Document:

Exhibit 4.4

 

FORM OF SUBORDINATED INDENTURE

 

 

 

UR-ENERGY INC.,

ISSUER,

AND

[                      
                  ],

TRUSTEE

 

INDENTURE

DATED AS OF [                            ],
200[    ]

 

 

 

SUBORDINATED DEBT SECURITIES

 

    	 

    	 

    

 

TABLE OF CONTENTS  

 

	 	 	Page
	ARTICLE I DEFINITIONS	 	1
	 	 	 
	Section 1.01 Definitions of Terms	 	1
	 	 	 
	ARTICLE II ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES	 	4
	 	 	 
	Section 2.01 Designation and Terms of Securities	 	4
	Section 2.02 Form of Securities and Trustee’s Certificate	 	6
	Section 2.03 Denominations; Provisions for Payment	 	6
	Section 2.04 Execution and Authentications	 	8
	Section 2.05 Registration of Transfer and Exchange	 	8
	Section 2.06 Temporary Securities	 	9
	Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities	 	10
	Section 2.08 Cancellation	 	10
	Section 2.09 Benefits of Indenture	 	10
	Section 2.10 Authenticating Agent	 	11
	Section 2.11 Global Securities	 	11
	 	 	 
	ARTICLE III REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS	 	12
	 	 	 
	Section 3.01 Redemption	 	12
	Section 3.02 Notice of Redemption	 	12
	Section 3.03 Payment Upon Redemption	 	13
	Section 3.04 Sinking Fund	 	14
	Section 3.05 Satisfaction of Sinking Fund Payments with Securities	 	14
	Section 3.06 Redemption of Securities for Sinking Fund	 	14
	 	 	 
	ARTICLE IV COVENANTS	 	14
	 	 	 
	Section 4.01 Payment of Principal, Premium and Interest	 	14
	Section 4.02 Maintenance of Office or Agency	 	14
	Section 4.03 Paying Agents	 	15
	Section 4.04 Appointment to Fill Vacancy in Office of Trustee	 	15
	 	 	 
	ARTICLE V SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE	 	16
	 	 	 
	Section 5.01 Company to Furnish Trustee Names and Addresses of Securityholders	 	16
	Section 5.02 Preservation Of Information; Communications With Securityholders	 	16
	Section 5.03 Reports by the Company	 	16
	Section 5.04 Reports by the Trustee	 	17
	 	 	 
	ARTICLE VI REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT	 	17
	 	 	 
	Section 6.01 Events of Default	 	17
	Section 6.02 Suits for Enforcement by Trustee	 	19
	Section 6.03 Application of Moneys Collected	 	20
	Section 6.04 Limitation on Suits	 	20

 

    	 

    	 

    

 

	 	 	Page
	Section 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver	 	21
	Section 6.06 Control by Securityholders	 	21
	Section 6.07 Undertaking to Pay Costs	 	22
	 	 	 
	ARTICLE VII CONCERNING THE TRUSTEE	 	22
	 	 	 
	Section 7.01 Certain Duties and Responsibilities of Trustee	 	22
	Section 7.02 Certain Rights of Trustee	 	23
	Section 7.03 Trustee Not Responsible for Recitals or Issuance or Securities	 	24
	Section 7.04 May Hold Securities	 	24
	Section 7.05 Moneys Held in Trust	 	24
	Section 7.06 Compensation and Reimbursement	 	24
	Section 7.07 Reliance on Officers’ Certificate	 	25
	Section 7.08 Disqualification; Conflicting Interests	 	25
	Section 7.09 Corporate Trustee Required; Eligibility	 	25
	Section 7.10 Resignation and Removal; Appointment of Successor	 	25
	Section 7.11 Acceptance of Appointment By Successor	 	26
	Section 7.12 Merger, Conversion, Consolidation or Succession to Business	 	28
	Section 7.13 Preferential Collection of Claims Against the Company	 	28
	 	 	 
	ARTICLE VIII CONCERNING THE SECURITYHOLDERS	 	28
	 	 	 
	Section 8.01 Evidence of Action by Securityholders	 	28
	Section 8.02 Proof of Execution by Securityholders	 	28
	Section 8.03 Who May be Deemed Owners	 	29
	Section 8.04 Certain Securities Owned by Company Disregarded	 	29
	Section 8.05 Actions Binding on Future Securityholders	 	29
	 	 	 
	ARTICLE IX SUPPLEMENTAL INDENTURES	 	30
	 	 	 
	Section 9.01 Supplemental Indentures Without the Consent of Securityholders	 	30
	Section 9.02 Supplemental Indentures With Consent of Securityholders	 	31
	Section 9.03 Effect of Supplemental Indentures	 	31
	Section 9.04 Securities Affected by Supplemental Indentures	 	31
	Section 9.05 Execution of Supplemental Indentures	 	31
	 	 	 
	ARTICLE X SUCCESSOR ENTITY	 	32
	 	 	 
	Section 10.01 Company May Consolidate, Etc	 	32
	Section 10.02 Successor Entity Substituted	 	32
	Section 10.03 Evidence of Consolidation, Etc	 	33
	 	 	 
	ARTICLE XI SATISFACTION AND DISCHARGE	 	33
	 	 	 
	Section 11.01 Satisfaction and Discharge of Indenture	 	33
	Section 11.02 Discharge of Obligations	 	33
	Section 11.03 Deposited Moneys to be Held in Trust	 	33
	Section 11.04 Payment of Moneys Held by Paying Agents	 	34
	Section 11.05 Repayment to Company	 	34

 

    	 

    	 

    

 

	 	 	Page
	ARTICLE XII IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS	 	34
	 	 	 
	Section 12.01 No Recourse	 	34
	 	 	 
	ARTICLE XIII MISCELLANEOUS PROVISIONS	 	34
	 	 	 
	Section 13.01 Effect on Successors and Assigns	 	34
	Section 13.02 Actions by Successor	 	35
	Section 13.03 Notices	 	35
	Section 13.04 Governing Law	 	35
	Section 13.05 Compliance Certificates and Opinions	 	35
	Section 13.06 Payments on Business Days	 	35
	Section 13.07 Conflict with Trust Indenture Act	 	36
	Section 13.08 Counterparts	 	36
	Section 13.09 Separability	 	36
	Section 13.10 Assignment	 	36
	 	 	 
	ARTICLE XIV SUBORDINATION OF SECURITIES	 	36
	 	 	 
	Section 14.01 Subordination Terms	 	36

 

		(1)	This Table of Contents does not constitute part of the Indenture and shall not have any bearing on the interpretation of any
of its terms or provisions.

 

    	 

    	 

    

 

CROSS-REFERENCE TABLE(2) 

 

	Section of Trust Indenture Act of 1939, as amended	 	Section of Indenture
	310(a)(1)	 	7.09
	310(a)(2)	 	7.09
	310(a)(3)	 	Inapplicable
	310(a)(4)	 	Inapplicable
	310(b)	 	7.08
	 	 	7.10
	310(c)	 	Inapplicable
	311(a)	 	7.13
	311(b)	 	7.13
	311(c)	 	Inapplicable
	312(a)	 	5.01
	 	 	5.02(a)
	312(b)	 	5.02(c)
	312(c)	 	5.02(c)
	313(a)	 	5.04(a)
	313(b)	 	5.04(b)
	313(c)	 	5.04(a)
	 	 	5.04(b)
	 	 	5.04(c)
	313(d)	 	5.04(b)
	 	 	5.04(c)
	314(a)	 	5.03
	 	 	13.05(c)
	314(b)	 	Inapplicable
	314(c)	 	13.05
	314(d)	 	Inapplicable
	314(e)	 	13.05
	314(f)	 	Inapplicable
	315(a)(1)	 	7.01(b)
	315(a)(2)	 	7.02
	315(b)	 	5.04(d)
	315(c)	 	7.01
	315(d)	 	7.01
	 	 	7.02
	315(e)	 	6.07
	316(a)	 	6.06
	 	 	8.04
	316(b)	 	6.04
	316(c)	 	8.01
	317(a)	 	6.02
	317(b)	 	4.03
	318(a)	 	13.07

 

		(2)	This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of
any of its terms or provisions.

 

    	 

    	 

    

 

INDENTURE, dated as of [      ],
20[    ], between Ur-Energy Inc., a corporation continued under the Canada Business Corporations Act
(the “Company”), and [      ], as trustee (the “Trustee”):

 

WHEREAS, for its lawful corporate purposes,
the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of unsecured subordinated
debt securities (hereinafter referred to as the “Securities”) in an unlimited aggregate principal amount to be issued
from time to time in one or more series as in this Indenture provided, as registered Securities without coupons, to be authenticated
by the certificate of the Trustee;

 

WHEREAS, to provide the terms and conditions
upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this
Indenture; and

 

WHEREAS, all things necessary to make this
Indenture a valid agreement of the Company, in accordance with its terms, have been done.

 

NOW, THEREFORE, in consideration of the
premises and the purchase of the Securities by the holders thereof, it is mutually covenanted and agreed as follows for the equal
and ratable benefit of the holders of Securities:

 

ARTICLE I

DEFINITIONS

 

Section 1.01 Definitions of Terms.
The terms defined in this Section (except as in this Indenture otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this
Section and shall include the plural as well as the singular. All other terms used in this Indenture that are defined in the Trust
Indenture Act of 1939, as amended, or that are by reference in such Act defined in the Securities Act of 1933, as amended (the
“Securities Act”) (except as herein otherwise expressly provided or unless the context otherwise requires), shall have
the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution
of this instrument.

 

“Authenticating Agent”
means an authenticating agent with respect to all or any of the series of Securities appointed with respect to all or any series
of the Securities by the Trustee pursuant to Section 2.10.

 

“Bankruptcy Law” means
Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

 

“Board of Directors”
means the Board of Directors of the Company or any duly authorized committee of such Board of Directors.

 

“Board Resolution” means
a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company, to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such certification.

 

“Business Day” means,
with respect to any series of Securities, [                                ].

 

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“Certificate” means a
certificate signed by the principal executive officer, the principal financial officer or the principal accounting officer of the
Company. The Certificate need not comply with the provisions of Section 13.05.

 

“Company” means Ur-Energy
Inc., a corporation continued under the Canada Business Corporations Act.

 

“Corporate Trust Office”
means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at [           ], except that whenever
a provision herein refers to an office or agency of the Trustee in the United States, such office is located, at the date hereof,
at [         ].

 

“Custodian” means any
receiver, trustee, assignee, liquidator, or similar official under any Bankruptcy Law.

 

“Default” means any event,
act or condition that with notice or lapse of time, or both, would constitute an Event of Default.

 

“Depositary” means, with
respect to Securities of any series, for which the Company shall determine that such Securities will be issued as a Global Security,
The Depository Trust Company, New York, New York, another clearing agency, or any successor registered as a clearing agency under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or other applicable statute or regulation, which,
in each case, shall be designated by the Company pursuant to either Section 2.01 or 2.11.

 

“Event of Default” means,
with respect to Securities of a particular series any event specified in Section 6.01, continued for the period of time, if
any, therein designated.

 

“Global Security” means,
with respect to any series of Securities, a Security executed by the Company and delivered by the Trustee to the Depositary or
pursuant to the Depositary’s instruction, all in accordance with the Indenture, which shall be registered in the name of
the Depositary or its nominee.

 

“Governmental Obligations”
means securities that are (i) direct obligations of the United States of America or Canada for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or Canada, the payment of which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America or Canada that, in either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian
with respect to any such Governmental Obligation or a specific payment of principal of or interest on any such Governmental Obligation
held by such custodian for the account of the holder of such depositary receipt; provided, however, that (except as required by
law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the Governmental Obligation or the specific payment of principal of or interest
on the Governmental Obligation evidenced by such depositary receipt.

 

“Herein,” “hereof”
and “hereunder,” and other words of similar import, refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.

 

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“Indenture” means this
instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental
hereto entered into in accordance with the terms hereof.

 

“Interest Payment Date,”
when used with respect to any installment of interest on a Security of a particular series, means the date specified in such Security
or in a Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment
of interest with respect to Securities of that series is due and payable.

 

“Officers’ Certificate”
means in the case of the Company, a certificate signed by the Chairman, Chief Executive Officer, President, Chief Financial Officer,
Chief Operating Officer, an Executive Vice President or a Senior Vice President and by the Controller or an Assistant Controller
or the Secretary or an Assistant Secretary of the Company, that is delivered to the Trustee in accordance with the terms hereof.
Each such certificate shall include the statements provided for in Section 13.05, if and to the extent required by the provisions
thereof.

 

“Opinion of Counsel”
means an opinion in writing of legal counsel, who may be an employee of or counsel for the Company, that is delivered to the Trustee
in accordance with the terms hereof. Each such opinion shall include the statements provided for in Section 13.05, if and
to the extent required by the provisions thereof.

 

“Outstanding,” when used
with reference to Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all
Securities of that series theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities
theretofore canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that
have previously been canceled; (b) Securities or portions thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the
Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent);
provided, however, that if such Securities or portions of such Securities are to be redeemed prior to the maturity thereof, notice
of such redemption shall have been given as in Article Three provided, or provision satisfactory to the Trustee shall have been
made for giving such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have been authenticated
and delivered pursuant to the terms of Section 2.07.

 

“Person” means any individual,
corporation, partnership, joint venture, joint-stock company, unincorporated organization or government or any agency or political
subdivision thereof.

 

“Predecessor Security”
of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.07
in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.

 

“Responsible Officer”
when used with respect to the Trustee means the President, any Senior Vice President, the Secretary, the Treasurer, any trust officer,
any corporate trust officer or any other officer or assistant officer of the Trustee customarily performing functions similar to
those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.

 

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“Securities” means the
debt Securities authenticated and delivered under this Indenture.

 

“Securityholder,” “holder
of Securities,” “registered holder” or other similar term, means the Person or Persons in whose name
or names a particular Security shall be registered on the books of the Company kept for that purpose in accordance with the terms
of this Indenture.

 

“Senior Indebtedness”
means indebtedness issued pursuant to a senior indenture, as supplemented or amended by one or more indentures supplemental thereto,
payment of which shall be senior to the payment of the Securities issued hereunder, pursuant to ARTICLE XIV hereof.

 

“Subsidiary” means, with
respect to any Person, (i) any corporation at least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
(ii) any general partnership, joint venture or similar entity, at least a majority of whose outstanding partnership or similar
interests shall at the time be owned by such Person, or by one or more of its Subsidiaries, or by such Person and one or more of
its Subsidiaries and (iii) any limited partnership of which such Person or any of its Subsidiaries is a general partner.

 

“Trustee” means [      ],
and, subject to the provisions of Article Seven, shall also include its successors and assigns, and, if at any time there is more
than one Person acting in such capacity hereunder, “Trustee” shall mean each such Person. The term “Trustee”
as used with respect to a particular series of the Securities shall mean the trustee with respect to that series.

 

“Trust Indenture Act”
means the Trust Indenture Act of 1939, as amended, subject to the provisions of Sections 9.01, 9.02 and 10.01, as in effect at
the date of execution of this instrument.

 

“Voting Stock,” as applied
to stock of any Person, means shares, interests, participations or other equivalents in the equity interest (however designated)
in such Person having ordinary voting power for the election of the directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power only by reason of the occurrence of a contingency.

 

ARTICLE II

ISSUE, DESCRIPTION, TERMS, EXECUTION,

REGISTRATION AND EXCHANGE OF SECURITIES

 

Section 2.01 Designation and Terms
of Securities.

 

(a) The aggregate principal amount of Securities
that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series up
to the aggregate principal amount of Securities of that series from time to time authorized by or pursuant to a Board Resolution
of the Company or pursuant to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of any series,
there shall be established in or pursuant to a Board Resolution of the Company, and set forth in an Officers’ Certificate,
or established in one or more indentures supplemental hereto:

 

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(1) the title of the Security of the series
(which shall distinguish the Securities of the series from all other Securities);

 

(2) any limit upon the aggregate principal
amount of the Securities of that series that may be authenticated and delivered under this Indenture (except for Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series);

 

(3) the date or dates on which the principal
of the Securities of the series is payable and the place(s) of payment;

 

(4) the rate or rates at which the Securities
of the series shall bear interest or the manner of calculation of such rate or rates, if any;

 

(5) the date or dates from which such interest
shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of determination of such Interest
Payment Dates, the place(s) of payment, and the record date for the determination of holders to whom interest is payable on any
such Interest Payment Dates;

 

(6) the right, if any, to extend the interest
payment periods and the duration of such extension;

 

(7) the period or periods within which, the
price or prices at which and the terms and conditions upon which, Securities of the series may be redeemed, in whole or in part,
at the option of the Company;

 

(8) the obligation, if any, of the Company
to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions (including payments made in
cash in satisfaction of future sinking fund obligations) or at the option of a holder thereof and the period or periods within
which, the price or prices at which, and the terms and conditions upon which, Securities of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;

 

(9) the form of the Securities of the series
including the form of the certificate of authentication for such series;

 

(10) if other than denominations of one thousand
U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities of the series shall be issuable;

 

(11) any and all other terms with respect
to such series (which terms shall not be inconsistent with the terms of this Indenture, as amended by any supplemental indenture)
including any terms which may be required by or advisable under United States laws or regulations or advisable in connection with
the marketing of Securities of that series;

 

(12) whether the Securities are issuable as
a Global Security and, in such case, the identity of the Depositary for such series;

 

(13) whether the Securities will be convertible
into shares of common stock or other securities of the Company and, if so, the terms and conditions upon which such Securities
will be so convertible, including the conversion price and the conversion period;

 

    	5

    	 

    

 

(14) if other than the principal amount thereof,
the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the
maturity thereof pursuant to Section 6.01;

 

(15) the subordination terms of the Securities
of the series; and

 

(16) any additional or different Events of
Default or restrictive covenants provided for with respect to the Securities of the series.

 

(b)  All Securities of any one series
shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to any such Board
Resolution or in any indentures supplemental hereto.

 

(c)  If any of the terms of the series
are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified
by the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee at or prior to the delivery of the Officers’
Certificate setting forth the terms of the series.

 

(d)  Securities of any particular series
may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different
rates of interest, if any, or different methods by which rates of interest may be determined, with different dates on which such
interest may be payable and with different redemption dates.

 

Section 2.02 Form of Securities
and Trustee’s Certificate. The Securities of any series and the Trustee’s certificate of authentication to be borne
by such Securities shall be substantially of the tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution and as set forth in an Officers’ Certificate and may have such letters, numbers or other
marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which Securities
of that series may be listed, or to conform to usage.

 

Section 2.03 Denominations; Provisions
for Payment. The Securities shall be issuable as registered Securities and in the denominations of one thousand U.S. dollars
($1,000) or any integral multiple thereof, subject to Section 2.01(10). The Securities of a particular series shall bear interest
payable on the dates and at the rate specified with respect to that series. The principal of and the interest on the Securities
of any series, as well as any premium thereon in case of redemption thereof prior to maturity, shall be payable in the coin or
currency of the United States of America that at the time is legal tender for public and private debt, at the office or agency
of the Company maintained for that purpose in the United States. Each Security shall be dated the date of its authentication. Interest
on the Securities shall be computed on the basis of a 360-day year composed of twelve 30-day months.

 

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The interest installment on any Security
that is payable, and is punctually paid or duly provided for, on any Interest Payment Date for Securities of that series shall
be paid to the Person in whose name said Security (or one or more Predecessor Securities) is registered at the close of business
on the regular record date for such interest installment. In the event that any Security of a particular series or portion thereof
is called for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment Date
and prior to such Interest Payment Date, interest on such Security will be paid upon presentation and surrender of such Security
as provided in Section 3.03.

 

Any interest on any Security that is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called
“Defaulted Interest”) shall forthwith cease to be payable to the registered holder on the relevant regular record date
by virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its election, as provided in
clause (1) or clause (2) below:

 

(1) The Company may make payment of any Defaulted
Interest on Securities to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered
at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following
manner: the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Security
and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit
of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special record
date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice
of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid,
to each Securityholder at his or her address as it appears in the Security Register (as hereinafter defined), not less than 10
days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or their
respective Predecessor Securities) are registered on such special record date.

 

(2) The Company may make payment of any Defaulted
Interest on any Securities in any other lawful manner not inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

Unless otherwise set forth in a Board Resolution
or one or more indentures supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01
hereof, the term “regular record date” as used in this Section with respect to a series of Securities with respect
to any Interest Payment Date for such series shall mean either the fifteenth day of the month immediately preceding the month in
which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment
Date is the first day of a month, or the last day of the month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day
of a month, whether or not such date is a Business Day.

 

    	7

    	 

    

 

Subject to the foregoing provisions of this
Section, each Security of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security
of such series shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security.

 

Section 2.04 Execution and Authentications.
The Securities shall be signed on behalf of the Company by its Chairman, Vice Chairman, Chief Executive Officer, President, Chief
Financial Officer, Chief Operating Officer, or one of its Executive Vice Presidents or Senior Vice Presidents, or its Treasurer,
or one of its Assistant Treasurers, or its Secretary, or one of its Assistant Secretaries, under its corporate seal attested by
its Secretary or one of its Assistant Secretaries. Signatures may be in the form of a manual or facsimile signature. The Company
may use the facsimile signature of any Person who were at any time proper officers of the Company, notwithstanding the fact that
at the time the Securities shall be authenticated and delivered or disposed of such Person shall have ceased to hold such office.
The seal of the Company may be in the form of a facsimile of such seal and may be impressed, affixed, imprinted or otherwise reproduced
on the Securities. The Securities may contain such notations, legends or endorsements required by law, stock exchange rule or usage.
Each Security shall be dated the date of its authentication by the Trustee.

 

No Security shall be valid until authenticated
manually by an authorized signatory of the Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence
that the Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits
of this Indenture. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver
Securities of any series executed by the Company to the Trustee for authentication, together with a written order of the Company
for the authentication and delivery of such Securities, signed by an authorized officer and its Secretary or any Assistant Secretary,
and the Trustee in accordance with such written order shall authenticate and deliver such Securities.

 

In authenticating such Securities and accepting
the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive,
and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms
thereof have been established in conformity with the provisions of this Indenture.

 

The Trustee shall not be required to authenticate
such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.

 

Section 2.05 Registration of Transfer
and Exchange.

 

(a) Securities of any series may be exchanged
upon presentation thereof at the office or agency of the Company designated for such purpose in the United States, for other Securities
of such series of authorized denominations, and for a like aggregate principal amount, upon payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, all as provided in this Section. In respect of any Securities so surrendered
for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in exchange therefor
the Security or Securities of the same series that the Securityholder making the exchange shall be entitled to receive, bearing
numbers not contemporaneously outstanding.

 

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(b) The Company shall keep, or cause to
be kept, at its office or agency designated for such purpose in the United States, or such other location designated by the Company
a register or registers (herein referred to as the “Security Register”) in which, subject to such reasonable regulations
as it may prescribe, the Company shall register the Securities and the transfers of Securities as in this Article provided and
which at all reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of registering Securities
and transfer of Securities as herein provided shall be appointed as authorized by a Board Resolution (the “Security Registrar”).

 

Upon surrender for transfer of any Security
at the office or agency of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate and
such office or agency shall deliver in the name of the transferee or transferees a new Security or Securities of the same series
as the Security presented for a like aggregate principal amount.

 

All Securities presented or surrendered
for exchange or registration of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the
Security Registrar) by a written instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar,
duly executed by the registered holder or by such holder’s duly authorized attorney in writing.

 

(c) No service charge shall be made for
any exchange or registration of transfer of Securities, or issue of new Securities in case of partial redemption of any series,
but the Company may require payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, other
than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer.

 

(d) The Company shall not be required (1) to
issue, exchange or register the transfer of any Securities during a period beginning at the opening of business 15 days before
the day of the mailing of a notice of redemption of less than all the Outstanding Securities of the same series and ending at the
close of business on the day of such mailing, nor (2) to register the transfer of or exchange any Securities of any series
or portions thereof called for redemption. The provisions of this Section 2.05 are, with respect to any Global Security, subject
to Section 2.11 hereof.

 

Section 2.06 Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and the Trustee shall authenticate and
deliver, temporary Securities (printed, lithographed or typewritten) of any authorized denomination. Such temporary Securities
shall be substantially in the form of the definitive Securities in lieu of which they are issued, but with such omissions, insertions
and variations as may be appropriate for temporary Securities, all as may be determined by the Company. Every temporary Security
of any series shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities of such series. Without unnecessary delay the Company will
execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of such series may
be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated for the
purpose in the United States, and the Trustee shall authenticate and such office or agency shall deliver in exchange for such temporary
Securities an equal aggregate principal amount of definitive Securities of such series, unless the Company advises the Trustee
to the effect that definitive Securities need not be executed and furnished until further notice from the Company. Until so exchanged,
the temporary Securities of such series shall be entitled to the same benefits under this Indenture as definitive Securities of
such series authenticated and delivered hereunder.

 

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Section 2.07 Mutilated, Destroyed,
Lost or Stolen Securities. In case any temporary or definitive Security shall become mutilated or be destroyed, lost or stolen,
the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s request, the Trustee (subject
as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost
or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s
Security and of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the
written request or authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may
require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected therewith. In case any Security that has matured
or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute
Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Security) if the
applicant for such payment shall furnish to the Company and the Trustee such security or indemnity as they may require to save
each of them harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee
of the destruction, loss or theft of such Security and of the ownership thereof.

 

Every replacement Security issued pursuant
to the provisions of this Section shall constitute an additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder. All Securities
shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or
payment of negotiable instruments or other securities without their surrender.

 

Section 2.08 Cancellation. All
Securities surrendered for the purpose of payment, redemption, exchange or registration of transfer shall, if surrendered to the
Company or any paying agent, be delivered to the Trustee for cancellation, or, if surrendered to the Trustee, shall be cancelled
by it, and no Securities shall be issued in lieu thereof except as expressly required or permitted by any of the provisions of
this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver to the Company canceled Securities
held by the Trustee. In the absence of such request the Trustee may dispose of canceled Securities in accordance with its standard
procedures and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire any of the Securities,
however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are delivered to the Trustee for cancellation.

 

Section 2.09 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give or be construed to give to any Person, other than
the parties hereto and the holders of the Securities (and, with respect to the provisions of ARTICLE XIV, the holders of Senior
Indebtedness), any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition
or provision herein contained; all such covenants, conditions and provisions being for the sole benefit of the parties hereto and
of the holders of the Securities (and, with respect to the provisions of ARTICLE XIV, the holders of Senior Indebtedness).

 

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Section 2.10 Authenticating Agent.
So long as any of the Securities of any series remain Outstanding there may be an Authenticating Agent for any or all such series
of Securities which the Trustee shall have the right to appoint. Said Authenticating Agent shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon exchange, transfer or partial redemption thereof, and Securities
so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. All references in this Indenture to the authentication of Securities by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be acceptable to the Company
and shall be a corporation that has a combined capital and surplus, as most recently reported or determined by it, sufficient under
the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business, and that
is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by Federal or State
authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign
immediately.

 

Any Authenticating Agent may at any time
resign by giving written notice of resignation to the Trustee, to the Company. The Trustee may at any time (and upon request by
the Company shall) terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating
Agent, to the Company. Upon resignation, termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its
appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder as if originally
named as an Authenticating Agent pursuant hereto.

 

Section 2.11 Global Securities.

 

(a) If the Company shall establish pursuant
to Section 2.01 that the Securities of a particular series are to be issued as a Global Security, then the Company shall execute
and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that (1) shall represent,
and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such series,
(2) shall be registered in the name of the Depositary or its nominee, (3) shall be delivered by the Trustee to the Depositary
or pursuant to the Depositary’s instruction and (4) shall bear a legend substantially to the following effect: “Except
as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred, in whole but not in part, only to
another nominee of the Depositary or to a successor Depositary or to a nominee of such successor Depositary.”

 

(b) Notwithstanding the provisions of Section 2.05,
the Global Security of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05, only
to another nominee of the Depositary for such series, or to a successor Depositary for such series selected or approved by the
Company or to a nominee of such successor Depositary.

 

(c) If at any time the Depositary for a
series of the Securities notifies the Company that it is unwilling or unable to continue as Depositary for such series or if at
any time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable
statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, as the case may be, this Section 2.11 shall no longer be applicable
to the Securities of such series and the Company will execute and, subject to Section 2.05, the Trustee will authenticate
and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security.
In addition, the Company may at any time determine that the Securities of any series shall no longer be represented by a Global
Security and that the provisions of this

 

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Section 2.11 shall no longer apply
to the Securities of such series. In such event the Company will execute and, subject to Section 2.05, the Trustee, upon receipt
of an Officers’ Certificate evidencing such determination by the Company, will authenticate and deliver the Securities of
such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Security of such series in exchange for such Global Security. Upon the exchange of the Global
Security for such Securities in definitive registered form without coupons, in authorized denominations, the Global Security shall
be canceled by the Trustee. Such Securities in definitive registered form issued in exchange for the Global Security pursuant to
this Section 2.11(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such
Securities to the Depositary for delivery to the Persons in whose names such Securities are so registered.

 

ARTICLE III

REDEMPTION OF SECURITIES AND SINKING FUND
PROVISIONS

 

Section 3.01 Redemption. The
Company may redeem the Securities of any series issued hereunder on and after the dates and in accordance with the terms established
for such series pursuant to Section 2.01 hereof.

 

Section 3.02 Notice of Redemption.

 

(a) In case the Company shall desire to
exercise such right to redeem all or, as the case may be, a portion of the Securities of any series in accordance with the right
reserved so to do, the Company shall, or shall cause the Trustee to, give notice of such redemption to holders of the Securities
of such series to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not
more than 90 days before the date fixed for redemption of that series to such holders at their last addresses as they shall appear
upon the Security Register unless a shorter period is specified in the Securities to be redeemed. Any notice that is mailed in
the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives
the notice. In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption
in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other
Securities of such series or any other series. In the case of any redemption of Securities prior to the expiration of any restriction
on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officers’ Certificate evidencing compliance with any such restriction.

 

Each such notice of redemption shall specify
the date fixed for redemption and the redemption price at which Securities of that series are to be redeemed, and shall state that
payment of the redemption price of such Securities to be redeemed will be made at the office or agency of the Company in the United
States, upon presentation and surrender of such Securities, that interest accrued to the date fixed for redemption will be paid
as specified in said notice, that from and after said date interest will cease to accrue and that the redemption is for a sinking
fund, if such is the case. If less than all the Securities of a series are to be redeemed, the notice to the holders of Securities
of that series to be redeemed in whole or in part shall specify the particular Securities to be so redeemed. In case any Security
is to be redeemed in part only, the notice that relates to such Security shall state the portion of the principal amount thereof
to be redeemed, and shall state that on and after the redemption date, upon surrender of such Security, a new Security or Securities
of such series in principal amount equal to the unredeemed portion thereof will be issued.

 

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(b) If less than all the Securities of a
series are to be redeemed, the Company shall give the Trustee at least 45 days’ notice in advance of the date fixed for redemption
as to the aggregate principal amount of Securities of the series to be redeemed, and thereupon the Trustee shall select, by lot
or in such other manner as it shall deem appropriate and fair in its discretion and that may provide for the selection of a portion
or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof) of the principal amount of such Securities
of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly notify the Company in writing
of the numbers of the Securities to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect, by delivery
of instructions signed on its behalf by its Chairman, Vice Chairman, Chief Executive Officer, President, Chief Financial Officer,
Chief Operating Officer, or any Executive Vice President or Senior Vice President, instruct the Trustee or any paying agent to
call all or any part of the Securities of a particular series for redemption and to give notice of redemption in the manner set
forth in this Section, such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In any case in which notice of redemption is to be given by the Trustee or any such paying agent, the Company shall
deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security
Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying
agent to give any notice by mail that may be required under the provisions of this Section.

 

Section 3.03 Payment Upon Redemption.

 

(a) If the giving of notice of redemption
shall have been completed as above provided, the Securities or portions of Securities of the series to be redeemed specified in
such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption and interest on such Securities or portions of Securities shall
cease to accrue on and after the date fixed for redemption, unless the Company shall default in the payment of such redemption
price and accrued interest with respect to any such Security or portion thereof. On presentation and surrender of such Securities
on or after the date fixed for redemption at the place of payment specified in the notice, said Securities shall be paid and redeemed
at the applicable redemption price for such series, together with interest accrued thereon to the date fixed for redemption (but
if the date fixed for redemption is an interest payment date, the interest installment payable on such date shall be payable to
the registered holder at the close of business on the applicable record date pursuant to Section 2.03).

 

(b) Upon presentation of any Security of
such series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the office or
agency where the Security is presented shall deliver to the holder thereof, at the expense of the Company, a new Security of the
same series of authorized denominations in principal amount equal to the unredeemed portion of the Security so presented.

 

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Section 3.04 Sinking Fund. The
provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement of Securities of a series,
except as otherwise specified as contemplated by Section 2.01 for Securities of such series. The minimum amount of any sinking
fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,”
and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as
an “optional sinking fund payment”. If provided for by the terms of Securities of any series, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 3.05. Each sinking fund payment shall be applied to
the redemption of Securities of any series as provided for by the terms of Securities of such series.

 

Section 3.05 Satisfaction of Sinking
Fund Payments with Securities. The Company (a) may deliver Outstanding Securities of a series (other than any Securities
previously called for redemption) and (b) may apply as a credit Securities of a series that have been redeemed either at the
election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment
with respect to the Securities of such series required to be made pursuant to the terms of such Securities, provided that such
Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee
at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.

 

Section 3.06 Redemption of Securities
for Sinking Fund. Not less than 45 days prior to each sinking fund payment date for any series of Securities, the Company will
deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of the series, the portion thereof, if any, that is to be satisfied by delivering and crediting Securities
of that series pursuant to Section 3.05 and the basis for such credit and will, together with such Officers’ Certificate,
deliver to the Trustee any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.02
and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided
in Section 3.02. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in
the manner stated in Section 3.03.

 

ARTICLE IV

COVENANTS

 

Section 4.01 Payment of Principal,
Premium and Interest. The Company will duly and punctually pay or cause to be paid the principal of (and premium, if any) and
interest on the Securities of that series at the time and place and in the manner provided herein and established with respect
to such Securities.

 

Section 4.02 Maintenance of Office
or Agency. So long as any series of the Securities remain Outstanding, the Company agrees to maintain an office or agency in
the United States, with respect to each such series and at such other location or locations as may be designated as provided in
this Section 4.02, where (a) Securities of that series may be presented for payment, (b) Securities of that series
may be presented as herein above authorized for registration of transfer and exchange, and (c) notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may be given or served, such designation to continue
with respect to such office or agency until the Company shall, by written notice signed by its Chairman, Vice Chairman, Chief Executive
Officer, President, Chief Financial Officer, Chief Operating Officer, or an Executive Vice President or Senior Vice President and
delivered to the Trustee, designate some other office or agency for such purposes or any of them. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations,
notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee
as its agent to receive all such presentations, notices and demands.

 

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Section 4.03 Paying Agents.

 

(a) If the Company shall appoint one or
more paying agents for all or any series of the Securities, other than the Trustee, the Company will cause each such paying agent
to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions
of this Section:

 

(1) that it will hold all sums held by it
as such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series (whether such
sums have been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons entitled
thereto;

 

(2) that it will give the Trustee notice of
any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of (and premium, if
any) or interest on the Securities of that series when the same shall be due and payable;

 

(3) that it will, at any time during the continuance
of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent; and

 

(4) that it will perform all other duties
of paying agent as set forth in this Indenture.

 

(b) If the Company shall act as its own
paying agent with respect to any series of the Securities, it will on or before each due date of the principal of (and premium,
if any) or interest on Securities of that series, set aside, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay such principal (and premium, if any) or interest so becoming due on Securities of that series until
such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of such
action, or any failure (by it or any other obligor on such Securities) to take such action. Whenever the Company shall have one
or more paying agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or
interest on any Securities of that series, deposit with the paying agent a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium
or interest, and (unless such paying agent is the Trustee) the Company will promptly notify the Trustee of this action or failure
so to act.

 

(c) Notwithstanding anything in this Section
to the contrary, (1) the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 11.05,
and (2) the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in trust by the Company or such paying
agent, such sums to be held by the Trustee upon the same terms and conditions as those upon which such sums were held by the Company
or such paying agent; and, upon such payment by any paying agent to the Trustee, such paying agent shall be released from all further
liability with respect to such money.

 

Section 4.04 Appointment to Fill
Vacancy in Office of Trustee. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint,
in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder.

 

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ARTICLE V

SECURITYHOLDERS’ LISTS AND REPORTS

BY THE COMPANY AND THE TRUSTEE

 

Section 5.01 Company to Furnish
Trustee Names and Addresses of Securityholders. The Company will furnish or cause to be furnished to the Trustee (a) on
each regular record date (as defined in Section 2.03), but in each case will be no more than six months apart, a list, in
such form as the Trustee may reasonably require, of the names and addresses of the holders of each series of Securities as of such
regular record date, provided that the Company shall not be obligated to furnish or cause to be furnished such list at any time
that the list shall not differ in any respect from the most recent list furnished to the Trustee by the Company and (b) at
such other times as the Trustee may request in writing within 30 days after the receipt by the Company of any such request, a list
of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that,
in either case, no such list need be furnished for any series for which the Trustee shall be the Security Registrar.

 

Section 5.02 Preservation Of Information;
Communications With Securityholders.

 

(a) The Trustee shall preserve, in as current
a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in the
most recent list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of Securities received
by the Trustee in its capacity as Security Registrar (if acting in such capacity).

 

(b) The Trustee may destroy any list furnished
to it as provided in Section 5.01 upon receipt of a new list so furnished.

 

(c) Securityholders may communicate as provided
in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture
or under the Securities. The Company, the Trustee, the Security Registrar and any other Person shall have the protection of the
Trust Indenture Act Section 312(c).

 

Section 5.03 Reports by the Company.

 

(a) The Company covenants and agrees to
file with the Trustee, within 15 days after the Company files the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) that the Company may be required to file with the Commission pursuant to Section 13
or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant
to either of such sections, then to file with the Trustee and the Commission, in accordance with the rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic information, documents and reports that may be required
pursuant to Section 13 of the Exchange Act, in respect of a security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and regulations.

 

(b) The Company covenants and agrees to
file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from to time by the Commission,
such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants
provided for in this Indenture as may be required from time to time by such rules and regulations.

 

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(c) The Company covenants and agrees to
transmit by mail, first class postage prepaid, or reputable overnight delivery service that provides for evidence of receipt, to
the Securityholders, as their names and addresses appear upon the Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections
(a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.

 

Section 5.04 Reports by the Trustee.

 

(a) On or before [      ]
in each year in which any of the Securities are Outstanding, the Trustee shall transmit by mail, first class postage prepaid, to
the Securityholders, as their names and addresses appear upon the Security Register, a brief report dated as of the preceding [      ],
if and to the extent required under Section 313(a) of the Trust Indenture Act.

 

(b) The Trustee shall comply with Sections
313(b), 313(c) and 313(d) of the Trust Indenture Act.

 

(c) A copy of each such report shall, at
the time of such transmission to Securityholders, be filed by the Trustee with the Company, with each stock exchange upon which
any Securities are listed (if so listed) and also with the Commission. The Company agrees to notify the Trustee when any Securities
become listed on any stock exchange.

 

(d) If an Event of Default occurs and is
continuing and the Trustee receives actual notice of such Event of Default, the Trustee shall mail to each Securityholder notice
of the uncured Event of Default within 90 days after the occurrence thereof. Except in the case of an Event of Default in payment
of principal of, or interest on, any Securities, or in the payment of any sinking or purchase fund installment, the Trustee may
withhold the notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the Securityholders.

 

ARTICLE VI

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT

 

Section 6.01 Events of Default.

 

(a) Whenever used herein with respect to
Securities of a particular series, “Event of Default” means any one or more of the following events that has occurred
and is continuing:

 

(1) the Company defaults in the payment of
any installment of interest upon any of the Securities of that series, as and when the same shall become due and payable, and such
default continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by the Company
in accordance with the terms of any indenture supplemental hereto, shall not constitute a default in the payment of interest for
this purpose;

 

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(2) the Company defaults in the payment of
the principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable
whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund
established with respect to that series; provided, however, that a valid extension of the maturity of such Securities in accordance
with the terms of any indenture supplemental hereto shall not constitute a default in the payment of principal or premium, if any;

 

(3) the Company fails to observe or perform
any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established with
respect to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly
included in this Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90
days after the date on which written notice of such failure, requiring the same to be remedied and stating that such notice is
a “Notice of Default” hereunder, shall have been given to the Company by the Trustee, by registered or certified mail,
or to the Company and the Trustee by the holders of at least 25% in principal amount of the Securities of that series at the time
Outstanding;

 

(4) the Company pursuant to or within the
meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against
it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property
or (iv) makes a general assignment for the benefit of its creditors; or

 

(5) a court of competent jurisdiction enters
an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a
Custodian of the Company for all or substantially all of its property or (iii) orders the liquidation of the Company, and
the order or decree remains unstayed and in effect for 90 days.

 

(b) In each and every such case, unless
the principal of all the Securities of that series shall have already become due and payable, either the Trustee or the holders
of not less than 25% in aggregate principal amount of the Securities of that series then Outstanding hereunder, by notice in writing
to the Company (and to the Trustee if given by such Securityholders), may declare the principal of all the Securities of that series
to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable.

 

(c) At any time after the principal of the
Securities of that series shall have been so declared due and payable, and before any judgment or decree for the payment of the
moneys due shall have been obtained or entered as hereinafter provided, the holders of a majority in aggregate principal amount
of the Securities of that series then Outstanding hereunder, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if: (1) the Company has paid or deposited with the Trustee a sum sufficient to
pay all matured installments of interest upon all the Securities of that series and the principal of (and premium, if any, on)
all Securities of that series that shall have become due otherwise than by acceleration (with interest upon such principal and
premium, if any, and, to the extent that such payment is enforceable under applicable law, upon overdue installments of interest,
at the rate per annum expressed in the Securities of that series to the date of such payment or deposit) and any amount payable
to the Trustee under Section 7.06, and (2) any and all other Events of Default under the Indenture with respect to such
series, other than the nonpayment of principal on Securities of that series that shall not have become due by their terms, shall
have been remedied or waived as provided in Section 6.06.

 

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No such rescission and annulment shall extend
to or shall affect any subsequent default or impair any right consequent thereon.

 

(d) In case the Trustee shall have proceeded
to enforce any right with respect to Securities of that series under this Indenture and such proceedings shall have been discontinued
or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee,
then and in every such case, subject to any determination in such proceedings, the Company and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and powers of the Company, and the Trustee shall continue
as though no such proceedings had been taken.

 

Section 6.02 Suits for Enforcement
by Trustee.

 

(a) If an Event of Default specified in
Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums
so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment
or final decree against the Company or any other obligor upon the Securities of that series and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Securities
of that series, wherever situated.

 

(b) In case of any receivership, insolvency,
liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings affecting the Company,
or its creditors or property, the Trustee shall have power to intervene in such proceedings and take any action therein that may
be permitted by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other
papers and documents as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Securities
of a series allowed for the entire amount due and payable by the Company under this Indenture at the date of institution of such
proceedings and for any additional amount that may become due and payable by the Company after such date, and to collect and receive
any moneys or other property payable or deliverable on any such claim, and to distribute the same after the deduction of the amount
payable to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the holders of Securities of such series to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to such Securityholders, to pay to the Trustee any amount due it
under Section 7.06.

 

(c) All rights of action and of asserting
claims under this Indenture, or under any of the terms established with respect to Securities of a series, may be enforced by the
Trustee without the possession of any of such Securities, or the production thereof at any trial or other proceeding relative thereto,
and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06, be for the
ratable benefit of the holders of the Securities of such series.

 

In case of an Event of Default hereunder,
the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity
or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee
by this Indenture or by law.

 

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Nothing contained herein shall be deemed
to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.

 

Section 6.03 Application of Moneys
Collected. Any moneys collected by the Trustee pursuant to this Article with respect to a particular series of Securities shall
be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on
account of principal (or premium, if any) or interest, upon presentation of the Securities of that series, and notation thereon
the payment, if only partially paid, and upon surrender thereof if fully paid:

 

FIRST: To the payment of costs and expenses of collection and
of all amounts payable to the Trustee under Section 7.06;

 

SECOND: To the payment of all Senior Indebtedness of the Company
if and to the extent required by ARTICLE XIV; and

 

THIRD: To the payment of the amounts then due and unpaid upon
Securities of such series for principal (and premium, if any) and interest, in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such
Securities for principal (and premium, if any) and interest, respectively.

 

Section 6.04 Limitation on Suits.
No holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute
any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless (a) such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof with respect to the Securities of such series specifying such
Event of Default, as hereinbefore provided; (b) the holders of not less than 25% in aggregate principal amount of the Securities
of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in
its own name as trustee hereunder; (c) such holder or holders shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred therein or thereby; (d) the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding;
and (e) during such 60-day period, the holders of a majority in principal amount of the Securities of that series shall not
have given the Trustee a direction inconsistent with the request.

 

Notwithstanding anything contained herein
to the contrary, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and interest
on such Security, as therein provided, on or after the respective due dates expressed in such Security (or in the case of redemption,
on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such holder. By accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security of such series with every other such taker and holder and the
Trustee, that no one or more holders of Securities of such series shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities,
or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable and common benefit of all holders of Securities of such series.
For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.

 

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Section 6.05 Rights and Remedies
Cumulative; Delay or Omission Not Waiver.

 

(a) All powers and remedies given by this
Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any other powers and remedies available to the Trustee or the holders of the Securities, by judicial proceedings or otherwise,
to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise established with
respect to such Securities.

 

(b) No delay or omission of the Trustee
or of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or on acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee
or the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.

 

Section 6.06 Control by Securityholders.
The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding, determined in
accordance with Section 8.01, shall have the right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such series; provided,
however, that such direction shall not be in conflict with any rule of law or with this Indenture or be unduly prejudicial to the
rights of holders of Securities of any other series at the time Outstanding determined in accordance with Section 8.01. Subject
to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee
in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability. The holders of a majority in aggregate principal amount of the Securities of any series at the
time Outstanding affected thereby, determined in accordance with Section 8.01, may on behalf of the holders of all of the
Securities of such series waive any past default in the performance of any of the covenants contained herein or established pursuant
to Section 2.01 with respect to such series and its consequences, except an uncured default in the payment of the principal
of (or premium, if any) or interest on, any of the Securities of that series as and when the same shall become due by the terms
of such Securities otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all matured installments
of interest and principal and any premium has been deposited with the Trustee (in accordance with Section 6.01(c)). Upon any
such waiver, the default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Company, the Trustee
and the holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

 

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Section 6.07 Undertaking to Pay
Costs. All parties to this Indenture agree, and each holder of any Securities by such holder’s acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more than 10% in
aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of (or premium, if any) or interest on any Security of such series, on or after the
respective due dates expressed in such Security or established pursuant to this Indenture.

 

ARTICLE VII

CONCERNING THE TRUSTEE

 

Section 7.01 Certain Duties and
Responsibilities of Trustee.

 

(a) The Trustee, prior to the occurrence
of an Event of Default with respect to the Securities of a series and after the curing of all Events of Default with respect to
the Securities of that series that may have occurred, shall undertake to perform with respect to the Securities of such series
such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this
Indenture against the Trustee. In case an Event of Default with respect to the Securities of a series has occurred (that has not
been cured or waived), the Trustee shall exercise with respect to Securities of that series such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his own affairs.

 

(b) No provision of this Indenture shall
be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

 

(1) prior to the occurrence of an Event of
Default with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect to
that series that may have occurred:

 

(i) the duties and obligations of the Trustee
shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and the Trustee
shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against
the Trustee; and

 

(ii) in the absence of bad faith on the
part of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;

 

(2) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;

 

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(3) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than
a majority in principal amount of the Securities of any series at the time Outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee
under this Indenture with respect to the Securities of that series; and

 

(4) none of the provisions contained in this
Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment
of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such
risk is not reasonably assured to it.

 

Section 7.02 Certain Rights of Trustee.
Except as otherwise provided in Section 7.01:

 

(a) The Trustee may rely and shall be protected
in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, security or other paper or document believed by it to be genuine and to have been signed or presented
by the proper party or parties;

 

(b) Any request, direction, order or demand
of the Company shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company, by the
Chairman, Vice Chairman, Chief Executive Officer, President, Executive Vice President or any Senior Vice President and by the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer thereof (unless other evidence in respect thereof is specifically
prescribed herein);

 

(c) The Trustee may consult with counsel
and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted hereunder in good faith and in reliance thereon;

 

(d) The Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders,
pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the Securities
(that has not been cured or waived) to exercise with respect to Securities of that series such of the rights and powers vested
in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs;

 

(e) The Trustee shall not be liable for
any action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Indenture;

 

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(f) The Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, security or other papers or documents, unless requested in writing so to do by the holders
of not less than a majority in principal amount of the Outstanding Securities of the particular series affected thereby (determined
as provided in Section 8.04); provided, however, that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable
indemnity against such costs, expenses or liabilities as a condition to so proceeding. The reasonable expense of every such examination
shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; and

 

(g) The Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall
not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

 

Section 7.03 Trustee Not Responsible
for Recitals or Issuance or Securities.

 

(a) The recitals contained herein and in
the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of
the same.

 

(b) The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities.

 

(c) The Trustee shall not be accountable
for the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the use or application
of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01,
or for the use or application of any moneys received by any paying agent other than the Trustee.

 

Section 7.04 May Hold Securities.
The Trustee or any paying agent or Security Registrar, in its individual or any other capacity, may become the owner or pledgee
of Securities with the same rights it would have if it were not Trustee, paying agent or Security Registrar.

 

Section 7.05 Moneys Held in Trust.
Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any moneys received by it hereunder except such as it
may agree with the Company to pay thereon.

 

Section 7.06 Compensation and Reimbursement.

 

(a) The Company covenants and agrees to
pay to the Trustee, and the Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust), as the Company and the Trustee may from time to time agree
in writing, for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee, and, except as otherwise expressly provided herein, the Company will pay
or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements
of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith. The Company also covenants to indemnify the Trustee (and its officers, agents, directors and employees)
for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the
Trustee and arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim of liability in the premises.

 

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(b) The obligations of the Company under
this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Securities.

 

Section 7.07 Reliance on Officers’
Certificate. Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting
to take any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in
the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers’
Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith on the part of the Trustee,
shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.

 

Section 7.08 Disqualification; Conflicting
Interests. If the Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b)
of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.

 

Section 7.09 Corporate Trustee Required;
Eligibility. There shall at all times be a Trustee with respect to the Securities issued hereunder which shall at all times
be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the Commission, authorized under
such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published. The Company may not, nor may any
Person directly or indirectly controlling, controlled by or under common control with the Company, serve as Trustee. In case at
any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately
in the manner and with the effect specified in Section 7.10.

 

Section 7.10 Resignation and Removal;
Appointment of Successor.

 

(a) The Trustee or any successor hereafter
appointed, may at any time resign with respect to the Securities of one or more series by giving written notice thereof to the
Company and by transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of such series,
as their names and addresses appear upon the Security Register. Upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the mailing of
such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor
trustee with respect to Securities of such series, or any Securityholder of that series who has been a bona fide holder of a Security
or Securities for at least six months may on behalf of himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, appoint
a successor trustee.

 

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(b) In case at any time any one of the following
shall occur:

 

(1) the Trustee shall fail to comply with
the provisions of Section 7.08 after written request therefor by the Company or by any Securityholder who has been a bona
fide holder of a Security or Securities for at least six months; or

 

(2) the Trustee shall cease to be eligible
in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or
by any such Securityholder; or

 

(3) the Trustee shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee
or of its property shall be appointed or consented to, or any public officer shall take charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Company may
remove the Trustee with respect to all Securities and appoint a successor trustee by written instrument, in duplicate, executed
by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, unless the Trustee’s duty to resign is stayed as provided herein, any Securityholder who has been
a bona fide holder of a Security or Securities for at least six months may, on behalf of that holder and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

 

(c) The holders of a majority in aggregate
principal amount of the Securities of any series at the time Outstanding may at any time remove the Trustee with respect to such
series by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with the consent of the
Company.

 

(d) Any resignation or removal of the Trustee
and appointment of a successor trustee with respect to the Securities of a series pursuant to any of the provisions of this Section
shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11.

 

(e) Any successor trustee appointed pursuant
to this Section may be appointed with respect to the Securities of one or more series or all of such series, and at any time there
shall be only one Trustee with respect to the Securities of any particular series.

 

Section 7.11 Acceptance of Appointment
By Successor.

 

(a) In case of the appointment hereunder
of a successor trustee with respect to all Securities, every such successor trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor
trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor
trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor
trustee all property and money held by such retiring Trustee hereunder.

 

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(b) In case of the appointment hereunder
of a successor trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and
each successor trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor trustee shall accept such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee
relates, (2) shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee
is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of
the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee and that no Trustee shall be responsible for any act or failure to act on the
part of any other Trustee hereunder; and upon the execution and delivery of such supplemental indenture the resignation or removal
of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall with respect to the
Securities of that or those series to which the appointment of such successor trustee relates have no further responsibility for
the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture,
and each such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such
successor trustee relates; but, on request of the Company or any successor trustee, such retiring Trustee shall duly assign, transfer
and deliver to such successor trustee, to the extent contemplated by such supplemental indenture, the property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor
trustee relates.

 

(c) Upon request of any such successor trustee,
the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor trustee
all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.

 

(d) No successor trustee shall accept its
appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article.

 

(e) Upon acceptance of appointment by a
successor trustee as provided in this Section, the Company shall transmit notice of the succession of such trustee hereunder by
mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register. If the
Company fails to transmit such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be transmitted at the expense of the Company.

 

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Section 7.12 Merger, Conversion,
Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of
Section 7.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. In case any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

 

Section 7.13 Preferential Collection
of Claims Against the Company. The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall
be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.

 

ARTICLE VIII

CONCERNING THE SECURITYHOLDERS

 

Section 8.01 Evidence of Action
by Securityholders. Whenever in this Indenture it is provided that the holders of a majority or specified percentage in aggregate
principal amount of the Securities of a particular series may take any action (including the making of any demand or request, the
giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action
the holders of such majority or specified percentage of that series have joined therein may be evidenced by any instrument or any
number of instruments of similar tenor executed by such holders of Securities of that series in Person or by agent or proxy appointed
in writing.

 

If the Company shall solicit from the Securityholders
of any series any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option,
as evidenced by an Officers’ Certificate, fix in advance a record date for such series for the determination of Securityholders
entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall
have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver
or other action may be given before or after the record date, but only the Securityholders of record at the close of business on
the record date shall be deemed to be Securityholders for the purposes of determining whether Securityholders of the requisite
proportion of Outstanding Securities of that series have authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the Outstanding Securities of that series shall be computed
as of the record date; provided, however, that no such authorization, agreement or consent by such Securityholders on the record
date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six
months after the record date.

 

Section 8.02 Proof of Execution
by Securityholders. Subject to the provisions of Section 7.01, proof of the execution of any instrument by a Securityholder
(such proof will not require notarization) or his agent or proxy and proof of the holding by any Person of any of the Securities
shall be sufficient if made in the following manner:

 

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(a) The fact and date of the execution by
any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.

 

(b) The ownership of Securities shall be
proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof.

 

(c) The Trustee may require such additional
proof of any matter referred to in this Section as it shall deem necessary.

 

Section 8.03 Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of any Security, the Company, the Trustee, any paying agent and any Security
Registrar may deem and treat the Person in whose name such Security shall be registered upon the books of the Company as the absolute
owner of such Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership or writing thereon
made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal of (and
premium, if any) and (subject to Section 2.03) interest on such Security and for all other purposes; and neither the Company
nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary.

 

Section 8.04 Certain Securities
Owned by Company Disregarded. In determining whether the holders of the requisite aggregate principal amount of Securities
of a particular series have concurred in any direction, consent or waiver under this Indenture, the Securities of that series that
are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly controlling
or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether
the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities of such series that the Trustee
actually knows are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may be regarded
as Outstanding for the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s
right so to act with respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company or any such other obligor. In case of a dispute as to such right,
any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

 

Section 8.05 Actions Binding on
Future Securityholders. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01,
of the taking of any action by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular
series specified in this Indenture in connection with such action, any holder of a Security of that series that is shown by the
evidence to be included in the Securities the holders of which have consented to such action may, by filing written notice with
the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security. Except
as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and upon all
future holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof
or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such Security. Any action taken
by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in
this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all
the Securities of that series.

 

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ARTICLE IX

SUPPLEMENTAL INDENTURES

 

Section 9.01 Supplemental Indentures
Without the Consent of Securityholders. In addition to any supplemental indenture otherwise authorized by this Indenture, the
Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for
one or more of the following purposes:

 

 (a) to cure any ambiguity, defect
or inconsistency herein or in the Securities of any series;

 

(b) to comply with Article Ten;

 

(c) to provide for uncertificated Securities
in addition to or in place of certificated Securities;

 

(d) to add to the covenants of the Company
for the benefit of the holders of all or any series of Securities (and if such covenants are to be for the benefit of less than
all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company;

 

(e) to add to, delete from or revise the
conditions, limitations and restrictions on the authorized amount, terms, purposes of issue, authentication and delivery of Securities,
as herein set forth;

 

(f) to make any change that does not adversely
affect the rights of any Securityholder in any material respect; or

 

(g) to provide for the issuance of and establish
the form and terms and conditions of the Securities of any series as provided in Section 2.01, to establish the form of any
certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add to the rights
of the holders of any series of Securities.

 

The Trustee is hereby authorized to join
with the Company in the execution of any such supplemental indenture, and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects
the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by
the provisions of this Section may be executed by the Company and the Trustee without the consent of the holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of Section 9.02.

 

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Section 9.02 Supplemental Indentures
With Consent of Securityholders. With the consent (evidenced as provided in Section 8.01) of the holders of not less than
a majority in aggregate principal amount of the Securities of each series affected by such supplemental indenture or indentures
at the time Outstanding, the Company, when authorized by Board Resolutions, and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as
then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders
of the Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the
consent of the holders of each Security then Outstanding and affected thereby, (i) extend the fixed maturity of any Securities
of any series, or reduce the principal amount thereof, or reduce the rate of interest thereon, or reduce any premium payable upon
the redemption thereof, or (ii) reduce the aforesaid percentage of Securities, the holders of which are required to consent
to any such supplemental indenture.

 

It shall not be necessary for the consent
of the Securityholders of any series affected thereby under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the substance thereof.

 

Section 9.03 Effect of Supplemental
Indentures. Upon the execution of any supplemental indenture pursuant to the provisions of this Article or of Section 10.01,
this Indenture shall, with respect to such series, be and be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and
the holders of Securities of the series affected thereby shall thereafter be determined, exercised and enforced hereunder subject
in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall
be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

Section 9.04 Securities Affected
by Supplemental Indentures. Securities of any series affected by a supplemental indenture, authenticated and delivered after
the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01, may bear a notation
in form approved by the Company, provided such form meets the requirements of any exchange upon which such series may be listed,
as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of that series
so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities
of that series then Outstanding.

 

Section 9.05 Execution of Supplemental
Indentures. Upon the request of the Company, accompanied by Board Resolutions authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders required to consent thereto as aforesaid,
the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects
the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion
but shall not be obligated to enter into such supplemental indenture. The Trustee, subject to the provisions of Section 7.01,
may receive an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article is authorized
or permitted by, and conforms to, the terms of this Article and that it is proper for the Trustee under the provisions of this
Article to join in the execution thereof; provided, however, that such Opinion of Counsel need not be provided in connection with
the execution of a supplemental indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.

 

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Promptly after the execution by the Company
and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first
class postage prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders
of all series affected thereby as their names and addresses appear upon the Security Register. Any failure of the Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

ARTICLE X

SUCCESSOR ENTITY

 

Section 10.01 Company May Consolidate,
Etc. Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of the Company
with or into any other Person (whether or not affiliated with the Company) or successive consolidations or mergers in which the
Company or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other disposition
of the property of the Company, or its successor or successors as an entirety, or substantially as an entirety, to any other corporation
(whether or not affiliated with the Company or its successor or successors) authorized to acquire and operate the same; provided,
however, the Company hereby covenants and agrees that, upon any such consolidation or merger (in each case, if the Company is not
the survivor of such transaction), sale, conveyance, transfer or other disposition, the due and punctual payment of the principal
of (premium, if any) and interest on all of the Securities of all series in accordance with the terms of each series, according
to their tenor, and the due and punctual performance and observance of all the covenants and conditions of this Indenture with
respect to each series or established with respect to such series pursuant to Section 2.01 to be kept or performed by the
Company shall be expressly assumed, by supplemental indenture (which shall conform to the provisions of the Trust Indenture Act
as then in effect) satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by such consolidation,
or into which the Company shall have been merged, or by the entity which shall have acquired such property.

 

Section 10.02 Successor Entity Substituted.

 

(a) In case of any such consolidation, merger,
sale, conveyance, transfer or other disposition and upon the assumption by the successor entity by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of (and
premium, if any) and interest on all of the Securities of all series Outstanding and the due and punctual performance of all of
the covenants and conditions of this Indenture or established with respect to each series of the Securities pursuant to Section 2.01
to be performed by the Company with respect to each series, such successor entity shall succeed to and be substituted for the Company
with the same effect as if it had been named as the Company herein, and thereupon the predecessor corporation shall be relieved
of all obligations and covenants under this Indenture and the Securities.

 

(b) In case of any such consolidation, merger,
sale, conveyance, transfer or other disposition, such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.

 

(c) Nothing contained in this Article shall
apply to limit or impose any requirements upon the consolidation or merger of any Person into the Company where the Company is
the survivor of such transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the property
of any other Person (whether or not affiliated with the Company).

 

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Section 10.03 Evidence of Consolidation,
Etc. to Trustee. The Trustee, subject to the provisions of Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article.

 

ARTICLE XI

SATISFACTION AND DISCHARGE

 

Section 11.01 Satisfaction and Discharge
of Indenture. If at any time: (a) the Company shall have delivered to the Trustee for cancellation all Securities of a
series theretofore authenticated (other than any Securities that have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 2.07) and Securities for whose payment money or Governmental Obligations have theretofore been
deposited in trust or segregated and held in trust by the Company (and thereupon repaid to the Company or discharged from such
trust, as provided in Section 11.05); or (b) all such Securities of a particular series not theretofore delivered to
the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year
or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit or cause to be deposited with the Trustee as trust funds the entire amount in moneys or Governmental
Obligations or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon redemption all Securities of
that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due
or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or
cause to be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall thereupon
cease to be of further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03
and 7.10, that shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that
shall survive to such date and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company,
shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to such series.

 

Section 11.02 Discharge of Obligations.
If at any time all such Securities of a particular series not heretofore delivered to the Trustee for cancellation or that have
not become due and payable as described in Section 11.01 shall have been paid by the Company by depositing irrevocably with
the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption all
such Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if
any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company
shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series, then after the
date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee, the obligations of the Company
under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03,
2.05, 2.07, 4.01, 4.02, 4.03, 7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid. Thereafter,
Sections 7.06 and 11.05 shall survive.

 

Section 11.03 Deposited Moneys to
be Held in Trust. All moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall
be held in trust and shall be available for payment as due, either directly or through any paying agent (including the Company
acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption of which such
moneys or Governmental Obligations have been deposited with the Trustee.

 

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Section 11.04 Payment of Moneys
Held by Paying Agents. In connection with the satisfaction and discharge of this Indenture all moneys or Governmental Obligations
then held by any paying agent under the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee
and thereupon such paying agent shall be released from all further liability with respect to such moneys or Governmental Obligations.

 

Section 11.05 Repayment to Company.
Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then held by the Company, in trust for
payment of principal of (and premium, if any) or interest on the Securities of a particular series that are not applied but remain
unclaimed by the holders of such Securities for at least two years after the date upon which the principal of (and premium, if
any) or interest on such Securities shall have respectively become due and payable, shall be repaid to the Company or (if then
held by the Company) shall be discharged from such trust; and thereupon the paying agent and the Trustee shall be released from
all further liability with respect to such moneys or Governmental Obligations, and the holder of any of the Securities entitled
to receive such payment shall thereafter, as an unsecured general creditor, look only to the Company for the payment thereof.

 

ARTICLE XII

IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS

 

Section 12.01 No Recourse. No
recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future
as such, of the Company or of any predecessor or successor Person, either directly or through the Company or any such predecessor
or successor Person, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate
obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders,
officers or directors as such, of the Company or of any predecessor or successor Person, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either
at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator,
stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or by reason
of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of
such Securities.

 

ARTICLE XIII

MISCELLANEOUS PROVISIONS

 

Section 13.01 Effect on Successors
and Assigns. All the covenants, stipulations, promises and agreements in this Indenture contained by or on behalf of the Company
shall bind its successors and assigns, whether so expressed or not.

 

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Section 13.02 Actions by Successor.
Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee
or officer of the Company shall and may be done and performed with like force and effect by the corresponding board, committee
or officer of any corporation that shall at the time be the lawful successor of the Company.

 

Section 13.03 Notices. Except
as otherwise expressly provided herein any notice or demand that by any provision of this Indenture is required or permitted to
be given or served by the Trustee or by the holders of Securities to or on the Company may be given or served by being deposited
first class postage prepaid in a post-office letterbox addressed (until another address is filed in writing by the Company with
the Trustee), as follows: [    ]. Any notice, election, request or demand by the Company or any Securityholder
to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at
the Corporate Trust Office of the Trustee.

 

Section 13.04 Governing Law.
This Indenture and each Security shall be deemed to be a contract made under the internal laws of [           ],
and for purposes shall be construed in accordance with the laws of [           ].

 

Section 13.05 Compliance Certificates
and Opinions.

(a) Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee
an Officers’ Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action
have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have
been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion
need be furnished.

 

(b) Each certificate or opinion provided
for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture shall
include (1) a statement that the Person making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based; (3) a statement that, in the opinion of such Person, he has made such examination
or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has
been complied with; and (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has
been complied with.

 

(c) The Company shall furnish to the Trustee,
on [    ] of each year, a brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of such obligor’s compliance with all conditions and covenants
under this Indenture. For purposes of this subsection, such compliance shall be determined without regard to any period of grace
or requirement of notice provided hereunder.

 

Section 13.06 Payments on Business
Days. Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth in an Officers’
Certificate, or established in one or more indentures supplemental to this Indenture, in any case where the date of maturity of
interest or principal of any Security or the date of redemption of any Security shall not be a Business Day, then payment of interest
or principal (and premium, if any) may be made on the next succeeding Business Day with the same force and effect as if made on
the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal date.

 

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Section 13.07 Conflict with Trust
Indenture Act. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed
by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.

 

Section 13.08 Counterparts.
This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.

 

Section 13.09 Separability.
In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein or therein.

 

Section 13.10 Assignment. The
Company will have the right at all times to assign any of its rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, provided that, in the event of any such assignment, the Company will remain liable for
all such obligations. Subject to the foregoing, the Indenture is binding upon and inures to the benefit of the parties thereto
and their respective successors and assigns. This Indenture may not otherwise be assigned by the parties thereto.

 

ARTICLE XIV

SUBORDINATION OF SECURITIES

 

Section 14.01 Subordination Terms.
The payment by the Company of the principal of (and premium, if any) and interest on any series of Securities issued hereunder
shall be subordinated to the extent set forth in an indenture supplemental hereto relating to such Securities.

 

    	36

    	 

    

 

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

 

	UR-ENERGY INC.	 
	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 
	 
	[                                             ], as Trustee
	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

    	37Exhibit 10.1

 

EXECUTION VERSION

 

 

ACRE COMMERCIAL MORTGAGE 2014-FL2 LTD.,
 as Issuer,

 

ACRE COMMERCIAL MORTGAGE 2014-FL2 LLC,
 as Co-Issuer,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
 as Advancing Agent,

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,
 as Trustee,

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
 as Note Administrator

 

INDENTURE

 

Dated as of August 15, 2014

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1
    
	
 
    
	
DEFINITIONS
    
	
 
    	
 
    	
 
    
	
Section 1.1
    	
Definitions
    	
3
    
	
Section 1.2
    	
Interest   Calculation Convention
    	
35
    
	
Section 1.3
    	
Rounding   Convention
    	
35
    
	
 
    	
 
    	
 
    
	
ARTICLE 2
    
	
 
    
	
THE NOTES
    
	
 
    	
 
    	
 
    
	
Section 2.1
    	
Forms   Generally
    	
35
    
	
Section 2.2
    	
Forms   of Notes and Certificate of Authentication
    	
35
    
	
Section 2.3
    	
Authorized   Amount; Stated Maturity Date; and Denominations
    	
37
    
	
Section 2.4
    	
Execution,   Authentication, Delivery and Dating
    	
38
    
	
Section 2.5
    	
Registration,   Registration of Transfer and Exchange
    	
38
    
	
Section 2.6
    	
Mutilated,   Defaced, Destroyed, Lost or Stolen Note
    	
45
    
	
Section 2.7
    	
Payment   of Principal and Interest and Other Amounts; Principal and Interest Rights   Preserved
    	
46
    
	
Section 2.8
    	
Persons   Deemed Owners
    	
50
    
	
Section 2.9
    	
Cancellation
    	
50
    
	
Section 2.10
    	
Global   Notes; Definitive Notes; Temporary Notes
    	
50
    
	
Section 2.11
    	
U.S.   Tax Treatment of Notes and the Issuer
    	
52
    
	
Section 2.12
    	
Authenticating   Agents
    	
52
    
	
Section 2.13
    	
Forced   Sale on Failure to Comply with Restrictions
    	
53
    
	
Section 2.14
    	
No   Gross Up
    	
54
    
	
 
    	
 
    	
 
    
	
ARTICLE 3
    
	
 
    
	
CONDITIONS PRECEDENT; PLEDGED MORTGAGE ASSETS
    
	
 
    	
 
    	
 
    
	
Section 3.1
    	
General   Provisions
    	
54
    
	
Section 3.2
    	
Security   for Notes
    	
57
    
	
Section 3.3
    	
Transfer   of Collateral
    	
58
    
	
 
    	
 
    	
 
    
	
ARTICLE 4
    
	
 
    
	
SATISFACTION AND DISCHARGE
    
	
 
    	
 
    	
 
    
	
Section 4.1
    	
Satisfaction   and Discharge of Indenture
    	
66
    

 

i

 

	
Section 4.2
    	
Application   of Amounts held in Trust
    	
68
    
	
Section 4.3
    	
Repayment   of Amounts Held by Paying Agent
    	
68
    
	
Section 4.4
    	
Limitation   on Obligation to Incur Company Administrative Expenses
    	
68
    
	
 
    	
 
    	
 
    
	
ARTICLE 5
    
	
 
    
	
REMEDIES
    
	
 
    	
 
    	
 
    
	
Section 5.1
    	
Events   of Default
    	
68
    
	
Section 5.2
    	
Acceleration   of Maturity; Rescission and Annulment
    	
71
    
	
Section 5.3
    	
Collection   of Indebtedness and Suits for Enforcement by Trustee
    	
72
    
	
Section 5.4
    	
Remedies
    	
75
    
	
Section 5.5
    	
Preservation   of Collateral
    	
77
    
	
Section 5.6
    	
Trustee   May Enforce Claims Without Possession of Notes
    	
78
    
	
Section 5.7
    	
Application   of Amounts Collected
    	
78
    
	
Section 5.8
    	
Limitation   on Suits
    	
78
    
	
Section 5.9
    	
Unconditional   Rights of Noteholders to Receive Principal and Interest
    	
79
    
	
Section 5.10
    	
Restoration   of Rights and Remedies
    	
79
    
	
Section 5.11
    	
Rights   and Remedies Cumulative
    	
79
    
	
Section 5.12
    	
Delay   or Omission Not Waiver
    	
80
    
	
Section 5.13
    	
Control   by the Controlling Class
    	
80
    
	
Section 5.14
    	
Waiver   of Past Defaults
    	
80
    
	
Section 5.15
    	
Undertaking   for Costs
    	
81
    
	
Section 5.16
    	
Waiver   of Stay or Extension Laws
    	
81
    
	
Section 5.17
    	
Sale   of Collateral
    	
82
    
	
Section 5.18
    	
Action   on the Notes
    	
82
    
	
 
    	
 
    	
 
    
	
ARTICLE 6
    
	
 
    
	
THE TRUSTEE AND NOTE ADMINISTRATOR
    
	
 
    	
 
    	
 
    
	
Section 6.1
    	
Certain   Duties and Responsibilities
    	
83
    
	
Section 6.2
    	
Notice   of Default
    	
85
    
	
Section 6.3
    	
Certain   Rights of Trustee and Note Administrator
    	
85
    
	
Section 6.4
    	
Not   Responsible for Recitals or Issuance of Notes
    	
87
    
	
Section 6.5
    	
May Hold   Notes
    	
87
    
	
Section 6.6
    	
Amounts   Held in Trust
    	
88
    
	
Section 6.7
    	
Compensation   and Reimbursement
    	
88
    
	
Section 6.8
    	
Corporate   Trustee Required; Eligibility
    	
89
    
	
Section 6.9
    	
Resignation   and Removal; Appointment of Successor
    	
90
    
	
Section 6.10
    	
Acceptance   of Appointment by Successor
    	
92
    
	
Section 6.11
    	
Merger,   Conversion, Consolidation or Succession to Business of Trustee and Note   Administrator
    	
92
    
	
Section 6.12
    	
Co-Trustees   and Separate Trustee
    	
93
    
	
Section 6.13
    	
Direction   to enter into the Servicing Agreement
    	
94
    
	
Section 6.14
    	
Representations   and Warranties of the Trustee
    	
94
    

 

ii

 

	
Section 6.15
    	
Representations   and Warranties of the Note Administrator
    	
95
    
	
Section 6.16
    	
Requests   for Consents
    	
95
    
	
Section 6.17
    	
Withholding
    	
96
    
	
 
    	
 
    	
 
    
	
ARTICLE 7
    
	
 
    
	
COVENANTS
    
	
 
    	
 
    	
 
    
	
Section 7.1
    	
Payment   of Principal and Interest
    	
96
    
	
Section 7.2
    	
Maintenance   of Office or Agency
    	
97
    
	
Section 7.3
    	
Amounts   for Note Payments to be Held in Trust
    	
97
    
	
Section 7.4
    	
Existence   of the Issuer and Co-Issuer
    	
99
    
	
Section 7.5
    	
Protection   of Collateral
    	
102
    
	
Section 7.6
    	
Notice   of Any Amendments
    	
103
    
	
Section 7.7
    	
Performance   of Obligations
    	
103
    
	
Section 7.8
    	
Negative   Covenants
    	
104
    
	
Section 7.9
    	
Statement   as to Compliance
    	
106
    
	
Section 7.10
    	
Issuer   and Co-Issuer May Consolidate or Merge Only on Certain Terms
    	
107
    
	
Section 7.11
    	
Successor   Substituted
    	
110
    
	
Section 7.12
    	
No   Other Business
    	
110
    
	
Section 7.13
    	
Reporting
    	
110
    
	
Section 7.14
    	
Calculation   Agent
    	
111
    
	
Section 7.15
    	
REIT   Status
    	
112
    
	
Section 7.16
    	
Permitted   Subsidiaries
    	
113
    
	
Section 7.17
    	
Repurchase   Requests
    	
113
    
	
Section 7.18
    	
Servicing   of Mortgage Loans and Control of Servicing Decisions
    	
114
    
	
Section 7.19
    	
Purchase   of Delayed Close Mortgage Assets After the Closing Date
    	
114
    
	
 
    	
 
    	
 
    
	
ARTICLE 8
    
	
 
    
	
SUPPLEMENTAL INDENTURES
    
	
 
    	
 
    	
 
    
	
Section 8.1
    	
Supplemental   Indentures Without Consent of Securityholders
    	
114
    
	
Section 8.2
    	
Supplemental   Indentures with Consent of Securityholders
    	
117
    
	
Section 8.3
    	
Execution   of Supplemental Indentures
    	
119
    
	
Section 8.4
    	
Effect   of Supplemental Indentures
    	
120
    
	
Section 8.5
    	
Reference   in Notes to Supplemental Indentures
    	
120
    
	
 
    	
 
    	
 
    
	
ARTICLE 9
    
	
 
    
	
REDEMPTION OF SECURITIES; REDEMPTION PROCEDURES
    
	
 
    	
 
    	
 
    
	
Section 9.1
    	
Clean-up   Call; Tax Redemption; Optional Redemption; and Auction Call Redemption
    	
121
    
	
Section 9.2
    	
Notice   of Redemption
    	
122
    
	
Section 9.3
    	
Notice   of Redemption or Maturity by the Issuer
    	
123
    

 

iii

 

	
Section 9.4
    	
Notes   Payable on Redemption Date
    	
123
    
	
Section 9.5
    	
Redemption   From Unused Proceeds
    	
124
    
	
 
    	
 
    	
 
    
	
ARTICLE 10
    
	
 
    
	
ACCOUNTS, ACCOUNTINGS AND RELEASES
    
	
 
    	
 
    	
 
    
	
Section 10.1
    	
Collection   of Amounts; Custodial Account
    	
124
    
	
Section 10.2
    	
Unused   Proceeds Account
    	
125
    
	
Section 10.3
    	
Payment   Account
    	
125
    
	
Section 10.4
    	
Funded   Companion Participation Acquisition Account
    	
126
    
	
Section 10.5
    	
Interest   Advances
    	
126
    
	
Section 10.6
    	
Reports   by Parties
    	
129
    
	
Section 10.7
    	
Reports;   Accountings
    	
130
    
	
Section 10.8
    	
Release   of Mortgage Assets; Release of Collateral
    	
132
    
	
Section 10.9
    	
Information   Available Electronically
    	
134
    
	
Section 10.10
    	
Investor   Q&A Forum; Investor Registry
    	
136
    
	
Section 10.11
    	
Certain   Procedures
    	
138
    
	
Section 10.12
    	
Ownership   of Accounts
    	
139
    
	
 
    	
 
    	
 
    
	
ARTICLE 11
    
	
 
    
	
APPLICATION OF FUNDS
    
	
 
    	
 
    	
 
    
	
Section 11.1
    	
Disbursements   of Amounts from Payment Account
    	
139
    
	
Section 11.2
    	
Securities   Accounts
    	
144
    
	
 
    	
 
    	
 
    
	
ARTICLE 12
    
	
 
    
	
SALE OF MORTGAGE ASSETS; ACQUISITION OF RELATED FUNDED COMPANION   PARTICIPATIONS; FUTURE FUNDING ESTIMATES
    
	
 
    	
 
    	
 
    
	
Section 12.1
    	
Sales   of Mortgage Assets
    	
145
    
	
Section 12.2
    	
Acquisition   of Related Funded Companion Participations and the Delayed Close Mortgage   Loan
    	
147
    
	
Section 12.3
    	
Ongoing   Future Advance Estimates
    	
147
    
	
 
    	
 
    	
 
    
	
ARTICLE 13
    
	
 
    
	
NOTEHOLDERS’ RELATIONS
    
	
 
    	
 
    	
 
    
	
Section 13.1
    	
Subordination
    	
150
    
	
Section 13.2
    	
Standard   of Conduct
    	
152
    

 

iv

 

	
ARTICLE 14
    
	
 
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
Section 14.1
    	
Form of   Documents Delivered to the Trustee and Note Administrator
    	
152
    
	
Section 14.2
    	
Acts   of Securityholders
    	
153
    
	
Section 14.3
    	
Notices, etc., to the Trustee, the Note   Administrator, the Issuer, the Co-Issuer, the Advancing Agent, the Servicer,   the Special Servicer, the Operating Advisor, the Preferred Share Paying   Agent, the Placement Agents, the Directing Holder and the Rating Agencies
    	
154
    
	
Section 14.4
    	
Notices   to Noteholders; Waiver
    	
157
    
	
Section 14.5
    	
Effect   of Headings and Table of Contents
    	
158
    
	
Section 14.6
    	
Successors   and Assigns
    	
158
    
	
Section 14.7
    	
Severability
    	
158
    
	
Section 14.8
    	
Benefits   of Indenture
    	
158
    
	
Section 14.9
    	
Governing   Law
    	
158
    
	
Section 14.10
    	
Submission   to Jurisdiction
    	
158
    
	
Section 14.11
    	
Counterparts
    	
159
    
	
Section 14.12
    	
Liability   of Co-Issuers
    	
159
    
	
Section 14.13
    	
17g-5   Information
    	
159
    
	
Section 14.14
    	
Rating   Agency Condition
    	
161
    
	
Section 14.15
    	
Patriot   Act Compliance
    	
161
    
	
 
    	
 
    	
 
    
	
ARTICLE 15
    
	
 
    
	
ASSIGNMENT OF THE MORTGAGE ASSET PURCHASE AGREEMENTS
    
	
 
    	
 
    	
 
    
	
Section 15.1
    	
Assignment   of Mortgage Asset Purchase Agreement
    	
162
    
	
 
    	
 
    	
 
    
	
ARTICLE 16
    
	
 
    
	
ADVANCING AGENT
    
	
 
    	
 
    	
 
    
	
Section 16.1
    	
Liability   of the Advancing Agent
    	
163
    
	
Section 16.2
    	
Merger   or Consolidation of the Advancing Agent
    	
163
    
	
Section 16.3
    	
Limitation   on Liability of the Advancing Agent and Others
    	
164
    
	
Section 16.4
    	
Representations   and Warranties of the Advancing Agent
    	
164
    
	
Section 16.5
    	
Resignation   and Removal; Appointment of Successor
    	
165
    
	
Section 16.6
    	
Acceptance   of Appointment by Successor Advancing Agent
    	
167
    
	
Section 16.7
    	
Removal   and Replacement of Successor Advancing Agent
    	
167
    

 

	
SCHEDULES
    	
 
    
	
 
    	
 
    
	
Schedule A
    	
Schedule   of Mortgage Assets
    
	
Schedule B
    	
LIBOR
    

 

v

 

	
EXHIBITS
    	
 
    
	
 
    	
 
    
	
Exhibit A-1
    	
Form of   Class A Note (Global Note)
    
	
Exhibit A-2
    	
Form of   Class A Note (Definitive Note)
    
	
Exhibit A-3
    	
Form of   Class A-S Note (Global Note)
    
	
Exhibit A-4
    	
Form of   Class A-S Note (Definitive Note)
    
	
Exhibit A-5
    	
Form of   Class B Note (Global Note)
    
	
Exhibit A-6
    	
Form of   Class B Note (Definitive Note)
    
	
Exhibit A-7
    	
Form of   Class C Note (Global Note)
    
	
Exhibit A-8
    	
Form of   Class C Note (Definitive Note)
    
	
Exhibit A-9
    	
Form of   Class D Note (Global Note)
    
	
Exhibit A-10
    	
Form of   Class D Note (Definitive Note)
    
	
Exhibit B-1
    	
[Reserved.]
    
	
Exhibit B-2
    	
Form of   Class E Note (Definitive Note)
    
	
Exhibit B-3
    	
Form of   Class F Note (Definitive Note)
    
	
Exhibit C-1
    	
Form of   Transfer Certificate – Regulation S Global Note
    
	
Exhibit C-2
    	
Form of   Transfer Certificate – Rule 144A Global Note
    
	
Exhibit C-3
    	
Form of   Transfer Certificate – Definitive Note
    
	
Exhibit D
    	
Form of   Custodian Post-Closing Certification
    
	
Exhibit E
    	
Form of   Request for Release
    
	
Exhibit F
    	
Form of   NRSRO Certification
    
	
Exhibit G
    	
Form of   Note Administrator’s Monthly Report
    
	
Exhibit H-1
    	
Form of   Investor Certification (for Non-Borrower Affiliates)
    
	
Exhibit H-2
    	
Form of   Investor Certification (for Borrower Affiliates)
    
	
Exhibit I
    	
Form of   Online Market Data Provider Certification
    

 

vi

 

INDENTURE, dated as of August 15, 2014, by and between ACRE COMMERCIAL MORTGAGE 2014-FL2 Ltd., an exempted company incorporated in the Cayman Islands with limited liability (the “Issuer”), ACRE COMMERCIAL MORTGAGE 2014-FL2 LLC, a limited liability company formed under the laws of Delaware (the “Co-Issuer”), WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, as trustee (herein, together with its permitted successors and assigns in the trusts hereunder, the “Trustee”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as note administrator, paying agent, calculation agent, transfer agent, authentication agent and custodian (in all of the foregoing capacities, together with its permitted successors and assigns, the “Note Administrator”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as advancing agent (in such capacity, together with its permitted successors and assigns in the trusts hereunder, the “Advancing Agent”).

 

PRELIMINARY STATEMENT

 

Each of the Issuer and the Co-Issuer is duly authorized to execute and deliver this Indenture to provide for the Notes issuable as provided in this Indenture.  All covenants and agreements made by the Issuer and Co-Issuer herein are for the benefit and security of the Secured Parties.  The Issuer, the Co-Issuer, the Note Administrator, in all of its capacities hereunder, the Trustee and the Advancing Agent are entering into this Indenture, and the Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

 

All things necessary to make this Indenture a valid agreement of the Issuer and Co-Issuer in accordance with this Indenture’s terms have been done.

 

GRANTING CLAUSES

 

The Issuer hereby Grants to the Trustee, for the benefit and security of the Secured Parties, all of its right, title and interest in, to and under, in each case, whether now owned or existing, or hereafter acquired or arising out of (in each case, to the extent of the Issuer’s interest therein and specifically excluding any interest of the related Companion Participation Holder therein):

 

(a)                                 (i) the Mortgage Assets that the Issuer has purchased on the Closing Date and all payments thereon or with respect thereto, and (ii) any Related Funded Companion Participation acquired by the Issuer after the Closing Date in accordance with the terms of this Indenture, and all payments thereon or with respect thereto, in each case, other than Retained Interests under, and as defined in, the Mortgage Asset Purchase Agreement,

 

(b)                                 the Servicing Accounts, the Payment Account, the Future Funding Reserve Account, the Unused Proceeds Account, the Funded Companion Participation Acquisition Account, the Custodial Account and the related security entitlements and all income from the investment of funds in any of the foregoing at any time credited to any of the foregoing accounts,

 

(c)                                  the Eligible Investments,

 

 

(d)                                 the rights of the Issuer under the Mortgage Asset Purchase Agreement and the Servicing Agreement,

 

(e)                                  all amounts delivered to the Note Administrator (or its bailee) (directly or through a securities intermediary),

 

(f)                                   all other investment property, instruments and general intangibles in which the Issuer has an interest, other than the Excepted Property,

 

(g)                                  the Issuer’s ownership interest in, and rights to, all Permitted Subsidiaries, and

 

(h)                                 all proceeds with respect to the foregoing clauses (a) through (g).

 

The collateral described in the foregoing clauses (a) through (h), with the exception of the Excepted Property, is referred to herein as the “Collateral.”  Such Grants are made to secure the Notes equally and ratably without prejudice, priority or distinction between any Note and any other Note for any reason, except as expressly provided in this Indenture (including, but not limited to, the Priority of Payments) and to secure (i) the payment of all amounts due on and in respect of the Notes in accordance with their terms, (ii) the payment of all other sums payable under this Indenture and (iii) compliance with the provisions of this Indenture, all as provided in this Indenture (together, the “Secured Obligations”).  The foregoing Grant shall, for the purpose of determining the property subject to the lien of this Indenture, be deemed to include any securities and any investments granted by or on behalf of the Issuer to the Trustee for the benefit of the Secured Parties, whether or not such securities or such investments satisfy the criteria set forth in the definitions of “Mortgage Asset” or “Eligible Investment,” as the case may be.

 

Except to the extent otherwise provided in this Indenture, this Indenture shall constitute a security agreement under the laws of the State of New York applicable to agreements made and to be performed therein, for the benefit of the Noteholders.  Upon the occurrence and during the continuation of any Event of Default hereunder, and in addition to any other rights available under this Indenture or any other Collateral held for the benefit and security of the Noteholders or otherwise available at law or in equity but subject to the terms hereof, the Trustee shall have all rights and remedies of a secured party under the laws of the State of New York and other applicable law to enforce the assignments and security interests contained herein and, in addition, shall have the right, subject to compliance with any mandatory requirements of applicable law and the terms of this Indenture, to exercise, sell or apply any rights and other interests assigned or pledged hereby in accordance with the terms hereof at public and private sale.

 

The Trustee acknowledges such Grants, accepts the trusts hereunder in accordance with the provisions hereof, and agrees to perform the duties herein in accordance with, and subject to, the terms hereof, in order that the interests of the Secured Parties may be adequately and effectively protected in accordance with this Indenture.

 

2

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.1                                    Definitions

 

Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms.  The word “including” and its variations shall mean “including without limitation.”  Whenever any reference is made to an amount the determination of which is governed by Section 1.2 hereof, the provisions of Section 1.2 shall be applicable to such determination or calculation, whether or not reference is specifically made to Section 1.2, unless some other method of calculation or determination is expressly specified in the particular provision. All references in this Indenture to designated “Articles,” “Sections,” “Subsections” and other subdivisions are to the designated Articles, Sections, Subsections and other subdivisions of this Indenture as originally executed.  The words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, Subsection or other subdivision.

 

“17g-5 Information”:  The meaning specified in Section 14.3(j) hereof.

 

“17g-5 Information Provider”:  The meaning specified in Section 14.13(b) hereof.

 

“17g-5 Website”:  A password-protected internet website maintained by the 17g-5 Information Provider, which shall initially be located at www.ctslink.com, under the “NRSRO” tab for this transaction.  Any change of the 17g-5 Website shall only occur after notice has been delivered by the 17g-5 Information Provider to the Issuer, the Note Administrator, the Trustee, the Operating Advisor, the Placement Agents and the Rating Agencies, which notice shall set forth the date of change and new location of the 17g-5 Website.

 

“1940 Act”:  Investment Company Act of 1940, as amended.

 

“Access Termination Notice”:  The meaning specified in the Future Funding Agreement.

 

“Accepted Servicing Practices”:  The meaning specified in the Servicing Agreement.

 

“Account”: Any of the Servicing Accounts, the Indenture Accounts and the Preferred Share Distribution Account.

 

“Accountants’ Report”:  A report of a firm of Independent certified public accountants of recognized national reputation appointed by the Issuer pursuant to Section 3.1(q), which may be the firm of independent accountants that reviews or performs procedures with respect to the financial reports prepared by the Issuer or the Servicer.

 

3

 

“Acquisition Criteria:” The following criteria that shall be satisfied with respect to each Related Funded Companion Participation as of the related acquisition date of such Related Funded Companion Participation:

 

(a)                                 the underlying Mortgage Loan is not a Defaulted Mortgage Loan or a Specially Serviced Mortgage Loan;

 

(b)                                 upon acquisition, the Related Funded Companion Participation will not be an Impaired Mortgage Asset;

 

(c)                                  no Event of Default has occurred and is continuing;

 

(d)                                 the requirements set forth in Section 12.2(d) regarding the representations and warranties with respect to such Related Funded Companion Participation and the related Mortgaged Property have been met (subject to such exceptions as are reasonably acceptable to the Special Servicer taking into consideration the exceptions taken by the Seller in connection with the related Pari Passu Participation);

 

(e)                                  no Control Shift Event with respect to the Class E Notes has occurred and is continuing; and

 

(f)                                   the acquisition of such Related Funded Companion Participation will be at a price no greater than the outstanding principal balance of such Related Funded Companion Participation.

 

“ACRC Holder”:  ACRC 2014-FL2 Holder LLC, a Delaware limited liability company.

 

“ACRC Lender”: ACRC Lender LLC, a Delaware limited liability company.

 

“ACRE”: ARES Commercial Real Estate Corporation, a Maryland corporation.

 

“Act” or “Act of Securityholders”:  The meaning specified in Section 14.2 hereof.

 

“Advance Rate”:  The meaning specified in the Servicing Agreement.

 

“Advancing Agent”:  Wells Fargo Bank, National Association, solely in its capacity as advancing agent hereunder, unless a successor Person shall have become the Advancing Agent pursuant to the applicable provisions of this Indenture, and thereafter “Advancing Agent” shall mean such successor Person.

 

“Affiliate” or “Affiliated”:  With respect to a Person, (i) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such Person or (ii) any other Person who is a director, Officer or employee (a) of such Person, (b) of any subsidiary or parent company of such Person or (c) of any Person described in clause (i) above.  For the purposes of this definition, control of a Person shall mean the power, direct or indirect, (i) to vote more than 50% of the securities having ordinary voting power for the election of directors of such Person, or (ii) to direct or cause the direction of the management and policies

 

4

 

of such Person whether by contract or otherwise; provided that neither the Company Administrator nor any other company, corporation or Person to which the Company Administrator provides directors and/or administrative services and/or acts as share trustee shall be an Affiliate of the Issuer or Co-Issuer.  The Note Administrator, the Servicer and Trustee may rely on certifications of any Holder or party hereto regarding such Person’s affiliations.

 

“Agent Members”:  Members of, or participants in, the Depository, Clearstream, Luxembourg or Euroclear.

 

“Aggregate Outstanding Amount”:  With respect to any Class or Classes of the Notes as of any date of determination, the aggregate principal balance of such Class or Classes of Notes Outstanding as of such date of determination.  The Aggregate Outstanding Amount of the Class C Notes, the Class D Notes, the Class E Notes and the Class F Notes will be increased by the amount of any Deferred Interest on such Classes.

 

“Aggregate Outstanding Portfolio Balance”: On any Measurement Date, the sum of (without duplication) (i) the aggregate Principal Balance of the Mortgage Assets, (ii) the aggregate Principal Balance of all Principal Proceeds held as Cash and Eligible Investments and (iii) all Cash and Eligible Investments held in the Funded Companion Participation Acquisition Account and the Unused Proceeds Account.

 

“Aggregate Principal Balance”: When used with respect to any Mortgage Assets as of any date of determination, the sum of the Principal Balances on such date of determination of all such Mortgage Assets.

 

“Appraisal”:  The meaning specified in the Servicing Agreement.

 

“Appraisal Reduction Amount”:  The meaning specified in the Servicing Agreement.

 

“Article 15 Agreement”:  The meaning specified in Section 15.1(a) hereof.

 

“Asset Documents”:  The indenture, loan agreement, note, mortgage, intercreditor agreement, participation agreement, co-lender agreement or other agreement pursuant to which a Mortgage Asset or Mortgage Loan has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Mortgage Asset or Mortgage Loan or of which holders of such Mortgage Asset or Mortgage Loan are the beneficiaries.

 

“Auction Call Redemption”:  The meaning specified in Section 9.1(d) hereof.

 

“Authenticating Agent”:  With respect to the Notes or a Class of the Notes, the Person designated by the Note Administrator to authenticate such Notes on behalf of the Note Administrator pursuant to Section 2.12 hereof.

 

“Authorized Officer”:  With respect to the Issuer or Co-Issuer, any Officer (or attorney-in-fact appointed by the Issuer or the Co-Issuer) who is authorized to act for the Issuer or Co-Issuer in matters relating to, and binding upon, the Issuer or Co-Issuer.  With respect to the Servicer, a “Responsible Officer” of the Servicer as set forth in the Servicing Agreement.  With

 

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respect to the Note Administrator or the Trustee or any other bank or trust company acting as trustee of an express trust, a Trust Officer.  Each party may receive and accept a certification of the authority of any other party as conclusive evidence of the authority of any Person to act, and such certification may be considered as in full force and effect until receipt by such other party of written notice to the contrary.

 

“Bankruptcy Code”:  The federal Bankruptcy Code, Title 11 of the United States Code, Part V of the Companies Law (2013 Revision) of the Cayman Islands, the Bankruptcy Law (1997 Revision) of the Cayman Islands, the Companies Winding Up Rules 2008 of the Cayman Islands and the Foreign Bankruptcy Proceedings (International Cooperation) Rules 2008 of the Cayman Islands, each as amended from time to time.

 

“Board of Directors”:  With respect to the Issuer, the directors of the Issuer duly appointed in accordance with the Governing Documents of the Issuer and, with respect to the Co-Issuer, the LLC Managers duly appointed by the sole member of the Co-Issuer or otherwise.

 

“Board Resolution”:  With respect to the Issuer, a resolution of the Board of Directors of the Issuer and, with respect to the Co-Issuer, a resolution or unanimous written consent of the LLC Managers or the sole member of the Co-Issuer.

 

“Business Day”: Any day other than (i) a Saturday or Sunday or (ii) a day on which commercial banks are authorized or required by applicable law, regulation or executive order to close in New York, New York, in the State of California, in the State of North Carolina, in the State of Georgia or the location of the Corporate Trust Office of the Note Administrator or the Trustee in the State of Delaware, or (iii) days when the New York Stock Exchange or the Federal Reserve Bank of New York are closed.

 

“Calculation Agent”:  The meaning specified in Section 7.14(a) hereof.

 

“Cash”:  Such coin or currency of the United States of America as at the time shall be legal tender for payment of all public and private debts.

 

“Certificate of Authentication”:  The meaning specified in Section 2.1 hereof.

 

“Certificated Security”:  A “certificated security” as defined in Section 8-102(a)(4) of the UCC.

 

“Class”:  The Class A Notes, the Class A-S Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes or the Class F Notes, as applicable.

 

“Class A Defaulted Interest Amount”:  With respect to the Class A Notes as of each Payment Date, the accrued and unpaid amount due to Holders of the Class A Notes on account of any shortfalls in the payment of the Class A Interest Distribution Amount with respect to any preceding Payment Date or Payment Dates, together with interest accrued thereon (to the extent lawful).

 

“Class A Interest Distribution Amount”:  On each Payment Date, the amount due to Holders of the Class A Notes on account of interest equal to the product of (i) the Aggregate

 

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Outstanding Amount of the Class A Notes on the first day of the related Interest Accrual Period, (ii) the actual number of days in such Interest Accrual Period divided by 360 and (iii) the Class A Rate.

 

“Class A Notes”:  The Class A First Priority Secured Floating Rate Notes, Due August 2031, issued by the Issuer and the Co-Issuer pursuant to this Indenture.

 

“Class A Rate”:  With respect to any Class A Note, the per annum rate at which interest accrues on such Note for any Interest Accrual Period, which shall be equal to (a) one-month LIBOR for the related Interest Accrual Period plus (b) (i) with respect to each Payment Date (and related Interest Accrual Period) prior to the Payment Date in September 2019, 1.00%, and (ii) with respect to each Payment Date (and related Interest Accrual Period) on and after the Payment Date in September 2019, 1.25%.

 

“Class A-S Defaulted Interest Amount”:  With respect to the Class A-S Notes as of each Payment Date, the accrued and unpaid amount due to Holders of the Class A-S Notes on account of any shortfalls in the payment of the Class A-S Interest Distribution Amount with respect to any preceding Payment Date or Payment Dates, together with interest accrued thereon (to the extent lawful).

 

“Class A-S Interest Distribution Amount”:  On each Payment Date, the amount due to Holders of the Class A-S Notes on account of interest equal to the product of (i) the Aggregate Outstanding Amount of the Class A-S Notes on the first day of the related Interest Accrual Period, (ii) the actual number of days in such Interest Accrual Period divided by 360 and (iii) the Class A-S Rate.

 

“Class A-S Notes”:  The Class A-S Second Priority Secured Floating Rate Notes due August 2031, issued by the Issuer and the Co-Issuer pursuant to this Indenture.

 

“Class A-S Rate”:  With respect to any Class A-S Note, the per annum rate at which interest accrues on such Note for any Interest Accrual Period, which shall be equal to (a) one-month LIBOR for the related Interest Accrual Period plus (b) (i) with respect to each Payment Date (and related Interest Accrual Period) prior to the Payment Date in September 2019, 1.45%, and (ii) with respect to each Payment Date (and related Interest Accrual Period) on and after the Payment Date in September 2019, 1.95%.

 

“Class B Defaulted Interest Amount”:  With respect to the Class B Notes as of each Payment Date, the accrued and unpaid amount due to Holders of the Class B Notes on account of any shortfalls in the payment of the Class B Interest Distribution Amount with respect to any preceding Payment Date or Payment Dates, together with interest accrued thereon (to the extent lawful).

 

“Class B Interest Distribution Amount”:  On each Payment Date, the amount due to Holders of the Class B Notes on account of interest equal to the product of (i) the Aggregate Outstanding Amount of the Class B Notes on the first day of the related Interest Accrual Period, (ii) the actual number of days in such Interest Accrual Period divided by 360 and (iii) the Class B Rate.

 

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“Class B Notes”:  The Class B Third Priority Secured Floating Rate Notes due August 2031, issued by the Issuer and the Co-Issuer pursuant to this Indenture.

 

“Class B Rate”:  With respect to any Class B Note, the per annum rate at which interest accrues on such Note for any Interest Accrual Period, which shall be equal to (a) one-month LIBOR for the related Interest Accrual Period plus (b) (i) with respect to each Payment Date (and related Interest Accrual Period) prior to the Payment Date in September 2019, 2.05%, and (ii) with respect to each Payment Date (and related Interest Accrual Period) on and after the Payment Date in September 2019, 2.55%.

 

“Class C Defaulted Interest Amount”:  If no Class A Notes, Class A-S Notes and Class B Notes are outstanding, with respect to the Class C Notes as of each Payment Date, the accrued and unpaid amount due to Holders of the Class C Notes on account of any shortfalls in the payment of the Class C Interest Distribution Amount with respect to any preceding Payment Date or Payment Dates, together with interest accrued thereon (to the extent lawful).

 

“Class C Deferred Interest Amount”:  So long as any Class A Notes, Class A-S Notes or Class B Notes are Outstanding, any interest due on the Class C Notes that is not paid as a result of the operation of the Priority of Payments on any Payment Date.

 

“Class C Interest Distribution Amount”:  On each Payment Date, the amount due to Holders of the Class C Notes on account of interest (including Deferred Interest) equal to the product of (i) the Aggregate Outstanding Amount of the Class C Notes on the first day of the related Interest Accrual Period, (ii) the actual number of days in such Interest Accrual Period divided by 360 and (iii) the Class C Rate.

 

“Class C Notes”:  The Class C Fourth Priority Secured Floating Rate Notes due August 2031, issued by the Issuer and the Co-Issuer pursuant to this Indenture.

 

“Class C Rate”:  With respect to any Class C Note, the per annum rate at which interest accrues on such Note for any Interest Accrual Period, which shall be equal to (a) one-month LIBOR for the related Interest Accrual Period plus (b) (i) with respect to each Payment Date (and related Interest Accrual Period) prior to the Payment Date in September 2019, 2.50%, and (ii) with respect to each Payment Date (and related Interest Accrual Period) on and after the Payment Date in September 2019, 3.00%.

 

“Class D Defaulted Interest Amount”:  If no Class A Notes, Class A-S Notes, Class B Notes and Class C Notes are outstanding, with respect to the Class D Notes as of each Payment Date, the accrued and unpaid amount due to Holders of the Class D Notes on account of any shortfalls in the payment of the Class D Interest Distribution Amount with respect to any preceding Payment Date or Payment Dates, together with interest accrued thereon (to the extent lawful).

 

“Class D Deferred Interest Amount”:  So long as any Class A Notes, Class A-S Notes, Class B Notes or Class C Notes are Outstanding, any interest due on the Class D Notes that is not paid as a result of the operation of the Priority of Payments on any Payment Date.

 

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“Class D Interest Distribution Amount”:  On each Payment Date, the amount due to Holders of the Class D Notes on account of interest (including Deferred Interest) equal to the product of (i) the Aggregate Outstanding Amount of the Class D Notes on the first day of the related Interest Accrual Period, (ii) the actual number of days in such Interest Accrual Period divided by 360 and (iii) the Class D Rate.

 

“Class D Notes”:  The Class D Fifth Priority Secured Floating Rate Notes due August 2031, issued by the Issuer and the Co-Issuer pursuant to this Indenture.

 

“Class D Rate”:  With respect to any Class D Note, the per annum rate at which interest accrues on such Note for any Interest Accrual Period, which shall be equal to (a) one-month LIBOR for the related Interest Accrual Period plus (b) (i) with respect to each Payment Date (and related Interest Accrual Period) prior to the Payment Date in September 2019, 3.40%, and (ii) with respect to each Payment Date (and related Interest Accrual Period) on and after the Payment Date in September 2019, 3.90%.

 

“Class E Defaulted Interest Amount”:  If no Class A Notes, Class A-S Notes, Class B Notes, Class C Notes and Class D Notes are outstanding, with respect to the Class E Notes as of each Payment Date, the accrued and unpaid amount due to Holders of the Class E Notes on account of any shortfalls in the payment of the Class E Interest Distribution Amount with respect to any preceding Payment Date or Payment Dates, together with interest accrued thereon (to the extent lawful).

 

“Class E Deferred Interest Amount”:  So long as any Class A Notes, Class A-S Notes, Class B Notes, Class C Notes or Class D Notes are Outstanding, any interest due on the Class E Notes that is not paid as a result of the operation of the Priority of Payments on any Payment Date.

 

“Class E Interest Distribution Amount”:  On each Payment Date, the amount due to Holders of the Class E Notes on account of interest (including Deferred Interest) equal to the product of (i) the Aggregate Outstanding Amount of the Class E Notes on the first day of the related Interest Accrual Period, (ii) the actual number of days in such Interest Accrual Period divided by 360 and (iii) the Class E Rate.

 

“Class E Notes”:  The Class E Sixth Priority Secured Floating Rate Notes due August 2031, issued by the Issuer pursuant to this Indenture.

 

“Class E Rate”:  With respect to any Class E Note, the per annum rate at which interest accrues on such Note for any Interest Accrual Period, which shall be equal to (a) one-month LIBOR for the related Interest Accrual Period plus (b) 4.75%.

 

“Class F Defaulted Interest Amount”:  If no Class A Notes, Class A-S Notes, Class B Notes, Class C Notes, Class D Notes and Class E Notes are outstanding, with respect to the Class F Notes as of each Payment Date, the accrued and unpaid amount due to Holders of the Class F Notes on account of any shortfalls in the payment of the Class F Interest Distribution Amount with respect to any preceding Payment Date or Payment Dates, together with interest accrued thereon (to the extent lawful).

 

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“Class F Deferred Interest Amount”:  So long as any Class A Notes, Class A-S Notes, Class B Notes, Class C Notes, Class D Notes or Class E Notes are Outstanding, any interest due on the Class F Notes that is not paid as a result of the operation of the Priority of Payments on any Payment Date.

 

“Class F Interest Distribution Amount”:  On each Payment Date, the amount due to Holders of the Class F Notes on account of interest (including Deferred Interest) equal to the product of (i) the Aggregate Outstanding Amount of the Class F Notes on the first day of the related Interest Accrual Period, (ii) the actual number of days in such Interest Accrual Period divided by 360 and (iii) the Class F Rate.

 

“Class F Notes”:  The Class F Seventh Priority Secured Floating Rate Notes due August 2031, issued by the Issuer pursuant to this Indenture.

 

“Class F Rate”:  With respect to any Class F Note, the per annum rate at which interest accrues on such Note for any Interest Accrual Period, which shall be equal to (a) one-month LIBOR for the related Interest Accrual Period plus (b) 6.00%.

 

“Clean-up Call”:  The meaning specified in Section 9.1 hereof.

 

“Clean-up Call Date”:  The meaning specified in Section 9.1 hereof.

 

“Clearing Agency”: An organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

 

“Clearstream, Luxembourg”: Clearstream Banking, société anonyme, a limited liability company organized under the laws of the Grand Duchy of Luxembourg.

 

“Closing Date”:  August 15, 2014.

 

“Closing Date Mortgage Assets”:  The Mortgage Assets acquired by the Issuer on the Closing Date, which are listed on Schedule A attached hereto.

 

“Code”:  The United States Internal Revenue Code of 1986, as amended.

 

“Co-Issuer”:  ACRE Commercial Mortgage 2014-FL2 LLC, a limited liability company formed under the laws of the State of Delaware, until a successor Person shall have become the Co-Issuer pursuant to the applicable provisions of this Indenture, and thereafter “Co-Issuer” shall mean such successor Person.

 

“Co-Issuers”:  The Issuer and the Co-Issuer.

 

“Collateral”:  The meaning specified in the first paragraph of the Granting Clause of this Indenture.

 

“Collection Account”:  The meaning specified in the Servicing Agreement.

 

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“Committed Warehouse Line”:  The meaning specified in the Servicing Agreement.

 

“Companion Participation Holder”:  The holder of any Unfunded Future Funding Participation.

 

“Company Administration Agreement”:  The administration agreement, dated on or about the Closing Date, by and between the Issuer and the Company Administrator, as modified and supplemented and in effect from time to time.

 

“Company Administrative Expenses”:  All fees, expenses and other amounts due or accrued with respect to any Payment Date and payable by the Issuer, Co-Issuer or any Permitted Subsidiary (including legal fees and expenses) to (i) the Note Administrator and the Trustee pursuant to this Indenture or any co-trustee appointed pursuant to Section 6.7 hereof (including amounts payable by the Issuer as indemnification pursuant to this Indenture), (ii) the Company Administrator under the Company Administration Agreement (including amounts payable by the Issuer as indemnification pursuant to the Company Administration Agreement) and to provide for the costs of liquidating the Issuer following redemption of the Notes, (iii) the LLC Managers (including indemnification), (iv) the independent accountants, agents and counsel of the Issuer for reasonable fees and expenses (including amounts payable in connection with the preparation of tax forms on behalf of the Issuer and the Co-Issuer), and any registered office and government filing fees, in each case, payable in the order in which invoices are received by the Issuer, (v) the Rating Agencies for fees and expenses in connection with any rating (including the annual fee payable with respect to the monitoring of any rating) of the Notes, including fees and expenses due or accrued in connection with any credit assessment or rating of the Mortgage Assets, (vi) the Advancing Agent or other Persons as indemnification pursuant Section 16.3, (vii) the Servicer, the Special Servicer or the Operating Advisor as indemnification or reimbursement of expenses pursuant to the Servicing Agreement, (viii) the CREFC® Intellectual Property Royalty License Fee, (ix) the Preferred Share Paying Agent and the Share Registrar pursuant to the Preferred Share Paying Agency Agreement (including amounts payable as indemnification), (x) any other Person in respect of any governmental fee, charge or tax (including any FATCA compliance costs) in relation to the Issuer or the Co-Issuer (in each case as certified by an Authorized Officer of the Issuer or the Co-Issuer to the Note Administrator), in each case, payable in the order in which invoices are received by the Issuer, and (xi)  any other Person in respect of any other fees or expenses (including indemnifications) permitted under this Indenture (including, without limitation, any costs or expenses incurred in connection with certain modeling systems and services) and the documents delivered pursuant to or in connection with this Indenture and the Notes and any amendment or other modification of any such documentation, in each case unless expressly prohibited under this Indenture (including, without limitation, the payment of all transaction fees and all legal and other fees and expenses required in connection with the purchase of any Mortgage Assets or any other transaction authorized by this Indenture), in each case, payable in the order in which invoices are received by the Issuer; provided that Company Administrative Expenses shall not include amounts payable in respect of the Notes.

 

“Company Administrator”:  MaplesFS Limited, a licensed trust company incorporated in the Cayman Islands, as administrator pursuant to the Company Administration

 

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Agreement, unless a successor Person shall have become administrator pursuant to the Company Administration Agreement, and thereafter, Company Administrator shall mean such successor Person.

 

“Consultation Termination Event”:  The meaning specified in the Servicing Agreement.

 

“Control Shift Event”:  The meaning specified in the Servicing Agreement.

 

“Controlling Class”:  The Class A Notes, so long as any Class A Notes are Outstanding, then the Class A-S Notes, so long as any Class A-S Notes are Outstanding, then the Class B Notes, so long as any Class B Notes are Outstanding, then the Class C Notes, so long as any Class C Notes are Outstanding, then the Class D Notes, so long as any Class D Notes are Outstanding, then the Class E Notes, so long as any Class E Notes are Outstanding and then the Class F Notes, so long as any Class F Notes are Outstanding.

 

“Corporate Trust Office”:  The designated corporate trust office of (1) the Note Administrator, currently located at: (a) (i) with respect to the delivery of Asset Documents, at 1055 10th Avenue SE, Minneapolis, Minnesota, 55414 and (ii) with respect to the delivery of Note transfers and surrenders, at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479-0113; and (b) for all other purposes, at 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: Corporate Trust Services (CMBS), ACRE Commercial Mortgage 2014-FL2 Ltd., telecopy number (410) 715-2380, and (2) the Trustee, at 1100 North Market Street, Wilmington, Delaware 19890, Attention: Trust Administration-ACRE 2014-FL2, or such other address as the Note Administrator or Trustee, as applicable, may designate from time to time by notice to the Noteholders, the Holder of the Preferred Shares, the 17g-5 Information Provider and the parties hereto.

 

“Credit Enhancement Level”:  With respect to any Class of Notes, the fraction, expressed as a percentage, where the numerator is the Aggregate Outstanding Amount (excluding Deferred Interest) of each Class of Notes that is subordinate to such Class of Notes including the aggregate notional amount of the Preferred Shares and the denominator is the Aggregate Outstanding Amount (excluding Deferred Interest) of all Classes of Notes plus the aggregate notional amount of the Preferred Shares.

 

“CREFC® Intellectual Property Royalty License Fee” means with respect to each Mortgage Asset and for any Payment Date, an amount accrued during the related Interest Accrual Period at the CREFC® Intellectual Property Royalty License Fee Rate on the Principal Balance of such Mortgage Asset as of the close of business on the Determination Date in such Interest Period.  Such amounts shall be computed for the same period and on the same interest accrual basis respecting which any related interest payment due or deemed due on the related Mortgage Asset is computed and shall be prorated for partial periods.

 

“CREFC® Intellectual Property Royalty License Fee Rate” means, with respect to each Mortgage Asset, a rate equal to 0.0005% per annum.

 

“Custodial Account”:  An account at the Securities Intermediary established pursuant to Section 10.1(b) hereof.

 

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“Custodian”:  The meaning specified in Section 3.3(a) hereof.

 

“Default”:  Any Event of Default or any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

 

“Defaulted Interest Amount”:  The Class A Defaulted Interest Amount, the Class A-S Defaulted Interest Amount, the Class B Defaulted Interest Amount, the Class C Defaulted Interest Amount, the Class D Defaulted Interest Amount, the Class E Defaulted Interest Amount and/or the Class F Defaulted Interest Amount as the context requires.

 

“Defaulted Mortgage Asset”: Any Mortgage Asset for which the related Mortgage Loan is a Defaulted Mortgage Loan.

 

“Defaulted Mortgage Loan”:  Any Mortgage Loan as to which there has occurred and is continuing for more than sixty (60) days either: (x) a payment default (after giving effect to any applicable grace period but without giving effect to any waiver); or (y) a material non-monetary event of default that is known to the Special Servicer and has occurred and is continuing (after giving effect to any applicable grace period but without giving effect to any waiver).

 

“Deferred Interest”:  The meaning specified in Section 2.7(a).

 

“Deferred Interest Notes”: The Class C Notes, the Class D Notes, the Class E Notes and the Class F Notes.

 

“Definitive Notes”:  The meaning specified in Section 2.2(b) hereof.

 

“Delayed Close Mortgage Asset”:  The Mortgage Asset identified on Schedule A attached hereto as “One Financial Plaza”.

 

“Depository” or “DTC”:  The Depository Trust Company, its nominees, and their respective successors.

 

“Determination Date”:  The 11th day of each month or, if such date is not a Business Day, the next succeeding Business Day, commencing on the Determination Date in September 2014.

 

“Directing Holder”:  The holder (or appointed representative) of a majority of the most subordinate of (1) the Preferred Shares, (2) the Class F Notes, and (3) the Class E Notes, in each case, as to which a Control Shift Event has not occurred (or has occurred but is no longer continuing).  The initial Directing Holder will be ACRC Holder.

 

“Disqualified Transferee”:  The meaning specified in Section 2.5(l) hereof.

 

“Dissolution Expenses”:  The amount of expenses reasonably likely to be incurred in connection with the discharge of this Indenture, the liquidation of the Collateral and the dissolution of the Co-Issuers, as reasonably certified by the Issuer, based in part on expenses incurred by the Trustee and Note Administrator and reported to the Servicer.

 

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“Dollar,” “U.S. $” or “$”:  A U.S. dollar or other equivalent unit in Cash.

 

“Due Period”:  With respect to any Payment Date, the period commencing on the day immediately succeeding the second preceding Determination Date (or commencing on the Closing Date, in the case of the Due Period relating to the first Payment Date) and ending on and including the Determination Date immediately preceding such Payment Date.

 

“Eligible Account”:  Means:

 

(a)                                 an account maintained with a federal or state chartered depository institution or trust company or an account or accounts maintained with the Note Administrator that has, in each case, either (1) a long-term unsecured debt rating at least equal to (a) “A2” by Moody’s and (b) “A” by DBRS (or, if not rated by DBRS, an equivalent (or higher) rating by any other two NRSROs), and (2) a short-term unsecured debt rating at least equal to (y) “P-1” by Moody’s and (z) “R-1(middle)” by DBRS (or, if not rated by DBRS, an equivalent (or higher) rating by any other two NRSROs);

 

(b)                                 a segregated trust account maintained with the trust department of a federal or state chartered depository institution or trust company acting in its fiduciary capacity; provided that (i) any such institution or trust company has a long-term unsecured debt rating of at least “A2” by Moody’s and a short-term unsecured debt rating of at least “P-1” by Moody’s, (ii) a capital surplus of at least U.S.$200,000,000 and (iii) any such account is subject to fiduciary funds on deposit regulations (or internal guidelines) substantially similar to 12 C.F. R. § 9.10(b); or

 

(c)                                  any other account approved by the Rating Agencies.

 

“Eligible Investments”:  Any Dollar-denominated investment, the maturity for which corresponds to the Issuer’s expected or potential need for funds, that, at the time it is Granted to the Trustee (directly or through a Securities Intermediary or bailee) is Registered and is one or more of the following obligations or securities:

 

(i)                                     direct obligations of, and obligations the timely payment of principal of and interest on which is fully and expressly guaranteed by, the United States, or any agency or instrumentality of the United States, the obligations of which are expressly backed by the full faith and credit of the United States;

 

(ii)                                  demand and time deposits in, certificates of deposit of, bankers’ acceptances issued by, or federal funds sold by, any depository institution or trust company incorporated under the laws of the United States or any state thereof or the District of Columbia (including the Note Administrator or the commercial department of any successor Note Administrator, as the case may be; provided that such successor otherwise meets the criteria specified herein) and subject to supervision and examination by federal and/or state banking authorities so long as the commercial paper and/or the debt obligations of such depositary institution or trust company (or, in the case of the principal depositary institution in a holding company system, the commercial paper or debt obligations of such holding company) at the time of such investment or contractual commitment providing for

 

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such investment have (1) a long-term unsecured debt rating (a) not less than “Aa3” by Moody’s and (b) in the highest long-term unsecured debt rating by DBRS (or, if not rated by DBRS and Moody’s, an equivalent (or higher) rating by any other two NRSROs), and (2) a short-term unsecured debt rating (y) not less than “P-1” by Moody’s and (z) in the highest short-term unsecured debt rating by DBRS (or, if not rated by DBRS and Moody’s, an equivalent (or higher) rating by any other two NRSROs);

 

(iii)                               unleveraged repurchase or forward purchase obligations with respect to (a) any security described in clause (i) above or (b) any other security issued or guaranteed by an agency or instrumentality of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (ii) above (including the Note Administrator or the commercial department of any successor Note Administrator, as the case may be; provided that such Person otherwise meets the criteria specified herein) or entered into with a corporation (acting as principal) whose (1) long-term unsecured debt rating (a) not less than “Aa3” by Moody’s and (b) in the highest long-term unsecured debt rating by DBRS (or, if not rated by DBRS and Moody’s, an equivalent (or higher) rating by any other two NRSROs), and (2) short-term unsecured debt rating (y) not less than “P-1” by Moody’s and (z) in the highest short-term unsecured debt rating by DBRS (or, if not rated by DBRS and Moody’s, an equivalent (or higher) rating by any other two NRSROs);

 

(iv)                              commercial paper or other similar short-term obligations (including that of the Note Administrator or the commercial department of any successor Note Administrator, as the case may be, or any affiliate thereof; provided that such Person otherwise meets the criteria specified herein) having at the time of such investment a short-term unsecured debt rating (a) not less than “P-1” by Moody’s and (b) the highest short-term unsecured debt rating by DBRS (or, if not rated by DBRS and Moody’s, an equivalent (or higher) rating by any other two NRSROs); provided, further, that the issuer thereof must also have at the time of such investment a senior long-term unsecured debt rating of (y) not less than “Aa3” by Moody’s and (z) the highest long-term unsecured debt rating by DBRS (or, if not rated by DBRS and Moody’s, an equivalent (or higher) rating by any other two NRSROs); and

 

(v)                                 the Wells Fargo Advantage Heritage Money Market Fund, or any other money market fund (including those managed or advised by the Note Administrator or its Affiliates) that maintain a constant asset value and that are rated by Moody’s and DBRS in its respective highest money market funds ratings category.

 

provided that mortgage-backed securities and interest only securities shall not constitute Eligible Investments; and provided, further, that (a) Eligible Investments shall not have a maturity in excess of 365 days and shall have a fixed principal amount due at maturity that cannot vary or change, (b) Eligible Investments acquired with funds in the Payment Account shall include only

 

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such obligations or securities that mature no later than the Business Day prior to the next Payment Date succeeding the acquisition of such obligations or securities, (c) Eligible Investments shall not include obligations bearing interest at inverse floating rates, (d) Eligible Investments shall be treated as indebtedness for U.S. federal income tax purposes and such investment shall not cause the Issuer to fail to be treated as a Qualified REIT Subsidiary (unless the Issuer has previously received an opinion of Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or another nationally recognized tax counsel experienced in such matters opining that the Issuer will be treated as a foreign corporation not engaged in a trade or business in the United States for U.S. federal income tax purposes, in which case the investment will not cause the Issuer to be treated as a foreign corporation engaged in a trade or business in the United States for U.S. federal income tax purposes), (e) Eligible Investments shall not be subject to deduction or withholding for or on account of any withholding or similar tax (other than any taxes imposed pursuant to FATCA), unless the payor is required to make “gross up” payments that ensure that the net amount actually received by the Issuer (free and clear of taxes, whether assessed against such obligor or the Issuer) will equal the full amount that the Issuer would have received had no such deduction or withholding been required, (f) Eligible Investments shall not be purchased for a price in excess of par; (g) notwithstanding the minimum unsecured debt rating requirements set forth in clauses (ii), (iii), (iv) or (v) above, Eligible Investments with maturities of 30 days or less shall only require short-term unsecured debt ratings and shall not require long-term unsecured debt ratings; and (h) Eligible Investments shall not include margin stock.

 

“Entitlement Order”:  The meaning specified in Section 8-102(a)(8) of the UCC.

 

“ERISA”:  The United States Employee Retirement Income Security Act of 1974, as amended.

 

“Euroclear”:  Euroclear Bank S.A./N.V., as operator of the Euroclear system.

 

“Event of Default”:  The meaning specified in Section 5.1 hereof.

 

“Excepted Property”:  (i) The U.S.$250 proceeds of share capital contributed by ACRC Holder as the holder of the ordinary shares of the Issuer, the U.S.$250 representing a profit fee to the Issuer, and, in each case, any interest earned thereon and the bank account in which such amounts are held and (ii) the Preferred Share Distribution Account and all of the funds and other property from time to time deposited in or credited to the Preferred Share Distribution Account.

 

“Exchange Act”:  The Securities Exchange Act of 1934, as amended.

 

“Expense Year”:  Each 12-month period commencing on the Business Day following the Payment Date occurring in January and ending on the Payment Date occurring in the following December.

 

“FATCA”:  Sections 1471 through 1474 of the Code, the treasury regulations promulgated thereunder, and any related provisions of law, court decisions, administrative guidance or agreements with any taxing authority (or laws thereof) in respect thereof.

 

“Financial Asset”:  The meaning specified in Section 8-102(a)(9) of the UCC.

 

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“Financing Statements”:  Financing statements relating to the Collateral naming the Issuer, as debtor, and the Trustee, on behalf of the Secured Parties, as secured party.

 

“Four Month Future Advance Estimate”:  The meaning specified in the Servicing Agreement.

 

“Funded Companion Participation Acquisition Account”:  The account established by the Note Administrator pursuant to Section 10.4 hereof.

 

“Future Funding Agreement”:  The meaning specified in the Servicing Agreement.

 

“Future Funding Account Control Agreement”:  Any account control agreement entered into in accordance with the terms of the Future Funding Agreement by and among ACRC Lender, the Trustee, as secured party, the Note Administrator and an account bank, as the same may be amended, supplemented or replaced from time to time.

 

“Future Funding Indemnitor”: ACRC Lender, and its successors in interest.

 

“Future Funding Reserve Account”:  The meaning specified in the Servicing Agreement.

 

“GAAP”:  The meaning specified in Section 6.3(k) hereof.

 

“General Intangible”:  The meaning specified in Section 9-102(a)(42) of the UCC.

 

“Global Notes”:  The Rule 144A Global Notes and the Regulation S Global Notes.

 

“Governing Documents”:  With respect to (i) the Issuer, the memorandum and articles of association of the Issuer, as amended and restated and/or supplemented and in effect from time to time and certain resolutions of its Board of Directors and (ii) all other Persons, the articles of incorporation, certificate of incorporation, by-laws, certificate of limited partnership, limited partnership agreement, limited liability company agreement, certificate of formation, articles of association and similar charter documents, as applicable to any such Person.

 

“Government Items”:  A security (other than a security issued by the Government National Mortgage Association) issued or guaranteed by the United States of America or an agency or instrumentality thereof representing a full faith and credit obligation of the United States of America and, with respect to each of the foregoing, that is maintained in book-entry form on the records of a Federal Reserve Bank.

 

“Grant”:  To grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of set-off against, deposit, set over and confirm.  A Grant of the Collateral or of any other security or instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including without limitation the immediate continuing right to claim, collect, receive and take receipt for principal and interest payments in respect of the Collateral

 

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(or any other security or instrument), and all other amounts payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.

 

“Holder” or “Securityholder”:  With respect to any Note, the Person in whose name such Note is registered in the Notes Register.  With respect to any Preferred Share, the Person in whose name such Preferred Share is registered in the register maintained by the Share Registrar.

 

“IAI”:  An institution that is an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under Regulation D under the Securities Act or an entity in which all of the equity owners are such “accredited investors.”

 

“Impaired Mortgage Asset”:  The meaning specified in the Servicing Agreement.

 

“Indemnification Agreements”:  Collectively, (1) the indemnification agreement dated as of August 1, 2014, by and among the Issuer, the Co-Issuer, the Placement Agents and the Note Administrator, (2) the indemnification agreement dated as of August 1, 2014, by and among the Issuer, the Co-Issuer the Placement Agents and the Trustee, (3) the indemnification agreement dated as of August 1, 2014, by and among the Issuer, the Co-Issuer the Placement Agents and the Operating Advisor, and (4) the indemnification agreement dated as of August 1, 2014, by and among the Issuer, the Co-Issuer the Placement Agents and the Servicer.

 

“Indenture”:  This instrument as originally executed and, if from time to time supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, as so supplemented or amended.

 

“Indenture Accounts”:  The Payment Account, the Funded Companion Participation Acquisition Account and the Custodial Account.

 

“Independent”:  As to any Person, any other Person (including, in the case of an accountant, or lawyer, a firm of accountants or lawyers and any member thereof or an investment bank and any member thereof) who (i) does not have and is not committed to acquire any material direct or any material indirect financial interest in such Person or in any Affiliate of such Person, and (ii) is not connected with such Person as an Officer, employee, promoter, underwriter, voting trustee, partner, director or Person performing similar functions.  “Independent” when used with respect to any accountant may include an accountant who audits the books of such Person if in addition to satisfying the criteria set forth above the accountant is independent with respect to such Person within the meaning of Rule 101 of the Code of Ethics of the American Institute of Certified Public Accountants.

 

Whenever any Independent Person’s opinion or certificate is to be furnished to the Trustee or Note Administrator such opinion or certificate shall state, or shall be deemed to state, that the signer has read this definition and that the signer is Independent within the meaning hereof.

 

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“Instrument”:  The meaning specified in Section 9-102(a)(47) of the UCC.

 

“Interest Accrual Period”:  With respect to the Notes and (i) the first Payment Date, the period from and including the Closing Date to but excluding such first Payment Date and (ii) each successive Payment Date, the period from and including the 15th day of the month preceding the month in which such Payment Date occurs and ending on and including the 14th day of the month in which such Payment Date occurs.

 

“Interest Advance”:  The meaning specified in Section 10.5(a) hereof.

 

“Interest Distribution Amount”:  Each of the Class A Interest Distribution Amount, the Class A-S Interest Distribution Amount, Class B Interest Distribution Amount, the Class C Interest Distribution Amount, Class D Interest Distribution Amount, Class E Interest Distribution Amount, and the Class F Interest Distribution Amount.

 

“Interest Proceeds”:  With respect to any Payment Date, (A) the sum (without duplication) of:

 

(1) all Cash payments of interest (including any deferred interest and any amount representing the accreted portion of a discount from the face amount of a Mortgage Asset or an Eligible Investment) or other distributions (excluding Principal Proceeds) received during the related Due Period on all Mortgage Assets (net of any fees and other compensation and reimbursement of expenses and Servicing Advances and interest thereon (but not net of amounts payable pursuant to any indemnification provisions) to which the Servicer, the Special Servicer or the Operating Advisor are entitled to pursuant to the terms of the Servicing Agreement) and Eligible Investments, including the accrued interest received in connection with a sale of such Mortgage Assets or Eligible Investments but excluding any (i) origination fees, (ii) exit fees, (iii) extension fees, (iv) make whole premiums, (v) yield maintenance or prepayment premiums, and (vi) interest amount paid in excess of the stated interest amount of a Mortgage Asset (other than default interest) received during the related Due Period;  each of which will be retained by the Seller and will not be assigned to the Issuer,

 

(2) all amendment, modification, waiver and late payment fees, and default interest received by the Issuer during such Due Period in connection with such Mortgage Assets and Eligible Investments (net of any amounts thereof payable to the Servicer or the Special Servicer pursuant to the terms of the Servicing Agreement),

 

(3) Interest Advances, if any, advanced by the Advancing Agent with respect to such Payment Date,

 

(4) all accrued original issue discount on Eligible Investments,

 

(5) any interest payments received in Cash by the Issuer during the related Due Period on any asset held by a Permitted Subsidiary,

 

(6) all payments of principal on Eligible Investments purchased with any other Interest Proceeds,

 

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(7) Cash and Eligible Investments contributed by ACRC Holder pursuant to Section 12.1(f), as Holder of 100% of the Preferred Shares and designated as “Interest Proceeds” by ACRC Holder, and

 

(8) any excess proceeds received in respect of a Mortgage Asset to the extent such proceeds are reported by the Servicer as “Interest Proceeds”, based on designation as such by the Special Servicer in its sole discretion, in the related CREFC® report delivered to the Paying Agent under the Servicing Agreement; provided that Interest Proceeds will in no event include any payment or proceeds specifically defined as “Principal Proceeds” in the definition thereof,

 

minus (B) the aggregate amount of any Nonrecoverable Interest Advances that were previously reimbursed to the Advancing Agent.

 

“Interest Shortfall”:  The meaning set forth in Section 10.5(a) hereof.

 

“Investor Certification”:  A certificate, substantially in the form of Exhibit H-1 or Exhibit H-2 hereto, representing that such Person executing the certificate is a Noteholder, a beneficial owner of a Note, a holder of a Preferred Share or a prospective purchaser of a Note or a Preferred Share and that either (a) such Person is not an agent of, or an investment advisor to, any borrower or affiliate of any borrower under a Mortgage Loan, or (b) such Person is an agent or Affiliate of, or an investment advisor to, any borrower under a Mortgage Loan.  The Investor Certification may be submitted electronically by means of the Note Administrator’s Website.

 

“Issuer”:  ACRE Commercial Mortgage 2014-FL2 Ltd., an exempted company incorporated under the laws of the Cayman Islands with limited liability, until a successor Person shall have become the Issuer pursuant to the applicable provisions of this Indenture, and thereafter “Issuer” shall mean such successor Person.

 

“Issuer Order” and “Issuer Request”:  A written order or request (which may be in the form of a standing order or request) dated and signed in the name of the Issuer (and the Co-Issuer, if applicable) by an Authorized Officer of the Issuer (and by an Authorized Officer of the Co-Issuer, if applicable), or by an Authorized Officer of the Special Servicer on behalf of the Issuer.

 

“Junior Notes”:  The Class E Notes and the Class F Notes.

 

“LIBOR”:  The meaning set forth in Schedule B attached hereto.

 

“LIBOR Determination Date”:  The meaning set forth in Schedule B attached hereto.

 

“Liquidation Fee”:  The meaning specified in the Servicing Agreement.

 

“LLC Managers”:  The managers of the Co-Issuer duly appointed by the sole member of the Co-Issuer (or, if there is only one manager of the Co-Issuer so duly appointed, such sole manager).

 

“London Banking Day”:  The meaning set forth in Schedule B attached hereto.

 

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“Loss Value Payment”:  A Cash payment made to the Issuer by the Seller in connection with a Material Breach of a representation or warranty with respect to any Mortgage Asset pursuant to the Mortgage Asset Purchase Agreement in an amount that the Special Servicer on behalf of the Issuer, subject to the consent of a majority of the holders of each Class of Notes (excluding any Note held by the Seller or any of its Affiliates), determines is sufficient to compensate the Issuer for such Material Breach of representation or warranty, which Loss Value Payment will be deemed to cure such Material Breach.

 

“Majority”:  With respect to (i) any Class of Notes, the Holders of more than 50% of the Aggregate Outstanding Amount of the Notes of such Class; and (ii) the Preferred Shares, the Preferred Shareholders representing more than 50% of the aggregate Notional Amount of the Preferred Shares.

 

“Material Breach”:  With respect to each Mortgage Asset, the meaning specified in the Mortgage Asset Purchase Agreement.

 

“Material Document Defect”:  With respect to each Mortgage Asset, the meaning specified in the Mortgage Asset Purchase Agreement.

 

“Maturity”:  With respect to any Note, the date on which the unpaid principal of such Note becomes due and payable as therein or herein provided, whether at the Stated Maturity Date or by declaration of acceleration or otherwise.

 

“Measurement Date”:  Any of the following: (a) the Closing Date, (b) the date of acquisition or disposition of any Mortgage Asset, (c) any date on which any Mortgage Asset becomes a Defaulted Mortgage Asset, (d) each Determination Date and (e) with reasonable notice to the Issuer and the Note Administrator, any other Business Day that the Rating Agencies or the Holders of at least 66-2/3% of the aggregate outstanding principal amount of any Class of Notes requests be a “Measurement Date”; provided, that if any such date would otherwise fall on a day that is not a Business Day, the relevant Measurement Date will be the immediately preceding Business Day.

 

“Minnesota Collateral”:  The meaning specified in Section 3.3(a)(v) hereof.

 

“Modified Mortgage Asset”:  The meaning specified in the Servicing Agreement.

 

“Modified Mortgage Loan”: The meaning specified in the Servicing Agreement.

 

“Monthly Operating Advisor Fee”: The meaning specified in the Servicing Agreement.

 

“Monthly Report”:  The meaning specified in Section 10.7(a) hereof.

 

“Moody’s”:  Moody’s Investors Service, Inc., and its successors in interest.

 

“Mortgage Assets”:  (i) The mortgage assets acquired by the Issuer on the Closing Date and listed on Schedule A attached hereto, which includes any Whole Loan and any Owned Participation, as applicable and as the context may require (including the Delayed Close

 

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Mortgage Asset, if acquired by the Issuer), and (ii) any Related Funded Companion Participation acquired by the Issuer after the Closing Date in accordance with the terms of this Indenture.

 

“Mortgage Asset File”: The meaning set forth in Section 3.3(e) hereof.

 

“Mortgage Asset Purchase Agreement”: The mortgage asset purchase agreement entered into between the Issuer and ACRC Lender on or about the Closing Date, as amended from time to time, which agreement is assigned to the Trustee on behalf of the Issuer pursuant to this Indenture.

 

“Mortgage Loan”:  Any Whole Loan or Pari Passu Participated Mortgage Loan, as applicable and as the context may require.

 

“Mortgaged Property”:  With respect to any Mortgage Loan, the commercial mortgage property or properties securing such Mortgage Loan.

 

“No Downgrade Confirmation”:  A confirmation from a Rating Agency that any proposed action, or failure to act or other specified event will not, in and of itself, result in the downgrade or withdrawal of the then-current rating assigned to any Class of Notes then rated by such Rating Agency, provided that if the Requesting Party receives a written waiver or acknowledgment indicating its decision not to review the matter for which the No Downgrade Confirmation is sought, then the requirement to receive a No Downgrade Confirmation from the Rating Agency with respect to such matter shall not apply.  For the purposes of this definition, any confirmation, waiver, request, acknowledgment or approval which is required to be in writing may be in the form of electronic mail.  Notwithstanding anything to the contrary set forth in this Agreement, at any time during which the Notes are no longer rated by a Rating Agency, no No Downgrade Confirmation shall be required from such Rating Agency under this Agreement.

 

“Non-call Period”:  The period from the Closing Date to and including the Business Day immediately preceding the Payment Date in August 2016 during which no Optional Redemption is permitted to occur.

 

“Non-Permitted Holder”: The meaning specified in Section 2.13(b) hereof.

 

“Nonrecoverable Interest Advance”: Any Interest Advance previously made or proposed to be made pursuant to Section 10.5 hereof that the Advancing Agent, has determined in its sole discretion, exercised in good faith, that the amount so advanced or proposed to be advanced plus interest expected to accrue thereon, will not be ultimately recoverable from subsequent payments or collections with respect to the Mortgage Assets.

 

“Note Administrator”:  Wells Fargo Bank, National Association, a national banking association, solely in its capacity as note administrator hereunder, unless a successor Person shall have become the Note Administrator pursuant to the applicable provisions of this Indenture, and thereafter “Note Administrator” shall mean such successor Person.

 

“Note Administrator Fee”: Amounts due and payable to the Note Administrator pursuant to Section 11.1(a)(i)(3) hereof.

 

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“Note Administrator’s Website”:  Initially www.ctslink.com provided that such address may change upon notice by the Note Administrator to the parties hereto, the 17g-5 Information Provider and Noteholders.

 

“Note Interest Rate”:  With respect to the Class A Notes, the Class A Rate, with respect to the Class A-S Notes, the Class A-S Rate with respect to the Class B Notes, the Class B Rate, with respect to the Class C Notes, the Class C Rate, with respect to the Class D Notes, the Class D Rate, with respect to the Class E Notes, the Class E Rate, with respect to the Class F Notes, the Class F Rate.

 

“Note Liquidation Event”:  The meaning specified in Section 12.1(c) hereof.

 

“Noteholder”:  The Person in whose name such Note is registered in the Notes Register.

 

“Notes”:  The Class A Notes, the Class A-S Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes and the Class F Notes, collectively, authorized by, and authenticated and delivered under, this Indenture.

 

“Notes Register” and “Notes Registrar”:  The respective meanings specified in Section 2.5(a) hereof.

 

“Notional Amount”:  In respect of the Preferred Shares, the per share notional amount of U.S.$1,000.  The aggregate Notional Amount of the Preferred Shares on the Closing Date will be U.S.$32,669,686.

 

“NRSRO”:  Any nationally recognized statistical rating organization, including the Rating Agencies.

 

“NRSRO Certification”:  A certification (a) executed by a NRSRO in favor of the 17g-5 Information Provider substantially in the form attached hereto as Exhibit F or (b) provided electronically and executed by an NRSRO by means of a click-through confirmation on the 17g-5 Website.

 

“Offering Memorandum”:  The Offering Memorandum, dated August 1, 2014, relating to the offering of the Class A Notes, the Class A-S Notes, the Class B Notes, the Class C Notes and the Class D Notes.

 

“Officer”:  With respect to any corporation or limited liability company, including the Issuer or the Co-Issuer, any Director, Manager, the Chairman of the Board of Directors, the President, any Senior Vice President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer or General Partner of such entity; and with respect to the Trustee or Note Administrator, any Trust Officer; and with respect to the Servicer or the Special Servicer, a Responsible Officer (as defined in the Servicing Agreement).

 

“Officer’s Certificate”:  With respect to the Issuer, the Co-Issuer and the Servicer, any certificate executed by an Authorized Officer thereof.

 

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“Operating Advisor”:  The Operating Advisor appointed pursuant to the Servicing Agreement.

 

“Opinion of Counsel”:  A written opinion addressed to the Trustee and the Note Administrator and, if required by the terms hereof, the Rating Agencies (each, a “Recipient”) in form and substance reasonably satisfactory to each Recipient, of an outside third party counsel of national recognition (or the Cayman Islands, in the case of an opinion relating to the laws of the Cayman Islands), which attorney may, except as otherwise expressly provided in this Indenture, be counsel for the Issuer, and which attorney shall be reasonably satisfactory to the Trustee and the Note Administrator.  Whenever an Opinion of Counsel is required hereunder, such Opinion of Counsel may rely on opinions of other counsel who are so admitted and so satisfactory which opinions of other counsel shall accompany such Opinion of Counsel and shall either be addressed to each Recipient or shall state that each Recipient shall each be entitled to rely thereon.

 

“Optional Redemption”:  The meaning specified in Section 9.1(c) hereof.

 

“Outstanding”:  With respect to the Notes, as of any date of determination, all of the Notes or any Class of Notes, as the case may be, theretofore authenticated and delivered under this Indenture except:

 

(i)                    Notes theretofore canceled by the Notes Registrar or delivered to the Notes Registrar for cancellation;

 

(ii)                 Notes or portions thereof for whose payment or redemption funds in the necessary amount have been theretofore irrevocably deposited with the Note Administrator or the Paying Agent in trust for the Holders of such Notes pursuant to Section 4.1(a)(ii); provided that, if such Notes or portions thereof are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture;

 

(iii)              Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, unless proof satisfactory to the Note Administrator is presented that any such Notes are held by a Holder in due course; and

 

(iv)             Notes alleged to have been mutilated, destroyed, lost or stolen for which replacement Notes have been issued as provided in Section 2.6;

 

provided that in determining whether the Noteholders of the requisite Aggregate Outstanding Amount have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by the Issuer, the Co-Issuer or any Affiliate thereof shall be disregarded and deemed not to be Outstanding.  The Trustee and the Note Administrator shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, except to the extent that a Trust Officer of the Trustee or Note Administrator, as applicable, has actual knowledge of any such affiliation.  Notes that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Note Administrator the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuer, the

 

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Co-Issuer or any other obligor upon the Notes or any Affiliate of the Issuer, the Co-Issuer or such other obligor.  The Note Administrator shall be entitled to rely on certificates from the Holder to determine any such pledges or affiliations.

 

“Owned Participation” means each of the Pari Passu Participations included in the Initial Mortgage Assets and, upon any acquisition thereof after the Closing Date, any Related Funded Companion Participations acquired by the Issuer as set forth in Section 12.2.

 

“Par Purchase Price”:  with respect to any Defaulted Mortgage Asset or Impaired Mortgage Asset, the sum of (A) the outstanding principal balance of such Mortgage Asset as of the date of purchase; plus (B) all accrued and unpaid interest on such Mortgage Asset at the related interest rate to but not including the date of purchase; plus (C) all related unreimbursed Servicing Advances plus accrued and unpaid interest on such Servicing Advances at the Advance Rate, plus (D) all Special Servicing Fees and either Workout Fees or Liquidation Fees previously allocated to such Mortgage Asset (other than to the extent any such fees are waived by the Special Servicer); plus (E) without duplication, all unreimbursed expenses incurred by the Issuer, the Servicer and the Special Servicer in connection with and allocable to, such Mortgage Asset.

 

“Pari Passu Participated Mortgage Loan”:  Any mortgage loan of which a Pari Passu Participation represents an interest.

 

“Pari Passu Participation”:  A fully funded pari passu participation interest in a whole loan secured by commercial real estate.

 

“Pari Passu Participation Agreement”:  With respect to each Pari Passu Participated Mortgage Loan, the participation agreement that governs the rights and obligations of the holders of the related Pari Passu Participation and the Unfunded Future Funding Participation.

 

“Participation”:  Any Pari Passu Participation, Unfunded Future Funding Participation and/or Related Funded Companion Participation, as applicable and as the context may require.

 

“Paying Agent”:  The Note Administrator, in its capacity as Paying Agent hereunder, authorized by the Issuer and the Co-Issuer to pay the principal of or interest on any Notes on behalf of the Issuer and the Co-Issuer as specified in Section 7.2 hereof.

 

“Payment Account”:  The payment account established by the Note Administrator pursuant to Section 10.3 hereof.

 

“Payment Date”:  The 4th Business Day following each Determination Date, commencing on the Payment Date in September 2014, and ending on the Stated Maturity Date unless the Notes are redeemed or repaid prior thereto.

 

“Permitted Subsidiary”: Any one or more single purpose entities that are wholly-owned by the Issuer and are established exclusively for the purpose of taking title to mortgage,

 

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real estate or any Sensitive Asset in connection, in each case, with the exercise of remedies or otherwise.

 

“Person”:  An individual, corporation (including a business trust), partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated association or government or any agency or political subdivision thereof.

 

“Placement Agency Agreement”:  The placement agreement relating to the Notes dated as of the Closing Date by and among the Issuer, the Co-Issuer, ACRC Lender, ARES Commercial Real Estate Corporation and the Placement Agents.

 

“Placement Agents”:  UBS Securities LLC, Citigroup Global Markets, Inc. and Wells Fargo Securities, LLC.

 

“Pledged Mortgage Asset”:  On any date of determination, any Mortgage Asset that has been Granted to the Trustee and not been released from the lien of this Indenture pursuant to Section 10.8 hereof.

 

“Preferred Share Distribution Account”:  A segregated account established and designated as such by the Preferred Share Paying Agent pursuant to the Preferred Share Paying Agency Agreement.

 

“Preferred Share Paying Agency Agreement”:  The Preferred Share Paying Agency Agreement, dated as of the Closing Date, among the Issuer, the Preferred Share Paying Agent relating to the Preferred Shares and the Share Registrar, as amended from time to time in accordance with the terms thereof.

 

“Preferred Share Paying Agent”:  The Note Administrator, solely in its capacity as Preferred Share Paying Agent under the Preferred Share Paying Agency Agreement and not individually, unless a successor Person shall have become the Preferred Share Paying Agent pursuant to the applicable provisions of the Preferred Share Paying Agency Agreement, and thereafter Preferred Share Paying Agent shall mean such successor Person.

 

“Preferred Shareholder”:  A registered owner of Preferred Shares as set forth in the share register maintained by the Share Registrar.

 

“Preferred Shares”:  The preferred shares issued by the Issuer concurrently with the issuance of the Notes.

 

“Primary Servicer”:  Ares Commercial Real Estate Servicer LLC, a Delaware limited liability company, solely in its capacity as Primary Servicer under the Primary Servicing Agreement, together with its permitted successors and assigns or any successor Person that shall have become the special servicer pursuant to the appropriate provisions of the Primary Servicing Agreement.

 

“Principal Balance” or “par”:  With respect to any Mortgage Loan, Mortgage Asset or Eligible Investment, as of any date of determination, the outstanding principal amount

 

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of such Mortgage Loan, Mortgage Asset or Eligible Investment; provided that the Principal Balance of any Eligible Investment that does not pay Cash interest on a current basis will be the accreted value thereof.

 

“Principal Proceeds”:  With respect to any Payment Date, (A) the sum (without duplication) of:

 

(1) all principal payments (including Unscheduled Principal Payments and any casualty or condemnation proceeds and any proceeds from the exercise of remedies (including liquidation proceeds)) received during the related Due Period in respect of (a) Eligible Investments (other than Eligible Investments purchased with Interest Proceeds, Eligible Investments in the Funded Companion Participation Acquisition Account and any amount representing the accreted portion of a discount from the face amount of a Mortgage Asset or an Eligible Investment) and (b) Mortgage Assets as a result of (i) a maturity, scheduled amortization or mandatory prepayment on a Mortgage Asset, (ii) optional prepayments made at the option of the related borrower, (iii) recoveries on Defaulted Mortgage Assets and Impaired Mortgage Assets, or (iv) any other principal payments received with respect to Mortgage Assets,

 

(2) Sale Proceeds received during such Due Period in respect of sales in accordance with the Transaction Documents and excluding (i) accrued interest included in Sale Proceeds, (ii) any reimbursement of expenses included in such Sale Proceeds and (iii) any portion of such Sale Proceeds that are in excess of the outstanding principal balance of the related Mortgage Asset or Eligible Investment,

 

(3) funds transferred to the Payment Account from the Funded Companion Participation Acquisition Account pursuant to Section 10.4, and funds transferred to the Payment Account from the Unused Proceeds Account pursuant to Section 10.2 in connection with an Unused Proceeds Principal Amortization,

 

(4) any principal payments received in Cash by the Issuer during the related Due Period on any asset held by a Permitted Subsidiary,

 

(5) any Loss Value Payment received by the Issuer from the Seller, and

 

(6) Cash and Eligible Investments contributed by ACRC Holder pursuant to the terms of the Indenture, as holder of 100% of the Preferred Shares and designated as “Principal Proceeds” by ACRC Holder; provided that in no event will Principal Proceeds include any proceeds from the Excepted Property,

 

minus (B) the aggregate amount of (i) any Nonrecoverable Interest Advances that were not previously reimbursed to the Advancing Agent from Interest Proceeds and (ii) any amounts paid to the Servicer, Special Servicer or Operating Advisor pursuant to the terms of the Servicing Agreement out of amounts that would otherwise be Principal Proceeds.

 

“Priority of Payments”:  The meaning specified in Section 11.1(a) hereof.

 

“Privileged Person”:  Any of the following: (i) the Directing Holder, (ii) the Placement Agents and their designees, (iii) the Servicer, (iv) the Special Servicer, (v) the

 

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Trustee, (vi) the Paying Agent, (vii) the Note Administrator, (viii) the Operating Advisor, (ix) the Advancing Agent hereunder and under the Servicing Agreement, (x) any Person who provides the Note Administrator with an Investor Certification (provided that access to information provided by the Note Administrator to any Person who provides the Note Administrator an Investor Certification in the form of Exhibit H-2 shall be limited to the Monthly Report), (xi) any NRSRO that provides the Note Administrator with an NRSRO Certification, which NRSRO Certification may be submitted electronically by means of the Note Administrator’s Website and (xii) the Seller.

 

“Proceeding”:  Any suit in equity, action at law or other judicial or administrative proceeding.

 

“Purchase Termination Date”:  With respect to the Delayed Close Mortgage Asset, the date that is ninety (90) days after the Closing Date.

 

“QIB”:  A “qualified institutional buyer” as defined in Rule 144A.

 

“Qualified Purchaser”:  A “qualified purchaser” within the meaning of Section 2(a)(51) of the 1940 Act or an entity owned exclusively by one or more such “qualified purchasers.”

 

“Qualified REIT Subsidiary”:  A corporation that, for U.S. federal tax purposes, is wholly-owned by a real estate investment trust under Section 856(i)(2) of the Code.

 

“Rating Agencies”: DBRS, Moody’s and any successor thereto, or, with respect to the Collateral generally, if at any time DRBS, Moody’s or any such successor ceases to provide rating services with respect to the Notes or certificates similar to the Notes, any other NRSRO selected by the Issuer and reasonably satisfactory to a Majority of the Notes voting as a single Class.

 

“Rating Agency Condition”: A condition that is satisfied if:

 

(a)                                 the party required to satisfy the Rating Agency Condition (the “Requesting Party”) has made a written request to a Rating Agency for a No Downgrade Confirmation; and

 

(b)                                 any one of the following has occurred:

 

(i)                                     a No Downgrade Confirmation has been received; or

 

(ii)                                  (A) within ten (10) business days of such request being sent to such Rating Agency, such Rating Agency has not replied to such request or has responded in a manner that indicates that such Rating Agency is neither reviewing such request nor waiving the requirement for confirmation;

 

(B)                               the Requesting Party has confirmed that such Rating Agency has received the confirmation request,

 

28

 

(C)                               the Requesting Party promptly requests the No Downgrade Confirmation a second time; and

 

(D)                               there is no response to either confirmation request within five (5) Business Days of such second request.

 

“Record Date”:  With respect to any Holder and any Payment Date, the close of business on the last Business Day of the calendar month immediately preceding the month in which such Payment Date occurs.

 

“Redemption Date”:  Any Payment Date specified for a redemption of the Securities pursuant to Section 9.1 hereof.

 

“Redemption Date Statement”:  The meaning specified in Section 10.7(c) hereof.

 

“Redemption Price”:  The Redemption Price of each Class of Notes or the Preferred Shares, as applicable, on a Redemption Date will be calculated as follows:

 

Class A Notes.  The redemption price for the Class A Notes will be calculated on the related Determination Date and will equal the Aggregate Outstanding Amount of the Class A Notes to be redeemed, together with the Class A Interest Distribution Amount (plus any Class A Defaulted Interest Amount) due on the applicable Redemption Date;

 

Class A-S Notes.  The redemption price for the Class A-S Notes will be calculated on the related Determination Date and will equal the Aggregate Outstanding Amount of the Class A-S Notes to be redeemed, together with the Class A-S Interest Distribution Amount (plus any Class A-S Defaulted Interest Amount) due on the applicable Redemption Date;

 

Class B Notes.  The redemption price for the Class B Notes will be calculated on the related Determination Date and will equal the Aggregate Outstanding Amount of the Class B Notes to be redeemed, together with the Class B Interest Distribution Amount (plus any Class B Defaulted Interest Amount) due on the applicable Redemption Date;

 

Class C Notes.  The redemption price for the Class C Notes will be calculated on the related Determination Date and will equal the Aggregate Outstanding Amount of the Class C Notes to be redeemed (including Deferred Interest thereon), together with the Class C Interest Distribution Amount (plus any Class C Defaulted Interest Amount) due on the applicable Redemption Date;

 

Class D Notes.  The redemption price for the Class D Notes will be calculated on the related Determination Date and will equal the Aggregate Outstanding Amount of the Class D Notes to be redeemed (including Deferred Interest thereon), together with the Class D Interest Distribution Amount (plus any Class D Defaulted Interest Amount) due on the applicable Redemption Date;

 

Class E Notes.  The redemption price for the Class E Notes will be calculated on the related Determination Date and will equal the Aggregate Outstanding Amount of the Class E Notes to be redeemed (including Deferred Interest thereon), together with the Class E Interest

 

29

 

Distribution Amount (plus any Class E Defaulted Interest Amount) due on the applicable Redemption Date;

 

Class F Notes.  The redemption price for the Class F Notes will be calculated on the related Determination Date and will equal the Aggregate Outstanding Amount of the Class F Notes to be redeemed (including Deferred Interest thereon), together with the Class F Interest Distribution Amount (plus any Class F Defaulted Interest Amount) due on the applicable Redemption Date; and

 

Preferred Shares.  The redemption price for the Preferred Shares will be calculated on the related Determination Date and will be equal to the sum of all net proceeds from the sale of the Collateral in accordance with Article 12 hereof and Cash (other than the Issuer’s rights, title and interest in the property described in clause (i) of the definition of “Excepted Property”), if any, remaining after payment of all amounts and expenses, including payments made in respect of the Notes, described under clauses (1) through (15) of Section 11.1(a)(i) and clauses (1) through (16) of Section 11.1(a)(ii); provided that if there are no such net proceeds or Cash remaining, the redemption price for the Preferred Shares shall be equal to U.S.$0.

 

“Reference Banks”:  The meaning set forth in Schedule S attached hereto.

 

“Registered”:  With respect to any debt obligation, a debt obligation that is issued after July 18, 1984, and that is in registered form for purposes of the Code.

 

“Regulation S”:  Regulation S under the Securities Act.

 

“Regulation S Global Note”:  The meaning specified in Section 2.2(b)(ii) hereof.

 

“Reimbursement Interest”:  Interest accrued on the amount of any Interest Advance made by the Advancing Agent, for so long as it is outstanding, at the Reimbursement Rate.

 

“Reimbursement Rate”:  A rate per annum equal to the “prime rate” as published in the “Money Rates” section of the Wall Street Journal, as such “prime rate” may change from time to time.  If more than one “prime rate” is published in The Wall Street Journal for a day, the average of such “prime rates” will be used, and such average will be rounded up to the nearest one eighth of one percent (0.125%).  If the “prime rate” contained in The Wall Street Journal is not readily ascertainable, the Servicer will select an equivalent publication that publishes such “prime rate,” and if such “prime rates” are no longer generally published or are limited, regulated or administered by a governmental authority or quasigovernmental body, then the Servicer will select, in its reasonable discretion, a comparable interest rate index.

 

“REIT”:  A “real estate investment trust” under the Code.

 

“Related Funded Companion Participation”: The funded portion of any Unfunded Future Funding Participation.

 

“Remittance Date”: The meaning specified in the Servicing Agreement.

 

30

 

“Repurchase Request”:  The meaning specified in Section 7.17 hereof.

 

“Retained Securities”:  100% of the Class E Notes, the Class F Notes and the Preferred Shares.

 

“Rule 17g-5”:  The meaning specified in Section 14.13 hereof.

 

“Rule 144A”:  Rule 144A under the Securities Act.

 

“Rule 144A Global Note”:  The meaning specified in Section 2.2(b)(i) hereof.

 

“Rule 144A Information”:  The meaning specified in Section 7.13 hereof.

 

“Sale”:  The meaning specified in Section 5.17(a) hereof.

 

“Sale Proceeds”:  All proceeds (including accrued interest) received with respect to Mortgage Assets and Eligible Investments as a result of sales of such Mortgage Assets and Eligible Investments, and sales in connection with a repurchase for a Material Breach or a Material Document Defect, in each case net of any reasonable out-of-pocket expenses of the Trustee, the Note Administrator, or the Servicer under the Servicing Agreement in connection with any such sale.

 

“SEC”:  The Securities and Exchange Commission.

 

“Secured Parties”:  Collectively, the Trustee, the Note Administrator, the Noteholders, the Servicer, the Special Servicer, the Company Administrator and the Operating Advisor, each as their interests appear in applicable Transaction Documents.

 

“Securities”:  Collectively, the Notes and the Preferred Shares.

 

“Securities Account”:  The meaning specified in Section 8-501(a) of the UCC.

 

“Securities Account Control Agreement”:  The meaning specified in Section 3.3(a) hereof.

 

“Securities Act”:  The Securities Act of 1933, as amended.

 

“Securities Intermediary”:  The meaning specified in Section 10.1(b) hereof.

 

“Security”:  Any Note or Preferred Share or, collectively, the Notes and Preferred Shares, as the context may require.

 

“Security Entitlement”:  The meaning specified in Section 8-102(a)(17) of the UCC.

 

“Seller”:  ACRC Lender, and its successors in interest, solely in its capacity as Seller.

 

“Segregated Liquidity”:  The meaning specified in the Servicing Agreement.

 

31

 

“Senior Notes”: The Class A Notes, the Class A-S Notes, the Class B Notes, the Class C Notes and the Class D Notes.

 

“Sensitive Asset”: Means (i) a Mortgage Asset, or a portion thereof, or (ii) a real property or other interest (including, without limitation, an interest in real property) resulting from the conversion, exchange, other modification or exercise of remedies with respect to a Mortgage Asset or portion thereof, in either case, as to which the Servicer or the Special Servicer has determined, based on an Opinion of Counsel, could give rise to material liability of the Issuer (including liability for taxes) if held directly by the Issuer.

 

“Servicer”: Wells Fargo Bank, National Association, a national banking association, solely in its capacity as servicer under the Servicing Agreement, together with its permitted successors and assigns or any successor Person that shall have become the servicer pursuant to the appropriate provisions of the Servicing Agreement.

 

“Servicing Accounts”:  The Escrow Accounts, the Collection Account, the REO Accounts and the Cash Collateral Accounts, each as established under and defined in the Servicing Agreement.

 

“Servicing Advances”:  The meaning specified in the Servicing Agreement.

 

“Servicing Agreement”:  The Servicing Agreement, dated as of the Closing Date, by and among the Issuer, the Trustee, the Note Administrator, the Servicer, the Special Servicer, the Advancing Agent and the Operating Advisor, as amended, supplemented or otherwise modified from time to time in accordance with its terms.

 

“Share Registrar”:  MaplesFS Limited, unless a successor Person shall have become the Share Registrar pursuant to the applicable provisions of the Preferred Share Paying Agency Agreement, and thereafter “Share Registrar” shall mean such successor Person.

 

“Special Servicer”:  Ares Commercial Real Estate Servicer LLC, a Delaware limited liability company, solely in its capacity as special servicer under the Servicing Agreement, together with its permitted successors and assigns or any successor Person that shall have become the special servicer pursuant to the appropriate provisions of the Servicing Agreement.

 

“Special Servicing Fee”:  The meaning specified in the Servicing Agreement.

 

“Specially Serviced Mortgage Loan”:  The meaning specified in the Servicing Agreement.

 

“Specified Person”:  The meaning specified in Section 2.6(a) hereof.

 

“Stated Maturity Date”:  The Payment Date in August 2031.

 

“Supermajority”:  With respect to (i) any Class of Notes, the Holders of at least 662/3% of the Aggregate Outstanding Amount of the Notes of such Class and (ii) with respect to

 

32

 

the Preferred Shares, the Holders of at least 662/3% of the aggregate Notional Amount of the Preferred Shares.

 

“Targeted Credit Enhancement Level”: Means, with respect to each Class of Notes, the percentage set forth opposite such Class in the table below:

 

	
Class
    	
 
    	
Aggregate Outstanding
   Amount
    	
 
    	
Targeted Credit
   Enhancement Level
    	
 
    
	
Class A
    	
 
    	
$
    	
223,857,000
    	
 
    	
40.900
    	
%
    
	
Class A-S
    	
 
    	
10,038,000
    	
 
    	
38.250
    	
%
    
	
Class B
    	
 
    	
18,465,000
    	
 
    	
33.375
    	
%
    
	
Class C
    	
 
    	
24,147,000
    	
 
    	
27.000
    	
%
    
	
Class D
    	
 
    	
32,196,000
    	
 
    	
18.500
    	
%
    
	
Class E
    	
 
    	
21,780,000
    	
 
    	
12.750
    	
%
    
	
Class F
    	
 
    	
15,625,000
    	
 
    	
8.625
    	
%
    
	
Preferred Shares
    	
 
    	
32,669,686
    	
 
    	
N/A
    	
 
    
							

 

“Tax Event”: (i) Any borrower is, or on the next scheduled payment date under any Mortgage Asset, will be, required to deduct or withhold from any payment under any Mortgage Asset to the Issuer for or on account of any tax for whatever reason and such borrower is not required to pay to the Issuer such additional amount as is necessary to ensure that the net amount actually received by the Issuer (free and clear of taxes, whether assessed against such borrower or the Issuer) will equal the full amount that the Issuer would have received had no such deduction or withholding been required, (ii) any jurisdiction imposes net income, profits, or similar tax on the Issuer or (iii) the Issuer fails to maintain its status as a Qualified REIT Subsidiary or other disregarded entity of a REIT and is not a foreign corporation that is not engaged in a trade or business in the United States for U.S. federal income tax purposes.  Withholding taxes imposed under FATCA, if any, shall be disregarded in applying the definition of “Tax Event.”

 

“Tax Materiality Condition”:  The condition that will be satisfied if either (i) as a result of the occurrence of a Tax Event, a tax or taxes are imposed on the Issuer or withheld from payments to the Issuer and with respect to which the Issuer receives less than the full amount that the Issuer would have received had no such deduction occurred and such amount exceeds, in the aggregate, $1,000,000 during any 12-month period or (ii) the Issuer fails to maintain its status as a Qualified REIT Subsidiary or other disregarded entity of a REIT and is not a foreign corporation that is not engaged in a trade or business in the United States for U.S. federal income tax purposes.

 

“Tax Redemption”:  The meaning specified in Section 9.1(b) hereof.

 

“Total Redemption Price”:  The amount equal to funds sufficient to pay all amounts and expenses described under clauses (1) through (3) of Section 11.1(a)(i) and to redeem all Notes at their applicable Redemption Prices.

 

“Transaction Documents”:  This Indenture, the Mortgage Asset Purchase Agreement, the Placement Agency Agreement, the Company Administration Agreement, the

 

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Preferred Share Paying Agency Agreement, the Pari Passu Participation Agreements, the Future Funding Agreement, the Servicing Agreement and the Securities Account Control Agreement.

 

“Transfer Agent”:  The Person or Persons, which may be the Issuer, authorized by the Issuer to exchange or register the transfer of Notes in its capacity as Transfer Agent.

 

“Treasury Regulations”:  Temporary or final regulations promulgated under the Code by the United States Treasury Department.

 

“Trust Officer”:  When used with respect to (i) the Trustee, any officer of the Corporate Trust Office of the Trustee with direct responsibility for the administration of this Indenture and also, with respect to a particular matter, any other officer to whom such matter is referred because such officer’s knowledge of and familiarity with the particular subject and (ii) the Note Administrator, any officer of the Corporate Trust Services group of the Note Administrator with direct responsibility for the administration of this Indenture and also, with respect to a particular matter, any other officer to whom a particular matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

“Trustee”:  Wilmington Trust National Association, a national banking association, solely in its capacity as trustee hereunder, unless a successor Person shall have become the Trustee pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean such successor Person.

 

“Trustee Fee”: Amounts due and payable to the Trustee pursuant to Section 11.1(a)(i)(3) hereof.

 

“UCC”:  The applicable Uniform Commercial Code.

 

“Uncertificated Security”:  The meaning specified in Section 3.3(a)(ii) hereof.

 

“Unfunded Future Funding Participation”: With respect to each Mortgage Asset that is a Pari Passu Participation, the future funding companion participation interest, which (unless it is acquired as a Related Funded Companion Participation after the Closing Date in accordance with the terms of this Indenture) is not an asset of the Issuer and is not part of the Collateral.

 

“United States” and “U.S.”: The United States of America, including any state and any territory or possession administered thereby.

 

“Unregistered Securities”:  The meaning specified in Section 5.17(c) hereof.

 

“Unscheduled Principal Payments”:  Any proceeds received by the Issuer from an unscheduled prepayment or redemption (in whole but not in part) by the obligor of a Mortgage Asset prior to the maturity date of such Mortgage Asset.

 

“Unused Proceeds Account”:  The trust account established pursuant to Section 10.2(a) hereof.

 

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“Unused Proceeds Principal Amortization”:  A special amortization of the Notes pursuant to clause (2) of Section 11.1(a)(ii) from all amounts remaining in the Unused Proceeds Account after the Purchase Termination Date and transferred to the Payment Account pursuant to Section 10.2(d).

 

“Unused Proceeds Principal Amortization Amount”:  Any amounts remaining in the Unused Proceeds Account on the first Payment Date after the Purchase Termination Date.

 

“U.S. Person”: The meaning specified in Regulation S.

 

“Whole Loan”:  A whole mortgage loan (and not a participation interest in a mortgage loan) secured by commercial real estate.

 

“Workout Fee”:  The meaning specified in the Servicing Agreement.

 

Section 1.2                                    Interest Calculation Convention.

 

All calculations of interest hereunder that are made with respect to the Notes shall be made on the basis of the actual number of days during the related Interest Accrual Period divided by 360.

 

Section 1.3                                    Rounding Convention.

 

Unless otherwise specified herein, test calculations that are evaluated as a percentage will be rounded to the nearest ten thousandth of a percentage point and test calculations that are evaluated as a number or decimal will be rounded to the nearest one hundredth of a percentage point.

 

ARTICLE 2

 

THE NOTES

 

Section 2.1                                    Forms Generally.

 

The Notes and the Authenticating Agent’s certificate of authentication thereon (the “Certificate of Authentication”) shall be in substantially the forms required by this Article 2, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may be consistent herewith, determined by the Authorized Officers of the Issuer and the Co-Issuer, executing such Notes as evidenced by their execution of such Notes.  Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.

 

Section 2.2                                    Forms of Notes and Certificate of Authentication.

 

(a)                                 Form.  The form of each Class of the Senior Notes, including the Certificate of Authentication, shall be substantially as set forth in Exhibit A hereto and the form

 

35

 

of each Class of the Junior Notes, including the Certificate of Authentication, shall be substantially as set forth in Exhibit B hereto.

 

(b)                                 Global Notes and Definitive Notes.

 

(i)                                     The Senior Notes initially offered and sold in the United States to (or to U.S. Persons who are) QIBs shall be represented by one or more permanent global notes in definitive, fully registered form without interest coupons with the applicable legend set forth in Exhibits A hereto added to the form of such Senior Notes (each, a “Rule 144A Global Note”), which shall be registered in the name of Cede & Co., as the nominee of the Depository and deposited with the Note Administrator, as custodian for the Depository, duly executed by the Issuer and the Co-Issuer and authenticated by the Authentication Agent as hereinafter provided.  The aggregate principal amount of the Rule 144A Global Notes may from time to time be increased or decreased by adjustments made on the records of the Note Administrator or the Depository or its nominee, as the case may be, as hereinafter provided.

 

(ii)                                  The Junior Notes and any Senior Notes initially offered and sold in the United States to (or to U.S. Persons who are) IAIs shall be issued in definitive form, registered in the name of the legal or beneficial owner thereof attached without interest coupons with the applicable legend set forth in Exhibits A and B hereto, as applicable, added to the form of such Notes (each a “Definitive Note”), which shall be duly executed by the Issuer and, in the case of the Senior Notes, the Co-Issuer and authenticated by the Authentication Agent as hereinafter provided.  The aggregate principal amount of Senior Notes that are Definitive Notes may from time to time be increased or decreased by adjustments made on the records of the Note Administrator or the Depository or its nominee, as the case may be, as hereinafter provided.

 

(iii)                               The Senior Notes initially sold in offshore transactions in reliance on Regulation S shall be represented by one or more permanent global notes in definitive, fully registered form without interest coupons with the applicable legend set forth in Exhibits A, hereto added to the form of such Notes (each, a “Regulation S Global Note”), which shall be deposited on behalf of the subscribers for such Senior Notes represented thereby with the Note Administrator as custodian for the Depository and registered in the name of a nominee of the Depository for the respective accounts of Euroclear and Clearstream, Luxembourg or their respective depositories, duly executed by the Issuer and the Co-Issuer and authenticated by the Authenticating Agent as hereinafter provided.  The aggregate principal amount of the Regulation S Global Notes may from time to time be increased or decreased by adjustments made on the records of the Note Administrator or the Depository or its nominee, as the case may be, as hereinafter provided.

 

(c)                                  Book-Entry Provisions.  This Section 2.2(c) shall apply only to Global Notes deposited with or on behalf of the Depository.

 

Each of the Issuer and Co-Issuer shall execute and the Authenticating Agent shall, in accordance with this Section 2.2(c), authenticate and deliver initially one or more Global Notes that shall be (i) registered in the name of the nominee of the Depository for such Global

 

36

 

Note or Global Notes and (ii) delivered by the Note Administrator to such Depository or pursuant to such Depository’s instructions or held by the Note Administrator’s agent as custodian for the Depository.

 

Agent Members shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Note Administrator, as custodian for the Depository or under the Global Note, and the Depository may be treated by the Issuer, the Co-Issuer, the Trustee, the Note Administrator, the Servicer, the Special Servicer, and the Operating Advisor and any of their respective agents as the absolute owner of such Global Note for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Co-Issuer, the Trustee, the Note Administrator, the Servicer, the Special Servicer and the Operating Advisor or any of their respective agents, from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Global Note.

 

(d)                                 Delivery of Definitive Notes in Lieu of Global Notes.  Except as provided in Section 2.10 hereof, owners of beneficial interests in a Class of Global Notes shall not be entitled to receive physical delivery of a Definitive Note.

 

Section 2.3                                    Authorized Amount; Stated Maturity Date; and Denominations.

 

(a)                                 The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is limited to U.S.$346,108,000, except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.5, 2.6 or 8.5 hereof.

 

Such Notes shall be divided into seven Classes having designations and original principal amounts as follows:

 

	
Designation
    	
 
    	
Original
   Principal
   Amount
    	
 
    
	
Class A First Priority Secured Floating Rate   Notes Due August 2031 
    	
 
    	
U.S.$
    	
223,857,000
    	
 
    
	
Class A-S Second Priority Secured Floating   Rate Notes Due August 2031 
    	
 
    	
U.S.$
    	
10,038,000
    	
 
    
	
Class B Third Priority Secured Floating Rate   Notes Due August 2031 
    	
 
    	
U.S.$
    	
18,465,000
    	
 
    
	
Class C Fourth Priority Secured Floating Rate   Notes Due August 2031 
    	
 
    	
U.S.$
    	
24,147,000
    	
 
    
	
Class D Fifth Priority Secured Floating Rate   Notes Due August 2031 
    	
 
    	
U.S.$
    	
32,196,000
    	
 
    
	
Class E Sixth Priority Secured Floating Rate   Notes Due August 2031 
    	
 
    	
U.S.$
    	
21,780,000
    	
 
    
	
Class F Seventh Priority Secured Floating   Rate Notes Due August 2031 
    	
 
    	
U.S.$
    	
15,625,000
    	
 
    

 

(b)                                 The Notes shall be issuable in minimum denominations of U.S.$100,000 and integral multiples of U.S.$500 in excess thereof (plus any residual amount).

 

37

 

Section 2.4                                    Execution, Authentication, Delivery and Dating.

 

The Notes shall be executed on behalf of the Issuer and, in the case of the Senior Notes, the Co-Issuer by an Authorized Officer of the Issuer and, in the case of the Senior Notes, the Co-Issuer, respectively.  The signature of such Authorized Officers on the Notes may be manual or facsimile.

 

Notes bearing the manual or facsimile signatures of individuals who were at any time the Authorized Officers of the Issuer and, in the case of the Senior Notes, the Co-Issuer shall bind the Issuer or the Co-Issuer, as the case may be, notwithstanding the fact that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of issuance of such Notes.

 

At any time and from time to time after the execution and delivery of this Indenture, the Issuer and, in the case of the Senior Notes, the Co-Issuer may deliver Notes executed by the Issuer and, in the case of the Senior Notes, the Co-Issuer to the Authenticating Agent for authentication and the Authenticating Agent, upon Issuer Order, shall authenticate and deliver such Notes as provided in this Indenture and not otherwise.

 

Each Note authenticated and delivered by the Authenticating Agent upon Issuer Order on the Closing Date shall be dated as of the Closing Date.  All other Notes that are authenticated after the Closing Date for any other purpose under this Indenture shall be dated the date of their authentication.

 

Notes issued upon transfer, exchange or replacement of other Notes shall be issued in authorized denominations reflecting the original aggregate principal amount of the Notes so transferred, exchanged or replaced, but shall represent only the current outstanding principal amount of the Notes so transferred, exchanged or replaced.  In the event that any Note is divided into more than one Note in accordance with this Article 2, the original principal amount of such Note shall be proportionately divided among the Notes delivered in exchange therefor and shall be deemed to be the original aggregate principal amount of such subsequently issued Notes.

 

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a Certificate of Authentication, substantially in the form provided for herein, executed by the Note Administrator or by the Authenticating Agent by the manual signature of one of their Authorized Officers, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

Section 2.5                                    Registration, Registration of Transfer and Exchange.

 

(a)                                 The Issuer and the Co-Issuer shall cause to be kept a register (the “Notes Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuer and the Co-Issuer shall provide for the registration of Notes and the registration of transfers and exchanges of Notes.  The Note Administrator is hereby initially appointed “Notes Registrar” for the purpose of maintaining the Notes Registrar and registering Notes and transfers and exchanges of such Notes with respect to the Notes Register kept in the United States as herein

 

38

 

provided.  Upon any resignation or removal of the Notes Registrar, the Issuer and the Co-Issuer shall promptly appoint a successor or, in the absence of such appointment, assume the duties of Notes Registrar.

 

If a Person other than the Note Administrator is appointed by the Issuer and the Co-Issuer as Notes Registrar, the Issuer and the Co-Issuer shall give the Note Administrator prompt written notice of the appointment of a successor Notes Registrar and of the location, and any change in the location, of the Notes Register, and the Note Administrator shall have the right to inspect the Notes Register at all reasonable times and to obtain copies thereof and the Note Administrator shall have the right to rely upon a certificate executed on behalf of the Notes Registrar by an Authorized Officer thereof as to the names and addresses of the Holders of the Notes and the principal amounts and numbers of such Notes.  In addition, the Note Registrar shall be required, within one Business Day of each Record Date, to provide the Note Administrator with a copy of the Note Registrar in the format required by, and with all accompanying information regarding the Noteholders as may reasonably be required by the Note Administrator.

 

Subject to this Section 2.5, upon surrender for registration of transfer of any Notes at the office or agency of the Issuer to be maintained as provided in Section 7.2, the Issuer and the Co-Issuer shall execute, and the Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination and of a like aggregate principal amount.

 

At the option of the Holder, Notes may be exchanged for Notes of like terms, in any authorized denominations and of like aggregate principal amount, upon surrender of the Notes to be exchanged at the office or agency of the Issuer to be maintained as provided in Section 7.2.  Whenever any Note is surrendered for exchange, the Issuer and, in the case of the Senior Notes, the Co-Issuer shall execute, and the Authenticating Agent shall authenticate and deliver, the Notes that the Holder making the exchange is entitled to receive.

 

All Notes issued and authenticated upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer and, in the case of the Senior Notes, the Co-Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

 

Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Issuer and, in the case of the Senior Notes, the Co-Issuer and, in each case, the Notes Registrar duly executed by the Holder thereof or his attorney duly authorized in writing.

 

No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Note Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

None of the Notes Registrar, the Issuer or the Co-Issuer shall be required (i) to issue, register the transfer of or exchange any Note during a period beginning at the opening of business 15 days before any selection of Notes to be redeemed and ending at the close of

 

39

 

business on the day of the mailing of the relevant notice of redemption, or (ii) to register the transfer of or exchange any Note so selected for redemption.

 

(b)                                 No Note may be sold or transferred (including, without limitation, by pledge or hypothecation) unless such sale or transfer is exempt from the registration requirements of the Securities Act and is exempt from the registration requirements under applicable securities laws of any state or other jurisdiction.

 

(c)                                  No Note may be offered, sold, resold or delivered, within the United States or to, or for the benefit of, U.S. Persons except in accordance with Section 2.5(e) below and in accordance with Rule 144A to QIBs or, solely with respect to Definitive Notes, IAIs.  The Notes may be offered, sold, resold or delivered, as the case may be, in offshore transactions to non-U.S. Persons in reliance on Regulation S.  None of the Issuer, the Co-Issuer, the Note Administrator, the Trustee or any other Person may register the Notes under the Securities Act or the securities laws of any state or other jurisdiction.

 

(d)                                 Upon final payment due on the Stated Maturity Date of a Note, the Holder thereof shall present and surrender such Note at the Corporate Trust Office of the Note Administrator or at the office of the Paying Agent.

 

(e)                                  Transfers of Global Notes.  Notwithstanding any provision to the contrary herein, so long as a Global Note remains outstanding and is held by or on behalf of the Depository, transfers of a Global Note, in whole or in part, shall be made only in accordance with Section 2.2(c) and this Section 2.5(e).

 

(i)                                     Except as otherwise set forth below, transfers of a Global Note shall be limited to transfers of such Global Note in whole, but not in part, to nominees of the Depository or to a successor of the Depository or such successor’s nominee.  Transfers of a Global Note to a Definitive Note may only be made in accordance with Section 2.10.

 

(ii)                                  Regulation S Global Note to Rule 144A Global Note or Definitive Note.  If a holder of a beneficial interest in a Regulation S Global Note wishes at any time to exchange its interest in such Regulation S Global Note for an interest in the corresponding Rule 144A Global Note or for a Definitive Note or to transfer its interest in such Regulation S Global Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Rule 144A Global Note or for a Definitive Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Rule 144A Global Note or for a Definitive Note.  Upon receipt by the Note Administrator or the Notes Registrar of:

 

(1)                                 if the transferee is taking a beneficial interest in a Rule 144A Global Note, instructions from Euroclear, Clearstream and/or DTC, as the case may be, directing the Note Registrar to cause to be credited a beneficial interest in the corresponding Rule 144A Global Note in an amount equal to the beneficial interest in such Regulation S Global Note, but not less than the minimum

 

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denomination applicable to such holder’s Notes to be exchanged or transferred, such instructions to contain information regarding the participant account with DTC to be credited with such increase and a duly completed certificate in the form of Exhibit C-2 attached hereto; or

 

(2)                                 if the transferee is taking a Definitive Note, a duly completed transfer certificate in substantially the form of Exhibit C-3 hereto, certifying that such transferee is an IAI,

 

then the Notes Registrar shall either (x) if the transferee is taking a beneficial interest in a Rule 144A Global Note, approve the instructions at DTC to reduce, or cause to be reduced, the Regulation S Global Note by the aggregate principal amount of the beneficial interest in the Regulation S Global Note to be transferred or exchanged and the Notes Registrar shall instruct DTC, concurrently with such reduction, to credit or cause to be credited to the securities account of the Person specified in such instructions a beneficial interest in the corresponding Rule 144A Global Note equal to the reduction in the principal amount of the Regulation S Global Note or (y) if the transferee is taking an interest in a Definitive Note, the Notes Registrar shall record the transfer in the Notes Register in accordance with Section 2.5(a) and, upon execution by the Issuers, the Authenticating Agent shall authenticate and deliver one or more Definitive Notes, as applicable, registered in the names specified in the instructions described above, in principal amounts designated by the transferee (the aggregate of such principal amounts being equal to the aggregate principal amount of the interest in the Regulation S Global Note transferred by the transferor).

 

(iii)                               Definitive Note or Rule 144A Global Note to Regulation S Global Note.  If a holder of a beneficial interest in a Rule 144A Global Note or a Holder of a Definitive Note wishes at any time to exchange its interest in such Rule 144A Global Note or Definitive Note for an interest in the corresponding Regulation S Global Note, or to transfer its interest in such Rule 144A Global Note or Definitive Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Regulation S Global Note, such holder, provided such holder or, in the case of a transfer, the transferee is not a U.S. person and is acquiring such interest in an offshore transaction, may, subject to the immediately succeeding sentence and the rules and procedures of DTC, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Regulation S Global Note.  Upon receipt by the Note Administrator or the Notes Registrar of:

 

(1)                                 instructions given in accordance with DTC’s procedures from an Agent Member directing the Note Administrator or the Notes Registrar to credit or cause to be credited a beneficial interest in the corresponding Regulation S Global Note, but not less than the minimum denomination applicable to such holder’s Notes, in an amount equal to the beneficial interest in the Rule 144A Global Note or Definitive Note to be exchanged or transferred, and in the case of a transfer of Definitive Notes, such Holder’s Definitive Notes properly endorsed for assignment to the transferee,

 

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(2)                                 a written order given in accordance with DTC’s procedures containing information regarding the participant account of DTC and the Euroclear or Clearstream account to be credited with such increase,

 

(3)                                 in the case of a transfer of Definitive Notes, a Holder’s Definitive Note properly endorsed for assignment to the transferee, and

 

(4)                                 a duly completed certificate in the form of Exhibit C-1 attached hereto,

 

then the Note Administrator or the Notes Registrar shall approve the instructions at DTC to reduce the principal amount of the Rule 144A Global Note (or, in the case of a transfer of Definitive Notes, the Note Administrator or the Notes Registrar shall cancel such Definitive Notes) and to increase the principal amount of the Regulation S Global Note by the aggregate principal amount of the beneficial interest in the Rule 144A Global Note or Definitive Note to be exchanged or transferred, and to credit or cause to be credited to the securities account of the Person specified in such instructions a beneficial interest in the corresponding Regulation S Global Note equal to the reduction in the principal amount of the Rule 144A Global Note (or, in the case of a cancellation of Definitive Notes, equal to the principal amount of Definitive Notes so cancelled).

 

(iv)                              Transfer of Rule 144A Global Notes to Definitive Notes.  If, in accordance with Section 2.10, a holder of a beneficial interest in a Rule 144A Global Note wishes at any time to exchange its interest in such Rule 144A Global Note for a Definitive Note or to transfer its interest in such Rule 144A Global Note to a Person who wishes to take delivery thereof in the form of a Definitive Note in accordance with Section 2.10, such holder may, subject to the immediately succeeding sentence and the rules and procedures of DTC, exchange or transfer, or cause the exchange or transfer of, such interest for a Definitive Note.  Upon receipt by the Note Administrator or the Notes Registrar of (A) a duly complete certificate substantially in the form of Exhibit C-3 and (B) appropriate instructions from DTC, if required, the Note Administrator or the Notes Registrar shall approve the instructions at DTC to reduce, or cause to be reduced, the Rule 144A Global Note by the aggregate principal amount of the beneficial interest in the Rule 144A Global Note to be transferred or exchanged, record the transfer in the Register in accordance with Section 2.5(a) and upon execution by the Issuers, the Authenticating Agent shall authenticate and deliver one or more Definitive Notes, registered in the names specified in the instructions described in clause (B) above, in principal amounts designated by the transferee (the aggregate of such principal amounts being equal to the aggregate principal amount of the interest in the Rule 144A Global Note transferred by the transferor).

 

(v)                                 Transfer of Definitive Notes to Rule 144A Global Notes.  If a holder of a Definitive Note wishes at any time to exchange its interest in such Definitive Note for a beneficial interest in a Rule 144A Global Note or to transfer such Definitive Note to a Person who wishes to take delivery thereof in the form of a beneficial interest in a Rule 144A Global Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of DTC, exchange or transfer, or cause the exchange or transfer of, such Definitive Note for beneficial interest in a Rule 144A Global Note (provided that

 

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no IAI may hold an interest in a Rule 144A Global Note).  Upon receipt by the Note Administrator or the Notes Registrar of (A) a Holder’s Definitive Note properly endorsed for assignment to the transferee; (B) a duly completed certificate substantially in the form of Exhibit C-2 attached hereto; (C) instructions given in accordance with DTC’s procedures from an Agent Member to instruct DTC to cause to be credited a beneficial interest in the Rule 144A Global Notes in an amount equal to the Definitive Notes to be transferred or exchanged; and (D) a written order given in accordance with DTC’s procedures containing information regarding the participant’s account of DTC to be credited with such increase, the Note Administrator or the Notes Registrar shall cancel such Definitive Note in accordance herewith, record the transfer in the Notes Register in accordance with Section 2.5(a) and approve the instructions at DTC, concurrently with such cancellation, to credit or cause to be credited to the securities account of the Person specified in such instructions a beneficial interest in the corresponding Rule 144A Global Note equal to the principal amount of the Definitive Note transferred or exchanged.

 

(vi)                              Other Exchanges.  In the event that, pursuant to Section 2.10 hereof, a Global Note is exchanged for Definitive Notes, such Notes may be exchanged for one another only in accordance with such procedures as are substantially consistent with the provisions above (including certification requirements intended to ensure that such transfers are to a QIB who is also a Qualified Purchaser or are to a non-U.S. Person, or otherwise comply with Rule 144A or Regulation S, as the case may be) and as may be from time to time adopted by the Issuer, the Co-Issuer and the Note Administrator.

 

(f)                                   Removal of Legend.  If Notes are issued upon the transfer, exchange or replacement of Notes bearing the applicable legends set forth in Exhibits A and B hereto, and if a request is made to remove such applicable legend on such Notes, the Notes so issued shall bear such applicable legend, or such applicable legend shall not be removed, as the case may be, unless there is delivered to the Issuer and the Co-Issuer such satisfactory evidence, which may include an Opinion of Counsel of an attorney at law licensed to practice law in the State of New York (and addressed to the Issuer and the Note Administrator), as may be reasonably required by the Issuer and the Co-Issuer, if applicable, to the effect that neither such applicable legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of Rule 144A or Regulation S, as applicable, the 1940 Act or ERISA.  So long as the Issuer or the Co-Issuer is relying on an exemption under or promulgated pursuant to the 1940 Act, the Issuer or the Co-Issuer shall not remove that portion of the legend required to maintain an exemption under or promulgated pursuant to the 1940 Act.  Upon provision of such satisfactory evidence, as confirmed in writing by the Issuer and the Co-Issuer, if applicable, to the Note Administrator, the Note Administrator, at the direction of the Issuer and the Co-Issuer, if applicable, shall authenticate and deliver Notes that do not bear such applicable legend.

 

(g)                                  Each beneficial owner of Regulation S Global Notes shall be deemed to make the representations and agreements set forth in Exhibit C-1 hereto.

 

(h)                                 Each beneficial owner of Rule 144A Global Notes shall be deemed to make the representations and agreements set forth in Exhibit C-2 hereto.

 

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(i)                                     Each Holder of Definitive Notes shall make the representations and agreements set forth in the certificate attached as Exhibit C-3 hereto.

 

(j)                                    Any purported transfer of a Note not in accordance with Section 2.5(a) shall be null and void and shall not be given effect for any purpose hereunder.

 

(k)                                 Notwithstanding anything contained in this Indenture to the contrary, neither the Note Administrator nor the Notes Registrar (nor any other Transfer Agent) shall be responsible or liable for compliance with applicable federal or state securities laws (including, without limitation, the Securities Act or Rule 144A or Regulation S promulgated thereunder), the 1940 Act, ERISA or the Code (or any applicable regulations thereunder); provided, however, that if a specified transfer certificate or Opinion of Counsel is required by the express terms of this Section 2.5 to be delivered to the Note Administrator or Notes Registrar prior to registration of transfer of a Note, the Note Administrator and/or Notes Registrar, as applicable, is required to request, as a condition for registering the transfer of the Note, such certificate or Opinion of Counsel and to examine the same to determine whether it conforms on its face to the requirements hereof (and the Note Administrator or Notes Registrar, as the case may be, shall promptly notify the party delivering the same if it determines that such certificate or Opinion of Counsel does not so conform).

 

(l)                                     If the Note Administrator has actual knowledge or is notified by the Issuer or the Co-Issuer that (i) a transfer or attempted or purported transfer of any interest in any Note was consummated in compliance with the provisions of this Section 2.5 on the basis of a materially incorrect certification from the transferee or purported transferee, (ii) a transferee failed to deliver to the Note Administrator any certification required to be delivered hereunder or (iii) the holder of any interest in a Note is in breach of any representation or agreement set forth in any certification or any deemed representation or agreement of such holder, the Note Administrator shall not register such attempted or purported transfer and if a transfer has been registered, such transfer shall be absolutely null and void ab initio and shall vest no rights in the purported transferee (such purported transferee, a “Disqualified Transferee”) and the last preceding holder of such interest in such Note that was not a Disqualified Transferee shall be restored to all rights as a Holder thereof retroactively to the date of transfer of such Note by such Holder.

 

In addition, the Note Administrator may require that the interest in the Note referred to in (i), (ii) or (iii) in the preceding paragraph be transferred to any Person designated by the Issuer at a price determined by the Issuer, based upon its estimation of the prevailing price of such interest and each Holder, by acceptance of an interest in a Note, authorizes the Note Administrator to take such action.  In any case, the Note Administrator shall not be held responsible for any losses that may be incurred as a result of any required transfer under this Section 2.5(l).

 

(m)                             Each Holder of Notes approves and consents to (i) the purchase of the Mortgage Assets by the Issuer from the Seller on the Closing Date and (ii) any other transaction between the Issuer and the Seller or its Affiliates that are permitted under the terms of this Indenture or the Mortgage Asset Purchase Agreement.

 

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(n)                                 As long as any Note is Outstanding, Retained Securities held by ACRE, ACRC Holder or any other disregarded entity of ACRE for U.S. federal income tax purposes may not be transferred, pledged or hypothecated to any other Person (except to an affiliate that is wholly-owned by ACRE and is disregarded for U.S. federal income tax purposes) unless the Issuer receives an opinion of Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or another nationally recognized tax counsel experienced in such matters that such transfer will not cause the Issuer to be treated as a foreign corporation engaged in a trade or business in the United States for federal income tax purposes (or has previously received an opinion of Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or another nationally recognized tax counsel experienced in such matters that the Issuer will be treated as a foreign corporation that is not engaged in a trade or business in the United States for federal income tax purposes).

 

Section 2.6                                    Mutilated, Defaced, Destroyed, Lost or Stolen Note.

 

If (a) any mutilated or defaced Note is surrendered to a Transfer Agent, or if there shall be delivered to the Issuer, the Co-Issuer, the Trustee, the Note Administrator and the relevant Transfer Agent (each a “Specified Person”) evidence to their reasonable satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to each Specified Person such security or indemnity as may be required by each Specified Person to save each of them and any agent of any of them harmless, then, in the absence of notice to the Specified Persons that such Note has been acquired by a bona fide purchaser, the Issuer and the Co-Issuer shall execute and, upon Issuer Request, the Note Administrator shall cause the Authenticating Agent to authenticate and deliver, in lieu of any such mutilated, defaced, destroyed, lost or stolen Note, a new Note, of like tenor (including the same date of issuance) and equal principal amount, registered in the same manner, dated the date of its authentication, bearing interest from the date to which interest has been paid on the mutilated, defaced, destroyed, lost or stolen Note and bearing a number not contemporaneously outstanding.

 

If, after delivery of such new Note, a bona fide purchaser of the predecessor Note presents for payment, transfer or exchange such predecessor Note, any Specified Person shall be entitled to recover such new Note from the Person to whom it was delivered or any Person taking therefrom, and each Specified Person shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by such Specified Person in connection therewith.

 

In case any such mutilated, defaced, destroyed, lost or stolen Note has become due and payable, the Issuer and the Co-Issuer, if applicable, in their discretion may, instead of issuing a new Note, pay such Note without requiring surrender thereof except that any mutilated or defaced Note shall be surrendered.

 

Upon the issuance of any new Note under this Section 2.6, the Issuer and the Co-Issuer, if applicable, may require the payment by the registered Holder thereof of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

 

Every new Note issued pursuant to this Section 2.6 in lieu of any mutilated, defaced, destroyed, lost or stolen Note shall constitute an original additional contractual

 

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obligation of the Issuer and the Co-Issuer, if applicable, and such new Note shall be entitled, subject to the second paragraph of this Section 2.6, to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

 

The provisions of this Section 2.6 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, defaced, destroyed, lost or stolen Notes.

 

Section 2.7                                    Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved.

 

(a)                                 Each Class of Notes shall accrue interest during each Interest Accrual Period at the Note Interest Rate applicable to such Class and such interest will be payable in arrears on each Payment Date on the Aggregate Outstanding Amount thereof on the first day of the related Interest Accrual Period (after giving effect to payments of principal thereof on such date), except as otherwise set forth below.  Payment of interest on each Class of Notes will be subordinated to the payment of interest on each related Class of Notes senior thereto.  Any payment of interest due on a Class of Deferred Interest Notes on any Payment Date to the extent sufficient funds are not available to make such payment in accordance with the Priority of Payments on such Payment Date, but only if such Class is not the most senior Class Outstanding, shall constitute “Deferred Interest” with respect to such Class and shall not be considered “due and payable” for the purposes of Section 5.1(a) (and the failure to pay such interest shall not be an Event of Default) until the earliest of (i) the Payment Date on which funds are available to pay such Deferred Interest in accordance with the Priority of Payments, (ii) the Redemption Date with respect to such Class of Deferred Interest Notes and (iii) the Stated Maturity (or the earlier date of Maturity) of such Class of Deferred Interest Notes.  Deferred Interest on any Class of Deferred Interest Notes shall be added to the principal balance of such Class of Deferred Interest Notes.  Regardless of whether any more senior Class of Notes is Outstanding with respect to any Class of Deferred Interest Notes, to the extent that funds are not available on any Payment Date (other than the Redemption Date with respect to, or Stated Maturity of, such Class of Deferred Interest Notes) to pay previously accrued Deferred Interest, such previously accrued Deferred Interest will not be due and payable on such Payment Date and any failure to pay such previously accrued Deferred Interest on such Payment Date will not be an Event of Default. Interest will cease to accrue on each Note, or in the case of a partial repayment, on such repaid part, from the date of repayment or Stated Maturity unless payment of principal is improperly withheld or unless an Event of Default occurs with respect to such payments of principal.  To the extent lawful and enforceable, interest on any interest that is not paid when due on the Class A Notes, Class A-S Notes or Class B Notes; or, if no Class A Notes, Class A-S Notes or Class B Notes are Outstanding, the Notes of the Controlling Class, shall accrue at the Note Interest Rate applicable to such Class until paid as provided herein.

 

(b)                                 The principal of each Class of Notes matures at par and is due and payable on the date of the Stated Maturity for such Class, unless such principal has been previously repaid or unless the unpaid principal of such Note becomes due and payable at an earlier date by declaration of acceleration, call for redemption or otherwise.  Notwithstanding the foregoing, the payment of principal of each Class of Notes may only occur (other than amounts constituting Deferred Interest thereon which will be payable from Interest Proceeds) pursuant to the Priority

 

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of Payments.  The payment of principal on any Note (x) may only occur after each Class more senior thereto is no longer Outstanding and (y) is subordinated to the payment on each Payment Date of the principal due and payable on each Class more senior thereto and certain other amounts in accordance with the Priority of Payments.  Payments of principal on any Class of Notes that are not paid, in accordance with the Priority of Payments, on any Payment Date (other than the Payment Date which is the Stated Maturity (or the earlier date of Maturity) of such Class of Notes or any Redemption Date), because of insufficient funds therefor shall not be considered “due and payable” for purposes of Section 5.1(a) until the Payment Date on which such principal may be paid in accordance with the Priority of Payments or all Classes of Notes most senior thereto with respect to such Class have been paid in full.  Payments of principal on the Notes in connection with a Clean-up Call, Tax Redemption or Optional Redemption will be made in accordance with Section 9.1 and the Priority of Payments.

 

(c)                                  As a condition to the payment of principal of and interest on any Note without the imposition of U.S. withholding tax, the Issuer shall require certification acceptable to it to enable the Issuer, the Co-Issuer, the Trustee, the Preferred Share Paying Agent and the Paying Agent to determine their duties and liabilities with respect to any taxes or other charges that they may be required to deduct or withhold from payments in respect of such Security under any present or future law or regulation of the United States or the Cayman Islands or any present or future law or regulation of any political subdivision thereof or taxing authority therein or to comply with any reporting or other requirements under any such law or regulation.  Such certification may include U.S. federal income tax forms (such as IRS Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)), Form W-8BEN-E (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities), Form W-8IMY (Certificate of Foreign Intermediary, Foreign Flow-Through Entity or Certain U.S. Branches for United States Tax Withholding and Reporting), IRS Form W-9 (Request for Taxpayer Identification Number and Certification), or IRS Form W-8ECI (Certificate of Foreign Person’s Claim that Income Is Effectively Connected with the Conduct of a Trade or Business in the United States) or any successors to such IRS forms).  In addition, each of the Issuer, Co-Issuer, the Trustee, Preferred Share Paying Agent or any Paying Agent may require certification acceptable to it to enable the Issuer to qualify for a reduced rate of withholding in any jurisdiction from or through which the Issuer receives payments on its Collateral.  Each Holder and each beneficial owner of Notes agree to provide any certification requested pursuant to this Section 2.7(c) and to update or replace such form or certification in accordance with its terms or its subsequent amendments.  Furthermore, the Issuer shall require information to comply with FATCA requirements pursuant to clause (xii) of the representations and warranties set forth under the third paragraph of Exhibit C-1 hereto, as deemed made pursuant to Section 2.5(g) hereto, or pursuant to clause (xiii) of the representations and warranties set forth under the third paragraph of Exhibit C-2 hereto, as deemed made pursuant to Section 2.5(h) hereto, or pursuant to clause (xi) of the representations and warranties set forth under the third paragraph of Exhibit C-3 hereto, made pursuant to Section 2.5(i) hereto, as applicable.

 

(d)                                 Payments in respect of interest on and principal on the Notes shall be payable by wire transfer in immediately available funds to a Dollar account maintained by the Holder or its nominee; provided that the Holder has provided wiring instructions to the Paying Agent on or before the related Record Date or, if wire transfer cannot be effected, by a Dollar

 

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check drawn on a bank in the United States, or by a Dollar check mailed to the Holder at its address in the Notes Register.  The Issuer expects that the Depository or its nominee, upon receipt of any payment of principal or interest in respect of a Global Note held by the Depository or its nominee, shall immediately credit the applicable Agent Members’ accounts with payments in amounts proportionate to the respective beneficial interests in such Global Note as shown on the records of the Depository or its nominee.  The Issuer also expects that payments by Agent Members to owners of beneficial interests in such Global Note held through Agent Members will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers.  Such payments will be the responsibility of the Agent Members.  Upon final payment due on the Maturity of a Note, the Holder thereof shall present and surrender such Note at the Corporate Trust Office of the Note Administrator or at the office of the Paying Agent (or, to a foreign paying agent appointed by the Note Administrator outside of the United States if then required by applicable law, in the case of a Definitive Note issued in exchange for a beneficial interest in the Regulation S Global Note) on or prior to such Maturity.  None of the Issuer, the Co-Issuer, the Trustee, the Note Administrator or the Paying Agent will have any responsibility or liability with respect to any records maintained by the Holder of any Note with respect to the beneficial holders thereof or payments made thereby on account of beneficial interests held therein.  In the case where any final payment of principal and interest is to be made on any Note (other than on the Stated Maturity Date thereof) the Issuer or, upon Issuer Request, the Note Administrator, in the name and at the expense of the Issuer, shall not more than 30 nor fewer than five Business Days prior to the date on which such payment is to be made, mail to the Persons entitled thereto at their addresses appearing on the Notes Register, a notice which shall state the date on which such payment will be made and the amount of such payment and shall specify the place where such Notes may be presented and surrendered for such payment.

 

(e)                                  Subject to the provisions of Sections 2.7(a) and Section 2.7(d) hereof, Holders of Notes as of the Record Date in respect of a Payment Date shall be entitled to the interest accrued and payable in accordance with the Priority of Payments and principal payable in accordance with the Priority of Payments on such Payment Date.  All such payments that are mailed or wired and returned to the Paying Agent shall be held for payment as herein provided at the office or agency of the Issuer and the Co-Issuer to be maintained as provided in Section 7.2 (or returned to the Trustee).

 

(f)                                   Interest on any Note which is payable, and is punctually paid or duly provided for, on any Payment Date shall be paid to the Person in whose name that Note (or one or more predecessor Notes) is registered at the close of business on the Record Date for such interest.

 

(g)                                  Payments of principal to Holders of the Notes of each Class shall be made in the proportion that the Aggregate Outstanding Amount of the Notes of such Class registered in the name of each such Holder on such Record Date bears to the Aggregate Outstanding Amount of all Notes of such Class on such Record Date.

 

(h)                                 Interest accrued with respect to the Notes shall be calculated as described in the applicable form of Note attached hereto.

 

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(i)                                     All reductions in the principal amount of a Note (or one or more predecessor Notes) effected by payments of installments of principal made on any Payment Date, Redemption Date or upon Maturity shall be binding upon all future Holders of such Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.

 

(j)                                    Notwithstanding anything contained in this Indenture to the contrary, the obligations of the Issuer under the Notes and the Co-Issuer under the Senior Notes, this Indenture and the other Transaction Documents are limited-recourse obligations of the Issuer and non-recourse obligations of the Co-Issuer payable solely from the Collateral and following realization of the Collateral, all obligations of the Co-Issuers and any claims of the Noteholders, the Trustee or any other parties to any Transaction Documents shall be extinguished and shall not thereafter revive.  No recourse shall be had for the payment of any amount owing in respect of the Notes against any Officer, director, employee, shareholder, limited partner or incorporator of the Issuer, the Co-Issuer or any of their respective successors or assigns for any amounts payable under the Notes or this Indenture.  It is understood that the foregoing provisions of this paragraph shall not (i) prevent recourse to the Collateral for the sums due or to become due under any security, instrument or agreement which is part of the Collateral or (ii) constitute a waiver, release or discharge of any indebtedness or obligation evidenced by the Notes or secured by this Indenture (to the extent it relates to the obligation to make payments on the Notes) until such Collateral have been realized, whereupon any outstanding indebtedness or obligation in respect of the Notes, this Indenture and the other Transaction Documents shall be extinguished and shall not thereafter revive.  It is further understood that the foregoing provisions of this paragraph shall not limit the right of any Person to name the Issuer or the Co-Issuer as a party defendant in any Proceeding or in the exercise of any other remedy under the Notes or this Indenture, so long as no judgment in the nature of a deficiency judgment or seeking personal liability shall be asked for or (if obtained) enforced against any such Person or entity.

 

(k)                                 Subject to the foregoing provisions of this Section 2.7, each Note delivered under this Indenture and upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights of unpaid interest and principal that were carried by such other Note.

 

(l)                                     Notwithstanding any of the foregoing provisions with respect to payments of principal of and interest on the Notes (but subject to Sections 2.7(e) and (h)), if the Notes have become or been declared due and payable following an Event of Default and such acceleration of Maturity and its consequences have not been rescinded and annulled and the provisions of Section 5.5 are not applicable, then payments of principal of and interest on such Notes shall be made in accordance with Section 5.7 hereof.

 

(m)                             Payments in respect of the Preferred Shares as contemplated by Sections 11.1(a)(i)(16), 11.1(a)(ii)(17) and 11.1(a)(iii)(17) shall be made by the Paying Agent to the Preferred Share Paying Agent.

 

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Section 2.8                                    Persons Deemed Owners.

 

The Issuer, the Co-Issuer, the Trustee, the Note Administrator, the Servicer, the Special Servicer, the Operating Advisor and any of their respective agents may treat as the owner of a Note the Person in whose name such Note is registered on the Notes Register on the applicable Record Date for the purpose of receiving payments of principal of and interest and other amounts on such Note and on any other date for all other purposes whatsoever (whether or not such Note is overdue), and none of the Note Administrator, the Servicer, the Special Servicer, the Operating Advisor or any of their respective agents shall be affected by notice to the contrary; provided, however, that the Depository, or its nominee, shall be deemed the owner of the Global Notes, and owners of beneficial interests in Global Notes will not be considered the owners of any Notes for the purpose of receiving notices.  With respect to the Preferred Shares, on any Payment Date, the Trustee shall deliver to the Preferred Share Paying Agent the distributions thereon for distribution to the Preferred Shareholders.

 

Section 2.9                                    Cancellation.

 

All Notes surrendered for payment, registration of transfer, exchange or redemption, or deemed lost or stolen, shall, upon delivery to the Notes Registrar, be promptly canceled by the Notes Registrar and may not be reissued or resold.  No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 2.9, except as expressly permitted by this Indenture.  All canceled Notes held by the Notes Registrar shall be destroyed or held by the Notes Registrar in accordance with its standard retention policy.  Notes of the most senior Class Outstanding that are held by the Issuer, the Co-Issuer or any of their respective Affiliates may be submitted to the Notes Registrar for cancellation at any time.

 

Section 2.10                             Global Notes; Definitive Notes; Temporary Notes.

 

(a)                                 Definitive Notes.  Definitive Notes shall only be issued in the following limited circumstances:

 

(i)                                     upon Transfer of Global Notes to an IAI in accordance with the procedures set forth in Section 2.5(e)(ii) or Section 2.5(e)(iii);

 

(ii)                                  if a holder of a Definitive Note wishes at any time to exchange such Definitive Note for one or more Definitive Notes or transfer such Definitive Note to a transferee who wishes to take delivery thereof in the form of a Definitive Note in accordance with this Section 2.10, such holder may effect such exchange or transfer upon receipt by the Notes Registrar of (A) a Holder’s Definitive Note properly endorsed for assignment to the transferee, and (B) duly completed certificates in the form of Exhibit C-3, upon receipt of which the Notes Registrar shall then cancel such Definitive Note in accordance herewith, record the transfer in the Notes Register in accordance with Section 2.5(a) and upon execution by the Co-Issuers, the Authenticating Agent shall authenticate and deliver one or more Definitive Notes bearing the same designation as the Definitive Note endorsed for transfer, registered in the names specified in the assignment described in clause (A) above, in principal amounts designated by the transferee (the aggregate of

 

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such principal amounts being equal to the aggregate principal amount of the Definitive Note surrendered by the transferor);

 

(iii)                               in the event that the Depository notifies the Issuer and the Co-Issuer that it is unwilling or unable to continue as Depository for a Global Note or if at any time such Depository ceases to be a “Clearing Agency” registered under the Exchange Act and a successor depository is not appointed by the Issuer within 90 days of such notice, the Global Notes deposited with the Depository pursuant to Section 2.2 hereof shall be transferred to the beneficial owners thereof subject to the procedures and conditions set forth in this Section 2.10.

 

(b)                                 Any Global Note that is exchanged for a Definitive Note shall be surrendered by the Depository to the Notes Administrator’s Corporate Trust Office together with necessary instruction for the registration and delivery of a Definitive Note to the beneficial owners (or such owner’s nominee) holding the ownership interests in such Global Note.  Any such transfer shall be made, without charge, and the Authenticating Agent shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of the same Class and authorized denominations.  Any Definitive Notes delivered in exchange for an interest in a Global Note shall, except as otherwise provided by Section 2.5(f), bear the applicable legend set forth in Exhibits C-1 or C-2, as applicable, and shall be subject to the transfer restrictions referred to in such applicable legend.  The Holder of each such registered individual Global Note may transfer such Global Note by surrendering it at the Corporate Trust Office of the Note Administrator, or at the office of the Paying Agent.

 

(c)                                  Subject to the provisions of Section 2.10(b) above, the registered Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

 

(d)                                 Junior Notes may only be issued as Definitive Notes and no interest in a Junior Note may be held in the form of a Global Note at any time.

 

(e)                                  In the event of the occurrence of either of the events specified in Section 2.10(a) above, the Issuer and the Co-Issuer shall promptly make available to the Notes Registrar a reasonable supply of Definitive Notes.

 

Pending the preparation of Definitive Notes pursuant to this Section 2.10, the Issuer and the Co-Issuer may execute and, upon Issuer Order, the Authenticating Agent shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise reproduced, in any authorized denomination, substantially of the tenor of the Definitive Notes in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the Officers executing such Definitive Notes may determine, as conclusively evidenced by their execution of such Definitive Notes.

 

If temporary Definitive Notes are issued, the Issuer and the Co-Issuer shall cause permanent Definitive Notes to be prepared without unreasonable delay.  The Definitive Notes shall be printed, lithographed, typewritten or otherwise reproduced, or provided by any

 

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combination thereof, or in any other manner permitted by the rules and regulations of any applicable notes exchange, all as determined by the Officers executing such Definitive Notes.  After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the applicable temporary Definitive Notes at the office or agency maintained by the Issuer and the Co-Issuer for such purpose, without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Definitive Note, the Issuer and the Co-Issuer shall execute, and the Authenticating Agent shall authenticate and deliver, in exchange therefor the same aggregate principal amount of Definitive Notes of authorized denominations.  Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes.

 

Section 2.11                             U.S. Tax Treatment of Notes and the Issuer.

 

(a)                                 Each of the Issuer and the Co-Issuer intends that, for U.S. federal income tax purposes, the Notes (unless held by ACRE or any entity disregarded into ACRE) be treated as debt and that the Issuer be treated as a Qualified REIT Subsidiary (unless the Issuer has received an opinion of Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or another nationally recognized tax counsel experienced in such matters opining that the Issuer will be treated as a foreign corporation not engaged in a trade or business in the United States for U.S. federal income tax purposes).  Each prospective purchaser and any subsequent transferee of a Note or any interest therein shall, by virtue of its purchase or other acquisition of such Note or interest therein, be deemed to have agreed to treat such Note in a manner consistent with the preceding sentence for U.S. federal income tax purposes.

 

(b)                                 The Issuer and the Co-Issuer shall account for the Notes and prepare any reports to Noteholders and tax authorities consistent with the intentions expressed in Section 2.11(a) above.

 

(c)                                  Each Holder of Notes shall timely furnish to the Issuer and the Co-Issuer or their respective agents any U.S. federal income tax form or certification (such as IRS Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)) (with Part III marked), IRS Form W-8BEN-E (Certificate of Foreign Status of Beneficial Owner for the United States Tax Withholding and Reporting (Entities)) IRS Form W-8IMY (Certificate of Foreign Intermediary, Foreign Flow Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting), IRS Form W-9 (Request for Taxpayer Identification Number and Certification), or IRS Form W-8ECI (Certificate of Foreign Person’s Claim that Income is Effectively Connected with the Conduct of a Trade or Business in the United States) or any successors to such IRS forms that the Issuer, the Co-Issuer or their respective agents may reasonably request and shall update or replace such forms or certification in accordance with its terms or its subsequent amendments.  Furthermore, Noteholders shall timely furnish any information required pursuant to Section 2.7(c).

 

Section 2.12                             Authenticating Agents.

 

Upon the request of the Issuer and, in the case of the Senior Notes, the Co-Issuer, the Note Administrator shall, and if the Note Administrator so chooses the Note Administrator may, pursuant to this Indenture, appoint one or more Authenticating Agents with power to act on

 

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its behalf and subject to its direction in the authentication of Notes in connection with issuance, transfers and exchanges under Sections 2.4, 2.5, 2.6 and 8.5 hereof, as fully to all intents and purposes as though each such Authenticating Agent had been expressly authorized by such Sections to authenticate such Notes.  For all purposes of this Indenture, the authentication of Notes by an Authenticating Agent pursuant to this Section 2.12 shall be deemed to be the authentication of Notes by the Note Administrator.

 

Any corporation or banking association into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation or banking association resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, without the execution or filing of any further act on the part of the parties hereto or such Authenticating Agent or such successor corporation.  Any Authenticating Agent may at any time resign by giving written notice of resignation to the Note Administrator, the Trustee, the Issuer and the Co-Issuer.  The Note Administrator may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent, the Trustee, the Issuer and the Co-Issuer.  Upon receiving such notice of resignation or upon such a termination, the Note Administrator shall promptly appoint a successor Authenticating Agent and shall give written notice of such appointment to the Issuer.

 

The Note Administrator agrees to pay to each Authenticating Agent appointed by it from time to time reasonable compensation for its services, and reimbursement for its reasonable expenses relating thereto and the Note Administrator shall be entitled to be reimbursed for such payments, subject to Section 6.7 hereof.  The provisions of Sections 2.9, 6.4 and 6.5 hereof shall be applicable to any Authenticating Agent.

 

Section 2.13                             Forced Sale on Failure to Comply with Restrictions.

 

(a)                                 Notwithstanding anything to the contrary elsewhere in this Indenture, any transfer of a Note or interest therein to a U.S. Person who is determined not to have been a QIB or an IAI at the time of acquisition of the Note or interest therein shall be null and void and any such proposed transfer of which the Issuer, the Co-Issuer, the Note Administrator or the Trustee shall have notice may be disregarded by the Issuer, the Co-Issuer, the Note Administrator and the Trustee for all purposes.

 

(b)                                 If the Issuer determines that any Holder of a Note has not satisfied the applicable requirement described in Section 2.13(a) above (any such Person a “Non-Permitted Holder”), then the Issuer shall promptly after discovery that such Person is a Non-Permitted Holder by the Issuer, the Co-Issuer or the Paying Agent (and notice by the Paying Agent or the Co-Issuer to the Issuer, if either of them makes the discovery), send notice (or cause notice to be sent) to such Non-Permitted Holder demanding that such Non-Permitted Holder transfer its interest to a Person that is not a Non-Permitted Holder within 30 days of the date of such notice.  If such Non-Permitted Holder fails to so transfer its Note or interest therein, the Issuer shall have the right, without further notice to the Non-Permitted Holder, to sell such Note or interest therein to a purchaser selected by the Issuer that is not a Non-Permitted Holder on such terms as the Issuer may choose.  The Issuer, or a third party acting on behalf of the Issuer, may select the

 

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purchaser by soliciting one or more bids from one or more brokers or other market professionals that regularly deal in securities similar to the Note, and selling such Note to the highest such bidder.  However, the Issuer may select a purchaser by any other means determined by it in its sole discretion.  The Holder of such Note, the Non-Permitted Holder and each other Person in the chain of title from the Holder to the Non-Permitted Holder, by its acceptance of an interest in the Note, agrees to cooperate with the Issuer and the Note Administrator to effect such transfers.  The proceeds of such sale, net of any commissions, expenses and taxes due in connection with such sale shall be remitted to the Non-Permitted Holder.  The terms and conditions of any sale under this Section 2.13(b) shall be determined in the sole discretion of the Issuer, and the Issuer shall not be liable to any Person having an interest in the Note sold as a result of any such sale of exercise of such discretion.

 

Section 2.14                             No Gross Up.

 

The Issuer shall not be obligated to pay any additional amounts to the Holders or beneficial owners of the Notes as a result of any withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges.

 

ARTICLE 3

 

CONDITIONS PRECEDENT; PLEDGED MORTGAGE ASSETS

 

Section 3.1                                    General Provisions.

 

The Notes to be issued on the Closing Date shall be executed by the Issuer and, in the case of the Senior Notes, the Co-Issuer upon compliance with Section 3.2 and shall be delivered to the Authenticating Agent for authentication and thereupon the same shall be authenticated and delivered by the Authenticating Agent upon Issuer Request.  The Issuer shall cause the following items to be delivered to the Trustee on or prior to the Closing Date:

 

(a)                                 an Officer’s Certificate of the Issuer (i) evidencing the authorization by Board Resolution of the execution and delivery of this Indenture and the Placement Agency Agreement and related documents, the execution, authentication and delivery of the Notes and specifying the Stated Maturity Date of each Class of Notes, the principal amount of each Class of Notes and the applicable Note Interest Rate of each Class of Notes to be authenticated and delivered, and (ii) certifying that (A) the attached copy of the Board Resolution is a true and complete copy thereof, (B) such resolutions have not been rescinded and are in full force and effect on and as of the Closing Date, (C) the Directors authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon and (D) the total aggregate Notional Amount of the Preferred Shares shall have been received in Cash by the Issuer on the Closing Date;

 

(b)                                 an Officer’s Certificate of the Co-Issuer (i) evidencing the authorization by Board Resolution of the execution and delivery of this Indenture and related documents, the execution, authentication and delivery of the Senior Notes and specifying the Stated Maturity Date of each Class of Senior Notes, the principal amount of each Class of Senior Notes and the applicable Note Interest Rate of each Class of Senior Notes to be authenticated and delivered,

 

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and (ii) certifying that (A) the attached copy of the Board Resolution is a true and complete copy thereof, (B) such resolutions have not been rescinded and are in full force and effect on and as of the Closing Date and (C) each Officer authorized to execute and deliver the documents referenced in clause (b)(i) above holds the office and has the signature indicated thereon;

 

(c)                                  an opinion of Cadwalader, Wickersham & Taft LLP, special U.S. counsel to the Co-Issuers, and certain Affiliates thereof (which opinions may be limited to the laws of the State of New York and the federal law of the United States and may assume, among other things, the correctness of the representations and warranties made or deemed made by the owners of Notes pursuant to Sections 2.5(g), (h) and (i)) dated the Closing Date, as to certain matters of New York law and certain United States federal income tax and securities law matters, in a form satisfactory to the Placement Agents;

 

(d)                                 opinions of Cadwalader, Wickersham & Taft LLP, special counsel to the Co-Issuers dated the Closing Date, relating to (i) the validity of the Grant hereunder and the perfection of the Trustee’s security interest in the Collateral and (ii) certain bankruptcy matters, in each case;

 

(e)                                  an opinion of Proskauer Rose LLP, special counsel to ACRE, dated the Closing Date, regarding its qualification and taxation as a REIT;

 

(f)                                   an opinion of Venable LLP, counsel to ACRE, dated the Closing Date, regarding certain issues of Maryland law;

 

(g)                                  an opinion of Maples and Calder, Cayman Islands counsel to the Issuer, dated the Closing Date, regarding certain issues of Cayman Islands law;

 

(h)                                 an opinion of Richards, Layton & Finger LLP, special Delaware counsel to the Co-Issuer and ACRC Lender, dated the Closing Date, regarding certain issues of Delaware law;

 

(i)                                     an opinion of Mayer Brown LLP, counsel to the Servicer and Advancing Agent and an opinion of in-house counsel to the Servicer and Advancing Agent, regarding certain issues of United States law;

 

(j)                                    an opinion of (i) senior corporate counsel of Wells Fargo Bank, National Association, dated as of the Closing Date, regarding certain matters of United States law and (ii) Aini & Associates PLLC, counsel to Wells Fargo Bank, National Association;

 

(k)                                 an opinion of Aini & Associates PLLC, counsel to the Trustee regarding certain matters of United States Law;

 

(l)                                     an opinion of Dorsey & Whitney LLP, special Minnesota counsel to Wells Fargo Bank, National Association, regarding certain matters of Minnesota law with respect to the Minnesota Collateral;

 

(m)                             an opinion of McKenna Long & Aldridge LLP, counsel to the Operating Advisor, regarding certain matters of Georgia and United States law;

 

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(n)                                 an Officer’s Certificate given on behalf of the Issuer and without personal liability, stating that the Issuer is not in Default under this Indenture and that the issuance of the Securities by the Issuer will not result in a breach of any of the terms, conditions or provisions of, or constitute a Default under, the Governing Documents of the Issuer, any indenture or other agreement or instrument to which the Issuer is a party or by which it is bound, or any order of any court or administrative agency entered in any Proceeding to which the Issuer is a party or by which it may be bound or to which it may be subject; that all conditions precedent provided in this Indenture relating to the authentication and delivery of the Notes applied for and all conditions precedent provided in the Preferred Share Paying Agency Agreement relating to the issuance by the Issuer of the Preferred Shares have been complied with and that all expenses due or accrued with respect to the offering or relating to actions taken on or in connection with the Closing Date have been paid;

 

(o)                                 an Officer’s Certificate given on behalf of the Co-Issuer stating that the Co-Issuer is not in Default under this Indenture and that the issuance of the Senior Notes by the Co-Issuer will not result in a breach of any of the terms, conditions or provisions of, or constitute a Default under, the Governing Documents of the Co-Issuer, any indenture or other agreement or instrument to which the Co-Issuer is a party or by which it is bound, or any order of any court or administrative agency entered in any Proceeding to which the Co-Issuer is a party or by which it may be bound or to which it may be subject; that all conditions precedent provided in this Indenture relating to the authentication and delivery of the Notes applied for have been complied with and that all expenses due or accrued with respect to the offering or relating to actions taken on or in connection with the Closing Date have been paid;

 

(p)                                 executed counterparts of the Mortgage Asset Purchase Agreement, the Servicing Agreement, the Pari Passu Participation Agreements, the Future Funding Agreement, the Placement Agency Agreement, the Preferred Share Paying Agency Agreement and the Securities Account Control Agreement;

 

(q)                                 an Accountants’ Report on applying Agreed-Upon Procedures with respect to certain information concerning the Mortgage Assets in the Preliminary Offering Memorandum of the Co-Issuers, dated July 30, 2014 and the Structural and Collateral Term Sheet dated July 30, 2014 and an Accountant’s Report on applying Agreed-Upon Procedures with respect to certain information concerning the Mortgage Assets in the Offering Memorandum;

 

(r)                                    evidence of preparation for filing at the appropriate filing office in the District of Columbia of a financing statement, on behalf of the Issuer, relating to the perfection of the lien of this Indenture in that Collateral in which a security interest may be perfected by filing under the UCC; and

 

(s)                                   an Issuer Order executed by the Issuer and the Co-Issuer directing the Authenticating Agent to (i) authenticate the Notes specified therein, in the amounts set forth therein and registered in the name(s) set forth therein and (ii) deliver the authenticated Notes as directed by the Issuer and the Co-Issuer.

 

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Section 3.2                                    Security for Notes.

 

Prior to the issuance of the Notes on the Closing Date, the Issuer shall cause the following conditions to be satisfied:

 

(a)                                 Grant of Security Interest; Delivery of Mortgage Assets.  The Grant pursuant to the Granting Clauses of this Indenture of all of the Issuer’s right, title and interest in and to the Collateral shall be effective and all Closing Date Mortgage Assets acquired in connection therewith purchased by the Issuer on the Closing Date (as set forth in Schedule A hereto) together with the Mortgage Note and other Asset Documents with respect thereto shall have been delivered to, and received by, the Custodian on behalf of the Trustee, without recourse (except as expressly provided in each applicable Mortgage Asset Purchase Agreement), in the manner provided in Section 3.3(a);

 

(b)                                 Certificate of the Issuer.  A certificate of an Authorized Officer of the Issuer given on behalf of the Issuer and without personal liability, dated as of the Closing Date, delivered to the Trustee and the Note Administrator, to the effect that, in the case of each Closing Date Mortgage Asset pledged to the Trustee for inclusion in the Collateral on the Closing Date and immediately prior to the delivery thereof on the Closing Date:

 

(i)                                     the Issuer is the owner of such Mortgage Asset free and clear of any liens, claims or encumbrances of any nature whatsoever except for those which are being released on the Closing Date;

 

(ii)                                  the Issuer has acquired its ownership in such Mortgage Asset in good faith without notice of any adverse claim, except as described in paragraph (i) above;

 

(iii)                               the Issuer has not assigned, pledged or otherwise encumbered any interest in such Mortgage Asset (or, if any such interest has been assigned, pledged or otherwise encumbered, it has been released) other than interests Granted pursuant to this Indenture;

 

(iv)                              the Asset Documents with respect to such Mortgage Asset do not prohibit the Issuer from Granting a security interest in and assigning and pledging such Mortgage Asset to the Trustee;

 

(v)                                 the list of Closing Date Mortgage Assets in Schedule A identifies every Mortgage Asset sold to the Issuer pursuant to the Mortgage Asset Purchase Agreement and pledged to the Issuer hereunder;

 

(vi)                              the requirements of Section 3.2(a) with respect to such Mortgage Assets have been satisfied; and

 

(vii)                           (1) the Grant pursuant to the Granting Clauses of this Indenture shall, upon execution and delivery of this Indenture by the parties hereto, result in a valid and continuing security interest in favor of the Trustee for the benefit of the Secured Parties in all of the Issuer’s right, title and interest in and to the Mortgage Assets pledged to the Trustee for inclusion in the Collateral on the Closing Date; and

 

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(2) upon the delivery of each Mortgage Note evidencing the obligations of the borrowers under each Mortgage Asset to the Custodian on behalf of the Trustee, at the Custodian’s office in Minneapolis, Minnesota, the Trustee’s security interest in all Mortgage Assets shall be a validly perfected, first priority security interest under the UCC as in effect in the State of Minnesota.

 

(c)                                  Rating Letters.  the Issuer and/or Co-Issuer’s receipt of a signed letter from each Rating Agency confirming that (i) the Class A Notes have been issued with ratings of “AAA(sf)” by DBRS and “Aaa(sf)” by Moody’s, (ii) the Class A-S Notes have been issued with a rating of “AAA(sf)” by DBRS (iii) the Class B Notes have been issued with a rating of at least “AA(low)(sf)” by DBRS, (iv) the Class C Notes have been issued with a rating of at least “A(low)(sf)” by DBRS, (v) the Class D Notes have been issued with a rating of at least “BBB(low)(sf)” by DBRS, (vi) the Class E Notes have been issued with a rating of at least “BB(low)(sf)” by DBRS, and (vii) the Class F Notes have been issued with a rating of at least “B(low)(sf)” by DBRS.

 

(d)                                 Accounts.  Evidence of the establishment of the Payment Account, the Unused Proceeds Account, the Funded Companion Participation Acquisition Account, the Preferred Share Distribution Account, the Custodial Account and the Collection Account.

 

(e)                                  Issuance of Preferred Shares.  The Issuer shall have confirmed that the Preferred Shares have been, or contemporaneously with the issuance of the Notes will be, (i) issued by the Issuer and (ii) acquired in their entirety by ACRC Holder.

 

(f)                                   Deposit to Unused Proceeds Account.  On the Closing Date, the Issuer shall deposit into the Unused Proceeds Account, U.S.$31,700,000, which represents the Purchase Price of the Delayed Close Mortgage Asset identified on Schedule A as “One Financial Plaza”.

 

Section 3.3                                    Transfer of Collateral.

 

(a)                                 The Note Administrator, as document custodian (in such capacity, the “Custodian”), is hereby appointed as Custodian, acting on behalf of the Noteholders and the holders of the Related Funded Companion Participation, to hold all of the Mortgage Notes, which shall be delivered to it by the Issuer on the Closing Date, at its office in Minneapolis, Minnesota, and perform all other functions hereunder.  Any successor to the Custodian shall be a U.S. state or national bank or trust company that is not an Affiliate of the Issuer or the Co-Issuer and has capital and surplus of at least U.S.$200,000,000 and whose long-term unsecured debt is rated at least (i) “AA(low)” by DBRS and (ii) “A2” by Moody’s; provided, that it may maintain a long-term unsecured debt rating of at least “Baa2” by Moody’s for so long as it maintains a short-term unsecured debt rating of at least “P-1” by Moody’s and the Servicer maintains a long-term unsecured debt rating of at least “A2” by Moody’s, or such other rating with respect to which the Rating Agencies have provided a No Downgrade Confirmation (provided that this proviso shall not impose on the Servicer any obligation to maintain such rating).  Subject to the limited right to relocate Collateral set forth in Section 7.5(b), the Custodian shall hold all Asset Documents at its Corporate Trust Office.

 

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(b)                                 All Eligible Investments and other investments purchased in accordance with this Indenture in the respective Accounts in which the funds used to purchase such investments shall be held in accordance with Article 10 and, in respect of each Indenture Account, the Trustee on behalf of the Secured Parties shall have entered into a securities account control agreement with the Issuer, as debtor and the Securities Intermediary, as “securities intermediary” (within the meaning of Section 8-102(a)(14) of the UCC as in effect in the State of New York) and the Trustee, as secured party (the “Securities Account Control Agreement”) providing, inter alia, that the establishment and maintenance of such Indenture Account will be governed by the law of the State of New York.  The security interest of the Trustee in Collateral shall be perfected and otherwise evidenced as follows:

 

(i)                                     in the case of such Collateral consisting of Security Entitlements, by the Issuer (A) causing the Securities Intermediary, in accordance with the Securities Account Control Agreement, to indicate by book entry that a Financial Asset has been credited to the Custodial Account and (B) causing the Securities Intermediary to agree pursuant to the Securities Account Control Agreement that it will comply with Entitlement Orders originated by or on behalf of the Trustee with respect to each such Security Entitlement without further consent by the Issuer;

 

(ii)                                  in the case of Assets that consist of Instruments or Certificated Securities (the “Minnesota Collateral”), to the extent that any such Minnesota Collateral does not constitute a Financial Asset forming the basis of a Security Entitlement acquired by the Trustee pursuant to clause (i), by the Issuer causing (A) the Custodian, on behalf of the Trustee, to acquire possession of such Minnesota Collateral in the State of Minnesota or (B) another Person (other than the Issuer or a Person controlling, controlled by, or under common control with, the Issuer) (1) to (x) take possession of such Minnesota Collateral in the State of Minnesota and (y) authenticate a record acknowledging that it holds such possession for the benefit of the Trustee or (2) to (x) authenticate a record acknowledging that it will hold possession of such Minnesota Collateral for the benefit of the Trustee and (y) take possession of such Minnesota Collateral in the State of Minnesota;

 

(iii)                               in the case of Collateral that consist of General Intangibles and all other Collateral of the Issuer in which a security interest may be perfected by filing a financing statement under Article 9 of the UCC as in effect in the District of Columbia, filing or causing the filing of a UCC financing statement naming the Issuer as debtor and the Trustee as secured party, which financing statement reasonably identifies all such Collateral, with the Recorder of Deeds of the District of Columbia;

 

(iv)                              in the case of Collateral that consists of General Intangibles, causing the registration of the security interests granted under this Indenture in the register of mortgages and charges of the Issuer maintained at the Issuer’s registered office in the Cayman Islands; and

 

(v)                                 in the case of Collateral that consists of Cash on deposit in any Servicing Account managed by the Servicer or Special Servicer pursuant to the terms of the Servicing Agreement, to deposit such Cash in a Servicing Account, which Servicing Account is in the name of the Servicer or Special Servicer on behalf of the Trustee.

 

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(c)                                  The Issuer hereby authorizes the filing of UCC financing statements describing as the collateral covered thereby “all of the debtor’s personal property and Collateral,” or words to that effect, notwithstanding that such wording may be broader in scope than the Collateral described in this Indenture.

 

(d)                                 Without limiting the foregoing, the Trustee shall cause the Note Administrator to take such different or additional action as the Trustee may be advised by advice of counsel to the Trustee, Note Administrator or the Issuer (delivered to the Trustee and the Note Administrator) is reasonably required in order to maintain the perfection and priority of the security interest of the Trustee in the event of any change in applicable law or regulation, including Articles 8 and 9 of the UCC and Treasury Regulations governing transfers of interests in Government Items (it being understood that the Note Administrator shall be entitled to rely upon an Opinion of Counsel, including an Opinion of Counsel delivered in accordance with Section 3.1(d), as to the need to file any financing statements or continuation statements, the dates by which such filings are required to be made and the jurisdictions in which such filings are required to be made).

 

(e)                                  Without limiting any of the foregoing, in connection with each Grant of a Mortgage Asset hereunder, the Issuer shall deliver (or cause to be delivered by the Seller) to the Custodian (with a copy to the Servicer), in each case to the extent specified on the closing checklist for such Mortgage Asset provided to the Custodian by the Issuer (or the Seller) the following documents (collectively, the “Mortgage Asset File”):

 

(i)                                     if such Mortgage Asset is a Mortgage Loan:

 

(1)                                 the original mortgage note or promissory note, as applicable, bearing all intervening endorsements, endorsed in blank or endorsed “Pay to the order of ACRE Commercial Mortgage 2014-FL2 LLC, without recourse,” and signed in the name of the last endorsee by an authorized Person;

 

(2)                                 an original of any participation certificate together with any and all intervening endorsements thereon, endorsed in blank on its face or by endorsement or stock power attached thereto (without recourse, representation or warranty, express or implied);

 

(3)                                 an original of any participation agreement relating to any item of collateral that is not evidenced by a promissory note;

 

(4)                                 an original blanket assignment of all unrecorded documents with respect to such Mortgage Loan to the Issuer, in each case in form and substance acceptable for recording;

 

(5)                                 the original of any guarantee executed in connection with the promissory note, if any;

 

(6)                                 the original mortgage with evidence of recording thereon, or a copy thereof together with an Officer’s Certificate of the Issuer (or the Seller) certifying that such represents a true and correct copy of the original and that such

 

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original has been submitted or delivered to an escrow agent for recordation in the appropriate governmental recording office of the jurisdiction where the encumbered property is located, in which case, recordation information shall not be required;

 

(7)                                 the originals of all assumption, modification, consolidation or extension agreements with evidence of recording thereon (or a copy thereof together with an Officer’s Certificate of the Issuer (or the Seller) certifying that such represents a true and correct copy of the original and that such original has been submitted or delivered to an escrow agent for recordation in the appropriate governmental recording office of the jurisdiction where the encumbered property is located, in which case, recordation information shall not be required), together with any other recorded document relating to the Mortgage Loan otherwise included in the Mortgage Asset File;

 

(8)                                 the original assignment of mortgage in blank or in the name of the Issuer, in form and substance acceptable for recording and signed in the name of the last endorsee;

 

(9)                                 the originals of all intervening assignments of mortgage, if any, with evidence of recording thereon, showing an unbroken chain of title from the originator thereof to the last endorsee, or copies thereof together with an Officer’s Certificate of the Issuer certifying that such represent true and correct copies of the originals and that such originals have each been submitted or delivered to an escrow agent for recordation in the appropriate governmental recording office of the jurisdiction where the encumbered property is located, in which case, recordation information shall not be required;

 

(10)                          an original mortgagee policy of title insurance or a conformed version of the mortgagee’s title insurance commitment either marked as binding for insurance or attached to an escrow closing letter, countersigned by the title company or its authorized agent if the original mortgagee’s title insurance policy has not yet been issued;

 

(11)                          the original of any security agreement, chattel mortgage or equivalent document executed in connection with the Mortgage Loan, if any;

 

(12)                          the original assignment of leases and rents, if any, with evidence of recording thereon, or a copy thereof together with an Officer’s Certificate of the Issuer certifying that such copy represents a true and correct copy of the original that has been submitted or delivered to an escrow agent for recordation in the appropriate governmental recording office of the jurisdiction where the encumbered property is located, in which case, recordation information shall not be required;

 

(13)                          the original assignment of any assignment of leases and rents in blank or in the name of the Issuer, in form and substance acceptable for recording;

 

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(14)                          a filed copy of the UCC-1 financing statements with evidence of filing thereon, and UCC-3 assignments in blank, which UCC-3 assignments shall be in form and substance acceptable for filing;

 

(15)                          the original of any related loan agreement;

 

(16)                          the original of any related guarantee;

 

(17)                          the original of the environmental indemnity agreement, if any;

 

(18)                          the original of any general collateral assignment of all other documents held by the Issuer in connection with the Mortgage Loan;

 

(19)                          an original of any disbursement letter from the collateral obligor to the original mortgagee;

 

(20)                          an original of the survey of the related Mortgaged Properties;

 

(21)                          a copy of any property management agreements;

 

(22)                          a copy of any ground leases;

 

(23)                          a copy of any related environmental insurance policy and environmental report with respect to the related Mortgaged Properties;

 

(24)                          with respect to any Mortgage Loan with related mezzanine or other subordinate debt (other than a companion participation), a copy of any related co-lender agreement, intercreditor agreement, subordination agreement or other similar agreement;

 

(25)                          [Reserved];

 

(26)                          a copy of any opinion of counsel;

 

(27)                          the following additional documents, which may be delivered as one or several instruments, (a) allonge, endorsed in blank; (b) assignment of mortgage, in blank, in form and substance acceptable for recording; (c) assignment of leases and rents, in blank, in form and substance acceptable for recording; and (d) blanket assignment, in blank, in form and substance acceptable for recording.

 

(ii)                                  if such Mortgage Asset is a Participation:

 

(1)                                 each of the documents specified in (i) above with respect to the related Mortgage Loan, other than the documents identified in item (i)(4); and

 

(2)                                 an original of the related Pari Passu Participation Agreement;

 

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With respect to any documents which have been delivered or are being delivered to recording offices for recording and have not been returned to the Issuer (or the Seller) in time to permit their delivery hereunder at the time required, the Issuer (or the Seller) shall deliver such original recorded documents to the Custodian promptly when received by the Issuer (or the Seller) from the applicable recording office.

 

(f)                                   The execution and delivery of this Indenture by the Note Administrator shall constitute certification that (i) each original note required to be delivered to the Custodian on behalf of the Trustee by the Issuer (or the Seller) and all allonges thereto, if any, have been received by the Custodian; and (ii) such original note has been reviewed by the Custodian and (A) appears regular on its face (handwritten additions, changes or corrections shall not constitute irregularities if initialed by the borrower), (B) appears to have been executed and (C) purports to relate to the related Mortgage Asset.  The Custodian agrees to review or cause to be reviewed the Mortgage Asset Files within thirty (30) days after the Closing Date, and to deliver to the Issuer, the Note Administrator, the Servicer, and the Trustee a certification in the form of Exhibit D attached hereto, indicating, subject to any exceptions found by it in such review, (A) those documents referred to in Section 3.3(e) that have been received, and (B) that such documents have been executed, appear on their face to be what they purport to be, purport to be recorded or filed (as applicable) and have not been torn, mutilated or otherwise defaced, and appear on their faces to relate to the Mortgage Asset.  The Custodian shall have no responsibility for reviewing the Mortgage Asset File except as expressly set forth in this Section 3.3(f).  None of the Trustee, the Note Administrator, and the Custodian shall be under any duty or obligation to inspect, review, or examine any such documents, instruments or certificates to independently determine that they are valid, genuine, enforceable, legally sufficient, duly authorized, or appropriate for the represented purpose, whether the text of any assignment or endorsement is in proper or recordable form (except to determine if the endorsement conforms to the requirements of Section 3.3(e)), whether any document has been recorded in accordance with the requirements of any applicable jurisdiction, to independently determine that any document has actually been filed or recorded in the appropriate office, that any document is other than what it purports to be on its face, or whether the title insurance policies relate to the Mortgaged Property.

 

(g)                                  No later than the 90th day after the Closing Date, the Custodian shall (i) deliver to the Issuer, with a copy to the Note Administrator, the Trustee, and the Servicer a final exception report as to any remaining documents that are required to be, but are not in the Mortgage Asset File and (ii) request that the Issuer cause such document deficiency to be cured.

 

(h)                                 Without limiting the generality of the foregoing:

 

(i)                                     from time to time upon the request of the Trustee, Servicer or Special Servicer, the Issuer shall deliver (or cause to be delivered) to the Custodian any Asset Document in the possession of the Issuer and not previously delivered hereunder (including originals of Asset Documents not previously required to be delivered as originals) and as to which the Trustee, Servicer or Special Servicer, as applicable, shall have reasonably determined, or shall have been advised, to be necessary or appropriate for the administration of such Mortgage Loan hereunder or under the Servicing Agreement or for the protection of the security interest of the Trustee under this Indenture;

 

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(ii)                                  in connection with any delivery of documents to the Custodian pursuant to clause (i) above, the Custodian shall deliver to the Servicer, on behalf of the Issuer, a Certification in the form of Exhibit D acknowledging the receipt of such documents by the Custodian and that it is holding such documents subject to the terms of this Indenture; and

 

(iii)                               from time to time upon request of the Servicer or the Special Servicer, the Custodian shall, upon delivery by the Servicer or Special Servicer, as applicable, of a Request for Release in the form of Exhibit E hereto, release to the Servicer or Special Servicer, as applicable, such of the Asset Documents then in its custody as the Servicer or Special Servicer, as applicable, reasonably so requests.  By submission of any such Request for Release, the Servicer or the Special Servicer, as applicable, shall be deemed to have represented and warranted that it has determined in accordance with the Accepted Servicing Practices, respectively, set forth in the Servicing Agreement, as the case may be, that the requested release is necessary for the administration of such Mortgage Loan hereunder or under the Servicing Agreement or for the protection of the security interest of the Trustee under this Indenture.  The Servicer or the Special Servicer shall return to the Custodian each Asset Document released from custody pursuant to this clause (iii) within 20 Business Days of receipt thereof (except such Asset Documents as are released in connection with a sale, exchange or other disposition, in each case only as permitted under this Indenture, of the related Mortgage Asset that is consummated within such 20-day period).  Notwithstanding the foregoing provisions of this clause (iii), any note, participation certificate or other instrument evidencing a Pledged Mortgage Asset shall be released only for the purpose of (1) a sale, exchange or other disposition of such Pledged Mortgage Asset that is permitted in accordance with the terms of this Indenture, (2) presentation, collection, renewal or registration of transfer of such Mortgage Asset, (3) in the case of any note, in connection with a payment in full of all amounts owing under such note, or (4) effecting any amendment or modification permitted and effected pursuant to the terms of the Servicing Agreement.

 

(i)                                     As of the Closing Date (with respect to the Collateral owned or existing as of the Closing Date) and each date on which any Collateral is acquired (only with respect to each Collateral so acquired or arising after the Closing Date), the Issuer represents and warrants as follows:

 

(i)                                     this Indenture creates a valid and continuing security interest (as defined in the UCC) in the Collateral in favor of the Trustee for the benefit of the Secured Parties, which security interest is prior to all other liens, and is enforceable as such against creditors of and purchasers from the Issuer;

 

(ii)                                  the Issuer owns and has good and marketable title to such Collateral free and clear of any lien, claim or encumbrance of any Person;

 

(iii)                               in the case of each Collateral, the Issuer has acquired its ownership in such Collateral in good faith without notice of any adverse claim as defined in Section 8-102(a)(1) of the UCC as in effect on the date hereof;

 

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(iv)                              other than the security interest granted to the Trustee for the benefit of the Secured Parties pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral;

 

(v)                                 the Issuer has not authorized the filing of, and is not aware of, any financing statements against the Issuer that include a description of collateral covering the Collateral other than any financing statement (x) relating to the security interest granted to the Trustee for the benefit of the Secured Parties hereunder or (y) that has been terminated; the Issuer is not aware of any judgment lien, Pension Benefit Guarantee Corporation lien or tax lien filings against the Issuer;

 

(vi)                              the Issuer has received all consents and approvals required by the terms of each Collateral and the Transaction Documents to grant to the Trustee its interest and rights in such Collateral hereunder;

 

(vii)                           the Issuer has caused or will have caused, within ten days, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Collateral granted to the Trustee for the benefit of the Secured Parties hereunder;

 

(viii)                        all of the Collateral constitutes one or more of the following categories:  an Instrument, a General Intangible, a Certificated Security or an Uncertificated Security, or a Financial Asset in which a Security Entitlement has been created and that has been or will have been credited to a Securities Account and Proceeds of all the foregoing;

 

(ix)                              the Securities Intermediary has agreed to treat all Collateral credited to the Custodial Account as a Financial Asset;

 

(x)                                 the Issuer has delivered a fully executed Securities Account Control Agreement pursuant to which the Securities Intermediary has agreed to comply with all instructions originated by the Trustee relating to the Indenture Accounts without further consent of the Issuer; none of the Indenture Accounts is in the name of any Person other than the Issuer, the Note Administrator or the Trustee; the Issuer has not consented to the Securities Intermediary to comply with any Entitlement Orders in respect of the Indenture Accounts and any Security Entitlement credited to any of the Indenture Accounts originated by any Person other than the Trustee or the Note Administrator on behalf of the Trustee;

 

(xi)                              (A) all original executed copies of each promissory note, participation certificate or other writings that constitute or evidence any pledged obligation that constitutes an Instrument have been delivered to the Custodian for the benefit of the Trustee and (B) none of the promissory notes, participation certificates or other writings that constitute or evidence such collateral has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed by the Issuer to any Person other than the Trustee;

 

(xii)                           each of the Indenture Accounts constitutes a Securities Account in respect of which Wells Fargo Bank, National Association has accepted to be Securities

 

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Intermediary pursuant to the Securities Account Control Agreement on behalf of the Trustee as secured party under this Indenture.

 

(j)                                    The Note Administrator shall cause all Eligible Investments delivered to the Note Administrator on behalf of the Issuer (upon receipt by the Note Administrator thereof) to be promptly credited to the applicable Account.

 

(k)                                 [Reserved]

 

(l)                                     [Reserved]

 

ARTICLE 4

 

SATISFACTION AND DISCHARGE

 

Section 4.1                                    Satisfaction and Discharge of Indenture.

 

This Indenture shall be discharged and shall cease to be of further effect except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon, (iv) the rights, protections, indemnities and immunities of the Note Administrator (in each of its capacities) and the Trustee and the specific obligations set forth below hereunder, (v) the rights, obligations and immunities of the Servicer and Special Servicer hereunder and under the Servicing Agreement, and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property deposited with the Custodian or Securities Intermediary (on behalf of the Trustee) and payable to all or any of them (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture) when:

 

(a)                                 (i) either:

 

(1)                                 all Notes theretofore authenticated and delivered to Noteholders (other than (A) Notes which have been mutilated, defaced, destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.6 and (B) Notes for which payment has theretofore irrevocably been deposited in trust and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 7.3) have been delivered to the Note Registrar for cancellation; or

 

(2)                                 all Notes not theretofore delivered to the Note Registrar for cancellation (A) have become due and payable, or (B) shall become due and payable at their Stated Maturity Date within one year, or (C) are to be called for redemption pursuant to Article 9 under an arrangement satisfactory to the Note Administrator for the giving of notice of redemption by the Issuer and the Co-Issuer pursuant to Section 9.3 and either (x) the Issuer has irrevocably deposited or caused to be deposited with the Note Administrator, Cash or non-callable direct obligations of the United States of America; which obligations are entitled to the full faith and credit of the United States of America or are debt obligations which

 

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are rated “Aaa” by Moody’s in an amount sufficient, as recalculated by a firm of Independent nationally-recognized certified public accountants, to pay and discharge the entire indebtedness (including, in the case of a redemption pursuant to Section 9.1, the Redemption Price) on such Notes not theretofore delivered to the Note Administrator for cancellation, for principal and interest to the date of such deposit (in the case of Notes which have become due and payable), or to the respective Stated Maturity Date or the respective Redemption Date, as the case may be or (y) in the event all of the Collateral is liquidated following the satisfaction of the conditions specified in Article 5, the Issuer shall have deposited or caused to be deposited with the Note Administrator, all proceeds of such liquidation of the Collateral, for payment in accordance with the Priority of Payments;

 

(ii)                                  the Issuer and the Co-Issuer have paid or caused to be paid all other sums then due and payable hereunder (including any amounts then due and payable pursuant to the Servicing Agreement) by the Issuer and Co-Issuer and no other amounts are scheduled to be due and payable by the Issuer other than Dissolution Expenses;  and

 

(iii)                               the Co-Issuers have delivered to the Trustee and the Note Administrator Officer’s certificates and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with;

 

provided, however, that in the case of clause (a)(i)(2)(x) above, the Issuer has delivered to the Trustee and Note Administrator an opinion of Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or an opinion of another tax counsel of nationally recognized standing in the United States experienced in such matters to the effect that the Noteholders would recognize no income gain or loss for U.S. federal income tax purposes as a result of such deposit and satisfaction and discharge of this Indenture; or

 

(b)                                 (i) each of the Co-Issuers has delivered to the Trustee and Note Administrator a certificate stating that (1) there is no Collateral (other than (x) the Servicing Agreement and the Servicing Accounts related thereto and the Securities Account Control Agreement and the Indenture Accounts related thereto and (y) Cash in an amount not greater than the Dissolution Expenses) that remain subject to the lien of this Indenture, and (2) all funds on deposit in or to the credit of the Accounts have been distributed in accordance with the terms of this Indenture or have otherwise been irrevocably deposited with the Servicer under the Servicing Agreement for such purpose; and

 

(ii)                                  the Co-Issuers have delivered to the Note Administrator and the Trustee Officer’s certificates and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

 

Notwithstanding the satisfaction and discharge of this Indenture, the rights and obligations of the Issuer, the Co-Issuer, the Trustee, the Note Administrator, and, if applicable,

 

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the Noteholders, as the case may be, under Sections 2.7, 4.2, 5.4(d), 5.9, 5.18, 6.7, 7.3 and 14.12 hereof shall survive.

 

Section 4.2                                    Application of Amounts held in Trust.

 

All amounts deposited with the Note Administrator pursuant to Section 4.1 shall be held in trust and applied by it in accordance with the provisions of the Notes and this Indenture (including, without limitation, the Priority of Payments) to the payment of the principal and interest, either directly or through any Paying Agent, as the Note Administrator may determine, and such amounts shall be held in a segregated account identified as being held in trust for the benefit of the Secured Parties.

 

Section 4.3                                    Repayment of Amounts Held by Paying Agent.

 

In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all amounts then held by any Paying Agent, upon demand of the Issuer and the Co-Issuer, shall be remitted to the Note Administrator to be held and applied pursuant to Section 7.3 hereof and, in the case of amounts payable on the Notes, in accordance with the Priority of Payments and thereupon such Paying Agent shall be released from all further liability with respect to such amounts.

 

Section 4.4                                    Limitation on Obligation to Incur Company Administrative Expenses.

 

If at any time after an Event of Default has occurred and the Notes have been declared immediately due and payable, the sum of (i) Eligible Investments, (ii) Cash and (iii) amounts reasonably expected to be received by the Issuer with respect to the Mortgage Assets in Cash during the current Due Period (as certified by the Special Servicer in accordance with Accepted Servicing Practices) is less than the sum of Dissolution Expenses and any accrued and unpaid Company Administrative Expenses, then notwithstanding any other provision of this Indenture, the Issuer shall no longer be required to incur Company Administrative Expenses as otherwise required by this Indenture to any Person, other than with respect to fees and indemnities of, and other payments, charges and expenses incurred in connection with opinions, reports or services to be provided to or for the benefit of, the Trustee, the Note Administrator, or any of their respective Affiliates.  Any failure to pay such amounts or provide or obtain such opinions, reports or services no longer required hereunder shall not constitute a Default hereunder.

 

ARTICLE 5

 

REMEDIES

 

Section 5.1                                    Events of Default.

 

“Event of Default,” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary

 

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or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a)                                 a default in the payment of any interest on any Class A Note, Class A-S Note or Class B Note (or, if no Class A Notes, Class A-S Notes or Class B Notes are Outstanding, any Note of the most senior Class Outstanding) when the same becomes due and payable and the continuation of any such default for three Business Days after a Trust Officer of the Note Administrator has actual knowledge or receives notice from any holder of Notes of such payment default; provided that in the case of a failure to disburse funds due to an administrative error or omission by the Note Administrator, the Trustee or any paying agent, such failure continues for five Business Days after a trust officer of the Note Administrator receives written notice or has actual knowledge of such administrative error or omission; or

 

(b)                                 a default in the payment of principal (or the related Redemption Price, if applicable) of any Class when the same becomes due and payable, at its Stated Maturity Date or any Redemption Date; provided, in each case, that in the case of a failure to disburse funds due to an administrative error or omission by the Note Administrator, Trustee or any paying agent, such failure continues for five Business Days after a trust officer of the Note Administrator receives written notice or has actual knowledge of such administrative error or omission;

 

(c)                                  the failure on any Payment Date to disburse amounts available in the Payment Account in accordance with the Priority of Payments set forth under Section 11.1(a) (other than (i) a default in payment described in clause (a) or (b) above and (ii) unless the Holders of the Preferred Shares object, a failure to disburse any amounts to the Preferred Share Paying Agent for distribution to the Holders of the Preferred Shares), which failure continues for a period of three (3) Business Days or, in the case of a failure to disburse such amounts due to an administrative error or omission by the Note Administrator or Paying Agent, which failure continues for five (5) Business Days;

 

(d)                                 either the Issuer, the Co-Issuer or the pool of Collateral becomes an investment company required to be registered under the 1940 Act;

 

(e)                                  a default in the performance, or breach, of any other covenant or other agreement of the Issuer or Co-Issuer (other than the covenant to make the payments described in clauses (a), (b) or (c) above) or any representation or warranty of the Issuer or Co-Issuer hereunder or in any certificate or other writing delivered pursuant hereto or in connection herewith proves to be incorrect in any material respect when made, and the continuation of such default or breach for a period of 30 days (or, if such default, breach or failure has an adverse effect on the validity, perfection or priority of the security interest granted hereunder, 15 days) after either the Issuer or the Co-Issuer has actual knowledge thereof or after notice thereof to the Issuer and the Co-Issuer by the Trustee or to the Issuer and the Co-Issuer and the Trustee by Holders of at least 25% of the Aggregate Outstanding Amount of the Controlling Class;

 

(f)                                   the entry of a decree or order by a court having competent jurisdiction adjudging the Issuer or the Co-Issuer as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Issuer or the Co-Issuer under the Bankruptcy Code, or any bankruptcy, insolvency,

 

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reorganization or similar law enacted under the laws of the Cayman Islands or any other applicable law, or appointing a receiver, liquidator, assignee, or sequestrator (or other similar official) of the Issuer or the Co-Issuer or of any substantial part of its property, respectively, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days;

 

(g)                                  the institution by the Issuer or the Co-Issuer of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code, or any bankruptcy, insolvency, reorganization or similar law enacted under the laws of the Cayman Islands or any other similar applicable law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee or sequestrator (or other similar official) of the Issuer or the Co-Issuer or of any substantial part of its property, respectively, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of any action by the Issuer in furtherance of any such action;

 

(h)                                 one or more final judgments being rendered against the Issuer or the Co-Issuer which exceed, in the aggregate, U.S.$1,000,000 and which remain unstayed, undischarged and unsatisfied for 30 days after such judgment(s) becomes nonappealable, unless adequate funds have been reserved or set aside for the payment thereof, and unless (except as otherwise specified in writing by the Rating Agencies) a No Downgrade Confirmation has been received from the Rating Agencies; or

 

(i)                                     the Issuer loses its status as a Qualified REIT Subsidiary or other disregarded entity of ACRE for U.S. federal income tax purposes, unless (A) within 90 days, the Issuer either (1) delivers an opinion of tax counsel of nationally recognized standing in the United States experienced in such matters to the effect that, notwithstanding the Issuer’s loss of Qualified REIT Subsidiary or disregarded entity status for U.S. federal income tax purposes, the Issuer is not, and has not been, an association (or publicly traded partnership) taxable as a corporation, or is not, and has not been, otherwise subject to U.S. federal income tax on a net basis and the Noteholders are not otherwise materially adversely affected by the loss of Qualified REIT Subsidiary or disregarded entity status for U.S. federal income tax purposes or (2) receives an amount from the Preferred Shareholders sufficient to discharge in full the amounts then due and unpaid on the Notes and amounts and expenses described in clauses (1) through (15) under Section 11.1(a)(i) in accordance with the Priority of Payments or (B) all Classes of the Notes are subject to a Tax Redemption announced by the Issuer in compliance with this Indenture, and such redemption has not been rescinded.

 

Upon becoming aware of the occurrence of an Event of Default, the Issuer, shall promptly notify (or shall procure the prompt notification of) the Trustee, the Note Administrator, the Servicer, the Special Servicer, the Operating Advisor, the Preferred Share Paying Agent and the Preferred Shareholders in writing.

 

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Section 5.2                                    Acceleration of Maturity; Rescission and Annulment.

 

(a)                                 If an Event of Default shall occur and be continuing (other than the Events of Default specified in Section 5.1(f) or 5.1(g)), the Trustee may (and shall at the direction of a Majority, by outstanding principal amount, of each Class of Notes voting as a separate Class (excluding any Notes owned by the Issuer, the Seller or any of their respective Affiliates), declare the principal of and accrued and unpaid interest on all the Notes to be immediately due and payable.  Upon any such declaration such principal, together with all accrued and unpaid interest thereon, and other amounts payable thereunder in accordance with the Priority of Payments will become immediately due and payable.  If an Event of Default described in Section 5.1(f) or 5.1(g) above occurs, such an acceleration shall occur automatically and without any further action.  If the Notes are accelerated, payments shall be made in the order and priority set forth in Section 11.1(a) hereof.

 

(b)                                 At any time after such a declaration of acceleration of Maturity of the Notes has been made, and before a judgment or decree for payment of the amounts due has been obtained by the Trustee as hereinafter provided in this Article 5, a Majority of each Class of Notes (voting as a separate Class), other than with respect to an Event of Default specified in Section 5.1(d), 5.1(f), 5.1(g), or 5.1(i), by written notice to the Issuer, the Co-Issuer and the Trustee, may rescind and annul such declaration and its consequences if:

 

(i)                                     the Issuer or the Co-Issuer has paid or deposited with the Note Administrator a sum sufficient to pay:

 

(A)               all unpaid installments of interest on and principal on the Notes that would be due and payable hereunder if the Event of Default giving rise to such acceleration had not occurred;

 

(B)               all unpaid taxes of the Issuer and the Co-Issuer, Company Administrative Expenses and other sums paid or advanced by or otherwise due and payable to the Note Administrator or to the Trustee hereunder;

 

(C)               with respect to the Advancing Agent, any amount due and payable for unreimbursed Interest Advances, Servicing Advances and Reimbursement Interest; and

 

(D)               any Company Administrative Expense due and payable;

 

(ii)                                  the Trustee has received notice that all Events of Default, other than the non-payment of the interest and principal on the Notes that have become due solely by such acceleration, have been cured and a Majority of the Controlling Class, by written notice to the Trustee, has agreed with such notice (which agreement shall not be unreasonably withheld or delayed) or waived as provided in Section 5.14.

 

At any such time that the Trustee, subject to Section 5.2(b), shall rescind and annul such declaration and its consequences as permitted hereinabove, the Collateral shall be preserved in accordance with the provisions of Section 5.5 with respect to the Event of Default 

 

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that gave rise to such declaration; provided, however, that if such preservation of the Collateral is rescinded pursuant to Section 5.5, the Notes may be accelerated pursuant to the first paragraph of this Section 5.2, notwithstanding any previous rescission and annulment of a declaration of acceleration pursuant to this paragraph.

 

No such rescission shall affect any subsequent Default or impair any right consequent thereon.

 

(c)                                  Subject to Sections 5.4 and 5.5, a Majority of the Controlling Class shall have the right to direct the Trustee in the conduct of any Proceedings for any remedy available to the Trustee or in the sale of any or all of the Collateral; provided that (i) such direction will not conflict with any rule of law or this Indenture; (ii) the Trustee may take any other action not inconsistent with such direction; (iii) the Trustee determines that such action will not involve it in liability (unless the Trustee has received security or indemnity satisfactory to it against any such liability); and (iv) any direction to undertake a sale of the Collateral may be made only as described in Section 5.17.  The Trustee shall be entitled to refuse to take any action absent such direction.

 

(d)                                 As security for the payment by the Issuer of the compensation and expenses of the Trustee, the Note Administrator, and any sums the Trustee or Note Administrator shall be entitled to receive as indemnification by the Issuer, the Issuer hereby grants the Trustee a lien on the Collateral, which lien is senior to the lien of the Noteholders.  The Trustee’s lien shall be subject to the Priority of Payments and exercisable by the Trustee only if the Notes have been declared due and payable following an Event of Default and such acceleration has not been rescinded or annulled.

 

(e)                                  A Majority of the Aggregate Outstanding Amount of each Class of Notes may, prior to the time a judgment or decree for the payment of amounts due has been obtained by the Trustee, waive any past Default on behalf of the holders of all the Notes and its consequences in accordance with Section 5.14.

 

Section 5.3                                    Collection of Indebtedness and Suits for Enforcement by Trustee.

 

(a)                                 The Issuer covenants that if a Default shall occur in respect of the payment of any interest and principal on any Class of Notes (but only after any amounts payable pursuant to Section 11.1(a) having a higher priority have been paid in full), the Issuer and Co-Issuer shall, upon demand of the Trustee or any affected Noteholder, pay to the Note Administrator on behalf of the Trustee, for the benefit of the Holder of such Note, the whole amount, if any, then due and payable on such Note for principal and interest or other payment with interest on the overdue principal and, to the extent that payments of such interest shall be legally enforceable, upon overdue installments of interest, at the applicable interest rate and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Note Administrator, the Trustee and such Noteholder and their respective agents and counsel.

 

If the Issuer or the Co-Issuer fails to pay such amounts forthwith upon such demand, the Trustee, as Trustee of an express trust, and at the expense of the Issuer, may 

 

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institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer and the Co-Issuer or any other obligor upon the Notes and collect the amounts adjudged or decreed to be payable in the manner provided by law out of the Collateral.

 

If an Event of Default occurs and is continuing, the Trustee shall proceed to protect and enforce its rights and the rights of the Noteholders by such Proceedings (x) as directed by a Majority of the Controlling Class or (y) in the absence of direction by a Majority of the Controlling Class, as determined by the Trustee acting in good faith; provided, that (a) such direction must not conflict with any rule of law or with any express provision of this Indenture, (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction, (c) the Trustee has been provided with security or indemnity reasonably satisfactory to it, and (d) notwithstanding the foregoing, any direction to the Trustee to undertake a sale of Collateral may be given only in accordance with the preceding paragraph, in connection with any sale and liquidation of all or a portion of the Collateral, the preceding sentence, and, in all cases, the applicable provisions of this Indenture.  Such Proceedings shall be used for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Trustee by this Indenture or by law.  Any direction to the Trustee to undertake a sale of Collateral shall be forwarded to the Special Servicer, and the Special Servicer shall conduct any such sale in accordance with the terms of the Servicing Agreement.

 

In the case where (x) there shall be pending Proceedings relative to the Issuer or the Co-Issuer under the Bankruptcy Code, any bankruptcy, insolvency, reorganization or similar law enacted under the laws of the Cayman Islands, or any other applicable bankruptcy, insolvency or other similar law, (y) a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or the Co-Issuer, or their respective property, or (z) there shall be any other comparable Proceedings relative to the Issuer or the Co-Issuer, or the creditors or property of the Issuer or the Co-Issuer, regardless of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration, or otherwise and regardless of whether the Trustee shall have made any demand pursuant to the provisions of this Section 5.3, the Trustee shall be entitled and empowered, by intervention in such Proceedings or otherwise:

 

(i)                                     to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Noteholders allowed in any Proceedings relative to the Issuer, the Co-Issuer or other obligor upon the Notes or to the creditors or property of the Issuer, the Co-Issuer or such other obligor;

 

(ii)                                  unless prohibited by applicable law and regulations, to vote on behalf of the Noteholders in any election of a trustee or a standby trustee in arrangement, 

 

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reorganization, liquidation or other bankruptcy or insolvency proceedings or of a Person performing similar functions in comparable Proceedings; and

 

(iii)                               to collect and receive (or cause the Note Administrator to collect and receive) any amounts or other property payable to or deliverable on any such claims, and to distribute (or cause the Note Administrator to distribute) all amounts received with respect to the claims of the Noteholders and of the Trustee on their behalf; the Secured Parties, and any trustee, receiver or liquidator, custodian or other similar official is hereby authorized by each of the Noteholders to make payments to the Trustee (or the Note Administrator on its behalf), and, in the event that the Trustee shall consent to the making of payments directly to the Noteholders, to pay to the Trustee and the Note Administrator such amounts as shall be sufficient to cover reasonable compensation to the Trustee and the Note Administrator, each predecessor trustee and note administrator, and their respective agents, attorneys and counsel, and all other reasonable expenses and liabilities incurred.

 

Nothing herein contained shall be deemed to authorize the Trustee to authorize, consent to, vote for, accept or adopt, on behalf of any Noteholder, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Noteholder in any such Proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

 

All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Trustee without the possession of any of the Notes or the production thereof in any trial or other Proceedings relative thereto, and any action or Proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, shall be applied as set forth in Section 5.7.

 

Notwithstanding anything in this Section 5.3 to the contrary, the Trustee may not sell or liquidate the Collateral or institute Proceedings in furtherance thereof pursuant to this Section 5.3 unless the conditions specified in Section 5.5(a) are met and any sale of Collateral contemplated to be conducted by the Trustee under this Indenture shall be effected by the Special Servicer pursuant to the terms of the Servicing Agreement, and the Trustee shall have no liability or responsibility for or in connection with any such sale.

 

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Section 5.4                                    Remedies.

 

(a)                                 If an Event of Default has occurred and is continuing, and the Notes have been declared due and payable and such declaration and its consequences have not been rescinded and annulled, the Issuer and the Co-Issuer agree that the Trustee, or, with respect to any sale of any Mortgage Assets, the Special Servicer, may, after notice to the Note Administrator and the Noteholders, and shall, upon direction by a Majority of the Controlling Class, to the extent permitted by applicable law, exercise one or more of the following rights, privileges and remedies:

 

(i)                                     institute Proceedings for the collection of all amounts then payable on the Notes or otherwise payable under this Indenture (whether by declaration or otherwise), enforce any judgment obtained and collect from the Collateral any amounts adjudged due;

 

(ii)                                  sell all or a portion of the Collateral or rights of interest therein, at one or more public or private sales called and conducted in any manner permitted by law and in accordance with Section 5.17 hereof (provided that any such sale shall be conducted by the Special Servicer pursuant to the Servicing Agreement);

 

(iii)                               institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Collateral;

 

(iv)                              exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Secured Parties hereunder; and

 

(v)                                 exercise any other rights and remedies that may be available at law or in equity;

 

provided, however, that no sale or liquidation of the Collateral or institution of Proceedings in furtherance thereof pursuant to this Section 5.4 may be effected unless either of the conditions specified in Section 5.5(a) are met.

 

The Issuer shall, at the Issuer’s expense, upon request of the Trustee or the Special Servicer, obtain and rely upon an opinion of an Independent investment banking firm as to the feasibility of any action proposed to be taken in accordance with this Section 5.4 and as to the sufficiency of the proceeds and other amounts expected to be received with respect to the Collateral to make the required payments of principal of and interest on the Notes and other amounts payable hereunder, which opinion shall be conclusive evidence as to such feasibility or sufficiency.

 

(b)                                 If an Event of Default as described in Section 5.1(e) hereof shall have occurred and be continuing, the Trustee may, and at the request of the Holders of not less than 25% of the Aggregate Outstanding Amount of the Controlling Class shall, institute a Proceeding solely to compel performance of the covenant or agreement or to cure the representation or warranty, the breach of which gave rise to the Event of Default under such Section, and enforce any equitable decree or order arising from such Proceeding.

 

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(c)                                  Upon any Sale, whether made under the power of sale hereby given or by virtue of judicial proceedings, any Noteholder, Preferred Shareholder or the Servicer or any of its Affiliates may bid for and purchase the Collateral or any part thereof and, upon compliance with the terms of Sale, may hold, retain, possess or dispose of such property in its or their own absolute right without accountability; and any purchaser at any such Sale may, in paying the purchase money, turn in any of the Notes in lieu of Cash equal to the amount which shall, upon distribution of the net proceeds of such sale, be payable on the Notes so turned in by such Holder (taking into account the Class of such Notes).  Such Notes, in case the amounts so payable thereon shall be less than the amount due thereon, shall either be returned to the Holders thereof after proper notation has been made thereon to show partial payment or a new note shall be delivered to the Holders reflecting the reduced interest thereon.

 

Upon any Sale, whether made under the power of sale hereby given or by virtue of judicial proceedings, the receipt of the Note Administrator or of the Officer making a sale under judicial proceedings shall be a sufficient discharge to the purchaser or purchasers at any sale for its or their purchase money and such purchaser or purchasers shall not be obliged to see to the application thereof.

 

Any such Sale, whether under any power of sale hereby given or by virtue of judicial proceedings, shall (x) bind the Issuer, the Co-Issuer, the Trustee, the Note Administrator, the Noteholders and the Preferred Shareholders, shall operate to divest all right, title and interest whatsoever, either at law or in equity, of each of them in and to the property sold and (y) be a perpetual bar, both at law and in equity, against each of them and their successors and assigns, and against any and all Persons claiming through or under them.

 

(d)                                 Notwithstanding any other provision of this Indenture or any other Transaction Document, none of the Advancing Agent, the Trustee, the Note Administrator or any other Secured Party, any other party to any Transaction Document, the Holder of the Notes and the holders of the equity in the Issuer and the Co-Issuer or third party beneficiary of this Indenture may, prior to the date which is one year and one day, or, if longer, the applicable preference period then in effect (including any period established pursuant to the laws of the Cayman Islands) after the payment in full of all Notes, institute against, or join any other Person in instituting against, the Issuer, the Co-Issuer or any Issuer Permitted Subsidiary any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings, or other proceedings under federal or State bankruptcy or similar laws of any jurisdiction.  Nothing in this Section 5.4 shall preclude, or be deemed to stop, the Advancing Agent, the Trustee, the Note Administrator, or any other Secured Party or any other party to any Transaction Document (i) from taking any action prior to the expiration of the aforementioned one year and one day period, or, if longer, the applicable preference period then in effect (including any period established pursuant to the laws of the Cayman Islands) period in (A) any case or proceeding voluntarily filed or commenced by the Issuer or the Co-Issuer or (B) any involuntary insolvency proceeding filed or commenced by a Person other than the Trustee, the Note Administrator or any other Secured Party or any other party to any Transaction Document, or (ii) from commencing against the Issuer or the Co-Issuer or any of their respective properties any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceeding.

 

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Section 5.5                                    Preservation of Collateral.

 

(a)                                 Notwithstanding anything to the contrary herein, if an Event of Default shall have occurred and be continuing when any of the Notes are Outstanding, the Trustee and the Note Administrator, as applicable, shall (except as otherwise expressly permitted or required under this Indenture) retain the Collateral securing the Notes, collect and cause the collection of the proceeds thereof and make and apply all payments and deposits and maintain all accounts in respect of the Collateral and the Notes in accordance with the Priority of Payments and the provisions of Articles 10, 12 and 13 and shall not sell or liquidate the Collateral, unless either:

 

(i)                                     the Note Administrator, pursuant to Section 5.5(c), determines that the anticipated proceeds of a sale or liquidation of the Collateral (after deducting the reasonable expenses of such sale or liquidation) would be sufficient to discharge in full the amounts then due and unpaid on the Notes for principal and interest (including accrued and unpaid Deferred Interest), and, upon receipt of information from Persons to whom fees are expenses are payable, all other amounts payable prior to payment of principal on the Notes due and payable pursuant to Section 11.1(a)(iii) and the holders of a Majority of the Controlling Class agrees with such determination; or

 

(ii)                                  a Supermajority of each Class of Notes (voting as a separate Class) directs the sale and liquidation of all or a portion of the Collateral.

 

In the event of a sale of a portion of the Collateral pursuant to clause (ii) above, the Special Servicer shall sell that portion of the Collateral identified by the requisite Noteholders and all proceeds of such sale shall be remitted to the Note Administrator for distribution in the order set forth in Section 11.1(a).  The Note Administrator shall give written notice of the retention of the Collateral by the Custodian to the Issuer, the Co-Issuer, the Trustee, the Servicer, the Special Servicer, the Operating Advisor and the Rating Agencies.  So long as such Event of Default is continuing, any such retention pursuant to this Section 5.5(a) may be rescinded at any time when the conditions specified in clause (i) or (ii) above exist.

 

(b)                                 Nothing contained in Section 5.5(a) shall be construed to require a sale of the Collateral securing the Notes if the conditions set forth in this Section 5.5(a) are not satisfied.  Nothing contained in Section 5.5(a) shall be construed to require the Trustee to preserve the Collateral securing the Notes if prohibited by applicable law.

 

(c)                                  In determining whether the condition specified in Section 5.5(a)(i) exists, the Special Servicer shall obtain bid prices with respect to each Mortgage Asset from two dealers that, at that time, engage in the trading, origination or securitization of whole loans or pari passu participations similar to the Mortgage Assets (or, if only one such dealer can be engaged, then the Special Servicer shall obtain a bid price from such dealer or, if no such dealer can be engaged, from a pricing service).  The Special Servicer shall compute the anticipated proceeds of sale or liquidation on the basis of the lowest of such bid prices for each such Mortgage Asset and provide the Trustee and the Note Administrator with the results thereof.  For the purposes of determining issues relating to the market value of any Mortgage Asset and the execution of a sale or other liquidation thereof, the Special Servicer may, but need not, retain at the expense of the 

 

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Issuer and rely on an opinion of an Independent investment banking firm of national reputation or other appropriate advisors (the cost of which shall be payable as a Company Administrative Expense) in connection with a determination as to whether the condition specified in Section 5.5(a)(i) exists.

 

The Note Administrator shall promptly deliver to the Noteholders and the Servicer, and the Note Administrator shall post to the Note Administrator’s Website, a report stating the results of any determination required to be made pursuant to Section 5.5(a)(i).

 

Section 5.6                                    Trustee May Enforce Claims Without Possession of Notes.

 

All rights of action and claims under this Indenture or under any of the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes or the production thereof in any trial or other Proceeding relating thereto, and any such action or Proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust.  Any recovery of judgment in respect of the Notes shall be applied as set forth in Section 5.7 hereof.

 

In any Proceedings brought by the Trustee (and in any Proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) in respect of the Notes, the Trustee shall be deemed to represent all the Holders of the Notes.

 

Section 5.7                                    Application of Amounts Collected.

 

Any amounts collected by the Note Administrator with respect to the Notes pursuant to this Article 5 and any amounts that may then be held or thereafter received by the Note Administrator with respect to the Notes hereunder shall be applied subject to Section 13.1 hereof and in accordance with the Priority of Payments set forth in Section 11.1(a)(iii) hereof, at the date or dates fixed by the Note Administrator.

 

Section 5.8                                    Limitation on Suits.

 

No Holder of any Notes shall have any right to institute any Proceedings (the right of a Noteholder to institute any proceeding with respect to the Indenture or the Notes is subject to any non-petition covenants set forth in the Indenture or the Notes), judicial or otherwise, with respect to this Indenture or the Notes, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

(a)                                 such Holder has previously given to the Trustee written notice of an Event of Default;

 

(b)                                 except as otherwise provided in Section 5.9 hereof, the Holders of at least 25% of the then Aggregate Outstanding Amount of the Controlling Class shall have made written request to the Trustee to institute Proceedings in respect of such Event of Default in its own name as Trustee hereunder and such Holders have offered to the Trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

 

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(c)                                  the Trustee for 30 days after its receipt of such notice, request and offer of indemnity has failed to institute any such Proceeding; and

 

(d)                                 no direction inconsistent with such written request has been given to the Trustee during such 30-day period by a Majority of the Controlling Class; it being understood and intended that no one or more Holders of Notes shall have any right in any manner whatsoever by virtue of, or by availing of, any provision of this Indenture or the Notes to affect, disturb or prejudice the rights of any other Holders of Notes of the same Class or to obtain or to seek to obtain priority or preference over any other Holders of the Notes of the same Class or to enforce any right under this Indenture or the Notes, except in the manner herein or therein provided and for the equal and ratable benefit of all the Holders of Notes of the same Class subject to and in accordance with Section 13.1 hereof and the Priority of Payments.

 

In the event the Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of the Controlling Class, each representing less than a Majority of the Controlling Class, the Trustee shall not be required to take any action until it shall have received the direction of a Majority of the Controlling Class.

 

Section 5.9                                    Unconditional Rights of Noteholders to Receive Principal and Interest.

 

Notwithstanding any other provision in this Indenture (except for Section 2.7(d) and 2.7(m)), the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest on such Note as such principal, interest and other amounts become due and payable in accordance with the Priority of Payments and Section 13.1, and, subject to the provisions of Sections 5.4 and 5.8 to institute Proceedings for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder; provided, however, that the right of such Holder to institute proceedings for the enforcement of any such payment shall not be subject to the 25% threshold requirement set forth in Section 5.8(b).

 

Section 5.10                             Restoration of Rights and Remedies.

 

If the Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Noteholder, then (and in every such case) the Issuer, the Co-Issuer, the Trustee, and the Noteholder shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.

 

Section 5.11                             Rights and Remedies Cumulative.

 

No right or remedy herein conferred upon or reserved to the Trustee, the Note Administrator or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or 

 

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otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 5.12                             Delay or Omission Not Waiver.

 

No delay or omission of the Trustee or of any Noteholder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein or a waiver of a subsequent Event of Default.  Every right and remedy given by this Article 5 or by law to the Trustee, or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee, or by the Noteholders, as the case may be.

 

Section 5.13                             Control by the Controlling Class.

 

Subject to Sections 5.2(a) and (b), but notwithstanding any other provision of this Indenture, if an Event of Default shall have occurred and be continuing when any of the Notes are Outstanding, a Majority of the Controlling Class shall have the right to cause the institution of, and direct the time, method and place of conducting, any Proceeding for any remedy available to the Trustee and for exercising any trust, right, remedy or power conferred on the Trustee in respect of the Notes; provided that:

 

(a)                                 such direction shall not conflict with any rule of law or with this Indenture;

 

(b)                                 the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction; provided, however, that, subject to Section 6.1, the Trustee need not take any action that it determines might involve it in liability (unless the Trustee has received indemnity satisfactory to it against such liability as set forth below);

 

(c)                                  the Trustee shall have been provided with security or indemnity reasonably satisfactory to it; and

 

(d)                                 notwithstanding the foregoing, any direction to the Trustee to undertake a Sale of the Assets shall be performed by the Special Servicer on behalf of the Trustee, and must satisfy the requirements of Section 5.5.

 

Section 5.14                             Waiver of Past Defaults.

 

Prior to the time a judgment or decree for payment of the amounts due has been obtained by the Trustee, as provided in this Article 5, a Majority of each and every Class of Notes (voting as a separate Class) may, on behalf of the Holders of all the Notes, waive any past Default in respect of the Notes and its consequences, except a Default:

 

(a)                                 in the payment of principal of any Note;

 

(b)                                 in the payment of interest in respect of the Controlling Class;

 

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(c)                                  in respect of a covenant or provision hereof that, under Section 8.2, cannot be modified or amended without the waiver or consent of the Holder of each Outstanding Note adversely affected thereby; or

 

(d)                                 in respect of any right, covenant or provision hereof for the individual protection or benefit of the Trustee or the Note Administrator, without the Trustee’s or the Note Administrator’s express written consent thereto, as applicable.

 

In the case of any such waiver, the Issuer, the Co-Issuer, the Trustee, and the Holders of the Notes shall be restored to their respective former positions and rights hereunder, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

 

Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.  Any such waiver shall be effectuated upon receipt by the Trustee and the Note Administrator of a written waiver by such Majority of each Class of Notes.

 

Section 5.15                             Undertaking for Costs.

 

All parties to this Indenture agree, and each Holder of any Note by its acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.15 shall not apply to any suit instituted by (x) the Trustee, (y) any Noteholder, or group of Noteholders, holding in the aggregate more than 10% of the Aggregate Outstanding Amount of the Controlling Class or (z) any Noteholder for the enforcement of the payment of the principal of or interest on any Note or any other amount payable hereunder on or after the Stated Maturity Date (or, in the case of redemption, on or after the applicable Redemption Date).

 

Section 5.16                             Waiver of Stay or Extension Laws.

 

Each of the Issuer and the Co-Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force (including but not limited to filing a voluntary petition under Chapter 11 of the Bankruptcy Code and by the voluntary commencement of a proceeding or the filing of a petition seeking winding up, liquidation, reorganization or other relief under any bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws now or hereafter in effect), which may affect the covenants, the performance of or any remedies under this Indenture; and each of the Issuer and the Co-Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not

 

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hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

Section 5.17                             Sale of Collateral.

 

(a)                                 The power to effect any sale (a “Sale”) of any portion of the Collateral pursuant to Sections 5.4 and 5.5 hereof shall not be exhausted by any one or more Sales as to any portion of such Collateral remaining unsold, but shall continue unimpaired until all amounts secured by the Collateral shall have been paid or if there are insufficient proceeds to pay such amount until the entire Collateral shall have been sold.  The Special Servicer may, upon notice to the Securityholders, and shall, upon direction of a Majority of the Controlling Class, from time to time postpone any Sale by public announcement made at the time and place of such Sale; provided, however, that if the Sale is rescheduled for a date more than three Business Days after the date of the determination by the Special Servicer pursuant to Section 5.5(a)(i) hereof, such Sale shall not occur unless and until the Special Servicer has again made the determination required by Section 5.5(a)(i) hereof.  The Trustee hereby expressly waives its rights to any amount fixed by law as compensation for any Sale; provided that the Special Servicer shall be authorized to deduct the reasonable costs, charges and expenses incurred by it, or by the Trustee or the Note Administrator in connection with such Sale from the proceeds thereof notwithstanding the provisions of Section 6.7 hereof.

 

(b)                                 The Notes need not be produced in order to complete any such Sale, or in order for the net proceeds of such Sale to be credited against amounts owing on the Notes.

 

(c)                                  The Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Collateral in connection with a Sale thereof, which, in the case of any Mortgage Assets, shall be upon request and delivery of any such instruments by the Special Servicer.  In addition, the Special Servicer, with respect to Mortgage Assets, and the Trustee, with respect to any other Collateral, is hereby irrevocably appointed the agent and attorney in fact of the Issuer to transfer and convey its interest in any portion of the Collateral in connection with a Sale thereof, and to take all action necessary to effect such Sale.  No purchaser or transferee at such a Sale shall be bound to ascertain the Trustee’s or Special Servicer’s authority, to inquire into the satisfaction of any conditions precedent or to see to the application of any amounts.

 

(d)                                 In the event of any Sale of the Collateral pursuant to Section 5.4 or Section 5.5, payments shall be made in the order and priority set forth in Section 11.1(a) in the same manner as if the Notes had been accelerated.

 

(e)                                  Notwithstanding anything herein to the contrary, any sale by the Trustee of any portion of the Collateral shall be executed by the Special Servicer on behalf of the Issuer, and the Trustee shall have no responsibility or liability therefor.

 

Section 5.18                             Action on the Notes.

 

The Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the application for or obtaining of any other relief under or with respect to this Indenture.  Neither the lien of this Indenture nor any rights or remedies of the

 

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Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Trustee against the Issuer or the Co-Issuer or by the levy of any execution under such judgment upon any portion of the Collateral or upon any of the Collateral of the Issuer or the Co-Issuer.

 

ARTICLE 6

 

THE TRUSTEE AND NOTE ADMINISTRATOR

 

Section 6.1                                    Certain Duties and Responsibilities.

 

(a)                                 Except during the continuance of an Event of Default:

 

(i)                                     each of the Trustee and the Note Administrator undertakes to perform such duties and only such duties as are set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee or the Note Administrator; and any permissive right of the Trustee or the Note Administrator contained herein shall not be construed as a duty; and

 

(ii)                                  in the absence of manifest error, or bad faith on its part, each of the Note Administrator and the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and the Note Administrator, as the case may be, and conforming to the requirements of this Indenture; provided, however, that in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee or the Note Administrator, the Trustee and the Note Administrator shall be under a duty to examine the same to determine whether or not they substantially conform to the requirements of this Indenture and shall promptly notify the party delivering the same if such certificate or opinion does not conform.  If a corrected form shall not have been delivered to the Trustee or the Note Administrator within 15 days after such notice from the Trustee or the Note Administrator, the Trustee or the Note Administrator, as applicable, shall notify the party providing such instrument and requesting the correction thereof.

 

(b)                                 In case an Event of Default actually known to the Trustee or the Note Administrator has occurred and is continuing, the Trustee or the Note Administrator shall, prior to the receipt of directions, if any, from a Majority of the Controlling Class (or other Noteholders to the extent provided in Article 5 hereof), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

 

(c)                                  If, in performing its duties under this Indenture, the Trustee or the Note Administrator is required to decide between alternative courses of action, the Trustee and the Note Administrator may request written instructions from the Directing Holder as to courses of action desired by it.  If the Trustee and the Note Administrator does not receive such instructions within two (2) Business Days after it has requested them, it may, but shall be under no duty to, take or refrain from taking such action.  The Trustee and the Note Administrator shall act in accordance with instructions received after such two (2) Business Day period except to the extent

 

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it has already taken, or committed itself to take, action inconsistent with such instructions.  The Trustee and the Note Administrator shall be entitled to request and rely on the advice of legal counsel and Independent accountants in performing its duties hereunder and be deemed to have acted in good faith and shall not be subject to any liability if it acts in accordance with such advice.

 

(d)                                 No provision of this Indenture shall be construed to relieve the Trustee or the Note Administrator from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that neither the Trustee nor the Note Administrator shall be liable:

 

(i)                                     for any error of judgment made in good faith by a Trust Officer, unless it shall be proven that it was negligent in ascertaining the pertinent facts; or

 

(ii)                                  with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Issuer, the Directing Holder, and/or a Majority of the Controlling Class relating to the time, method and place of conducting any Proceeding for any remedy available to the Trustee or the Note Administrator in respect of any Note or exercising any trust or power conferred upon the Trustee or the Note Administrator under this Indenture.

 

(e)                                  No provision of this Indenture shall require the Trustee or the Note Administrator to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers contemplated hereunder, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it unless such risk or liability relates to its ordinary services under this Indenture, except where this Indenture provides otherwise.

 

(f)                                   Neither the Trustee nor the Note Administrator shall be liable to the Noteholders for any action taken or omitted by it at the direction of the Issuer, the Co-Issuer, the Directing Holder, the Servicer, the Special Servicer, the Operating Adviser, the Controlling Class, the Trustee (in the case of the Note Administrator), the Note Administrator (in the case of the Trustee) and/or a Noteholder under circumstances in which such direction is required or permitted by the terms of this Indenture.

 

(g)                                  For all purposes under this Indenture, neither the Trustee nor the Note Administrator shall be deemed to have notice or knowledge of any Event of Default, unless a Trust Officer of either the Trustee or the Note Administrator, as applicable, has actual knowledge thereof or unless written notice of any event which is in fact such an Event of Default or Default is received by the Trustee or the Note Administrator, as applicable at the respective Corporate Trust Office, and such notice references the Notes and this Indenture.  For purposes of determining the Trustee’s and Note Administrator’s responsibility and liability hereunder, whenever reference is made in this Indenture to such an Event of Default or a Default, such reference shall be construed to refer only to such an Event of Default or Default of which the Trustee or Note Administrator, as applicable, is deemed to have notice as described in this Section 6.1.

 

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(h)                                 The Trustee and the Note Administrator shall, upon reasonable prior written notice, permit the Issuer and its designees, during its normal business hours, to review all books of account, records, reports and other papers of the Note Administrator relating to the Notes and to make copies and extracts therefrom (the reasonable out-of-pocket expenses incurred in making any such copies or extracts to be reimbursed to the Trustee or the Note Administrator, as applicable, by such Person).

 

Section 6.2                                    Notice of Default.

 

Promptly (and in no event later than three Business Days) after the occurrence of any Default known to the Trustee or after any declaration of acceleration has been made or delivered to the Trustee pursuant to Section 5.2, the Trustee shall transmit by mail to the 17g-5 Information Provider and to the Note Administrator (who shall post such notice the Note Administrator’s Website) and the Note Administrator shall deliver to all Holders of Notes as their names and addresses appear on the Notes Register, and to Preferred Share Paying Agent, notice of such Default, unless such Default shall have been cured or waived.

 

Section 6.3                                    Certain Rights of Trustee and Note Administrator.

 

Except as otherwise provided in Section 6.1:

 

(a)                                 the Trustee and the Note Administrator may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, note or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(b)                                 any request or direction of the Issuer or the Co-Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request or Issuer Order, as the case may be;

 

(c)                                  whenever in the administration of this Indenture the Trustee or the Note Administrator shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee and the Note Administrator (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate;

 

(d)                                 as a condition to the taking or omitting of any action by it hereunder, the Trustee and the Note Administrator may consult with counsel and the advice of such counsel or any Opinion of Counsel (including with respect to any matters, other than factual matters, in connection with the execution by the Trustee or the Note Administrator of a supplemental indenture pursuant to Section 8.3) shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in reliance thereon;

 

(e)                                  neither the Trustee nor the Note Administrator shall be under any obligation to exercise or to honor any of the rights or powers vested in it by this Indenture at the request or direction of any of the Noteholders pursuant to this Indenture, or to make any investigation of matters arising hereunder or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Noteholders unless such Noteholders shall have offered to the Trustee and the Note Administrator, as applicable

 

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indemnity acceptable to it against the costs, expenses and liabilities which might reasonably be incurred by it in compliance with such request or direction;

 

(f)                                   neither the Trustee nor the Note Administrator shall be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, note or other paper documents and shall be entitled to rely conclusively thereon;

 

(g)                                  each of the Trustee and the Note Administrator may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and upon any such appointment of an agent or attorney, such agent or attorney shall be conferred with all the same rights, indemnities, and immunities as the Trustee or Note Administrator, as applicable;

 

(h)                                 neither the Trustee nor the Note Administrator shall be liable for any action it takes or omits to take in good faith that it reasonably and prudently believes to be authorized or within its rights or powers hereunder;

 

(i)                                     neither the Trustee nor the Note Administrator shall be responsible for the accuracy of the books or records of, or for any acts or omissions of, the Depository, any Transfer Agent (other than the Note Administrator itself acting in that capacity), Clearstream, Luxembourg, Euroclear, any Calculation Agent (other than the Note Administrator itself acting in that capacity) or any Paying Agent (other than the Note Administrator itself acting in that capacity);

 

(j)                                    neither the Trustee nor the Note Administrator shall be liable for the actions or omissions of the Issuer, the Co-Issuer, Directing Holder, the Servicer, the Special Servicer, the Trustee (in the case of the Note Administrator), the Note Administrator (in the case of the Trustee), the Operating Advisor; and without limiting the foregoing, neither the Trustee nor the Note Administrator shall be under any obligation to verify compliance by (any party hereto with the terms of this Indenture (other than itself) to verify or independently determine the accuracy of information received by it from the Servicer or Special Servicer (or from any selling institution, agent bank, trustee or similar source) with respect to the Mortgage Loans;

 

(k)                                 to the extent any defined term hereunder, or any calculation required to be made or determined by the Trustee or Note Administrator hereunder, is dependent upon or defined by reference to generally accepted accounting principles in the United States in effect from time to time (“GAAP”), the Trustee and Note Administrator shall be entitled to request and receive (and rely upon) instruction from the Issuer or the accountants appointed pursuant to Section 10.7 as to the application of GAAP in such connection, in any instance;

 

(l)                                     neither the Trustee nor the Note Administrator shall have any responsibility to the Issuer or the Secured Parties hereunder to make any inquiry or investigation as to, and shall have no obligation in respect of, the terms of any engagement of Independent accountants by the Issuer;

 

(m)                             the Trustee and the Note Administrator shall be entitled to all of the same rights, protections, immunities and indemnities afforded to it as Trustee or as Note

 

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Administrator, as applicable, in each capacity for which it serves hereunder and under the Future Funding Agreement, the Servicing Agreement, the Future Funding Account Control Agreement and the Securities Account Control Agreement (including, without limitation, as Secured Party, Paying Agent, Authenticating Agent, Calculation Agent, Transfer Agent, Custodian, Securities Intermediary and Notes Registrar);

 

(n)                                 in determining any affiliations of Noteholders with any party hereto or otherwise, each of the Trustee and the Note Administrator shall be entitled to request and conclusively rely on a certification provided by a Noteholder;

 

(o)                                 in no event shall the Trustee or Note Administrator be liable for special, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee or Note Administrator has been advised of the likelihood of such loss or damage and regardless of the form of action;

 

(p)                                 neither the Trustee nor the Note Administrator shall be required to give any bond or surety in respect of the execution of the trusts created hereby or the powers granted hereunder; and

 

(q)                                 in no event shall the Trustee or the Note Administrator be liable for any failure or delay in the performance of its obligations hereunder because of circumstances beyond its control, including, but not limited to acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, strikes or work stoppages for any reason, embargo, government action, including any laws, ordinances, regulations or the like which restrict or prohibit the providing of the services contemplated by this Indenture, inability to obtain material, equipment, or communications or computer facilities, or the failure of equipment or interruption of communications or computer facilities, and other causes beyond the Trustee’s or the Note Administrator’s control, as applicable, whether or not of the same class or kind as specifically named above.

 

Section 6.4                                    Not Responsible for Recitals or Issuance of Notes.

 

The recitals contained herein and in the Notes, other than the Certificate of Authentication thereon, shall be taken as the statements of the Issuer and the Co-Issuer, and neither the Trustee nor the Note Administrator assumes any responsibility for their correctness.  Neither the Trustee nor the Note Administrator makes any representation as to the validity or sufficiency of this Indenture, the Collateral or the Notes.  Neither the Trustee nor the Note Administrator shall be accountable for the use or application by the Issuer or the Co-Issuer of the Notes or the proceeds thereof or any amounts paid to the Issuer or the Co-Issuer pursuant to the provisions hereof.

 

Section 6.5                                    May Hold Notes.

 

The Trustee, the Note Administrator, the Paying Agent, the Notes Registrar or any other agent of the Issuer or the Co-Issuer, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Issuer and the Co-Issuer with the same rights it would have if it were not Trustee, Note Administrator, Paying Agent, Notes Registrar or such other agent.

 

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Section 6.6                                    Amounts Held in Trust.

 

Amounts held by the Note Administrator hereunder shall be held in trust to the extent required herein.  The Note Administrator shall be under no liability for interest on any amounts received by it hereunder except to the extent of income or other gain on investments received by the Note Administrator on Eligible Investments.

 

Section 6.7                                    Compensation and Reimbursement.

 

(a)                                 The Issuer agrees:

 

(i)                                     to pay the Trustee and Note Administrator on each Payment Date in accordance with the Priority of Payments reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee or note administrator of an express trust);

 

(ii)                                  except as otherwise expressly provided herein, to reimburse the Trustee and Note Administrator in a timely manner upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee or Note Administrator in connection with its performance of its obligations under, or otherwise in accordance with any provision of this Indenture;

 

(iii)                               to indemnify the Trustee or Note Administrator and its Officers, directors, employees and agents for, and to hold them harmless against, any loss, liability or expense incurred without negligence, willful misconduct or bad faith on their part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties hereunder; and

 

(iv)                              to pay the Trustee and Note Administrator reasonable additional compensation together with its expenses (including reasonable counsel fees) for any collection action taken pursuant to Section 6.13 hereof.

 

(b)                                 The Issuer may remit payment for such fees and expenses to the Trustee and Note Administrator or, in the absence thereof, the Note Administrator may from time to time deduct payment of its and the Trustee’s fees and expenses hereunder from amounts on deposit in the Payment Account in accordance with the Priority of Payments.

 

(c)                                  The Note Administrator, in its capacity as Note Administrator, Paying Agent, Calculation Agent, Transfer Agent, Custodian, Securities Intermediary and Notes Registrar, hereby agrees not to cause the filing of a petition in bankruptcy against the Issuer, the Co-Issuer or any Permitted Subsidiary until at least one year and one day (or, if longer, the applicable preference period then in effect) after the payment in full of all Notes issued under this Indenture.  This provision shall survive termination of this Indenture.

 

(d)                                 The Trustee and Note Administrator agree that the payment of all amounts to which it is entitled pursuant to Sections 6.7(a)(i), (a)(ii), (a)(iii) and (a)(iv) shall be subject to the Priority of Payments, shall be payable only to the extent funds are available in accordance

 

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with such Priority of Payments, shall be payable solely from the Collateral and following realization of the Collateral, any such claims of the Trustee or Note Administrator against the Issuer, and all obligations of the Issuer, shall be extinguished.  The Trustee and Note Administrator will have a lien upon the Collateral to secure the payment of such payments to it in accordance with the Priority of Payments; provided that the Trustee and Note Administrator shall not institute any proceeding for enforcement of such lien except in connection with an action taken pursuant to Section 5.3 hereof for enforcement of the lien of this Indenture for the benefit of the Noteholders.

 

The Trustee and Note Administrator shall receive amounts pursuant to this Section 6.7 and Section 11.1(a) only to the extent that such payment is made in accordance with the Priority of Payments and the failure to pay such amounts to the Trustee and Note Administrator will not, by itself, constitute an Event of Default.  Subject to Section 6.9, the Trustee and Note Administrator shall continue to serve under this Indenture notwithstanding the fact that the Trustee and Note Administrator shall not have received amounts due to it hereunder; provided that the Trustee and Note Administrator shall not be required to expend any funds or incur any expenses unless reimbursement therefor is reasonably assured to it.  No direction by a Majority of the Controlling Class shall affect the right of the Trustee and Note Administrator to collect amounts owed to it under this Indenture.

 

If on any Payment Date, an amount payable to the Trustee and Note Administrator pursuant to this Indenture is not paid because there are insufficient funds available for the payment thereof, all or any portion of such amount not so paid shall be deferred and payable on any later Payment Date on which sufficient funds are available therefor in accordance with the Priority of Payments.

 

Section 6.8                                    Corporate Trustee Required; Eligibility.

 

There shall at all times be a Trustee and a Note Administrator hereunder which shall be a corporation organized and doing business under the laws of the United States of America or of any State thereof, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least U.S.$200,000,000, subject to supervision or examination by federal or State authority, having a long-term unsecured debt rating of, (1) in the case of the Trustee, at least “A” by DBRS (or if not rated by DBRS, an equivalent rating by any two other NRSROs) and “A2” by Moody’s; provided, that it may maintain a long-term unsecured debt rating of at least “Baa2” by Moody’s for so long as it maintains a short-term unsecured debt rating of at least “P-2” by Moody’s and the Servicer maintains a long-term unsecured debt rating of at least “A2” by Moody’s, or such other rating with respect to which the Rating Agencies have provided a No Downgrade Confirmation (provided that this proviso shall not impose on the Servicer any obligation to maintain such rating), and (2) in the case of the Note Administrator, at least “A” by DBRS (or if not rated by DBRS, an equivalent rating by any two other NRSROs) and “A2” by Moody’s; provided, that it may maintain a long-term unsecured debt rating of at least “Baa2” by Moody’s for so long as it maintains a short-term unsecured debt rating of at least “P-2” by Moody’s and the Servicer maintains a long-term unsecured debt rating of at least “A2” by Moody’s, or such other rating with respect to which the Rating Agencies have provided a No Downgrade Confirmation (provided that this proviso shall not impose on the Servicer any obligation to maintain such rating), and, in either case, having an

 

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office within the United States.  If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 6.8, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time the Trustee or the Note Administrator shall cease to be eligible in accordance with the provisions of this Section 6.8, the Trustee or the Note Administrator, as applicable, shall resign immediately in the manner and with the effect hereinafter specified in this Article 6.

 

Section 6.9                                    Resignation and Removal; Appointment of Successor.

 

(a)                                 No resignation or removal of the Note Administrator or the Trustee and no appointment of a successor Note Administrator or Trustee, as applicable, pursuant to this Article 6 shall become effective until the acceptance of appointment by such successor Note Administrator or Trustee under Section 6.10.

 

(b)                                 Each of the Trustee and the Note Administrator may resign at any time by giving written notice thereof to the Issuer, the Co-Issuer, the Servicer, the Special Servicer, the Operating Advisor, the Noteholders, the Note Administrator (in the case of the Trustee), the Trustee (in the case of the Note Administrator), and the Rating Agencies.  Upon receiving such notice of resignation, the Issuer and the Co-Issuer shall promptly appoint a successor trustee or trustees, or a successor Note Administrator, as the case may be, by written instrument, in duplicate, executed by an Authorized Officer of the Issuer and an Authorized Officer of the Co-Issuer, one copy of which shall be delivered to the Note Administrator or the Trustee so resigning and one copy to the successor Note Administrator, Trustee or Trustees, together with a copy to each Noteholder, the Servicer, the parties hereto and the Rating Agencies; provided that such successor Note Administrator and Trustee shall be appointed only upon the written consent of a Majority of the Notes (or if there are no Notes Outstanding, a Majority of Preferred Shareholders) or, at any time when an Event of Default shall have occurred and be continuing or when a successor Note Administrator and Trustee has been appointed pursuant to Section 6.10, by Act of a Majority of the Controlling Class.  If no successor Note Administrator and Trustee shall have been appointed and an instrument of acceptance by a successor Trustee or Note Administrator shall not have been delivered to the Trustee or the Note Administrator within 30 days after the giving of such notice of resignation, the resigning Trustee or Note Administrator, as the case may be, the Controlling Class of Notes or any Holder of a Note, on behalf of himself and all others similarly situated, may petition any court of competent jurisdiction for the appointment of a successor Trustee or a successor Note Administrator, as the case may be.  No resignation or removal of the Note Administrator or the Trustee and no appointment of a successor Note Administrator or Trustee will become effective until the acceptance of appointment by the successor Note Administrator or Trustee, as applicable.

 

(c)                                  The Note Administrator and Trustee may be removed at any time by Act of a Supermajority of the Notes (or if there are no Notes Outstanding, a Majority of Preferred Shareholders) or when a successor Trustee has been appointed pursuant to Section 6.10, by Act of a Majority of the Controlling Class, in each case, upon written notice delivered to the parties hereto.

 

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(d)                                 If at any time:

 

(i)                                     the Trustee or the Note Administrator shall cease to be eligible under Section 6.8 and shall fail to resign after written request therefor by the Issuer, the Co-Issuer, or by any Holder; or

 

(ii)                                  the Trustee or the Note Administrator shall become incapable of acting or there shall be instituted any proceeding pursuant to which it could be adjudged as bankrupt or insolvent or a receiver or liquidator of the Trustee or the Note Administrator or of its respective property shall be appointed or any public officer shall take charge or control of the Trustee or the Note Administrator or of its respective property or affairs for the purpose of rehabilitation, conservation or liquidation;

 

then, in any such case (subject to Section 6.9(a)), (a) the Issuer or the Co-Issuer, by Issuer Order, may remove the Trustee or the Note Administrator, as applicable, or (b) subject to Section 5.15, a Majority of the Controlling Class or any Holder may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee or the Note Administrator, as the case may be, and the appointment of a successor thereto.

 

(e)                                  If the Trustee or the Note Administrator shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Trustee or the Note Administrator for any reason, the Issuer and the Co-Issuer, by Issuer Order, shall promptly appoint a successor Trustee or Note Administrator, as applicable, and the successor Trustee or Note Administrator so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee or the successor Note Administrator, as the case may be.  If the Issuer and the Co-Issuer shall fail to appoint a successor Trustee or Note Administrator within 30 days after such resignation, removal or incapability or the occurrence of such vacancy, a successor Trustee or Note Administrator may be appointed by Act of a Majority of the Controlling Class delivered to the Servicer and the parties hereto, including the retiring Trustee or the retiring Note Administrator, as the case may be, and the successor Trustee or Note Administrator so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee or Note Administrator, as applicable, and supersede any successor Trustee or Note Administrator proposed by the Issuer and the Co-Issuer.  If no successor Trustee or Note Administrator shall have been so appointed by the Issuer and the Co-Issuer or a Majority of the Controlling Class and shall have accepted appointment in the manner hereinafter provided, subject to Section 5.15, the Controlling Class or any Holder may, on behalf of itself or himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee or Note Administrator.

 

(f)                                   The Issuer and the Co-Issuer shall give prompt notice of each resignation and each removal of the Trustee or Note Administrator and each appointment of a successor Trustee or Note Administrator by mailing written notice of such event by first class mail, postage prepaid, to the Rating Agencies, the Preferred Share Paying Agent, the Servicer, the parties hereto, and to the Holders of the Notes as their names and addresses appear in the Notes Register.  Each notice shall include the name of the successor Trustee or Note Administrator, as the case may be, and the address of its respective Corporate Trust Office.  If the Issuer or the Co-Issuer fail to mail such notice within ten days after acceptance of appointment by the successor

 

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Trustee or Note Administrator, the successor Trustee or Note Administrator shall cause such notice to be given at the expense of the Issuer or the Co-Issuer, as the case may be.

 

(g)                                  The resignation or removal of the Note Administrator in any capacity in which it is serving hereunder, including Note Administrator, Paying Agent, Authenticating Agent, Calculation Agent, Transfer Agent, Custodian, Securities Intermediary and Notes Registrar, shall be deemed a resignation or removal, as applicable, in each of the other capacities in which it serves.

 

Section 6.10                             Acceptance of Appointment by Successor.

 

Every successor Trustee or Note Administrator appointed hereunder shall execute, acknowledge and deliver to the Servicer, and the parties hereto including the retiring Trustee or the retiring Note Administrator, as the case may be, an instrument accepting such appointment.  Upon delivery of the required instruments, the resignation or removal of the retiring Trustee or the retiring Note Administrator shall become effective and such successor Trustee or Note Administrator, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts, duties and obligations of the retiring Trustee or Note Administrator, as the case may be; but, on request of the Issuer and the Co-Issuer or a Majority of the Controlling Class or the successor Trustee or Note Administrator, such retiring Trustee or Note Administrator shall, upon payment of its fees, indemnities and other amounts then unpaid, execute and deliver an instrument transferring to such successor Trustee or Note Administrator all the rights, powers and trusts of the retiring Trustee or Note Administrator, as the case may be, and shall duly assign, transfer and deliver to such successor Trustee or Note Administrator all property and amounts held by such retiring Trustee or Note Administrator hereunder, subject nevertheless to its lien, if any, provided for in Section 6.7(d).  Upon request of any such successor Trustee or Note Administrator, the Issuer and the Co-Issuer shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee or Note Administrator all such rights, powers and trusts.

 

No successor Trustee or successor Note Administrator shall accept its appointment unless (a) at the time of such acceptance such successor shall be qualified and eligible under this Article 6, (b) such successor shall have a long-term unsecured debt rating satisfying the requirements set forth in Section 6.8, and (c) the Rating Agency Condition is satisfied.

 

Section 6.11                             Merger, Conversion, Consolidation or Succession to Business of Trustee and Note Administrator.

 

Any corporation or banking association into which the Trustee or the Note Administrator may be merged or converted or with which it may be consolidated, or any corporation or banking association resulting from any merger, conversion or consolidation to which the Trustee or the Note Administrator, shall be a party, or any corporation or banking association succeeding to all or substantially all of the corporate trust business of the Trustee or the Note Administrator, shall be the successor of the Trustee or the Note Administrator, as applicable, hereunder; provided that with respect to the Trustee, such corporation or banking association shall be otherwise qualified and eligible under this Article 6, without the execution or

 

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filing of any paper or any further act on the part of any of the parties hereto.  In case any of the Notes have been authenticated, but not delivered, by the Note Administrator then in office, any successor by merger, conversion or consolidation to such authenticating Note Administrator may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Note Administrator had itself authenticated such Notes.

 

Section 6.12                             Co-Trustees and Separate Trustee.

 

At any time or times, including for the purpose of meeting the legal requirements of any jurisdiction in which any part of the Collateral may at the time be located, the Issuer, the Co-Issuer and the Trustee shall have power to appoint, one or more Persons to act as co-trustee jointly with the Trustee of all or any part of the Collateral, with the power to file such proofs of claim and take such other actions pursuant to Section 5.6 herein and to make such claims and enforce such rights of action on behalf of the Holders of the Notes as such Holders themselves may have the right to do, subject to the other provisions of this Section 6.12.

 

Each of the Issuer and the Co-Issuer shall join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint a co-trustee.  If the Issuer and the Co-Issuer do not both join in such appointment within 15 days after the receipt by them of a request to do so, the Trustee shall have power to make such appointment on its own.

 

Should any written instrument from the Issuer or the Co-Issuer be required by any co-trustee, so appointed, more fully confirming to such co-trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Issuer or the Co-Issuer, as the case may be.  The Issuer agrees to pay (but only from and to the extent of the Collateral) to the extent funds are available therefor under the Priority of Payments, for any reasonable fees and expenses in connection with such appointment.

 

Every co-trustee, shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms:

 

(a)                                 all rights, powers, duties and obligations hereunder in respect of the custody of securities, Cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be exercised solely by the Trustee;

 

(b)                                 the rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by the appointment of a co-trustee shall be conferred or imposed upon and exercised or performed by the Trustee or by the Trustee and such co-trustee jointly in the case of the appointment of a co-trustee as shall be provided in the instrument appointing such co-trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by a co-trustee;

 

(c)                                  the Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Issuer and the Co-Issuer evidenced by an Issuer Order, may accept the resignation of, or remove, any co-trustee appointed under this Section 6.12, and in case an Event

 

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of Default has occurred and is continuing, the Trustee shall have the power to accept the resignation of, or remove, any such co-trustee without the concurrence of the Issuer or the Co-Issuer.  A successor to any co-trustee so resigned or removed may be appointed in the manner provided in this Section 6.12;

 

(d)                                 no co-trustee hereunder shall be personally liable by reason of any act or omission of the Trustee hereunder, and any co-trustee hereunder shall be entitled to all the privileges, rights and immunities under Article 6 hereof, as if it were named the Trustee hereunder; and

 

(e)                                  any Act of Securityholders delivered to the Trustee shall be deemed to have been delivered to each co-trustee.

 

Section 6.13                             Direction to enter into the Servicing Agreement.

 

The Issuer hereby directs the Trustee and the Note Administrator to enter into the Servicing Agreement.  Each of the Trustee and the Note Administrator shall be entitled to the same rights, protections, immunities and indemnities afforded to each herein in connection with any matter contained in the Servicing Agreement.

 

Section 6.14                             Representations and Warranties of the Trustee.

 

The Trustee represents and warrants for the benefit of the other parties to this Indenture and the parties to the Servicing Agreement that:

 

(a)                                 the Trustee is a New York banking corporation, with trust powers, duly and validly existing under the laws of the State of New York, with corporate power and authority to execute, deliver and perform its obligations under this Indenture and the Servicing Agreement, and is duly eligible and qualified to act as trustee under this Indenture and the Servicing Agreement;

 

(b)                                 this Indenture and the Servicing Agreement have each been duly authorized, executed and delivered by the Trustee and each constitutes the valid and binding obligation of the Trustee, enforceable against it in accordance with its terms except (i) as limited by bankruptcy, fraudulent conveyance, fraudulent transfer, insolvency, reorganization, liquidation, receivership, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally and by general equitable principles, regardless of whether considered in a proceeding in equity or at law, and (ii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought;

 

(c)                                  neither the execution, delivery and performance of this Indenture or the Servicing Agreement, nor the consummation of the transactions contemplated by this Indenture or the Servicing Agreement, (i) is prohibited by, or requires the Trustee to obtain any consent, authorization, approval or registration under, any law, statute, rule, regulation, or any judgment, order, writ, injunction or decree that is binding upon the Trustee or any of its properties or Collateral or (ii) will violate the provisions of the Governing Documents of the Trustee; and

 

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(d)                                 there are no proceedings pending or, to the best knowledge of the Trustee, threatened against the Trustee before any Federal, state or other governmental agency, authority, administrator or regulatory body, arbitrator, court or other tribunal, foreign or domestic, which could have a material adverse effect on the Collateral or the performance by the Trustee of its obligations under this Indenture or the Servicing Agreement.

 

Section 6.15                             Representations and Warranties of the Note Administrator.

 

The Note Administrator represents and warrants for the benefit of the other parties to this Indenture and the parties to the Servicing Agreement that:

 

(a)                                 the Note Administrator is a national banking association with trust powers, duly and validly existing under the laws of the United States of America, with corporate power and authority to execute, deliver and perform its obligations under this Indenture and the Servicing Agreement, and is duly eligible and qualified to act as Note Administrator under this Indenture and the Servicing Agreement;

 

(b)                                 this Indenture and the Servicing Agreement have each been duly authorized, executed and delivered by the Note Administrator and each constitutes the valid and binding obligation of the Note Administrator, enforceable against it in accordance with its terms except (i) as limited by bankruptcy, fraudulent conveyance, fraudulent transfer, insolvency, reorganization, liquidation, receivership, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally and by general equitable principles, regardless of whether considered in a proceeding in equity or at law, and (ii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought;

 

(c)                                  neither the execution, delivery and performance of this Indenture of the Servicing Agreement, nor the consummation of the transactions contemplated by this Indenture or the Servicing Agreement, (i) is prohibited by, or requires the Note Administrator to obtain any consent, authorization, approval or registration under, any law, statute, rule, regulation, or any judgment, order, writ, injunction or decree that is binding upon the Note Administrator or any of its properties or Collateral or (ii) will violate the provisions of the Governing Documents of the Note Administrator; and

 

(d)                                 there are no proceedings pending or, to the best knowledge of the Note Administrator, threatened against the Note Administrator before any Federal, state or other governmental agency, authority, administrator or regulatory body, arbitrator, court or other tribunal, foreign or domestic, which could have a material adverse effect on the Collateral or the performance by the Note Administrator of its obligations under this Indenture or the Servicing Agreement.

 

Section 6.16                             Requests for Consents.

 

In the event that the Trustee and Note Administrator receives written notice of any offer or any request for a waiver, consent, amendment or other modification with respect to any Mortgage Asset (before or after any default) or in the event any action is required to be taken in respect to an Asset Document, the Note Administrator shall promptly forward such notice to

 

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the Issuer, the Servicer and the Special Servicer.  The Special Servicer shall take such action as required under the Servicing Agreement as described in Section 10.8(f) of this Indenture.

 

Section 6.17                             Withholding.

 

(a)                                 If any amount is required to be deducted or withheld from any payment to any Noteholder, such amount shall reduce the amount otherwise distributable to such Noteholder.  The Note Administrator is hereby authorized to withhold or deduct from amounts otherwise distributable to any Noteholder sufficient funds for the payment of any tax that is legally required to be withheld or deducted (but such authorization shall not prevent the Note Administrator from contesting any such tax in appropriate proceedings and legally withholding payment of such tax, pending the outcome of such proceedings).  The amount of any withholding tax imposed with respect to any Noteholder shall be treated as Cash distributed to such Noteholder at the time it is deducted or withheld by the Issuer or the Note Administrator, as applicable, and remitted to the appropriate taxing authority.  If there is a possibility that withholding tax is payable with respect to a distribution, the Note Administrator may in its sole discretion withhold such amounts in accordance with this Section 6.16.  The Issuer and the Co-Issuer agree to timely provide to the Trustee accurate and complete copies of all documentation received from Noteholders pursuant to Sections 2.7(f) and 2.11(c) of this Indenture.  Nothing herein shall impose an obligation on the part of the Note Administrator to determine the amount of any tax or withholding obligation on the part of the Issuer or in respect of the Notes.

 

(b)                                 For the avoidance of doubt, the Note Administrator shall reasonably cooperate with Issuer, at Issuer’s direction and expense, to permit Issuer to fulfill its obligations under FATCA; provided that the Note Administrator shall have no independent obligation to cause or maintain Issuer’s compliance with FATCA and shall have no liability for any withholding on payments to Issuer as a result of Issuer’s failure to achieve or maintain FATCA compliance.

 

ARTICLE 7

 

COVENANTS

 

Section 7.1                                    Payment of Principal and Interest.

 

The Issuer and the Co-Issuer shall duly and punctually pay the principal of and interest on each Class of Notes in accordance with the terms of this Indenture. Amounts properly withheld under the Code or other applicable law by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuer and the Co-Issuer, and, with respect to the Preferred Shares, by the Issuer, to such Preferred Shareholder for all purposes of this Indenture.

 

The Note Administrator shall, unless prevented from doing so for reasons beyond its reasonable control, give notice to each Securityholder of any such withholding requirement no later than ten days prior to the related Payment Date from which amounts are required (as directed by the Issuer to be withheld, provided that, despite the failure of the Note Administrator

 

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to give such notice, amounts withheld pursuant to applicable tax laws shall be considered as having been paid by the Issuer and the Co-Issuer, as provided above.

 

Section 7.2                                    Maintenance of Office or Agency.

 

The Co-Issuers hereby appoint the Note Administrator as a Paying Agent for the payment of principal of and interest on the Notes and where Notes may be surrendered for registration of transfer or exchange and the Issuer hereby appoints Corporation Service Company in New York, New York, as its agent where notices and demands to or upon the Issuer in respect of the Notes or this Indenture may be served.

 

The Issuer may at any time and from time to time vary or terminate the appointment of any such agent or appoint any additional agents for any or all of such purposes; provided, however, that the Issuer will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served, and, subject to any laws or regulations applicable thereto, an office or agency outside of the United States where Notes may be presented and surrendered for payment; provided, further, that no paying agent shall be appointed in a jurisdiction which subjects payments on the Notes to withholding tax. The Issuer shall give prompt written notice to the Trustee, the Note Administrator, the Rating Agencies and the Noteholders of the appointment or termination of any such agent and of the location and any change in the location of any such office or agency.

 

If at any time the Issuer shall fail to maintain any such required office or agency in the Borough of Manhattan, The City of New York, or outside the United States, or shall fail to furnish the Trustee and the Note Administrator with the address thereof, presentations and surrenders may be made (subject to the limitations described in the preceding paragraph) at and notices and demands may be served on the Issuer and Co-Issuer and Notes may be presented and surrendered for payment to the appropriate Paying Agent at its main office and the Issuer and the Co-Issuer hereby appoint the same as their agent to receive such respective presentations, surrenders, notices and demands.

 

Section 7.3                                    Amounts for Note Payments to be Held in Trust.

 

(a)                                 All payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Payment Account shall be made on behalf of the Issuer and the Co-Issuer by the Note Administrator or a Paying Agent (in each case, from and to the extent of available funds in the Payment Account and subject to the Priority of Payments) with respect to payments on the Notes.

 

When the Paying Agent is not also the Notes Registrar, the Issuer and the Co-Issuer shall furnish, or cause the Notes Registrar to furnish, no later than the fifth calendar day after each Record Date a list, if necessary, in such form as such Paying Agent may reasonably request, of the names and addresses of the Holders of Notes and of the certificate numbers of individual Notes held by each such Holder together with wiring instructions, contact information, and such other information reasonably required by the paying agent.

 

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Whenever the Paying Agent is not also the Note Administrator, the Issuer, the Co-Issuer, and such Paying Agent shall, on or before the Business Day next preceding each Payment Date or Redemption Date, as the case may be, direct the Note Administrator to deposit on such Payment Date with such Paying Agent, if necessary, an aggregate sum sufficient to pay the amounts then becoming due pursuant to the terms of this Indenture (to the extent funds are then available for such purpose in the Payment Account, and subject to the Priority of Payments), such sum to be held for the benefit of the Persons entitled thereto and (unless such Paying Agent is the Note Administrator) the Issuer and the Co-Issuer shall promptly notify the Note Administrator of its action or failure so to act. Any amounts deposited with a Paying Agent (other than the Note Administrator) in excess of an amount sufficient to pay the amounts then becoming due on the Notes with respect to which such deposit was made shall be paid over by such Paying Agent to the Note Administrator for application in accordance with Article 11.  Any such Paying Agent shall be deemed to agree by assuming such role not to cause the filing of a petition in bankruptcy against the Issuer, the Co-Issuer or any Permitted Subsidiary for the non-payment to the Paying Agent of any amounts payable thereto until at least one year and one day (or, if longer, the applicable preference period then in effect) after the payment in full of all Notes issued under this Indenture.

 

The initial Paying Agent shall be as set forth in Section 7.2. Any additional or successor Paying Agents shall be appointed by Issuer Order of the Issuer and Issuer Order of the Co-Issuer and at the sole cost and expense (including such Paying Agent’s fee) of the Issuer and the Co Issuer, with written notice thereof to the Note Administrator; provided, however, that so long as any Class of the Notes are rated by a Rating Agency and with respect to any additional or successor Paying Agent for the Notes, either (i) such Paying Agent has (1) a long-term unsecured debt rating of  “AA(low)” or higher by DBRS (of, if not rated by DBRS, an equivalent rating by any two other NRSROs) and (2) a long-term unsecured debt rating of “Aa3” or higher by Moody’s, and short-term unsecured debt rating of “P-1” or higher by Moody’s, or (ii) the Rating Agencies confirm that employing such Paying Agent shall not adversely affect the then-current ratings of the Notes.  In the event that such successor Paying Agent ceases to have (1) a long-term unsecured debt rating of “AA(low)” or higher by DBRS (of, if not rated by DBRS, an equivalent rating by any two other NRSROs) and (2) a long-term unsecured debt rating of “Aa3” or higher by Moody’s, and short-term unsecured debt rating of “P-1” or higher by Moody’s, the Issuer and the Co-Issuer shall promptly remove such Paying Agent and appoint a successor Paying Agent.  The Issuer and the Co-Issuer shall not appoint any Paying Agent that is not, at the time of such appointment, a depository institution or trust company subject to supervision and examination by federal and/or state and/or national banking authorities. The Issuer and the Co-Issuer shall cause the Paying Agent other than the Note Administrator to execute and deliver to the Note Administrator an instrument in which such Paying Agent shall agree with the Note Administrator (and if the Note Administrator acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section 7.3, that such Paying Agent will:

 

(i)                                     allocate all sums received for payment to the Holders of Notes in accordance with the terms of this Indenture;

 

(ii)                                  hold all sums held by it for the payment of amounts due with respect to the Notes for the benefit of the Persons entitled thereto until such sums shall be paid to such

 

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Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

 

(iii)                               if such Paying Agent is not the Note Administrator, immediately resign as a Paying Agent and forthwith pay to the Note Administrator all sums held by it for the payment of Notes if at any time it ceases to satisfy the standards set forth above required to be met by a Paying Agent at the time of its appointment;

 

(iv)                              if such Paying Agent is not the Note Administrator, immediately give the Note Administrator notice of any Default by the Issuer or the Co-Issuer (or any other obligor upon the Notes) in the making of any payment required to be made; and

 

(v)                                 if such Paying Agent is not the Note Administrator at any time during the continuance of any such Default, upon the written request of the Note Administrator, forthwith pay to the Note Administrator all sums so held by such Paying Agent.

 

The Issuer or the Co-Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Issuer Order direct the Paying Agent to pay, to the Note Administrator all sums held by the Issuer or the Co-Issuer or held by the Paying Agent for payment of the Notes, such sums to be held by the Note Administrator in trust for the same Noteholders as those upon which such sums were held by the Issuer, the Co-Issuer or the Paying Agent; and, upon such payment by the Paying Agent to the Note Administrator, the Paying Agent shall be released from all further liability with respect to such amounts.

 

Except as otherwise required by applicable law, any amounts deposited with the Note Administrator in trust or deposited with the Paying Agent for the payment of the principal of or interest on any Note and remaining unclaimed for two years after such principal or interest has become due and payable shall be paid to the Issuer on request; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment of such amounts and all liability of the Note Administrator or the Paying Agent with respect to such amounts (but only to the extent of the amounts so paid to the Issuer or the Co-Issuer, as applicable) shall thereupon cease. The Note Administrator or the Paying Agent, before being required to make any such release of payment, may, but shall not be required to, adopt and employ, at the expense of the Issuer or the Co-Issuer, as the case may be, any reasonable means of notification of such release of payment, including, but not limited to, mailing notice of such release to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in amounts due and payable but not claimed is determinable from the records of the Paying Agent, at the last address of record of each such Holder.

 

Section 7.4                                    Existence of the Issuer and Co-Issuer.

 

(a)                                 So long as any Note is Outstanding, the Issuer shall, to the maximum extent permitted by applicable law, maintain in full force and effect its existence and rights as an exempted company incorporated with limited liability under the laws of the Cayman Islands and shall obtain and preserve its qualification to do business as a foreign limited liability company in each jurisdiction in which such qualifications are or shall be necessary to protect the validity and

 

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enforceability of this Indenture, the Notes or any of the Collateral; provided that the Issuer shall be entitled to change its jurisdiction of registration from the Cayman Islands to any other jurisdiction reasonably selected by the Issuer so long as (i) such change is not disadvantageous in any material respect to the Holders of the Notes or the Preferred Shares, (ii) it delivers written notice of such change to the Note Administrator for delivery to the Holders of the Notes or Preferred Shares, the Preferred Share Paying Agent and the Rating Agencies and (iii) on or prior to the fifteenth (15th) Business Day following delivery of such notice by the Note Administrator to the Noteholders, the Note Administrator shall not have received written notice from a Majority of the Controlling Class or a Majority of Preferred Shareholders objecting to such change.  So long as any Rated Notes are Outstanding, the Issuer will maintain at all times at least one director who is Independent of the Special Servicer and its Affiliates.

 

(b)                                 So long as any Note is Outstanding, the Co-Issuer shall maintain in full force and effect its existence and rights as a limited liability company organized under the laws of Delaware and shall obtain and preserve its qualification to do business as a foreign limited liability company in each jurisdiction in which such qualifications are or shall be necessary to protect the validity and enforceability of this Indenture or the Notes; provided, however, that the Co-Issuer shall be entitled to change its jurisdiction of formation from Delaware to any other jurisdiction reasonably selected by the Co-Issuer so long as (i) such change is not disadvantageous in any material respect to the Holders of the Notes, (ii) it delivers written notice of such change to the Note Administrator for delivery to the Holders of the Notes and the Rating Agencies and (iii) on or prior to the fifteenth (15th) Business Day following such delivery of such notice by the Note Administrator to the Noteholders, the Note Administrator shall not have received written notice from a Majority of the Controlling Class objecting to such change.  So long as any Rated Notes are Outstanding, the Co-Issuer will maintain at all times at least one director who is Independent of the Special Servicer and its Affiliates.

 

(c)                                  So long as any Note is Outstanding, the Issuer shall ensure that all corporate or other formalities regarding its existence are followed (including correcting any known misunderstanding regarding its separate existence).  So long as any Note is Outstanding, the Issuer shall not take any action or conduct its affairs in a manner that is likely to result in its separate existence being ignored or its Collateral and liabilities being substantively consolidated with any other Person in a bankruptcy, reorganization or other insolvency proceeding.  So long as any Note is Outstanding, the Issuer shall maintain and implement administrative and operating procedures reasonably necessary in the performance of the Issuer’s obligations hereunder, and the Issuer shall at all times keep and maintain, or cause to be kept and maintained, separate books, records, accounts and other information customarily maintained for the performance of the Issuer’s obligations hereunder.  Without limiting the foregoing, so long as any Note is Outstanding, (i) the Issuer shall (A) pay its own liabilities only out of its own funds and (B) use separate stationery, invoices and checks, (C) hold itself out and identify itself as a separate and distinct entity under its own name; (D) not commingle its assets with assets of any other Person; (E) hold title to its assets in its own name; (F) maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Issuer’s assets may be included in a consolidated financial statement of its Affiliate provided that (1) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Issuer from such Affiliate and to indicate that the Issuer’s assets and credit

 

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are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (2) such assets shall also be listed on the Issuer’s own balance sheet; (G) not guarantee any obligation of any Person, including any Affiliate or become obligated for the debts of any other Person or hold out its credit or assets as being available to satisfy the obligations of others; (H) allocate fairly and reasonably any overhead expenses, including for shared office space; (I) not have its obligations guaranteed by any Affiliate; (J) not pledge its assets to secure the obligations of any other Person; (K) correct any known misunderstanding regarding its separate identity; (L) maintain adequate capital in light of its contemplated business purpose, transactions and liabilities; (M) not acquire any securities of any Affiliate of the Issuer; and (N) not own any asset or property other than property arising out of the actions permitted to be performed under the Transaction Documents; and (ii) the Issuer shall not (A) have any subsidiaries (other than a Permitted Subsidiary and, in the case of the Issuer, the Co-Issuer); (B) engage, directly or indirectly, in any business other than the actions required or permitted to be performed under the Transaction Documents; (C) engage in any transaction with any shareholder that is not permitted under the terms of the Servicing Agreement; (D) pay dividends other than in accordance with the terms of this Indenture, its governing documents and the Preferred Share Paying Agency Agreement; (E) conduct business under an assumed name (i.e., no “DBAs”); (F) incur, create or assume any indebtedness other than as expressly permitted under the Transaction Documents; (G) enter into any contract or agreement with any of its Affiliates, except upon terms and conditions that are commercially reasonable and substantially similar to those available in arm’s-length transactions; provided that the foregoing shall not prohibit the Issuer from entering into the transactions contemplated by the Company Administration Agreement with the Company Administrator, the Preferred Share Paying Agency Agreement with the Share Registrar and any other agreement contemplated or permitted by the Servicing Agreement or this Indenture; (H) make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person, except that the Issuer may invest in those investments permitted under the Transaction Documents and may make any advance required or expressly permitted to be made pursuant to any provisions of the Transaction Documents and permit the same to remain outstanding in accordance with such provisions; (I) to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than such activities as are expressly permitted pursuant to any provision of the Transaction Documents.

 

(d)                                 So long as any Note is Outstanding, the Co-Issuer shall ensure that all limited liability company or other formalities regarding its existence are followed, as well as correcting any known misunderstanding regarding its separate existence.  The Co-Issuer shall not take any action or conduct its affairs in a manner, that is likely to result in its separate existence being ignored or its Collateral and liabilities being substantively consolidated with any other Person in a bankruptcy, reorganization or other insolvency proceeding.  The Co-Issuer shall maintain and implement administrative and operating procedures reasonably necessary in the performance of the Co-Issuer’s obligations hereunder, and the Co-Issuer shall at all times keep and maintain, or cause to be kept and maintained, books, records, accounts and other information customarily maintained for the performance of the Co-Issuer’s obligations hereunder.  Without limiting the foregoing, the Co-Issuer shall not (A) have any subsidiaries, (B) have any employees (other than its managers), (C) join in any transaction with any member that is not permitted under the terms of the Servicing Agreement or this Indenture, (D) pay dividends other than in accordance with the terms of this Indenture, (E) commingle its funds or Collateral with those of

 

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any other Person, or (F) enter into any contract or agreement with any of its Affiliates, except upon terms and conditions that are commercially reasonable and substantially similar to those available in arm’s-length transactions with an unrelated party.

 

Section 7.5                                    Protection of Collateral.

 

(a)                                 The Note Administrator, at the expense of the Issuer and pursuant to any Opinion of Counsel received pursuant to Section 7.5(d) shall execute and deliver all such Financing Statements, continuation statements, instruments of further assurance and other instruments, and shall take such other action as may be necessary or advisable or desirable to secure the rights and remedies of the Holders and to:

 

(i)                                     Grant more effectively all or any portion of the Collateral;

 

(ii)                                  maintain or preserve the lien (and the priority thereof) of this Indenture or to carry out more effectively the purposes hereof;

 

(iii)                               perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture (including, without limitation, any and all actions necessary or desirable as a result of changes in law or regulations);

 

(iv)                              instruct the Special Servicer with respect to enforcement on any of the Mortgage Assets or enforce on any other instruments or property included in the Collateral;

 

(v)                                 instruct the Special Servicer to preserve and defend title to the Mortgage Assets and preserve and defend title to the other Collateral and the rights of the Trustee, the Holders of the Notes in the Collateral against the claims of all persons and parties; and

 

(vi)                              pursuant to Sections 11.1(a)(i)(1) and 11.1(a)(ii)(1), pay or cause to be paid any and all taxes levied or assessed upon all or any part of the Collateral.

 

The Issuer hereby designates the Note Administrator as its agent and attorney-in-fact to execute any Financing Statement, continuation statement or other instrument required pursuant to this Section 7.5.  The Note Administrator agrees that it will from time to time execute and cause such Financing Statements and continuation statements to be filed (it being understood that the Note Administrator shall be entitled to rely upon an Opinion of Counsel described in Section 7.5(d), at the expense of the Issuer, as to the need to file such Financing Statements and continuation statements, the dates by which such filings are required to be made and the jurisdictions in which such filings are required to be made).

 

(b)                                 Neither the Trustee nor the Note Administrator shall (except in accordance with Section 10.8 and except for payments, deliveries and distributions otherwise expressly permitted under this Indenture) cause or permit the Custodial Account or the Custodian to be located in a different jurisdiction from the jurisdiction in which the Custodian was located on the Closing Date, unless the Trustee or the Note Administrator, as applicable, shall have first received an Opinion of Counsel to the effect that the lien and security interest created by this

 

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Indenture with respect to such property will continue to be maintained after giving effect to such action or actions.

 

(c)                                  The Issuer shall (i) pay or cause to be paid taxes, if any, levied on account of the beneficial ownership by the Issuer of any Collateral that secure the Notes and timely file all tax returns and information statements as required, (ii) take all actions necessary or advisable to prevent the Issuer from becoming subject to any withholding or other taxes or assessments and to allow the Issuer to comply with FATCA, and (iii) if required to prevent the withholding or imposition of United States income tax, deliver or cause to be delivered a United States IRS Form W-9 (or the applicable IRS Form W-8, if appropriate) or successor applicable form, to each borrower, counterparty or paying agent with respect to (as applicable) an item included in the Collateral at the time such item is purchased or entered into and thereafter prior to the expiration or obsolescence of such form.

 

(d)                                 For so long as the Notes are Outstanding, on or about March 31, 2019 and every 55 months thereafter, the Issuer shall deliver to the Trustee and the Note Administrator, for the benefit of the Trustee, the Note Administrator and the Rating Agencies, at the expense of the Issuer, an Opinion of Counsel stating what is required, in the opinion of such counsel, as of the date of such opinion, to maintain the lien and security interest created by this Indenture with respect to the Collateral, and confirming the matters set forth in the Opinion of Counsel, furnished pursuant to Section 3.1(d), with regard to the perfection and priority of such security interest (and such Opinion of Counsel may likewise be subject to qualifications and assumptions similar to those set forth in the Opinion of Counsel delivered pursuant to Section 3.1(d)).

 

Section 7.6                                    Notice of Any Amendments.

 

Each of the Issuer and the Co-Issuer shall give notice to the 17g-5 Information Provider of, and satisfy the Rating Agency Condition with respect to, any amendments to its Governing Documents.

 

Section 7.7                                    Performance of Obligations.

 

(a)                                 Each of the Issuer and the Co-Issuer shall not take any action, and will use commercially reasonable efforts not to permit any action to be taken by others, that would release any Person from any of such Person’s covenants or obligations under any Instrument included in the Collateral, except in the case of enforcement action taken with respect to any Defaulted Mortgage Asset in accordance with the provisions hereof and as otherwise required hereby.

 

(b)                                 The Issuer or the Co-Issuer may, with the prior written consent of the Majority of the Notes (or if there are no Notes Outstanding, a Majority of Preferred Shareholders), contract with other Persons, including the Servicer, the Special Servicer, the Note Administrator, or the Trustee, for the performance of actions and obligations to be performed by the Issuer or the Co-Issuer, as the case may be, hereunder by such Persons and the performance of the actions and other obligations with respect to the Collateral of the nature set forth in the Indenture. Notwithstanding any such arrangement, the Issuer or the Co-Issuer, as the case may be, shall remain primarily liable with respect thereto. In the event of such contract, the

 

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performance of such actions and obligations by such Persons shall be deemed to be performance of such actions and obligations by the Issuer or the Co-Issuer; and the Issuer or the Co-Issuer shall punctually perform, and use commercially reasonable efforts to cause the Servicer, the Special Servicer or such other Person to perform, all of their obligations and agreements contained in the Indenture or such other agreement.

 

(c)                                  Unless the Rating Agency Condition is satisfied with respect thereto, the Issuer shall maintain the Servicing Agreement in full force and effect so long as any Notes remain Outstanding and shall not terminate the Servicing Agreement with respect to any Mortgage Asset except upon the sale or other liquidation of such Mortgage Asset in accordance with the terms and conditions of this Indenture.

 

(d)                                 If the Co-Issuers receive a notice from the Rating Agencies stating that they are not in compliance with Rule 17g-5, the Co-Issuers shall take such action as mutually agreed between the Co-Issuers and the Rating Agencies in order to comply with Rule 17g-5.

 

Section 7.8                                    Negative Covenants.

 

(a)                                 The Issuer and the Co-Issuer shall not:

 

(i)                                     sell, assign, participate, transfer, exchange or otherwise dispose of, or pledge, mortgage, hypothecate or otherwise encumber (or permit such to occur or suffer such to exist), any part of the Collateral, except as otherwise expressly permitted by this Indenture or the Servicing Agreement;

 

(ii)                                  claim any credit on, make any deduction from, or dispute the enforceability of, the payment of the principal or interest payable in respect of the Notes (other than amounts required to be paid, deducted or withheld in accordance with any applicable law or regulation of any governmental authority) or assert any claim against any present or future Noteholder by reason of the payment of any taxes levied or assessed upon any part of the Collateral;

 

(iii)                               (A) incur or assume or guarantee any indebtedness, other than the Notes and this Indenture and the transactions contemplated hereby; (B) issue any additional class of securities, other than the Notes, the Preferred Shares, the ordinary shares of the Issuer and the limited liability company membership interests of the Co-Issuer; or (C) issue any additional shares of stock, other than the ordinary shares of the Issuer and the Preferred Shares;

 

(iv)                              (A) permit the validity or effectiveness of this Indenture or any Grant hereunder to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to this Indenture or the Notes, except as may be expressly permitted hereby; (B) permit any lien, charge, adverse claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Collateral or any part thereof, any interest therein or the proceeds thereof, except as may be expressly permitted hereby; or (C) take any action that would permit the lien of this Indenture not to

 

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constitute a valid first priority security interest in the Collateral, except as may be expressly permitted hereby;

 

(v)                                 amend the Servicing Agreement, except pursuant to the terms thereof;

 

(vi)                              amend the Preferred Share Paying Agency Agreement, except pursuant to the terms thereof;

 

(vii)                           to the maximum extent permitted by applicable law, dissolve or liquidate in whole or in part, except as permitted hereunder;

 

(viii)                        make or incur any capital expenditures, except as reasonably required to perform its functions in accordance with the terms of this Indenture and, in the case of the Issuer, the Preferred Share Paying Agency Agreement;

 

(ix)                              become liable in any way, whether directly or by assignment or as a guarantor or other surety, for the obligations of the lessee under any lease, hire any employees or pay any dividends to its shareholders, except with respect to the Preferred Shares in accordance with the Priority of Payments;

 

(x)                                 maintain any bank accounts other than the Accounts and the bank account in the Cayman Islands in which (inter alia) the proceeds of the Issuer’s issued share capital and the transaction fees paid to the Issuer for agreeing to issue the Securities will be kept;

 

(xi)                              conduct business under an assumed name, or change its name without first delivering at least 30 days’ prior written notice to the Trustee, the Note Administrator, the Noteholders and the Rating Agencies and an Opinion of Counsel to the effect that such name change will not adversely affect the security interest hereunder of the Trustee or the Secured Parties;

 

(xii)                           take any action that would result in it failing to qualify as a Qualified REIT Subsidiary of ACRE for federal income tax purposes (including, but not limited to, an election to treat the Issuer as a “taxable REIT subsidiary,” as defined in Section 856(l) of the Code), unless (A) based on an Opinion of Counsel of Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or another nationally-recognized tax counsel experienced in such matters, the Issuer will be treated as a Qualified REIT Subsidiary of a REIT other than ACRE, or (B) based on an Opinion of Counsel of Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or another nationally-recognized tax counsel experienced in such matters, the Issuer will be treated as a foreign corporation that is not engaged in a trade or business in the United States for U.S. federal income tax purposes;

 

(xiii)                        except (i) for any agreements involving the purchase and sale of Mortgage Assets having customary purchase or sale terms and documented with customary loan trading documentation and (ii) the Indemnification Agreements to which it is a party, enter into any agreements unless such agreements contain “non-petition” and “limited recourse” provisions; or

 

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(xiv)                       amend their respective organizational documents without satisfaction of the Rating Agency Condition in connection therewith.

 

(b)                                 Neither the Issuer nor the Trustee shall sell, transfer, exchange or otherwise dispose of Collateral, or enter into or engage in any business with respect to any part of the Collateral, except as expressly permitted or required by this Indenture or the Servicing Agreement.

 

(c)                                  The Co-Issuer shall not invest any of its Collateral in “securities” (as such term is defined in the 1940 Act) and shall keep all of the Co-Issuer’s Collateral in Cash.

 

(d)                                 For so long as any of the Notes are Outstanding, the Co-Issuer shall not issue any limited liability company membership interests of the Co-Issuer to any Person other than ACRE or a wholly-owned subsidiary of ACRE.

 

(e)                                  The Issuer shall not enter into any material new agreements (other than any Mortgage Asset Purchase Agreement or other agreement contemplated by this Indenture) (including, without limitation, in connection with the sale of Collateral by the Issuer) without the prior written consent of the Holders of at least a Majority of the Notes (or if there are no Notes Outstanding, a Majority of Preferred Shareholders) and shall provide notice of all new agreements (other than any Mortgage Asset or other agreement specifically contemplated by this Indenture) to the Holders of the Notes.  The foregoing notwithstanding, the Issuer may agree to any material new agreements; provided that (i) the Issuer determines that such new agreements would not, upon becoming effective, adversely affect the rights or interests of any Class or Classes of Noteholders and (ii) subject to satisfaction of the Rating Agency Condition.

 

(f)                                   As long as any Note is Outstanding, ACRE Holder may not transfer, pledge or hypothecate any retained or repurchased Notes, the Preferred Shares or ordinary shares of the Issuer to any other Person (except to an affiliate that is wholly-owned by ACRE and is disregarded for U.S. federal income tax purposes) unless the Issuer receives an opinion of Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or another nationally recognized tax counsel experienced in such matters that such transfer, pledge or hypothecation will not cause the Issuer to be treated as a foreign corporation engaged in a trade or business in the United States for federal income tax purposes, or has previously received an opinion of Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or another nationally recognized tax counsel experienced in such matters that the Issuer will be treated as a foreign corporation that is not engaged in a trade or business in the United States for federal income tax purposes.

 

Section 7.9                                    Statement as to Compliance.

 

On or before January 31, in each calendar year, commencing in 2015 or immediately if there has been a Default in the fulfillment of an obligation under this Indenture, the Issuer shall deliver to the Trustee, the Note Administrator and the 17g-5 Information Provider an Officer’s Certificate given on behalf of the Issuer and without personal liability stating, as to each signer thereof, that, since the date of the last certificate or, in the case of the first certificate, the Closing Date, to the best of the knowledge, information and belief of such Officer, the Issuer has fulfilled all of its obligations under this Indenture or, if there has been a

 

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Default in the fulfillment of any such obligation, specifying each such Default known to them and the nature and status thereof.

 

Section 7.10                             Issuer and Co-Issuer May Consolidate or Merge Only on Certain Terms.

 

(a)                                 The Issuer shall not consolidate or merge with or into any other Person or transfer or convey all or substantially all of its Collateral to any Person, unless permitted by the Governing Documents and Cayman Islands law and unless:

 

(i)                                     the Issuer shall be the surviving entity, or the Person (if other than the Issuer) formed by such consolidation or into which the Issuer is merged or to which all or substantially all of the Collateral of the Issuer are transferred shall be an entity organized and existing under the laws of the Cayman Islands or such other jurisdiction approved by a Majority of each and every Class of the Notes (each voting as a separate Class), and a Majority of Preferred Shareholders; provided that no such approval shall be required in connection with any such transaction undertaken solely to effect a change in the jurisdiction of registration pursuant to Section 7.4 hereof; and provided, further, that the surviving entity shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, the Note Administrator, and each Noteholder, the due and punctual payment of the principal of and interest on all Notes and other amounts payable hereunder and under the Servicing Agreement and the performance and observance of every covenant of this Indenture and the Servicing Agreement on the part of the Issuer to be performed or observed, all as provided herein;

 

(ii)                                  the Rating Agency Condition shall be satisfied;

 

(iii)                               if the Issuer is not the surviving entity, the Person formed by such consolidation or into which the Issuer is merged or to which all or substantially all of the Collateral of the Issuer are transferred shall have agreed with the Trustee and the Note Administrator (A) to observe the same legal requirements for the recognition of such formed or surviving entity as a legal entity separate and apart from any of its Affiliates as are applicable to the Issuer with respect to its Affiliates and (B) not to consolidate or merge with or into any other Person or transfer or convey all or substantially all of the Collateral or all or substantially all of its Collateral to any other Person except in accordance with the provisions of this Section 7.10, unless in connection with a sale of the Collateral pursuant to Article 5, Article 9 or Article 12;

 

(iv)                              if the Issuer is not the surviving entity, the Person formed by such consolidation or into which the Issuer is merged or to which all or substantially all of the Collateral of the Issuer are transferred shall have delivered to the Trustee, the Note Administrator, the Servicer, the Special Servicer, the Operating Advisor and the Rating Agency an Officer’s Certificate and an Opinion of Counsel each stating that such Person is duly organized, validly existing and in good standing in the jurisdiction in which such Person is organized; that such Person has sufficient power and authority to assume the obligations set forth in Section 7.10(a)(i) above and to execute and deliver an indenture supplemental hereto for the purpose of assuming such obligations; that such Person has

 

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duly authorized the execution, delivery and performance of an indenture supplemental hereto for the purpose of assuming such obligations and that such supplemental indenture is a valid, legal and binding obligation of such Person, enforceable in accordance with its terms, subject only to bankruptcy, reorganization, insolvency, moratorium and other laws affecting the enforcement of creditors’ rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); that, immediately following the event which causes such Person to become the successor to the Issuer, (A) such Person has good and marketable title, free and clear of any lien, security interest or charge, other than the lien and security interest of this Indenture, to the Collateral securing, in the case of a consolidation or merger of the Issuer, all of the Notes or, in the case of any transfer or conveyance of the Collateral securing any of the Notes, such Notes, (B) the Trustee continues to have a valid perfected first priority security interest in the Collateral securing, in the case of a consolidation or merger of the Issuer, all of the Notes, or, in the case of any transfer or conveyance of the Collateral securing any of the Notes, such Notes and (C) such other matters as the Trustee, the Note Administrator, or any Noteholder may reasonably require;

 

(v)                                 immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(vi)                              the Issuer shall have delivered to the Trustee, the Note Administrator, the Preferred Share Paying Agent and each Noteholder, an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation, merger, transfer or conveyance and such supplemental indenture comply with this Article 7 and that all conditions precedent in this Article 7 provided for relating to such transaction have been complied with;

 

(vii)                           the Issuer has received an opinion from Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or an opinion of other nationally recognized U.S. tax counsel experienced in such matters that the Issuer or the Person referred to in clause (a) either will (a) be treated as a Qualified REIT Subsidiary or (b) be treated as a foreign corporation not engaged in a U.S. trade or business or otherwise not subject to U.S. federal income tax on a net income tax basis;

 

(viii)                        the Issuer has received an opinion from Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or an opinion of other nationally recognized U.S. tax counsel experienced in such matters that such action will not adversely affect the tax treatment of the Noteholders as described in the Offering Memorandum under the heading “Certain U.S. Federal Income Tax Considerations” to any material extent; and

 

(ix)                              after giving effect to such transaction, the Issuer shall not be required to register as an investment company under the 1940 Act.

 

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(b)                                 The Co-Issuer shall not consolidate or merge with or into any other Person or transfer or convey all or substantially all of its Collateral to any Person, unless no Notes remain Outstanding or:

 

(i)                                     the Co-Issuer shall be the surviving entity, or the Person (if other than the Co-Issuer) formed by such consolidation or into which the Co-Issuer is merged or to which all or substantially all of the Collateral of the Co-Issuer are transferred shall be a company organized and existing under the laws of Delaware or such other jurisdiction approved by a Majority of the Controlling Class; provided that no such approval shall be required in connection with any such transaction undertaken solely to effect a change in the jurisdiction of formation pursuant to Section 7.4; and provided, further, that the surviving entity shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, the Note Administrator, and each Noteholder, the due and punctual payment of the principal of and interest on all Notes and the performance and observance of every covenant of this Indenture on the part of the Co-Issuer to be performed or observed, all as provided herein;

 

(ii)                                  the Rating Agency Condition has been satisfied;

 

(iii)                               if the Co-Issuer is not the surviving entity, the Person formed by such consolidation or into which the Co-Issuer is merged or to which all or substantially all of the Collateral of the Co-Issuer are transferred shall have agreed with the Trustee and the Note Administrator (A) to observe the same legal requirements for the recognition of such formed or surviving entity as a legal entity separate and apart from any of its Affiliates as are applicable to the Co-Issuer with respect to its Affiliates and (B) not to consolidate or merge with or into any other Person or transfer or convey all or substantially all of its Collateral to any other Person except in accordance with the provisions of this Section 7.10;

 

(iv)                              if the Co-Issuer is not the surviving entity, the Person formed by such consolidation or into which the Co-Issuer is merged or to which all or substantially all of the Collateral of the Co-Issuer are transferred shall have delivered to the Trustee, the Note Administrator and the Rating Agencies an Officer’s Certificate and an Opinion of Counsel each stating that such Person is duly organized, validly existing and in good standing in the jurisdiction in which such Person is organized; that such Person has sufficient power and authority to assume the obligations set forth in Section 7.10(b)(i) above and to execute and deliver an indenture supplemental hereto for the purpose of assuming such obligations; that such Person has duly authorized the execution, delivery and performance of an indenture supplemental hereto for the purpose of assuming such obligations and that such supplemental indenture is a valid, legal and binding obligation of such Person, enforceable in accordance with its terms, subject only to bankruptcy, reorganization, insolvency, moratorium and other laws affecting the enforcement of creditors’ rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); such other matters as the Trustee, the Note Administrator or any Noteholder may reasonably require;

 

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(v)                                 immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(vi)                              the Co-Issuer shall have delivered to the Trustee, the Note Administrator, the Preferred Share Paying Agent and each Noteholder an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation, merger, transfer or conveyance and such supplemental indenture comply with this Article 7 and that all conditions precedent in this Article 7 provided for relating to such transaction have been complied with and that no adverse tax consequences will result therefrom to the Holders of the Notes or the Preferred Shareholders; and

 

(vii)                           after giving effect to such transaction, the Co-Issuer shall not be required to register as an investment company under the 1940 Act.

 

Section 7.11                             Successor Substituted.

 

Upon any consolidation or merger, or transfer or conveyance of all or substantially all of the Collateral of the Issuer or the Co-Issuer, in accordance with Section 7.10 hereof, the Person formed by or surviving such consolidation or merger (if other than the Issuer or the Co-Issuer), or the Person to which such consolidation, merger, transfer or conveyance is made, shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer or the Co-Issuer, as the case may be, under this Indenture with the same effect as if such Person had been named as the Issuer or the Co-Issuer, as the case may be, herein.  In the event of any such consolidation, merger, transfer or conveyance, the Person named as the “Issuer” or the “Co-Issuer” in the first paragraph of this Indenture or any successor which shall theretofore have become such in the manner prescribed in this Article 7 may be dissolved, wound-up and liquidated at any time thereafter, and such Person thereafter shall be released from its liabilities as obligor and maker on all the Notes and from its obligations under this Indenture.

 

Section 7.12                             No Other Business.

 

The Issuer shall not engage in any business or activity other than issuing and selling the Notes pursuant to this Indenture and any supplements thereto, issuing its ordinary shares and issuing and selling the Preferred Shares in accordance with its Governing Documents, and acquiring, owning, holding, disposing of and pledging the Collateral in connection with the Notes and such other activities which are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.  The Co-Issuer shall not engage in any business or activity other than issuing and selling the Notes pursuant to this Indenture and any supplements thereto and such other activities which are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith.

 

Section 7.13                             Reporting.

 

At any time when the Issuer and/or the Co-Issuer is not subject to Section 13 or 15(d) of the Exchange Act and is not exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, upon the request of a Holder or beneficial owner of a Note, the Issuer and/or the Co-Issuer shall promptly furnish or cause to be furnished “Rule 144A Information” (as defined below) to such Holder or beneficial owner, to a prospective purchaser of such Note

 

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designated by such Holder or beneficial owner or to the Note Administrator for delivery to such Holder or beneficial owner or a prospective purchaser designated by such Holder or beneficial owner, as the case may be, in order to permit compliance by such Holder or beneficial owner with Rule 144A under the Securities Act in connection with the resale of such Note by such Holder or beneficial owner.  “Rule 144A Information” shall be such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).  The Note Administrator shall reasonably cooperate with the Issuer and/or the Co-Issuer in mailing or otherwise distributing (at the Issuer’s expense) to such Noteholders or prospective purchasers, at and pursuant to the Issuer’s and/or the Co-Issuer’s written direction the foregoing materials prepared by or on behalf of the Issuer and/or the Co-Issuer; provided, however, that the Note Administrator shall be entitled to prepare and affix thereto or enclose therewith reasonable disclaimers to the effect that such Rule 144A Information was not assembled by the Note Administrator, that the Note Administrator has not reviewed or verified the accuracy thereof, and that it makes no representation as to such accuracy or as to the sufficiency of such information under the requirements of Rule 144A or for any other purpose.

 

Section 7.14                             Calculation Agent.

 

(a)                                 The Issuer and the Co-Issuer hereby agree that for so long as any Notes remain Outstanding there shall at all times be an agent appointed to calculate LIBOR in respect of each Interest Accrual Period in accordance with the terms of Schedule B attached hereto (the “Calculation Agent”).  The Issuer and the Co-Issuer initially have appointed the Note Administrator as Calculation Agent for purposes of determining LIBOR for each Interest Accrual Period.  The Calculation Agent may be removed by the Issuer at any time.  The Calculation Agent may resign at any time by giving written notice thereof to the Issuer, the Co-Issuer, the Noteholders and the Rating Agencies.  If the Calculation Agent is unable or unwilling to act as such or is removed by the Issuer or if the Calculation Agent fails to determine LIBOR or the Interest Distribution Amount for any Class of Notes for any Interest Accrual Period, the Issuer shall promptly appoint as a replacement Calculation Agent a leading bank which is engaged in transactions in Eurodollar deposits in the international Eurodollar market and which does not control or is not controlled by or under common control with the Issuer or its Affiliates.  The Calculation Agent may not resign its duties without a successor having been duly appointed.  If no successor Calculation Agent shall have been appointed within 30 days after giving of a notice of resignation, the resigning Calculation Agent or a Majority of the Holders of the Notes, on behalf of himself and all others similarly situated, may petition a court of competent jurisdiction for the appointment of a successor Calculation Agent.

 

(b)                                 The Calculation Agent shall be required to agree that, as soon as practicable after 11:00 a.m. (London time) on each LIBOR Determination Date (as defined in Schedule B attached hereto), but in no event later than 11:00 a.m. (New York time) on the London Banking Day immediately following each LIBOR Determination Date, the Calculation Agent shall calculate LIBOR for the next Interest Accrual Period and will communicate such information to the Note Administrator, who shall include such calculation on the next Monthly Report following such Libor Determination Date.  The Calculation Agent shall notify the Issuer and the Co-Issuer before 5:00 p.m. (New York time) on each LIBOR Determination Date if it has not determined and is not in the process of determining LIBOR and the Interest Distribution Amounts for each Class of Notes, together with the reasons therefor.  The determination of the

 

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Note Interest Rates and the related Interest Distribution Amounts, respectively, by the Calculation Agent shall, absent manifest error, be final and binding on all parties.

 

Section 7.15                             REIT Status.

 

(a)                                 ACRE shall not take any action that results in the Issuer failing to qualify as a Qualified REIT Subsidiary of ACRE for federal income tax purposes, unless (A) based on an Opinion of Counsel, the Issuer will be treated as a Qualified REIT Subsidiary of a REIT other than ACRE, or (B) based on an Opinion of Counsel, the Issuer will be treated as a foreign corporation that is not engaged in a trade or business in the United States for U.S. federal income tax purposes.

 

(b)                                 Without limiting the generality of Section 7.16, If the Issuer is no longer a Qualified REIT Subsidiary, prior to the time that:

 

(i)                                     any Mortgage Asset would cause the Issuer to be treated as engaged in a trade or business in the United States or to become subject to U.S. federal tax on a net income basis,

 

(ii)                                  the Issuer would acquire or receive any asset in connection with a workout or restructuring of a Mortgage Asset that could cause the Issuer to be treated as engaged in a trade or business in the United States or to become subject to U.S. federal tax on a net income basis,

 

(iii)                               the Issuer would acquire the real property underlying any Mortgage Asset pursuant to a foreclosure or deed-in-lieu of foreclosure, or

 

(iv)                              any Mortgage Loan is modified in such a manner that could cause the Issuer to be treated as engaged in a trade or business in the United States or to become subject to U.S. federal tax on a net income basis,

 

the Issuer will either (x) organize one or more Permitted Subsidiaries and contribute the subject property to such Permitted Subsidiary, (y) contribute such Mortgage Asset to an existing Permitted Subsidiary, or (z) sell such Mortgage Asset in accordance with Section 12.1.

 

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Section 7.16                             Permitted Subsidiaries.

 

Notwithstanding any other provision of this Indenture, the Special Servicer on behalf of the Issuer shall, following delivery of an Issuer Order to the parties hereto, be permitted to sell to a Permitted Subsidiary at any time any Sensitive Asset for consideration consisting entirely of the equity interests of such Permitted Subsidiary (or for an increase in the value of equity interests already owned).  Such Issuer Order shall certify that the sale of a Sensitive Asset is being made in accordance with satisfaction of all requirements of this Indenture.  The Custodian shall, upon receipt of a Request for Release with respect to a Sensitive Asset, release such Sensitive Asset and shall deliver such Sensitive Asset as specified in such Request for Release.  The following provisions shall apply to all Sensitive Asset and Permitted Subsidiaries:

 

(a)                                 For all purposes under this Indenture, any Sensitive Asset transferred to a Permitted Subsidiary shall be treated as if it were an asset owned directly by the Issuer.

 

(b)                                 Any distribution of Cash by a Permitted Subsidiary to the Issuer shall be characterized as Interest Proceeds or Principal Proceeds to the same extent that such Cash would have been characterized as Interest Proceeds or Principal Proceeds if received directly by the Issuer and each Permitted Subsidiary shall cause all proceeds of and collections on each Sensitive Asset owned by such Permitted Subsidiary to be deposited into the Payment Account.

 

(c)                                  To the extent applicable, the Issuer shall form one or more Securities Accounts with the Securities Intermediary for the benefit of each Permitted Subsidiary and shall, to the extent applicable, cause Sensitive Asset to be credited to such Securities Accounts.

 

(d)                                 Notwithstanding the complete and absolute transfer of a Sensitive Asset to a Permitted Subsidiary, the ownership interests of the Issuer in a Permitted Subsidiary or any property distributed to the Issuer by a Permitted Subsidiary shall be treated as a continuation of its ownership of the Sensitive Asset that was transferred to such Permitted Subsidiary (and shall be treated as having the same characteristics as such Sensitive Asset).

 

(e)                                  If the Special Servicer on behalf of the Trustee, or any other authorized party takes any action under this Indenture to sell, liquidate or dispose of all or substantially all of the Collateral, the Issuer shall cause each Permitted Subsidiary to sell each Sensitive Asset and all other Collateral held by such Permitted Subsidiary and distribute the proceeds of such sale, net of any amounts necessary to satisfy any related expenses and tax liabilities, to the Issuer in exchange for the equity interest in such Permitted Subsidiary held by the Issuer.

 

Section 7.17                             Repurchase Requests.

 

If the Issuer, the Trustee, the Note Administrator, the Servicer or the Special Servicer receives any request or demand that a Mortgage Asset be repurchased or replaced arising from any Material Breach of a representation or warranty made with respect to such Mortgage Asset or any Material Document Defect (any such request or demand, a “Repurchase Request”) or a withdrawal of a Repurchase Request from any Person other than the Servicer or Special Servicer, then the Trustee or the Note Administrator, as applicable, shall promptly forward such notice of such Repurchase Request or withdrawal of a Repurchase Request, as the case may be, to the Servicer (if related to a Performing Mortgage Loan) or Special Servicer, and

 

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include the following statement in the related correspondence:  “This is a “[Repurchase Request]/[withdrawal of a Repurchase Request]” under Section 3.19 of the Servicing Agreement relating to ACRE Commercial Mortgage 2014-FL2 Ltd. and ACRE Commercial Mortgage 2014-FL2 LLC, requiring action from you as the “Repurchase Request Recipient” thereunder.”  Upon receipt of such Repurchase Request or withdrawal of a Repurchase Request by the Servicer or Special Servicer pursuant to the prior sentence, the Servicer or the Special Servicer, as applicable, shall be deemed to be the Repurchase Request Recipient in respect of such Repurchase Request or withdrawal of a Repurchase Request, as the case may be, and shall be responsible for complying with the procedures set forth in Section 3.19 of the Servicing Agreement with respect to such Repurchase Request.

 

Section 7.18                             Servicing of Mortgage Loans and Control of Servicing Decisions.

 

The Mortgage Loans will be serviced by the Servicer or, with respect to Specially Serviced Mortgage Loans, the Special Servicer, in each case pursuant to the Servicing Agreement, subject to the consultation, consent and direction rights of the Directing Holder and the consultation rights of the Operating Advisor, as set forth in the Servicing Agreement, subject to those conditions, restrictions or termination events expressly provided therein.  Nothing in this Indenture shall be interpreted to limit in any respect the rights of the Directing Holder under the Servicing Agreement and none of the Issuer, Co-Issuer, Note Administrator and Trustee shall take any action under the Indenture inconsistent with the Directing Holder’s rights set forth under the Servicing Agreement.

 

Section 7.19                             Purchase of Delayed Close Mortgage Assets After the Closing Date.

 

The Issuer (or the Special Servicer on behalf of the Issuer) shall, prior to the Purchase Termination Date, use commercially reasonable efforts to apply amounts on deposit in the Unused Proceeds Account to purchase the Delayed Close Mortgage Asset, in accordance with Section 10.2(c) and Section 12.3 for inclusion as Collateral.

 

ARTICLE 8

 

SUPPLEMENTAL INDENTURES

 

Section 8.1                                    Supplemental Indentures Without Consent of Securityholders.

 

(a)                                 Without the consent of the Holders of any Notes or any Preferred Shareholders, and without satisfaction of the Rating Agency Condition, the Issuer, the Co-Issuer, when authorized by Board Resolutions of the Co-Issuers, the Trustee and the Note Administrator, at any time and from time to time subject to the requirement provided below in this Section 8.1, may enter into one or more indentures supplemental hereto, in form satisfactory to the parties thereto, for any of the following purposes:

 

(i)                                     evidence the succession of any Person to the Issuer or the Co-Issuer and the assumption by any such successor of the covenants of the Issuer or the Co-Issuer, as applicable, herein and in the Notes;

 

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(ii)                                  add to the covenants of the Issuer, the Co-Issuer, the Note Administrator or the Trustee for the benefit of the Holders of the Notes, Preferred Shareholders or to surrender any right or power herein conferred upon the Issuer or the Co-Issuer, as applicable;

 

(iii)                               convey, transfer, assign, mortgage or pledge any property to or with the Trustee, or add to the conditions, limitations or restrictions on the authorized amount, terms and purposes of the issue, authentication and delivery of the Notes;

 

(iv)                              evidence and provide for the acceptance of appointment hereunder of a successor Trustee or a successor Note Administrator and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Sections 6.9, 6.10 and 6.12 hereof;

 

(v)                                 correct or amplify the description of any property at any time subject to the lien of this Indenture, or to better assure, convey and confirm unto the Trustee any property subject or required to be subject to the lien of this Indenture (including, without limitation, any and all actions necessary or desirable as a result of changes in law or regulations) or to subject any additional property to the lien of this Indenture;

 

(vi)                              modify the restrictions on and procedures for resales and other transfers of Notes to reflect any changes in applicable law or regulation (or the interpretation thereof) or to enable the Issuer and the Co-Issuer to rely upon any exemption from registration under the Securities Act, the Exchange Act or the 1940 Act or to remove restrictions on resale and transfer to the extent not required thereunder;

 

(vii)                           accommodate the issuance, if any, of Notes in global or book-entry form through the facilities of DTC or otherwise;

 

(viii)                        take any action commercially reasonably necessary or advisable as required for the Issuer to comply with the requirements of FATCA to prevent the Issuer from failing to qualify as a Qualified REIT Subsidiary or other disregarded entity of a REIT for U.S. federal income tax purposes or otherwise being treated as a foreign corporation engaged in a trade or business in the United States for federal income tax purposes, or to prevent the Issuer, the Holders of the Notes, the Holders of the Preferred Shares or the Trustee from being subject to withholding or other taxes, fees or assessments or otherwise subject to U.S. federal, state, local or foreign income or franchise tax on a net income tax basis;

 

(ix)                              amend or supplement any provision of this Indenture to the extent necessary to maintain the then-current ratings assigned to the Notes;

 

(x)                                 accommodate the settlement of the Notes in book-entry form through the facilities of DTC, Euroclear or Clearstream, Luxembourg or otherwise;

 

(xi)                              authorize the appointment of any listing agent, transfer agent, paying agent or additional registrar for any Class of Notes required or advisable in connection with the

 

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listing of any Class of Notes on any stock exchange, and otherwise to amend this Indenture to incorporate any changes required or requested by any governmental authority, stock exchange authority, listing agent, transfer agent, paying agent or additional registrar for any Class of Notes in connection therewith;

 

(xii)                           evidence changes to applicable laws and regulations;

 

(xiii)                        reduce the minimum denominations required for transfer of the Notes;

 

(xiv)                       modify the provisions of this Indenture with respect to reimbursement of Nonrecoverable Interest Advances if (a) the Special Servicer determines that the commercial mortgage securitization industry standard for such provisions has changed, in order to conform to such industry standard and (b) such modification does not adversely affect the status of Issuer for federal income tax purposes, as evidenced by an Opinion of Counsel;

 

(xv)                          modify the procedures set forth in this Indenture relating to compliance with Rule 17g-5 of the Exchange Act; provided that the change would not materially increase the obligations of the Note Administrator, Trustee, any paying agent, the Operating Advisor, the Servicer or the Special Servicer (in each case, without such party’s consent) and would not adversely affect in any material respect the interests of any Noteholder or Holder of the Preferred Shares; provided, further, that the Special Servicer must provide a copy of any such amendment to the 17g-5 Information Provider and provide notice of any such amendment to the Rating Agencies; and

 

(xvi)                       make any change to any other provisions with respect to matters or questions arising under this Indenture; provided that the required action will not adversely affect in any material respect the interests of any Noteholder not consenting thereto, as evidenced by (A) an Opinion of Counsel or (B) satisfaction of the Rating Agency Condition.

 

The Note Administrator and Trustee are each hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Note Administrator and Trustee shall not be obligated to enter into any such supplemental indenture which affects the Note Administrator’s or Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise, except to the extent required by law.

 

(b)                                 Notwithstanding Section 8.1(a) or any other provision of this Indenture, without prior notice to, and without the consent of the Holders of any Notes or any Preferred Shareholders, the Issuer, the Co-Issuer, when authorized by Board Resolutions of the Co-Issuers, the Trustee and the Note Administrator, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee and the Note Administrator, for any of the following purposes:

 

(i)                                     conform this Indenture to the provisions described in the Offering Memorandum (or any supplement thereto); and

 

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(ii)                                  to correct any defect or ambiguity in this Indenture in order to address any manifest error, omission or mistake in any provision of this Indenture.

 

Section 8.2                                    Supplemental Indentures with Consent of Securityholders.

 

Except as set forth below, the Note Administrator, the Trustee and the Co-Issuers may enter into one or more indentures supplemental hereto to add any provisions to, or change in any manner or eliminate any of the provisions of, this Indenture or modify in any manner the rights of the Holders of any Class of Notes or the Preferred Shares under this Indenture only (x) with the written consent of the Holders of at least Majority in Aggregate Outstanding Amount of the Notes of each Class materially and adversely affected thereby (excluding any Notes owned by the Issuer, the Seller or any of their Affiliates) and the Holder of Preferred Shares if materially and adversely affected thereby, by Act of said Securityholders delivered to the Trustee, the Note Administrator and the Co-Issuers, and (y) subject to satisfaction of the Rating Agency Condition, notice of which may be in electronic form.  The Note Administrator shall provide (x) fifteen (15) Business Days’ notice of such change to the Holders of each Class of Notes and the Holder of the Preferred Shares, requesting notification by such Noteholders and Holders of the Preferred Shares if any such Noteholders or Holders of the Preferred Shares would be materially and adversely affected by the proposed supplemental indenture and (y) following such initial fifteen (15) Business Day period, the Note Administrator shall provide an additional fifteen (15) Business Days’ notice to any holder of Notes or Preferred Shares that did not respond to the initial notice.  Unless the Note Administrator is notified (after giving such initial fifteen (15) Business Days’ notice and a second fifteen (15) Business Days’ notice, as applicable) by Holders of at least a Majority in Aggregate Outstanding Amount of the Notes of any Class that such Class of Notes or a Majority of Preferred Shareholders will be materially and adversely affected by the proposed supplemental indenture (and upon receipt of an Officer’s Certificate of the Issuer), the interests of such Class and the interests of the Preferred Shares will be deemed not to be materially and adversely affected by such proposed supplemental indenture and the Trustee will be permitted to enter into such supplemental indenture.  Such determinations shall be conclusive and binding on all present and future Noteholders.  The consent of the Holders of the Preferred Shares shall be binding on all present and future Holders of the Preferred Shares.

 

Without the consent of (x) all of the Holders of each Outstanding Class of Notes materially adversely affected and (y) all of the Holders of the Preferred Shares materially adversely affected thereby, no supplemental indenture may:

 

(a)                                 change the Stated Maturity Date of the principal of or the due date of any installment of interest on any Note, reduce the principal amount thereof or the Note Interest Rate thereon or the Redemption Price with respect to any Note, change the date of any scheduled distribution on the Preferred Shares, or the Redemption Price with respect thereto, change the earliest date on which any Note may be redeemed at the option of the Issuer, change the provisions of this Indenture that apply proceeds of any Collateral to the payment of principal of or interest on Notes or of distributions to the Preferred Share Paying Agent for the payment of distributions in respect of the Preferred Shares or change any place where, or the coin or currency in which, any Note or the principal thereof or interest thereon is payable, or impair the

 

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right to institute suit for the enforcement of any such payment on or after the Stated Maturity Date thereof (or, in the case of redemption, on or after the applicable Redemption Date);

 

(b)                                 reduce the percentage of the Aggregate Outstanding Amount of Holders of Notes of each Class or the Notional Amount of Preferred Shares of the Holders thereof whose consent is required for the authorization of any such supplemental indenture or for any waiver of compliance with certain provisions of this Indenture or certain Defaults hereunder or their consequences provided for in this Indenture;

 

(c)                                  impair or adversely affect the Collateral except as otherwise permitted in this Indenture;

 

(d)                                 permit the creation of any lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Collateral or terminate such lien on any property at any time subject hereto or deprive the Holder of any Note, or the Holder of any Preferred Share as an indirect beneficiary, of the security afforded to such Holder by the lien of this Indenture;

 

(e)                                  reduce the percentage of the Aggregate Outstanding Amount of Holders of Notes of each Class whose consent is required to request the Trustee to preserve the Collateral or rescind any election to preserve the Collateral pursuant to Section 5.5 or to sell or liquidate the Collateral pursuant to Section 5.4 or 5.5 hereof;

 

(f)                                   modify any of the provisions of this Section 8.2, except to increase any percentage of Outstanding Notes whose holders’ consent is required for any such action or to provide that other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby;

 

(g)                                  modify the definition of the term “Outstanding” or the provisions of Section 11.1(a) or Section 13.1 hereof;

 

(h)                                 modify any of the provisions of this Indenture in such a manner as to affect the calculation of the amount of any payment of interest on or principal of any Note on any Payment Date or of distributions to the Preferred Share Paying Agent for the payment of distributions in respect of the Preferred Shares on any Payment Date (or any other date) or to affect the rights of the Holders of Securities to the benefit of any provisions for the redemption of such Securities contained herein;

 

(i)                                     reduce the permitted minimum denominations of the Notes below the minimum denomination necessary to maintain an exemption from the registration requirements of the Securities Act or the 1940 Act; or

 

(j)                                    modify any provisions regarding non- recourse or non-petition covenants with respect to the Issuer and the Co-Issuer.

 

The Trustee and Note Administrator shall be entitled to rely upon an Officer’s Certificate of the Issuer in determining whether or not the Holders of Securities would be materially or adversely affected by such change (after giving notice of such change to the

 

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Holders of Securities).  Such determination shall be conclusive and binding on all present and future Holders of Securities.  Neither the Trustee nor the Note Administrator shall be liable for any such determination made in good faith.

 

Section 8.3                                    Execution of Supplemental Indentures.

 

In executing or accepting the additional trusts created by any supplemental indenture permitted by this Article 8 or the modifications thereby of the trusts created by this Indenture, the Note Administrator and Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that all conditions precedent thereto have been satisfied.  The Note Administrator and Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects its own rights, duties or immunities under this Indenture or otherwise.

 

The Servicer and Special Servicer will be bound to follow any amendment or supplement to this Indenture of which it has received written notice at least ten Business Days prior to the execution and delivery of such amendment or supplement; provided, however, that with respect to any amendment or supplement to this Indenture which may, in the judgment of the Servicer or Special Servicer adversely affect the Servicer or Special Servicer, the Servicer or Special Servicer, as applicable, shall not be bound (and the Issuer agrees that it will not permit any such amendment to become effective) unless the Servicer or Special Servicer, as applicable, gives written consent to the Note Administrator, the Trustee and the Issuer to such amendment.  The Issuer, the Trustee and the Note Administrator shall give written notice to the Servicer and Special Servicer of any amendment made to this Indenture pursuant to its terms.  In addition, the Servicer and Special Servicer’s written consent shall be required prior to any amendment to this Indenture by which it is adversely affected.

 

At the cost of the Issuer, the Note Administrator shall provide to each Noteholder, each holder of Preferred Shares and, for so long as any Class of Notes shall remain Outstanding and is rated, the Note Administrator shall provide to the 17g-5 Information Provider and the Rating Agencies a copy of any proposed supplemental indenture at least 15 Business Days prior to the execution thereof by the Note Administrator, and following execution shall provide to the 17g-5 Information Provider and the Rating Agencies a copy of the executed supplemental indenture.

 

The Trustee shall not enter into any such supplemental indenture (i) if such action would adversely affect the tax treatment of the Holders of the Notes as described in the Offering Memorandum under the heading “Certain U.S. Federal Income Tax Considerations” to any material extent or otherwise cause any of the statements described in the Offering Memorandum under the heading “Certain U.S. Federal Income Tax Considerations” to be inaccurate or incorrect to any material extent, and (ii) unless the Trustee and the Note Administrator has received an Opinion of Counsel from Cadwalader, Wickersham & Taft LLP, Proskauer Rose LLP or other nationally recognized U.S. tax counsel experienced in such matters that the proposed supplemental indenture will not cause the Issuer to (x) fail to be treated as a Qualified REIT Subsidiary or other disregarded entity of a REIT for U.S. federal income tax purposes or (y) be treated as a foreign corporation that is engaged in a trade or business in the United States

 

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for U.S. federal income tax purposes.  The Trustee and the Note Administrator shall be entitled to rely upon (i) the receipt of notice from the Rating Agencies or the Requesting Party, which may be in electronic form, that the Rating Agency Condition has been satisfied and (ii) receipt of an Opinion of Counsel forwarded to the Trustee and Note Administrator certifying that, following provision of notice of such supplemental indenture to the Noteholders and holders of the Preferred Shares, that the Holders of Securities would not be materially and adversely affected by such supplemental indenture.  Such determination shall be conclusive and binding on all present and future Holders of Securities.  Neither the Trustee nor the Note Administrator shall be liable for any such determination made in good faith and in reliance upon such Opinion of Counsel, as the case may be.

 

It shall not be necessary for any Act of Securityholders under this Section 8.2 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

 

Promptly after the execution by the Issuer, the Co-Issuer, the Note Administrator and the Trustee of any supplemental indenture pursuant to this Section 8.2, the Note Administrator, at the expense of the Issuer, shall mail to the Securityholders, the Preferred Share Paying Agent, the Servicer, the Special Servicer, the Operating Advisor and, so long as the Notes are Outstanding and so rated, the Rating Agencies a copy thereof based on an outstanding rating.  Any failure of the Trustee and the Note Administrator to publish or mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

Section 8.4                                    Effect of Supplemental Indentures.

 

Upon the execution of any supplemental indenture under this Article 8, this Indenture shall be modified in accordance therewith, such supplemental indenture shall form a part of this Indenture for all purposes and every Holder of Notes theretofore and thereafter authenticated and delivered hereunder, and every Holder of Preferred Shares, shall be bound thereby.

 

Section 8.5                                    Reference in Notes to Supplemental Indentures.

 

Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article 8 may, and if required by the Note Administrator shall, bear a notice in form approved by the Note Administrator as to any matter provided for in such supplemental indenture.  If the Issuer and the Co-Issuer shall so determine, new Notes, so modified as to conform in the opinion of the Note Administrator and the Issuer and the Co-Issuer to any such supplemental indenture, may be prepared and executed by the Issuer and the Co-Issuer and authenticated and delivered by the Note Administrator in exchange for Outstanding Notes.  Notwithstanding the foregoing, any Note authenticated and delivered hereunder shall be subject to the terms and provisions of this Indenture, and any supplemental indenture.

 

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ARTICLE 9

 

REDEMPTION OF SECURITIES; REDEMPTION PROCEDURES

 

Section 9.1                                    Clean-up Call; Tax Redemption; Optional Redemption; and Auction Call Redemption.

 

(a)                                 The Notes shall be redeemed by the Issuer and the Co-Issuer at the option of and at the direction of a Majority of the Preferred Shareholders by written notice to the Issuer, the Note Administrator and the Trustee (such redemption, a “Clean-up Call”), in whole but not in part, at a price equal to the applicable Redemption Prices on any Payment Date (the “Clean-up Call Date”) on or after the Payment Date on which the Aggregate Outstanding Amount of the Notes (excluding any Deferred Interest) has been reduced to 10% of the Aggregate Outstanding Amount of the Notes on the Closing Date; provided that that the funds available to be used for such Clean-up Call will be sufficient to pay the Total Redemption Price.

 

(b)                                 The Notes shall be redeemable by the Issuer and the Co-Issuer in whole but not in part, at the written direction of a Majority of Preferred Shareholders delivered to the Issuer, the Note Administrator and the Trustee, on the Payment Date (the “Tax Redemption Date”) following the occurrence of a Tax Event if the Tax Materiality Condition is satisfied at a price equal to the applicable Redemption Prices (such redemption, a “Tax Redemption”); provided that that the funds available to be used for such Tax Redemption will be sufficient to pay the Total Redemption Price.  Upon the receipt of such written direction of a Tax Redemption, the Note Administrator shall provide written notice thereof to the Securityholders and the Rating Agencies.  Any sale or disposition of a Mortgage Asset by the Special Servicer in connection with a Tax Redemption shall be performed upon Issuer Order by the Special Servicer on behalf of the Issuer.

 

(c)                                  The Notes shall be redeemable by the Issuer and the Co-Issuer, in whole but not in part, at a price equal to the applicable Redemption Prices, on any Payment Date after the end of the Non-call Period, at the written direction of a Majority of the Preferred Shareholders to the Issuer, the Note Administrator and the Trustee (such redemption, an “Optional Redemption”); provided, however, that the funds available to be used for such Optional Redemption will be sufficient to pay the Total Redemption Price.  Notwithstanding anything herein to the contrary, the Issuer shall not sell any Mortgage Asset to any Affiliate other than ACRC Holder in connection with an Optional Redemption.

 

(d)                                 The Notes shall be redeemable by the Issuer and the Co-Issuer, in whole but not in part, at a price equal to the applicable Redemption Prices, on any Payment Date occurring in September, December, March or June in each year, beginning on the Payment Date occurring in September 2019, upon the occurrence of a Successful Auction, as defined in, and pursuant to the procedures set forth in, Section 3.18(b) of the Servicing Agreement (such redemption, an “Auction Call Redemption”).

 

(e)                                  The election by a Majority of Preferred Shareholders to redeem the Notes pursuant to a Clean-up Call shall be evidenced by Act of the Majority of Preferred Shareholders directing the Note Administrator to pay to the Paying Agent the Redemption Price of all of the

 

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Notes to be redeemed from funds in the Payment Account in accordance with the Priority of Payments.  In connection with a Tax Redemption, the occurrence of a Tax Event and satisfaction of the Tax Materiality Condition shall be evidenced by an Issuer Order certifying that such conditions for a Tax Redemption have occurred.  The election by a Majority of Preferred Shareholders to redeem the Notes pursuant to an Optional Redemption shall be evidenced by an Act of the Majority of Preferred Shareholders certifying that the conditions for an Optional Redemption have occurred.

 

(f)                                   A redemption pursuant to Section 9.1(a), 9.1(b) or 9.1(c) shall not occur unless (i) at least five (5) Business Days before the scheduled Redemption Date, (A) the Majority of Preferred Shareholders shall have furnished to the Trustee and the Note Administrator evidence (in a form reasonably satisfactory to the Trustee and the Note Administrator) that the Special Servicer, on behalf of the Issuer, has entered into a binding agreement or agreements with (1) one or more financial institutions whose long-term unsecured debt obligations (other than such obligations whose rating is based on the credit of a Person other than such institution) have a credit rating from DBRS and Moody’s at least equal to the highest rating of any Notes then Outstanding or whose short-term unsecured debt obligations have a credit rating of “P-1” or higher by Moody’s (as long as the term of such agreement is 90 days or less) or (2)ACRE (or an Affiliate or Agent thereof) if ACRE Servicer or one or more Affiliates thereof is Special Servicer, to sell (directly or by participation or other arrangement) all or part of the Collateral not later than the Business Day immediately preceding the scheduled Redemption Date, (B) the Rating Agency Condition has been satisfied with respect to the Rating Agencies, or (C) at least 3 Business Days prior to the scheduled Redemption Date, ACRE (or an Affiliate or Agent thereof) has priced but not yet closed another securitization transaction, and (ii) the related Sale Proceeds pursuant to clause (i)(A) or net proceeds pursuant to clause (i)(C), as applicable, (in immediately available funds), together with all other available funds (including proceeds from the sale of the Collateral, Eligible Investments maturing on or prior to the scheduled Redemption Date, all amounts in the Accounts and available Cash), shall be an aggregate amount sufficient to pay all amounts, payments, fees and expenses in accordance with the Priority of Payments due and owing on such Redemption Date.

 

(g)                                  Disposition of Collateral in connection with a redemption pursuant to Section 9.1(a), 9.1(b) or 9.1(c), may include sales of Collateral to more than one purchaser, including by means of sales of participation interests in one or more Mortgage Loans to more than one purchaser.

 

Section 9.2                                    Notice of Redemption.

 

(a)                                 In connection with a Clean-up Call pursuant to Section 9.1(a), a Tax Redemption pursuant to Section 9.1(b), an Optional Redemption pursuant to Section 9.1(c), or an Auction Call Redemption pursuant to Section 9.1(d), the Note Administrator shall set the applicable Record Date ten (10) Business Days prior to the proposed Redemption Date.  The Note Administrator shall deliver to the Rating Agencies any notice received by it from the Issuer or the Special Servicer of such proposed Redemption Date, the applicable Record Date, the principal amount of Notes to be redeemed on such Redemption Date and the Redemption Price of such Notes in accordance with Section 9.1.

 

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(b)                                 Any such notice of an Optional Redemption, Clean-up Call or Tax Redemption may be withdrawn by the Issuer and the Co-Issuer at the direction of a Supermajority of Preferred Shareholders up to the second Business Day prior to the scheduled Redemption Date by written notice to the Note Administrator, the Trustee, the Preferred Share Paying Agent, the Servicer, the Special Servicer, the Operating Advisor and each Holder of Notes to be redeemed.  The failure of any Optional Redemption, Clean-up Call or Tax Redemption that is withdrawn in accordance with this Indenture shall not constitute an Event of Default.

 

Section 9.3                                    Notice of Redemption or Maturity by the Issuer.

 

Any sale or disposition of a Mortgage Asset by the Trustee in connection with an Optional Redemption, Clean-up Call, Tax Redemption or Auction Call Redemption shall be performed upon Issuer Order by the Special Servicer on behalf of the Issuer, and the Trustee shall have no responsibility or liability therefore.  Notice of redemption (or a withdrawal thereof) or Clean-up Call pursuant to Section 9.2 or the Maturity of any Notes shall be given by first class mail, postage prepaid, mailed not less than ten (10) Business Days (or, where the notice of an Optional Redemption, a Clean-up Call or a Tax Redemption is withdrawn pursuant to Section 9.2(b), four (4) Business Days (or promptly thereafter upon receipt of written notice, if later)) prior to the applicable Redemption Date or Maturity, to (unless the Note Administrator agrees to a shorter notice period) the Trustee, the Servicer, the Special Servicer, the Operating Advisor, the Preferred Share Paying Agent, the Rating Agencies, and not less than five (5) Business Days prior to the applicable Redemption Date or Maturity, to each Holder of Securities to be redeemed, at its address in the Notes Register.

 

All notices of redemption shall state:

 

(a)                                 the applicable Redemption Date;

 

(b)                                 the applicable Redemption Price;

 

(c)                                  that all the Notes are being paid in full and that interest on the Notes shall cease to accrue on the Redemption Date specified in the notice; and

 

(d)                                 the place or places where such Notes to be redeemed in whole are to be surrendered for payment of the Redemption Price which shall be the office or agency of the Paying Agent as provided in Section 7.2.

 

Notice of redemption shall be given by the Issuer and Co-Issuer, or at their request, by the Note Administrator in their names, and at the expense of the Issuer.  Failure to give notice of redemption, or any defect therein, to any Holder of any Note shall not impair or affect the validity of the redemption of any other Notes.

 

Section 9.4                                    Notes Payable on Redemption Date.

 

Notice of redemption having been given as aforesaid, the Notes to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after the Redemption Date (unless the Issuer shall Default in the

 

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payment of the Redemption Price and accrued interest thereon) the Notes shall cease to bear interest on the Redemption Date.  Upon final payment on a Note to be redeemed, the Holder shall present and surrender such Note at the place specified in the notice of redemption on or prior to such Redemption Date; provided, however, that if there is delivered to the Issuer, the Co-Issuer, the Note Administrator and the Trustee such security or indemnity as may be required by them to hold each of them harmless and an undertaking thereafter to surrender such Note, then, in the absence of notice to the Issuer, the Note Administrator and the Trustee that the applicable Note has been acquired by a bona fide purchaser, such final payment shall be made without presentation or surrender.  Payments of interest on the Notes so to be redeemed whose Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Notes, or one or more predecessor Notes, registered as such at the close of business on the relevant Record Date according to the terms and provisions of Section 2.7(f).

 

If any Note called for redemption shall not be paid upon surrender thereof for redemption, the principal thereof shall, until paid, bear interest from the Redemption Date at the applicable Note Interest Rate for each successive Interest Accrual Period the Note remains Outstanding.

 

Section 9.5                                    Redemption From Unused Proceeds.

 

To the extent the Unused Proceeds Account is established pursuant to Section 10.2(a), on the first Payment Date after the Purchase Termination Date, any amounts remaining in the Unused Proceeds Account on such date (the “Unused Proceeds Principal Amortization Amount”) shall be applied in the manner set forth in Section 11.1(a)(ii).

 

ARTICLE 10

 

ACCOUNTS, ACCOUNTINGS AND RELEASES

 

Section 10.1                             Collection of Amounts; Custodial Account.

 

(a)                                 Except as otherwise expressly provided herein, the Note Administrator may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all amounts and other property payable to or receivable by the Note Administrator pursuant to this Indenture, including all payments due on the Collateral in accordance with the terms and conditions of such Collateral.  The Note Administrator shall segregate and hold all such amounts and property received by it in an Eligible Account in trust for the Secured Parties, and shall apply such amounts as provided in this Indenture.

 

(b)                                 The Note Administrator in its capacity as Securities Intermediary on behalf of the Trustee for the benefit of the Secured Parties (the “Securities Intermediary”) shall, upon receipt, credit all Mortgage Assets and Eligible Investments to an account in its own name for the benefit of the Secured Parties designated as the “Custodial Account.”  The Custodial Account shall remain at all times an Eligible Account.

 

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Section 10.2                             Unused Proceeds Account.

 

(a)                                 The Note Administrator shall, on or prior to the Closing Date, establish a single, segregated trust account which shall be designated as the “Unused Proceeds Account,” which shall be held in trust in the name of the Note Administrator, for the benefit of the Trustee and for the benefit of the Secured Parties, into which the amount specified in Section 3.2(f) shall be deposited.  All amounts credited to the Unused Proceeds Account pursuant to this Indenture shall be held by the Note Administrator as part of the Collateral and shall be applied to the purposes herein provided.

 

(b)                                 The Note Administrator agrees to give the Issuer prompt notice if it becomes aware that the Unused Proceeds Account or any funds on deposit therein, or otherwise to the credit of the Unused Proceeds Account, becomes subject to any writ, order, judgment, warrant of attachment, execution or similar process.  The Issuer shall have no legal, equitable or beneficial interest in the Unused Proceeds Account other than in accordance with the Priority of Payments.  The Unused Proceeds Account shall remain at all times an Eligible Account.

 

(c)                                  Prior to the Purchase Termination Date, the Issuer (or the Special Servicer on behalf of the Issuer) may by Issuer Order direct the Note Administrator to, and upon receipt of such Issuer Order the Note Administrator shall, apply amounts on deposit in the Unused Proceeds Account to acquire Delayed Close Mortgage Asset as directed by the Special Servicer as permitted under and in accordance with the requirements of Section 7.19 and such Issuer Order.

 

(d)                                 Amounts remaining in the Unused Proceeds Account shall, on the Business Day after the Purchase Termination Date, be transferred by the Note Administrator to the Payment Account and applied pursuant to Section 11.1(a)(ii)(2) on the Payment Date after the Purchase Termination Date.

 

Section 10.3                             Payment Account.

 

(a)                                 The Note Administrator shall, on or prior to the Closing Date, establish a single, segregated trust account which shall be designated as the “Payment Account,” which shall be held in trust for the benefit of the Secured Parties and over which the Note Administrator shall have exclusive control and the sole right of withdrawal.  Any and all funds at any time on deposit in, or otherwise to the credit of, the Payment Account shall be held in trust by the Note Administrator, on behalf of the Trustee for the benefit of the Secured Parties.  Except as provided in Sections 11.1 and 11.2, the only permitted withdrawal from or application of funds on deposit in, or otherwise to the credit of, the Payment Account shall be (i) to pay the interest on and the principal of the Notes and make other payments in respect of the Notes in accordance with their terms and the provisions of this Indenture, (ii) to deposit into the Preferred Share Distribution Account for distributions to the Preferred Shareholders, (iii) upon Issuer Order, to pay other amounts specified therein, and (iv) otherwise to pay amounts payable pursuant to and in accordance with the terms of this Indenture, each in accordance with the Priority of Payments.

 

(b)                                 The Note Administrator agrees to give the Issuer prompt notice if it becomes aware that the Payment Account or any funds on deposit therein, or otherwise to the

 

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credit of the Payment Account, becomes subject to any writ, order, judgment, warrant of attachment, execution or similar process.  The Issuer shall have no legal, equitable or beneficial interest in the Payment Account other than in accordance with the Priority of Payments.  The Payment Account shall remain at all times an Eligible Account.

 

Section 10.4                             Funded Companion Participation Acquisition Account.

 

(a)                                 The Note Administrator shall, on or prior to the Closing Date, establish a single, segregated trust account which shall be designated as the “Funded Companion Participation Acquisition Account” which shall be held in trust for the benefit of the Secured Parties and over which the Note Administrator shall have exclusive control and the sole right of withdrawal. All amounts credited to the Funded Companion Participation Acquisition Account pursuant to this Indenture shall be held by the Note Administrator as part of the Collateral and shall be applied to the purposes herein provided.

 

(b)                                 The Note Administrator agrees to give the Issuer prompt notice if it becomes aware that the Funded Companion Participation Acquisition Account or any funds on deposit therein, or otherwise to the credit of the Funded Companion Participation Acquisition Account, becomes subject to any writ, order, judgment, warrant of attachment, execution or similar process.  The Issuer shall have no legal, equitable or beneficial interest in the Funded Companion Participation Acquisition Account other than in accordance with the Priority of Payments.  The Funded Companion Participation Acquisition Account shall remain at all times an Eligible Account.

 

(c)                                  The only permitted withdrawals from deposits in, or otherwise standing to the credit of, the Funded Companion Participation Acquisition Account shall be (i) to acquire Related Funded Companion Participations in accordance with Section 12.2 of this Indenture and (ii) to withdraw amounts for deposit into the Payment Account for application pursuant to Section 11.1(a)(ii) as Principal Proceeds.  Amounts remaining in the Funded Companion Participation Acquisition Account as to which the Seller has indicated that it will not direct the Issuer to use towards the acquisition of Related Funded Companion Participations, shall be deposited in the Payment Account and treated as Principal Proceeds to be applied pursuant to Section 11.1(a)(ii) as Principal Proceeds.

 

Section 10.5                             Interest Advances.

 

(a)                                 With respect to each Payment Date for which the sum of Interest Proceeds and, if applicable, Principal Proceeds, collected during the related Due Period and remitted to the Note Administrator that are available to pay interest on the Class A Notes, Class A-S Notes and the Class B Notes in accordance with the Priority of Payments, are insufficient to remit the interest due and payable with respect to the Class A Notes, Class A-S Notes and the Class B Notes on such Payment Date as a result of interest shortfalls on the Mortgage Assets (or the application of interest received on the Mortgage Assets to pay certain expenses in accordance with the terms of the Servicing Agreement (other than the Servicing Fee, the Note Administrator Fee, the Trustee Fee and the Monthly Operating Advisor Fee)) (the amount of such insufficiency, an “Interest Shortfall”), the Note Administrator shall provide the Advancing Agent with email notice of such Interest Shortfall no later than the close of business on the Business Day preceding

 

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such Payment Date.  The Note Administrator shall provide the Advancing Agent with additional email notice, prior to any funding of an Interest Advance by the Advancing Agent, of any additional interest remittances received by the Note Administrator after delivery of such initial notice that reduces such Interest Shortfall.  No later than 11:00 a.m. (New York time) on the related Payment Date, the Advancing Agent shall advance the difference between such amounts (each such advance, an “Interest Advance”) by deposit of an amount equal to such Interest Advance in the Payment Account, subject to a determination of recoverability by the Advancing Agent as described in Section 10.5(b), and subject to a maximum limit in respect of any Payment Date equal to the lesser of (i) the aggregate of such Interest Shortfalls that would otherwise occur on the Class A Notes, Class A-S Notes and the Class B Notes and (ii) the aggregate of the interest payments not received in respect of Mortgage Assets with respect to such Payment Date (including, for such purpose, interest payments received on the Mortgage Assets but applied to pay certain expenses in accordance with the terms of the Servicing Agreement (other than the Servicing Fee, the Note Administrator Fee, the Trustee Fee and the Monthly Operating Advisor Fee)).

 

Notwithstanding the foregoing, in no circumstance will the Advancing Agent be required to make an Interest Advance in respect of a Mortgage Asset to the extent that the aggregate outstanding amount of all unreimbursed Interest Advances would exceed the aggregate outstanding principal amount of the Senior Notes.  In addition, in no event will the Advancing Agent be required to advance any payments in respect of interest on any Class of Notes other than the Class A Notes, Class A-S Notes and the Class B Notes or in respect of principal of any Note.  Any Interest Advance made by the Advancing Agent with respect to a Payment Date that is in excess of the actual Interest Shortfall for such Payment Date shall be refunded to the Advancing Agent by the Note Administrator on the related Payment Date (or, if such Interest Advance is made prior to final determination by the Note Administrator of such Interest Shortfall, on the Business Day of such final determination).

 

The Advancing Agent shall provide the Note Administrator and Trustee written notice of a determination by the Advancing Agent that a proposed Interest Advance would constitute a Nonrecoverable Interest Advance no later than 11:00 a.m. (New York time) on the related Payment Date.  If the Advancing Agent shall fail to make any required Interest Advance by 11:00 a.m. (New York time) on the Payment Date upon which distributions are to be made pursuant to Section 11.1(a)(i), the Trustee shall  make such Interest Advance by no later than 12:00 pm.  Based upon available information at the time, the Advancing Agent shall use reasonable efforts to provide 15 days prior notice to the Rating Agencies if recovery of a Nonrecoverable Interest Advance would result in an Interest Shortfall on the next succeeding Payment Date; provided that the failure to provide such notice shall not prejudice the Advancing Agent’s right to obtain reimbursement of any Nonrecoverable Interest Advance (or the timing of such reimbursement).  No later than the close of business on the Determination Date related to a Payment Date on which the recovery of a Nonrecoverable Interest Advance would result in an Interest Shortfall, the Special Servicer will provide the Rating Agencies notice of such recovery.

 

(b)                                 Notwithstanding anything herein to the contrary, neither the Advancing Agent nor the Trustee, as applicable, shall be required to make any Interest Advance unless such Person determines, in its sole discretion, exercised in good faith that such Interest Advance, or such proposed Interest Advance, plus interest expected to accrue thereon at the Reimbursement

 

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Rate, will not be a Nonrecoverable Interest Advance.  In determining whether any proposed Interest Advance will be, or whether any Interest Advance previously made is, a Nonrecoverable Interest Advance, the Advancing Agent or the Trustee, as applicable, will take into account:

 

(i)                                     amounts that may be realized on each Mortgaged Property in its “as is” or then-current condition and occupancy;

 

(ii)                                  the potential length of time before such Interest Advance may be reimbursed and the resulting degree of uncertainty with respect to such reimbursement; and

 

(iii)                               the possibility and effects of future adverse changes with respect to the Mortgaged Properties, and

 

(iv)                              the fact that Interest Advances are intended to provide liquidity only and not credit support to the Holders of the Class A Notes, Class A-S Notes and the Class B Notes.

 

For purposes of any such determination of whether an Interest Advance constitutes or would constitute a Nonrecoverable Interest Advance, an Interest Advance will be deemed to be nonrecoverable if the Advancing Agent or the Trustee, as applicable, determines that future Interest Proceeds and Principal Proceeds may be ultimately insufficient to fully reimburse such Interest Advance, plus interest thereon at the Reimbursement Rate within a reasonable period of time.  The Trustee will be entitled to conclusively rely on any affirmative determination by the Advancing Agent that an Interest Advance would have been a Nonrecoverable Interest Advance.  Absent bad faith, the determination by the Advancing Agent as to the nonrecoverability of any Interest Advance shall be conclusive and binding on the Holders of the Notes.

 

(c)                                  The Advancing Agent may recover any previously unreimbursed Interest Advance made by it (including any Nonrecoverable Interest Advance), together with interest thereon, first, from Interest Proceeds and second  (to the extent that there are insufficient Interest Proceeds for such reimbursement), from Principal Proceeds to the extent that such reimbursement (other than in the case of reimbursement of Nonrecoverable Interest Advances) would not trigger an additional Interest Shortfall; provided that if at any time an Interest Advance is determined to be a Nonrecoverable Interest Advance, the Advancing Agent shall be entitled to recover all outstanding Interest Advances from the Collection Account pursuant to the Servicing Agreement on any Business Day during any Interest Accrual Period prior to the Determination Date in such Interest Accrual Period (or on a Payment Date prior to any payment of interest on or principal of the Notes in accordance with the Priority of Payments first, from Interest Proceeds and second (to the extent that there are insufficient Interest Proceeds for such reimbursement), from Principal Proceeds).  The Advancing Agent shall be permitted (but not obligated), at its sole option and in its sole discretion, to defer or otherwise structure the timing of recoveries of Nonrecoverable Interest Advances in such manner as the Advancing Agent determines is in the best interest of the Class A Notes, Class A-S Notes and the Class B Notes, as a collective whole, which may include being reimbursed for Nonrecoverable Interest Advances in installments.

 

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If the Advancing Agent makes such an election at its sole option to defer or structure reimbursement with respect to all or a portion of a Nonrecoverable Interest Advance (and interest thereon), then such Nonrecoverable Interest Advance (and interest thereon) or portion thereof shall continue to be fully reimbursable in any subsequent one-month period.  Any election by the Advancing Agent to abstain from obtaining reimbursement for any Nonrecoverable Advance (and Advance Interest thereon) or portion thereof with respect to any Due Period shall not be construed to impose on the Advancing Agent any obligation to make such an election (or any entitlement in favor of any holder of a Note or any other Person to such an election) with respect to any subsequent Due Period or to constitute a waiver or limitation on the right of the Advancing Agent to otherwise be reimbursed for such Nonrecoverable Advance (and interest thereon). No determination by the Advancing Agent to exercise its sole option to defer the reimbursement of Interest Advances and/or interest thereon shall be construed as an agreement by the Advancing Agent to subordinate (in respect of realizing losses), to any Class of Notes, such party’s right to such reimbursement during such period of deferral.

 

(d)                                 The Advancing Agent will be entitled with respect to any Interest Advance made by it (including Nonrecoverable Interest Advances) to interest accrued on the amount of such Interest Advance for so long as it is outstanding at the Reimbursement Rate.

 

(e)                                  The obligation of the Advancing Agent to make Interest Advances in respect of the Class A Notes, Class A-S Notes and the Class B Notes will continue through the Stated Maturity Date, unless the Class A Notes, Class A-S Notes and the Class B Notes are previously redeemed or repaid in full.

 

(f)                                   In no event will the Advancing Agent, in its capacity as such hereunder, be required to advance any amounts in respect of payments of principal of any Mortgage Asset or Note.

 

(g)                                  [Reserved].

 

(h)                                 The determination by the Advancing Agent, (i) that it has made a Nonrecoverable Interest Advance (together with Reimbursement Interest thereon) or (ii) that any proposed Interest Advance, if made, would constitute a Nonrecoverable Interest Advance, shall be evidenced by an Officer’s Certificate delivered promptly to the Trustee, the Note Administrator, the Issuer and the 17g-5 Information Provider, setting forth the basis for such determination; provided that failure to give such notice, or any defect therein, shall not impair or affect the validity of, or the Advancing Agent, entitlement to reimbursement with respect to, any Interest Advance.

 

Section 10.6                             Reports by Parties.

 

(a)                                 The Note Administrator shall supply, in a timely fashion, to the Issuer, the Trustee, the Special Servicer and the Directing Holder any information regularly maintained by the Note Administrator that the Issuer, the Trustee, the Special Servicer, the Servicer or the Directing Holder may from time to time request in writing with respect to the Collateral or the Indenture Accounts and provide any other information reasonably available to the Note Administrator by reason of its acting as Note Administrator hereunder and required to be

 

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provided by Section 10.7.  Each of the Issuer, the Servicer, and the Special Servicer shall promptly forward to the Trustee and the Note Administrator any information in their possession or reasonably available to them concerning any of the Collateral that the Trustee or the Note Administrator reasonably may request or that reasonably may be necessary to enable the Note Administrator to prepare any report or to enable the Trustee or the Note Administrator to perform any duty or function on its part to be performed under the terms of this Indenture.

 

Section 10.7                             Reports; Accountings.

 

(a)                                 Based on the CREFC® Loan Periodic Update File prepared by the Servicer and delivered by the Servicer to the Note Administrator no later than 2:00 p.m. (New York time) on the second Business Day before the Payment Date, the Note Administrator shall prepare and make available on its website initially located at www.ctslink.com (or, upon written request from registered Holders of the Notes or from those parties that cannot receive such statement electronically, provide by first class mail), on each Payment Date to Privileged Persons, a report substantially in the form of Exhibit G hereto (the “Monthly Report”), setting forth the following information:

 

(i)                                     the amount of the distribution of principal and interest on such Payment Date to the Noteholders and any reduction of the Aggregate Outstanding Amount of the Notes;

 

(ii)                                  the aggregate amount of compensation paid to the Note Administrator, the Trustee and servicing compensation paid to the Servicer during the related Due Period;

 

(iii)                               the Aggregate Outstanding Portfolio Balance outstanding immediately before and immediately after the Payment Date;

 

(iv)                              the number, Aggregate Outstanding Portfolio Balance, weighted average remaining term to maturity and weighted average interest rate of the Mortgage Assets as of the end of the related Due Period;

 

(v)                                 the number and aggregate principal balance of Mortgage Assets that are (A) delinquent 30-59 days, (B) delinquent 60-89 days, (C) delinquent 90 days or more and (D) current but Specially Serviced Mortgage Loans or in foreclosure but not an REO Property;

 

(vi)                              the value of any REO Property owned by the Issuer or any Permitted Subsidiary as of the end of the related Due Period, on an individual Mortgage Asset basis, based on the most recent appraisal or valuation;

 

(vii)                           the amount of Interest Proceeds and Principal Proceeds received in the related Due Period;

 

(viii)                        the amount of any Interest Advances made by the Advancing Agent;

 

(ix)                              the payments due pursuant to the Priority of Payments with respect to each clause thereof;

 

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(x)                                 the number and related principal balances of any Mortgage Assets that have been (or are related to Mortgage Loans that have been) extended or modified during the related Due Period on an individual Mortgage Asset basis;

 

(xi)                              the amount of any remaining unpaid Interest Shortfalls as of the close of business on the Payment Date;

 

(xii)                           a listing of each Mortgage Asset that was the subject of a principal prepayment during the related collection period and the amount of principal prepayment occurring;

 

(xiii)                        the aggregate unpaid principal balance of the Mortgage Assets outstanding as of the close of business on the related Determination Date;

 

(xiv)                       with respect to any Mortgage Asset as to which a liquidation occurred during the related Due Period (other than through a payment in full), (A) the number thereof and (B) the aggregate of all liquidation proceeds which are included in the Payment Account and other amounts received in connection with the liquidation (separately identifying the portion thereof allocable to distributions of the Notes);

 

(xv)                          with respect to any REO Property owned by the Issuer or any Permitted Subsidiary thereof, as to which the Special Servicer determined that all payments or recoveries with respect to the related property have been ultimately recovered during the related collection period, (A) the related Mortgage Asset and (B) the aggregate of all liquidation proceeds and other amounts received in connection with that determination (separately identifying the portion thereof allocable to distributions on the Securities);

 

(xvi)                       the aggregate amount of interest on monthly debt service advances in respect of the Mortgage Assets paid to the Advancing Agent since the prior Payment Date;

 

(xvii)                    a listing of each modification, extension or waiver made with respect to each Mortgage Asset;

 

(xviii)                 an itemized listing of any Special Servicer Fees received from the Special Servicer or any of its affiliates during the related Due Period;

 

(xix)                       the amount of any dividends or other distributions to the Preferred Shares on the Payment Date; and

 

(xx)                          whether any Control Shift Event or Consultation Termination Event has occurred and, if either such event has occurred, whether either such event is continuing.

 

(b)                                 The Note Administrator will post on the Note Administrator’s Website, any report received from the Servicer or Special Servicer detailing any breach of the representations and warranties with respect to any Mortgage Asset by ACRC Lender or any of its affiliates and the steps taken by ACRC Lender or any of its affiliates to cure such breach; a listing of any breach of the representations and warranties with respect to any Mortgage Asset by

 

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ACRC Lender or any of its affiliates and the steps taken by ACRC Lender or any of its affiliates to cure such breach;

 

(c)                                  All information made available on the Note Administrator’s Website will be restricted and the Note Administrator will only provide access to such reports to Privileged Persons in accordance with this Indenture.  In connection with providing access to its website, the Note Administrator may require registration and the acceptance of a disclaimer.

 

(d)                                 Not more than five (5) Business Days after receiving an Issuer Request requesting information regarding a Clean-up Call, a Tax Redemption, an Auction Call Redemption or an Optional Redemption as of a proposed Redemption Date, the Note Administrator shall, subject to its timely receipt of the necessary information to the extent not in its possession, compute the following information and provide such information in a statement (the “Redemption Date Statement”) delivered to the Preferred Shareholders and the Preferred Share Paying Agent:

 

(i)                                     the Aggregate Outstanding Amount of the Notes of the Class or Classes to be redeemed as of such Redemption Date;

 

(ii)                                  the amount of accrued interest due on such Notes as of the last day of the Due Period immediately preceding such Redemption Date;

 

(iii)                               the Redemption Price;

 

(iv)                              the sum of all amounts due and unpaid under Section 11.1(a) (other than amounts payable on the Notes being redeemed or to the Noteholders thereof); and

 

(v)                                 the amount in the Collection Account and the Indenture Accounts (other than the Preferred Share Distribution Account) available for application to the redemption of such Notes.

 

Section 10.8                             Release of Mortgage Assets; Release of Collateral.

 

(a)                                 If no Event of Default has occurred and is continuing and subject to Article 12 hereof, the Issuer may direct the Special Servicer on behalf of the Trustee to release a Pledged Mortgage Asset from the lien of this Indenture, by Issuer Order delivered to the Trustee and the Custodian at least two (2) Business Days prior to the settlement date for any sale of a Pledged Mortgage Asset certifying that (i) it has sold such Pledged Mortgage Asset pursuant to and in compliance with Article 12 or (ii) in the case of a redemption pursuant to Section 9.1, the proceeds from any such sale of Mortgage Assets are sufficient to redeem the Notes pursuant to Section 9.1, and, upon receipt of a Request for Release of such Mortgage Asset from the Special Servicer, the Custodian shall deliver any such Pledged Mortgage Asset, if in physical form, duly endorsed to the broker or purchaser designated in such Issuer Order or to the Issuer if so requested in the Issuer Order, or, if such Pledged Mortgage Asset is represented by a Security Entitlement, cause an appropriate transfer thereof to be made, in each case against receipt of the sales price therefor as set forth in such Issuer Order.  If requested, the Custodian may deliver any such Pledged Mortgage Asset in physical form for examination (prior to receipt of the sales proceeds) in accordance with street delivery custom.  The Custodian shall (i) deliver any

 

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agreements and other documents in its possession relating to such Pledged Mortgage Asset and (ii) the Trustee, if applicable, duly assign each such agreement and other document, in each case, to the broker or purchaser designated in such Issuer Order or to the Issuer if so requested in the Issuer Order.

 

(b)                                 The Issuer (or the Special Servicer on behalf of the Issuer) may deliver to the Trustee and Custodian at least three (3) Business Days prior to the date set for redemption or payment in full of a Pledged Mortgage Asset, an Issuer Order certifying that such Pledged Mortgage Asset is being paid in full.  Thereafter, the Special Servicer, by delivery of a Request for Release, may direct the Custodian to deliver such Pledged Mortgage Asset and the related Mortgage Asset File therefor on or before the date set for redemption or payment, to the Special Servicer for redemption against receipt of the applicable redemption price or payment in full thereof.

 

(c)                                  With respect to any Mortgage Asset subject to a workout or restructuring, the Issuer (or the Special Servicer on behalf of the Issuer) may, by Issuer Order delivered to the Trustee and Custodian at least two (2) Business Days prior to the date set for an exchange, tender or sale, certify that a Mortgage Asset is subject to a workout or restructuring and setting forth in reasonable detail the procedure for response thereto. Thereafter, the Special Servicer may, in accordance with the terms of, and subject to any required consent and consultation obligations set forth in the Servicing Agreement, direct the Custodian, by delivery to the Custodian of a Request for Release, to deliver any Collateral to the Special Servicer in accordance with such Request for Release.

 

(d)                                 The Special Servicer shall remit to the Servicer for deposit into the Collection Account any proceeds received by it from the disposition of a Pledged Mortgage Asset and treat such proceeds as Principal Proceeds, for remittance by the Servicer to the Note Administrator on the first Remittance Date occurring thereafter.  None of the Trustee, the Note Administrator or the Securities Intermediary shall be responsible for any loss resulting from delivery or transfer of any such proceeds prior to receipt of payment in accordance herewith.

 

(e)                                  The Trustee shall, upon receipt of an Issuer Order declaring that there are no Notes Outstanding and all obligations of the Issuer hereunder have been satisfied, release the Collateral from the lien of this Indenture.

 

(f)                                   Upon receiving actual notice of any offer or any request for a waiver, consent, amendment or other modification with respect to any Mortgage Asset, or in the event any action is required to be taken in respect to an Asset Document, the Special Servicer on behalf of the Issuer will promptly notify the Directing Holder, the Operating Advisor and the Servicer of such request, and the Special Servicer shall grant any waiver or consent, and enter into any amendment or other modification pursuant to the Servicing Agreement in accordance with Accepted Servicing Practices.  In the case of any modification or amendment that results in the release of the related Mortgage Asset, notwithstanding anything to the contrary in Section 5.5(a), the Custodian, upon receipt of a Request for Release, shall release the related Mortgage Asset File upon the written instruction of the Servicer or the Special Servicer, as applicable.

 

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Section 10.9                             Information Available Electronically.

 

(a)                                 The Note Administrator shall make available to any Privileged Person the following items (in each case, as applicable, to the extent received by it) by means of the Note Administrator’s Website the following items (to the extent such items were prepared by or delivered to the Note Administrator in electronic format);

 

(i)                                     The following documents, which will initially be available under a tab or heading designated “deal documents”:

 

(1)                                 the final Offering Circular related to the Notes offered thereunder;

 

(2)                                 this Indenture, and any schedules, exhibits and supplements thereto;

 

(3)                                 the CREFC® Loan Setup file;

 

(4)                                 the Issuer Charter,

 

(5)                                 the Servicing Agreement, any schedules, exhibits and supplements thereto:

 

(6)                                 the Preferred Share Paying Agency Agreement, and any schedules, exhibits and supplements thereto;

 

(ii)                                  The following documents will initially be available under a tab or heading designated “periodic reports”:

 

(1)                                 the Monthly Reports prepared by the Note Administrator pursuant to Section 10.7(a); and

 

(2)                                 certain information and reports specified in the Servicing Agreement (including the collection of reports specified by CRE Finance Council  or any successor organization reasonably acceptable to the Note Administrator and the Servicer) known as the “CREFC® Investor Reporting Package” relating to the Mortgage Assets to the extent that the Note Administrator receives such information and reports from the Servicer from time to time;

 

(iii)                               The following documents, which will initially be available under a tab or heading designated “Additional Documents”:

 

(1)                                 inspection reports delivered to the Note Administrator under the terms of the Servicing Agreement; and

 

(2)                                 appraisals delivered to the Note Administrator under the terms of the Servicing Agreement;

 

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(iv)                              The following documents, which will initially be available under a tab or heading designated “special notices”:

 

(1)                                 notice of final payment on the Notes delivered to the Note Administrator pursuant to Section 2.7(d);

 

(2)                                 notice of termination of the Servicer or the Special Servicer;

 

(3)                                 notice of a Servicer Termination Event or a Special Servicer Termination Event, each as defined in the Servicing Agreement and delivered to the Note Administrator under the terms of the Servicing Agreement;

 

(4)                                 notice of the resignation of any party to the Indenture and notice of the acceptance of appointment of a replacement for any such party, to the extent such notice is prepared or received by the Note Administrator;

 

(5)                                 officer’s certificates supporting the determination that any Interest Advance was (or, if made, would be) a Nonrecoverable Interest Advance delivered to the Note Administrator pursuant to Section 10.5(b);

 

(6)                                 any direction received by the Note Administrator from the Directing Holder for the termination of the Special Servicer during any period when such Person is entitled to make such a direction, and any direction of a Majority of the Notes to terminate the Special Servicer in response to the recommendation of the Operating Advisor; and

 

(7)                                 any direction received by the Note Administrator from a Majority of the  Controlling Class or a Supermajority of the Notes for the termination of the Note Administrator or the Trustee pursuant to Section 6.9(c);

 

(v)                                 the “Investor Q&A Forum” pursuant to Section 10.10; and

 

(vi)                              solely to Noteholders and holders of any Preferred Shares, the “Investor Registry” pursuant to Section 10.10.

 

Privileged Persons who execute Exhibit H-2 shall only be entitled to access the Monthly Report, and shall not have access to any other information on the Note Administrator’s Website.

 

The Note Administrator’s Website shall initially be located at www.ctslink.com.  The foregoing information shall be made available by the Note Administrator on the Note Administrator’s Website promptly following receipt. The Note Administrator may change the titles of the tabs and headings on portions of its website, and may re-arrange the files as it deems proper.  The Note Administrator shall have no obligation or duty to verify, confirm or otherwise determine whether the information being delivered is accurate, complete, conforms to the transaction, or otherwise is or is not anything other than what it purports to be. In the event that any such information is delivered or posted in error, the Note Administrator may remove it from the Note Administrator’s Website. The Note Administrator has not obtained and shall not be

 

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deemed to have obtained actual knowledge of any information posted to the Note Administrator’s Website to the extent such information was not produced by the Note Administrator. In connection with providing access to the Note Administrator’s Website, the Note Administrator may require registration and the acceptance of a disclaimer. The Note Administrator shall not be liable for the dissemination of information in accordance with the terms of this Agreement, makes no representations or warranties as to the accuracy or completeness of such information being made available, and assumes no responsibility for such information. Assistance in using the Note Administrator’s Website can be obtained by calling 866-846-4526.

 

Section 10.10                      Investor Q&A Forum; Investor Registry.

 

(a)                                 The Note Administrator shall make the Investor Q&A Forum available to Privileged Persons and prospective purchasers of Notes by means of the Note Administrator’s Website, where Noteholders (including beneficial owners of Notes) may (i) submit inquiries to the 17g-5 Information Provider relating to the Monthly Reports, and submit inquiries to the Servicer, the Special Servicer or, after the occurrence of a Control Shift Event with respect to the Class E Notes, the Operating Advisor (each, a “Q&A Respondent”) relating to any servicing reports prepared by that party, the Mortgage Assets, or the properties related thereto (each an “Inquiry” and collectively, “Inquiries”), and (ii) view Inquiries that have been previously submitted and answered, together with the answers thereto.  Upon receipt of an Inquiry for a Q&A Respondent, the Note Administrator shall forward the Inquiry to the applicable Q&A Respondent, in each case via email within a commercially reasonable period of time following receipt thereof.  Following receipt of an Inquiry, the Note Administrator and the applicable Q&A Respondent, unless such party determines not to answer such Inquiry as provided below, shall reply to the Inquiry, which reply of the applicable Q&A Respondent shall be by email to the Note Administrator.  The Note Administrator shall post (within a commercially reasonable period of time following preparation or receipt of such answer, as the case may be) such Inquiry and the related answer to the Note Administrator’s Website.  If the Note Administrator or the applicable Q&A Respondent determines, in its respective sole discretion, that (i) any Inquiry is not of a type described above, (ii) answering any Inquiry would not be in the best interests of the Issuer or the Noteholders, (iii) answering any Inquiry would be in violation of applicable law, the Asset Documents, this Indenture or the Servicing Agreement, (iv) answering any Inquiry would materially increase the duties of, or result in significant additional cost or expense to, the Note Administrator, the Servicer, the Special Servicer or the Operating Advisor, as applicable or (v) answering any such inquiry would reasonably be expected to result in the waiver of an attorney client privilege or the disclosure of attorney work product, or is otherwise not advisable to answer, it shall not be required to answer such Inquiry and shall promptly notify the Note Administrator of such determination.  The Note Administrator shall notify the Person who submitted such Inquiry in the event that the Inquiry shall not be answered in accordance with the terms of this Agreement.  Any notice by the Note Administrator to the Person who submitted an Inquiry that shall not be answered shall include the following statement: “Because the Indenture and the Servicing Agreement provides that the Note Administrator, Servicer, Special Servicer and Operating Advisor shall not answer an Inquiry if it determines, in its respective sole discretion, that (i) any Inquiry is beyond the scope of the topics described in the Indenture, (ii) answering any Inquiry would not be in the best interests of the Issuer and/or the Noteholders, (iii) answering any Inquiry would be in violation of applicable law or the Asset Documents, this

 

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Indenture or the Servicing Agreement, (iv) answering any Inquiry would materially increase the duties of, or result in significant additional cost or expense to, the Trustee, the Servicer, the Special Servicer or the Operating Advisor, as applicable, or (v) answering any such inquiry would reasonably be expected to result in the waiver of an attorney client privilege or the disclosure of attorney work product, or is otherwise not advisable to answer, no inference shall be drawn from the fact that the Trustee, the Servicer, the Special Servicer or the Operating Advisor has declined to answer the Inquiry.” Answers posted on the Investor Q&A Forum shall be attributable only to the respondent, and shall not be deemed to be answers from any of the Issuer, the Co-Issuer, the Placement Agents or any of their respective Affiliates except the Special Servicer.  None of the Placement Agents, the Issuer, the Co-Issuer, the Servicer, the Special Servicer, the Operating Advisor, the Note Administrator or the Trustee, or any of their respective Affiliates shall certify to any of the information posted in the Investor Q&A Forum and no such party shall have any responsibility or liability for the content of any such information.  The Note Administrator shall not be required to post to the Note Administrator’s Website any Inquiry or answer thereto that the Note Administrator determines, in its sole discretion, is administrative or ministerial in nature.  The Investor Q&A Forum shall not reflect questions, answers and other communications that are not submitted via the Note Administrator’s Website. Additionally, the Note Administrator may require acceptance of a waiver and disclaimer for access to the Investor Q&A Forum.

 

(b)                                 The Note Administrator shall make available to any Noteholder or holder of Preferred Shares and any beneficial owner of a Note, the Investor Registry.  The “Investor Registry” shall be a voluntary service available on the Note Administrator’s Website, where Noteholders and beneficial owners of Notes can register and thereafter obtain information with respect to any other Noteholder or beneficial owner that has so registered.  Any Person registering to use the Investor Registry shall be required to certify that (i) it is a Noteholder, a beneficial owner of a Note or a holder of a Preferred Share and (ii) it grants authorization to the Note Administrator to make its name and contact information available on the Investor Registry for at least 45 days from the date of such certification to other registered Noteholders and registered beneficial owners or Notes.  Such Person shall then be asked to enter certain mandatory fields such as the individual’s name, the company name and email address, as well as certain optional fields such as address, and phone number.  If any Noteholder or beneficial owner of a Note notifies the Note Administrator that it wishes to be removed from the Investor Registry (which notice may not be within forty-five (45) days of its registration), the Note Administrator shall promptly remove it from the Investor Registry.  The Note Administrator shall not be responsible for verifying or validating any information submitted on the Investor Registry, or for monitoring or otherwise maintaining the accuracy of any information thereon.  The Note Administrator may require acceptance of a waiver and disclaimer for access to the Investor Registry.

 

(c)                                  Certain information concerning the Collateral and the Notes, including the Monthly Reports, CREFC® Reports and supplemental notices, shall be provided by the Note Administrator to certain market data providers upon receipt by the Note Administrator from such persons of a certification in the form of Exhibit I hereto, which certification may be submitted electronically via the Note Administrator’s Website.  The Issuer hereby authorizes the provision of such information to Bloomberg, L.P., Trepp, LLC, Intex Solutions, Inc., CMBS.com, Inc., Markit, LLC, Interactive Data Corporation, and Thomson Reuters Corporation.

 

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(d)                                 [Reserved.]

 

(e)                                  The 17g-5 Information Provider will make the “Rating Agency Q&A Forum and Servicer Document Request Tool” available to NRSROs via the 17g-5 Information Providers Website, where NRSROs may (i) submit inquiries to the Trustee relating to the Monthly Report, (ii) submit inquiries to the Servicer or the Special Servicer relating to servicing reports, or the Collateral, except to the extent already obtained, (iii) submit requests for loan-level reports and information, and (iv) view previously submitted inquiries and related answers or reports, as the case may be.  The Trustee, the Note Administrator, the Servicer or the Special Servicer, as applicable, will be required to answer each inquiry, unless it determines that (a) answering the inquiry would be in violation of applicable law, the Accepted Servicing Practices, the Indenture, the Servicing Agreement or the applicable loan documents, (b) answering the inquiry would or is reasonably expected to result in a waiver of an attorney-client privilege or the disclosure of attorney work product, or (c) answering the inquiry would materially increase the duties of, or result in significant additional cost or expense to, such party, and the performance of such additional duty or the payment of such additional cost or expense is beyond the scope of its duties under the Indenture or the Servicing Agreement, as applicable.  In the event that any of the Trustee, the Note Administrator, the Servicer or the Special Servicer declines to answer an inquiry, it shall promptly email the 17g-5 Information Provider with the basis of such declination.  The 17g-5 Information Provider will be required to post the inquiries and the related answers (or reports, as applicable) on the Rating Agency Q&A Forum and Servicer Document Request Tool promptly upon receipt, or in the event that an inquiry is unanswered, the inquiry and the basis for which it was unanswered.  The Rating Agency Q&A Forum and Servicer Document Request Tool may not reflect questions, answers, or other communications which are not submitted through the 17g-5 Website.  Answers and information posted on the Rating Agency Q&A Forum and Servicer Document Request Tool will be attributable only to the respondent, and will not be deemed to be answers from any other Person.  No such other Person will have any responsibility or liability for, and will not be deemed to have knowledge of, the content of any such information.

 

Section 10.11                      Certain Procedures.

 

For so long as the Notes may be transferred only in accordance with Rule 144A, the Issuer will ensure that any Bloomberg screen containing information about the Rule 144A Global Notes includes the following (or similar) language:

 

(i)                                     the “Note Box” on the bottom of the “Security Display” page describing the Rule 144A Global Notes will state: “Iss’d Under 144A”;

 

(ii)                                  the “Security Display” page will have the flashing red indicator “See Other Available Information”; and

 

(b)                                 the indicator will link to the “Additional Security Information” page, which will state that the Notes “are being offered in reliance on the exemption from registration under Rule 144A of the Securities Act to persons who are qualified institutional buyers (as defined in Rule 144A under the Securities Act).

 

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Section 10.12                      Ownership of Accounts.

 

For the avoidance of doubt, the Indenture Accounts (including income, if any, earned on the investments of funds in such account) will be owned by the Issuer for federal income tax purposes. The Issuer shall provide to the Note Administrator (i) an IRS Form W-9 or appropriate IRS Form W-8 no later than the Closing Date, and (ii) any additional IRS forms (or updated versions of any previously submitted IRS forms) or other documentation at such time or times required by applicable law or upon the reasonable request of the Note Administrator as may be necessary (i) to reduce or eliminate the imposition of U.S. withholding taxes and (ii) to permit the Note Administrator to fulfill its tax reporting obligations under applicable law with respect to the Indenture Accounts or any amounts paid to the Issuer.  If any IRS form or other documentation previously delivered becomes obsolete or inaccurate in any respect, Issuer shall timely provide to the Note Administrator accurately updated and complete versions of such IRS forms or other documentation.  The Note Administrator shall have no liability to Issuer or any other person in connection with any tax withholding amounts paid or withheld from the Indenture Accounts pursuant to applicable law arising from the Issuer’s failure to timely provide an accurate, correct and complete IRS Form W-9, an appropriate IRS Form W-8 or such other documentation contemplated under this paragraph.  For the avoidance of doubt, no funds shall be invested with respect to such Indenture Accounts absent the Note Administrator having first received (i) the requisite written investment direction from the Issuer with respect to the investment of such funds, and (ii) the IRS forms and other documentation required by this paragraph.

 

ARTICLE 11

 

APPLICATION OF FUNDS

 

Section 11.1                             Disbursements of Amounts from Payment Account.

 

(a)                                 Notwithstanding any other provision in this Indenture, but subject to the other subsections of this Section 11.1 hereof, on each Payment Date, the Note Administrator shall disburse amounts transferred to the Payment Account in accordance with the following priorities (the “Priority of Payments”):

 

(i)                                     Interest Proceeds. On each Payment Date that is not a Redemption Date, a Stated Maturity Date or a Payment Date following an acceleration of the Notes as a result of the occurrence and continuation of an Event of Default, Interest Proceeds with respect to the related Due Period shall be distributed in the following order of priority:

 

(1)                                 to the payment of taxes and filing fees (including any registered office and government fees) owed by the Issuer, if any;

 

(2)                                 (a) first, to the extent not previously reimbursed, to the Advancing Agent, the aggregate amount of any Nonrecoverable Interest Advances due and payable to such party; and (b) second, to the Advancing Agent, to the extent due and payable to such party, Reimbursement Interest and reimbursement of any outstanding Interest Advances not to exceed, in the case of this clause (b), the

 

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amount that would result in an Interest Shortfall with respect to such Payment Date;

 

(3)                                 (a) first, to the payment to the Note Administrator  and to the Trustee of the accrued and unpaid fees in respect of their services, in the aggregate, equal to U.S. $3,500, payable monthly, (b) second, to the payment of other accrued and unpaid Company Administrative Expenses of the Note Administrator, the Trustee, the Paying Agent and the Preferred Share Paying Agent in an amount not to exceed the sum of $250,000 per annum, and (c) third, to the payment of any other accrued and unpaid Company Administrative Expenses, the aggregate of all such amounts in this clause (c) per Expense Year not to exceed the greater of (i) 0.10% per annum of the Aggregate Outstanding Portfolio Balance and (ii) U.S. $250,000 per annum;

 

(4)                                 to the payment of the Class A Interest Distribution Amount, plus any Class A Defaulted Interest Amount;

 

(5)                                 to the payment of the Class A-S Interest Distribution Amount, plus any Class A-S Defaulted Interest Amount;

 

(6)                                 to the payment of the Class B Interest Distribution Amount, plus any Class B Defaulted Interest Amount;

 

(7)                                 to the payment of the Class C Interest Distribution Amount, and if no Class A Notes, Class A-S Notes and Class B Notes are outstanding, any Class C Defaulted Interest Amount;

 

(8)                                 to the payment of the Class C Deferred Interest Amount (in reduction of the Aggregate Outstanding Amount of the Class C Notes);

 

(9)                                 to the payment of the Class D Interest Distribution Amount, and if no Class A Notes, Class A-S Notes, Class B Notes and Class C Notes are outstanding, any Class D Defaulted Interest Amount;

 

(10)                          to the payment of the Class D Deferred Interest Amount (in reduction of the Aggregate Outstanding Amount of the Class D Notes);

 

(11)                          to the payment of the Class E Interest Distribution Amount, and if no Class A Notes, Class A-S Notes, Class B Notes, Class C Notes and Class D Notes are outstanding, any Class E Defaulted Interest Amount;

 

(12)                          to the payment of the Class E Deferred Interest Amount (in reduction of the Aggregate Outstanding Amount of the Class E Notes);

 

(13)                          to the payment of the Class F Interest Distribution Amount, and if no Class A Notes, Class A-S Notes, Class B Notes, Class C Notes, Class D Notes and Class E Notes are outstanding, any Class F Defaulted Interest Amount;

 

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(14)                          to the payment of the Class F Deferred Interest Amount (in reduction of the Aggregate Outstanding Amount of the Class F Notes);

 

(15)                          to the payment of any Company Administrative Expenses not paid pursuant to clause (3) above in the order specified therein; and

 

(16)                          any remaining Interest Proceeds to be released from the lien of the Indenture and paid (upon standing order of the Issuer) to the Preferred Share Paying Agent for deposit into the Preferred Share Distribution Account for distribution to the holder of the Preferred Shares subject to and in accordance with the provisions of the Preferred Share Paying Agency Agreement.

 

(ii)                                  Principal Proceeds. On each Payment Date that is not a Redemption Date, the Stated Maturity Date or a Payment Date following the occurrence and continuation of an Event of Default, Principal Proceeds with respect to the related Due Period shall be distributed in the following order of priority:

 

(1)                                 to the payment of the amounts referred to in clauses (1) through (4) of Section 11.1(a)(i) in the same order of priority specified therein, without giving effect to any limitations on amounts payable set forth therein, but only to the extent not paid in full thereunder;

 

(2)                                 on the Payment Date after the Purchase Termination Date, in an amount equal to the Unused Proceeds Principal Amortization Amount: (A)  first, to be applied to the payment of principal of the Class A Notes, the Class A-S Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes and the Class F Notes, in that order, each in the amount equal to the amount necessary to cause the Credit Enhancement Level for such Class (after taking into account any other payments of principal scheduled to be made on such Class of Notes on such Payment Date) to equal the Targeted Credit Enhancement Level for such Class; and (B) then, any remaining Unused Proceeds Principal Amortization Amount to be applied as a distribution to the Preferred Share Paying Agent on behalf of the holders of the Preferred Shares;

 

(3)                                 to the payment of principal of the Class A Notes until the Class A Notes have been paid in full;

 

(4)                                 to the payment of the amounts referred to in clause (5) of the “—Application of Interest Proceeds,” but only to the extent not paid in full thereunder;

 

(5)                                 to the payment of principal of the Class A-S Notes until the Class A-S Notes have been paid in full;

 

(6)                                 to the payment of the amounts referred to in clause (6) of the “—Application of Interest Proceeds,” but only to the extent not paid in full thereunder;

 

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(7)                                 to payment of principal of the Class B Notes, until the Class B Notes have been paid in full;

 

(8)                                 to the payment of the amounts referred to in clause (7) of the “—Application of Interest Proceeds,” but only to the extent not paid in full thereunder;

 

(9)                                 to payment of principal of the Class C Notes (including the Class C Deferred Interest Amount), until the Class C Notes have been paid in full;

 

(10)                          to the payment of the amounts referred to in clause (9) of the “—Application of Interest Proceeds,” but only to the extent not paid in full thereunder;

 

(11)                          to payment of principal of the Class D Notes (including the Class D Deferred Interest Amount), until the Class D Notes have been paid in full;

 

(12)                          to the payment of the amounts referred to in clause (11) of the “—Application of Interest Proceeds,” but only to the extent not paid in full thereunder;

 

(13)                          to payment of principal of the Class E Notes (including the Class E Deferred Interest Amount), until the Class E Notes have been paid in full;

 

(14)                          to the payment of the amounts referred to in clause (13) of Section 11.1(a)(i), in the same order of priority set forth therein, but only to the extent not paid in full thereunder;

 

(15)                          to payment of principal of the Class F Notes (including the Class F Deferred Interest Amount), until the Class F Notes have been paid in full;

 

(16)                          to the payment of the amounts referred to in clause (15) of Section 11.1(a)(i), in the same order of priority set forth therein, but only to the extent not paid in full thereunder;

 

(17)                          any remaining Principal Proceeds to be released from the lien of the Indenture and paid (upon standing order of the Issuer) to the Preferred Share Paying Agent for deposit into the Preferred Share Distribution Account for distribution to the holder of the Preferred Shares subject to and in accordance with the provisions of the Preferred Share Paying Agency Agreement.]

 

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(iii)                              Redemption Dates and Payment Dates During Events of Default.  On any Redemption Date, the Stated Maturity Date or a Payment Date following the occurrence and continuation of an Event of Default, Interest Proceeds and Principal Proceeds with respect to the related Due Period will be distributed in the following order of priority:

 

(1)                                 to the payment of the amounts referred to in clauses (1) through (3) of Section 11.1(a)(i) in the same order of priority specified therein, but without giving effect to any limitations on amounts payable set forth therein;

 

(2)                                 to the payment of any out-of-pocket fees and expenses of the Issuer, the Note Administrator and Trustee (including legal fees and expenses) incurred in connection with an acceleration of the Notes following an Event of Default, including in connection with sale and liquidation of any of the Collateral in connection therewith;

 

(3)                                 to the payment of the Class A Interest Distribution Amount, plus, any Class A Defaulted Interest Amount;

 

(4)                                 to the payment in full of principal of the Class A Notes;

 

(5)                                 to the payment of the Class A-S Interest Distribution Amount (including any Class A-S Defaulted Interest Amount);

 

(6)                                 to the payment in full of principal of the Class A-S Notes;

 

(7)                                 to the payment of the Class B Interest Distribution Amount (including any Class B Defaulted Interest Amount);

 

(8)                                 to the payment in full of principal of the Class B Notes;

 

(9)                                 to the payment of the Class C Interest Distribution Amount (including, if no Class A Notes, Class A-S Notes and Class B Notes are outstanding, any Class C Defaulted Interest Amount), plus, any Class C Deferred Interest Amount;

 

(10)                          to the payment in full of the principal of the Class C Notes;

 

(11)                          to the payment of the Class D Interest Distribution Amount (including, if no Class A Notes, Class A-S Notes, Class B Notes and Class C Notes are outstanding, any Class D Defaulted Interest Amount), plus, any Class D Deferred Interest Amount;

 

(12)                          to the payment in full of the principal of the Class D Notes;

 

(13)                          to the payment of the Class E Interest Distribution Amount (including, if no Class A Notes, Class A-S Notes, Class B Notes, Class C Notes and Class D Notes are outstanding, any Class E Defaulted Interest Amount), plus, any Class E Deferred Interest Amount;

 

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(14)                          to the payment in full of the principal of the Class E Notes;

 

(15)                          to the payment of the Class F Interest Distribution Amount (including, if no Class A Notes, Class A-S Notes, Class B Notes, Class C Notes, Class D Notes and Class E Notes are outstanding, any Class F Defaulted Interest Amount), plus, any Class F Deferred Interest Amount;

 

(16)                          to the payment in full of the principal of the Class F Notes;

 

(17)                          any remaining Interest Proceeds and Principal Proceeds to be released from the lien of the Indenture and paid (upon standing order of the Issuer) to the Preferred Share Paying Agent for deposit into the Preferred Share Distribution Account for distribution to the Holder of the Preferred Shares subject to and in accordance with the provisions of the Preferred Share Paying Agency Agreement.

 

(b)                                 On or before the Business Day prior to each Payment Date, the Issuer shall, pursuant to Section 10.3, remit or cause to be remitted to the Note Administrator for deposit in the Payment Account an amount of Cash sufficient to pay the amounts described in Section 11.1(a) required to be paid on such Payment Date.

 

(c)                                  If on any Payment Date the amount available in the Payment Account from amounts received in the related Due Period are insufficient to make the full amount of the disbursements required by any clause of Section 11.1(a)(i), Section 11.1(a)(ii) or Section 11.1(a)(iii), such payments will be made to Noteholders of each applicable Class, as to each such clause, ratably in accordance with the respective amounts of such disbursements then due and payable to the extent funds are available therefor.

 

(d)                                 In connection with any required payment by the Issuer to the Servicer or the Special Servicer pursuant to the Servicing Agreement of any amount scheduled to be paid from time to time between Payment Dates from amounts received with respect to the Mortgage Assets, the Servicer or the Special Servicer, as applicable, shall be entitled to retain or withdraw such amounts from the Collection Account pursuant to the terms of the Servicing Agreement.

 

(e)                                  In connection with any required payment by the Issuer to the Operating Advisor pursuant to the Servicing Agreement of any amount scheduled to be paid from time to time between Payment Dates from amounts received with respect to the Mortgage Assets, such amounts shall be paid to the Operating Advisor pursuant to the terms of the Servicing Agreement.

 

Section 11.2                             Securities Accounts.

 

All amounts held by, or deposited with the Note Administrator in the Funded Companion Participation Acquisition Account pursuant to the provisions of this Indenture shall be invested in Eligible Investments as directed by Issuer Order and credited to the Indenture Account that is the source of funds for such investment.  Any amounts not so invested in Eligible Investments as herein provided, shall be credited to one or more securities accounts established and maintained pursuant to the Securities Account Control Agreement at the Corporate Trust

 

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Office of the Note Administrator, or at another financial institution whose long-term rating is at least equal to “A” by DBRS and “A2” by Moody’s (or, in each case, such lower rating as the Rating Agencies shall approve) and agrees to act as a Securities Intermediary on behalf of the Note Administrator on behalf of the Secured Parties pursuant to an account control agreement in form and substance similar to the Securities Account Control Agreement.

 

ARTICLE 12

 

SALE OF MORTGAGE ASSETS; ACQUISITION OF RELATED FUNDED COMPANION PARTICIPATIONS; FUTURE FUNDING ESTIMATES

 

Section 12.1                             Sales of Mortgage Assets.

 

(a)                                 Except as otherwise expressly permitted or required by this Indenture, the Issuer shall not sell or otherwise dispose of any Mortgage Asset.  The Issuer may sell a Mortgage Asset in the following circumstances:

 

(i)                                     in the event that a Mortgage Asset is a Defaulted Mortgage Asset and the Special Servicer determines in accordance with Accepted Servicing Practices that the sale of such Mortgage Asset is in the best interest of the Noteholders, the Special Servicer may, on behalf of the Issuer, sell such Mortgage Asset;

 

(ii)                                  in the event that the Holder of a majority of the aggregate Notional Amount of the Preferred Shares notifies the Issuer, the Trustee, the Note Administrator, the Servicer and the Special Servicer that it is exercising its right under Section 12.1(g) to purchase a Defaulted Mortgage Asset or an Impaired Mortgage Asset at the Par Purchase Price for such Mortgage Asset, the Special Servicer shall, on behalf of the Issuer, sell such Mortgage Asset to such Holder;

 

(iii)                               in the event the Seller is required to repurchase such Mortgage Asset for the par value thereof plus accrued and unpaid interest thereon as a result of a Material Document Defect or Material Breach of representation or warranty set forth in the Mortgage Asset Purchase Agreement, the Special Servicer shall, on behalf of the Issuer, sell such Mortgage Asset to the Seller; and

 

(iv)                              in the event of a Clean-up Call, Tax Redemption, Optional Redemption or Auction Call Redemption pursuant to Sections 9.1(a), (b), (c), or (d) respectively, the Special Servicer shall, on behalf of the Issuer, sell such Mortgage Asset to the Seller (as defined in the Mortgage Asset Purchase Agreement).

 

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(b)                                 After the Issuer has notified the Trustee and the Note Administrator of an Optional Redemption, a Clean-up Call, a Tax Redemption or an Auction Call Redemption in accordance with Section 9.1, any disposition of Mortgage Assets shall be effected by the Special Servicer upon Issuer Order to the Special Servicer with a copy to the Trustee and the Note Administrator (directly or by means of participation or other arrangement) in a manner reasonably acceptable to the Special Servicer, and the Special Servicer shall sell in such manner, any Mortgage Asset without regard to the foregoing limitations in Section 12.1(a); provided that:

 

(i)                                     the Sale Proceeds therefrom must be used to pay certain expenses and redeem all of the Notes in whole but not in part pursuant to Section 9.1, and upon any such sale the Trustee shall release the lien of such Mortgage Asset, and the Custodian shall, upon receipt of a Request for Release, release the related Mortgage File, pursuant to Section 10.8;

 

(ii)                                  the Special Servicer on behalf of the Issuer shall not sell (and the Trustee shall not be required to release) a Mortgage Asset pursuant to this Section 12.1(b) unless the Special Servicer certifies to the Trustee and the Note Administrator that, based on calculations included in the certification (which shall include the sales prices of the Mortgage Assets), the Sale Proceeds from the sale of one or more of the Mortgage Assets and all Cash and proceeds from Eligible Investments shall be sufficient to pay the Total Redemption Price; and

 

(iii)                               in connection with an Optional Redemption, a Clean-up Call or a Tax Redemption, all the Mortgage Assets to be sold pursuant to this Section 12.1(b) must be sold in accordance with the requirements set forth in Section 9.1(f).

 

(c)                                  In the event that any Notes remain Outstanding as of the Payment Date occurring six months prior to the Stated Maturity Date of the Notes, the Special Servicer will be required to determine whether the proceeds expected to be received on the Collateral prior to the Stated Maturity Date of the Notes will be sufficient to pay in full the principal amount of (and accrued interest on) the Notes on the Stated Maturity Date.  If the Special Servicer determines, in its sole discretion, that such proceeds will not be sufficient to pay the outstanding principal amount of and accrued interest on the Notes (a “Note Liquidation Event”) on the Stated Maturity Date of the Notes, the Issuer will be obligated to liquidate the portion of Mortgage Assets sufficient to pay the remaining principal amount of and interest on the Notes on or before the Stated Maturity Date.  The Mortgage Assets to be liquidated will be selected by the Special Servicer.

 

(d)                                 Under no circumstance shall the Trustee be required to acquire any Mortgage Assets or property related thereto.

 

(e)                                  Any Mortgage Asset sold pursuant to this Section 12.1 shall be released from the lien of this Indenture.

 

(f)                                   Pursuant to the terms of this Agreement, any time when ACRC Holder holds 100% of the Preferred Shares, it may contribute additional Cash and Eligible Investments to the Issuer.

 

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(g)                                  The Holder of a majority of the aggregate Notional Amount of the Preferred Shares shall have an assignable right to purchase any Defaulted Mortgage Asset or Impaired Mortgage Asset for a Cash purchase price equal to the Par Purchase Price for such Mortgage Asset.

 

Section 12.2                             Acquisition of Related Funded Companion Participations.

 

(a)                                 On the Closing Date, the Issuer will deposit the sum of $11,000,000 into the Funded Companion Participation Acquisition Account to be available for the acquisition, if so directed by ACRC Lender (or the Issuer in connection with an acquisition pursuant to clause (b) below), of all or a portion of a Related Funded Companion Participation (which shall be, and hereby are upon acquisition by the Issuer, Granted to the Trustee pursuant to the Granting Clause of this Indenture), subject to the satisfaction of the Acquisition Criteria as of the date of the acquisition of such Related Funded Companion Participation as evidenced by the delivery to the Note Administrator of an officer’s certificate of ACRC Lender confirming the satisfaction of the Acquisition Criteria.

 

(b)                                 The Issuer may also acquire all or a portion of a Related Funded Companion Participation, subject to each of the conditions set forth in clause (a) above and clauses (b) and (c) below, by instructing the Note Administrator by Issuer Order to release amounts in the Funded Companion Participation Acquisition Account directly to the account of the related Obligor, in which case and at which time, the amount so funded shall become an Owned Participation.

 

(c)                                  The acquisition by the Issuer of any Related Funded Companion Participation, and the remittance by the Note Administrator of amounts from the Funded Companion Participation Acquisition Account as consideration for such acquisition shall be conditioned upon receipt by the Note Administrator of the officer’s certificate of ACRC Lender confirming satisfaction of the Acquisition Criteria (upon which the Note Administrator may conclusively rely).

 

(d)                                 In connection with the acquisition of any Related Funded Companion Participations, ACRC Lender shall make the representations and warranties that were made with respect to the related Pari Passu Participation on the Closing Date (subject to such exceptions as are reasonably acceptable to the Special Servicer taking into consideration the exceptions taken by the Seller in connection with the related Pari Passu Participation).

 

Section 12.3                             Acquisition of the Delayed Close Mortgage Asset.

 

(a)                                 On the Closing Date, the Issuer will deposit the sum of $31,700,000 into the Unused Proceeds Account to be available for the acquisition, of all or a portion of Delayed Close Mortgage Loan (which shall be, and hereby are upon acquisition by the Issuer, Granted to the Trustee pursuant to the Granting Clause of this Indenture), subject to confirmation by the Special Servicer that the terms of the Asset Documents evidencing such Mortgage Asset substantially conform to those provided to the Special Servicer as of the date hereof (receipt of which is hereby acknowledged), as evidenced by the delivery to the Trustee and Note Administrator of any officer’s certificate of the Special Servicer confirming the same.

 

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(b)                                 The Issuer may also acquire all or a portion of the Delayed Close Mortgage Asset, subject to each of the conditions set forth in clause (a) above and clauses (b), (c) and (d) below, by instructing the Note Administrator by Issuer Order to release amounts in the Unused Proceeds Account directly to the account of the related Obligor, in which case and at which time, the amount so funded shall become an Owned Participation.

 

(c)                                  The acquisition by the Issuer of the Delayed Close Mortgage Asset, and the remittance by the Note Administrator of amounts from the Unused Proceeds Account as consideration for such acquisition shall be conditioned upon receipt by the Note Administrator of the officer’s certificate described in clause (a) above (upon which the Note Administrator may conclusively rely).

 

(d)                                 In connection with the acquisition of the Delayed Close Mortgage Asset, ACRC Lender shall make the representations and warranties set forth on Exhibit B to the Mortgage Asset Purchase Agreement as of the date of such acquisition (subject to such exceptions as are reasonably acceptable to the Special Servicer).

 

Section 12.4                             Ongoing Future Advance Estimates.

 

(a)                                 The Note Administrator and the Trustee, on behalf of the Noteholders and the Holders of the Preferred Shares, are hereby directed by the Issuer to (i) enter into the Future Funding Agreement and the Future Funding Account Control Agreement, pursuant to which ACRC Lender will agree to pledge certain collateral described therein in order to secure certain future funding obligations of ACRC Lender or its Affiliate, as holder of the Unfunded Future Funding Participations under the Pari Passu Participation Agreements and (ii) administer the rights of the Note Administrator and the secured party, as applicable, under the Future Funding Agreement and the Future Funding Account Control Agreement.  In the event an Access Termination Notice (as defined in the Future Funding Agreement) has been sent by the Note Administrator to the related account bank and for so long as such Access Termination Notice is not withdrawn by the Note Administrator, the Note Administrator shall, pursuant to the direction of the Issuer or the Special Servicer on its behalf, to direct the use of funds on deposit in the Future Funding Reserve Account pursuant to the terms of the Future Funding Agreement.  Neither the Trustee nor the Note Administrator shall have any obligation to ensure that ACRC Holder is depositing or causing to be deposited all amounts into the Future Funding Reserve Account that are required to be deposited therein pursuant to the Future Funding Agreement.

 

(b)                                 Pursuant to the Future Funding Agreement, on the Closing Date, ACRC Lender, in its capacity as the Future Funding Indemnitor, shall deliver to the Servicer, the Operating Advisor, the Note Administrator and the 17g-5 Information Provider a certification of a responsible financial officer of the Future Funding Indemnitor that the Future Funding Indemnitor has Segregated Liquidity at least equal to the Four Month Future Advance Estimate as of the Closing Date.  Thereafter, so long as (i) a subsidiary of ACRC Lender is the holder of any Unfunded Future Funding Participation and (ii) any Class A Notes and Class A-S Notes remain Outstanding, and so long as any future advance obligations remain outstanding under such Unfunded Future Funding Participations, no later than the 5th day (or, if such day is not a Business Day, the next succeeding Business Day) of each calendar month, ACRC Lender shall deliver (which may be by email) to the Servicer, the Operating Advisor, the Note Administrator 

 

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and the 17g-5 Information Provider a certification of a responsible financial officer of the Future Funding Indemnitor that ACRC Lender has Segregated Liquidity at least equal to the Four Month Future Advance Estimate for the immediately following four month period.

 

(c)                                  The Issuer shall cause the Operating Advisor to, within ten (10) days after receipt of the Four Month Future Advance Estimate and supporting documentation from ACRC Lender and posting by the Note Administrator of each Monthly Report, (A) review ACRC Lender’s Four Month Future Advance Estimate and such supporting documentation and other information provided by ACRC Lender in connection therewith, (B) consult with ACRC Lender with respect thereto and make such inquiry, and request such additional information, in each case as is commercially reasonable for the Operating Advisor to perform its obligations described in the following clause (C), and (C) by written notice to the Note Administrator, ACRC Lender, the Issuer and the Future Funding Indemnitor substantially in the form set forth in the Servicing Agreement, either (1) confirm that nothing has come to the attention of the Operating Advisor in the documentation provided by ACRC Lender that in the reasonable opinion of the Operating Advisor would support a determination of a Four Month Future Advance Estimate that is at least 25% higher than ACRC Lender’s Four Month Future Advance Estimate for such period in which case ACRC Lender’s Four Month Future Advance Estimate for such period shall control or (2) deliver its own Four Month Future Advance Estimate for such period.  If the Operating Advisor’s Four Month Future Advance Estimate is at least 25% higher than ACRC Lender’s Four Month Future Advance Estimate for any period, then the Operating Advisor’s Four Month Future Advance Estimate for such period shall control; otherwise, ACRC Lender’s Four Month Future Advance Estimate for such period shall control.

 

(d)                                 No Four Month Future Advance Estimate will be required to be made by ACRC Lender or the Operating Advisor for a calendar month if, by the fifth (5th) day of the calendar-month immediately preceding the beginning of the calendar month in which such Four Month Future Advance Estimate is to be delivered, the Future Funding Indemnitor delivers (which may be by email) to the Special Servicer, the Servicer, the Operating Advisor, the Note Administrator and the 17g-5 Information Provider a certificate of a responsible financial officer of the Future Funding Indemnitor certifying that (i) the Future Funding Indemnitor has Segregated Liquidity equal to at least 100% of the aggregate amount of outstanding future advance obligations (subject to the same exclusions as the calculation of the Four Month Future Advance Estimate) under the Unfunded Future Funding Participations or (ii) no such future funding obligations remain outstanding under the Unfunded Future Funding Participations.  All certifications regarding Segregated Liquidity, any Four Month Future Advance Estimates, or any notices from the Operating Advisor described in (b) and (c) above shall be emailed to the Note Administrator at trustadministrationgroup@wellsfargo.com and cts.cmbs.bond.admin@wellsfargo.com or such other email address as provided by the Note Administrator.

 

(e)                                  The 17g-5 Information Provider shall promptly post to the 17g-5 Website pursuant to Section 14.13(d) of this Agreement, any certification with respect to the holder of the Unfunded Future Funding Participations that is delivered to it in accordance with the Future Funding Agreement.

 

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ARTICLE 13

 

NOTEHOLDERS’ RELATIONS

 

Section 13.1                             Subordination.

 

(a)                                 Anything in this Indenture or the Notes to the contrary notwithstanding, the Issuer and the Holders agree that, for the benefit of the Holders of the Class A Notes that the rights of the Holders of the Class A-S Notes, Class B Notes, Class C Notes, Class D Notes, Class E Notes and Class F Notes shall be subordinate and junior to the Class A Notes to the extent and in the manner set forth in Article XI of this Indenture; provided that on each Redemption Date and each Payment Date as a result of the occurrence and continuation of the acceleration of the Notes following the occurrence of an Event of Default, all accrued and unpaid interest on and outstanding principal on the Class A Notes shall be paid pursuant to Section 11.1(a)(iii) in full in Cash or, to the extent 100% of Holders of the Class A Notes consent, other than in Cash, before any further payment or distribution is made on account of any other Class of Notes, to the extent and in the manner provided in Section 11.1(a)(iii).

 

(b)                                 Anything in this Indenture or the Notes to the contrary notwithstanding, the Issuer and the Holders agree that, for the benefit of the Holders of the Class A-S Notes that the rights of the Holders of the Class B Notes, the Class C Notes, Class D Notes, Class E Notes and Class F Notes shall be subordinate and junior to the Class A-S Notes to the extent and in the manner set forth in Article XI of this Indenture; provided that on each Redemption Date and each Payment Date as a result of the occurrence and continuation of the acceleration of the Notes following the occurrence of an Event of Default, all accrued and unpaid interest on and outstanding principal on the Class A-S Notes shall be paid pursuant to Section 11.1(a)(iii) in full in Cash or, to the extent 100% of Holders of the Class A-S Notes consent, other than in Cash, before any further payment or distribution is made on account of any of the Class B Notes, Class C Notes, Class D Notes, Class E Notes and Class F Notes, to the extent and in the manner provided in Section 11.1(a)(iii).

 

(c)                                  Anything in this Indenture or the Notes to the contrary notwithstanding, the Issuer and the Holders agree that, for the benefit of the Holders of the Class B Notes that the rights of the Holders of the Class C Notes, Class D Notes, Class E Notes and Class F Notes shall be subordinate and junior to the Class B Notes to the extent and in the manner set forth in Article XI of this Indenture; provided that on each Redemption Date and each Payment Date as a result of the occurrence and continuation of the acceleration of the Notes following the occurrence of an Event of Default, all accrued and unpaid interest on and outstanding principal on the Class B Notes shall be paid pursuant to Section 11.1(a)(iii) in full in Cash or, to the extent 100% of Holders of the Class B Notes consent, other than in Cash, before any further payment or distribution is made on account of any of the Class C Notes, Class D Notes, Class E Notes and Class F Notes, to the extent and in the manner provided in Section 11.1(a)(iii).

 

(d)                                 Anything in this Indenture or the Notes to the contrary notwithstanding, the Issuer and the Holders agree that, for the benefit of the Holders of the Class C Notes that the rights of the Holders of the Class D Notes, Class E Notes and Class F Notes shall be subordinate and junior to the Class C Notes to the extent and in the manner set forth in Article XI of this 

 

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Indenture; provided that on each Redemption Date and each Payment Date as a result of the occurrence and continuation of the acceleration of the Notes following the occurrence of an Event of Default, all accrued and unpaid interest on and outstanding principal on the Class C Notes shall be paid pursuant to Section 11.1(a)(iii) in full in Cash or, to the extent 100% of Holders of the Class C Notes consent, other than in Cash, before any further payment or distribution is made on account of any of the Class D Notes, Class E Notes and Class F Notes, to the extent and in the manner provided in Section 11.1(a)(iii).

 

(e)                                  Anything in this Indenture or the Notes to the contrary notwithstanding, the Issuer and the Holders agree that, for the benefit of the Holders of the Class D Notes that the rights of the Holders of the Class E Notes and Class F Notes shall be subordinate and junior to the Class D Notes to the extent and in the manner set forth in Article XI of this Indenture; provided that on each Redemption Date and each Payment Date as a result of the occurrence and continuation of the acceleration of the Notes following the occurrence of an Event of Default, all accrued and unpaid interest on and outstanding principal on the Class D Notes shall be paid pursuant to Section 11.1(a)(iii) in full in Cash or, to the extent 100% of Holders of the Class D Notes consent, other than in Cash, before any further payment or distribution is made on account of any of the Class E Notes and Class F Notes, to the extent and in the manner provided in Section 11.1(a)(iii).

 

(f)                                   Anything in this Indenture or the Notes to the contrary notwithstanding, the Issuer and the Holders agree that, for the benefit of the Holders of the Class E Notes that the rights of the Holders of the Class F Notes shall be subordinate and junior to the Class E Notes to the extent and in the manner set forth in Article XI of this Indenture; provided that on each Redemption Date and each Payment Date as a result of the occurrence and continuation of the acceleration of the Notes following the occurrence of an Event of Default, all accrued and unpaid interest on and outstanding principal on the Class E Notes shall be paid pursuant to Section 11.1(a)(iii) in full in Cash or, to the extent 100% of Holders of the Class E Notes consent, other than in Cash, before any further payment or distribution is made on account of the Class F Notes, to the extent and in the manner provided in Section 11.1(a)(iii).

 

(g)                                  In the event that notwithstanding the provisions of this Indenture, any Holders of any Class of Notes shall have received any payment or distribution in respect of such Class contrary to the provisions of this Indenture, then, unless and until all accrued and unpaid interest on and outstanding principal of all more senior Classes of Notes have been paid in full in accordance with this Indenture, such payment or distribution shall be received and held in trust for the benefit of, and shall forthwith be paid over and delivered to, the Note Administrator, which shall pay and deliver the same to the Holders of the more senior Classes of Notes in accordance with this Indenture.

 

(h)                                 Each Holder of any Class of Notes agrees with the Note Administrator on behalf of the Secured Parties that such Holder shall not demand, accept, or receive any payment or distribution in respect of such Notes in violation of the provisions of this Indenture including Section 11.1(a) and this Section 13.1; provided, however, that after all accrued and unpaid interest on, and principal of, each Class of Notes senior to such Class have been paid in full, the Holders of such Class of Notes shall be fully subrogated to the rights of the Holders of each 

 

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Class of Notes senior thereto.  Nothing in this Section 13.1 shall affect the obligation of the Issuer to pay Holders of such Class of Notes any amounts due and payable hereunder.

 

(i)                                     The Holders of each Class of Notes agree, for the benefit of all Holders of the Notes, not to institute against, or join any other person in instituting against, the Issuer, the Co-Issuer or any Permitted Subsidiary, any petition for bankruptcy, reorganization, arrangement, moratorium, liquidation or similar proceedings under the laws of any jurisdiction before one year and one day or, if longer, the applicable preference period then in effect, have elapsed since the final payments to the Holders of the Notes.

 

Section 13.2                             Standard of Conduct.

 

In exercising any of its or their voting rights, rights to direct and consent or any other rights as a Securityholder under this Indenture, a Securityholder or Securityholders shall not have any obligation or duty to any Person or to consider or take into account the interests of any Person and shall not be liable to any Person for any action taken by it or them or at its or their direction or any failure by it or them to act or to direct that an action be taken, without regard to whether such action or inaction benefits or adversely affects any Securityholder, the Issuer, or any other Person, except for any liability to which such Securityholder may be subject to the extent the same results from such Securityholder’s taking or directing an action, or failing to take or direct an action, in bad faith or in violation of the express terms of this Indenture.

 

ARTICLE 14

 

MISCELLANEOUS

 

Section 14.1                             Form of Documents Delivered to the Trustee and Note Administrator.

 

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an Authorized Officer of the Issuer or the Co-Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such Authorized Officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous.  Any such certificate of an Authorized Officer of the Issuer or the Co-Issuer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, the Issuer, the Co-Issuer, the Servicer or any other Person, stating that the information with respect to such factual matters is in the possession of the Issuer, the Co-Issuer, the Servicer or such other Person, unless such Authorized Officer of the Issuer or the Co-Issuer or such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.  Any Opinion 

 

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of Counsel also may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Authorized Officer of the Issuer or the Co-Issuer, or the Servicer on behalf of the Issuer, certifying as to the factual matters that form a basis for such Opinion of Counsel and stating that the information with respect to such matters is in the possession of the Issuer or the Co-Issuer or the Servicer on behalf of the Issuer, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Whenever in this Indenture it is provided that the absence of the occurrence and continuation of a Default or Event of Default is a condition precedent to the taking of any action by the Trustee or the Note Administrator at the request or direction of the Issuer or the Co-Issuer, then notwithstanding that the satisfaction of such condition is a condition precedent to the Issuer’s or the Co-Issuer’s rights to make such request or direction, the Trustee or the Note Administrator shall be protected in acting in accordance with such request or direction if it does not have knowledge of the occurrence and continuation of such Default or Event of Default as provided in Section 6.1(e).

 

Section 14.2                             Acts of Securityholders.

 

(a)                                 Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Securityholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and the Note Administrator, and, where it is hereby expressly required, to the Issuer and/or the Co-Issuer.  Such instrument or instruments (and the action or actions embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Securityholders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee, the Note Administrator, the Issuer and the Co-Issuer, if made in the manner provided in this Section 14.2.

 

(b)                                 The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Trustee or the Note Administrator deems sufficient.

 

(c)                                  The principal amount and registered numbers of Notes held by any Person, and the date of his holding the same, shall be proved by the Notes Register.  The Notional Amount and registered numbers of the Preferred Shares held by any Person, and the date of his holding the same, shall be proved by the register of members maintained with respect to the Preferred Shares.  Notwithstanding the foregoing, the Trustee and Note Administrator may conclusively rely on an Investor Certification to determine ownership of any Notes.

 

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(d)                                 Any request, demand, authorization, direction, notice, consent, waiver or other action by the Securityholder shall bind such Securityholder (and any transferee thereof) of such Security and of every Security issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Trustee, the Note Administrator, the Preferred Share Paying Agent, the Share Registrar, the Issuer or the Co-Issuer in reliance thereon, whether or not notation of such action is made upon such Security.

 

Section 14.3                             Notices, etc., to the Trustee, the Note Administrator, the Issuer, the Co-Issuer, the Advancing Agent, the Servicer, the Special Servicer, the Operating Advisor, the Preferred Share Paying Agent, the Placement Agents, the Directing Holder and the Rating Agencies.

 

Any request, demand, authorization, direction, notice, consent, waiver or Act of Securityholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to, or filed with:

 

(a)                                 the Trustee by any Securityholder or by the Note Administrator, the Issuer or the Co-Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to and mailed, by certified mail, return receipt requested, hand delivered, sent by overnight courier service guaranteeing next day delivery or by facsimile in legible form, to the Trustee addressed to it at 1100 North Market Street, Wilmington, Delaware 19890, Attention: Adam Scozzafava, Fax: +1 302 630 4140, Email: cmbstrustee@wilmingtontrust.com or at any other address previously furnished in writing to the parties hereto and the Servicing Agreement, and to the Securityholders;

 

(b)                                 the Note Administrator by the Trustee or by any Securityholder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Note Administrator addressed to it at Wells Fargo Bank, National Association, 9062 Old Annapolis Road, Columbia, Maryland 21045, or at any other address previously furnished in writing to the parties hereto and the Servicing Agreement, and to the Securityholders.

 

(c)                                  the Issuer by the Trustee, the Note Administrator or by any Securityholder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Issuer addressed to it at ACRE Commercial Mortgage 2014-FL2 Ltd. at c/o MaplesFS Limited, PO Box 1093, Boundary Hall, Cricket Square, Grand Cayman, KY1 - 1102, Facsimile number: +1 345 945 7100, Attention:  The Directors, or at any other address previously furnished in writing to the Trustee and the Note Administrator by the Issuer, with a copy to the Special Servicer.

 

(d)                                 the Co-Issuer by the Trustee, the Note Administrator or by any Securityholder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Co-Issuer addressed to it in c/o Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, Attention: 

 

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ACRE Commercial Mortgage 2014-FL2 LLC, facsimile number: 302 636 5454, or at any other address previously furnished in writing to the Trustee and the Note Administrator by the Co-Issuer, with a copy to the Special Servicer at its address set forth below;

 

(e)                                  the Advancing Agent by the Trustee, the Note Administrator, the Issuer or the Co-Issuer shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Advancing Agent addressed to it at Wells Fargo Bank, National Association, Commercial Mortgage Servicing, MAC D1086-120, 550 South Tryon Street, 14th Floor, Charlotte, North Carolina, 28202, Attention: ACRE 2014-FL2 Asset Manager, or at any other address previously furnished in writing to the Trustee, the Note Administrator, and the Co-Issuers, with a copy to the Special Servicer at its address set forth below.

 

(f)                                   the Preferred Share Paying Agent shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to and mailed, by certified mail, return receipt requested, hand delivered, sent by overnight courier service guaranteeing next day delivery or by facsimile in legible form, to the Preferred Share Paying Agent addressed to it at its Corporate Trust Office or at any other address previously furnished in writing by the Preferred Share Paying Agent;

 

(g)                                  the Servicer by the Issuer, the Note Administrator, the Co-Issuer or the Trustee shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Servicer addressed to it at Wells Fargo Bank, National Association, Commercial Mortgage Servicing, MAC D1086-120, 550 South Tryon Street, 14th Floor, Charlotte, North Carolina, 28202, Attention: ACRE 2014-FL2 Asset Manager, or at any other address previously furnished in writing to the Issuer, the Note Administrator, the Co-Issuer and the Trustee;

 

(h)                                 the Special Servicer by the Issuer, the Co-Issuer, the Note Administrator, or the Trustee shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Special Servicer addressed to it at Ares Commercial Real Estate Servicer LLC, 2000 Avenue of the Stars, 12th Floor, Los Angeles, California 90067, Attention: Real Estate Servicing, or at any other address previously furnished in writing to the Issuer, the Co-Issuer, the Note Administrator and the Trustee;

 

(i)                                     the Operating Advisor by the Issuer, the Co-Issuer, the Note Administrator, or the Trustee shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Operating Advisor addressed to it at Trimont Real Estate Advisors, Inc., Monarch Tower, 3424 Peachtree Road, Suite 2200, Atlanta, Georgia 30326, Attention: J Gregory Winchester, Email: trustadvisor@trimontrea.com, or at any other address previously furnished in writing to the Issuer, the Co-Issuer, the Note Administrator and the Trustee;

 

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(j)                                    the Rating Agencies, as applicable, by the Issuer, the Co-Issuer, the Servicer, the Note Administrator or the Trustee shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Rating Agencies addressed to (1) Moody’s Investors Service, Inc., 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, Attention: CMBS Surveillance, (or by electronic mail at moodys_cre_cdo_monitoring@moodys.com) and (2) DBRS, Inc., 101 N. Wacker, Suite 100, Chicago, Illinois 60606, Attention: Commercial Mortgage Surveillance, Email: cmbs.surveillance@dbrs.com Fax: (312) 332-3492, or such other address that the Rating Agencies shall designate in the future; provided that any request, demand, authorization, direction, order, notice, consent, waiver or Act of Securityholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to, or filed with the Rating Agencies (“17g-5 Information”) shall be given in accordance with, and subject to, the provisions of Section 14.13 hereof;

 

(k)                                 Wells Fargo Securities, LLC, as a Placement Agent, by the Issuer, the Co-Issuer, the Note Administrator, the Trustee or the Servicer shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form to Wells Fargo Securities, LLC, 375 Park Avenue, 2nd Floor, New York, New York 10152, Attention:  Darren Esser, Fax: (212) 214-5600, Email: darren.esser@wellsfargo.com, with a copy to Brad W. Funk, Esq., Wells Fargo Law Department, D1053-300, 301 South College St., Charlotte, North Carolina 28288, Fax: (704) 715-2378, Email: brad.funk@wellsfargo.com;

 

(l)                                     UBS Securities LLC, as a Placement Agent, by the Issuer, the Co-Issuer, the Note Administrator, the Trustee or the Servicer shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form to 1285 Avenue of the Americas, 8th Floor, New York, New York 10019, Attention:  David Schell, Facsimile: (212) 821-2943, with an electronic copy to UBS Securities LLC, 1285 Avenue of the Americas, New York, New York 10019, Attention: Henry Chung, Facsimile: (212) 821-2943 and with an electronic copy to: UBS Securities LLC, 153 West 51st Street, New York, New York 10019, Attention: Chad Eisenberger, Executive Director & Counsel, Email: chad.eisenberger@ubs.comor at any other address furnished in writing to the Issuer, the Co-Issuer, the Note Administrator and the Trustee;

 

(m)                             Citigroup Global Markets Inc., as a Placement Agent, by the Issuer, the Co-Issuer, the Note Administrator, the Trustee or the Servicer shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form to Citigroup Global Markets Inc., 390 Greenwich Street, 5th Floor, New York, New York 10013, Attention: Paul Vanderslice, Facsimile: (212) 723-8599 and Citigroup Global Markets Inc., 388 Greenwich Street, 19th Floor, New York, New York 10013, Attention: Richard Simpson, Facsimile: (646) 328-2943, with copies by electronic mail to Richard Simpson at Richard.simpson@citi.com and Ryan M. O’Connor at ryan.m.oconnor@citi.com or at any other address furnished in writing to the Issuer, the Co-Issuer, the Note Administrator and the Trustee;

 

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(n)                                 the Directing Holder shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Directing Holder addressed to it at ACRC 2014-FL2 Holder LLC, c/o Ares Management LLC, One North Wacker Drive, 48th Floor, Chicago, IL 60606, Attention: Capital Markets, with a copy to Attention: Legal, or at any other address furnished in writing to the Issuer, the Co-Issuer, the Note Administrator and the Trustee; and

 

(o)                                 the Note Administrator, shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid hand delivered, sent by overnight courier service or by facsimile in legible form to the Corporate Trust Office of the Note Administrator.

 

Section 14.4                             Notices to Noteholders; Waiver.

 

Except as otherwise expressly provided herein, where this Indenture or the Servicing Agreement provides for notice to Holders of Notes of any event,

 

(a)                                 such notice shall be sufficiently given to Holders of Notes if in writing and mailed, first class postage prepaid, to each Holder of a Note affected by such event, at the address of such Holder as it appears in the Notes Register, not earlier than the earliest date and not later than the latest date, prescribed for the giving of such notice;

 

(b)                                 such notice shall be in the English language; and

 

(c)                                  all reports or notices to Preferred Shareholders shall be sufficiently given if provided in writing and mailed, first class postage prepaid, to the Preferred Share Paying Agent.

 

The Note Administrator shall deliver to the Holders of the Notes any information or notice in its possession, requested to be so delivered by at least 25% of the Holders of any Class of Notes.

 

Neither the failure to mail any notice, nor any defect in any notice so mailed, to any particular Holder of a Note shall affect the sufficiency of such notice with respect to other Holders of Notes.  In case by reason of the suspension of regular mail service or by reason of any other cause, it shall be impracticable to give such notice by mail, then such notification to Holders of Notes shall be made with the approval of the Note Administrator and shall constitute sufficient notification to such Holders of Notes for every purpose hereunder.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall be filed with the Trustee and with the Note Administrator, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

In the event that, by reason of the suspension of the regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this 

 

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Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee and the Note Administrator shall be deemed to be a sufficient giving of such notice.

 

Section 14.5                             Effect of Headings and Table of Contents.

 

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 14.6                             Successors and Assigns.

 

All covenants and agreements in this Indenture by the Issuer and the Co-Issuer shall bind their respective successors and assigns, whether so expressed or not.

 

Section 14.7                             Severability.

 

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 14.8                             Benefits of Indenture.

 

Nothing in this Indenture or in the Securities, expressed or implied, shall give to any Person, other than (i) the parties hereto and their successors hereunder and (ii) the Servicer, the Special Servicer, the Operating Advisor, the Preferred Shareholders, the Preferred Share Paying Agent, the Share Registrar and the Noteholders (each of whom shall be an express third party beneficiary hereunder), any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 14.9                             Governing Law.

 

THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

Section 14.10                      Submission to Jurisdiction.

 

Each of the Issuer and the Co-Issuer hereby irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan in The City of New York in any action or proceeding arising out of or relating to the Notes or this Indenture, and each of the Issuer and the Co-Issuer hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State or federal court.  Each of the Issuer and the Co-Issuer hereby irrevocably waives, to the fullest extent that they may legally do so, the defense of an inconvenient forum to the maintenance of such action or proceeding.  Each of the Issuer and the Co-Issuer irrevocably consents to the service of any and all process in any action or proceeding by the mailing or delivery of copies of such process to it at the office of the Issuer’s and the Co-Issuer’s agent set forth in Section 7.2.  Each of the Issuer and the Co-Issuer agrees that a final judgment in any 

 

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such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

Section 14.11                      Counterparts.

 

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

Section 14.12                      Liability of Co-Issuers.

 

Notwithstanding any other terms of this Indenture, the Notes or any other agreement entered into between, inter alios, the Issuer and the Co-Issuer or otherwise, neither the Issuer nor the Co-Issuer shall have any liability whatsoever to the Co-Issuer or the Issuer, respectively, under this Indenture, the Notes, any such agreement or otherwise and, without prejudice to the generality of the foregoing, neither the Issuer nor the Co-Issuer shall be entitled to take any steps to enforce, or bring any action or proceeding, in respect of this Indenture, the Notes, any such agreement or otherwise against the other Co-Issuer or the Issuer, respectively.  In particular, neither the Issuer nor the Co-Issuer shall be entitled to petition or take any other steps for the winding up or bankruptcy of the Co-Issuer or the Issuer, respectively or shall have any claim in respect of any Collateral of the Co-Issuer or the Issuer, respectively.

 

Section 14.13                      17g-5 Information.

 

(a)                                 The Co-Issuers shall comply with their obligations under Rule 17g-5 promulgated under the Exchange Act (“Rule 17g-5”), by their or their agent’s posting on the 17g-5 Website, no later than the time such information is provided to the Rating Agencies, all information that the Issuer or other parties on its behalf, including the Trustee, the Note Administrator, the Servicer and the Special Servicer, provide to the Rating Agencies for the purposes of determining the initial credit rating of the Notes or undertaking credit rating surveillance of the Notes (the “17g-5 Information”); provided that no party other than the Issuer, the Trustee, the Note Administrator, the Servicer or the Special Servicer may provide information to the Rating Agencies on the Issuer’s behalf without the prior written consent of the Special Servicer.  At all times while any Notes are rated by any Rating Agency or any other NRSRO, the Issuer shall engage a third party to post 17g-5 Information to the 17g-5 Website.  The Issuer hereby engages the Note Administrator (in such capacity, the “17g-5 Information Provider”), to post 17g-5 Information it receives from the Issuer, the Trustee, the Note Administrator, the Servicer or the Special Servicer to the 17g-5 Website in accordance with this Section 14.13, and the Note Administrator hereby accepts such engagement.

 

(b)                                 Any information required to be delivered to the 17g-5 Information Provider by any party under this Agreement or the Servicing Agreement shall be delivered to it via electronic mail at 17g5InformationProvider@wellsfargo.com, specifically with a subject reference of “ACRE Commercial Mortgage 2014-FL2 Ltd.” and an identification of the type of information being provided in the body of such electronic mail, or via any alternative electronic mail address following notice to the parties hereto or any other delivery method established or approved by the 17g-5 Information Provider.

 

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(c)                                  The 17g-5 Information Provider shall make available, solely to NRSROs, the following items to the extent such items are delivered to it via email at 17g5informationprovider@wellsfargo.com, specifically with a subject reference of “ACRE Commercial Mortgage 2014-FL2 Ltd.” and an identification of the type of information being provided in the body of the email, or via any alternate email address following notice to the parties hereto or any other delivery method established or approved by the 17g-5 Information Provider if or as may be necessary or beneficial:

 

(i)                                     any statements as to compliance and related Officer’s Certificates delivered under Section 7.9;

 

(ii)                                  any information requested by the Issuer or the Rating Agencies (it being understood the 17g-5 Information Provider shall not disclose on the Note Administrator’s Website which Rating Agency requested such information as provided in Section 14.13);

 

(iii)                               any notice to the Rating Agencies relating to the Special Servicer’s determination to take action without satisfaction of the Rating Agency Condition;

 

(iv)                              any requests for satisfaction of the Rating Agency Condition that are delivered to the 17g-5 Information Provider pursuant to Section 14.14;

 

(v)                                 any summary of oral communications with the Rating Agencies that are delivered to the 17g-5 Information Provider pursuant to Section 14.13(c); provided that the summary of such oral communications shall not disclose which Rating Agency the communication was with;

 

(vi)                              any amendment or proposed supplemental indenture to this Agreement pursuant to Section 8.3; and

 

(vii)                           the “Rating Agency Q&A Forum and Servicer Document Request Tool” pursuant to Section 10.10(e).

 

The foregoing information shall be made available by the 17g-5 Information Provider on the 17g-5 Website or such other website as the Issuer may notify the parties hereto in writing.

 

(d)                                 Information shall be posted on the same Business Day of receipt provided that such information is received by 12:00 p.m. (eastern time) or, if received after 12:00 p.m., on the next Business Day.  The 17g-5 Information Provider shall have no obligation or duty to verify, confirm or otherwise determine whether the information being delivered is accurate, complete, conforms to the transaction, or otherwise is or is not anything other than what it purports to be.  In the event that any information is delivered or posted in error, the 17g-5 Information Provider may remove it from the website.  The 17g-5 Information Provider (and the Trustee) has not obtained and shall not be deemed to have obtained actual knowledge of any information posted to the 17g-5 Website to the extent such information was not produced by it.  Access will be provided by the 17g-5 Information Provider to NRSROs upon receipt of an NRSRO Certification in the form of Exhibit F hereto (which certification may be submitted electronically via the 17g-5 Website).

 

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(e)                                  Upon request of the Issuer or the Rating Agencies, the 17g-5 Information Provider shall post on the 17g-5 Website any additional information requested by the Issuer or the Rating Agencies to the extent such information is delivered to the 17g-5 Information Provider electronically in accordance with this Section 14.13. In no event shall the 17g-5 Information Provider disclose on the 17g-5 Website the Rating Agencies or NRSRO that requested such additional information.

 

(f)                                   The 17g-5 Information Provider shall provide a mechanism to notify each Person that has signed-up for access to the 17g-5 Website in respect of the transaction governed by this Agreement each time an additional document is posted to the 17g-5 Website.

 

(g)                                  Any other information required to be delivered to the Rating Agencies pursuant to this agreement shall be furnished to the Rating Agencies only after the earlier of (x) receipt of confirmation (which may be by email) from the 17g-5 Information Provider that such information has been posted to the 17g-5 Website and (y) two (2) Business Days after such information has been delivered to the 17g-5 Information Provider in accordance with this Section 14.13.

 

(h)                                 Notwithstanding anything to the contrary in this Indenture, a breach of this Section 14.13 shall not constitute a Default or Event of Default.

 

Section 14.14                      Rating Agency Condition.

 

Any request for satisfaction of the Rating Agency Condition made by a Requesting Party pursuant to this Indenture, shall be made in writing, which writing shall contain a cover page indicating the nature of the request for satisfaction of the Rating Agency Condition, and shall contain all back-up material necessary for the Rating Agencies to process such request.  Such written request for satisfaction of the Rating Agency Condition shall be provided in electronic format to the 17g-5 Information Provider in accordance with Section 14.13 hereof and after receiving actual knowledge of such posting (which may be in the form of an automatic email notification of posting delivered by the 17g-5 Website to such party), the Requesting Party shall send the request for satisfaction of such Condition to the Rating Agencies in accordance with the instructions for notices set forth in Section 14.3 hereof.

 

Section 14.15                      Patriot Act Compliance.

 

In order to comply with laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including those relating to the funding of terrorist activities and money laundering (“Applicable Law”), the Trustee and Note Administrator may be required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Trustee or Note Administrator, as the case may be. Accordingly, each of the parties agrees to provide to the Trustee and the Note Administrator, upon its request from time to time, such identifying information and documentation as may be available for such party in order to enable the Trustee and the Note Administrator, as applicable, to comply with Applicable Law.

 

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ARTICLE 15

 

ASSIGNMENT OF THE MORTGAGE ASSET PURCHASE AGREEMENTS

 

Section 15.1                             Assignment of Mortgage Asset Purchase Agreement.

 

(a)                                 The Issuer, in furtherance of the covenants of this Indenture and as security for the Notes and amounts payable to the Secured Parties hereunder and the performance and observance of the provisions hereof, hereby collaterally assigns, transfers, conveys and sets over to the Trustee, for the benefit of the Noteholders (and to be exercised on behalf of the Issuer by persons responsible therefor pursuant to this Agreement and the Servicing Agreement), all of the Issuer’s estate, right, title and interest in, to and under the Mortgage Asset Purchase Agreement (now or hereafter entered into) (an “Article 15 Agreement”), including, without limitation, (i) the right to give all notices, consents and releases thereunder, (ii) the right to give all notices of termination and to take any legal action upon the breach of an obligation of the Seller thereunder, including the commencement, conduct and consummation of proceedings at law or in equity, (iii) the right to receive all notices, accountings, consents, releases and statements thereunder and (iv) the right to do any and all other things whatsoever that the Issuer is or may be entitled to do thereunder; provided, however, that the Issuer reserves for itself a license to exercise all of the Issuer’s rights pursuant to the Article 15 Agreement without notice to or the consent of the Trustee or any other party hereto (except as otherwise expressly required by this Indenture, including, without limitation, as set forth in Section 15.1(f)) which license shall be and is hereby deemed to be automatically revoked upon the occurrence of an Event of Default hereunder until such time, if any, that such Event of Default is cured or waived.

 

(b)                                 The assignment made hereby is executed as collateral security, and the execution and delivery hereby shall not in any way impair or diminish the obligations of the Issuer under the provisions of each of the Article 15 Agreement, nor shall any of the obligations contained in each of the Article 15 Agreement be imposed on the Trustee.

 

(c)                                  Upon the retirement of the Notes and the release of the Collateral from the lien of this Indenture, this assignment and all rights herein assigned to the Trustee for the benefit of the Noteholders shall cease and terminate and all the estate, right, title and interest of the Trustee in, to and under each of the Article 15 Agreement shall revert to the Issuer and no further instrument or act shall be necessary to evidence such termination and reversion.

 

(d)                                 The Issuer represents that it has not executed any assignment of the Article 15 Agreement other than this collateral assignment.

 

(e)                                  The Issuer agrees that this assignment is irrevocable, and that it shall not take any action which is inconsistent with this assignment or make any other assignment inconsistent herewith.  The Issuer shall, from time to time upon the request of the Trustee, execute all instruments of further assurance and all such supplemental instruments with respect to this assignment as the Trustee may specify.

 

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(f)                                   The Issuer hereby agrees, and hereby undertakes to obtain the agreement and consent of the Seller in the Mortgage Asset Purchase Agreement to the following:

 

(i)                                     the Seller consents to the provisions of this collateral assignment and agrees to perform any provisions of this Indenture made expressly applicable to the Seller pursuant to the applicable Article 15 Agreement;

 

(ii)                                  the Seller acknowledges that the Issuer is collaterally assigning all of its right, title and interest in, to and under the Mortgage Asset Purchase Agreement to the Trustee for the benefit of the Noteholders, and the Seller agrees that all of the representations, covenants and agreements made by the Seller in the Article 15 Agreement are also for the benefit of, and enforceable by, the Trustee and the Noteholders;

 

(iii)                               the Seller shall deliver to the Trustee duplicate original copies of all notices, statements, communications and instruments delivered or required to be delivered to the Issuer pursuant to the applicable Article 15 Agreement; and

 

(iv)                              none of the Issuer or the Seller shall enter into any agreement amending, modifying or terminating the applicable Article 15 Agreement, (other than in respect of an amendment or modification to cure any inconsistency, ambiguity or manifest error) or selecting or consenting to a successor without notifying the Rating Agencies and without the prior written consent and written confirmation of the Rating Agencies that such amendment, modification or termination will not cause its then-current ratings of the Notes to be downgraded or withdrawn.

 

ARTICLE 16

 

ADVANCING AGENT

 

Section 16.1                             Liability of the Advancing Agent.

 

The Advancing Agent shall be liable in accordance herewith only to the extent of the obligations specifically imposed upon and undertaken by the Advancing Agent.

 

Section 16.2                             Merger or Consolidation of the Advancing Agent.

 

(a)                                 The Advancing Agent will keep in full effect its existence, rights and franchises as a corporation under the laws of the jurisdiction in which it was formed, and will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture to perform its duties under this Indenture.

 

(b)                                 Any Person into which the Advancing Agent may be merged or consolidated, or any corporation resulting from any merger or consolidation to which the Advancing Agent shall be a party, or any Person succeeding to the business of the Advancing Agent shall be the successor of the Advancing Agent, hereunder, without the execution or filing

 

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of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

 

Section 16.3                             Limitation on Liability of the Advancing Agent and Others.

 

None of the Advancing Agent or any of its affiliates, directors, officers, employees or agents shall be under any liability for any action taken or for refraining from the taking of any action in good faith pursuant to this Indenture, or for errors in judgment; provided, however, that this provision shall not protect the Advancing Agent against liability to the Issuer or Noteholders for any breach of warranties or representations made herein or any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of negligent disregard of obligations and duties hereunder.  The Advancing Agent and any director, officer, employee or agent of the Advancing Agent may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder. The Advancing Agent and any director, officer, employee or agent of the Advancing Agent shall be indemnified by the Issuer pursuant to the priorities set forth in Section 11.1(a) and held harmless against any loss, liability or expense incurred in connection with any legal action relating to this Indenture or the Notes, other than any loss, liability or expense (i) specifically required to be borne by the Advancing Agent pursuant to the terms hereof or otherwise incidental to the performance of obligations and duties hereunder (except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this Indenture); or (ii) incurred by reason of any breach of a representation, warranty or covenant made herein, any misfeasance, bad faith or negligence by the Advancing Agent in the performance of or negligent disregard of, obligations or duties hereunder or any violation of any state or federal securities law.

 

Section 16.4                             Representations and Warranties of the Advancing Agent.

 

The Advancing Agent represents and warrants that:

 

(a)                                 the Advancing Agent is a national banking association duly organized, validly existing and in good standing under the laws of the United States, and is licensed in each state to the extent necessary to perform its duties and obligations under this Indenture in accordance with the terms of this Indenture; the Advancing Agent has the full power, authority and legal right to execute and deliver this Indenture and to perform in accordance herewith; the Advancing Agent has duly authorized the execution, delivery and performance of this Indenture and has duly executed and delivered this Indenture; this Indenture constitutes the valid, legal, binding obligation of the Advancing Agent, except as enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law);

 

(b)                                 neither the execution and delivery of this Indenture, nor the fulfillment of or compliance with the terms and conditions of this Indenture by the Advancing Agent, (v) conflicts with or results in a breach of any of the terms, conditions or provisions of the Advancing Agent’s articles of association, as amended, or by laws; (w) conflicts with or results in a breach of any material agreement or material instrument to which the Advancing Agent is

 

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now a party or by which it (or any of its properties) is bound, or constitutes a default or results in an acceleration under any of the foregoing if compliance therewith is necessary for the Advancing Agent to perform its obligations under this Indenture in accordance with the terms hereof; (x) conflicts with or results in a breach of any legal restriction if compliance therewith is necessary for the Advancing Agent to perform its obligations under this Indenture in accordance with the terms hereof; (y) results in the violation of any law, rule, regulation, order, judgment or decree to which the Advancing Agent or its property is subject if compliance therewith is necessary for the Advancing Agent to perform its obligations under this Indenture in accordance with the terms hereof; or (z) results in the creation or imposition of any lien, charge or encumbrance that would have a material adverse effect upon any of its properties pursuant to the terms of any mortgage, contract, deed of trust or other instrument, or materially impairs the ability of the Advancing Agent to perform its obligations hereunder;

 

(c)                                  no litigation is pending or, to the best of the Advancing Agent’s knowledge, threatened, against the Advancing Agent that would materially and adversely affect the execution, delivery or enforceability of this Indenture or the ability of the Advancing Agent to perform any of its obligations under this Indenture in accordance with the terms hereof;

 

(d)                                 no consent, approval, authorization or order of, or registration or filing with, or notice to, any court or governmental agency or body having jurisdiction or regulatory authority over the Advancing Agent is required for (x) the Advancing Agent’s execution and delivery of this Indenture, or (y) the consummation of the transactions of the Advancing Agent contemplated by this Indenture, or, to the extent required, such consent, approval, authorization, order, registration, filing or notice has been obtained, made or given (as applicable), except that the Advancing Agent may not be duly qualified to transact business as an entity or licensed in one or more states if such qualification or licensing is not necessary for the Advancing Agent to perform its obligations under this Indenture in accordance with the terms hereof; and

 

(e)                                  the Advancing Agent is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency, which, in the judgment of the Advancing Agent, will have consequences that would materially and adversely affect the financial condition or operations of the Advancing Agent or its properties taken as a whole or its performance hereunder.

 

Section 16.5                             Resignation and Removal; Appointment of Successor.

 

(a)                                 No resignation or removal of the Advancing Agent and no appointment of a successor Advancing Agent pursuant to this Article 16 shall become effective until the acceptance of appointment of the successor Advancing Agent pursuant to Section 16.6; provided that, notwithstanding any provision herein or in the Servicing Agreement, in no event shall Wells Fargo Bank, National Association continue as Advancing Agent after the effectiveness of the termination or resignation of Wells Fargo Bank, National Association as Servicer, and the effectiveness of the termination or resignation of Wells Fargo Bank, National Association as Advancing Agent shall be concurrent with the effectiveness of the termination or resignation of Wells Fargo Bank, National Association as Servicer.

 

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(b)                                 The Advancing Agent may, subject to Section 16.5(a), resign at any time by giving written notice thereof to the Issuer, the Co-Issuer, the Note Administrator, the Trustee, the Servicer, the Operating Advisor, the Noteholders and the Rating Agencies.

 

(c)                                  The Advancing Agent may be removed at any time by Act of Supermajority of the Preferred Shares upon written notice delivered to the Trustee and to the Issuer and the Co-Issuer.

 

(d)                                 If Wells Fargo Bank, National Association is terminated as Servicer as described in the Servicing Agreement or resigns as Servicer or if Wells Fargo Bank, National Association is otherwise no longer the Servicer, it will also be terminated in its capacity as Advancing Agent concurrently with its termination or resignation as Servicer.  In the event the Servicer is terminated or resigns, the Trustee (in the case of a termination) or the resigning Servicer (in the case of a resignation) will be required to replace the Servicer with a successor Servicer that satisfies the requirements set forth in the Servicing Agreement (which replacement Servicer will also be the successor Advancing Agent), including satisfaction of the Rating Agency Condition.  However, if after reasonable efforts, the Trustee or resigning Servicer, as applicable, is unable to identify a successor Servicer that is also willing and able to be the successor Advancing Agent, then the Trustee or resigning Servicer, as applicable, may replace the Advancing Agent with an institution separate and apart from the successor Servicer, subject to the satisfaction of certain conditions set forth in the Servicing Agreement, including the Rating Agency Condition.  In such a case, the successor Servicer and the successor Advancing Agent may agree to payment of an Advancing Agent fee, which will be the sole responsibility of the Servicer to be paid out of the Servicing Fee.

 

(e)                                  If the Advancing Agent fails to make a required Interest Advance and it has not determined such Interest Advance to be a Nonrecoverable Interest Advance, the Trustee shall make such Interest Advance in accordance Section 10.5 hereof.

 

(f)                                   Subject to Section 16.5(d), if the Advancing Agent shall resign or be removed, upon receiving such notice of resignation or removal, the Issuer and the Co-Issuer shall promptly appoint a successor advancing agent by written instrument, in duplicate, executed by an Authorized Officer of the Issuer and an Authorized Officer of the Co-Issuer, one copy of which shall be delivered to the Advancing Agent so resigning and one copy to the successor Advancing Agent, together with a copy to each Noteholder, the Trustee, the Note Administrator, the Servicer, the Special Servicer and the Operating Advisor; provided that such successor Advancing Agent shall be appointed only subject to satisfaction of the Rating Agency Condition, upon the written consent of a Majority of Preferred Shareholders, and upon the acceptance of its role as successor Servicer pursuant to the terms of the Servicing Agreement.  If no successor Advancing Agent shall have been appointed and an instrument of acceptance by a successor Advancing Agent shall not have been delivered to the Advancing Agent within 30 days after the giving of such notice of resignation, the resigning Advancing Agent, the Trustee, the Note Administrator, or any Preferred Shareholder, on behalf of himself and all others similarly situated, may petition any court of competent jurisdiction for the appointment of a successor Advancing Agent.

 

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(g)                                  The Issuer and the Co-Issuer shall give prompt notice of each resignation and each removal of the Advancing Agent and each appointment of a successor Advancing Agent by mailing written notice of such event by first class mail, postage prepaid, to the Rating Agencies, the Trustee, the Note Administrator, and to the Holders of the Notes as their names and addresses appear in the Notes Register.

 

Section 16.6                             Acceptance of Appointment by Successor Advancing Agent.

 

(a)                                 Every successor Advancing Agent appointed hereunder shall execute, acknowledge and deliver to the Issuer, the Co-Issuer, the Servicer, the Special Servicer, the Trustee, the Operating Advisor, the Note Administrator, and the retiring Advancing Agent an instrument accepting such appointment.  Upon delivery of the required instruments, the resignation or removal of the retiring Advancing Agent shall become effective and such successor Advancing Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts, duties and obligations of the retiring Advancing Agent.

 

(b)                                 No appointment of a successor Advancing Agent shall become effective unless (1) the Rating Agency Condition has been satisfied with respect to the appointment of such successor Advancing Agent and (2) such successor has a long-term unsecured debt rating of at least “A” by DBRS and “A2” by Moody’s, and whose short-term unsecured debt rating is at least “R-1” from DBRS and “P-1” from Moody’s.

 

Section 16.7                             Removal and Replacement of Successor Advancing Agent.

 

The Note Administrator shall replace any such successor Advancing Agent whose long-term unsecured debt rating at any time becomes lower than “A” by DBRS and “A2” by Moody’s, and whose short-term unsecured debt rating at any time becomes lower than “A-1” from DBRS and “P-1” from Moody’s, with a successor Advancing Agent that has a long-term unsecured debt rating of at least “A” by DBRS and “A2” by Moody’s, and a short-term unsecured debt rating is at least “A-1” from DBRS and “P-1” from Moody’s.

 

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

 

 

	
 
    	
ACRE   COMMERCIAL MORTGAGE 2014-FL2 LTD., as Issuer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Executed   as a deed
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Betsy Mortel
    
	
 
    	
 
    	
Name:   Betsy Mortel
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ACRE COMMERCIAL MORTGAGE 2014-FL2 LLC, as   Co-Issuer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Donald J. Puglisi
    
	
 
    	
 
    	
Name:   Donald J. Puglisi
    
	
 
    	
 
    	
Title:   Manager
    

 

 

	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as   Advancing Agent
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Joseph Newell III
    
	
 
    	
 
    	
Name:   Joseph Newell III
    
	
 
    	
 
    	
Title:  Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Note   Administrator
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Manon D. Spinette
    
	
 
    	
 
    	
Name:   Manon D. Spinette
    
	
 
    	
 
    	
Title:   Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Adam B. Scozzafava
    
	
 
    	
 
    	
Name:   Adam B. Scozzafava
    
	
 
    	
 
    	
Title:   Vice President

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