense items contained in
said Annual Budget (and no other matters contained therein) shall be subject to
Lender’s approval (such approval not to be unreasonably withheld, conditioned
or delayed). Each Annual Budget shall set forth in  reasonable detail
budgeted monthly operating income and monthly operating and capital expenses
and other cash expenses for the Property. If Lender’s approval is required
hereunder, (i) in the event Lender objects to any discretionary operating
and capital expense item contained in a proposed Annual Budget, Lender shall
advise Borrower of such objections in writing within ten (10) Business
Days after receipt thereof (and deliver to Borrower a reasonably detailed
description of such objections), and Borrower shall revise such Annual Budget
within 


 


52

















 


five (5) Business
Days after receipt of such notice and resubmit the same to Lender; and (ii) Lender
shall advise Borrower in writing of any reasonable objections to any discretionary
operating and capital expense items contained in such revised Annual Budget
within five (5) Business Days after receipt thereof (and
deliver to Borrower a reasonably detailed description of such objections), and
Borrower shall revise such Annual Budget in accordance with the process
described in this Section until Lender approves all of the discretionary
operating and capital expense items contained in such Annual Budget. Each
Annual Budget which contains discretionary operating and capital expense items
approved or deemed approved by Lender in  accordance with the terms hereof
shall be referred to herein as an “Approved Annual Budget”. If Lender’s
approval is required hereunder, until such time that Lender approves all of the
discretionary operating and capital expense items contained in such proposed
Annual Budget, with respect to any discretionary operating and capital expense
items contained therein, an increase in an amount equal to the increase in the
Consumer Price Index for All Urban Consumers since the most recently Approved
Annual Budget shall be permitted with respect to such discretionary operating
and capital expense items. Any proposed Annual Budget submitted for Lender’s
approval of the discretionary operating and capital expense items contained
therein pursuant to this Section 4.1.6(e) which states at the
top of such submittal “THIS ANNUAL BUDGET IS
BEING SUBMITTED FOR APPROVAL OF THE DISCRETIONARY OPERATING AND CAPITAL EXPENSE
ITEMS CONTAINED THEREIN PURSUANT TO SECTION 4:1.6(e) OF THE LOAN
AGREEMENT. THE OPERATING AND CAPITAL EXPENSE DISCRETIONARY ITEMS CONTAINED IN
THIS ANNUAL BUDGET SHALL BE DEEMED APPROVED BY LENDER IF LENDER DOES NOT NOTIFY
BORROWER IN WRITING OF ITS DISAPPROVAL, TOGETHER WITH THE GROUNDS FOR SUCH
DISAPPROVAL, WITHIN TEN (10) BUSINESS DAYS,” shall be deemed
approved if Lender shall have not notified Borrower in writing of its
disapproval (together with a reasonably detailed statement of the grounds of
such disapproval) within ten (10) Business Days after Borrower has
submitted such Annual Budget in such manner to Lender. Any revised proposed
Annual Budget resubmitted for Lender’s approval of the discretionary operating
and capital expense items contained therein pursuant to this Section 4.1.6(e) due
to Lender’s reasonable objections to any discretionary operating and capital
expense items contained in an Annual Budget previously submitted to Lender
pursuant to this Section 4.1.6(e) which states at the top of
such submittal “THIS ANNUAL BUDGET IS BEING
RESUBMITTED FOR APPROVAL OF THE DISCRETIONARY OPERATING AND CAPITAL EXPENSE
ITEMS CONTAINED THEREIN PURSUANT TO SECTION 4.1.6(e) OF THE LOAN
AGREEMENT. THE DISCRETIONARY OPERATING AND CAPITAL EXPENSE ITEMS CONTAINED IN
THIS REVISED ANNUAL BUDGET SHALL BE DEEMED APPROVED BY LENDER IF LENDER DOES
NOT NOTIFY BORROWER IN WRITING OF ITS DISAPPROVAL, TOGETHER WITH THE GROUNDS
FOR SUCH DISAPPROVAL, WITHIN FIVE (5) BUSINESS DAYS,” shall be
deemed approved if Lender shall have not notified Borrower in writing of
its disapproval (together with a reasonably detailed statement of the grounds
of such disapproval) within five (5) Business Days after Borrower has
submitted such revised Annual Budget in such manner to Lender.


 


(f)            If, at the time one or more
Disclosure Documents are being prepared for a Securitization, Lender expects
that Borrower alone or Borrower and one or more Affiliates of Borrower
collectively, or the Property and Related Property collectively, will be a
Significant 


 


53

















 


Obligor, Lender will so
notify Borrower in writing and Borrower shall furnish to Lender upon written
request (i) the selected financial data or, if applicable, Underwritable
Cash Flow, required under Item 11 12(b)(1) of Regulation AB, if Lender
expects that the principal amount of the Loan together with any Related Loans
as of the cut-off date for such Securitization may, or if the principal amount
of the Loan together with any Related Loans as of the cut-off date for such
Securitization and at any time during which the Loan and any Related Loans are
included in a Securitization does, equal or exceed ten percent (10%) (but less
than twenty percent (20%)) of the aggregate principal amount of all mortgage
loans included or expected to be included, as applicable, in the Securitization
or (ii) the financial statements required under Item 1112(b)(2) of
Regulation AB, if Lender expects that the principal amount of the Loan together
with any Related Loans as of the cut-off date for such Securitization may, or
if the principal amount of the Loan together with any Related Loans as of the
cut-off date for such Securitization and at any time during which the Loan and
any Related Loans are included in a Securitization does, equal or exceed twenty
percent (20%) of the aggregate
principal amount of all mortgage loans included or expected to be included, as
applicable, in the Securitization. Such financial data or financial statements
shall be furnished to Lender A) within ten (10) Business Days after notice
from Lender in connection with the preparation of Disclosure Documents for the
Securitization, (B) not later than thirty (30) days after the end of each
fiscal quarter of Borrower and (C) not later than seventy-five (75) days
after the end of each fiscal year of Borrower; provided, however, that Borrower
shall not be obligated to furnish financial data or financial statements
pursuant to clauses (B) or (C) of this sentence with respect to any
period for which a filing pursuant to the Exchange Act in connection with or relating
to the Securitization is not required. If requested by Lender, Borrower shall
furnish to Lender financial data and/or financial statements for any Tenant of
any of the Individual Properties if available to Borrower and Borrower is not
restricted from disclosing the same to Lender by such Tenant and if, in
connection with a Securitization, Lender expects there to be, with respect to
such Tenant or group of affiliated Tenants, a concentration within all of the
mortgage loans included or expected to be included, as applicable, in the
Securitization such that such Tenant or group of affiliated Tenants would
constitute a Significant Obligor.


 


(g)           If requested by Lender, Borrower
shall provide such financial and other information as shall be required pursuant
to Regulation AB in connection with a Securitization.


 


(h)           All financial data and financial
statements provided by Borrower pursuant to Section 4.1.6(f) or
Section 4.1.(g) shall meet the requirements of Regulation AB
and other applicable legal requirements, if required by Lender.


 


4.1.7       Title to the Property.  Borrower will warrant and defend the validity and
priority of the Liens of the Mortgage and the Assignment of Leases on the
Property against the claims of all Persons whomsoever, subject only to Permitted
Encumbrances.


 


4.1.8       Estoppel Statement.  (a) After request by Lender, Borrower shall
within ten (10) Business Days furnish Lender with a statement, duly
acknowledged and certified, stating to the best of Borrower’s knowledge (i) the
unpaid principal amount of the Note, (ii) the Applicable Interest Rate of
the Note, (iii) the date installments of interest and/or principal were
last paid, (iv) any offsets or defenses to the payment of the Debt, if
any, and (v) that this 


 


54

















 


Agreement and the other
Loan Documents have not been modified or if modified, giving particulars of
such modification.


 


(b)           After request by Borrower, Lender
shall within ten (10) Business Days furnish Borrower with a statement, duly
acknowledged and certified, stating (i) the unpaid principal amount of the Note, (ii) the Applicable Interest Rate of the
Note, (iii) the date installments of interest and/or principal were last
paid and (iv) whether or not Lender has sent any notice of default under
the Loan Documents which remains uncured in the opinion of Lender.


 


4.1.9       Leases.  (a) All
Leases and all renewals of Leases executed after the date hereof shall (i) be
on commercially reasonable terms, (ii) provide that such Lease is subordinate
to the Mortgage and that the lessee will attorn to Lender and any purchaser at
a foreclosure sale (provided, however, that Borrower shall be required only to
use commercially reasonable efforts to obtain such subordination and attornment
provisions in the Warehouse Agreements) and (iii) not contain any terms
which would materially adversely affect Lender’s rights under the Loan
Documents. Any Major Leases and all renewals, amendments and modifications
thereof executed after the date hereof shall be subject to Lender’s prior
approval, which approval shall not be unreasonably withheld or delayed, and
subject to delivery by Borrower of a Rating Agency Confirmation with respect to
such Major Lease. Borrower shall pay all reasonable actual out-of-pocket costs
and expenses (including reasonable attorney’s fees but excluding internal fees)
incurred by Lender or Servicer in connection with its review of a Major Lease,
including, without limitation, the fees and charges of the Rating Agencies.
Lender shall execute and deliver a Subordination Non-Disturbance and Attornment
Agreement in the form annexed as Schedule IV to the Tenant under any future
Major Lease approved by Lender or any other Lease entered into, subject to and
in accordance with this Section 4.1.9(a) promptly upon request
with such commercially reasonable changes as may be requested by the Tenant,
from time to time, and which are reasonably acceptable to Lender, provided that
Borrower shall pay all reasonable costs and expenses incurred by Lender in connection
with such Subordination Non-Disturbance and Attornment Agreement.


 


(b)           Borrower:


 


(i)            shall
observe and perform, or cause to be observed and performed, in a commercially
reasonable manner the material obligations imposed upon the lessor under Leases
in which Borrower is the lessor


 


(ii)           shall
enforce, or cause to be enforced as against, the lessees, in a commercially
reasonable manner the material terms, covenants and conditions contained in the
Leases under which Borrower is the
lessor, provided, however, Borrower shall not terminate or accept a
surrender of a Major Lease without Lender’s prior approval (which approval may
be conditioned upon receipt by Lender of a Rating Agency Confirmation) and
shall not terminate or accept a surrender of any other Lease without Lender’s
approval, unless such termination or surrender, when taken together with any
replacement Lease(s), will not have a material adverse effect on the applicable
Individual Property;


 


55

















 


(iii)          shall
not collect, or cause or permit to be collected, any of the Rents more than one
(1) month in advance and shall not grant its approval of Manager’s
collection of any of the Rents more than one (1) month in advance (other
than security deposits);


 


(iv)          shall
not grant any assignment of lessor’s interest in the Leases or the Rents
(except as contemplated by the Loan Documents);


 


(v)           intentionally
omitted; and


 


(vi)          in
its capacity as lessor, shall hold all security deposits under all Leases in accordance
with Legal Requirements and upon request, shall furnish Lender with executed
copies of all Leases.


 


(c)           Any proposed Lease, or any amendment,
modification or termination of a Lease, that in each case requires Lender’s
consent pursuant to this Section 4.1.9 which is, in each case,
accompanied by a summary of the material terms of such document(s) (including
any economic terms and any termination options) and which states at the top of
such submittal “THIS IS A REQUEST FOR
APPROVAL OF A LEASE, AMENDMENT, MODIFICATION OR TERMINATION OF A LEASE PURSUANT
TO SECTION 4.1.9 OF THE LOAN AGREEMENT. THIS LEASE OR AN AMENDMENT,
MODIFICATION OR TERMINATION THEREOF SHALL BE DEEMED APPROVED BY LENDER IF
LENDER DOES NOT NOTIFY BORROWER IN WRITING OF ITS DISAPPROVAL, TOGETHER WITH
THE GROUNDS FOR SUCH DISAPPROVAL, WITHIN FIFTEEN (15) CALENDAR DAYS,” shall
be deemed approved if Lender shall have not notified Borrower in writing of its
disapproval (together with a statement of the grounds of such disapproval)
within fifteen (15) calendar days after Borrower has
submitted such Lease, or any such amendment, modification or termination of a
Lease in such manner to Lender.


 


(d)           Borrower shall use good faith efforts
to obtain, within sixty (60) days after Lender’s request therefor,
Subordination, Non-Disturbance and Attornment Agreements in the form annexed as
Schedule IV from all Major Tenants then in existence.


 


4.1.10     Alterations.  (a) Lender’s prior approval shall be
required in connection with any (i) Alterations to any Improvements
(except tenant improvements under any Lease approved by Lender or Alterations
required in order to comply with applicable Legal Requirements) that would
reasonably be expected to have
a material adverse effect on Borrower’s financial condition, the value of the Property or the ongoing
cash flow of the Property or (ii) any Alterations that are structural in
nature to any Improvements (except tenant improvements under any Lease approved
by Lender or Alterations required in order to comply with applicable Legal
Requirements), the aggregate cost of which (including any related structural
Alteration) is reasonably anticipated to exceed the Alteration Threshold, which
approval shall not be unreasonably withheld, conditioned or delayed. If the
total unpaid amounts incurred and to be incurred with respect to such
Alterations set forth in clause (i) and (ii) above (whether or not
Lender’s prior approval is required with respect to such Alterations), shall at
any time exceed the Alteration Threshold, Borrower shall promptly deliver to
Lender, at Borrower’s option, but subject to the next succeeding sentence, any
one or more of the following: (A) as security for the payment of such
amounts and as additional security for Borrower’s obligations 


 


56

















 


under the Loan Documents
any of the following: (1) cash, (2) Letters of Credit, (3) U.S.
Obligations, (4) other securities acceptable to Lender, provided that
Lender shall have received a Rating Agency Confirmation as to the form and
issuer of same, or (5) a
completion bond, provided that Lender shall have received a Rating Agency
Confirmation as to the form and issuer of same (any of the foregoing, “Alteration
Security”) and/or (B) a guaranty in the form attached as Schedule XII from
Guarantor or a Person with an Investment Grade Rating reasonably acceptable to
Lender containing the “Guaranteed Obligations” as defined therein (each, an “Alteration
Guaranty”; any Alteration Security and/or Alteration Guaranty so delivered are
collectively, the “Alteration Collateral”). The amount of the Alteration
Security together with the amount of the “Guaranteed Obligations” under any
Alteration Guaranty delivered pursuant to this Section 4.1.10 shall
be in an amount (the “Excess Alteration Amount”) equal to the excess of the
total unpaid amounts to be incurred with respect to such Alterations (other
than such amounts to be paid or reimbursed by Tenants under the Leases) over
the Alteration Threshold, which required amount (y) shall be reduced as
such Alteration progresses in an amount which is commensurate with the amount
expended in connection with such Alteration and (z) in the case of any
Capital Expenditures, shall be reduced by the amount of any Capital Expenditure
Funds on deposit at the time such Alteration is commenced. If the Alteration
Guaranty delivered in accordance with this Section 4.1.10 is by
Guarantor, and the aggregate potential liability of Guarantor pursuant to such
Alteration Guaranty and any and all other guarantees and indemnities delivered
by Guarantor pursuant to this Agreement and the other Loan Documents (excluding
for these purposes the Guaranty) exceeds ten percent (10%) of the outstanding
principal amount of the Loan, then Borrower shall have delivered to Lender a
new non-consolidation opinion acceptable to the Rating Agencies which states
that the existence of such Alteration Guaranty does not alter any of the
conclusions contained in any non-consolidation opinion previously delivered to
Lender in connection with the Loan. If any other Person other than Guarantor
delivers an Alteration Guaranty in accordance with this Section 4.1.10,
Borrower shall have delivered to Lender a new non-consolidation opinion
acceptable to the Rating Agencies which states that the existence of such
Alteration Guaranty does not alter any of the conclusions contained in any
non-consolidation opinion previously delivered to Lender in connection with the
Loan and which includes an additional pairing between Borrower and such other Person.
Lender hereby agrees to accept on a several (but not joint) basis the aggregate
Alteration Collateral required pursuant to this Section 4.1.10 in
such proportions as Borrower may specify. Any and all Alterations shall be
performed in compliance with all Legal Requirements in a manner that does not
significantly disrupt the business otherwise conducted at each Individual
Property. Upon completion of the Alterations to which any security delivered by
Borrower pursuant to this Section 4.1.10 relates, Lender shall
promptly return such excess security to Borrower.


 


(b)           Any proposed Alteration that requires
Lender’s consent pursuant to this Section 4.1.10 which is, in each
case, accompanied by a reasonably. detailed description of the Alteration and
the plans and specifications therefor and which states at the top of such
submittal “THIS IS A REQUEST FOR APPROVAL OF AN ALTERATION PURSUANT TO SECTION 4.1.10
OF THE LOAN AGREEMENT. THIS ALTERATION SHALL BE DEEMED APPROVED BY LENDER IF
LENDER DOES NOT NOTIFY BORROWER IN WRITING OF ITS DISAPPROVAL, TOGETHER WITH
THE GROUNDS FOR SUCH DISAPPROVAL, WITHIN FIFTEEN (15) BUSINESS DAYS,” shall be
deemed approved if Lender shall have not notified Borrower in writing of its
disapproval (together with a reasonably detailed statement of


 


57














 


the grounds of such
disapproval) within fifteen (15) Business
Days after Borrower has submitted such request for approval of a proposed
Alteration in such manner to Lender.


 


4.1.11              Intentionally Omitted.


 


4.1.12              Material Agreements.  Borrower shall, to the extent Borrower’s
failure to so act would cause a material adverse effect upon Borrower’ ability
to perform its obligations under this Agreement or the other Loan Documents, (a) promptly
perform and/or observe all of the material covenants and agreements required to
be performed and observed by it under each Material Agreement to which it is a
party, and do all things necessary to preserve and to keep unimpaired its
rights thereunder unless the other party thereunder is in default of its
obligations to Borrower, (b) promptly notify Lender in writing of the
giving of any notice of any default by any party under any Material Agreement
of which it is aware and (c) promptly enforce the performance and
observance of all of the material covenants and agreements required to be
performed and/or observed by the other party under each Material Agreement to
which it is a party in a commercially reasonable manner.


 


4.1.13              Performance by Borrower. 
Borrower shall in a timely manner observe, perform and fulfill each and every
covenant, term and provision of each Loan Document executed and delivered by
Borrower, and shall not enter into or otherwise suffer or permit any amendment,
waiver, supplement, termination or other modification of any Loan Document
executed and delivered by Borrower without the prior consent of Lender.


 


4.1.14              Costs of Enforcement/Remedying Defaults.  In the event (a) that the Mortgage is foreclosed
in whole or in part or, following the occurrence and during the continuance of
an Event of Default, the Note or any other Loan Document is put into the hands
of an attorney for collection, suit, action or foreclosure, (b) of the
foreclosure of any Lien or Mortgage prior to or subsequent to the Mortgage in
which proceeding Lender is made a party, (c) of the bankruptcy,
insolvency, rehabilitation or other similar proceeding in respect of Borrower
or Guarantor or an assignment by Borrower or Guarantor for the benefit of its
creditors, or (d) Lender shall remedy or attempt to remedy any Event of
Default hereunder, Borrower shall be chargeable with and agrees to pay all
costs incurred by Lender as a result thereof, including costs of collection and
defense (including reasonable attorneys’, experts’, consultants’ and witnesses’ fees and disbursements) in
connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, which shall be due and payable on
demand, together with interest thereon from the date incurred by Lender at the
Default Rate, and together with all required service or use taxes.


 


4.1.15              Business and Operations.  Borrower will continue to engage in the businesses
currently conducted by it as and to the extent the same are necessary for the
ownership, operation and leasing of the Property. Borrower will qualify to do
business and will remain in good standing under the laws of each jurisdiction
as and to the extent the same are required for the ownership, operation and
leasing of the related Property. Borrower shall at all times cause the Property
to be maintained as cold and/or dry storage warehouse facilities and uses
incidental thereto.


 


58

















 


4.1.16              Intentionally Omitted.


 


4.1.17              Intentionally Omitted.


 


4.1.18              Cash Management Agency
Agreement.  (a)  Borrower shall observe and
perform, and shall cause each party thereto to observe and perform, in a
commercially reasonable manner the material obligations imposed upon Borrower
or any other party thereto under each agreement comprising the Cash Management
Agency Agreement, except where the failure to so observe and perform would not
have a Material Adverse Effect.


 


(b)                                 Borrower shall enforce, as against each
counterparty thereto, its rights under each agreement comprising the Cash
Management Agency Agreement to which it is a party, in a commercially,
reasonable manner, except where the failure to enforce such rights under the
Cash Management Agency Agreement would not have a Material Adverse Effect;
provided, however, that, Borrower shall not terminate or accept a surrender of,
or cause or permit the termination or surrender of any agreement comprising the
Cash Management Agency Agreement without Lender’s prior approval, except where
the termination or acceptance of a surrender of any such agreement comprising
the Cash Management Agency Agreement would not have a Material Adverse Effect.


 


Section 4.2                                   Borrower
Negative Covenants.  Borrower covenants and
agrees with Lender that:


 


4.2.1                     Due on Sale and
Encumbrance; Transfers of Interests. 
Without
the prior written consent of Lender, neither Borrower nor any other Person
having a direct or indirect ownership or beneficial interest in Borrower shall
sell, convey, mortgage, grant, bargain, encumber, pledge, assign or Transfer
any interest, direct or indirect, in the Borrower, the Property or any part
thereof, whether voluntarily or involuntarily, by operation of law or
otherwise, in violation of the covenants and conditions set forth in the
Mortgage and this Agreement.


 


4.2.2                     Liens.  Subject to Borrower’s right to contest Taxes or Other
Charges pursuant to this Agreement or any other Loan Documents, Borrower shall
not create, incur, assume or suffer to exist any Lien on any portion of the
Property except for Permitted Encumbrances.


 


4.2.3                     Dissolution.  Borrower shall not (i) engage in any dissolution,
liquidation or consolidation or merger with or into any other business entity, (ii) engage
in any business activity not related to the ownership and operation of the
Property or (iii) transfer, lease or sell, in one transaction or any
combination of transactions, all or substantially all of the property or assets
of Borrower except to the extent expressly permitted by the Loan Documents.


 


4.2.4                     Change in Business.  Borrower shall not enter into any line of business
other than the ownership and operation of the Property.


 


4.2.5                     Debt Cancellation.  Borrower shall not cancel or otherwise forgive or
release any claim or debt (other than termination of Leases subject to the
requirements hereof) 


 


59

















 


owed to Borrower by any
Person, except for adequate consideration and in the ordinary course of
Borrower’s business.


 


4.2.6                     Affiliate Transactions. Other than as expressly permitted herein,
Borrower shall not enter into, or be a party to, any transaction with an
Affiliate of Borrower or any of the partners of Borrower except in the ordinary
course of business and on terms which are fully disclosed to Lender in advance
and are no less favorable to Borrower or such Affiliate than would be obtained
in a comparable arm’s length transaction with an unrelated third party.


 


4.2.7                     Zoning.  Except as would not have a material adverse effect on
Borrower’s ability to perform its obligations hereunder, Borrower shall not
initiate or consent to any zoning reclassification of any portion of any
Individual Property or seek any variance under any existing zoning ordinance or
use or permit the use of any portion of any Individual Property in any manner
that could result in such use becoming a non-conforming use under any zoning
ordinance or any other applicable land use law, rule or regulation,
without the prior consent of Lender.


 


4.2.8                     Assets.  Borrower shall not purchase or own any property other
than the Property and any property necessary or incidental for the operation of
the Property.


 


4.2.9                     No Joint Assessment.  Borrower shall not suffer, permit or initiate the
joint assessment of any Individual Property (1) with any other real
property constituting a tax lot separate from any Individual Property, and (ii) with
any portion of any Individual Property which may be deemed to constitute
personal property, or any other procedure whereby the lien of any taxes which
may be levied against such personal property shall be assessed or levied or
charged to any Individual Property.


 


4.2.10              Principal Place of
Business.  Borrower shall not change its principal
place of business from the address set forth on the first page of this
Agreement without first giving Lender ten (10) days’ prior notice.


 


4.2.11              ERISA.  (a) Borrower
shall not engage in any transaction which would cause any obligation, or action
taken or to be taken, hereunder (or the exercise by Lender of any of its rights
under the Note, this Agreement or the other Loan Documents) to be a non-exempt
(under a statutory or administrative class exemption) prohibited transaction
under ERISA or Section 4973 of the Code.


 


(b)                                 Borrower shall deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its sole discretion, that (A) Borrower is
not an “employee benefit plan” as defined in Section 3(3) of ERISA,
whether or not subject to Title I of ERISA, or a “plan” within the meaning of Section 4975 of the Code; and (B) one or
more of the following circumstances is true:


 


(i)                                     Equity interests in Borrower are publicly
offered securities, within the meaning of the Plan Assets Regulation;


 


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(ii)                                  Less than twenty-five percent (25%) of each
outstanding class of equity interests in Borrower is held by “benefit plan
investors” within the meaning of the Plan Assets Regulation; or


 


(iii)                               Borrower qualifies as an “operating
company” or a “real estate operating company” within the meaning of the Plan
Assets Regulation.


 


4.2.12              Material Agreements.  Except as would not have a material adverse effect on
Borrower’s ability to perform its obligations under this Agreement and the
other Loan Documents, Borrower shall not, without Lender’s prior written
consent: (a) enter into any Material Agreement, except on commercially
reasonable terms, (b) surrender or terminate any Material Agreement to
which it is a party other than in the ordinary course of Borrower’s business,
including where the same is being replaced or is no longer necessary (unless
the other party thereto is in material default and the termination of such
agreement would be commercially reasonable), (c) increase or consent to
the increase of the amount of any charges under any Material Agreement to which
it is a party, except as provided therein or on an arms’ length basis and
commercially reasonable terms; or (d) otherwise modify, change,
supplement, alter or amend, or waive or release any of its rights and remedies
under any Material Agreement to which it is a party in any material respect
other than in the ordinary course of Borrower’s business, except on an arm’s
length basis and commercially reasonable terms.


 


4.2.13              Intentionally Omitted.


 


4.2.14              Intentionally Omitted.


 


4.2.15              Intentionally Omitted.


 


4.2.16              Cash Management Agency
Agreement. Borrower
shall not, without the prior written consent of Lender, modify, supplement,
restate, amend or waive any provision of the Cash Management Agency Agreement
in any manner whatsoever that (a) reduces the amount payable by the
counterparty thereto to Borrower thereunder, (b) reduces or otherwise
limits Borrower’s right to terminate the Cash Management Agency Agreement or (c) would
cause or result in a Material Adverse Effect. Nothing contained in this
Agreement or any other Loan Document shall constrain the termination of the
Cash Management Agency Agreement so long as such termination would not have a
Material Adverse Effect.


 


V.                                    INSURANCE, CASUALTY
AND CONDEMNATION


 


Section 5.1                                   Insurance.


 


5.1.1                     Insurance Policies. (a) Borrower shall obtain and
maintain, or cause to be maintained, insurance for Borrower and the Property
providing at least the following coverages:


 


(i)                                     all risk insurance on the improvements
and the personal property at the Property, including contingent liability from
Operation of Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements, in each case (A) in an amount equal to one hundred percent
(100%) of the “Full Replacement Cost,” which for purposes of this Agreement
shall mean actual replacement value (exclusive of costs of excavations, 


 


61

















 


foundations, underground utilities and footings) with a waiver of
depreciation; (B) containing an agreed amount endorsement with respect to
the Improvements and personal property at the Properly waiving all co-insurance
provisions; (C) providing for no deductible in excess of Two Hundred Fifty
Thousand and No/100 Dollars ($250,000) (except with respect to floods, wind and
earthquakes, each of which shall be limited to 5%
of the insurable
value per loss or at prevailing market deductibles, with such increase to be
approved by Lender, such approval not to be unreasonably withheld, delayed or
conditioned) for all such insurance coverage; and (D) containing an “Ordinance
or Law Coverage” (sublimit of $10,000,000 for property damage and $2,000,000
for business interruption in respect of the Property or such lesser sublimits
as may be commercially available as determined by Lender in its reasonable
discretion) or “Enforcement” endorsement if any of the Improvements or the use
of the Property shall at any time constitute legal non-conforming structures or
uses. In addition, Borrower shall obtain: 
(y) if any portion of the Improvements at any Individual Property
is currently or at any time in the future located in a federally designated “special
flood hazard area,” flood hazard insurance in an amount equal to the lesser of (1) the
Allocated Loan Amount of such Individual Property or (2) the maximum
amount of such insurance available under the National Flood Insurance Act of
1968, the Flood Disaster-Protection Act of 1973 or the National Flood Insurance
Reform Act of 1994, as each may be amended; and (z) earthquake insurance
in amounts and in form and substance satisfactory to Lender in the event any
Individual Property is located in an area with a high degree of seismic
activity, provided that the insurance pursuant to clauses (y) and (z) hereof
shall be on terms consistent with the all risk insurance policy required under
this subsection


 


(ii)                                  commercial general liability insurance
against claims for personal injury, bodily injury, death or property damage
occurring upon, in or about the Property, such insurance (A) to be on the
so-called “occurrence” form with a combined limit, including umbrella coverage,
of not less than Twenty-Five Million and No/100 Dollars ($25,000,000); (B) to
continue at not less than the aforesaid limit until required to be changed by
Lender by reason of changed economic conditions making such protection
inadequate; and (C) to cover at
least the following
hazards: (1) premises and operations; (2) products and completed
operations on an “if any” basis; (3) independent
contractors; (4) blanket contractual liability for all legal contracts;
and (5) contractual liability covering
the indemnities
contained in Article 9 of the Mortgage to the extent the same is
available, the terms of excess coverage to “follow form” over the primary
general liability insurance and the commercial
motor vehicle liability coverage required under clause (viii) below;


 


(iii)                               business income insurance (A) with
loss payable to Lender; (B) covering all risks required to be covered by the insurance provided
for in subsection (i) above for a period commencing at the time of loss
for such length of time as it takes to repair or replace with the exercise of
due diligence and dispatch, but in no event in an amount less than one year;
and (C) containing an extended period of indemnity endorsement which
provides that after the physical loss to the Improvements and Personal Property
has been repaired, the continued loss of income will be insured until such
income either returns to the same level it
was at prior to the loss, or the expiration of one hundred twenty (120)
days from the date that the affected Individual Property is repaired or
replaced and 


 


62

















 


operations are resumed, whichever first occurs, and notwithstanding
that the policy may expire prior to the end of such period. The amount of
coverage required for business income insurance pursuant to this Section 5.1.1(a)(iii) shall be included in the
coverage amounts specified in Section 5.1.1(a)(i) above.
All proceeds payable to Lender pursuant to this subsection shall be held by
Lender and shall be applied to the obligations secured by the Loan Documents
from time to time due and payable hereunder and under the Note; provided, however,
that nothing herein contained shall be deemed to relieve Borrower of its
obligations to pay the obligations secured by the Loan Documents on the
respective dates of payment provided for in the Note and the other Loan
Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;


 


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


 


(v)                                 workers’ compensation, subject to the
statutory limits of the state in which the Property is located, and employer’s
liability insurance with a limit of at least One Million and No/ 1 00 Dollars
($1,000,000) per accident and per disease per employee, and One Million and No/1
00 Dollars ($1,000,000) for disease aggregate in respect of any work or
operations on or about the Property, or in connection with the Property or its
operation (if applicable);


 


(vi)                              boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender on terms
consistent with the commercial property insurance policy required under
subsection (i) above;


 


(vii)                           Intentionally Omitted;


 


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


 


(ix)                                Intentionally Omitted;


 


(x)                                   insurance against employee dishonesty in
an amount not less than Three Million and No/100 Dollars ($3,000,000) and with
a deductible not greater than One Hundred Thousand and No/100 Dollars
($100,000);


 


(xi)                                (A) during any period of the term of
the Loan that TRIA is in effect, if “acts of terrorism” or other similar acts
or events are hereafter excluded from Borrower’s all risk insurance policy
(including business income), Borrower shall obtain an 


 


63

















 


endorsement to such policy insuring against all “certified acts of
terrorism” as defined by TRIA in an amount equal to the Release Amount
applicable to the Individual Property with the highest then-outstanding
Allocated Loan Amount. The endorsement shall be in form and substance
reasonably satisfactory to Lender and shall meet Rating Agency criteria for
securitized loans; or


 


(b)                                 during any period of the term of the Loan
that TRIA is not in effect, or the endorsement referred to in (A) above is not available, if “acts of terrorism” or other similar acts are
hereafter excluded from Borrower’s all risk insurance policy or business income insurance
coverage, Borrower shall obtain an endorsement to such policy or a separate
policy from an insurance provider, insuring against all such excluded acts or events, to the extent such policy or
endorsement is available, in an amount determined by Lender in its reasonable
discretion (but in no event greater than the Release Amount applicable to the
Individual Property with the highest then-outstanding Allocated Loan Amount,
plus required business income coverage); provided, however, Borrower shall not
be required to pay annual premiums in excess of $41,000 for such coverage. The
endorsement or policy shall be in form and substance reasonably satisfactory to
Lender and shall meet Rating Agency criteria for securitized loans; and


 


(xii)                             upon sixty (60) days’ notice, such other
reasonable insurance and in such reasonable amounts as Lender from time to time
may reasonably request against such other insurable hazards which at the time
are commonly insured against for property similar to the Property located in or
around the region in which the Property is located, provided such insurance is
generally available at commercially reasonable premiums.


 


(b)                                 All insurance provided for in Section 5.1.1(a) shall
be obtained under valid and enforceable policies (collectively, the “Policies”
or in the singular, the “Policy”) and, to the extent not specified above, shall
be subject to the approval of Lender as to deductibles, loss payees and
insureds. Not less than ten (10) days prior to the expiration dates of the Policies
theretofore furnished to Lender, certificates of insurance evidencing the
Policies accompanied by evidence satisfactory to Lender of payment of the
premiums then due thereunder (the “Insurance Premiums”), shall be delivered by
Borrower to Lender.


 


(c)                                  Borrower shall have the right to effect
the coverages required hereunder under one or more blanket insurance Policies
that cover the Property as well as other properties of Borrower’s Affiliates,
provided that any blanket insurance Policy shall provide substantially the same
protection required hereunder in respect of the Property as would a separate
Policy insuring only the Property in compliance
with the provisions of Section 5.1.1(a) taking into account the geographic diversity of the
Property.


 


(d)                                 All Policies of insurance provided for or
contemplated by Section 5.1.1(a) shall
be primary coverage and, except for the Policy referenced in Section 5.1.1(a)(v) and
Section 5.1.1(a)(x), shall name
Borrower as the insured and Lender and its successors and/or assigns as the
additional insured, as its interests may appear, and in the case of property
damage, boiler and machinery, flood, earthquake and terrorism insurance, shall
contain a so-called New York standard non-contributing mortgagee clause in
favor of Lender providing that the loss thereunder shall be payable to Lender.
Borrower shall not procure or permit any of its constituent entities to procure
any other insurance coverage which would be on the
same level of payment
as 


 


64

















 


the Policies or would
adversely impact in any way the ability of Lender or Borrower to collect any
proceeds under any of the Policies.


 


(e)                                  All Policies of insurance provided for in
Section 5.1.1(a), except for the Policies referenced in Section 5.1.1(a)(v) and
(a)(viii) shall contain clauses or endorsements to the effect that:


 


(i)                                     no act or negligence of Borrower, or
anyone acting for Borrower, or of any Tenant or other occupant, or failure to
comply with the provisions of any Policy, which
might otherwise
result in a forfeiture of the insurance or any part thereof, shall in any way
affect the validity or enforceability of the insurance insofar as Lender is
concerned;


 


(ii)                                  the Policy shall not be canceled without
at least thirty (30) days’ written notice to Lender and any other party named
therein as an additional insured and, if obtainable by Borrower using
commercially reasonable efforts, shall not be materially changed (other than
to increase the coverage provided thereby) without such a thirty (30) day
notice; and


 


(iii)                               Lender shall not be liable for any
Insurance Premiums thereon or subject to any assessments thereunder.


 


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


 


(ii)                                  The following language applies solely
with respect to the Individual Property located in the State of Oregon, and
shall be in lieu of the language contained in clause (i) of this Section 5.1(f): UNLESS BORROWER PROVIDES
LENDER WITH EVIDENCE OF THE INSURANCE COVERAGE AS REQUIRED BY THE LOAN DOCUMENTS, THE
LENDER MAY PURCHASE SUCH INSURANCE AT BORROWER’S EXPENSE TO PROTECT LENDER’S
INTEREST. THIS INSURANCE MAY, BUT NEED NOT, ALSO PROTECT BORROWER’S INTEREST.
IF THE COLLATERAL BECOMES DAMAGED, THE COVERAGE LENDER PURCHASES MAY NOT
PAY ANY CLAIM BORROWER MAKES OR ANY CLAIM MADE AGAINST BORROWER. BORROWER MAY LATER CANCEL
THIS COVERAGE BY PROVIDING EVIDENCE THAT BORROWER HAS OBTAINED PROPERTY
COVERAGE ELSEWHERE.


 


BORROWER IS RESPONSIBLE FOR THE REASONABLE COST OF
ANY SUCH INSURANCE PURCHASED BY LENDER. THE COST OF THIS INSURANCE MAY BE
ADDED TO THE LOAN BALANCE. IF THIS COST IS ADDED TO THE LOAN 


 


65

















 


BALANCE, THE INTEREST RATE PAYABLE UNDER THE
UNDERLYING LOAN WILL APPLY TO THE ADDED AMOUNT. THE EFFECTIVE DATE OF THE
COVERAGE MAY BE THE DATE BORROWER’S PRIOR COVERAGE LAPSED OR THE DATE
BORROWER FAILED TO PROVIDE PROOF OF COVERAGE.


 


THE COVERAGE LENDER PURCHASES MAY BE
CONSIDERABLY MORE EXPENSIVE THAN INSURANCE BORROWER CAN OBTAIN ON BORROWER’S
OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE OR ANY
MANDATORY LIABILITY INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE LAW.


 


(g)                                 In the event of foreclosure of the
Mortgage or other transfer of title to the Property in extinguishment in whole
or in part of the Debt, all right, title and interest of Borrower in and to the
Policies that are not blanket Policies then in force concerning the Property
and all proceeds payable thereunder shall thereupon vest in the purchaser at
such foreclosure or Lender or other transferee in the event of such other
transfer of title.


 


5.1.2                     Insurance Company. The Policies shall be issued by financially
sound and responsible insurance companies permitted to do business in the State
in which each Individual Property is located. For so long as five (5) or
more insurance carriers are providing the Policies, at least sixty percent
(60%) of such coverage shall be provided by insurance companies having a claims
paying ability rating of “A-” or better by S&P with the remaining forty
percent (40%) of such coverage being provided by insurance companies having a
claims paying ability rating of “BBB-” or better by S&P; provided,
however, with respect to the first One Hundred Million and No/100 Dollars
($100,000,000.00) of coverage under such Policies, not more than twenty percent
(20%) of such coverage shall be provided by insurance companies with a claims
paying ability rating lower than “A-” by S&P (but in no event lower than “BBB-”
by S&P). In the event that four (4) or fewer insurance carriers are providing
the Policies, at least seventy-five percent (75%)
of such coverage
shall be provided by insurance companies having a claims
paying ability rating
of “A-” or better by S&P, with the remaining twenty-five percent (25%) of such coverage being provided by
insurance companies having a claims paying ability rating of “BBB-” or better
by S&P. If a Securitization occurs, (i) the foregoing required
insurance company rating by a Rating Agency not rating any Securities shall be
disregarded and (ii) if the insurance company complies with the aforesaid
S&P required rating (and S&P is rating the Securities) and the other
Rating Agencies rating the Securities do not rate the insurance company, such
insurance company shall be deemed acceptable with respect to such Rating Agency
not rating such insurance company. Notwithstanding the foregoing, Borrower
shall be permitted to maintain the Policies with insurance companies which do
not meet the foregoing requirements (an “Otherwise Rated Insurer”), provided
Borrower obtains a “cut-through” endorsement (that is, an endorsement which
permits recovery against the provider of such endorsement) with respect to any
Otherwise Rated Insurer from an insurance company which meets the claims paying
ability ratings required above. Moreover, if Borrower desires to maintain
insurance required hereunder from an insurance company which does not meet the
claims paying ability ratings set forth herein but the parent of such insurance
company, which owns at least fifty-one percent (51%) of such insurance company, maintains such ratings,
Borrower may use such insurance companies if approved by the Rating Agencies
(such approval 


 


66

















 


may be conditioned on
items required by the Rating Agencies including a requirement that the parent
guarantee the obligations of such insurance company).


 


5.1.3                     Current Insurance. Lender hereby acknowledges that the
insurance coverages under the certificates of insurance delivered to Lender in
connection with the execution and delivery of this Agreement are currently
acceptable to Lender as of the date hereof for the periods covered under the
policies described in said certificates for purposes of this Section 5.1.


 


Section 5.2                                   Casualty and Condemnation.


 


5.2.1                     Casualty. If any Individual Property shall sustain
a Casualty, Borrower shall give prompt notice of such Casualty to Lender and
shall promptly commence and diligently prosecute to completion the repair and
restoration of such Individual Property as nearly as possible to the condition
such Individual Property was in immediately prior to such Casualty (a “Restoration”)
and otherwise in accordance with Section 5.3, it
being understood, however, that Borrower shall not be obligated to restore such
Individual Property to the precise condition of such Individual Property prior
to such Casualty provided the Individual Property is restored, to the extent
practicable, to be of at least equal value and of substantially the same
character as prior to the Casualty. Borrower shall pay all costs of such
Restoration whether or not such costs are covered by insurance. Lender may, but
shall not be obligated to, make proof of loss if not made promptly by Borrower.
In the event of a Casualty where the loss does not exceed the Restoration
Threshold, Borrower may settle and adjust such claim; provided that (a) no
Event of Default has occurred and is continuing and (b) such adjustment is
carried out in a commercially reasonable and timely manner. In the event of a
Casualty where the loss exceeds the Restoration Threshold or if an Event of
Default then exists, Borrower may settle and adjust such claim only with the
consent of Lender (which consent
shall not be unreasonably withheld or delayed) and Lender shall have the
opportunity to participate, at Borrower’s cost, in any such adjustments.
Notwithstanding any Casualty, Borrower shall continue to pay the Debt at the
time and in the manner provided for its payment in the Note and in this
Agreement.


 


5.2.2                     Condemnation. Borrower shall give Lender prompt notice
of any actual or threatened Condemnation by any Governmental Authority of all
or any part of any Individual Property and shall deliver to Lender a copy of any and
all papers served in connection with such proceedings. Provided no Event of
Default has occurred and is continuing, in the event of a Condemnation where
the amount of the taking does not exceed the Restoration Threshold, Borrower
may settle and compromise such Condemnation; provided that the same is
effected in a commercially reasonable and timely manner. In the event of a
Condemnation where the amount of the taking exceeds the Restoration Threshold
or if an Event of Default then exists, Borrower may settle and compromise the
Condemnation only with the consent of Lender (which consent shall not be
unreasonably withheld or delayed) and Lender shall have the opportunity to
participate, at Borrower’s cost, in any litigation and settlement discussions
in respect thereof and Borrower shall from time to time deliver to Lender all
instruments requested by Lender to permit such participation. Borrower shall,
at its expense, diligently prosecute any such proceedings, and shall consult
with Lender, its attorneys and experts, and cooperate with them in the carrying
on or defense of any such proceedings. Notwithstanding any Condemnation,
Borrower shall continue to pay the Debt at the time and in the manner provided
for its payment in the Note and 


 


67

















 


in this Agreement. Lender
shall not be limited to the interest paid on the Award by any Governmental
Authority but shall be entitled to receive out of the Award interest at the
rate or rates provided herein or in the Note. If any Individual Property or any
portion thereof is taken by any Governmental Authority, Borrower shall promptly
commence and diligently prosecute the Restoration of the Property and otherwise
comply with the provisions of Section 5.3. If any Individual Property is sold by or
on behalf of Lender subsequent to acceleration, through foreclosure or
otherwise, prior to the receipt by Lender of the Award, Lender shall have the
right, whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the Award, or a portion thereof sufficient to
pay the Debt.


 


5.2.3                     Casualty Proceeds. Notwithstanding the last sentence of Section 5.1.1(a)(iii) and
provided no Event of Default exists hereunder, proceeds received by Lender on
account of the business interruption insurance specified in Section 5.1.l(a)(iii) above with respect to any Casualty shall
be deposited by Lender directly into the Deposit Account (as defined in the
Cash Management Agreement) but (a) only to the extent it reflects a
replacement for (i) lost Rents that would have been due under Leases or
Service Contracts existing on the date of such Casualty, and/or (ii) lost
Rents under Leases or Service Contracts that had not yet been executed and
delivered at the time of such Casualty which Borrower has proven to the
insurance company would have been due under such Leases (and then only to the
extent such proceeds disbursed by the insurance company reflect a replacement
for such past due Rents) and (b) only to the extent necessary to fully
make the disbursements required by Sections 3.3(a)(i) through (vi) of
the Cash Management Agreement. All other such proceeds shall be held by Lender
and disbursed in accordance with Section 5.3  hereof.


 


Section 5.3                                   Delivery of Net Proceeds.


 


5.3.1                     Minor Casualty or Condemnation. If a Casualty or Condemnation has
occurred to any Individual Property and the Net Proceeds shall be less than the
Restoration Threshold and the costs of completing the Restoration shall be less
than the Restoration Threshold, and provided no Event of Default shall have
occurred and remain uncured, the Net Proceeds will be disbursed by Lender to
Borrower. Promptly after receipt of the Net Proceeds, Borrower shall commence
and satisfactorily complete with due diligence the Restoration in accordance
with the terms of this Agreement. If any Net Proceeds are received by Borrower
and may be retained by Borrower pursuant to the terms hereof, such Net Proceeds
shall, until completion of the Restoration, be held in trust for Lender and
shall be segregated from other funds of Borrower to be used to pay for the cost
of Restoration in accordance with the terms hereof.


 


5.3.2                     Major Casualty or
Condemnation. (a) If
a Casualty or Condemnation has occurred to any Individual Property and the Net
Proceeds are equal to or greater than the Restoration Threshold or the costs of
completing the Restoration is equal to or greater than the Restoration
Threshold, Lender shall make the Net Proceeds available for the Restoration, provided
that each of the following conditions are met:


 


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


 


68














 


(ii)                                  (A) in the event the Net Proceeds
are insurance proceeds, less than forty percent (40%) of the total floor area
of the Improvements at such Individual Property has been damaged, destroyed or
rendered unusable as a result of such Casualty or (B) in the event the Net
Proceeds are an Award, less than fifteen percent (15%)
of the land
constituting such Individual Property is taken, and such land is located along
the perimeter or periphery of such Individual Property, and no portion of the
Improvements is the subject of the Condemnation;


 


(iii)                               The projected aggregate Gross Revenue for
the Property after completion of the Restoration (as reasonably determined by
Lender) shall not be reduced as a result of the occurrence of such Casualty or
Condemnation by more than twenty percent (20%) as compared to the Gross Revenue
received by Borrower during the twelve (12) month period immediately preceding
such Casualty or Condemnation.


 


(iv)                              Borrower shall commence the Restoration
as soon as reasonably practicable and shall diligently pursue the same to
satisfactory completion;


 


(v)                                 Lender shall be satisfied that any
operating deficits and all payments of principal and interest under the Note
will be paid during the period required for Restoration from (A) the Net
Proceeds (including sums received from the proceeds of the coverage required
pursuant to Section 5.1.1(a)(iii)), or (B) other
funds of Borrower;


 


(vi)                              Lender shall be satisfied that the
Restoration will be completed on or before the earliest to occur of (A) the
date six (6) months prior to the Maturity Date, (B) the earliest date
required for such completion under the terms of any Lease covering 25% or more
of the applicable Individual Property or (C) such time as may be required
under applicable Legal Requirements in order to repair and restore the Property
to the condition it was in immediately prior to such Casualty or to as nearly
as possible the condition it was in immediately prior to such Condemnation, as
applicable;


 


(vii)                           such Individual Property and the use
thereof after the Restoration will be in compliance with and permitted under
all applicable Legal Requirements;


 


(viii)                        the Restoration shall be done and
completed by Borrower in an expeditious and diligent fashion and in compliance
with all applicable Legal Requirements; and


 


(ix)                                such Casualty or Condemnation, as
applicable, does not result in the loss of access to such Individual Property
or the related Improvements (except if the same is effectively replaced).


 


(b)                                 The Net Proceeds shall be paid directly
to Lender and held by Lender in an interest-bearing account (with such interest
being credited to such account) and, until disbursed in accordance with the
provisions of this Section 5.3.2, shall constitute additional
security for the Debt. The Net Proceeds shall be disbursed by Lender to, or as
directed by, Borrower from time to time during the course of the Restoration,
upon receipt of evidence satisfactory to Lender that (A) all requirements
set forth in Section 5.3.2(a) have
been satisfied, (B) all materials installed and work and labor performed
(except to the extent that they are to be 


 


69

















 


paid for out of the
requested disbursement) in connection with the Restoration have been paid for in full, and (C) there
exist no notices of pendency, stop orders, mechanic’s or materialman’s liens or
notices of intention to file same, or any other liens or encumbrances of any
nature whatsoever on the Individual Property arising out of the Restoration
which have not been fully bonded to the reasonable satisfaction of Lender,
discharged of record or fully insured to the reasonable satisfaction of Lender
by the title company issuing the Title Insurance Policy (or another reputable
title company satisfactory to Lender).


 


(c)                                  The Restoration shall be completed in a
first class workmanlike manner at least equivalent to the quality and character
of the original work in the Improvements (provided, however, that
in the case of a partial Condemnation, the Restoration shall be done to the
extent reasonable practicable after taking into account the consequences of
such partial Condemnation), so that upon completion thereof, the Individual
Property shall be at least equal in value and general utility to such
Individual Property prior to the damage or destruction; it being understood,
however, that Borrower shall not be obligated to restore the Individual
Property to the precise condition of such Individual Property prior to such
Casualty provided the Individual Property is restored, to the extent
practicable, to be of at least equal value and of substantially the same
character as prior to the Casualty. Borrower shall restore all Improvements
such that when they are fully restored and/or repaired, such Improvements and
their contemplated use fully comply with all applicable material Legal
Requirements. All reasonable out-of-pocket costs and expenses incurred by
Lender in connection with recovering, holding and advancing the Net Proceeds
for the Restoration including, without limitation, reasonable attorneys’ fees
and disbursements and the Casualty Consultant’s fees and disbursements, shall
be paid by Borrower.


 


(d)                                 In no event shall Lender be obligated to
make disbursements of the Net Proceeds in excess of an amount equal to the
costs actually incurred from time to time for work in place as part of the
Restoration, as certified by Borrower, less the Casualty Retainage. The term “Casualty
Retainage” shall mean, as to each contractor, subcontractor or materialman
engaged in the Restoration, an amount equal to ten percent (10%) of the costs
actually incurred for work in place as part of the Restoration, as certified by
Borrower, until the Restoration has been completed. The Casualty Retainage
shall in no event, and notwithstanding anything to the contrary set forth above
in this Section 5.3.2(d), be less than the amount actually held
back by Borrower from contractors, subcontractors and materialmen engaged in
the Restoration. The Casualty Retainage shall not be released until Borrower
certifies to Lender that the Restoration has been completed in accordance with
the provisions of this Section 5.3.2(d) and that all approvals
necessary for the re-occupancy and use of the Property have been obtained from
all appropriate Governmental Authorities, and Lender receives evidence
satisfactory to Lender that the costs of the Restoration have been paid in full
or will be paid in full out of the Casualty Retainage; provided, however,
that Lender will release the portion of the Casualty Retainage being held with
respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which Borrower certifies to Lender that the
contractor, subcontractor or materialman has substantially completed all work
in a satisfactory manner and has supplied all materials in accordance with the
provisions of the contractor’s, subcontractor’s or materialman’s contract, the
contractor, subcontractor or materialman delivers the lien waivers and evidence
of payment in full of all sums due to the contractor, subcontractor or
materialman as may be reasonably requested by Lender or by the title company
issuing the Title Insurance Policy (or another reputable title company
satisfactory to Lender), and Lender receives an 


 


70

















 


endorsement to the Title
Insurance Policy insuring the continued priority of the lien of the Mortgage
and evidence of payment of any premium payable for such endorsement. If
required by Lender, the release of any such portion of the Casualty Retainage
shall be approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or materialman.


 


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


 


(f)                                    If at any time the Net Proceeds or the
undisbursed balance thereof shall not, in the reasonable opinion of Lender, be
sufficient to pay in full the balance of the costs which are reasonably estimated
by the Casualty Consultant to be incurred in connection with the completion of
the Restoration, Borrower shall deposit the deficiency (the “Net Proceeds
Deficiency”) with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this Section 5.3.2  shall constitute additional security for
the Debt.


 


(g)                                 The excess, if any, of the Net Proceeds
and the remaining balance, if any, of the Net Proceeds Deficiency deposited
with Lender after the Casualty Consultant certifies to Lender that the
Restoration has been completed in accordance with the provisions of this Section 5.3.2,
and the receipt by Lender of evidence satisfactory to Lender that all costs
incurred in connection with the Restoration have been paid in full, shall be remitted
by Lender to Borrower, provided no Event of Default shall have occurred and
shall be continuing under any of the Loan Documents.


 


(h)                                 Subject to Borrower’s rights pursuant to Section 2.4.2,
all Net Proceeds not required (i) to be made available for the Restoration
or (ii) to be returned to Borrower as excess Net Proceeds pursuant to Section 5.3.2(g) may be retained and applied by Lender
toward the payment of the Debt, whether or not then due and payable, in such
order, priority and proportions as Lender in its sole discretion shall deem
proper, or, at the discretion of Lender, the same may be paid, either in whole
or in part, to Borrower for such purposes as Lender shall designate.


 


(i)                                     Notwithstanding anything to the contrary
contained herein, from and after the occurrence of a Casualty or Condemnation,
if (1) any Lease of all or any portion of an Individual Property covering
at least 25% of the total square footage of such Individual Property and/or any
contract for services at an Individual Property (a “Service Contract”)
for which the payments thereunder constitute at least 25% of the Gross Revenue generated by such Individual Property
requires Borrower to restore such Individual Property after such Casualty or
Condemnation, (2) no default (beyond any applicable notice and/or grace
periods) shall have occurred and be continuing under such Lease or Service
Contract and (3) no Event of
Default shall have
occurred and be continuing, then Lender shall disburse the Net Proceeds or
Award in accordance with the disbursement provisions specified in Section 5.3.2(b)-(g) to Borrower (without Borrower
having to satisfy the conditions specified in Section 5.3.2(a)) to
facilitate Borrower’s compliance therewith.


 


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VI.                                RESERVE FUNDS


 


Section 6.1                                   Required Repairs.


 


6.1.1                     Required Repairs and
Deposit of Required Repair Funds. Borrower shall perform the repairs and the
remediations at the Property, as more particularly set forth on Schedule II
hereto (such repairs and remediations hereinafter collectively referred to as “Required
Repairs”). Borrower shall complete the Required Repairs at each Individual
Property by the required deadline for each repair or remediation as set forth
on Schedule II, subject to Excusable Delays. In the event that any
amounts are required to be deposited pursuant to Section 11.29(i),
such amounts, together with interest earned thereon, shall be referred to as
the “Required Repair Funds”.


 


6.1.2                     Release of Required
Repair Funds.  (a) Lender shall direct Agent to disburse
Required Repair Funds only for Required Repairs.


 


(b)                                 Lender shall direct Agent to disburse
Required Repair Funds upon satisfaction by Borrower of each of the following
conditions: (i) Borrower shall submit a request for payment to Lender at
least ten (10) days prior to the date on which Borrower requests such
payment be made and specifies the Required Repairs to be paid, (ii) on the
date such request is received by Lender and on the date such payment is to be
made, no Event of Default shall exist and remain uncured, (iii) Lender
shall have received a certificate from Borrower (A) stating that the items
to be funded by the requested disbursement are Required Repairs, (B) stating
that all Required Repairs at the Property to be funded by the requested
disbursement have been performed to date in a good and workmanlike manner and
in accordance with all applicable Legal Requirements, such certificate to be
accompanied by a copy of any license, permit or other approval required by any
Governmental Authority in connection with the Required Repairs, (C) identifying
each Person that supplied materials or labor in connection with the Required
Repairs to be funded by the requested disbursement, and (D) stating that
each such Person has been paid amounts then due or will be paid such amount
upon such disbursement, such certificate to be accompanied by lien waivers or
other evidence of payment reasonably satisfactory to Lender, (iv) at
Lender’s option, a title search for the Individual Property at which such
Required Repairs are being
performed indicating that such Individual Property is free from all Liens,
claims and other encumbrances not previously approved by Lender, (v) at
Lender’s option, if the cost of any individual Required Repair exceeds
$750,000, Lender shall have received a report satisfactory to Lender in its
reasonable discretion from an architect, engineer or consultant approved (which
approval shall not be unreasonably withheld, conditioned or delayed) by Lender
in respect of such architect’s, engineer’s or consultant’s inspection of the
Required Repairs, and (vi) Lender shall have received such other evidence
as Lender shall reasonably request that the portion of the Required Repairs to
be funded by the requested disbursement have been performed to date and are
paid for or will be paid upon such disbursement to Borrower. Lender shall not
be required to disburse Required Repair Funds more frequently than once each
calendar month, unless such requested disbursement is in an amount greater than
the Minimum Disbursement Amount (or a lesser amount if the total amount of
Required Repair Funds is less than the Minimum Disbursement Amount, in which
case only one disbursement of the amount remaining in the account shall be
made).


 


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(c)                                  Nothing in this Section 6.1.2
shall (i) make Lender responsible for performing or completing the
Required Repairs; (ii) require Lender to expend funds in addition to the
Required Repair Funds to complete any Required Repairs; (iii) obligate
Lender to proceed with the Required Repairs; or (iv) obligate Lender to
demand from Borrower additional sums to complete any Required Repairs.


 


(d)                                 Borrower shall permit Lender and Lender’s
agents and representatives (including, without limitation, Lender’s engineer,
architect, inspector or consultant) or third parties to enter onto the Property
during normal business hours (subject to the rights of Tenants under their
Leases) to inspect the progress of any Required Repairs and all materials being
used in connection therewith and to examine, if applicable, all plans and shop drawings relating to such
Required Repairs. Prior to the occurrence of an Event of Default such entry and
inspection shall be conducted in a manner that minimizes any interference with
Borrower’s business or the use and enjoyment of the Property by Borrower,
Borrower’s tenants and Borrower’s tenants’ customers and guests. Borrower shall
cause all contractors and subcontractors to cooperate with Lender or Lender’s
representatives or such other Persons described above in connection with
inspections described in this Section 6.1.2(d).


 


(e)                                  If a disbursement for any single Required
Repair at an Individual Property will exceed $750,000, Lender may require an
inspection of the Property at Borrower’s expense prior to making a disbursement
of Required Repair Funds, and in connection therewith, such entry and
inspection shall be conducted in a manner that minimizes any interference with
Borrower’s business or the use and enjoyment of the Property by Borrower,
Borrower’s tenants and Borrower’s tenants’ customers and guests. Lender may
require that such inspection be conducted by an appropriate independent
qualified professional selected by Lender and may require a certificate of
completion by an independent qualified professional engineer, architect or
consultant acceptable to Lender prior to the disbursement of such Required
Repair Funds. Borrower shall pay the reasonable out-of-pocket expense of the
inspection as required hereunder, whether such inspection is conducted by
Lender or by an independent qualified professional engineer, architect or
consultant.


 


(f)                                    In the event Lender releases an
Individual Property (or assigns the Mortgage encumbering such Individual Property)
as a result of the exercise of Borrower’s rights under Section 2.4
or Section 2.5 hereof, Lender shall direct Agent, and Agent shall,
promptly following the release of the Lien of the Mortgage (or the assignment
of the Mortgage) with respect to such Individual Property, deliver, or cause
the delivery, to Borrower from the Required Repair Funds an amount equal to the
undisbursed portion of the Required Repair Funds deposited by Borrower with
respect to the Required Repairs to be performed on such Individual Property.


 


Section 6.2                                   Tax Funds.


 


6.2.1                     Deposits of Tax Funds. Pursuant to the Cash Management
Agreement, upon the occurrence of (a) a Trigger Event and during the
continuance of a Trigger Period or (b) an Event of Default and during the continuance thereof, there shall be
deposited with Agent on each Monthly Payment Date an amount equal to
one-twelfth of the Taxes that Lender reasonably estimates will be payable
during the next ensuing twelve (12)
months in order to accumulate 


 


73

















 


sufficient funds to pay
all such Taxes at least ten (10) days prior to their respective due dates.
Amounts deposited pursuant to this Section 6.2.1, together with
interest earned thereon, are referred to herein as the “Tax Funds”. If
at any time Lender reasonably
determines that the Tax Funds
will not be sufficient to pay
the Taxes, Lender shall notify Borrower of such determination and the monthly
deposits for Taxes shall be increased by the amount that Lender estimates is
sufficient to make up the deficiency at least fifteen (15) days
prior to the respective due dates for the Taxes; provided that if Borrower receives notice of any
deficiency after the date that is fifteen (15) days prior to the date that Taxes are due, Borrower will
deposit such amount within three (3) Business Days after its receipt of
such notice.


 


6.2.2                     Release of Tax Funds. Lender shall have the right to apply the Tax
Funds to payment of Taxes (and, at Borrower’s request, which shall be made not later than ten (10) days
prior to the date the applicable payment of Taxes is due, Lender shall apply
the Tax Funds to such payment of Taxes, provided that no Event of Default has
occurred and is continuing). In making any payment relating to Taxes, Lender
may do so according to any bill, statement or estimate procured from the
appropriate public office (with respect to Taxes) without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof. If the amount
of the Tax Funds shall exceed the amounts due for Taxes, Lender shall, in its sole discretion, return any
excess to Borrower or credit such excess against future payments to be made to
the Tax Funds. Any Tax Funds remaining after the Debt has been paid in full
shall be returned to Borrower. In the event Lender releases an Individual
Property (or assigns the Mortgage encumbering such Individual Property) as a
result of the exercise of Borrower’s rights under Section 2.4 or Section 2.5
hereof, Lender shall direct Agent, and Agent shall, promptly following the
release of the Lien of the Mortgage (or the assignment of the Mortgage) with
respect to such Individual Property, deliver, or cause the delivery, to
Borrower from the Tax Funds an amount equal to the Tax Funds deposited by
Borrower into the Tax Account with respect to such Individual Property (to the
extent such Tax Funds are in excess of the Tax Funds that will be required to
be reserved in the Tax Account with respect to the Property (excluding such
Individual Property)).


 


Section 6.3                                   Insurance Funds.


 


6.3.1                     Deposits of Insurance
Funds.
Pursuant to the Cash Management Agreement, upon the occurrence of (a) a
Trigger Event and during the continuance of a Trigger Period or (b) an
Event of Default and during the continuance thereof, there shall be deposited
with Agent on each Monthly Payment Date an amount equal to one-twelfth of the
Insurance Premiums that Lender reasonably estimates will be payable for the
renewal of the coverage afforded by the Policies upon the expiration thereof in
order to accumulate sufficient funds to pay all such Insurance Premiums at
least thirty (30) days prior to the expiration of the Policies. Amounts
deposited pursuant to this Section 6.3.1 are referred to herein as
the “Insurance Funds”. If at any time Lender reasonably determines that
the Insurance Funds will not be sufficient to pay the insurance Premiums,
Lender shall notify Borrower of such determination and the monthly deposits for
Insurance Premiums shall be increased by the amount that Lender estimates is
sufficient to make up the deficiency at least thirty (30) days prior to
expiration of the Policies; provided that if Borrower receives notice of any
deficiency after the date that is thirty (30) days prior to the expiration date
of the Policies, Borrower will deposit such amount within three (3) Business
Days after its receipt of such notice. Notwithstanding the foregoing provisions
of this 


 


74

















 


Section 6.3.1, if insurance coverages required
hereunder are effected under one or more blanket insurance Policies in
accordance with the terms set forth in Section 5.1.1(c), Borrower
shall not be required to make deposits under this Section 6.3.1, provided
that Borrower delivers to Lender certificates of insurance evidencing such
blanket insurance Policies, together with evidence reasonably satisfactory to
Lender that the premiums for such blanket insurance Policies have been paid,
and if such Policies are to expire within thirty (30) days, that the premiums
with respect to such blanket Policies for the next succeeding period have been
paid.


 


6.3.2                     Release of Insurance Funds. Lender shall have the right to apply
the Insurance Funds to payment of Insurance Premiums (and, at Borrower’s
request, which shall be made not later than ten (10) days prior to the
date the applicable payment of Insurance Premiums is due, Lender shall apply
the Insurance Funds to such payment of Insurance Premiums, provided  that no Event
of Default has occurred and is continuing). In making any payment relating to
Insurance Premiums, Lender may do so according to any bill, statement or
estimate procured from the insurer or its agent, without inquiry into the
accuracy of such bill, statement or estimate. If the amount of the Insurance
Funds shall exceed the amounts due for Insurance Premiums, Lender shall, in its
sole discretion, return any excess to Borrower or credit such excess against
future payments to be made to the Insurance Funds. Any Insurance Funds
remaining after the Debt has been paid in full shall be returned to Borrower.
In the event Lender releases an Individual Property (or assigns the Mortgage
encumbering such Individual Property) as a result of the exercise of Borrower’s
rights under Section 2.4 or Section 2.5  hereof, Lender shall direct Agent, and
Agent shall, promptly following the release of the Lien of the Mortgage (or the
assignment of the Mortgage) with respect to such Individual Property, deliver,
or cause the delivery, to Borrower from the Insurance Funds an amount equal to
the Insurance Funds deposited by Borrower into the Insurance Account with
respect to such Individual Property (to the extent such Insurance Funds are in
excess of the Insurance Funds that will be required to be reserved in the
Insurance Account with respect to the Property (excluding such Individual
Property)).


 


Section 6.4                                   Capital Expenditure Funds.


 


6.4.1                     Deposits of Capital
Expenditure Funds. Pursuant to the Cash Management Agreement, upon (a) the
occurrence of a Trigger Event and during the continuance of a Trigger Period or (b) the occurrence of an Event of Default and
during the continuance thereof, Borrower shall deposit with Agent on each
Monthly Payment Date an amount equal to the lesser of (a) one-twelfth of
the product of $0.03 and the number of cubic feet of space at the Property (it
being agreed that, as of the date hereof there is 20,587,000 cubic feet of
space at the Property comprised of the number of cubic feet at each Individual
Property set forth on Schedule VI) and (b) the amount necessary to
bring the amount of Capital Expenditure Funds in the Capital Expenditure
Account to the Capital Expenditure Maximum Amount, which amounts shall be for
Capital Expenditures. Amounts deposited pursuant to this Section 6.4.1,.
together with interest earned thereon, are referred to herein as the “Capital
Expenditure Funds”.


 


6.4.2                     Release of Capital
Expenditure Funds. (a) Lender shall direct Agent to disburse Capital
Expenditure Funds only for Capital Expenditures Work.


 


75

















 


(b)                                 Lender shall direct Agent to disburse to
Borrower the Capital Expenditure Funds upon satisfaction by Borrower of each of
the following conditions: (i) Borrower shall submit a request for payment
to Lender at least ten (10) days prior to the date on which Borrower
requests such payment be made and specifies the Capital Expenditures Work to be
paid, (ii) on the date such request is received by Lender and on the date
such payment is to be made, no Event of Default shall exist and remain uncured,
(iii) Lender shall have received a certificate from Borrower (A) stating
that the items to be funded by the requested disbursement are Capital
Expenditures Work, (B) stating that all Capital Expenditures Work at the
Property to be funded by the requested disbursement have been performed to date
in a good and workmanlike manner and in accordance with all applicable Legal Requirements, such certificate to be accompanied by a copy of any
license, permit or other approval required by any Governmental Authority in
connection with the Capital Expenditures Work, (C) identifying each Person
that supplied materials or labor in connection with the Capital Expenditures
Work to be funded by the requested disbursement, and (D) stating that each
such Person has been paid amounts then due or will be paid such amount upon
such disbursement, such certificate to be accompanied by lien waivers or other
evidence of payment reasonably satisfactory to Lender, (iv) at Lender’s
option, a title search for the Individual Property at which such Capital
Expenditures Work are being performed indicating that such Individual Property
is free from all Liens, claims and other encumbrances not previously approved
by Lender. (v) intentionally omitted, and (vi) Lender shall have
received such other evidence as Lender shall reasonably request that the
portion of the Capital Expenditures Work at the Property to be funded by the
requested disbursement have been performed to date and are paid for or will be
paid upon such disbursement to Borrower. Lender shall not be required to
disburse Capital Expenditure Funds more frequently than once each calendar
month, unless such requested disbursement is in an amount greater than the Minimum
Disbursement Amount (or a lesser amount if the total amount of Capital
Expenditure Funds is less than the Minimum Disbursement Amount, in which case
only one disbursement of the amount remaining in the account shall be made).


 


(c)                                  Nothing in this Section 6.4.2
shall (i) make Lender responsible for making or completing the Capital
Expenditures Work; (ii) require Lender to expend funds in addition to the
Capital Expenditure Funds to complete any Capital Expenditures Work; (iii) obligate
Lender to proceed with the Capital Expenditures Work; or (iv) obligate
Lender to demand from Borrower additional sums to complete any Capital
Expenditures Work.


 


(d)                                 Borrower shall permit Lender and Lender’s
agents and representatives (including, without limitation, Lender’s engineer,
architect, or inspector) or third parties to enter onto the Property during
normal business hours (subject to the rights of Tenants under their Leases) to
inspect the progress of any Capital Expenditures Work and all materials being
used in connection therewith and to examine (if applicable) all plans and shop
drawings relating to such Capital Expenditures Work. Prior to the occurrence of
an Event of Default, such entry and inspection shall be conducted in a manner
that minimizes any interference with Borrower’s business or the use and
enjoyment of the Property by Borrower, Borrower’s tenants and Borrower’s
tenants’ customers and guests. Borrower shall cause all contractors and
subcontractors to cooperate with Lender or Lender’s representatives or such
other Persons described above in connection with inspections described in this Section 6.4.2(d).


 


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(e)                                  If a disbursement with respect to any
Individual Property will exceed fifteen percent (15%)
of the Allocated Loan
Amount for such Individual Property, Lender may require an inspection of such
Individual Property at Borrower’s expense prior to making a disbursement of
Capital Expenditure Funds in connection therewith. Such entry and inspection
shall be conducted in a manner that minimizes any interference with Borrower’s
business or the use and enjoyment of the affected Individual Property by
Borrower, Borrower’s tenants and Borrower’s tenants’ customers and guests.
Lender may require that such inspection be conducted by an appropriate
independent qualified professional selected by Lender and may require a
certificate of completion by an independent qualified professional architect,
engineer or consultant reasonably acceptable to Lender prior to the
disbursement of such Capital Expenditure Funds. Borrower shall pay the
reasonable out-of-pocket expense of the inspection as required hereunder,
whether such inspection is conducted by Lender or by an independent qualified
professional architect, engineer or consultant.


 


(f)                                    In addition to any insurance required
under the Loan Documents, Borrower shall provide or cause to be provided
workmen’s compensation insurance, builder’s risk, and public liability
insurance and other insurance to the extent required under applicable law in connection
with Capital Expenditures Work. All such policies shall be in form and amount
reasonably satisfactory to Lender.


 


(g)                                 In the event Lender releases an
Individual Property (or assigns the Mortgage encumbering such Individual
Property) as a result of the exercise of Borrower’s rights under Section 2.4,
Section 2.5  or Section 11.29
hereof, Lender shall direct Agent, and Agent shall, promptly following the
release of the Lien of the Mortgage (or the assignment of the Mortgage) with
respect to such Individual Property, deliver, or cause the delivery, to
Borrower from the Capital Expenditure Funds an amount equal to the Capital
Expenditure Funds on deposit which are in excess of the Capital Expenditure
Maximum Amount (as reduced due to such release), and the amount required to be
deposited pursuant to Section 6.4.1 shall be reduced
proportionately to reflect the reduced cubic footage of such released
Individual Property.


 


Section 6.5                                   Borrower Cash Collateral Funds.


 


6.5.1                     Deposits of Borrower
Cash Collateral Funds. From and after the occurrence of a Cash Trap Event and
during the continuance of a Cash Trap Period, Borrower shall deposit with Agent
all of the Borrower Excess Cash Flow (the “Borrower Cash
Collateral Funds”).


 


6.5.2                     Release of Borrower Cash
Collateral Funds. All Borrower Cash Collateral Funds on deposit shall be
released by Lender in accordance with the Cash Management Agreement when Lender
determines that a Cash Trap Period no longer exists.


 


Section 6.6                                   Intentionally Omitted.


 


Section 6.7                                   Intentionally Omitted.


 


Section 6.8                                   Application of Reserve Funds. Upon the occurrence and during the continuance of an Event of Default, Lender, at its option,
may withdraw the Reserve Funds and apply the Reserve Funds to the items for
which the Reserve Funds were established or to 


 


77

















 


payment of the Debt in such order,
proportion and priority as Lender may determine in its sole discretion. Lender’s
right to withdraw and apply the Reserve Funds shall be in addition to all other
rights and remedies provided to Lender under the Loan Documents.


 


Section 6.9                                   Security Interest in Reserve Funds.


 


6.9.1                     Grant of Security Interest. Borrower shall be the owner of the funds
on deposit in the Accounts. Borrower hereby pledges, assigns and grants a
security interest to Lender, as security for payment of the Debt and the
performance of all other terms, conditions and covenants of the Loan Documents
on Borrower’s part to be paid and performed, in all of Borrower’s right, title
and interest in and to the funds on deposit in the Accounts. The Reserve Funds
shall be under the sole dominion and control of Lender, and Lender shall hold
the Reserve Funds now or hereafter deposited in the Accounts subject to the
terms of this Agreement and the Cash Management Agreement. Notwithstanding
anything to the contrary contained herein or in the Cash Management Agreement
or any other Loan Document, Lender shall have no security interest or Lien in
any funds disbursed to Borrower in accordance with the Cash Management
Agreement following such disbursement.


 


6.9.2                     Income Taxes. The Reserve Funds shall be held in an
interest-bearing account and invested in Permitted Investments in accordance
with the terms of the Cash Management Agreement. Borrower shall report on its
federal, state and local income tax returns all interest or income accrued on
the Reserve Funds.


 


6.9.3                     Prohibition Against
Further Encumbrance. Borrower shall not, without the prior consent of
Lender, further pledge, assign or grant any security interest in the Reserve
Funds or permit any lien or encumbrance to attach thereto, or any levy to be
made thereon, or any UCC-1 Financing Statements, except those naming Lender as
the secured party, to be filed with respect thereto.


 


Section 6.10                            Intentionally Omitted.


 


Section 6.11                            Provisions Regarding Letters of Credit.


 


6.11.1              Security for Debt. Each Letter of Credit delivered under
this Agreement shall be additional security for the payment of the Debt. Upon
the occurrence and during the continuance of an Event of Default, Lender shall
have the right, at its option, to draw on any Letter of Credit and to apply all
or any part thereof to the payment of the items for which such Letter of Credit
was established or to apply each such Letter of Credit to payment of the Debt
in such order, proportion or priority as Lender may determine. Any such
application to the Debt shall be subject to the terms set forth in Section 2.3.3
and Section 2.4.3. On the Maturity Date, any such Letter of Credit
may be applied to reduce the Debt.


 


6.11.2              Additional Rights of
Lender. In
addition to any other right Lender may have to draw upon a Letter of Credit
pursuant to the terms and conditions of this Agreement, Lender shall have the
additional rights to draw in full any Letter of Credit: (a) with respect
to any evergreen Letter of Credit, if Lender has received a notice from the
issuing bank that the Letter of Credit will not be renewed and a substitute
Letter of Credit is not provided at least thirty (30) days prior to the date on
which the outstanding Letter of Credit is scheduled to expire; (b) with


 


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respect to any Letter of
Credit with a stated expiration date, if Lender has not received a notice from
the issuing bank that it has renewed the Letter of Credit at least thirty (30)
days prior to the date on which such Letter of Credit is scheduled to expire
and a substitute Letter of Credit is not provided at least thirty (30) days
prior to the date on which the outstanding Letter of Credit is scheduled to
expire; (c) upon receipt of notice from the issuing bank that the Letter
of Credit will be terminated (except if the termination of such Letter of
Credit is permitted pursuant to the terms and conditions of this Agreement or a
substitute Letter of Credit is provided); or (d) if Lender has received
notice that the bank issuing the Letter of Credit shall cease to be an Eligible
Institution, and Borrower shall have failed to provide a replacement Letter of
Credit within five (5) Business
Days thereof. Notwithstanding anything to the contrary contained in the above,
Lender is not obligated to draw any Letter of Credit upon the happening of an
event specified in (a), (b), (c) or (d) above and shall not be liable for
any losses sustained by Borrower due to the insolvency of the bank issuing the
Letter of Credit if Lender has not drawn the Letter of Credit. If any Letter of
Credit proceeds shall be disbursed to Lender hereunder, Borrower shall
thereafter be permitted to deliver to Lender, as a replacement for such cash
proceeds, either a Letter of Credit or Reserve Guaranty in the amount of the
cash proceeds then remaining after application in accordance with the terms
hereof, and Lender shall promptly disburse such remaining cash proceeds to
Borrower upon its receipt of such replacement Letter of Credit or Reserve
Guaranty.


 


Section 6.12                            Guaranty or
Letter of Credit in Lieu of Cash Deposit.  (a) In lieu of making cash deposits of
Required Repair Funds, Tax Funds, Insurance Funds and/or Capital Expenditure
Funds, Borrower may deliver to Lender one or more of the following: (i) a
guaranty from Guarantor in form and substance reasonably acceptable to Lender
(a “Reserve Guaranty”) or (ii) a Letter of Credit in accordance
with the provisions of this Section 6.12. Borrower shall be
responsible for the payment of all reasonable out-of-pocket costs and expenses
incurred by the Servicer in the administration of any Letter of Credit or
Reserve Guaranty delivered pursuant to this Section 6.12.


 


(b)                                 In the event Borrower elects to deliver a
Letter of Credit in lieu of making cash deposits of Required Repair Funds, Tax
Funds, Insurance Funds and/or Capital Expenditure Funds, the aggregate amount
of any Letter of Credit, Reserve
Guaranty and/or cash on deposit with respect to the Required Repair Funds, Tax
Funds, Insurance Funds and/or Capital Expenditure Funds shall at all times be
at least equal to the aggregate amount which Borrower is required to have on
deposit in such Reserve Fund(s) pursuant to this Agreement. The aggregate amount of any Letter of Credit,
Reserve Guaranty and/or cash on deposit with respect to the Tax Funds shall at
all times be at least equal to the aggregate which Borrower would be required
to deposit in such Reserve Fund over the next twelve (12) month period. The
aggregate amount of any Letter of Credit, Reserve Guaranty and/or cash on
deposit with respect to the Insurance Funds shall at all times be at least
equal to the aggregate which Borrower would be required to deposit in such
Reserve Fund over the next twelve (12) month period. In the event that a Letter
of Credit and/or Reserve Guaranty is delivered in lieu of any portion of the
Tax Funds or the Insurance Funds, Borrower shall be responsible for the payment
of Taxes or Insurance Premiums, as applicable, and Lender shall not be
responsible therefor.


 


(c)                                  Borrower shall give Lender no less than
thirty (30) days notice of Borrower’s election to deliver a Letter of Credit
pursuant to this Section 6.12 and Borrower shall pay to Lender all
of Lender’s reasonable out-of-pocket costs and expenses in connection 


 


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therewith. Borrower shall
not be entitled to draw from any such Letter of Credit. Upon thirty (30) days’
notice to Lender, Borrower may replace a Letter of Credit theretofore delivered
to Lender pursuant to this Section 6.12 with a cash deposit to the
applicable Reserve Fund and/or with a Reserve Guaranty. Prior to such
replacement of a Letter of Credit, to the extent same is not replaced with a
Reserve Guaranty, Borrower shall deposit an amount equal to the amount that
would have accumulated in the applicable Reserve Fund and not been disbursed in
accordance with this Agreement if such Letter of Credit had not been delivered.


 


(d)                                 Borrower shall provide Lender with notice
of any increases in the annual payments for Taxes and Insurance Premiums thirty
(30) days prior to the effective date of any such increase and any applicable
Letter of Credit under this Section 6.12 shall be increased by such
increased amount at least ten (10) days prior to the effective date of
such increase (unless such increase is covered by cash or a Reserve Guaranty).


 


VII.                            PROPERTY MANAGEMENT


 


Section 7.1                                   The Management
Agreement.  Borrower shall cause any Manager to
manage the Property in accordance with the Management Agreement. Borrower shall
(i) diligently perform and observe all of the material terms, covenants
and conditions of the Management Agreement on the part of Borrower to be
performed and observed, (ii) promptly notify Lender of any notice to
Borrower of any default by Borrower in the performance or observance of any of
the terms, covenants or conditions of the Management Agreement on the part of
Borrower to be performed and observed, and (iii) if Manager is not an
Affiliate of Borrower, promptly deliver to Lender a copy of each financial
statement, business plan, capital expenditures plan, report and estimate
received by it under the Management Agreement. If Borrower shall default in the
performance or observance of any material term, covenant or condition of any
Management Agreement on the part of Borrower to be performed or observed, then,
without limiting Lender’s other rights or remedies under this Agreement or the
other Loan Documents, and without waiving or releasing Borrower from any of its
obligations hereunder or under the Management Agreement, Lender shall have the
right, but shall be under no obligation, to pay any sums and to perform any act
as may be appropriate to cause all the material terms, covenants and conditions
of the Management Agreement on the part of Borrower to be performed or
observed.


 


Section 7.2                                   Prohibition
Against Termination or Modification.  Borrower shall not (i) surrender,
terminate or cancel any Management Agreement, unless (A) Borrower has
advised Lender of its intention to terminate the Manager, (B) the
replacement manager has delivered to Lender copies of an Assignment of
Management Agreement and a cash management agreement in substantially the form
of the Cash Management Agreement in each case executed by Borrower and
replacement manager and (C) the replacement manager is a Qualified
Manager, (ii) modify any Management Agreement in such a way that would
have a material adverse effect on the use, operation or value of the Property
or the ability of Borrower to pay its obligations in respect of the Loan, (iii) enter
into any other agreement with any Person for such Person to act as the manager
or operator of the Property, except as provided in this Section 7.2,
or (iv) consent to the Transfer by the Manager of its interest under the
Management Agreement except as provided in this Section 7.2, in
each case without the express consent of Lender, which consent shall not be
unreasonably withheld; provided, however, with respect to a new
manager (other than a 


 


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Qualified Manager), such consent may be
conditioned upon Borrower delivering a Rating Agency Confirmation as to such
new manager and management agreement. If at any time Lender consents to the
appointment of a new manager, or a new manager is appointed without Lender’s
consent being required, (a) such new manager and Borrower shall, as a
condition of Lender’s consent, if required, execute an Assignment of Management
Agreement and a cash management agreement in substantially the form of the Cash
Management Agreement and (b) if such new manager is an Affiliate of
Borrower, Borrower shall deliver a non-consolidation opinion acceptable to the
Rating Agencies.


 


Section 7.3                                   Replacement of
Manager.  Lender shall have the right to
require Borrower to replace any Manager with a Person which is not an Affiliate
of, but is chosen by, Borrower and approved by Lender (which approval, in the
case of a replacement due to the circumstances described in subsections (ii) and/or
(iii) of this Section 7.3, shall not be unreasonably withheld,
conditioned or delayed) upon the occurrence of any one or more of the following
events: (i) at any time following the acceleration of the Loan by Lender, (ii) if
Manager shall be in material default under the Management Agreement beyond any
applicable notice and cure period and/or (iii) if at any time the Manager
has engaged in gross negligence, fraud or willful misconduct.


 


Section 7.4                                   The Cash
Management Agency Agreement.  Lender shall have the
right to require Borrower to terminate the Cash Management Agency Agreement
upon the occurrence of any one or more of the following events: (i) at any
time following the acceleration of the Loan by Lender, (ii) if Borrower’s
counterparty to the Cash Management Agency Agreement shall be in material
default thereunder beyond any applicable notice and cure period and/or (iii) if
at any time such counterparty has engaged in gross negligence, fraud or willful
misconduct.


 


VIII.                        PERMITTED TRANSFERS


 


Section 8.1                                   Permitted
Transfer of Property.  The Loan may not be assumed in
connection with a Transfer of the Property until the earlier of (i) the
date on which one or more Secondary Market Transactions have been effected
resulting in UBS Real Estate Securities Inc. or its Affiliates holding none of
the Loan and (ii) the first anniversary of the date hereof. Thereafter,
Lender’s consent to a Transfer of the Property and assumption of the Loan, or
to a Transfer of all of the interests in Borrower, which Transfer is otherwise
prohibited hereunder, shall not be unreasonably withheld, provided that
the following requirements are satisfied:


 


(a)                                  Lender receives sixty (60) days’ prior
written notice of such Transfer;


 


(b)                                 no Event of Default has occurred and is
continuing and no Default or Event of Default shall occur as a result of such
Transfer;


 


(c)                                  Borrower shall pay Lender a transfer fee
which is payable to the Servicer equal to $25,000 at the time of such Transfer;
provided that no transfer fee shall be payable to the Lender or the Servicer
for the first such Transfer;


 


(d)                                 Borrower shall pay any and all reasonable
out-of-pocket costs incurred in connection with such Transfer (including,
without limitation, Lender’s reasonable counsel fees 


 


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and disbursements and all
recording fees, title insurance premiums and mortgage and intangible taxes and
the fees and expenses of the Rating Agencies pursuant to clause (l) below);


 


(e)           Transferee shall be a Qualified
Transferee;


 


(f)            Transferee must have demonstrated
expertise in owning and operating properties similar in location, size, class
and operation to the Property, which expertise shall be reasonably determined
by Lender;


 


(g)           Intentionally omitted;


 


(h)           If the Property is being transferred and
the Loan assumed, Transferee shall assume all of the obligations of Borrower
under the Loan Documents in a manner satisfactory to Lender in all respects,
including, without limitation, by entering into an assumption agreement in form
and substance reasonably satisfactory to Lender;


 


(i)            Transferee and the general partner of
Transferee (if Transferee is a limited partnership) or economic member of
Transferee (if Transferee is a limited liability company) must be able to
satisfy all the representations and covenants set forth in Section 3.1.8
(with respect to ERISA), Section 3.1.9 (with respect to Prescribed Laws), Sections
4.1.1 (with respect to Prescribed Laws) and Section 4.2.11
(with respect to ERISA) of this Agreement;


 


(j)            Transferee and the general partner of
Transferee (if Transferee is a limited partnership) or economic member of
Transferee (if Transferee is a limited liability company) shall deliver all
organizational documentation reasonably requested by Lender, which shall be
reasonably satisfactory to Lender;


 


(k)           Borrower shall have delivered a Rating
Agency Confirmation with respect to Transferee and the Transfer;


 


(l)            Borrower or Transferee, at its sole cost
and expense, shall deliver to Lender a bankruptcy nonconsolidation opinion
letter reflecting such Transfer reasonably satisfactory in form and substance
to Lender and acceptable to the Rating Agencies;


 


(m)          (i) in the event Guarantor has
executed and delivered any guaranty in connection with the Loan, prior to any
release of Guarantor from its liabilities and obligations thereunder, one (1) or
more substitute guarantors reasonably acceptable to Lender and acceptable to
the Rating Agencies (A) shall have assumed all of the liabilities and
obligations of Guarantor under such guaranties or (B) shall execute and
deliver a replacement guaranty reasonably satisfactory to Lender and acceptable
to the Rating Agencies and (ii) prior to any release of Guarantor from its
liabilities and obligations under the Environmental Indemnity, one (1) or
more substitute indemnitors reasonably acceptable to Lender and acceptable to
the Rating Agencies (A) shall have assumed all of the liabilities and
obligations of Guarantor under the Environmental Indemnity or (B) shall
execute and deliver a replacement environmental indemnity reasonably
satisfactory to Lender and acceptable to the Rating Agencies;


 


(n)           Borrower shall deliver, at its sole cost
and expense, an endorsement to the Title Insurance Policies, insuring the
Mortgage, as modified by the assumption agreement, as a 


 


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valid first lien on the
Property and naming the Transferee as owner of the Property, which endorsement
shall insure that, as of the date of the recording of the assumption agreement,
the Property shall not be subject to any additional exceptions or liens other
than those contained in the relevant Title Insurance Policy issued on the date
hereof and the Permitted Encumbrances relating thereto; and


 


(o)                                 each Individual Property shall be managed
by a Qualified Manager pursuant to a replacement management agreement
reasonably satisfactory to Lender.


 


The consent of the Lender to
a Transfer may be conditioned on, among other things, whether or not the
Transferee, the controlling principals of Transferee and all other entities
which may be owned or controlled directly or indirectly by Transferee’s
controlling principals (such principal and other entities, collectively, the “Related
Persons”) are Disqualified Transferees as of the date of the Transfer
(unless, with respect to any entity, the controlling principals of Transferee
did not own or control such entity at the time there occurred with respect to
such entity the event giving rise to it being regarded as a Disqualified
Transferee).


 


Immediately upon a Transfer
to such Transferee and the satisfaction of all of the above requirements, the
named Borrower and Guarantor herein shall be released from all liability under
this Agreement, the Note, the Mortgage and the other Loan Documents accruing
after such Transfer. The foregoing release shall be effective upon the date of
such Transfer, but Lender agrees to provide written evidence thereof reasonably
requested by Borrower.


 


Notwithstanding the
foregoing, nothing contained in this Agreement or the other Loan Documents
shall in any way restrict or prohibit, nor shall any notice to Lender or
consent of Lender be required in connection with, a Transfer effectuated in
compliance with the terms and provisions of
clause (A) or clause (B) contained in the last sentence of Section 8.2.


 


Section 8.2                                   Permitted
Transfers of Interest in Borrower.  A Transfer of (but not
a mortgage, pledge, hypothecation, encumbrance or grant of a security interest
in) a direct or indirect beneficial interest in Borrower or any SPC Party of
Borrower shall be permitted without Lender’s consent if (a) Lender
receives thirty (30) days’ prior written notice (or such shorter period of time
as may be permitted by Lender in its sole discretion) thereof and, to the
extent required to permit compliance by Borrower’s affiliates with Regulation
FD, agrees to regard and keep the same as Confidential, (b) Transferee and
its Related Persons must not be Disqualified Transferees as of the date of the Transfer; provided,
however, that in the event that the Transferee or any of its Related
Persons is a Disqualified Transferee, Lender shall not unreasonably withhold
its consent, and may consider such fact in making its determination, but such
fact shall not constitute the sole factor or reason for withholding its
consent, (c) immediately prior to such Transfer, no Event of Default shall
have occurred and be continuing (other than an Event of Default which would be
cured by such Transfer), (d) subsequent to such Transfer, Borrower and
each SPC Party continue to satisfy the conditions of Section 3.1.24,
(e) subsequent to such Transfer, Guarantor owns directly or indirectly
more than fifty percent (50%) of Borrower and each
SPC Party and controls Borrower and each SPC Party, and (f) if (i) such
Transfer causes Transferee to own, in the aggregate with the ownership
interests of its Affiliates, more than a 49% interest in Borrower or any SPC
Party (and Transferee together with its Affiliates did not, prior to such
Transfer, own more than a 49% interest in Borrower or such SPC 


 


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Party), or (ii) such Transfer,
together with all other Transfers of direct or indirect interest in Borrower or
any SPC Party, whether in a single Transfer or in a series of Transfers and
whether or not effected simultaneously, results in a transfer of more than 49%
of the aggregate ownership interests in Borrower or any SPC Party, an acceptable non-consolidation
opinion is delivered to Lender and to each of the Rating Agencies concerning,
as applicable, Borrower, each SPC Party, Transferee and/or their respective
owners. Notwithstanding the foregoing, nothing contained in this Agreement or
the other Loan Documents shall in any way restrict or prohibit, nor shall any
notice to Lender or consent of Lender or Rating Agency Confirmation (except as
expressly provided below) be required in connection with (A) the transfer,
mortgage, pledge, hypothecation, encumbrance or issuance of any ownership
interests or securities in VNO, VRLP, CEI, CRE, YAA, YAP or YCI or any Public
Company (or of any Persons owning an interest in any of the foregoing), (B) the
merger or consolidation of VNO, VRLP, CEI, CRE, YAA, YAP or YCI or any Public
Company with or into any other Person (or of any Persons owning an interest in
any of the foregoing), or a sale or transfer of all or substantially all of the
assets of VNO, VRLP, CEI, CRE, YAA, YAP or YCI or of any Public Company (or of
any Persons owning an interest in any of the foregoing), (C) the transfer,
mortgage, pledge, hypothecation or encumbrance of any ownership interests or
securities in Guarantor between or among VNO, VRLP, CEI, CRE, YAA, YAP and YCI
(or one or more entities owned and controlled by any one or more of the
foregoing), (D) the issuance of any ownership interests or securities in
Guarantor so long as Guarantor (or its permitted successor) or its direct or
indirect owner is or, in connection with such issuance, becomes, a Public
Company, and (E) the merger or consolidation of Guarantor or its direct or
indirect owner with or into any other Person, provided that the
surviving entity of such merger or consolidation or its direct or indirect
owner is a Public Company; provided further that, if, after giving effect to
any transaction described under clause (D) or (E), VNO, VRLP, CEI, CRE,
YAA, YAP and/or YCI would own in the aggregate, directly or indirectly, less
than fifty-one percent (51%) interest of Borrower or any SPC Party or would not
control Borrower and each SPC Party, Borrower shall have obtained a Rating
Agency Confirmation.


 


IX.                                SALE AND
SECURITIZATION OF MORTGAGE


 


Section 9.1                                   Sale of Mortgage and Securitization; Loan
Components; Mezzanine Loans. (a)  Subject to the limitations in Section 11.27,
Lender shall have the right (i) to sell or otherwise transfer the Loan or
any portion thereof as a whole loan, (ii) to sell participation interests
in the Loan or (iii) to securitize the Loan or any portion thereof in a
single-asset securitization or a pooled-loan securitization. The transactions
referred to in clauses (i), (ii) and (iii) shall hereinafter be
referred to collectively as “Secondary Market Transactions” and the
transactions referred to in clause (iii) shall hereinafter be referred to
as a “Securitization”. Any certificates, notes or other securities
issued in connection with a Securitization are hereinafter referred to as “Securities”.


 


(b)                                 If requested by Lender, Borrower shall
use reasonable efforts to assist Lender in satisfying the market standards to
which Lender customarily adheres or which may be reasonably required in the
marketplace or by the Rating Agencies in connection with any Secondary Market Transactions, including, without
limitation, to:


 


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(i)                                     (A) provide updated financial and
other information with respect to the Property, the business operated at the
Property, Borrower and the Manager, (B) provide updated budgets relating
to the Property and (C) provide updated appraisals, market studies,
environmental reviews (Phase I’s and, if appropriate, Phase II’s), property
condition reports and other due diligence investigations of the Property (the “Updated
Information”), together, if customary, with appropriate verification of the
Updated Information through letters of auditors or opinions of counsel
reasonably acceptable to Lender and acceptable to the Rating Agencies;


 


(ii)                                  provide opinions of counsel, which may be
relied upon by Lender, the Rating Agencies and their respective counsel, agents
and representatives, as to non-consolidation, fraudulent conveyance, and true
sale or any other opinion customary in Secondary Market Transactions or
required by the Rating Agencies with respect to the Property and Borrower and
Affiliates, which counsel and opinions shall be reasonably satisfactory to
Lender and satisfactory to the Rating Agencies;


 


(iii)                               provide updated, as of the closing date
of the Secondary Market Transaction if such closing date is more than six (6) months
after the date hereof, representations and warranties made in the Loan
Documents and such additional representations and warranties as the Rating
Agencies may reasonably require, in each case, with such modifications as are
necessary to make such representations and warranties true in all material
respects; and


 


(iv)                              execute amendments to the Loan Documents
and Borrower’s organizational documents reasonably requested by Lender;
provided, however, that Borrower shall not be required to modify or amend (A) any
Loan Document if such modification or amendment would change the interest rate,
the stated maturity or the amortization of principal as set forth herein or in
the Note, or (B) any Loan Document or organizational document of Borrower
if in the reasonable judgment of Borrower the same would modify or amend any
other material economic term of the Loan, increase Borrower’s obligations or
liabilities thereunder in any material respect, adversely effect any right of
Borrower under the Loan Documents in any material respect or have a material
adverse effect on the manner in which Borrower operates its business.


 


(c)                                  Borrower covenants and agrees that, upon
Lender’s request, Borrower shall deliver one or more new component notes
to replace the original note or modify the original note to reflect multiple
components of the Loan or create one or more new mezzanine loans (including
amending Borrower’s organizational structure to provide
for one or more new
mezzanine borrowers) (each a “Resizing Event”). Lender agrees that such
new notes, modified notes or mezzanine notes shall immediately after the
Resizing Event have the same initial weighted average
interest rate as the
original note immediately prior to such Resizing Event. Such new notes,
modified notes or mezzanine notes may allocate principal and interest rates of the
Loan between or among such new components and/or mezzanine loans in a manner
specified by Lender in its sole discretion; provided that, unless an
Event of Default has occurred and is then continuing, all prepayments with
respect to such new notes or modified note or mezzanine notes shall be applied
on a pro rata basis. In connection with any Resizing Event, Borrower covenants
and agrees to modify and amend the Cash Management Agreement, and execute 


 


85

















 


amendments to the Loan
Documents and Borrower’s organizational documents reasonably requested by
Lender; provided, however, that Borrower shall not be required to
modify or amend any Loan Document or organizational document of Borrower if in
the reasonable judgment of Borrower the same would increase Borrower’s monetary
obligations, modify or amend any other material economic term of the Loan,
increase Borrower’s other obligations or liabilities thereunder in any material
respect, adversely affect any right of Borrower under the Loan Documents in any
material respect or have a material adverse effect on the manner in which
Borrower operates its business.


 


(d)                                 Notwithstanding anything herein or in any
other Loan Document to the contrary, (i) all reasonable out-of-pocket
costs and expenses (other than the first $4,592
of legal fees) actually incurred by Borrower or its Affiliates in
connection with Borrower’s complying with requests made under this Section 9.1
shall be paid by Lender and (ii) Lender shall pay all other costs and
expenses incurred by any other parties in connection with any action contemplated
by this Section 9.1.


 


(e)                                  Nothing contained in this Agreement or in
the other Loan Documents shall restrict Lender from requesting that Borrower
deliver to Lender information regarding tenants or customers at the Property
and the impact such tenants or customers have or may have on the Gross Revenue
of the Property; provided, however, that Borrower shall not be
required to deliver specific information concerning the specific pricing
structure applicable to any tenant or customer..


 


Section 9.2                                   Securitization
Indemnification. (a)   Borrower understands that
information provided to Lender by Borrower and its agents, counsel and
representatives may be included in disclosure documents in connection with the
Securitization, including, without limitation, an offering circular, a
prospectus, prospectus supplement, private placement memorandum or other
offering document (each, an “Disclosure Document”) and may also be
included in filings with the Securities and Exchange Commission pursuant to the
Securities Act of 19337 as amended (the “Securities Act”), or the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”),
and may be made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization.


 


(b)                                 Borrower shall provide in connection with
each of (i) a preliminary and a final private placement memorandum or (ii) a
preliminary and final prospectus or prospectus supplement, as applicable, an
agreement (the entering into of which shall be at no cost to Borrower) (A) certifying
that Borrower has examined those portions of such Disclosure Documents
specified by Lender for Borrower’s review pertaining to Borrower, Borrower’s
Affiliates, Manager or the Loan and that each such Disclosure Document, as it
relates to sections of the Disclosure Documents specified with reasonable
specificity by Lender relating to Borrower, Borrower’s Affiliates, the
Property, Manager and any material aspects of the Loan, does not (except to the
extent specified by Borrower if Borrower does not agree with the statements
therein) contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading, (B) indemnifying
Lender (and for purposes of this Section 9.2, Lender hereunder
shall include its officers and directors), the Affiliate of Lender that has
filed the registration statement relating to the Securitization (the “Registration
Statement”), each of its 


 


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directors, each of its
officers who have signed the Registration Statement and each Person that
controls the Affiliate within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (collectively, the “Lender Group”),
and Lender, and any other placement agent or underwriter with respect to the
Securitization, each of their respective directors and each Person who controls
Lender or any other placement agent or underwriter within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act (collectively;
the “Underwriter Group”) for any losses, claims, damages or liabilities,
including reasonable attorneys’ fees and disbursements, other than those
arising out of the gross negligence, willful misconduct or bad faith of any of
the foregoing proposed indemnitees (collectively, the “Liabilities”) to
which Lender, the Lender Group or the Underwriter Group may become subject insofar
as the Liabilities arise out of or are based upon any untrue statement of any
material fact contained in such sections or arise out of or are based upon the
omission to state therein a material fact required to be stated in such
sections or necessary in order to make the statements in such sections, in
light of the circumstances under which they were made, not misleading (except
that (x) Borrower’s obligation to indemnify in respect of any information
contained in such sections that is derived in part from information provided by
Borrower and in part from information provided by others unrelated to or not
employed by Borrower shall be limited
to any untrue
statement or omission of material fact therein known to Borrower that results
from an error in any information provided (or which should
have been provided)
by Borrower which Borrower has been given the opportunity to examine and
reasonably and promptly approve (Borrower hereby confirms that it has reviewed
and approved each of the appraisals, engineering, environmental and asbestos
reports prepared by third parties in connection with the Loan) and (y) Borrower
shall have no responsibility for the failure of any member of the Underwriting
Group to accurately transcribe written information supplied by Borrower or the
refusal of any member of the Underwriting Group to include any written
information supplied by Borrower after an explicit direction from Borrower to
do so) and (C) agreeing to reimburse Lender, the Lender Group and/or the
Underwriter Group for any legal or other expenses reasonably incurred by
Lender, the Lender Group and the Underwriter Group in connection with
investigating or defending the Liabilities to the extent that such legal or
other expenses are incurred in connection with matters for which Borrower has
agreed to indemnify the Underwriter Group herein; provided, however,
that Borrower will be liable in any such case under clauses (B) or (C) above
only to the extent that any such loss, claim, damage or liability arises out of
or is based upon any such untrue statement or omission made therein in reliance
upon and in conformity with information furnished to Lender by or on behalf of
Borrower in connection with the preparation of the Disclosure Document or in
connection with the underwriting or closing of the Loan, including, without
limitation, financial statements of Borrower, operating statements and major
customer lists with respect to the Property and not subsequently retracted or
modified in whole or in part so as to eliminate the misstatement or omission in
question prior to any Securitization. This indemnity agreement will be in
addition to any liability which Borrower may otherwise have.


 


(c)                                  Intentionally Omitted.


 


(d)                                 Promptly after receipt by an indemnified
party under this Section 9.2 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 9.2, notify
the indemnifying party in writing of the commencement thereof, but the omission
to so notify the 


 


87

















 


indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein
and, to the extent that it (or they) may elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from the indemnifying
party to such indemnified party under this Section 9.2, such
indemnified party shall pay for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there are any legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
at the cost of the indemnifying party. The indemnifying party shall not be
liable for the expenses of more than one separate counsel unless an indemnified
party shall have reasonably concluded that there may be legal defenses
available to it that are different from or additional to those available to
another indemnified party.


 


(e)                                  In order to provide for just and equitable
contribution in. circumstances in which the indemnity agreement provided for in
Section 9.2(b) is for any reason held to be unenforceable as
to an indemnified party in respect of any losses, claims, damages or
liabilities (or action in respect thereof) referred to therein which would
otherwise be indemnifiable under Section 9.2(b), the indemnifying
party shall contribute to the amount paid or payable by the indemnified party
as a result of such losses, claims, damages or liabilities (or action in respect
thereof); provided, however, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. In addition, no right of
contribution may be enforced by any party who shall have committed gross
negligence or willful misconduct in connection with the actions or omissions
that led to such liability against any party who was not guilty of such gross
negligence or willful misconduct in connection with the actions or omissions
that led to such liability. In determining the amount of contribution to which
the respective parties are entitled, the following factors shall be considered:
(i) the applicable Lender’s and Borrower’s relative knowledge and access
to information concerning the matter with respect to which the claim was
asserted; (ii) the opportunity to correct and prevent any statement or
omission; (iii) the responsibilities and obligations of Borrower specified
herein; and (iv) any other equitable considerations appropriate in the
circumstances. Lender and Borrower hereby agree that it would not be equitable
if the amount of such contribution were determined by pro rata or per capita
allocation.


 


(f)                                    The liabilities and obligations of both
Borrower and Lender under this Section 9.2 shall survive the
termination of this Agreement and the satisfaction and discharge of the Debt.


 


88






 










 


X.                                    DEFAULTS


 


Section 10.1                            Event of
Default. (a) Each of the following events shall constitute an event of
default hereunder (an “Event of Default”):


 


(i)                                     if (A) the payment due on the
Maturity Date is not paid when due, (B) if any monthly installment of interest
due under the Note (other than the payment due on the Maturity Date) is not
paid on or prior to the applicable Monthly Payment Date; provided that
it shall not be an Event of Default if a monthly installment of interest is not
paid when due if there are sufficient sums on deposit in the Debt Service
Account (as defined in the Cash Management Agreement) for payment of such
amounts and Lender’s access to such funds has not been inhibited or prevented
in any manner whatsoever due to circumstances or events which are directly or
indirectly caused by or otherwise relate to any actions or omissions of
Borrower or any of its Affiliates, or (C) any other portion of the Debt is
not paid when due and such non-payment continues for five (5) days
following notice to Borrower that the same is due and payable;


 


(ii)                                  if any of the Taxes or Other Charges are
not paid when due, provided that it shall not be an Event of Default if
Taxes are not paid when due if there are sufficient sums on deposit in the Tax
Account (as defined in the Cash Management Agreement) for payment of such
amounts and Lender’s access to such funds has not been inhibited or prevented
in any manner whatsoever due to circumstances or events which are directly or
indirectly caused by or otherwise relate to any actions or omissions of
Borrower or any of its Affiliates;


 


(iii)                               if the Policies are not kept in full
force and effect;


 


(iv)                              if Borrower breaches or permits or suffers a breach of Section 4.2.1;


 


(v)                                 if any representation or warranty made by
Borrower herein or in any other Loan Document, or in any material
report, certificate, financial statement or other instrument, agreement or
document furnished to Lender shall have been false or misleading in any
material respect as of the date the representation or warranty was made and,
with respect to any such breach which is not the subject of any other
subsection of this Section 10.1(a) and which is capable of
being cured, Borrower fails to remedy such condition within ten (10) days
following notice to Borrower from Lender, in the case of any such breach which
can be cured by the payment of a sum of money, or within thirty (30) days
following notice from Lender in the case of any other such breach; provided,
however, that if such non-monetary breach is susceptible of cure but
cannot reasonably be cured within such 30-day period and provided further that
Borrower shall have commenced to cure such breach within such 30-day period and
thereafter diligently and expeditiously proceeds to cure the same, such 30-day
period shall be extended for such time as is reasonably necessary for Borrower
in the exercise of due diligence to cure such breach, such additional period
not to exceed sixty (60) days plus time permitted for Excusable Delays;


 


89

















 


(vi)                              if Borrower, any SPC Party or Guarantor
shall make an assignment for the benefit of creditors;


 


(vii)                           if a receiver, liquidator or trustee
shall be appointed for Borrower, any SPC Party or Guarantor or if Borrower, any
SPC Party or Guarantor shall be adjudicated a bankrupt or insolvent, or if any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, Borrower, any SPC Party or
Guarantor, or if any proceeding for the dissolution or liquidation of Borrower,
any SPC Party or Guarantor shall be instituted; provided, however,
if such appointment, adjudication, petition or proceeding was involuntary and
not consented to by Borrower, any -SPC Party or Guarantor, upon the same not
being discharged, stayed or dismissed within ninety (90) days;


 


(viii)                        if Borrower attempts to assign its rights
under this Agreement or any of the other Loan Documents or any interest herein
or therein in contravention of the Loan Documents;


 


(ix)                                if any of the assumptions contained in (A) the
Insolvency Opinion, (B) any other non-consolidation opinion delivered to
Lender in connection with the Loan or (C) any other non-consolidation
opinion delivered subsequent to the closing of the Loan is or shall become
untrue in any material respect;


 


(x)                                   if Borrower breaches in any material
respect any representation, warranty or covenant contained in Section 3.1.24
hereof;


 


(xi)                                if Borrower breaches any of the negative
covenants contained in Section 4.2.12 hereof;


 


(xii)                             a Cross Event of Default has occurred and
is continuing;


 


(xiii)                          intentionally omitted;


 


(xiv)                         if Guarantor breaches in any material
respect any covenant, warranty or representation contained in any guaranty
executed and delivered by Guarantor in connection with the Loan and such breach
is not cured to Lender’s satisfaction within fifteen (15) days of notice to
Guarantor from Lender;


 


(xv)                            intentionally omitted;


 


(xvi)                         if at any time during the term of the
Loan an Alteration Guaranty is delivered pursuant to the terms of this
Agreement and the guarantor thereunder (other than Guarantor) fails to maintain
an Investment Grade Rating (a “Downgrade Event”) and Borrower fails to
deliver (A) a replacement Alteration Guaranty in an amount equal to the
amount of the “Guaranteed Obligations” under such Alteration Guaranty from
Guarantor or a guarantor with an Investment Grade Rating or (B) Alteration
Security within ten (10) Business Days of the occurrence of the applicable
Downgrade Event;


 


90

















 


(xvii)                      intentionally omitted;


 


(xviii)                   if Borrower shall continue to be in
Default under any of the other terms, covenants or conditions of this Agreement
or any other Loan Document not specified in subsections (i) to (xvii)
above, for ten (10) days after notice to Borrower from Lender, in the case
of any Default which can be cured by the payment of a sum of money, or for
thirty (30) days after notice from Lender in the case of any other Default; provided,
however, that if such non-monetary Default is susceptible of cure but
cannot reasonably be cured within such 30-day period and provided further that
Borrower shall have commenced to cure such Default within such 30-day period
and thereafter diligently and expeditiously proceeds to cure the same, such
30-day period shall be extended for such time as is reasonably necessary for
Borrower in the exercise of due diligence to cure such Default, such additional
period not to exceed sixty (60) days plus time permitted for Excusable Delays;
or


 


(xix)                           if any other such event shall occur or
condition shall exist, if the effect of such event or condition is to
accelerate the maturity of any portion of the Debt or to permit Lender to
accelerate the maturity of all or any portion of the Debt.


 


(b)                                 Upon the occurrence of an Event of
Default (other than an Event of Default described in clauses (vi), (vii) or
(viii) above) and at any time thereafter Lender may, in addition to any
other rights or remedies available to it pursuant to this Agreement and the
other Loan Documents or at Jaw or in equity, take such action, without notice
or demand, that Lender deems advisable to protect and enforce its rights against
Borrower and in and to the. Property, including, without limitation, declaring
the Debt to be immediately due and payable, and Lender may enforce or avail
itself of any or all rights or remedies provided in the Loan Documents against
Borrower and the Property, including, without limitation, all rights or
remedies available at law or in equity; and upon any Event of Default described
in clauses (vi), (vii) or (viii) above, the Debt and all other
obligations of Borrower hereunder and under the other Loan Documents shall
immediately and automatically become due and payable, without notice or demand,
and Borrower hereby expressly waives any such notice or demand, anything
contained herein or in any other Loan Document to the contrary notwithstanding.


 


Section 10.2                            Remedies. (a)   Upon the occurrence
and during the continuance of an Event of Default, all or any one or more of
the rights, powers, privileges and other remedies available to Lender against
Borrower under this Agreement or any of the other Loan Documents executed and
delivered by, or applicable to, Borrower or at law or in equity may be
exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared due and payable, and whether or not Lender
shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to the Property. Any such actions taken by Lender shall be cumulative
and concurrent and may be pursued independently, singly, successively, together
or otherwise, at such time and in such order as Lender may determine in its
sole discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
Without limiting the generality of the foregoing, if an Event of Default is
continuing (i) Lender is not subject to any “one action” or “election of
remedies” law or rule, and (ii) all 


 


91

















 


liens and other rights, remedies or
privileges provided to Lender shall remain in full force and effect until
Lender has exhausted all of its remedies against the Property and the Mortgage
has been foreclosed, sold and/or otherwise realized upon in satisfaction of the
Debt or the Debt has been paid in full.


 


(b)                                 Upon the occurrence and during the
continuance of an Event of Default, Lender shall have the right from time to
time to partially foreclose the Mortgage in any manner and for any amounts
secured by the Mortgage then due and payable as determined by Lender in its
sole discretion including, without limitation, the following circumstances: (i) in
the event Borrower defaults beyond any applicable grace period in the payment
of one or more scheduled payments of principal and interest, Lender may
foreclose the Mortgage to recover such delinquent payments, or (ii) in the
event Lender elects to accelerate less than the entire outstanding principal
balance of the Loan, Lender may foreclose the Mortgage to recover so much of
the principal balance of the Loan as Lender may accelerate and such other sums
secured by the Mortgage as Lender may elect. Notwithstanding one or more
partial foreclosures, the Property shall remain subject to the Mortgage to
secure payment of sums secured by the Mortgage and not previously recovered.


 


(c)                                  Lender shall have the right from time to
time to sever the Note and the other Loan Documents into one or more separate
notes, mortgages and other security documents (the “Severed Loan Documents”)
in such denominations as Lender shall determine in its sole discretion for
purposes of evidencing and enforcing its rights and remedies provided
hereunder. Borrower shall execute and deliver to Lender from time to time,
promptly after the request of Lender, a severance agreement and such other
documents as Lender shall request in order to effect the severance described in
the preceding sentence, all in form and substance reasonably satisfactory to
Lender. Borrower hereby absolutely and irrevocably appoints Lender as its true
and lawful attorney, coupled with an interest, in its name and stead to make
and execute all documents necessary or desirable to effect the aforesaid severance,
Borrower ratifying all that its said attorney shall do by virtue thereof, provided,
however, Lender shall not make or execute any such documents under such
power until three (3) days after notice has been given to Borrower by
Lender of Lender’s intent to exercise its rights under such power. Borrower
shall not be obligated to pay any costs or expenses incurred in connection with
the preparation, execution, recording or filing of the Severed Loan Documents.
The Severed Loan Documents shall contain only provisions which are
substantially similar to those contained in the Loan Documents (except to
reflect reductions in principal) and which do not have any material adverse
effect on Borrower’s rights or obligations thereunder in any material respect
or increase Borrower’s monetary obligations thereunder in any material respect
or the operation of its business and any representations and warranties
contained in the Severed Loan Documents will be given by Borrower only as of
the date hereof.


 


(d)                                 Any amounts recovered from the Property
or any other collateral for the Loan after an Event of Default may be applied
by Lender toward the payment of any interest anchor principal of the Loan
and/or any other amounts due under the Loan Documents in such order, priority and
proportions as Lender in its sole discretion shall determine; provided, however,
that Borrower shall not be liable for the misapplication of any amounts
recovered and applied by Lender in its sole discretion.


 


92

















 


Section 10.3                            Right to Cure
Defaults.  Upon the occurrence and during the
continuance of an Event of Default, Lender may, but without any obligation to
do so and without notice to or demand on Borrower and without releasing
Borrower from any obligation hereunder or being deemed to have cured any Event
of Default hereunder, make, do or perform any obligation of Borrower hereunder
in such manner and to such extent as Lender may deem necessary in respect of
such Event of Default. Lender is authorized to enter upon the Property for such
purposes, or appear in, defend, or bring any action or proceeding to protect
its interest in the Property for such purposes, and the cost and expense
thereof (including reasonable attorneys’ fees to the extent permitted by law),
with interest as provided in this Section 10.3, shall constitute a portion
of the Debt and shall be due and payable to Lender upon demand. All such costs
and expenses incurred by Lender in remedying such Event of Default or such
failed payment or act or in appearing in, defending, or bringing any action or
proceeding shall bear interest at the Default Rate, for the period after such
cost or expense was incurred into the date of payment to Lender. All such costs
and expenses incurred by Lender together with interest thereon calculated at
the Default Rate shall be deemed to constitute a portion of the Debt and be
secured by the liens, claims and security interests provided to Lender under
the Loan Documents and shall be immediately due and payable upon demand by
Lender therefore.


 


Section 10.4                            Remedies
Cumulative. The rights, powers and remedies of Lender under this
Agreement shall be cumulative and not exclusive of any other right, power or
remedy which Lender may have against Borrower pursuant to this Agreement or the
other Loan Documents, or existing at law or in equity or otherwise. Lender’s
rights, powers and remedies may be pursued singly, concurrently or otherwise,
at such time and in such order as Lender may determine in Lender’s sole
discretion. No delay or omission to exercise any remedy, right or power
accruing upon an Event of Default shall impair any such remedy, right or power
or shall be construed as a waiver thereof, but any such remedy, right or power
may be exercised from time to time and as often as may be deemed expedient. A
waiver of one Default or Event of Default with respect to Borrower shall not be
construed to be a waiver of any subsequent Default or Event of Default by
Borrower or to impair any remedy, right or power consequent thereon.


 


XI.                                MISCELLANEOUS


 


Section 11.1                            Successors and
Assigns. All covenants, promises and agreements in this Agreement shall inure to
the benefit of the legal representatives, successors and assigns of the parties
hereto.


 


Section 11.2                            Lender’s
Discretion. Whenever pursuant to this Agreement Lender exercises any
right given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Lender (which discretion shall be exercised in good faith) and shall be
final and conclusive. Prior to a Securitization, whenever pursuant to this
Agreement the Rating Agencies are given any right to approve or disapprove, or
any arrangement or term is to be satisfactory to the Rating Agencies, the
decision of Lender to approve or disapprove or to decide whether arrangements
or terms are satisfactory or not satisfactory, based upon Lender’s
determination of Rating Agency criteria, shall be substituted therefore.


 


93

















 


Section 11.3                            Governing Law. (A) THIS AGREEMENT
WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY LENDER AND
ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN
DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH
STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO
THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS
AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA,
EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND
ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED PURSUANT HERETO AND
PURSUANT TO THE OTHER LOAN DOCUMENTS (OTHER THAN WITH RESPECT TO LIENS AND
SECURITY INTERESTS IN PROPERTY WHOSE PERFECTION AND PRIORITY IS COVERED BY
ARTICLE 9 OF THE UCC (EXCLUDING FIXTURES AND INCLUDING, WITHOUT LIMITATION, THE
ACCOUNTS) WHICH SHALL BE GOVERNED BY THE LAW OF THE JURISDICTION APPLICABLE
THERETO IN ACCORDANCE WITH SECTIONS 9-301 THROUGH 9-307 OF THE UCC AS IN EFFECT
IN THE STATE OF NEW YORK) SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE
LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING
UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF
NEW YORK SHALL GOVERN
THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE
OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER AND LENDER
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY CLAIM TO ASSERT THAT THE LAW
OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTE AND THE OTHER LOAN
DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW EXCEPT
AS SPECIFICALLY SET FORTH ABOVE.


 


(B) ANY
LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER
OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402
OF THE NEW YORK GENERAL OBLIGATIONS LAW AND LENDER
AND BORROWER EACH WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER AND LENDER HEREBY IRREVOCABLY 


 


94

















 


SUBMIT
TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:


 


CT
CORPORATION


111
EIGHTH AVENUE, 13TH FLOOR


NEW
YORK, NEW YORK 10011


 


AS ITS
AUTHORIZED AGENT TO ACCEPT
AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE
SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN
NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO
BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY
CHANGED ADDRESS OF ITS AUTHORIZED
AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM
TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW
YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS
AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED
WITHOUT LEAVING A SUCCESSOR.


 


Section 11.4                            Modification,
Waiver in Writing. No modification, amendment, extension, discharge,
termination or waiver of any provision of this Agreement or of any other Loan
Document, nor consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in a writing signed by the party
against whom enforcement is sought, and then such waiver or consent shall be
effective only in the specific instance, and for the purpose, for which given.
Except as otherwise expressly provided herein, no notice to, or demand on
Borrower, shall entitle Borrower to any other or future notice or demand in the
same, similar or other circumstances. UNDER OREGON LAW, MOST AGREEMENTS,
PROMISES AND COMMITMENTS MADE BY THE PARTIES HERETO CONCERNING LOANS AND OTHER
CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR
SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS
CONSIDERATION AND BE SIGNED BY THE PARTIES HERETO TO BE ENFORCEABLE.


 


Section 11.5                            Delay Not a
Waiver. Neither any failure nor any delay on the part of Lender in insisting
upon strict performance of any term, condition, covenant or agreement, or
exercising any right, power, remedy or privilege hereunder, or under any other
Loan Document, shall operate as or constitute a waiver thereof, nor shall a
single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Agreement or any other Loan Document, Lender shall not be
deemed to have waived any right either to require prompt payment when due of
all other amounts due 


 


95

















 


under this Agreement or the other
Loan Documents, or to declare a default for failure to effect prompt payment of
any such other amount. Lender shall have the right to waive or reduce any time
periods that Lender is entitled to under the Loan Documents in its sole and
absolute discretion.


 


Section 11.6                            Notices. All notices, demands,
requests, consents, approvals or other communications (any of the foregoing, a “Notice”)
required, permitted, or desired to be given hereunder shall be in writing sent
by telefax (with answer back acknowledged) or by registered or certified mail,
postage prepaid, return receipt requested, or delivered by hand or reputable
overnight courier addressed to the party to be so notified at its address
hereinafter set forth, or to such other address as such party may hereafter
specify in accordance with the provisions of this Section 11.6.  Any Notice shall be deemed to have been
received: (a) three (3) days after the date such Notice is mailed, (b) on
the date of sending by telefax if sent during business hours on a Business Day
(otherwise on the next Business Day), (c) on the date of delivery by hand
if delivered during business hours on a Business Day (otherwise on the next
Business Day), and (d) on the next Business Day if sent by an overnight
commercial courier, in each case addressed to the parties as follows:


 


	
   

  	
  If
  to Lender:

  	
   

  	
  UBS
  Real Estate Securities Inc.

  
	
   

  	
   

  	
   

  	
  1285
  Avenue of the Americas

  
	
   

  	
   

  	
   

  	
  New
  York, New York 10019

  
	
   

  	
   

  	
   

  	
  Attention:
  Jeffrey N. Lavine

  
	
   

  	
   

  	
   

  	
  Facsimile No.: (212) 713-4062

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
   

  	
  Cadwalader,
  Wickersham & Taft LLP

  
	
   

  	
   

  	
   

  	
  One
  World Financial Center

  
	
   

  	
   

  	
   

  	
  New
  York, New York 10281

  
	
   

  	
   

  	
   

  	
  Attention:
  Steven M. Herman, Esq.

  
	
   

  	
   

  	
   

  	
  Facsimile
  No.: (212) 504-6666

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If
  to Borrower:

  	
   

  	
  c/o  AmeriCold
  Logistics, LLC

  
	
   

  	
   

  	
   

  	
  10
  Glenlake Parkway, Suite 800

  
	
   

  	
   

  	
   

  	
  Atlanta,
  Georgia 30328

  
	
   

  	
   

  	
   

  	
  Attention:
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
  Facsimile
  No: (678) 441-6852

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
   

  	
  c/o  Crescent Real
  Estate Equities

  
	
   

  	
   

  	
   

  	
  777
  Main Street, Suite 2100

  
	
   

  	
   

  	
   

  	
  Fort
  Worth, Texas 76102

  
	
   

  	
   

  	
   

  	
  Attention:
  David Dean, Executive Vice President - Law

  
	
   

  	
   

  	
   

  	
  Facsimile
  No: (817) 321-2929

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
   

  	
  c/o  Yucaipa
  American Alliance Fund I, LP

  
	
   

  	
   

  	
   

  	
  9130
  West Sunset Boulevard

  
	
   

  	
   

  	
   

  	
  Los
  Angeles, California 90069

  
	
   

  	
   

  	
   

  	
  Attention:
  Legal Department

  
	
   

  	
   

  	
   

  	
  Facsimile
  No.: (310) 789-1791

  



 


96

















 


	
   

  	
  with
  a copy to:

  	
   

  	
  c.o  Yucaipa
  Corporate Initiatives Fund I, LP

  
	
   

  	
   

  	
   

  	
  9130
  West Sunset Boulevard

  
	
   

  	
   

  	
   

  	
  Los
  Angeles, California 90069

  
	
   

  	
   

  	
   

  	
  Attention:
  Legal Department

  
	
   

  	
   

  	
   

  	
  Facsimile
  No.: (310) 789-1791

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
   

  	
  c/o  Vornado
  Realty Trust 888 Seventh Avenue

  
	
   

  	
   

  	
   

  	
  New
  York, New York 10019

  
	
   

  	
   

  	
   

  	
  Attention:
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
  Facsimile
  No.: (201) 843-2198

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
   

  	
  Sullivan &
  Cromwell LLP

  
	
   

  	
   

  	
   

  	
  125
  Broad Street

  
	
   

  	
   

  	
   

  	
  New
  York, New York 10004

  
	
   

  	
   

  	
   

  	
  Attention:
  Arthur S. Adler, Esq.

  
	
   

  	
   

  	
   

  	
  Facsimile
  No.: (212) 558-3588

  



 


Section 11.7                            Trial by Jury. BORROWER AND LENDER EACH
HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY
JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH
RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY
CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER
AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH
ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH
PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER.


 


Section 11.8                            Headings. The Article and/or
Section headings and the Table of Contents in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose.


 


Section 11.9                            Severability. Wherever possible,
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.


 


Section 11.10                     Preferences. Lender shall have the
continuing and exclusive right to apply or reverse and reapply any and all
payments by Borrower to any portion of the obligations of Borrower hereunder To
the extent Borrower makes a payment or payments to Lender, which payment or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,  common law or equitable cause,
then, to the 


 


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extent of such payment or proceeds
received, the obligations hereunder or part thereof intended to be satisfied
shall be revived and continue in full force and effect, as if such payment or
proceeds had not been received by Lender.


 


Section 11.11                     Waiver of
Notice. Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Agreement or the other Loan Documents
specifically and expressly provide for the giving of notice by Lender to
Borrower and except with respect to matters for which Borrower is not, pursuant
to applicable Legal Requirements, permitted to waive the giving of notice.
Borrower hereby expressly waives the right to receive any notice from Lender
with respect to any matter for which this Agreement or the other Loan Documents
do not specifically and expressly provide for the giving of notice by Lender to
Borrower.


 


Section 11.12                     Remedies of
Borrower. In the event that a claim or adjudication is made that Lender or its
agents have acted unreasonably or unreasonably delayed acting in any case
where, by law or under this Agreement or the other Loan Documents, Lender or
such agent, as the case may be, has an obligation to act reasonably or
promptly, neither Lender nor its agents shall be liable for any monetary
damages, and Borrower’s sole remedy shall be limited to commencing an action
seeking injunctive relief or declaratory judgment. Any action or proceeding to
determine whether Lender has acted reasonably shall be determined by an action
seeking declaratory judgment.


 


Section 11.13                     Expenses;
Indemnity. (a)  Borrower shall pay or, if Borrower
fails to pay, reimburse Lender upon receipt of notice from Lender, for all reasonable and customary
out-of-pocket costs and expenses (including reasonable attorneys’ fees and
disbursements) incurred by Lender in connection with (i) Borrower’s
ongoing performance of and compliance with Borrower’s agreements and covenants
contained in this Agreement and the other Loan Documents on its part to be
performed or complied with after the date hereof, including, without limitation, confirming compliance
with environmental and insurance requirements; (ii) Lender’s ongoing
performance of and compliance with all agreements and covenants contained in
this Agreement and the other Loan Documents on its part to be performed or
complied with after the date hereof, (iii) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any
other documents or matters requested by Borrower; (iv) the filing and
recording fees and expenses, title insurance and reasonable fees and expenses
of counsel for providing to Lender all required legal opinions, and other
similar expenses incurred, in creating and perfecting the Liens in favor of Lender
pursuant to this Agreement and the other Loan Documents; (v) enforcing or
preserving any rights, in response to third party claims or the prosecuting or
defending of any action or proceeding or other litigation or otherwise upon the
occurrence and during the continuance of an Event of Default, in each case
against, under or affecting Borrower, this Agreement, the other Loan Documents,
the Property, or any other security given for the Loan; and (vi) enforcing
any obligations of or collecting any payments due from Borrower under this
Agreement, the other Loan Documents or with respect to the Property or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a “work-out” or of any insolvency
or bankruptcy proceedings; provided, however, that Borrower shall not be liable
for the payment of any such costs and expenses to the extent the same arise by
reason of the gross negligence, illegal acts, bad faith,


 


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fraud or willful misconduct of
Lender Any costs due and payable to Lender which are not paid by Borrower
within ten (10) days after written demand therefore may be paid to Lender
pursuant to the Cash Management Agreement.


 


(b)                                 Borrower shall indemnify, defend and hold
harmless Lender and its officers, directors, agents, employees (and the
successors and assigns of the foregoing) (the “Lender Indemnitees”) from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for the Lender Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Lender Indemnitees shall be designated a party thereto),
that may be imposed on, incurred by, or asserted against the Lender Indemnitees
in any manner relating to or arising out of (i) any breach by Borrower of
its obligations under, or any material misrepresentation by Borrower contained
in, this Agreement or the other Loan Documents, or (ii) the use or
intended use of the proceeds of the Loan (collectively, the “Indemnified
Liabilities”); provided, however, that Borrower shall not
have any obligation to the Lender Indemnitees hereunder to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, had
faith, fraud or willful misconduct of the Lender Indemnitees. To the extent
that the undertaking to indemnify, defend and hold harmless set forth in the
preceding sentence may be unenforceable because it violates any law or public
policy, Borrower shall pay the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by any Lender Indemnitees.


 


Section 11.14                     Schedules
Incorporated. The Schedules annexed hereto are hereby incorporated herein
as a part of this Agreement with the same effect as if set forth in the body
hereof.


 


Section 11.15                     Offsets,
Counterclaims and Defenses. Any assignee of Lender’s interest in and to this
Agreement and the other Loan Documents shall take the same free and clear of
all offsets, counterclaims or defenses which are unrelated to such documents
which Borrower may otherwise have against any assignor of such documents, and
no such unrelated counterclaim or defense shall be interposed or asserted by
Borrower in any action or proceeding brought by any such assignee upon such
documents and any such right to interpose or assert any such unrelated offset,
counterclaim or defense in any such action or proceeding is hereby expressly
waived by Borrower.


 


Section 11.16                     No Joint
Venture or Partnership; No Third Party Beneficiaries. (a)  Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the Property other than that of
mortgagee, beneficiary or lender.


 


(b)                                 This Agreement and the other Loan
Documents are solely for the benefit of Lender and nothing contained in this
Agreement or the other Loan Documents shall be deemed to confer upon anyone
other than Lender any right to insist upon or to enforce the 


 


99

















 


performance or observance
of any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing
to require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender’s sole
discretion, Lender deems it advisable or desirable to do so.


 


Section 11.17                     Publicity. All news releases,
publicity or advertising (other than any of the foregoing effectuated in
connection with a Securitization of all or any portion of the Loan by Lender)
by each of Lender or Borrower or their Affiliates through any media intended to
reach the general public which refers to the Loan Documents or the financing
evidenced by the Loan Documents, to Lender, Borrower or any of their Affiliates
shall be subject to the prior approval of Lender and (except in connection with
a Securitization of all or any portion of the Loan) Borrower (except that no
Lender approval shall be required for Borrower’s or its Affiliate’s press
release, if any, in connection with the execution and delivery of this
Agreement), which approval, in any case, shall not be unreasonably withheld,
conditioned or delayed.


 


Section 11.18                     Waiver of
Marshalling of Assets. To the fullest extent permitted by law, Borrower, for
itself and its successors and assigns, waives all rights to a marshalling of
the assets of Borrower, Borrower’s partners and others with interests in
Borrower, and of the Property, and shall not assert any right under any laws
pertaining to the marshalling of assets, the sale in inverse order of
alienation, homestead exemption, the administration of estates of decedents, or
any other matters whatsoever to defeat, reduce or affect the right of Lender
under the Loan Documents to a sale of the Property for the collection of the
Debt without any prior or different resort for collection or of the right of
Lender to the payment of the Debt out of the net proceeds of the Property in
preference to every other claimant whatsoever.


 


Section 11.19                     Waiver of
Offsets/Defenses/Counterclaims. Borrower hereby waives the right to
assert a counterclaim, other than a compulsory counterclaim, in any action or
proceeding brought against it by Lender or its agents or otherwise to offset
any obligations to make the payments required by the Loan Documents. No failure
by Lender to perform any of its obligations hereunder shall be a valid defense
to, or result in any offset against, any payments which Borrower is obligated
to make under any of the Loan Documents.


 


Section 11.20                     Conflict;
Construction of Documents; Reliance. In the event of any conflict
between the provisions of this Agreement and any of the other Loan Documents,
the provisions of this Agreement shall control. The parties hereto acknowledge
that they were represented by competent counsel in connection with the
negotiation, drafting and execution of the Loan Documents and that such Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever
in the exercise of any rights or remedies available to it under 


 


100

















 


any of the Loan Documents or any
other agreements or instruments which govern the Loan by virtue of the
ownership by it or any parent, subsidiary or Affiliate of Lender of any equity
interest any of them may acquire in Borrower, and Borrower hereby irrevocably
waives the right to raise any defense or take any action on the basis of the
foregoing with respect to Lender’s exercise of any such rights or remedies.
Borrower acknowledges that Lender engages in the business of real estate
financings and other real estate transactions and investments which may be
viewed as adverse to or competitive with the business of Borrower or its
Affiliates.


 


Section 11.21                     Brokers and
Financial Advisors. Borrower and Lender each hereby represent that it has not
dealt independently of the other with any financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement. Each party shall indemnify, defend
and hold the other party harmless from and against any and all claims,
liabilities, costs and expenses of any kind (including reasonable attorneys’
fees and expenses) in any way relating to or arising from a claim by any Person
that such Person acted on behalf of such party in connection with the
transactions contemplated herein. The provisions of this Section 11.21
shall survive the expiration and termination of this Agreement and the payment
of the Debt.


 


Section 11.22                     Exculpation. Subject to the
qualifications below, Lender shall not enforce the liability and obligation of
Borrower to perform and observe the obligations contained in the Note, this
Agreement, the Mortgage or the other Loan Documents by any action or proceeding
wherein a money judgment shall be sought against Borrower, except that Lender
may bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon
its interest under the Note, this Agreement, the Mortgage and the other Loan
Documents, or in the Property, the Rents, or any other collateral given to
Lender pursuant to the Loan Documents; provided, however, that,
except as specifically provided herein, any judgment in any such action or
proceeding shall be enforceable against Borrower only to the extent of Borrower’s
interest in the Property, in the Rents and in any other collateral given to
Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the
other Loan Documents, shall not sue for, seek or demand any deficiency judgment
against Borrower in any such action or proceeding under or by reason of or
under or in connection with the Note, this Agreement, the Mortgage or the other
Loan Documents. The provisions of this Section shall not, however, (a) constitute
a waiver, release or impairment of any obligation evidenced or secured by any
of the Loan Documents; (b) impair the right of Lender to name Borrower as
a party defendant in any action or suit for foreclosure and sale under the
Mortgage; (c) affect the validity or enforceability of any guaranty made
in connection with the Loan or any of the rights and remedies of Lender
thereunder; (d) impair the right of Lender to obtain the appointment of a
receiver; (e) impair the enforcement of the Assignment of Leases; (0
constitute a prohibition against Lender to seek a deficiency judgment against
Borrower in order to fully realize on any security given by Borrower in
connection with the Loan or to commence any other appropriate action or
proceeding in order for Lender to exercise its remedies against such security
which, in any event, shall only be enforced against such security; or (g) constitute
a waiver of the right of Lender to enforce the liability and obligation of
Borrower, by money judgment or otherwise, to the extent of any loss, damage, cost,
expense, liability, claim or other obligation incurred by Lender (including
attorneys’ fees and costs reasonably incurred) arising out of or in connection
with any of the following:


 


101

















 


(i)                                     fraud or intentional misrepresentation by
Borrower or any guarantor in connection with the Loan;


 


(ii)                                  the gross negligence or willful
misconduct of Borrower;


 


(iii)                               the breach of any representation,
warranty, covenant or indemnification provision in the Environmental Indemnity
or in the Mortgage concerning environmental laws, hazardous substances and
asbestos and any indemnification of Lender with respect thereto in either
document;


 


(iv)                              the removal or disposal of any portion of
the Property after an Event of Default other than in accordance with the terms
of the Loan Documents (including, without limitation, the Cash Management
Agreement);


 


(v)                                 the misapplication or conversion by
Borrower of (A) any insurance proceeds paid by reason of any loss, damage
or destruction to the Property, (B) any Awards. or other amounts received
in connection with the Condemnation of all or a portion of the Property, or (C) any
Rents following an Event of Default;


 


(vi)                              any security deposits, advance deposits
or any other deposits collected with respect to the Property which are not
delivered to Lender upon a
foreclosure of the Property or action in lieu thereof, except to the extent any
such security deposits were applied in accordance with the terms and conditions
of any of the Leases prior to the occurrence of the Event of Default that gave
rise to such foreclosure or action in lieu thereof;


 


(vii)                           Borrower’s indemnification of Lender set
forth in Section 9.2 hereof; and


 


(viii)                        intentionally omitted


 


Notwithstanding anything to
the contrary in this Agreement, the Note or any of the Loan Documents, (A) Lender
shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the
Bankruptcy Code to file a claim for the full amount of the Debt or to require
that all collateral shall continue to secure all of the Debt owing to Lender in
accordance with the Loan Documents, (B) the Debt shall be fully recourse
to Borrower in the event that: (i) Borrower fails to obtain Lender’s prior
consent to any subordinate financing or other voluntary Lien encumbering the
Property; (ii) Borrower fails to obtain Lender’s prior consent to any
assignment, transfer, or conveyance of the Property or any interest therein as
required by the Mortgage or this Agreement; (iii) Borrower files a
voluntary petition under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (iv) an Affiliate, officer, director,
trustee, or representative which controls, directly or indirectly, Borrower
files, or joins in the filing of; an involuntary petition against Borrower
under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law, or solicits or causes to be solicited petitioning creditors for
any involuntary petition against Borrower from any Person; (v) intentionally
omitted; (vi) Borrower files an answer consenting to or otherwise
acquiescing in or joining in any involuntary petition filed against it, by any
other Person under the Bankruptcy Code or any other Federal or state bankruptcy
or insolvency law, or solicits or causes to be solicited petitioning creditors
for any 


 


102

















 


involuntary
petition from any Person; (vii) any Affiliate, officer, director, trustee,
or representative which controls Borrower consents to or acquiesces in or joins
in an application for the appointment of a custodian, receiver, trustee, or
examiner for Borrower or any portion of the Property; (viii) Borrower
makes an assignment for the benefit of creditors, or admits, in writing or in
any legal proceeding, its insolvency or inability to pay its debts as they
become due or (ix) Borrower, any SPC Party or any Borrower GP breaches any
of the representations, warranties or covenants applicable to it under Section 3.1.24
and (C) if the Pasco Event occurs, (i) prior to the foreclosure by
Lender of the Pasco Property or the acceptance of a deed in lieu of foreclosure
with respect thereto or any other acquisition of title to the Pasco Property by
Lender, in each case pursuant to an exercise by Lender of its rights and
remedies pursuant hereto and the other Loan Documents, pursuant to a bankruptcy
proceeding or otherwise, the Release Amount for the Pasco Property and any and
all other amounts then due, including but not limited to, the Yield Maintenance
Premium, if any, and any and all reasonable costs and expenses incurred by
Lender in connection therewith, shall be fully recourse to Borrower, and (ii) following
the foreclosure by Lender of the Pasco Property or the acceptance of a deed in
lieu of foreclosure with respect thereto or any other acquisition of title to
the Pasco Property by Lender, in each case pursuant to an exercise by Lender of
its rights and remedies pursuant hereto and the other Loan Documents, pursuant
to a bankruptcy proceeding or otherwise, the excess of (I) the Allocated
Loan Amount and any and all reasonable costs and expenses incurred by Lender in
connection therewith over (II) the amount actually received by Lender upon
payment of the purchase price by Simplot for the Pasco Property, shall be fully
recourse to Borrower.


 


Section 11.23                     Prior
Agreements. This Agreement and the other Loan Documents contain the
entire agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written, are superseded by the terms of this Agreement
and the other Loan Documents.


 


Section 11.24                     Servicer.  (a)   At the option of Lender, the Loan
may be serviced by a servicer (the “Servicer”) selected by Lender and
Lender may delegate all or any portion of its responsibilities under this
Agreement and the other Loan Documents to the Servicer pursuant to a servicing
agreement (the “Servicing Agreement”) between Lender and Servicer.
Borrower shall not be responsible for any set-up fees or any other initial
costs relating to or arising under the Servicing Agreement, or for the payment
of any monthly servicing fee due to the Servicer under the Servicing Agreement.
Servicer shall, however, be entitled to reimbursement of costs and expenses as
and to the same extent (but without duplication) as Lender is entitled thereto
under the applicable provisions of this Agreement and the other Loan Documents.
In addition, subject to the express provisions contained elsewhere in this
Agreement (including provisions specifying either an amount, or that no amount,
should be payable), Borrower shall be responsible for the payment of any
customary and reasonable servicing fees charged in connection with any requests
made by Borrower during the term of the Loan, including, but not limited to,
approvals, consents, amendments or waivers contemplated by this Agreement or
otherwise.


 


(b)                                 Upon notice thereof from Lender, Servicer
shall have the right to exercise all rights of Lender and enforce all
obligations of Borrower pursuant to the provisions of this Agreement, the Note
and the other Loan Documents.


 


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(c)                                  Provided Borrower shall have been given
notice of Servicer’s address by Lender, Borrower shall deliver to Servicer
duplicate originals of all notices and other instruments which Borrower may or
shall be required to deliver to Lender pursuant to this Agreement, the Note and
the other Loan Documents (and no delivery of such notices or other instruments
by Borrower shall be of any force or effect unless delivered to Lender and
Servicer as provided above).


 


(d)                                 Notwithstanding anything to the contrary
contained herein or in any other Loan Documents, unless the Loan is being
transferred to a “special servicer” or is then being “specially serviced” (in
which case Borrower may be required to deal with one primary Servicer and one “special
servicer”), Borrower shall be required to deal with only one Servicer acting on
behalf of all Persons comprising Lender and Cross Lender (the “primary
Servicer”), with respect to any consents, approvals or notices required or
permitted from, or to, Servicer, Lender or Cross Lender pursuant to the Loan
Documents (it being understood that such primary Servicer may need to consult
with other Persons that hold a portion of Lender’s and/or Cross Lender’s rights
and obligations under the Loan or with the Rating Agencies in connection with
any such consent, approval or notice and that a so-called “special servicer”
may act as such primary Servicer). Lender may replace such primary Servicer
with another primary Servicer at any time in Lender’s sole discretion. As of
the date hereof, Wachovia Bank, N.A., in its capacity as servicer under a
Servicing Agreement with Lender, is hereby designated as the primary Servicer
and unless and until Borrower is notified by all Persons comprising Lender of a
new primary Servicer, Borrower shall be permitted to rely conclusively and
irrevocably on such designation.


 


Section 11.25                     Joint and
Several Liability. If more than one Person has executed this Agreement as “Borrower,”
the representations, covenants, warranties and obligations of all such Persons
hereunder shall be joint and several.


 


Section 11.26                     Creation of
Security Interest. Notwithstanding any other provision set forth in this
Agreement, the Note, the Mortgage or any of the other Loan Documents, Lender
may at any time create a security interest in all or any portion of its rights
under this Agreement, the Note, the Mortgage and any other Loan Document
(including, without limitation, the advances owing to it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.


 


Section 11.27                     Assignments and
Participations. 
(a)   The Lender may assign
to one or more Persons other than (as long as no Event of Default has occurred
and is continuing) any Excluded Lender Transferee all or a portion of its
rights and obligations under this Loan Agreement (it being agreed that the
foregoing shall not apply to the holder of any Securities issued in a
pooled-loan Securitization).


 


(b)                                 Lender may sell participations to one or
more Persons other than (as long as no Event of Default has occurred and is
continuing) any Excluded Lender Transferee in or to all or a portion of its
rights and obligations under this Loan Agreement (it being agreed that the
foregoing shall not apply to the holder of any Securities issued in a pooled-loan
Securitization); provided, however, that (i) Lender’s
obligations under this Loan Agreement shall remain unchanged, (ii) except
as otherwise provided in Section 2.5, Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) Lender shall 


 


104

















 


remain the holder of any
Note for all purposes of this Loan Agreement and (iv) Borrower shall
continue to deal solely and directly with Lender in connection with Lender’s
rights and obligations under and in respect of this Loan Agreement and the
other Loan Documents.


 


(c)                                  Lender may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 11.27, disclose to the assignee or participant or
proposed assignee or participant, as the case may be, any information relating
to Borrower or any of its Affiliates or to any aspect of the Loan that has been
furnished to the Lender by or on behalf of the Borrower or any of its Affiliates, subject to such
Person keeping all such information Confidential.


 


(d)                                 Subject to acceptance and recording
thereof pursuant to paragraph (e) of this Section 11.27, from
and after the effective date specified in each Assignment and Acceptance the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of
Lender under this Agreement. Any assignment or transfer by Lender of rights or
obligations under this Agreement that does not comply with this Section 11.27
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with clause (b) of
this Section 11.27.


 


(e)                                  Lender or an agent of Lender shall
maintain a register (the “Register”) on which it  will record the
Loans made hereunder, and each Assignment and Acceptance and
participation.  The Register shall
include the names and addresses of Lenders (including all assignees, successors
and Participants), and the commitment of, and principal amount of the Loans
owing to each such Lender.  Failure to
make any such recordation, or any error in such recordation shall not affect
the Borrower’s obligations in respect of such Loans. If Lender sells an
assignment or participation in any Loan, it shall update the register to
reflect such assignment or participation.


 


(f)                                    Notwithstanding anything contained herein
to the contrary, as long as no Event of Default shall have occurred and be
continuing, no Lender or Participant shall Transfer all or any portion of the
Loan or any interest therein to an Excluded Lender Transferee or permit or
suffer any Transfer such that any portion of or participation interest in the
Loan will be held directly or indirectly by a Person that is an Excluded Lender
Transferee (it being agreed that the foregoing shall not apply to the holder of
any Securities issued in a pooled-loan Securitization).


 


(g)                                 It shall be a condition to the
Securitization of any portion of the Loan and/or the Cross Loan into different
securitization pools that the Loan and the Cross Loan shall be uncrossed so
that an Event of Default under and as defined in the Cross Loan Agreement shall
no longer be an Event of Default hereunder and that an Event of Default
hereunder shall no longer be a Cross Event of Default, and that the lien of the
Mortgage and the Security Agreement will no longer secure the Cross Loan
pursuant to the Cross Guaranty (as defined in the Cross Loan Agreement) and the
Cross Mortgage and Cross Security Agreement will no longer secure the Loan
pursuant to the Cross Guaranty.


 


(h)                                 It shall be a condition to the assignment
of more than fifty percent (50%) of the Loan to any Person which is not an
Affiliate of Lender and whereby the Loan and the 


 


105

















 


Cross Loan shall be
majority-owned by Persons which are not Affiliates that either (i) the
Loan and the Cross Loan shall be uncrossed so that an Event of Default under
and as defined in the Cross Loan Agreement shall no longer be an Event of
Default hereunder and that an Event of Default hereunder shall no longer be a
Cross Event of Default, and that the lien of the Mortgage and the Security
Agreement will no longer secure the Cross Loan pursuant to the Cross Guaranty
(as defined in the Cross Loan Agreement) and the Cross Mortgage and the Cross
Security Agreement will no longer secure the Loan pursuant to the Cross
Guaranty or (ii) the holders of the Loan and the holders of the Cross Loan
shall enter into a co-lender arrangement pursuant to which one holder of the
Loan or holder of the Cross Loan shall be designated as a directing lender and
shall be the Person designated to act on behalf of the Lender and the Cross
Lender with respect to the Loan and shall have the sole right to receive any
notices which are required to be given to the Lender, or which are required to
be given by the Lender to the Borrower or any other party pursuant to this
Agreement, and to exercise the rights and powers given to the Lender hereunder,
including, without limitation, approval rights, primary Servicer appointment
rights, and the ability to exercise rights and remedies hereunder. Promptly
after entering into such co-lender arrangement, notice of the designation of a
directing lender shall be delivered to Borrower, and Borrower shall be entitled
to rely on such designation. Such directing lender designation shall be
irrevocable without Borrower’s approval unless and until a replacement
directing lender is designated therefor.


 


(i)                                     Notwithstanding anything to the contrary
contained herein or in any other Loan Document, all reasonable out-of-pocket
costs and expenses actually incurred by Borrower or its Affiliates in
connection with Borrower’s cooperation with Lender in effecting any of the
actions contemplated pursuant to either or both of clauses (g) or (h) of
this Section 11.27 shall be borne by Lender.


 


Section 11.28                     Cross Default;
Cross-Collateralization.  Borrower acknowledges that Lender has made the Loan to Borrower upon
the additional security of the collateral securing the Cross Loan and in
reliance upon the aggregate of the collateral securing the Loan and the
collateral securing the Cross Loan taken together being of greater value as
collateral security than the sum of the collateral securing the Loan and the
collateral securing the Cross Loan taken separately, and that the Mortgage and
certain other Loan Documents secure both the Loan and the Cross Guaranty (as
defined in the Cross Loan Agreement), and the Cross Mortgage and certain other
Loan Documents (as defined in the Cross Loan Agreement) secure both the Cross
Guaranty and the Cross Loan. Borrower agrees that the Loan and the Cross Loan
are and will be cross-defaulted with each other so that a Cross Event of
Default shall constitute an Event of Default under the Loan Documents which
secure the Note. Notwithstanding anything to the contrary contained herein,
Lender in its sole discretion may, and in such event shall cause Cross Lender
to, uncross the Loan with the Cross Loan at any time, and upon the release of
the Cross Borrowers under the Cross Guaranty and the Borrowers under the Cross
Guaranty (as defined in the Cross Loan Agreement), the foregoing cross-default
of the Loan and the Cross Loan shall terminate and be of no further force or
effect such that a Cross Event of Default shall no longer constitute an Event
of Default under the Loan Documents and an Event of Default under the Loan
Documents shall no longer constitute a Cross Event of Default under and as
defined in the Cross Loan Agreement. Upon the release of the Cross Borrowers
under the Cross Guaranty, and the Borrowers under the Cross Guaranty (as
defined in the Cross Loan Agreement) as provided in this Section 11.28 and
in Section 11-28 of the Cross Loan Agreement, Lender and Cross 


 


106

















 


Lender, at their sole cost and
expense, with the cooperation of Borrower and its Affiliates in the Cross Loan,
including Cross Borrowers, shall execute and deliver, or shall cause to be
executed and delivered, such documents and instruments as are reasonably
necessary and appropriate to evidence the same and to effect the release and
discharge of record the lien created by each of the Mortgage and Security
Agreement in favor of the Cross Lender and the Cross Mortgage and the Cross
Security Agreement in favor of Lender, including but not limited to UCC-3
termination statements. For the purpose of clarity, upon the release or
substitution of an Individual’ Property pursuant to this Agreement, such
Individual Property shall no longer be collateral for the benefit of the Cross
Lender pursuant to the Cross Guaranty Substitution. After the Closing Date, but
prior to the Permitted Prepayment Date, Borrower may obtain a release of the
Lien of a Mortgage (and the related Loan Documents) encumbering an Individual
Property (a “Substituted Property”) by substituting therefor another property
of like kind and quality acquired by Borrower (individually, a “Substitute
Property” and collectively, the “Substitute Properties”), provided
that the following conditions precedent are satisfied:


 


(a)           Lender shall have received at least
thirty (30) days prior written notice requesting the substitution and
identifying the Substitute Property and the Substituted Property.


 


(b)           The Allocated Loan Amount of the
Substituted Property, when taken together with the Allocated Loan Amounts of
all other Substituted Properties substituted pursuant to this Section 11.29,
does not exceed thirty-five percent (35%)
of the original
principal balance of the Loan.


 


(c)           After giving effect to the proposed
substitution, no Event of Default shall be continuing.


 


(d)           The Substitute Property shall not have
suffered a Casualty or Condemnation which has not been fully restored.


 


(e)           If the Loan is part of a Securitization,
Lender shall have received an Appraisal of the Substitute Property, dated no
more than sixty (60) days prior to the substitution date, prepared by a senior
commercial appraiser of the American Appraisal Institute acceptable to the
Rating Agencies.


 


(f)            Intentionally omitted.


 


(g)           Lender shall have received a current
survey for the Substitute Property, certified to the title insurance company
and Lender and their respective successors and assigns, in substantially the
same form and content as the certification of the survey of the Substituted
Property prepared by a professional land surveyor licensed in the state in
which the Substitute Property is located and acceptable to the Rating Agencies,
in accordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSM
Land Title Surveys. Such survey shall reflect the same legal description
contained in the title insurance policy relating to such Substitute Property
and shall include, among other things, a metes and bounds description of the
real property comprising part of such Substitute Property (unless such real
property has been satisfactorily designated by lot number on a recorded plat).
The surveyor’s seal shall be affixed 


 


107

















 


to such survey and, if
customary, such survey shall certify whether any portion of the surveyed
property or the improvements thereon is located in a “‘one-hundred -year flood
hazard area.”


 


(h)           Lender shall have received a Phase I
environmental report acceptable to a reasonably prudent lender and, if
recommended under the Phase I environmental report, a Phase II environmental
report acceptable to a reasonably prudent lender, which concludes that the
Substitute Property does not contain any Hazardous Substances (as defined in
the Environmental Indemnity) requiring remediation under any Environmental Law
(as defined in the Environmental Indemnity) and is not subject to any known
risk of contamination from any off-site Hazardous Substance.


 


(i)            Lender shall have received a Physical
Conditions Report with respect to the Substitute Property stating that the
Substitute Property is in good condition and repair and free of damage or
waste. If the Physical Conditions Report recommends that any repairs be made
with respect to the Substitute Property, such Physical Conditions Report shall
include an estimate of the cost of such recommended repairs and, subject to the
terms and conditions set forth in Section 6.1.2, Borrower shall
deposit with Lender an amount equal to one hundred fifteen percent (115%) of
such estimated cost in the event such estimated cost exceeds $50,000, which
deposit shall constitute “Required Repair Funds”, and shall be released to
Borrower in accordance with the provisions of Section 6.1.


 


(j)            Lender shall have received evidence
satisfactory to a reasonably prudent lender that the Substitute Property and
its use comply in all material respects with all applicable Legal Requirements
(including, without limitation, zoning, subdivision and building laws) and such
compliance shall be confirmed by delivery to Lender of report from the Planning
and Zoning Resource Corporation or such other similar consultant which in the
ordinary course of its business provides zoning analyses and reports to
institutional lenders.


 


(k)           Lender shall have received valid
certificates of insurance indicating that the requirements for the policies of
insurance required for an Individual Property hereunder have been satisfied
with respect to the Substitute Property and evidence of the payment of all
premiums payable for the existing policy period (or if such Substitute Property
is being added to Borrower’s existing policies, that such amounts have been
escrowed with Lender in accordance with the terms and conditions of Section 6.3).


 


(l)            Intentionally omitted.


 


(m)          Intentionally omitted.


 


(n)           After giving effect to the substitution,
the Debt Service Coverage Ratio for the Loan for the Property (excluding the
Substituted Property and including the Substitute Property) is not less than
the greater of (i) the Debt Service Coverage Ratio as of the Closing Date
and (ii) the Debt Service Coverage Ratio for the trailing twelve (12) full
calendar months as of the date immediately preceding the substitution; provided
that, Borrower shall be permitted to defease a portion of the Loan in
accordance with Section 2.5.2 in order to satisfy the Debt Service
Coverage Ratio test set forth in this clause (n);


 


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(o)                                 (i) The Individual Loan-to-Value
Ratio of the Substitute Property is not greater than the lesser of the
Individual Loan-to-Value Ratio of the Substituted Property (A) as of the
Closing Date and (B) immediately prior to the substitution, which determination,
with respect to (x) the Substitute Property, if based on an Appraisal
pursuant to the definition of “Individual Loan-to-Value Ratio”, shall be based
on the Appraisal described in clause (e) above and, (y) the
Substituted Property, (I) if the determination is as of the Closing Date
and is based on an Appraisal pursuant to the definition of “Individual
Loan-to-Value Ratio”, shall be based on the Appraisal delivered at closing and,
(II) if the determination is as of immediately prior to date of substitution
and is based on an Appraisal pursuant to the definition of “Individual
Loan-to-Value Ratio”, shall be based on a new Appraisal dated no earlier than
ninety (90) days prior to such substitution, or, (ii) if Borrower is
unable to satisfy the foregoing test, after giving effect to such substitution,
the Loan-to-Value Ratio for the Property (excluding the Substituted Property
and including the Substitute Property) is not greater than the lesser of (A) the
Loan-to-Value Ratio as of the Closing Date, which, if based on Appraisals
pursuant to the definition of “Loan-to-Value Ratio”, shall be based on the
Appraisals delivered at closing, and (B) the Loan-to-Value Ratio as of the
date immediately preceding such substitution, which, if based on Appraisals
pursuant to the definition of “Loan-to-Value Ratio”, shall be based on
Appraisals dated no earlier than ninety (90) days prior to the date of such
substitution.


 


(p)                                 Lender shall have received an Officer’s
Certificate certifying that the representations and warranties of Borrower
contained in this Agreement and the other Loan Documents are true and correct
in all material respects on and as of the date of the substitution with respect
to the Substitute Property and, if the Loan is part of a Securitization, containing
any other representations and warranties with respect to the Substitute
Property as the Rating Agencies may require, such certificate to be in form and
substance satisfactory to the Rating Agencies.


 


(q)                                 Borrower shall (i) have executed,
acknowledged and delivered to Lender (A) a Mortgage, an Assignment of
Leases and two UCC-1 Financing Statements with respect to the Substitute
Property, together with a letter from Borrower countersigned by a title
insurance company acknowledging receipt of such Mortgage, Assignment of Leases
and UCC-1 Financing Statements and agreeing to record or file, as applicable,
such Mortgage, Assignment of Leases and one of the UCC-1 Financing Statements
in the real estate records for the county in which the Substitute Property is
located and to file one of the UCC-1 Financing Statements in the office of the
Secretary of State (or other central filing office) of the state of its
organization, so as to effectively create upon such recording and filing valid
and enforceable Liens upon the Substitute Property, of the requisite priority,
in favor of Lender (or such other trustee as may be desired under local law),
subject only to the Permitted Encumbrances and such other Liens as are
permitted pursuant to the Loan Documents and (B) an Environmental
Indemnity with respect to the Substitute Property and (ii) have caused
Guarantor to acknowledge and confirm its obligations under (A) any
guaranty executed and delivered by Guarantor in connection with the Loan and (B) the
Environmental Indemnity. The Mortgage, Assignment of Leases, UCC-1 Financing
Statements and Environmental Indemnity shall be the same in form and substance
as the counterparts of such documents executed and delivered with respect to
the Substituted Property subject to modifications reflecting the Substitute
Property as the Individual Property that is the subject of such documents and
such modifications reflecting the laws of the state in which the Substitute
Property is located as shall be recommended for similar transactions by the 


 


109

















 


counsel admitted to
practice in such state and delivering the opinion as to the enforceability of
such documents required pursuant to subsection (u) below. The
Mortgage encumbering the Substitute Property shall secure all amounts evidenced
by the Note, provided that in the event that the jurisdiction in which
the Substitute Property is located imposes a mortgage recording, intangibles or
similar tax and does not permit the allocation of indebtedness for the purpose
of determining the amount of such tax payable, the principal amount secured by
such Mortgage shall be equal to one hundred twenty-five percent (125%) of the
Allocated Loan Amount of the Substitute Property. The amount of the Loan allocated
to the Substitute Property (such amount being hereinafter referred to as the “Substitute
Allocated Loan Amount”) shall equal the Allocated Loan Amount of the
Substituted Property immediately prior to the substitution and the Allocated
UCF Amount of the Substitute Property shall be equal to the Allocated UCF
Amount of the Substituted Property immediately prior to the substitution.
Further, Lender shall, in its reasonable discretion, provide an Allocated
Capital Expenditure Amount for the Substitute Property, which Allocated Capital
Expenditure Amount shall be equal to $0.03 per cubic foot of such Substitute
Property and which, when aggregated with the Allocated Capital Expenditure
Amounts of each remaining Individual Property, shall not exceed the Capital
Expenditure Maximum Amount. Schedule VI will be deemed to be modified to
reflect any such changes to the Allocated Loan Amount, Allocated UCF Amount and
Allocated Capital Expenditure Amount for each Individual Property subsequent to
a substitution.


 


(r)                                    Lender shall have received (i) unless
Borrower shall have elected to provide title insurance in an amount equal to
one hundred twenty-five percent (125%) of the Substitute Allocated Loan Amount
as set forth in clause (A) of Section 11.29(q), a “tie-in”
or similar endorsement, but only to the extent available in such jurisdiction,
to each title insurance policy insuring the Lien of an existing Mortgage (which
shall be tied in as of the Closing Date) with respect to such existing
Mortgages and as of the date of the substitution with respect to the title
insurance policy insuring the Lien of the Mortgage with respect to the
Substitute Property and (ii) a title insurance policy (or a marked, signed
and redated commitment to issue such title insurance policy) insuring the Lien
of the Mortgage encumbering the Substitute Property, issued by the title
company that issued the title insurance policies insuring the Lien of the
existing Mortgages and dated as of the date of the substitution, with
reinsurance and direct access agreements that replace such agreements issued in
connection with the title insurance policy insuring the Lien of the Mortgage
encumbering the Substituted Property. The title insurance policy issued with
respect to the Substitute Property shall (A) at Borrower’s option, provide
coverage in the amount of the Substitute Allocated Loan Amount if the “tie-in”
or similar endorsement described above is available or, in lieu of a tie-in
endorsement, in an amount equal to one hundred twenty-five percent (125%) of
the Substitute Allocated Loan Amount, (B) insure Lender that the relevant
Mortgage creates a valid first lien on the Substitute Property encumbered
thereby, free and clear of all exceptions from coverage other than Permitted
Encumbrances and standard exceptions and exclusions from coverage (as modified
by the terms of any endorsements), (C) contain such endorsements and
affirmative coverages reasonably requested by Lender, but only to the extent
the same are available in the jurisdiction in which the Substitute Property is
located, and (D) name Lender as the insured. Lender also shall have
received copies of paid receipts or other evidence showing that all premiums in
respect of such endorsements and title insurance policies have been paid.


 


110

















 


(s)                                  Lender shall have received (i) an
endorsement to the title insurance policy insuring the Lien of the Mortgage
encumbering the Substitute Property insuring that the Substitute Property
constitutes a separate tax lot or, if such an endorsement is not available in
the state in which the Substitute Property is located, a letter from the title
insurance company issuing such Title Insurance Policy stating that the
Substitute Policy constitutes a separate tax lot or (ii) a letter from the
appropriate taxing authority stating that the Substitute Property constitutes a
separate tax lot or other evidence satisfactory to a reasonably prudent lender
as to same.


 


(t)                                    Borrower shall deliver or cause to be
delivered to Lender (i) updates certified by Borrower of all
organizational documentation related to Borrower and/or the formation,
structure, existence, good standing and/or qualification to do business
delivered to Lender on the Closing Date; (ii) good standing certificates,
certificates of qualification to do business in the jurisdiction in which the
Substitute Property is located (if required in such jurisdiction); and (iii) resolutions
of Borrower authorizing the substitution and any actions taken in connection
with such substitution.


 


(u)                                 Lender shall have received the following
opinions of Borrower’s counsel: (i) an opinion or opinions of counsel,
admitted to practice under the laws of the state in which the Substitute
Property is located, stating that the Loan Documents governed by such state law
delivered with respect to the Substitute Property are valid and enforceable in
accordance with their terms, subject to the laws applicable to creditors’
rights and equitable principles, and that Borrower is qualified to do business
and in good standing under the laws of the jurisdiction where the Substitute
Property is located or that Borrower is not required by applicable law to
qualify to do business in such jurisdiction; (ii) an opinion of
counsel acceptable to the Rating Agencies, if the Loan is part of a
Securitization, or reasonably acceptable to the Lender, if the Loan is not part
of a Securitization, stating that the Loan Documents delivered with respect to
the Substitute Property pursuant to clause (i) above were duly
authorized, executed and delivered by such Borrower; (iii) an opinion of
counsel acceptable to, the Rating Agencies if the Loan is part of a
Securitization, or the Lender if the Loan is not part of a Securitization,
stating either (x) that subjecting the Substitute Property to the Lien of
the related Mortgage and the execution and delivery of the related Loan
Documents do not and will not affect or impair the ability of Lender to enforce
its remedies under all of the Loan Documents or (y) this Agreement, after
giving effect to the Loan Documents executed in connection with the
substitution, shall be enforceable in accordance with its terms; (iv) an
update of the Insolvency Opinion indicating that the substitution does not
affect the opinions set forth therein; and (v) if the Loan is part of a
Securitization, an opinion of counsel acceptable to the Rating Agencies that
the substitution does not constitute a “significant modification” of the Loan
under Section 1001 of the Code or otherwise cause a tax to be imposed on a
“prohibited transaction” by the REMIC Trust holding the Loan. Such opinions, to
the extent applicable, shall be substantially in the respective forms approved
by Lender in connection with the origination of the Loan, and shall contain
customary assumptions and qualifications.


 


(v)                                 To the extent such escrows would be
required pursuant to the terms and conditions set forth in Article VI,
Borrower shall have paid, or escrowed with Lender, all Basic Carrying Costs
relating to the Substitute Property, including without limitation, (i) accrued
but unpaid insurance premiums relating to each of the individual Properties and
the Substitute Property, and (ii) currently due and payable Taxes
(including any in arrears) relating to each of 


 


111

















 


the Individual Properties
and the Substitute Property and (iii) currently due and payable
maintenance charges and other impositions relating to each of the Individual
Properties and Substitute Property after taking into account Reserve Funds held
in connection with the Substituted Property and available as Reserve Funds for
the Substitute Property.


 


(w)                               Lender shall have received such other
amendments and modifications to this Agreement and the other Loan Documents as
would be requested by a reasonably prudent lender originating commercial loans
for securitization similar to the Loan in order to reflect and effect the
substitution and to protect and preserve the Liens and security interests of
Lender in the Substitute Property.


 


(x)                                   Lender shall have received such other and
further approvals, opinions, documents and information in connection with the
substitution as requested by the Rating Agencies if the Loan is part of a
Securitization.


 


(y)                                 If the Loan is part of a Securitization,
Borrower shall have delivered to Lender a Rating Agency Confirmation with
respect to the substitution.


 


(z)                                   Borrower shall convey the Substituted
Property to another Person other than an SPC Party.


 


(aa)                            Borrower shall submit to Lender for its
review, not less than fifteen (15) days prior to the date of such substitution,
a release of Lien (and related Loan Documents) for the Substituted Property to
be executed by Lender. Such release shall be in a form appropriate for the
jurisdiction in which the Substituted Property is located and that contains
standard provisions protecting the rights of the releasing lender. In addition,
Borrower shall provide all other documentation that a reasonably prudent lender
originating commercial loans for securitization similar to the Loan would
require to be delivered by Borrower in connection with such release, together
with an Officer’s Certificate certifying that such documentation (i) is in
compliance with all Legal Requirements, and (ii) will effect such release
in accordance with the terms of this Agreement.


 


(bb)                          Borrower shall deliver an Officer’s
Certificate certifying that the requirements set forth in this Section 11.29
have been satisfied.


 


(cc)                            Borrower shall have paid or reimbursed
Lender for all reasonable out-of-pocket costs and expenses incurred by Lender
(including, without limitation, reasonable attorneys fees and disbursements) in
connection with the substitution. Borrower shall have paid all recording
charges, filing fees, taxes or other expenses (including, without limitation,
mortgage and intangibles taxes and documentary stamp taxes) payable in
connection with the substitution. If the Loan is part of a Securitization,
Borrower shall have paid all costs and expenses of the Rating Agencies incurred
in connection with the substitution.


 


(dd)                          Upon the satisfaction of the foregoing
conditions precedent, Lender will release its Lien from the Substituted
Property (or assign such Lien, as applicable) and the Substitute Property shall
be deemed to be an Individual Property for purposes of this Agreement and the
Substitute Allocated Loan Amount with respect to such Substitute Property shall
be 


 


112

















 


deemed to be the
Allocated Loan Amount with respect to such Substitute Property for all purposes
hereunder.


 


Following the substitution
of a Substituted Property in exchange for a Substitute Property in accordance
with this Section 11.29, Lender shall adjust (if applicable) the
amounts thereafter required to be deposited by Borrower into the Reserve Funds
to reflect amounts required solely for the remaining Individual Properties and
the Substitute Property after giving effect to such substitution.


 


Section 11.30                     Partial Release
– Expansion. (a)   Provided no Event of Default shall
have occurred and. remain uncured and provided that the intended use, at
the time of the transfer of the Expansion Parcel is not for purposes
incompatible with the use and operation of the applicable Individual Property
as a dry and/or cold storage warehouse facility (it being agreed that the use
of the Expansion Parcel as a dry and/or cold storage warehouse facility is not
incompatible with the use and operation of the remainder of the applicable
Individual Property as a dry and/or cold storage warehouse facility), Borrower
shall have the right at any time and from time to time prior to the Maturity
Date to obtain a release of the lien of the Mortgage (and related Loan
Documents) as to an Expansion Parcel upon satisfaction
of the following conditions precedent:


 


(i)                                     Borrower shall provide Lender not less
than thirty (30) days’ notice (or a shorter period of time if permitted by
Lender in its sole discretion) specifying the date (the “Expansion Date”)
on which the partial release is to occur provided, however, that
Borrower may postpone the Expansion Date from time to time as long as the
extended date is at least ten (10) Business Days after Notice of such
extension;


 


(ii)                                  Lender shall have received an Officer’s
Certificate certifying (A) that the proposed use of the Expansion Parcel
would not be incompatible with a dry and/or cold storage warehouse facility on
the remainder of the applicable Individual Property, (B) that the excess
of Gross Revenue over Operating Expenses for the Individual Property
immediately after the proposed release after taking into account the proposed
use of the Expansion Parcel will not be less than the excess of Gross Revenue
over Operating Expenses for the Individual Property immediately before the
proposed release and (C) that the proposed use of the Expansion Parcel
will not have a material adverse effect on the income and expense at the
Individual Property, together with evidence reasonably acceptable to Lender in
support of such conclusions;


 


(iii)                               Borrower shall deliver to Lender an
opinion of counsel for Borrower that is standard in commercial lending
transactions and subject only to customary qualifications, assumptions and
exceptions opining, among other things, that if a Securitization of any portion
of the Loan has occurred, the REMIC Trust formed pursuant to such
Securitization will not fail to maintain its status as a “real estate mortgage investment
conduit” within the meaning of Section 860D of the Code as a result of the
partial release pursuant to this Section 11.30;


 


(iv)                              Borrower shall have delivered to Lender
evidence that Borrower has complied with all requirements of and obtained all
approvals required under any Leases 


 


113

















 


with Major Tenants and the Operating Agreements applicable to the
release of the Expansion Parcel and that the partial release does not
violate any of the provisions of any Leases with Major Tenants and the
Operating Agreements provided, however, that an Officer’s
Certificate to that effect shall be sufficient evidence of such compliance and
obtaining of such approvals as to Leases which are not Major Leases;


 


(v)                                 Borrower shall have delivered to Lender (A) at
Borrower’s option, (x) an endorsement to the Title Insurance Policy, (y) an
opinion of counsel (from counsel reasonably acceptable to Lender) or (z) a
certificate of an architect (from an architect reasonably acceptable to Lender
and licensed to practice in the State), indicating that the Expansion Parcel
has been legally subdivided for zoning lot purposes from the remainder of the
Individual Property pursuant to a zoning lot subdivision in accordance with
applicable law, (B) at Borrower’s option, (x) an endorsement to the
Title Insurance Policy, (y) an opinion of counsel (from counsel reasonably
acceptable to Lender) or (z) a certificate of an architect (from an
architect reasonably acceptable to Lender and licensed to practice in the
State), indicating that the balance of the Individual Property separately
conforms to and is in material compliance with all applicable Legal
Requirements and constitutes one or more separate tax lots, (C) a
certificate from an architect or engineer (licensed to practice in the State
and reasonably acceptable to Lender) to the effect that the Expansion Parcel is
not necessary for the use of the remainder of the Individual Property in the
manner in which it is then being used, including, without limitation, for
support, access, driveways, parking, utilities or drainage flows (after giving
effect to any easements therefor reserved over the Expansion Parcel for the
benefit of the remainder of the Individual Property) and (D) an Officer’s
Certificate with supporting documentation indicating that either (y) sufficient
parking remains on the remainder of the Individual Property to comply with all
Leases of such remainder and with all Operating Agreements and which is
adequate for the proper use and enjoyment of the balance of the Individual
Property or (z) reservations of parking (in favor of such remainder) in
the Expansion Parcel are sufficient (when added to parking otherwise available
to the remainder) to comply with all Leases of such remainder and with all
Operating Agreements and which are adequate for the proper use and enjoyment of
the remainder of the Individual Property;


 


(vi)                              Lender shall have received a Officer’s
Certificate certifying that any improvements proposed to be built on the
Expansion Parcel will not adversely affect the operation of the remainder of
the Individual Property (after giving effect to any easements reserved or
granted for the benefit of such remainder or the Expansion Parcel);


 


(vii)                           Lender shall have received an Appraisal
of the Individual Property (using an income method of valuation (it being
agreed that in conducting such valuation any income that might be derived from
the sale or subsequent use of such Expansion Parcel shall not be included))
dated no more than ninety (90) days prior to the proposed Expansion Date by an
appraiser (which appraiser shall be reasonably acceptable to Lender),
indicating an appraised value of the Individual Property after the release,
both before and after construction of improvements to be built on the Expansion
Parcel, equal to or greater than the greater of (y) one hundred percent
(100%) of the value of such 


 


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Individual Property immediately prior to the release or (z) one
hundred percent (100%) of the Allocated Loan Amount for such Individual
Property on the Expansion Date;


 


(viii)                        Borrower shall have delivered a metes and
bounds description of the Expansion Parcel and a survey of the Expansion Parcel
and the remainder of the Individual Property which would be standard in
commercial lending transactions;


 


(ix)                                Borrower shall have delivered to Lender
on the date of the release an endorsement to the policy or policies of title
insurance insuring the Mortgage on such Individual Property reflecting the
release and (A) insuring Lender’s interest in any easements created in
connection with the Release and (B) confirming no change in the priority
of the Mortgage on the remainder of the Individual Property or in the amount of
the insurance or the coverage under the policy or policies;


 


(x)                                   Borrower shall deliver to Lender an
Officer’s Certificate certifying that the requirements set forth in this Section 11.30
have been satisfied; and


 


(xi)                                Borrower shall pay all out-of-pocket
costs and expenses of Lender incurred in connection with the partial release, including Lender’s reasonably
attorneys’ fees and expenses.


 


(b)                                 If Borrower shall provide a Letter of
Credit to Lender on the Expansion Date as additional security for the Loan, the
amount of the Loan equal to the amount of the Letter of Credit shall be added
to the appraised value of the remainder of the Property after the release for
the purposes of doing the comparison in Section 11.30(a)(vii).


 


(c)                                  if Borrower has elected to release the
Expansion Parcel and the requirements of this Section 11.30 have
been satisfied, the Expansion Parcel shall be released from the Lien of the Mortgage (and related
Loan Documents) and Lender shall consent and subordinate the Lien of the
Mortgage thereto. In connection with the release of the Lien, Borrower shall
submit to Lender, not less than thirty (30) days prior to the Expansion Date
(or such shorter time as is reasonably acceptable
to Lender), a release of Lien (and related Loan Documents) for execution
by Lender. Such release shall be in a form appropriate in the jurisdiction in
which the Property is located and shall contain standard provisions protecting
the rights of a releasing lender. In addition, Borrower shall provide all other
documentation Lender reasonably requires to be delivered by Borrower in
connection with such release, together with an Officer’s Certificate certifying
that such documentation (i) is in compliance with all Legal Requirements,
and (ii) will effect such release in accordance with the terms of this
Agreement. Borrower shall pay all costs, taxes and expenses associated with the
release of the Lien of the Mortgage, including Lender’s reasonable attorneys’
fees. Borrower shall cause title to the Expansion Parcel so released from the
Lien of the Mortgage to be transferred to and held by a Person other than
Borrower.


 


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


 


	
   

  	
  UBS
  REAL ESTATE SECURITIES INC., 

  a
  Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christopher Reilly

  
	
   

  	
   

  	
  Name:

  	
  Christopher
  Reilly

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jeffrey N. Lavine

  
	
   

  	
   

  	
  Name:
  

  	
  Jeffrey
  N. Lavine

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  



 


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  ART
  MORTGAGE BORROWER PROPCO 2006-1B L.P.,

  
	
   

  	
   

  	
  a
  Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  ART
  MORTGAGE BORROWER PROPCO GP

  
	
   

  	
   

  	
   

  	
  2006-1C
  LLC, a Delaware limited
  liability company, its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  AMERICOLD
  REALTY TRUST, a Maryland real estate investment trust, its sole equity member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Anthony Cossentino

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ART
  MORTGAGE BORROWER OPCO 2006-1B LP.,

  
	
   

  	
   

  	
  a
  Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  ART MORTGAGE BORROWER OPCO GP 2006-1C LLC, a
  Delaware limited liability company, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  AMERICOLD LOGISTICS, LLC, a Delaware limited
  liability company, its sole equity member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Anthony Cossentino

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
								



 


117