Document:

ex10-111.htm

EXHIBIT 10.111

 

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT OF

 

GRT MALL JV LLC

March 26, 2010

 

 

 

 

Table of Contents

 

Page

 

	
ARTICLE 1 DEFINITIONS

	
2

	
Section 1.1.   Definitions

	
2

	
Section 1.2.   Captions, References

	
12

	
ARTICLE 2 ORGANIZATIONAL MATTERS; PURPOSE; TERM

	
12

	
Section 2.1.   Formation of the Company

	
12

	
Section 2.2.   Name

	
12

	
Section 2.3.   Registered Office; Registered Agent; Principal Office

	
12

	
Section 2.4.   Foreign Qualification

	
12

	
Section 2.5.   Purpose and Scope

	
12

	
Section 2.6.   Term

	
13

	
ARTICLE 3 MEMBERS; DISPOSITIONS OF INTERESTS

	
13

	
Section 3.1.   Members

	
13

	
Section 3.2.   Dispositions of Interests

	
13

	
Section 3.3.   Transfer Subject to ROFO.

	
15

	
Section 3.4.   Other Transfer Provisions.

	
17

	
Section 3.5.   Tag-Along Rights.

	
17

	
Section 3.6.   Resignation

	
17

	
Section 3.7.   Information

	
18

	
Section 3.8.   Liability to Third Parties

	
18

	
Section 3.9.   ERISA Matters.

	
18

	
ARTICLE 4 MANAGEMENT OF THE COMPANY

	
18

	
Section 4.1.   Management

	
18

	
Section 4.2.   Duties of the Administrative Member.

	
22

 

 

 

 

	
Section 4.3.   Business Plan and Operating Budget

	
23

	
Section 4.4.   Meetings of Members

	
23

	
Section 4.5.   Removal of Administrative Member

	
24

	
Section 4.6.   Property Management Agreement.

	
26

	
Section 4.7.   Intentionally Omitted.

	
26

	
Section 4.8.   Cooperation by Administrative Member.

	
26

	
Section 4.9.   Compensation of Members

	
26

	
Section 4.10.  Transactions with Affiliates

	
26

	
Section 4.11.  Indemnification; Reimbursement of Expenses; Insurance

	
26

	
Section 4.12.  Conflicts of Interest.

	
27

	
Section 4.13.  Blackstone Right to Cause Sale; Glimcher ROFO.

	
27

	
ARTICLE 5 ACCOUNTING AND REPORTING

	
29

	
Section 5.1.   Fiscal Year, Accounts, Reports

	
29

	
Section 5.2.   Financial Accounting Matters

	
30

	
ARTICLE 6  CAPITAL CONTRIBUTIONS

	
30

	
Section 6.1.   Initial Capital Contributions

	
30

	
Section 6.2.   Additional Capital Contributions

	
31

	
Section 6.3.   Failure to Make Contributions

	
32

	
Section 6.4.   Return of Contributions

	
32

	
Section 6.5.   Balances

	
32

	
ARTICLE 7 FINANCING

	
32

	
Section 7.1.   Financing

	
32

	
Section 7.2.   Cooperation; Securitized Debt

	
34

	
ARTICLE 8 DISTRIBUTIONS

	
34

	
Section 8.1.   Distributions in General

	
34

 

 

 

 

	
Section 8.2.   Miscellaneous.

	
34

	
Section 8.3.   Off-Set for Obligations under Purchase Agreement..

	
35

	
ARTICLE 9 CAPITAL ACCOUNTS, ALLOCATIONS, AND TAX MATTERS

	
35

	
Section 9.1.   Capital Accounts

	
35

	
Section 9.2.   Adjustment of Gross Asset Value

	
36

	
Section 9.3.   Profits, Losses and Distribution Shares of Tax Items

	
37

	
Section 9.4.   Tax Returns

	
40

	
Section 9.5.   Tax Elections

	
40

	
Section 9.6.   Tax Matters Member

	
40

	
ARTICLE 10   DISSOLUTION, LIQUIDATION, AND TERMINATION

	
41

	
Section 10.1.   Dissolution, Liquidation, and Termination Generally

	
41

	
Section 10.2.   Liquidation and Termination

	
42

	
Section 10.3.   Deficit Capital Accounts

	
42

	
Section 10.4.   Cancellation of Certificate

	
42

	
ARTICLE 11  MISCELLANEOUS PROVISIONS

	
43

	
Section 11.1.   Notices

	
43

	
Section 11.2.   Governing Law

	
43

	
Section 11.3.   Entireties; Amendments

	
43

	
Section 11.4.   Waiver

	
43

	
Section 11.5.   Severability

	
43

	
Section 11.6.   Ownership of Property and Right of Partition

	
44

	
Section 11.7.   Involvement of Members in Certain Proceedings

	
44

	
Section 11.8.   Use of Blackstone Name; Confidentiality; Press Releases.

	
44

	
Section 11.9.   Interest

	
45

	
Section 11.10  Attorneys’ Fees

	
45

 

 

 

 

	
Section 11.11.   Counterparts

	
45

	
Section 11.12.   Company Tax Treatment

	
45

	
Section 11.13.   REIT Covenant

	
45

	
ARTICLE 12 REPRESENTATIONS AND WARRANTIES

	
45

	
Section 12.1.   Glimcher Member Representations

	
45

	
Section 12.2.   Blackstone Member Representations

	
46

 

	Schedules:	 
	Schedule A 	Members
	Schedule B-1   	Legal Description- Lloyd Center Property
	Schedule B-2	Legal Description- Westshore Property
	 	 
	Exhibits:	 
	Exhibit A    	Form of Management Rights Letter
	Exhibit B  	Form of Interest ROFO Sale Documents
	Exhibit C	Form of Asset ROFO Sale Documents
	Exhibit D 	Form of Asset ROFO Deemed Liquidation Sale Documents

 

 

 

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT OF

GRT MALL JV LLC

This Amended and Restated Limited Company Agreement is entered into as of March 26, 2010 (the “Effective Date”), between the members set forth on Schedule A hereto (each, a “Member” and collectively, the “Members”).

 

Preliminary Statement

A.           A certificate of formation for GRT MALL JV LLC, a Delaware limited liability company (the “Company”) was filed with the Secretary of State for the State of Delaware on January 29, 2010 (the “Certificate”).  Glimcher Properties Limited Partnership, a Delaware limited partnership (“GPLP”), as the initial sole member, entered into that certain Limited Liability Company Agreement of the Company dated January 29, 2010 (the “Original LLC Agreement”).

 

B.           GPLP is the owner of (x) 100% of the membership interests (the “LC Owner Interest”) in LC PORTLAND, LLC, a Delaware limited liability company (“LC Owner”), and (y) 100% of the membership interests (the “Westshore Owner Interest”; together with the LC Owner Interest, collectively, the “Owner Membership Interests”) in GLIMCHER WESTSHORE, LLC, a Delaware limited liability company (“Westshore Owner”; together with LC Owner, each a “Property Owner” and, collectively, the “Property Owners”).

 

C.           LC Owner is the owner of the land, buildings and other improvements known as Lloyd Center in Portland, Oregon and more particularly described on Schedule B-1 attached hereto (the “Lloyd Center Property”).  Westshore Owner is the owner of the land, buildings and other improvements known as Westshore Plaza in Tampa, Florida and more particularly described on Schedule B-2 attached hereto (the “Westshore Property”; together with the Lloyd Center Property, each, a “Property”, and, collectively, the “Properties”).

 

D.           GPLP and the Blackstone Member are parties to that certain Agreement of Purchase and Sale dated as of November 5, 2009, as amended by that certain First Amendment to Agreement of Purchase and Sale dated January 14, 2010 and that certain Second Amendment to Agreement of Purchase and Sale dated March 18, 2010 (as amended, the “Purchase Agreement”) between the GPLP, as seller, and the Blackstone Member, as buyer, pursuant to which, upon the terms and conditions set forth therein, GPLP has agreed to (i) contribute the Owner Membership Interests to the Company, and (ii) immediately thereafter, sell 60% of the Interests in the Company to the Blackstone Member, upon the terms and conditions set forth in the Purchase Agreement.

 

E.           On the date hereof, GPLP has first contributed all of its right, title and interest in the Owner Membership Interests to the Company, then conveyed 60% of the Interests in the Company to the Blackstone Member, and then contributed all its remaining Interests in the Company (after conveying 60% of the Interests in the Company to Blackstone Member) to the Glimcher Member.

 

 

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F.           The Members desire to execute this Amended and Restated Limited Liability Company Agreement for purposes of evidencing the admission of the Blackstone Member as a Member in the Company and as the Managing Member of the Company and superseding, amending and restating the Original LLC Agreement in its entirety as more particularly set forth herein.

 

Agreement

Accordingly, in consideration of the mutual promises and agreements herein made and intending to be legally bound hereby, the parties hereto agree that the Original LLC Agreement is amended, restated and superseded in its entirety as follows:

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.1.   Definitions.  As used in this Agreement, the following terms shall have the following meanings:

 

“Act” means the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101, et. seq., as it may be amended from time to time, and any successor to such statute.

 

“Additional Capital Contributions” has the meaning for such term set forth in Section 6.2(a).

 

“Adjusted Capital Account” means, with respect to a Member, such Member’s Capital Account as of the end of each taxable year, as the same is specially computed to reflect the adjustments required or permitted to be taken into account in applying Regulations Section 1.704-1(b)(2)(ii)(d) (including adjustments for Company Minimum Gain and Member Nonrecourse Debt Minimum Gain) and taking into account any amounts such Member is obligated or deemed obligated to restore pursuant to any provision of this Agreement and the Regulations.

 

“Adjusted Capital Account Deficit” means, for any Member, the deficit balance, if any, in that Member’s Adjusted Capital Account.

 

“Administrative Member” means the Glimcher Member, and each Person hereafter designated as the Administrative Member in accordance with this Agreement, until such Person ceases to be the Administrative Member of the Company.

 

 “Affiliate” means with respect to a Person, another Person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the Person in question.  The term “control” as used in the preceding sentence means, with respect to a Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).

 

 

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“Affiliate Service Contracts” means contracts between the Property Owners and Affiliates of the Glimcher Member to provide housekeeping and/or security services to the Properties.

 

“Agreement” means this Amended and Restated Limited Liability Company Agreement, including the Exhibits and Schedules attached hereto, as the same may be amended, modified and/or supplemented from time to time in accordance with the provisions hereof.

 

“Asset Disposition” has the meaning for such term set forth in Section 4.13(a).

 

“Asset ROFO” has the meaning for such term set forth in Section 4.13(a).

 

“Asset ROFO Closing Date” has the meaning for such term set forth in Section 4.13(c).

 

“Asset ROFO Deemed Liquidation Sale Documents” has the meaning for such term set forth in Section 4.13(d).

 

“Asset ROFO Election Notice” has the meaning for such term set forth in Section 4.13(a).

 

“Asset ROFO Escrow Agent” has the meaning for such term set forth in Section 4.13(b).

 

“Asset ROFO Down Payment” has the meaning for such term set forth in Section 4.13(b).

 

“Asset ROFO Notice” has the meaning for such term set forth in Section 4.13(a).

 

“Asset ROFO Purchase Agreement” has the meaning for such term set forth in Section 4.13(e).

 

“Asset ROFO Purchase Price” has the meaning for such term set forth in Section 4.13(a).

 

“Asset ROFO Response Period” has the meaning for such term set forth in Section 4.13(a).

 

“Asset ROFO Rejection Notice” has the meaning for such term set forth in Section 4.13(a).

 

“Asset ROFO Sale Documents” has the meaning for such term set forth in Section 4.13(c).

 

“Bankruptcy” means, with respect to a Person, the occurrence of (i) an assignment by the Person for the benefit of creditors; (ii) the filing by the Person of a voluntary petition in bankruptcy; (iii) the entry of a judgment by any court that the Person is bankrupt or insolvent, or the entry against the Person of an order for relief in any bankruptcy or insolvency proceeding; (iv) the filing of a petition or answer by the Person seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation; (v) the filing by the Person of an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding for reorganization or of a similar nature; (vi) the consent or acquiescence of the Person to the appointment of a trustee, receiver or liquidator of the Person or of all or any substantial part of its properties; or (vii) any other event that, if not for the provisions of this Agreement, would cause the Person to cease to be a member of a limited liability company under the Act.

 

 

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“Blackstone” or “Blackstone Member” means BRE/GRJV Holdings LLC, a Delaware limited liability company, and any permitted assignee or successor to any of the membership interests currently held by such Person, for so long as such Person is a Member.

 

“Blackstone Existing Lloyd’s Guaranty” has the meaning for such term set forth in Section 7.1(e).

 

“Blackstone Financing Guaranties” has the meaning for such term set forth in Section 7.1(e).

 

“Blackstone Future Financing Guaranties” has the meaning for such term set forth in Section 7.1(e).

 

“Blackstone Guarantor” has the meaning for such term set forth in Section 7.1(e).

 

“Blackstone Major Decisions” has the meaning for such term set forth in Section 4.1(c).

 

“Blackstone Purchase Agreement Liabilities” means all indemnification and other liabilities of the Blackstone Member or its Affiliates under Section 11.2 of the Purchase Agreement, which expressly survive the Closing (as defined in the Purchase Agreement).

 

 “BREP” means Blackstone Real Estate Partners VI L.P., and the parallel investment funds which collectively comprise the private equity fund commonly known as Blackstone Real Estate Partners VI from time to time.

 

“BREP VI” means Blackstone Real Estate Partners VI L.P., Blackstone Real Estate Partners VI.TE.1 L.P., Blackstone Real Estate Partners VI.TE.2 L.P., Blackstone Real Estate Partners VI.(AV) L.P., and Blackstone Real Estate Holdings VI L.P., each a Delaware limited partnership.

 

“Business Day” means any day other than Saturday, Sunday, or other day on which commercial banks in New York are authorized or required to close under the laws of the State of New York.

 

“Business Plan” means, at any time, the strategic annual plan duly prepared by the Property Manager and approved by the Blackstone Member in accordance with this Agreement and in effect at such time for the operation, development, renovation, refurbishment, marketing, leasing, financing/refinancing and/or disposition of each Property, which shall include and incorporate an Operating Budget.

 

 

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“Capital Account” has the meaning for such term set forth in Section 9.1(a).

 

“Capital Contribution” means, with respect to each Member, the amount of capital contributed or deemed contributed to the Company by that Member, including all Additional Capital Contributions.

 

“Capital Proceeds” means funds of the Company arising from a Capital Transaction, less any cash which is applied to (i) the payment of transaction costs and expenses relating to such Capital Transaction, (ii) the repayment of debt of the Company, (iii) the repair, restoration or other improvement of assets of the Company which is required under any contractual obligation of the Company and (iv) the establishment of holdbacks or other similar reserves in connection with the sale of a Property or as otherwise approved by the Members as a Unanimous Major Decision.  “Capital Proceeds” shall also mean any of the foregoing which are received by a Property Owner, as and when received by the Company as dividends or distributions.

 

“Capital Sharing Ratios” of a Member means, at any time, the ratio (expressed as a percentage) of (a) the Capital Contributions of such Member to (b) the aggregate Capital Contributions of all of the Members.

 

“Capital Transaction” means the sale, financing, refinancing or similar transaction of or involving one or more of the Properties or the interests owned, directly or indirectly, by the Company in any subsidiary, and any condemnation awards, payment of title insurance proceeds or payment of casualty loss insurance proceeds (other than business interruption or rental loss insurance proceeds) received by the Company to the extent not used for reconstruction of all or any portion of one or more of the Properties.

 

“Certificate” has the meaning given thereto in the paragraph A of the Preliminary Statement of this Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any corresponding provisions of succeeding law.

 

“Company” has the meaning given thereto in paragraph A of the Preliminary Statement of this Agreement.

 

“Company Minimum Gain” has the meaning assigned to “partnership minimum gain” in Regulations Section 1.704-2(d).

 

“Deemed Liquidation” means a deemed sale by the Property Owners of the Properties for the Asset ROFO Purchase Price, the payment of all liabilities of the Company and the Property Owners (including any prepayment fees or defeasance costs in connection with any Indebtedness), followed immediately by a distribution by the Company to the Members of the resulting Capital Proceeds from such sale, together with all other assets of the Company and the Property Owners, in accordance with Section 10.2.

 

 

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“Depreciation” means, for each taxable year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for the year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of the year or other period, Depreciation will be an amount which bears the same ratio to the beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for the year or other period bears to the beginning adjusted tax basis, provided that if the federal income tax depreciation, amortization, or other cost recovery deduction for the year or other period is zero, Depreciation will be determined with reference to the beginning Gross Asset Value using any method reasonably agreed to by the Members.

 

“Effective Date” has the meaning for such term set forth in the Introductory Paragraph to this Agreement.

 

“Emergency” has the meaning for such term set forth in Section 6.2(b).

 

“Encumbrance” has the meaning for such term set forth in Section 3.2(a).

 

“Existing Loans” means, collectively, the Westshore Loan and the Lloyd Center Loan.  As the context requires, “Existing Loan” shall mean the Westshore Loan or the Lloyd Center Loan, as applicable.

 

“Excluded Liabilities” means any and all costs, fees, expenses, damages, claims, causes of actions or other liabilities arising out of or in connection with any environmental or similar condition at the Westshore Property which is known to exist on the date of this Agreement.

 

“Financing” has the meaning for such term set forth in Section 7.1(b).

 

“Funding Members” has the meaning for such term set forth in Section 6.3.

 

“Funding Notice” has the meaning for such term set forth in Section 6.2(a).

 

“Glimcher Financing Guaranties” has the meaning for such term set forth in Section 7.1(c).

 

“Glimcher Future Financing Guaranties” has the meaning for such term set forth in Section 7.1(c).

 

“Glimcher Guaranty Indemnity Liabilities” means all indemnification and other liabilities of the Glimcher Member under Section 7.1(e) of this Agreement.

 

“Glimcher Leasing Agent” means Glimcher Development Corporation, a Delaware corporation.

 

“Glimcher Member” means GRT WSP-LC Holdings LLC, a Delaware limited liability company, and any permitted assignee or successor to any of the membership interests currently held by such Person, for so long as such Person is a Member.

 

 

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“Glimcher Property Manager” means GPLP.

 

“Glimcher Purchase Agreement Liabilities” means all indemnification and other liabilities of GPLP or its Affiliates under Section 11.1 of the Purchase Agreement, which expressly survive the Closing (as defined in the Purchase Agreement).

 

“GPLP” has the meaning given thereto in paragraph A of the Preliminary Statement of this Agreement.

 

“Gross Asset Value” has the meaning for such term set forth in Section 9.2.

 

“GRT” means Glimcher Realty Trust, a Maryland real estate investment trust.

 

“Indebtedness” means the Existing Loans, any indebtedness resulting from a Financing, and/or any other indebtedness approved by the Members.

 

“Initial Capital Contributions” has the meaning for such term set forth in Section 6.1.

 

“Interest Price” means an amount equal to the amount the Blackstone Member would receive if a Deemed Liquidation occurred on the Asset ROFO Closing Date.

 

“Interest Purchase Agreement” has the meaning for such term set forth in Section 3.3(d).

 

“Interest Rate” means a rate of interest per annum equal to the lesser of (i) 20% per annum, compounded on a quarterly basis, and (ii) the maximum rate permitted by applicable law.

 

“Interest ROFO” has the meaning for such term set forth in Section 3.3(a).

 

“Interest ROFO Closing Date” has the meaning for such term set forth in Section 3.3(c).

 

“Interest ROFO Down Payment” has the meaning for such term set forth in Section 3.3(b).

 

“Interest ROFO Election Notice” has the meaning for such term set forth in Section 3.3(a).

 

“Interest ROFO Escrow Agent” has the meaning for such term set forth in Section 3.3(b).

 

“Interest ROFO Notice” has the meaning for such term set forth in Section 3.3(a).

 

“Interest ROFO Purchase Price” has the meaning for such term set forth in Section 3.3(a).

 

 

7

 

“Interest ROFO Response Period” has the meaning for such term set forth in Section 3.3(a).

 

“Interest ROFO Rejection Notice” has the meaning for such term set forth in Section 3.3(a).

 

“Interest ROFO Sale Documents” has the meaning for such term set forth in Section 3.3(c).

 

“Interests” means all of the rights and interests of whatsoever nature of the Members in the Company, including without limitation the membership interests in the Company, the right to receive distributions of funds, and to receive allocations of income, gain, loss, deduction, and credit.

 

“Lease” shall mean all leases, licenses and other occupancy agreements for all or any portion of a Property.

 

“LC Owner” has the meaning given thereto in paragraph B of the Preliminary Statement of this Agreement.

 

“LC Owner Interest” has the meaning given thereto in paragraph B of the Preliminary Statement of this Agreement.

 

“Lender” means any Lender providing a Financing.

 

“Lloyd Center Loan” means that certain loan to the LC Owner from Lehman Brothers Holding Inc. in the original principal amount of One Hundred Forty Million and No/100 Dollars ($140,000,000.00) which loan is evidenced by those certain promissory notes dated May 12, 2003, and any amendment, modification or extension thereof entered into in accordance with the terms of this Agreement.

 

“Lloyd Center Property” has the meaning given thereto in paragraph C of the Preliminary Statement of this Agreement.

 

“Lockout Date” means the two year anniversary of the Effective Date.

 

“Managing Member” means the Blackstone Member, and any permitted assignee or successor to the Interest currently held by such Person, for so long as such Person is a Member.

 

“Member Loan” has the meaning for such term set forth in Section 6.3.

 

“Member Nonrecourse Debt” has the meaning assigned to “partner non-recourse debt” in Regulations Sections 1.704-2(b)(4) and 1.752-2.

 

“Member Nonrecourse Debt Minimum Gain” has the meaning assigned to “partner non recourse minimum gain” in Regulations Section 1.704-2(i)(3).

 

 

8

 

“Member Nonrecourse Deductions” has the meaning assigned to “partner nonrecourse deductions” in Regulations Section 1.704-2(i)(2).

 

“Members” means the Blackstone Member and the Glimcher Member and each Person hereafter admitted as a Member in accordance with this Agreement, until such Person ceases to be a Member of the Company.

 

“Net Cash Flow” means Net Operating Income less debt service on any Indebtedness. “Net Cash Flow” shall also mean the foregoing as determined for a Property Owner or other permitted subsidiary of the Company as and when received by the Company as dividends or distributions.

 

“Net Operating Income” means, for any period, the amount by which Operating Revenues exceed Operating Expenses for such period.

 

“Non-Funding Member” has the meaning for such term set forth in Section 6.3.

 

“OFAC” has the meaning for such term set forth in Section 12.1(f).

 

“Offered Assets” has the meaning for such term set forth in Section 4.13(a).

 

“Offered Interest” has the meaning for such term set forth in Section 3.3(a).

 

“Operating Budget” means the annual budget prepared by the Property Manager and approved by the Blackstone Member in accordance with Section 4.3 and the Property Management Agreement or any other property management agreement entered into in accordance with the terms of this Agreement, and including the items set forth in the Property Management Agreement or any other property management agreement entered into in accordance with the terms of this Agreement.  The Operating Budget shall be incorporated into and be part of the Business Plan.

 

“Operating Expenses” means, for any period, the current obligations for such period, determined in accordance with sound accounting principles and applicable to commercial real estate, consistently applied, for operating expenses of the Properties, for capital expenditures not otherwise paid from Indebtedness proceeds, and for working capital and reserves actually funded.  Operating Expenses shall not include debt service on Indebtedness or any non-cash expenses including, without limitation, Depreciation or amortization.

 

“Operating Revenues” means, for any, period, the gross revenues arising from the ownership and operation of the Properties during such period, including proceeds of any business interruption or rental loss insurance and amounts released from reserves, but specifically excluding Capital Proceeds, Capital Contributions and proceeds of Indebtedness.

 

“Original LLC Agreement” has the meaning given thereto in the paragraph A of the Preliminary Statement of this Agreement.

 

“Owner Membership Interests” has the meaning given thereto in paragraph B of the Preliminary Statement of this Agreement.

 

 

9

 

“Person” means an individual or entity.

 

“Proceeding” has the meaning for such term set forth in Section 4.11(a).

 

“Profits” and “Losses” mean, for each taxable year or other period, an amount equal to the Company’s taxable income or loss for the year or other period, determined in accordance with Section 703(a) of the Code (including all items of income, gain, loss or deduction required to be stated separately under Section 703(a)(1) of the Code), with the following adjustments:

 

(i)            Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses will be added to taxable income or loss;

 

(ii)           Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Section 705(a)(2)(B) expenditures under Regulations Section 1.704- 1 (b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses, will be subtracted from taxable income or loss;

 

(iii)           Gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes will be computed by reference to the Gross Asset Value of the property, notwithstanding that the adjusted tax basis of the property differs from its Gross Asset Value;

 

(iv)           In lieu of depreciation, amortization and other cost recovery deductions taken into account in computing taxable income or loss, there will be taken into account Depreciation for the taxable year or other period;

 

(v)           Any items which are specially allocated under Section 9.3(c) or 9.3(d) shall be excluded from the calculations of Profits or Losses; and

 

(vi)           If the Gross Asset Value of any Company asset is adjusted under Section 9.2(b), (c) or (d), the adjustment will be taken into account as gain or loss from disposition of the asset for purposes of computing Profits or Losses.

 

“Property” or “Properties” has the meaning given thereto in paragraph C of the Preliminary Statement of this Agreement.

 

“Property Management Agreement” has the meaning for such term set forth in Section 4.6.

 

“Property Manager” shall mean the Person managing one or more of the Properties.  The initial Property Manager shall be the Glimcher Property Manager.

 

“Property Owner” or “Property Owners” has the meaning given thereto in paragraph B of the Preliminary Statement of this Agreement.

 

 

10

 

“Purchase Agreement” has the meaning given thereto in paragraph D of the Preliminary Statement of this Agreement.

 

“Qualified Financing” means any Financing provided by a third party who is not an Affiliate of a Member and which (1) does not exceed a loan-to-value ratio with respect to the applicable Property or Properties of 75%, (2) is at competitive rates of interest which prevail in the marketplace at such time for similar properties, (3) is on an “interest only” basis or provides for amortization on a straight line amortization schedule of no less than 20 years, and (4) provides for commitment or other upfront fees payable to the lender thereunder which are no greater than those that prevail in the marketplace at such time for similar transactions.

 

“Regulations” means the regulations promulgated by the United States Department of the Treasury pursuant to and in respect of provisions of the Code.  All references herein to sections of the Regulations shall include any corresponding provisions of succeeding, similar or substitute temporary or final Regulations.

 

“Regulatory Allocations” has the meaning for such term set forth in Section 9.3(d).

 

“REIT” has the meaning for such term set forth in Section 11.13.

 

“Removal Event” has the meaning for such term set forth in Section 4.5(a).

 

“Responding Member” has the meaning for such term set forth in Section 3.3(a).

 

“Securitization” has the meaning for such term set forth in Section 7.2.

 

“Selling Member” has the meaning for such term set forth in Section 3.3(d).

 

“Tag Along Offer Notice” has the meaning for such term set forth in Section 3.5(a).

 

“Tag Along Acceptance Notice” has the meaning for such term set forth in Section 3.5(b).

 

“Transfer” has the meaning for such term set forth in Section 3.2(a).

 

“Unanimous Major Decisions” has the meaning for such term set forth in Section 4.1(b).

 

“Westshore Loan” means that certain loan to the Westshore Owner from Morgan Stanley Mortgage Capital Inc. in the original principal amount of One Hundred Million and No/100 Dollars ($100,000,000.00), which loan is evidenced by those certain promissory notes dated August 27, 2003, and any amendment, modification or extension thereof entered into in accordance with the terms of this Agreement.

 

“Westshore Owner” has the meaning given thereto in paragraph B of the Preliminary Statement of this Agreement.

 

 

11

 

“Westshore Owner Interest” has the meaning given thereto in paragraph B of the Preliminary Statement of this Agreement.

 

“Westshore Property” has the meaning given thereto in paragraph C of the Preliminary Statement of this Agreement.

 

Section 1.2.   Captions, References.  Pronouns, wherever used herein, and of whatever gender, shall include natural persons and corporations and associations of every kind and character, and the singular shall include the plural wherever and as often as may be appropriate.  Article and section headings are for convenience of reference and shall not affect the construction or interpretation of this Agreement.  Whenever the terms “hereof,” “hereby,” “herein,” or words of similar import are used in this Agreement they shall be construed as referring to this Agreement in its entirety rather than to a particular section or provision, unless the context specifically indicates to the contrary.  Whenever the word “including” is used herein, it shall be construed to mean including without limitation.  Any reference to a particular “Article” or a “Section” shall be construed as referring to the indicated article or section of this Agreement unless the context indicates to the contrary.

 

ARTICLE 2

ORGANIZATIONAL MATTERS; PURPOSE; TERM

 

Section 2.1.   Formation of the Company.   The Company has been formed under the provisions of the Act.

 

Section 2.2.   Name.  The Company shall conduct its activities under the name of GRT MALL JV LLC, and all Company business must be conducted in that name or such other name as the Managing Member and the Administrative Member shall jointly approve (or, after the occurrence of a Removal Event, as the Managing Member shall approve); provided, that the name shall always contain the letters “LLC”.

 

Section 2.3.   Registered Office; Registered Agent; Principal Office.  The registered office and the registered agent of the Company in the State of Delaware shall be as specified in the Certificate.  The principal office and principal place of business of the Company shall be at 180 East Broad Street, Columbus, Ohio 43215.

Section 2.4.   Foreign Qualification.  Before the Company conducts business in any jurisdiction other than the State of Delaware, the Administrative Member shall cause the Company to comply with all requirements necessary to qualify the Company as a foreign limited liability company in that jurisdiction.  At the request of the Administrative Member, each Member shall execute, acknowledge, swear to, and deliver all certificates and other instruments conforming with this Agreement that are necessary or appropriate to qualify, continue, or terminate the Company as a foreign limited liability company in all jurisdictions in which the Company may conduct business.

 

Section 2.5.   Purpose and Scope.   The nature of the business and of the purpose to be conducted and promoted by the Company is to engage solely in the following activities:

 

 

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(a)           To directly, or indirectly through the Property Owners, own, manage, operate, improve, maintain, develop, assign, transfer, lease, finance, refinance, mortgage, pledge and otherwise deal with the Properties or any portion thereof and to own the direct or indirect interests in the Property Owners, and provide any services related thereto.

 

(b)           To exercise all powers enumerated in the Act necessary or convenient to the conduct, promotion or attainment of the business or purpose otherwise set forth herein.

 

Section 2.6.   Term.  The Company shall commence on the effective date of the Certificate and shall have perpetual existence, unless sooner dissolved as herein provided.

 

ARTICLE 3

MEMBERS; DISPOSITIONS OF INTERESTS

 

Section 3.1.   Members. Schedule A hereto contains the name, address and Capital Sharing Ratio of each Member as of the date of this Agreement.  Schedule A shall be revised from time to time by the Administrative Member to reflect the admission or withdrawal of a Member or other transfer of Interests in accordance with the terms of this Agreement and other modifications to or changes in the information set forth therein.

 

Section 3.2.   Dispositions of Interests.

 

(a)           General Restriction.  A Member may not, directly or indirectly, make or permit an assignment, transfer, or other disposition, either voluntarily, involuntarily or by operation of law (a “Transfer”) of all or any portion of its Interest, nor pledge, mortgage, hypothecate, grant a security interest in, or otherwise encumber (an “Encumbrance”) all or any portion of its Interest, except with the consent of the other Members (which may be given or withheld in their sole discretion) or as expressly permitted in this Article 3.  A Person to whom an Interest is Transferred may be admitted to the Company as a member as provided under Sections 3.2(b), 3.2(c) or 3.3 or with the consent of the other Members, which may be given or withheld in the other Members' sole and absolute discretion.  In connection with any Transfer of an Interest or any portion thereof, and any admission of an assignee as a Member, the Member making such Transfer and the assignee shall furnish the other Members with such documents regarding the Transfer as the other Members may reasonably request, including a copy of the Transfer instrument and a ratification and assumption by the assignee of this Agreement (if the assignee is to be admitted as a Member), each in form and substance reasonably satisfactory to the other Members.  For purposes hereof, a Transfer shall be deemed to have occurred with respect to a Member upon any assignment, transfer, or other disposition (voluntary, involuntary, or by operation of law) of a direct or indirect interest in that Member.

 

(b)           Permitted Blackstone Transfers.  Notwithstanding the provisions of Section 3.2(a), the Blackstone Member may, at any time and without the consent of any other Member, Transfer, or otherwise grant Encumbrances in, all or any portion of its Interest (and any Person holding a direct or indirect interest in the Blackstone Member may Transfer or otherwise grant an Encumbrance in the direct or indirect interests in the Blackstone Member held by such Person) (i) to an Affiliate of BREP, or (ii) to any other Person, so long as immediately following any such Transfer the transferee shall be an Affiliate of BREP.  Notwithstanding the foregoing, the Blackstone Member shall be entitled to pledge its Interest and to allow the pledge of the direct or indirect ownership of the Blackstone Member to any bank or other financial institution without the consent of any Member if such pledge is in connection with a loan or line of credit that is secured by material assets in addition to its Interest.  Transferees of direct Interests permitted by this paragraph shall be admitted as a Member of the Company without the consent of the other Members, provided only that the transferee shall be required to deliver to the non-assigning Members an assumption of the obligations under this Agreement with respect to such transferred Interest arising from and after the date of such transfer, and provided further that the Blackstone Member shall remain obligated to fund any Additional Capital Contributions approved or required pursuant to Section 6.2 but not funded at the time of such Transfer.  In addition, any bank or other financial institution which was granted any pledge by the Blackstone Member permitted by this paragraph (and any Affiliate or nominee thereof) shall be admitted as a member of the Company without the consent of the Members if it shall become a transferee of an Interest as the result of the exercise of the remedies under such pledge (including a transfer in lieu of foreclosure); provided  that (1) such bank or other financial institution (or Affiliate or nominee thereof) shall be required to deliver to the other Members an assumption of the obligations of the Blackstone Member under this Agreement arising from and after the date of such transfer, and (2) such bank or other financial institution shall not be entitled to succeed to the Blackstone Member’s role as Managing Member under this Agreement, and from and after the date of any such exercise of remedies the Glimcher Member shall have the right to appoint the Managing Member in its sole discretion.

 

 

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(c)           Permitted Glimcher Transfers.  Notwithstanding the provisions of Section 3.2(a), the Glimcher Member may, at any time and without the consent of any other Member, Transfer, or otherwise grant Encumbrances in, all or any portion of its Interest (and any Person holding a direct or indirect interest in the Glimcher Member may Transfer or otherwise grant an Encumbrance in the direct or indirect interests in the Glimcher Member held by such Person) (i) to an Affiliate of GRT, or (ii) to any other Person, so long as immediately following any such Transfer,  (a) GPLP shall own no less than 51% of the ownership interests in such transferee, and (b) GPLP shall control such transferee.  Notwithstanding the foregoing, the Glimcher Member shall be entitled to pledge its Interest and to allow the pledge of the direct or indirect ownership of the Glimcher Member to any bank or other financial institution without the consent of any Member if such pledge is in connection with a loan or line of credit that is secured by material assets in addition to its Interest.  Transferees of direct Interests permitted by this paragraph shall be admitted as a Member of the Company without the consent of the other Members, provided only that the transferee shall be required to deliver to the non-assigning Members an assumption of the obligations under this Agreement with respect to such transferred Interest arising from and after the date of such transfer; and provided further that the Glimcher Member shall remain obligated to fund any Additional Capital Contributions approved or required pursuant to Section 6.2 but not funded at the time of such Transfer.  In addition, any bank or other financial institution which was granted any pledge by the Glimcher Member permitted by this paragraph (and any Affiliate or nominee thereof) shall be admitted as a member of the Company without the consent of the Members if it shall become a transferee of an Interest as the result of the exercise of the remedies under such pledge (including a transfer in lieu of foreclosure); provided  that (1) such bank or other financial institution (or Affiliate or nominee thereof) shall be required to deliver to the other Members an assumption of the obligations of the Glimcher Member under this Agreement arising from and after the date of such transfer, and (2) such bank or other financial institution shall not be entitled to succeed to the Glimcher Member’s role as Administrative Member under this Agreement, and from and after the date of any such exercise of remedies the Blackstone Member shall have the right to appoint the Administrative Member in its sole discretion.

 

 

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Section 3.3.   Transfer Subject to ROFO.

 

(a)           Notwithstanding anything to the contrary contained herein, from and after the Lockout Date each of the Blackstone Member and the Glimcher Member shall have the right to sell all (but not part) of its Interest in the Company to any Person, provided such sale shall be subject to the right of first offer given to the other Member pursuant to this Section 3.3 (“Interest ROFO”).  At any time following the Lockout Date, the Member desiring to sell its Interest (“Selling Member”) shall be required to give written notice (the “Interest ROFO Notice”) to the other Member (the “Responding Member”) of the Selling Member’s desire to sell its Interest in the Company (the “Offered Interest”), which shall contain an offer by the Selling Member to sell the Offered Interest to the Responding Member at a price set forth in the Interest ROFO Notice (the “Interest ROFO Purchase Price”).   At any time within the 45 day period (the “Interest ROFO Response Period”) commencing on the day the Selling Member sends the Interest ROFO Notice to the Responding Member, the Responding Member shall either (A) deliver to the Selling Member a written notice electing to purchase the Offered Interest for the Interest ROFO Purchase Price (an “Interest ROFO Election Notice”), or (B) deliver to Selling Member a written notice rejecting the offer contained in the Interest ROFO Notice (a “Interest ROFO Rejection Notice”).  If the Responding Member fails to deliver an Interest ROFO Election Notice or Interest ROFO Rejection Notice within the Interest ROFO Response Period, the Responding Member shall be deemed to have delivered an Interest ROFO Rejection Notice rejecting the offer contained in the Interest ROFO Notice.

 

(b)           If the Responding Member delivers an Interest ROFO Election Notice, then within three Business Days after the date thereof, the Responding Member shall deposit in escrow with a reputable title insurance company authorized to do business in the State of New York (the “Interest ROFO Escrow Agent”) pursuant to escrow instructions consistent with this Section 3.3, a non-refundable cash down payment in immediately available funds in an aggregate amount equal to 10% of the Interest ROFO Purchase Price (the “Interest ROFO Down Payment”).  If the Responding Member fails to timely deliver the Interest ROFO Down Payment, the Responding Member shall be deemed to have delivered an Interest ROFO Rejection Notice rejecting the offer contained in the Interest ROFO Notice.

 

(c)           If the Responding Member timely delivers the Interest ROFO Down Payment, the Selling Member, as seller, and the Responding Member, as purchaser, shall proceed to close the sale of the Offered Interest at the Interest ROFO Purchase Price on a mutually acceptable closing date (the “Interest ROFO Closing Date”), but in any event not later than 90 days after the Responding Member delivered the Interest ROFO Election Notice, at a location designated by the Responding Member.  On the Interest ROFO Closing Date, (x) the Selling Member shall sell to the Responding Member the Offered Interest free and clear of all liens, claims, encumbrances, options and rights of any kind by execution and delivery of the documents attached hereto as Exhibit B (the “Interest ROFO Sale Documents”), (y) the Interest ROFO Escrow Agent shall deliver the Interest ROFO Down Payment in immediately available funds to the Selling Member and (z) the Responding Member shall pay to the Selling Member the Interest ROFO Purchase Price (less a credit for the Interest ROFO Down Payment) in immediately available funds, as adjusted by customary closing adjustments.  Each party shall pay its own closing costs in connection with such sale, provided that any transfer taxes or other similar tax payable in connection therewith shall be paid by the Members pro rata in accordance with their respective Capital Sharing Ratios.  If the closing fails to occur by reason of a default of the Responding Member, the Responding Member’s Interest ROFO rights under this Section 3.3 shall be deemed extinguished and shall thereafter be null and void and of no further force and effect, the Selling Member shall be entitled to retain the Interest ROFO Down Payment as liquidated damages and the Selling Member shall thereafter be free, at any time and from time to time, to cause a sale of the Offered Interest in an arms-length transaction with a third-party unaffiliated with the Selling Member at such price as the Selling Member determines.  If the closing hereunder fails to occur by reason of default of the Selling Member, the Responding Member shall have the right, as its sole and exclusive remedy, to either (A) demand that the Interest ROFO Down Payment be returned to the Responding Member, or (B) seek specific performance.

 

 

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(d)           If the Responding Member delivers an Interest ROFO Rejection Notice (or is deemed to have delivered an Interest ROFO Rejection Notice), the Selling Member shall have a period of 180 days from expiration of the Interest ROFO Response Period to enter into a contract of sale with a third party unaffiliated with Selling Member (the “Interest Purchase Agreement”) to complete the sale of the Offered Interest for a purchase price of not less than 95% of the Interest ROFO Purchase Price.  The Selling Member shall deliver a copy of the Interest Purchase Agreement (together with all schedules and exhibits thereto) to the Responding Member promptly following execution.  The Interest Purchase Agreement must provide for a closing thereunder on a date not later than 270 days after expiration of the Interest ROFO Response Period.   If (i) the Interest Purchase Agreement is not executed within 180 days from expiration of the Interest ROFO Response Period, (ii) the closing thereunder does not occur within 270 days of the expiration of the Interest ROFO Response Period, or (iii) Selling Member desires to sell the Offered Interest for less than 95% of the Interest ROFO Purchase Price, Selling Member must again comply with the ROFO procedures in this Section 3.3 prior to any sale of its Interest and the other Member shall have all the rights available to it under this Section 3.3 in connection with any such sale.

 

(e)           Notwithstanding anything to the contrary contained in this Agreement or elsewhere, in the event that the Glimcher Member transfers its Interest in the Company under this Section 3.3, (i) it shall be a condition to the consummation of such sale that, at the option of the Blackstone Member in each case, the Property Management Agreements, Affiliate Service Contracts and any other agreement between the Company or the Property Owners, on the one hand, and any Affiliate of the Glimcher Member, on the other hand, shall be terminated without any penalty, premium or other liability incurred by the Property Owners, the Company or the Members, (ii) the Blackstone Member shall thereafter have the right to cause the Company and/or the Property Owners to enter into such property management and leasing agreements with respect to the Properties as the Blackstone Member in its sole discretion shall decide, and (iii) no such transferee of the Glimcher Member’s Interest shall become the Administrative Member, and the Blackstone Member shall have the sole and exclusive right to appoint the successor Administrative Member from and after the consummation of the sale of the Glimcher Member’s Interest.

 

 

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Section 3.4.   Other Transfer Provisions.

 

(a)           Notwithstanding the provisions of Sections 3.2(b), 3.2(c) or 3.3, no Member may Transfer or Encumber all or any part of its Interest if such Transfer or Encumbrance would (i) violate any provision of any Indebtedness or the organizational documents of the Company, (ii) violate, or cause the Company to violate, any applicable law or regulation, including any federal or state securities laws, or (iii) jeopardize the status of the Company as a partnership for federal income tax purposes.

 

(b)           To the fullest extent permitted by law, any attempted Transfer of all or any portion of an Interest or any Encumbrance, other than in strict accordance with this Article 3, shall be null and void.

 

Section 3.5.   Tag-Along Rights.  If the Responding Member delivers (or is deemed to deliver) an Interest ROFO Rejection Notice pursuant to Section 3.3(a), and the Selling Member thereafter intends to execute an Interest Purchase Agreement with respect to the Offered Interest, the Responding Member may require the Selling Member to include the Responding Member’s Interest in such sale in accordance with the provisions of this Section 3.5:

 

(a)           In the event the Selling Member proposes to enter into an Interest Purchase Agreement pursuant to Section 3.3(d), the Selling Member shall deliver written notice to the Responding Member (the “Tag Along Offer Notice”) which shall include:

 

(1)      A description of the proposed purchase price and other material terms under such proposed Interest Purchase Agreement , including a draft of the Interest Purchase Agreement and any letters of intent or term sheets, and

 

(2)      An offer by the Selling Member to include the Responding Member’s Interest in such proposed sale.

 

(b)           The Responding Member may accept the offer contained in the Tag Along Offer Notice by delivering written notice to the Selling Member of such intent (“Tag Along Acceptance Notice”) at any time within the 10 Business Day period following delivery of the Tag Along Notice.  If the Responding Member does not deliver the Tag Along Acceptance Notice within such 10 Business Day period, the Selling Member shall be free to consummate such sale in accordance with Section 3.3 without including the Responding Member’s Interest. If the Responding Member does deliver a Tag Along Acceptance Notice within such 10 Business Day period then the Selling Member shall be required to include the Responding Member’s Interest in any such sale at the price and substantially in accordance with the other terms set forth in the Tag Along Offer Notice.    Each Member shall use commercially reasonable efforts to cooperate with respect to any sale pursuant to this Section 3.5.

 

Section 3.6.   Resignation.  A Member may not resign or withdraw from the Company without the consent of all other Members (which can be withheld in their sole discretion).

 

 

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Section 3.7.   Information.  In addition to the other rights specifically set forth in this Agreement, each Member is entitled to the following information under the circumstances and conditions set forth in the Act: (a) true and full information regarding the status of the business and financial condition of the Company; (b) promptly after becoming available, a copy of the Company’s federal, state and local income tax returns for each year; (c) a current list of the name and last known business, residence or mailing address of each Member; (d) a copy of this Agreement and the Certificate and all amendments to such documents; (e) true and full information regarding the amount of cash and a description and statement of the agreed value of any other property or services contributed by each Member and which each Member has agreed to contribute in the future, and the date on which each became a Member; and (f) other information regarding the affairs of the Company to which that Member is entitled pursuant to the Act (including all Company books and records).  Under no circumstances shall any information regarding the Company or its business be kept confidential from any Member.

 

Section 3.8.   Liability to Third Parties.  No Member shall be liable for the debts, obligations or liabilities of the Company except as specifically agreed by such Member and approved by all other Members.  Each Member acknowledges and agrees that the terms of Article 6 are a part of this Agreement solely for the individual benefit of the Members, are not an asset of the Company and may not be relied on by any creditor of the Company.

 

Section 3.9.   ERISA Matters.  The parties acknowledge that the Blackstone Member is a an entity that is intended to qualify as a “real estate operating company” within the meaning of the U.S. Department of Labor plan asset regulation (Section 2510.3-101, Part 2510 of Chapter XXV, Title 29 of the Code of Federal Regulations) and that it is intended that the Blackstone Member will have the right to substantially participate directly in the management, operations and development of the Properties.  Towards that end, on the date hereof, the Company and the Property Owners shall execute and deliver the letter agreement in the form attached as Exhibit A.

 

ARTICLE 4

MANAGEMENT OF THE COMPANY

 

Section 4.1.   Management.

 

(a)           In General.

 

(1)      The Members hereby appoint the Glimcher Member as the initial Administrative Member of the Company (in such capacity, the “Administrative Member”) subject to the terms of Section 4.2 hereof.

 

(2)      No Member shall be liable, responsible or accountable in damages or otherwise to the Company or to any other Member for (i) any act performed within the scope of the authority conferred on such Member by this Agreement, (ii) such Member’s failure or refusal to perform any act, except those expressly required by or pursuant to the terms of this Agreement, (iii) such Member’s performance of, or failure to perform, any act on the reasonable reliance on advice of legal counsel to the Company, (iv) the negligence, dishonesty or bad faith of any agent, consultant or broker of the Company selected, engaged or retained in good faith, or (v) any other act or failure to act, unless such act or failure to act constitutes gross negligence, fraud or intentional misconduct and has a material adverse effect on the Company.

 

 

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(3)       Except as expressly delegated to the Administrative Member pursuant to this Agreement or as otherwise provided in this Agreement relating to a Blackstone Major Decision, and subject to the requirements of this Article 4, the management and control of the Company shall be vested exclusively in the Members.  Except for the authority and responsibilities granted to the Administrative Member or the Managing Member as expressly provided herein, no Member shall have the right to act for, or bind, the Company in any way unless delegated such power by unanimous consent of the Members.

 

(4)      Upon the request of any Person, the other Members shall confirm in writing the authorization of the Managing Member or the Administrative Member, as the case may be, to take any specific action on behalf of and in the name of the Company which is authorized to be taken by such Member under the terms of this Agreement.

 

(b)           Unanimous Major Decisions.  No action shall be taken, sum expended, or obligation incurred by the Administrative Member or the Company regarding the matters described below (the “Unanimous Major Decisions”) unless such specific action or expenditure is (i) expressly included in the Business Plan or Operating Budget then in effect in accordance with Section 4.3 hereof, or (ii) approved by both the Blackstone Member and the Glimcher Member:

 

(1)      Any sale or transfer of the Properties or the Property Owners prior to the Lockout Date;

 

(2)      Any borrowing, financing, mortgaging, hypothecation or encumbrance of the Properties or the Property Owners other than in accordance with a Qualified Financing;

 

(3)      calling of Additional Capital Contributions (subject to the provisions of Sections 6.2(b) and 6.2(c));

 

(4)      regarding Company financial affairs, (A) determination of accounting policies, including selection of depreciation schedules, accounting methods, making of decisions regarding treatment of transactions and allocations for federal and state income, franchise or other tax purposes and the making of any tax elections, except to the extent otherwise expressly provided in this Agreement, (B) selection of banks for deposit of Company funds, and the designation of Persons with signatory authority over withdrawal of such funds, and (C) the determination of any capital or operating reserves necessary or advisable for the Company or any modifications thereof;

 

(5)      regarding operation of the Properties, approval of brokerage agreements and any other material third party agreements and subject to the Blackstone Member’s rights under Section 4.1(c) and 4.1(d)) below, any amendments to or termination of any of the foregoing; insurance coverages, the underwriters thereof and claims related thereto; zoning changes, any ground lease or master lease for all or substantially all of any Property, easements, restrictive covenants, reciprocal operating agreements, cross-easement agreements, similar agreements or any amendments thereto, and any material matters relating to any casualty affecting the Property, or any condemnation or eminent domain proceeding affecting the Property; setting the amount of reserves for capital improvements, replacements, purchases, or any other Company purposes; modifications of any of the foregoing; and all matters relating to the Property’s compliance with environmental, health, access, and other applicable laws other than in the ordinary course of business;

 

 

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(6)      regarding any alterations to the Properties, approval of the plans and specifications therefor, construction drawings therefor, development schedules, budgets, and all other material matters relating to the development of the Properties; any construction contracts, selection of contractors, architects and engineers; related insurance coverages, the underwriters thereof, and claims related thereto, and any variation from or amendment to any of the foregoing;

 

(7)      selection of attorneys, accountants, auditors, engineers, environmental consultants, or other professionals for the Properties or the Company, except as set forth in Section 5.1;

 

(8)      approval, amendment or extension of any Lease or the termination or acceptance of cancellation or surrender of any Lease;

 

(9)      entering into any agreement with any governmental agency, neighboring or adjacent property owner, any community organizations, or any other third party which directly binds the Company or its subsidiaries;

 

(10)           regarding any environmental matter relating to the Properties, including the adoption of and implementation of any operation and maintenance program or any other program to remove or otherwise remediate hazardous materials or other potential adverse effects on the assets (including goodwill) of the Company;

 

(11)           commencing, defending or settling any legal action;

 

(12)           making any expenditure or incurring any costs or expenses by or for the Company which is not set forth in the approved Operating Budget or Business Plan;

 

(13)           merging with or acquiring any other Person;

 

(14)           forming subsidiaries of the Company;

 

(15)           the recapitalization of the Company;

 

(16)           acquiring any real properties;

 

(17)           hiring any employee on behalf of the Company;

 

 

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(18)           filing of any petition or consenting to the filing of any petition that would subject the Company, any Property Owner or any of the Properties or any portion thereof to a Bankruptcy; and

 

(19)           defeasance, modification, amendment or extension of the Indebtedness, other than as set forth in Section 4.1(c) of this Agreement.

 

(c)           Blackstone Major Decisions. Notwithstanding the foregoing or anything to the contrary in this Agreement or elsewhere, the Blackstone Member shall have the sole and exclusive authority over the following matters (the “Blackstone Major Decisions”) and no action shall be taken, sum expended, or obligation incurred by any Member or the Company with respect to such actions without the express written approval of the Blackstone Member, which may be given or withheld in the Blackstone Member’s sole discretion (it being acknowledged and agreed that the Blackstone Member shall have the sole authority, without the approval of any other Member, to make and implement each of the following on behalf of the Company and the Property Owners):

 

(1)      Any Qualified Financing (including when and whether to implement any Qualified Financing and all decisions relating to the terms, provisions and implementation thereof);

 

(2)      Any sale, assignment, transfer or other disposition of one or both of the Properties from and after the Lockout Date, subject only to the Glimcher Member’s right of first offer under Section 4.13 below;

 

(3)      Approval of the Business Plan (including the Operating Budget);

 

(4)      In the event the Glimcher Property Manager or Glimcher Leasing Agent is terminated pursuant to the terms of this Agreement or the Property Management Agreement, the selection and appointment of a replacement property manager and/or leasing agent (including the negotiation and execution of applicable management and/or leasing agreements), which may be an Affiliate of Blackstone, on customary terms and at comparable rates of compensation which prevail in the marketplace among unrelated third parties and in accordance with any applicable Indebtedness;

 

(5)      The taking of all decisions with respect to the Company, the Property Owners and the Properties following the occurrence of a Removal Event, subject to its fiduciary obligations to all Members; and

 

(6)      With respect to any Indebtedness, (a) any prepayment or refinancing of such Indebtedness at maturity or during the period in which voluntary prepayments are permitted thereunder provided any such replacement financing is in accordance with a Qualified Financing; provided that the Blackstone Member shall only have the right to cause a voluntary prepayment of the Existing Loans prior to maturity thereof if no penalty, premium or defeasance costs are payable in connection with such prepayment; (b) any extension of the term of such Indebtedness provided such extension would otherwise be in accordance with a Qualified Financing; or (c) any modification to an Existing Loan which documents the replacement of the guarantor thereunder or the property manager thereunder, to the extent permitted under the terms of the Existing Loans and the applicable property management agreement.

 

 

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(d)           Managing Member Authority Over Glimcher Agreements. Notwithstanding anything to the contrary contained in this Agreement, the Blackstone Member shall have sole authority on behalf of the Company and the Property Owners (and the Glimcher Member shall not be entitled) to enter into, enforce, modify, amend, terminate in accordance with its terms, make waivers, make all decisions and take all actions under any agreement between the Company and/or Property Owners and the Glimcher Member or any of its Affiliates on behalf of the Company or the Property Owners, including, without limitation, the Property Management Agreements and the Affiliate Service Contracts.

 

Section 4.2.   Authority and Duties of the Administrative Member.

 

(a)           The Administrative Member shall have the authority to do, and shall be responsible for, the items set forth below in this Section 4.2(a).  The Administrative Member shall discharge such duties in a proper manner as provided for in this Agreement.  The Administrative Member shall use diligent efforts to keep the Managing Member fully informed regarding all material matters in connection with its obligations under this Section 4.2(a) and relating to the Company and its operations and assets (and such other matters as the Managing Member may reasonably request from time to time) and shall consult on a monthly basis and at all reasonable times requested by the Managing Member, and without limitation on the foregoing, shall promptly inform the Managing Member with respect to any major or significant Company matters so that the Managing Member may exercise any rights it may have under this Agreement.  The Administrative Member shall at all times act in good faith and in the best interests of the Company and the Properties and shall use its commercially reasonable efforts to carry out the following duties:

 

(A)           implementing all Unanimous Major Decisions approved in accordance with Section 4.1(b) and all Blackstone Major Decisions unless otherwise directed by the Blackstone Member;

 

(B)           complying with, and causing the Company and the Property Owners to comply with the terms, conditions and requirements of any Indebtedness;

 

(C)           delivering the reports required under Section 5.1 of this Agreement and filing the forms required under Section 9.4;

 

(D)           supervising any third parties engaged by the Company in accordance with this Agreement;

 

(E)           maintaining the insurance coverages required pursuant to this Agreement, the Business Plan and the applicable Property Management Agreements;

 

(F)           ensuring the Company’s material compliance with all applicable laws, rules, regulations, permits and licenses affecting the Company; and

 

(G)           maintaining accurate records reflecting the status of taxes, assessments and other similar items that are or may become liens against the Properties, and the status of any insurance premiums, real estate taxes, rents, mortgages and other expenses in respect thereof, and ensuring the timely payment of such items.

 

 

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(b)           In the event that the Administrative Member fails to perform any of its duties under this Agreement within 10 Business Days after receipt of written notice of such default from the Managing Member, or if such duty cannot reasonably be performed within 10 Business Days, such additional time, not to exceed one year, necessary to cure such default, provided the Administrative Member commences performance within ten (10) Business Days and proceeds diligently in good faith to effect such performance thereafter,  the Managing Member shall have the right (but not the obligation), in its sole and absolute discretion and in addition to any other rights and remedies available to the Managing Member under this Agreement or at law or in equity, to perform such duties.

 

(c)           The staff members of the Administrative Member shall devote such time and efforts to the Company and the Properties as is necessary to properly carry out the duties of the Administrative Member under this Agreement in a timely and cost efficient manner.  The Administrative Member shall not delegate any of its rights or powers to manage and control the business and affairs of the Company without the prior written consent of the Managing Member or as expressly provided for under this Agreement.

 

Section 4.3.   Business Plan and Operating Budget.  The Business Plan for calendar year 2010 shall be approved in accordance with the Purchase Agreement.  Pursuant to the Property Management Agreements, Property Manager shall (A) beginning in 2010, prepare an updated Business Plan (including an Operating Budget) annually which shall be submitted to the Blackstone Member for approval on or before November 15th of each year, and (B) implement the Business Plan on behalf of the Company in accordance with the terms of this Agreement and the Property Management Agreement.

 

Section 4.4.   Meetings of Members.

 

(a)           Regular Meetings.  The Members shall hold annual meetings (or such more frequent meetings as the Members may mutually agree) after the Property Manager submits a Business Plan and Operating Budget to the Blackstone Member for its review, to discuss the Properties and such other matters regarding Company business as the Members may decide.

 

(b)           Special Meetings.  Special meetings of the Members may be called by the Administrative Member or by the Managing Member at any time by delivering at least two Business Days’ prior notice thereof to the other Member to discuss such matters regarding Company business as the Members may decide; provided that the failure to attend any such meetings shall not limit any approval rights granted to a Member under this Agreement.

 

(c)           Procedure.  Each Company meeting shall be held at a place mutually agreed upon by the Members; provided, that any meeting may take place by means of telephone conference, video conference, or similar communication equipment by means of which all Persons participating therein can hear each other.  Attendance of a Person at a meeting shall constitute a waiver of notice of such meeting, unless such Person attends the meeting for the purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.  A Person may vote at such meeting by written proxy executed by that Person and delivered to the Administrative Member or other Member.  A proxy shall be revocable unless it is stated to be irrevocable.  Any action required or permitted to be taken at such meeting may be taken without a meeting, without prior notice, and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the Members that would be necessary to take the action at a meeting at which all Members were present and voted.  If the consent of either the Glimcher Member or the Blackstone Member is required under Sections 4.1(b)(5) – (9) or Section 4.1(b)(11) and the other Member requests such consent in writing, the Glimcher Member or the Blackstone Member, as the case may be, shall be deemed to have given its consent to such request if it does not affirmatively respond in writing within ten (10) Business Days of receipt of such request.

 

 

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Section 4.5.   Removal of Administrative Member.

 

(a)           The Administrative Member may be removed as Administrative Member by the Managing Member as provided herein under any of the following circumstances (each, a “Removal Event”):

 

(1)      If the Glimcher Member or any Affiliate of the Glimcher Member (i) is convicted of a felony; (ii) misappropriates or defalcates any funds derived from the Property (including rents, security deposits, down payments,  insurance proceeds and condemnation awards); (iii) commits fraud, intentional misrepresentation of a material fact, gross negligence or willful misconduct with respect to the Companies or the Properties; or (iv) commits any other material breach of this Agreement which would cause material adverse harm to the Company or the Managing Member, which breach continues for 30 days after receipt by the Glimcher Member of written notice from the Managing Member of its occurrence, or, with respect to such breach that requires more than 30 days to cure, such additional time, not to exceed one year, necessary to cure such breach as long as the Glimcher Member or such Affiliate commences to cure promptly after receipt of written notice of such breach and thereafter diligently prosecutes the cure to completion;

 

(2)      If a material breach or default under the terms of any Indebtedness occurs which is due to the affirmative actions or inactions of the Glimcher Member or any Affiliate of the Glimcher Member and such actions or inactions (i) are not otherwise approved by the Managing Member, and (ii) are not due to the performance of the Properties or the failure of the Company to provide the Glimcher Member with either the authority or the necessary funds to perform its obligations under such agreements;

 

(3)      If a material breach or default by the Glimcher Property Manager or Glimcher Leasing Agent under the terms of the Property Management Agreements, as applicable, occurs beyond any applicable grace or cure period provided therein;

 

 

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(4)      If a material default by the Company or the Property Owners occurs under any material agreement (which shall include, without limitation, any property management agreement and any leasing agreement) which is caused by the affirmative actions or inactions of the Glimcher Member and such actions or inactions (i) are not otherwise approved by the Managing Member, (ii) are not due to the performance of the Properties or the failure of the Company to provide the Glimcher Member with either the authority or the necessary funds to perform its obligations under such agreements, and (iii) are reasonably expected to have a material adverse effect on the Company, the Properties or the Blackstone Member, and such default is not cured by the Glimcher Member within the applicable cure period under such agreement;

 

(5)      Bankruptcy of the Company or any Property Owner filed by Glimcher Member without the consent of the Managing Member;

 

(6)      Bankruptcy, liquidation or dissolution of the Glimcher Member, GRT, Glimcher Property Manager or Glimcher Leasing Agent;

 

(7)      The occurrence of any other material breach or material default by the Glimcher Member under the terms of this Agreement (i.e., a breach or default not specifically identified and provided for above in this Section 4.5(a)) that has or could reasonably be expected to have a material adverse effect on the Company or the Property Owners, if the actions or inactions causing such breach (i) are not otherwise approved by the Managing Member, (ii) are not due to performance of the Properties or the failure of the Company to provide the Glimcher Member with either the authority or the necessary funds to perform its obligations under such agreements, and such breach is not cured within 30 days after notice of the occurrence of such breach or default is delivered to the Glimcher Member hereunder; provided, however, in the event such breach or default is not cured within such 30 day period, then, provided the Glimcher Member commences to cure such breach or default within the 30 day period and continues to cure such default or breach with due diligence, then such 30 day period shall be extended for so long as it shall require the Glimcher Member in the exercise of due diligence to cure such default or breach, such extension not to exceed one year in the aggregate.

 

(b)           Upon the occurrence of a Removal Event, the Managing Member may, in its sole discretion:

 

(1)      relieve the Glimcher Member of its rights and duties as the Administrative Member, in which event the Managing Member, in its sole and absolute discretion, may appoint itself, an Affiliate of the Managing Member, or a third party, as Administrative Member, in each case, without the prior approval of the Glimcher Member; and

 

(2)      without cause and without prior approval of the Glimcher Member, terminate all agreements between the Company or Property Owners, on the one hand, and the Glimcher Member and any Affiliate of the Glimcher Member, on the other hand, including, without limitation, the Property Management Agreements and the Affiliate Service Contracts.

 

 

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Section 4.6.   Property Management Agreement. Each Member hereby authorizes and directs the Company to cause the Property Owners to enter into a property management agreement with respect to each Property with the Glimcher Property Manager and the Glimcher Leasing Agent, effective as of the date hereof, in the form attached to the Purchase Agreement as Exhibit G (each, a “Property Management Agreement”).  If a Property Management Agreement is terminated for any reason, the replacement property manager or leasing agent hired by the Company and the terms of its engagement shall be determined by the Blackstone Member in its sole discretion, and may be with an Affiliate of Blackstone.  Such replacement management and/or leasing agreement shall be on customary terms and at competitive rates of compensation which prevail in the marketplace among unrelated third parties, and notwithstanding anything contained in this Agreement may include such delegations of such rights and responsibilities similar to those rights and responsibilities granted to the Glimcher Property Manager and Glimcher Leasing Agent under the Property Management Agreements.

 

Section 4.7.   Intentionally Omitted.

 

Section 4.8.   Cooperation by Administrative Member.  The Administrative Member agrees, upon any termination of its role as Administrative Member in accordance with this Agreement (whether upon a sale of its Interest in the Company or otherwise) to cooperate with the other Members to effectuate an orderly transition of the duties and obligations of the Administrative Member hereunder.

 

Section 4.9.   Compensation of Members. Except pursuant to the Property Management Agreements, Affiliate Service Contracts and the reimbursement of expenses as contemplated by Section 4.11 hereof, no compensatory payment or reimbursement of expenses shall be made by the Company or Property Owner to any Member for any services to the Company or Property Owner by such Member or Affiliate of any such Member or employee of such Member or Affiliate.

 

Section 4.10.   Transactions with Affiliates.  When any service or activity to be performed on behalf of the Company is performed by an Affiliate of a Member, the fee payable for such service or activity shall not exceed the fee which would be payable by the Company to an unaffiliated third party of comparable standing providing the same services and such agreement shall otherwise be on arms-length terms and conditions.

 

Section 4.11.   Indemnification; Reimbursement of Expenses; Insurance.

 

(a)           To the fullest extent permitted by the Act: (1) the Company shall indemnify the Managing Member, the Administrative Member and each Member who was, is or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (“Proceeding”), any appeal therein, or any inquiry or investigation preliminary thereto by reason of the fact that such Member is or was a Managing Member, Administrative Member or a Member, and (2) the Company shall pay or reimburse any Managing Member, Administrative Member, or any Member for expenses incurred by such Member as approved by the Managing Member: (A) in advance of the final disposition of a Proceeding to which such Managing Member, Administrative Member, or Member was, is or is threatened to be made a party, and (B) in connection with such Member’s appearance as a witness or other participation in any Proceeding.  The Company shall indemnify and advance expenses to an officer, employee or agent of the Company to the same extent and subject to the same conditions under which it may indemnify and advance expenses to Members under the preceding sentence.  The provisions of this Section 4.11 shall not be exclusive of any other right under any law, provision of this Agreement, or otherwise.  Notwithstanding the foregoing, this indemnity shall not apply to actions of any such Person constituting gross negligence, willful misconduct or bad faith, but shall apply to actions constituting simple negligence.  The Company may purchase and maintain insurance to protect itself, and any Member, officer, employee or agent of the Company, whether or not the Company would have the power to indemnify such Person under this Section 4.11.  This indemnification obligation shall be limited to the assets of Company and no Member shall be required to make a Capital Contribution or loan in respect thereof.

 

 

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(b)           Each Member agrees to indemnify, defend and hold harmless the Company and the other Members from any loss, claim, damage or liability resulting from actions of such Member constituting gross negligence, willful misconduct or bad faith or actions taken outside the scope of authority provided under this Agreement.

 

Section 4.12.   Conflicts of Interest.  Except as expressly provided under this Agreement, each Member and any Affiliate of any Member may engage in and possess interests in other business ventures of any and every type and description, independently or with others, including ones in competition with the Company, with no obligation to offer to the Company or any other Member the right to participate therein or to account therefore; provided, the foregoing shall in no way diminish or impair any rights of the Company and Property Owners or obligations of the Glimcher Property Manager or Glimcher Leasing Agent under the Property Management Agreements.

 

Section 4.13.   Blackstone Right to Cause Sale; Glimcher ROFO.

 

(a)           From and after the Lockout Date, the Blackstone Member shall have the sole right to cause the sale of one or both of the Properties (or 100% of the interests in one or both Property Owners) to an unaffiliated third party (any such sale, an “Asset Disposition”), provided such sale shall be subject to the right of first offer given to the Glimcher Member pursuant to this Section 4.13 (“Asset ROFO”).  If the Blackstone Member desires to cause an Asset Disposition, the Blackstone Member shall be required to give written notice (the “Asset ROFO Notice”) to the Glimcher Member identifying one or both of the Properties (or one or both of the Property Owners) (the “Offered Assets”) and containing an offer by the Blackstone Member to cause the Property Owners (or the Company) to sell the Offered Assets to the Glimcher Member at a price set forth in the Asset ROFO Notice (the “Asset ROFO Purchase Price”).  At any time within the 45 day period (the “Asset ROFO Response Period”) commencing on the day the Blackstone Member sends the Asset ROFO Notice to the Glimcher Member, the Glimcher Member shall have the right to deliver written notice to the Blackstone Member either (A) electing to purchase the Offered Assets for the Asset ROFO Purchase Price (an “Asset ROFO Election Notice”), or (B) rejecting the offer contained in the Asset ROFO Notice (an “Asset ROFO Rejection Notice”).  If the Glimcher Member fails to duly deliver an Asset ROFO Election Notice within the Asset ROFO Response Period, the Glimcher Member shall be deemed to have delivered an Asset ROFO Rejection Notice rejecting the offer contained in the Asset ROFO Notice.  If the Asset ROFO Notice covers both Properties (or both Property Owners), then the Glimcher Member’s Asset ROFO Election Notice must cover both Properties (or Property Owners).

 

 

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(b)           If the Glimcher Member duly delivers an Asset ROFO Election Notice, then within three Business Days after the date thereof, the Glimcher Member shall deposit in escrow with a reputable title insurance company authorized to do business in the State of New York (the “Asset ROFO Escrow Agent”) pursuant to escrow instructions consistent with this Section 4.13, a non-refundable cash down payment in immediately available funds in an aggregate amount equal to 10% of the Asset ROFO Purchase Price (the “Asset ROFO Down Payment”).  If the Glimcher Member fails to timely deliver the Asset ROFO Down Payment, the Glimcher Member shall be deemed to have delivered an Asset ROFO Rejection Notice.

 

(c)           If the Glimcher Member timely delivers the Asset ROFO Down Payment, then each applicable Property Owner (or the Company), as seller, and the Glimcher Member, as purchaser, shall proceed to close the sale of the Offered Assets at the Asset ROFO Purchase Price on a mutually acceptable closing date (the “Asset ROFO Closing Date”), but in any event not later than 90 days after the Glimcher Member delivered the Asset ROFO Election Notice, at a location designated by the Blackstone Member.  On the Asset ROFO Closing Date, (x) the Property Owners (or the Company) shall sell to the Glimcher Member the Offered Assets free and clear of all monetary liens other than liens for current real estate taxes and assessments (or, to the extent permitted under any Indebtedness, subject to such Indebtedness) by execution and delivery of the documents attached hereto as Exhibit C (the “Asset ROFO Sale Documents”), (y) the Asset ROFO Escrow Agent shall deliver the Asset ROFO Down Payment in immediately available funds to the applicable Property Owner (or the Company) and (z) the Glimcher Member shall pay to the applicable Property Owner (or the Company) the Asset ROFO Purchase Price (less a credit for the Asset ROFO Down Payment) in immediately available funds, as adjusted by customary closing adjustments.  None of the Blackstone Member, the applicable Property Owner or the Company shall be required to make any representations or warranties with respect to the Offered Assets in connection with such sale.  Each party shall pay its own closing costs in connection with such sale, provided that any transfer taxes or other similar tax payable in connection therewith shall be by the Members pro rata in accordance with their respective Capital Sharing Ratios.  If the closing fails to occur by reason of a default of the Glimcher Member, the Glimcher Member’s Asset ROFO rights under this Section 4.13 shall be deemed forever extinguished and shall thereafter be null and void and of no further force and effect, the Blackstone Member shall be entitled to retain the Asset ROFO Down Payment as liquidated damages and the Blackstone Member shall thereafter be free, at any time and from time to time, to cause a sale of the Offered Asset in an arms-length transaction with a third-party unaffiliated with the Blackstone Member or BREP at such price as the Blackstone Member determines in its sole discretion.  If the closing hereunder fails to occur by reason of default of the Blackstone Member, the Glimcher Member shall have the right, as its sole and exclusive remedy, to either (A) demand that the Asset ROFO Down Payment be returned to the Glimcher Member, or (B) seek specific performance.

 

(d)           Notwithstanding the foregoing, in the event the Offered Assets consist of both Properties (or Property Owners), then, the Glimcher Member shall purchase all of the Blackstone Member’s Interest in the Company, instead of purchasing the Offered Assets, and the provisions of Section 4.13(c) shall apply in respect of such sale, except that (i) the purchase price to be paid by the Glimcher Member to the Blackstone Member in connection with consummating such sale shall be equal to the Interest Price, and (ii) the documentation to be executed and delivered by the Glimcher Member and the Blackstone Member to consummate such sale shall be in the form attached hereto as Exhibit D (the “Asset ROFO Deemed Liquidation Sale Documents”).

 

 

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(e)           If the Glimcher Member delivers an Asset ROFO Rejection Notice (or is deemed to have delivered an Asset ROFO Rejection Notice), the Blackstone Member shall have the right, for a period of 180 days from expiration of the Asset ROFO Response Period to cause the applicable Property Owners (or the Company) enter into a contract of sale (the “Asset ROFO Purchase Agreement”) with an unaffiliated third party to complete the sale of the Offered Assets for a purchase price of not less than 95% the Asset ROFO Purchase Price.  The Asset ROFO Purchase Agreement must provide for a closing thereunder on a date not later than 270 days after expiration of the Asset ROFO Response Period.   If (i) the Asset ROFO Purchase Agreement is not executed within 180 days from expiration of the Asset ROFO Response Period, (ii) the closing thereunder does not occur within 270 days of the expiration of the Asset ROFO Response Period, or (iii) the Blackstone Member desires to sell the Offered Asset for less than 95% of the Asset ROFO Purchase Price, the Blackstone Member must again comply with the ROFO procedures in this Section 4.13 and the Glimcher Member shall have all the rights available to it under this Section 4.13 in connection with any such sale.  If the Blackstone Member offers both Properties under an Asset ROFO Notice, then it must sell both Properties pursuant to this Section 4.13(e).

 

(f)           Notwithstanding the provisions of Section 4.13, no Member may cause the sale or disposition of a Property or an interest in a Property Owner if such sale or disposition would (i) violate any provision of any Indebtedness, or (ii) violate, or cause the Company to violate, any applicable law or regulation, including any federal or state securities laws.

 

ARTICLE 5

ACCOUNTING AND REPORTING

 

Section 5.1.   Fiscal Year, Accounts, Reports.

 

(a)           The fiscal year of the Company shall be the calendar year.

 

(b)           The books of account of the Company, at Company expense, shall be kept and maintained by the Administrative Member on an accrual basis and in accordance with generally accepted accounting principles (GAAP), applied on a consistent basis; provided that the Administrative Member shall also provide quarterly book to tax adjustments reasonably requested by the Managing Member.  The annual audited statements shall be in accordance with generally accepted accounting principles (GAAP), applied on a consistent basis, which statements shall be delivered to the Members within 90 days of calendar year end.  The Administrative Member shall prepare a reconciliation of such books and records to accrual removing non-cash items such as straight-line depreciation, fair market value adjustments and similar items.  Further, the Administrative Member at the Company’s expense, shall prepare or cause to be prepared all required federal, state and local Company tax returns, which draft returns shall be delivered to the Members within 60 days of calendar year end and shall be subject to the approval of the Managing Member, not to be unreasonably withheld, and final returns (including schedules K-1) to be delivered to the Members by April 15 and timely filed with the appropriate government agencies.

 

 

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(c)           At the earliest practicable time, but in no event later 90 days following the end of each year, the Administrative Member, at the cost and expense of the Company, shall provide annual audited financial statements for the Company including, as supplementary schedules, a consolidated balance sheet, cash flow statement and income statement for each Property and a statement of the Capital Accounts of each Member, and of all balances of each Member indicating the type and amount of each type of Capital Contribution and any changes in Members’ equity, together with such other supplementary schedules, statements, reports, and data files as may be reasonably requested by the Managing Member.  Such annual financial statements shall be audited by BDO Seidman, LLP or such other nationally recognized certified public accounting firm mutually selected by the Members.

 

(d)           The books and records of the Company shall be kept at the offices of the Administrative Member.  Each Member, or its designated agents or employees, at such Member’s own expense, may at all reasonable times during usual business hours and upon reasonable prior notice, audit, examine and make copies of or extracts from the books of account records, files and bank statements of the Company.

 

(e)           The foregoing reports and statements are in addition to any other report or statement specifically required by this Agreement.

 

Section 5.2.   Financial Accounting Matters.  The Company’s books and financial statements shall be kept on an accrual basis or as otherwise mutually agreed by the Blackstone Member and the Glimcher Member and otherwise in accordance with generally accepted accounting principles (consistently applied) unless otherwise expressly provided in this Agreement.  All determinations, valuations and other matters of judgment required to be made for accounting and tax purposes under this Agreement that will have a material impact on the Blackstone Member shall be made by mutual agreement of the Members.

 

ARTICLE 6­

CAPITAL CONTRIBUTIONS

 

Section 6.1.   Initial Capital Contributions.    On the date hereof, (i) the Blackstone Member is deemed to have made Capital Contributions to the Company in the amount of $63,575,613.84 and (ii) the Glimcher Member is deemed to have made Capital Contributions to the Company in the amount of $42,383,742.56.1  All Capital Contributions made in accordance with this Section 6.1 shall be referred to herein as “Initial Capital Contributions”.  The Members agree that after giving effect to the Initial Capital Contributions, the respective Capital Sharing Ratios of the Members as of the date hereof shall be as set forth on Schedule A.

 

1 Note: appropriate adjustments to initial capital contributions (and deemed contributions) to be made based on any true up under Section 10.11 of the Purchase Agreement; no change to be made to the 60/40 split.

 

 

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Section 6.2.   Additional Capital Contributions.

 

(a)           After the Initial Capital Contributions have been made, each Member shall make Capital Contributions (“Additional Capital Contributions”) pro rata based on each Member’s Capital Sharing Ratio, in such amounts and at such times as are approved by the Members as a Unanimous Major Decision.  From time to time as the Company requires funds to conduct its business as approved by the Members as a Unanimous Major Decision, the Administrative Member, acting pursuant to the authority granted to it under Section 4.2, shall give written notice (a “Funding Notice”) to the Members of the amount of funds required, the use and purpose of such funds, and each Member’s required contribution amount.

 

(b)           In addition to the foregoing, in the event additional capital is required by the Company to address or avoid an “Emergency” (as defined below), both the Administrative Member and the Managing Member shall have the authority to issue a Funding Notice to the Members describing in reasonable detail the relevant Emergency and indicating the amount of funds required and each Member’s required contribution, and the Members shall be obligated to fund such amounts; provided, however, that no Member shall be required to fund Additional Capital Contributions in respect of Emergencies in excess of (i) $5,000,000 in any calendar year, or (ii) $15,000,000 in the aggregate during the term of this Agreement.  For purposes of this Agreement, an “Emergency” shall mean the existence or imminent occurrence of any of the following events: (x) shortfalls in funds for the payment of interest, required amortization (other than any amortization at maturity) or required reserves under any Indebtedness, (y) shortfalls in funds available for tenant inducement or tenant allowance costs relating to each Lease which has been approved and entered into in accordance with this Agreement or the Property Management Agreement, and (z) costs associated with repairing or replacing life/safety systems or equipment at a Property.

 

(c)           Notwithstanding anything to the contrary contained herein, each Member shall be automatically obligated to fund Additional Capital Contributions pro rata in accordance with their respective Capital Sharing Ratios (without any further approvals hereunder) as may be required to fund any shortfalls in connection with the consummation of a Qualified Financing (including funding any shortfalls relating to (i) the Indebtedness being refinanced by such Qualified Financing and (ii) any closing costs relating to such Qualified Financing).  Any Additional Capital Contributions required to be funded by the Members pursuant to this Section 6.2(c) shall be funded by each Member at least five Business Days prior to the closing of the applicable Qualified Financing.

 

(d)           In the event of a failure by any Member to contribute an Additional Capital Contribution required by this Section 6.2 within 10 Business Days of receipt of the Funding Notice, such failure shall constitute a default by the Member of its obligations under this Agreement and the Company and the other Member shall have all remedies available at law and in equity, including all remedies set forth in Section 6.3 of this Agreement.   Notwithstanding anything to the contrary, a failure of the Glimcher Member to fund any Additional Capital Contributions shall not constitute a Removal Event.

 

 

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(e)           No Member shall be required to make Capital Contributions except as provided in this Article 6.

 

Section 6.3.   Failure to Make Contributions.   If a Member fails to timely contribute all or any portion of an Additional Capital Contribution (such Member, a “Non-Funding Member”) and such default is not cured within 10 days notice of the date such Additional Capital Contribution was due, then the other Members shall have the option, in proportion to their Capital Sharing Ratios or in such other percentages as they may agree (the “Funding Members”) to advance that portion of the Additional Capital Contribution that the Non-Funding Member has failed to timely contribute (a) as an Additional Capital Contribution by such Funding Members, with a corresponding dilution to the Non-Funding Member’s Capital Sharing Ratio (such dilution to be on a 1.25:1 basis), or (b) as a loan (each, a “Member Loan”) in accordance with the provisions of this Article.  Any amounts funded by a Funding Member on behalf of a Non-Funding Member as a Member Loan shall be made directly to the Company, but shall be treated as a non-recourse (except to the extent of the Non-Funding Member’s Interest) demand loan made by the Funding Member to the Non-Funding Member, bearing interest at the Interest Rate, and a Capital Contribution of the amount of such loan from the Non-Funding Member to the Company.  Any such non-recourse loan shall be repaid in full directly by the Company on behalf of the Non-Funding Member to the Funding Member from Net Cash Flow and Capital Proceeds otherwise distributable to the Non-Funding Member under Article 8 prior to any amount being distributed to such Non-Funding Member.  Amounts paid directly by the Company to the Funding Member on account of a Member Loan shall be deemed distributions to the Non-Funding Member. Any Amounts used to repay such Member Loan shall be applied first to accrued interest therein and then to repay principal of such Member Loan.

 

Section 6.4.   Return of Contributions.   Except as expressly provided herein, no Member shall be entitled to (a) the return of any part of its Capital Contributions, (b) any interest in respect of any Capital Contribution or (c) the fair market value of its Interest in connection with a withdrawal from the Company or otherwise.  Capital Contributions which are not repaid shall not be a liability of the Company or of any Member.  No Member shall be required to contribute or lend any cash or property to the Company to enable the Company to return any Member’s Capital Contributions to the Company.

 

Section 6.5.   Balances.  The Company’s books and records shall contain entries indicating the type and amount of Capital Contributions and loans made to the Company and the distributions and payments made by the Company thereon.

 

ARTICLE 7

FINANCING

 

Section 7.1.   Financing.

 

(a)           The Members acknowledge that as of the date hereof the Properties are subject to the Existing Loans.  The Administrative Member shall, subject to the provisions of this Agreement, including Section 4.5(a)(2) hereof, cause the Company and the Property Owners to comply in all respects with the terms and provisions of the Existing Loans.

 

 

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(b)           Notwithstanding any other provision of this Agreement to the contrary, the Blackstone Member shall have the unilateral and exclusive right, in its sole and absolute discretion, during the period in which voluntary prepayment is permitted under any Indebtedness and on or following the maturity of the Existing Loan or any other Indebtedness with respect to each Property, to cause the Company and/or the Property Owners to obtain one or more loans (any such loan and any amendment, extension, restatement, modification, restructuring and refinancing thereof shall be referred to as a “Financing”) which may be secured by one or more mortgage liens on the Properties and/or pledges of ownership interests in the Property Owners, provided that such Financing shall be a Qualified Financing; provided that the Blackstone Member shall only have the right to cause a voluntary prepayment of the Existing Loans prior to maturity thereof if no penalty, premium or defeasance costs are payable in connection with such prepayment. The Members agree that they and their respective Affiliates as required by the Lender of a Financing shall promptly provide such Lender with all information in its possession or readily obtainable relating to the Properties, the Company and the Members which is reasonably requested by such Lender in connection with a Financing.

 

(c)           In connection with the closing of any Financing, GPLP shall be required to provide in favor of the Lender thereof any required (i) guaranty of customary non-recourse carveouts and (ii) environmental indemnity (collectively, the “Glimcher Future Financing Guaranties”) in each case in such form and substance as is required by such Lender.  In connection with the Glimcher Financing Guaranties, the Glimcher Member shall provide to such Lender all information in its possession or readily available with respect to the financial condition of the Glimcher Member which is requested by the Lender in connection with such Financing.  As used herein, the term “Glimcher Financing Guaranties” shall mean (1) any Glimcher Future Financing Guaranties, and (2) the existing guaranty of recourse obligations executed by GPLP with respect to each Existing Loan.  Notwithstanding the foregoing, in the event that as of the closing of a Financing relating to any Property, the Property Management Agreement for such Property has been terminated and no Affiliate of the Glimcher Member is then the property manager with respect to such Property, GPLP shall not be required to provide any Glimcher Future Financing Guaranty in connection with such Financing.

 

(d)           The Blackstone Member shall indemnify GPLP from and against (1) any out-of pocket cost or expense actually incurred by GPLP under any Glimcher Financing Guaranty which is caused solely by the affirmative actions of the Blackstone Member or its Affiliates, (2) Blackstone Member’s pro rata share (based on each Member’s respective Capital Sharing Ratio) of any out-of-pocket cost or expense actually incurred by GPLP under any Glimcher Financing Guaranty which results from (i) the taking of any action that is mutually approved by the Members as a Unanimous Major Decision, or (ii) the existence of an environmental condition not resulting from the actions or failure to act on the part of the Glimcher Member or its Affiliates, other than the Excluded Liabilities, and (3) from and after the date on which an Affiliate of the Glimcher Member is no longer the property manager of any Property, the Blackstone Member’s pro rata share (based on each Member’s respective Capital Sharing Ratio) of any out-of-pocket cost or expense actually incurred by GPLP under any Glimcher Financing Guaranty relating to such Property with respect to matters arising from and after the date that GPLP or an Affiliate is no longer property manager thereof, unless caused by GPLP or any of its Affiliates.

 

 

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(e)           The Members acknowledge that on the date hereof BREP VI has executed a non-recourse carveout guaranty under the Lloyd’s Loan, on a joint and several basis with GPLP (the “Blackstone Existing Lloyd’s Guaranty”).  Further, the Members agree that in connection with a Financing entered into following the date hereof in accordance with this Agreement under which the applicable Lender does not accept GPLP or another Affiliate of the Glimcher Member as guarantor in accordance with Section 7.1(c) above, then BREP VI (or any other Affiliate of the Blackstone Member acceptable to such Lender) shall have the right (but not the obligation) to provide such guaranty and/or indemnity in respect of such Financing (any such guarantees and/or indemnities, a “Blackstone Future Financing Guaranty”; together with the Blackstone Existing Lloyd’s Guaranty, the “Blackstone Financing Guaranties”).  BREP VI and any other Affiliates of the Blackstone Member providing a Blackstone Financing Guaranty from time to time are referred to herein collectively as the “Blackstone Guarantor”.  The Glimcher Member shall indemnify the Blackstone Guarantor from and against (1) any out-of-pocket cost or expense actually incurred by the Blackstone Guarantor under any Blackstone Financing Guaranty which is caused solely by the affirmative actions of the Glimcher Member or its Affiliates and (2) the Glimcher Member’s pro rata share (based on each Member’s respective Capital Sharing Ratio) of any other out-of-pocket cost or expense actually incurred by any Blackstone Guarantor under any Blackstone Financing Guaranty, unless caused solely by the actions of the Blackstone Guarantor or its Affiliates..

 

Section 7.2.   Cooperation; Securitized Debt.  Each of the Members acknowledges that a Lender may securitize, sell or otherwise dispose of all or any portion of the Financing (each, a “Securitization”), and each of the Members agrees to cooperate in all respects with such Lender in connection with any such Securitization, including, without limitation, (a) executing modifications to the Certificate and this Agreement and the organizational documents of the Company and its subsidiaries so that the Company and its subsidiaries will qualify as bankruptcy-remote entities and other documentation changes of a similar nature and (b) causing the Company to comply with other industry standard requirements  in connection with Securitizations.  In addition, if any portion of the Financing is structured as a mezzanine loan, the Company shall provide such pledges of its interests in the Property Owners as required by the Lender under such Financing.

 

ARTICLE 8

DISTRIBUTIONS

 

Section 8.1.   Distributions in General.  Except as set forth in the approved Business Plan, all Net Cash Flow shall be distributed quarterly, within 30 days after the end of the applicable calendar quarter, and all Capital Proceeds shall be distributed within five days after receipt of such Capital Proceeds.  All distributions shall be made to the Members pro rata in accordance with their respective Capital Sharing Ratios.

 

Section 8.2.   Miscellaneous.

 

(a)           Notwithstanding anything to contrary contained in this Article 8, at any time that any Member Loan is outstanding, all distributions of Net Cash Flow and Capital Proceeds otherwise distributable to the Non-Funding Member under this Article 8 shall instead be paid to the Funding Member until such Member Loan, including all accrued interest thereon, has been fully repaid.  Any amounts paid directly by the Company to the Funding Member on account of a Member Loan shall be (1) deemed distributions to the Non-Funding Member, and (2) applied first to interest on and then to principal of such Member Loan.

 

 

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(b)           Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not be required to make a distribution to the Member on account of its Interest if such distribution would violate the Act or any other applicable law.

 

Section 8.3.   Off-Set for Obligations under Purchase Agreement and Certain Indemnity Obligations.  In the event that the Glimcher Member (or its Affiliates) fails to pay to the Blackstone Member (or its Affiliates) (i) any Glimcher Purchase Agreement Liabilities or (ii) any Glimcher Guaranty Indemnity Liabilities, the Blackstone Member shall have the right to off-set the amounts of any such Glimcher Purchase Agreement Liabilities or Glimcher Guaranty Indemnity Liabilities against any distributions to be made to the Glimcher Member pursuant to Section 8.1, and such distributions shall instead be paid directly to the Blackstone Member up to the amount of any unpaid Glimcher Purchase Agreement Liabilities and Glimcher Guaranty Indemnity Liabilities; provided, however, that the Blackstone Member’s right to offset Glimcher Guaranty Indemnity Liabilities against such distributions shall be limited to distributions to be made to the Glimcher Member in respect of the Lloyd Center Property and the WestShore Property only (and not any additional properties or assets acquired by the Company following the date hereof in accordance with this Agreement).  In the event that the Blackstone Member (or its Affiliates) fails to pay to the Glimcher Member (or its Affiliates) any Blackstone Purchase Agreement Liabilities, the Glimcher Member shall have the right to off-set the amounts of any such Blackstone Purchase Agreement Liabilities against any distributions to be made to the Blackstone Member pursuant to Section 8.1, and such distributions shall instead be paid directly to the Glimcher Member up to the amount of any unpaid Blackstone Purchase Agreement Liabilities.

 

ARTICLE 9

CAPITAL ACCOUNTS, ALLOCATIONS, AND TAX MATTERS

 

Section 9.1.   Capital Accounts.

 

(a)           Establishment and Maintenance.  A separate capital account (“Capital Account”) will be maintained for each Member.  The Capital Account of each Member will be determined and adjusted as follows:

 

(1)      Each Member’s Capital Account will be credited with the Member’s Capital Contributions, the Profits allocated to such Member pursuant to Section 9.3(a), any items in the nature of income or gain that are specially allocated to the Member under Sections 9.3(c) or 9.3(d), and the amount of any Company liabilities that are assumed by the Member or secured by any Company property distributed to the Member.

 

(2)      Each Member’s Capital Account will be debited with the amount of cash and the Gross Asset Value of any Company property distributed to the Member under any provision of this Agreement, the Losses allocated to such Member pursuant to Section 9.3(a), any items in the nature of deduction or loss that are specially allocated to the Member under Section 9.3(c) or 9.3(d), and the amount of any liabilities of the Member assumed by the Company or which are secured by any property contributed by the Member to the Company.

 

 

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(3)      If any interest in the Company is transferred in accordance with the terms of this Agreement, the transferee will succeed to the Capital Account of the transferor to the extent it relates to the transferred interest.

 

(b)           Modifications by Managing Member.  The provisions of this Section 9.1 and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Section 704(b) of the Code and the Regulations promulgated thereunder and will be interpreted and applied in a manner consistent with those provisions.  The Managing Member may modify the manner in which the Capital Accounts are maintained under this Section 9.1 to comply with those provisions, as well as upon the occurrence of events which might otherwise cause this Agreement not to comply with those provisions.

 

Section 9.2.   Adjustment of Gross Asset Value.  “Gross Asset Value”, with respect to any asset, is the adjusted basis of that asset for federal income tax purposes, except as follows:

 

(a)           The initial Gross Asset Value of any asset contributed by a Member to the Company will be the fair market value of the asset on the date of the contribution, as determined by the Members; provided, however, that the initial Gross Asset Value of the Properties shall be determined in accordance with Section 2.5 of the Purchase Agreement.

 

(b)           The Gross Asset Values of all Company assets will be adjusted to equal the respective gross fair market values (taking Code Section 7701(g) into account) of the assets, as determined by the Members, as of (1) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis capital contribution, (2) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an interest in the Company if an adjustment is necessary or appropriate to reflect the relative economic interests of the Members in the Company, (3) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), and (4) any other date that is required by Regulations Section 1.704-1(b)(2)(iv)(f).

 

(c)           The Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross fair market value (taking Code Section 7701(g) into account) of the asset on the date of distribution.

 

(d)           The Gross Asset Value of Company assets will be increased or decreased to reflect any adjustment to the adjusted basis of the assets under Code Section 734(b) or 743(b), but only to the extent that the adjustment is taken into account in determining Capital Accounts under Regulations Section 1.704-1(b)(2)(iv)(m), provided that Gross Asset Values will not be adjusted under this Section 9.2(d) to the extent that the Managing Member determines that an adjustment under Section 9.2(b) is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment under this Section 9.2(d).

 

 

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(e)           After the Gross Asset Value of any asset has been determined or adjusted under Section 9.2(a), 9.2(b) or 9.2(d), Gross Asset Value will be adjusted by the Depreciation taken into account with respect to the asset for purposes of computing Profits or Losses.

 

Section 9.3.   Profits, Losses and Distribution Shares of Tax Items.

 

(a)           Profits and Losses.  Except as otherwise provided in Sections 9.3(c) and 9.3(d), Profits and Losses for any taxable year or other period, shall be allocated among the Members pro rata in accordance with their respective Capital Sharing Ratios.  Notwithstanding any other provision of this Agreement, all allocations are intended to satisfy the “fractions” and “substantial economic effect” rules contained in Section 514(c)(9)(E) of the Code, and items of income, gain, credit, loss and deduction shall be allocated among the Members only to the extent that such allocations would not violate such rules.  The Blackstone Member shall reasonably cooperate with the Glimcher Member in complying with the provisions of Section 514(c)(9) of the Code including providing all reasonable information required for such compliance.

 

(b)           Intentionally Omitted.

 

(c)           Special Allocations.  The following special allocations will be made in the following order and priority before allocations of Profits and Losses:

 

(1)      Company Minimum Gain Chargeback.   Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding any other provision of this Section 9.3 other than the last sentence of Section 9.3(a) above, if there is a net decrease in Company Minimum Gain during any taxable year or other period for which allocations are made, before any other allocation under this Agreement, each Member will be specially allocated items of Company income and gain for that period (and, if necessary, subsequent periods) in proportion to, and to the extent of, an amount equal to such Member’s share of the net decrease in Company Minimum Gain during such year determined in accordance with Regulations Section 1.704-2(g)(2).  The items to be allocated will be determined in accordance with Regulations Sections 1.704-2(g), 1.704-2(f)(6) and 1.704-2(j)(2).  This Section 9.3(c)(1) is intended to comply with the Company Minimum Gain chargeback requirements of the Regulations, will be interpreted consistently with the Regulations and will be subject to all exceptions provided therein.

 

(2)      Member Nonrecourse Debt Minimum Gain Chargeback.  Notwithstanding any other provision of this Section 9.3 (other than the last sentence of Section 9.3(a) above and other than Section 9.3(c)(1) which shall be applied first), if there is a net decrease in Member Nonrecourse Debt Minimum Gain with respect to a Member Nonrecourse Debt during any taxable year or other period for which allocations are made, any Member with a share of such Member Nonrecourse Debt Minimum Gain (determined under Regulations Section 1.704-2(i)(5)) as of the beginning of the year will be specially allocated items of Company income and gain for that period (and, if necessary, subsequent periods) in an amount equal to such Member’s share of the net decrease in the Member Nonrecourse Debt Minimum Gain during such year determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(g)(2).  The items to be so allocated will be determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(j)(2).  This Section 9.3(c)(2) is intended to comply with the Member Nonrecourse Debt Minimum Gain chargeback requirements of the Regulations, will be interpreted consistently with the Regulations and will be subject to all exceptions provided therein.

 

 

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(3)      Qualified Income Offset.  A Member who unexpectedly receives any adjustment, allocation or distribution described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) will be specially allocated items of Company income and gain in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible; provided, that an allocation pursuant to this Section 9.3(c)(3) shall be made only to the extent that a Member would have a deficit balance in its Adjusted Capital Account after all other allocations provided for in this Article 9 have been tentatively made as if this Section 9.3(c)(3) were not in this Agreement.  This Section 9.3(c)(3) is intended to qualify with the “qualified income offset” requirement of the Regulations.

 

(4)      Nonrecourse Deductions.  Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated among the Members pro rata in accordance with their respective Capital Sharing Ratios.  The provisions of this Section 9.3(c)(4) are intended to satisfy the requirements of Sections 704 and 514 of the Code and shall be interpreted in accordance therewith for all purposes under this Agreement.

 

(5)      ­Member Nonrecourse Deductions.  Notwithstanding anything to the contrary in this Agreement, any Member Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which the Member Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i).

 

(6)      Code Section 754 Adjustments.  To the extent an adjustment to the adjusted tax basis of any Company asset under Code Sections 734(b) or 743(b) is required to be taken into account in determining Capital Accounts under Regulations Section 1.704-1(b)(2)(iv)(m), the amount of the adjustment to the Capital Accounts will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis), and the gain or loss will be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted under Regulations Section 1.704-1(b)(2)(iv)(m).

 

(7)      Gross Income Allocation.  In the event any Member has a deficit Capital Account at the end of any taxable year or other period for which allocations are made that is in excess of the sum of the amount such Member is obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this provision shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Section 9.3 have been made as if the Qualified Income Offset provision were not in the Agreement.

 

 

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(d)           ­Curative Allocations.  The allocations set forth in Section 9.3(c) (the “Regulatory Allocations”) are intended to comply with certain requirements of Regulations Sections 1.704-1(b) and 1.704-2.  The Regulatory Allocations may affect results which would be inconsistent with the manner in which the Members intend to divide Company distributions.  Accordingly, the Administrative Member is authorized to divide other allocations of Profits, Losses, and other items among the Members, to the extent that they exist, so that the net amount of the Regulatory¬ Allocations and the special allocations to each Member, taking into account other Regulatory Allocations that are contemplated, is zero.  The Administrative Member will have discretion to accomplish this result in any reasonable manner that is consistent with Code Section 704 and the related Regulations.

 

(e)           Loss Limitation.  Losses allocated pursuant to Section 9.3(a) hereof shall not exceed the maximum amount of Losses that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any taxable year or other period for which allocations are made.  In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to Section 9.3(a) hereof, the limitation set forth in this Section 9.3(d) shall be applied on a Member by Member basis and Losses not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such other Members’ Capital Accounts so as to allocate the maximum permissible Losses to each Member under Regulations Section 1.704-1(b)(2)(ii)(d).

 

(f)           ­Tax Allocations - Code Section 704(c).  For federal, state and local income tax purposes only, Company income, gain, loss, deduction or expense (or any item thereof) for each taxable year or other period for which allocations are made shall be allocated to and among the Members to reflect the allocations of Profits and Losses made pursuant to the provisions of this Section 9.3 for such fiscal year.  In accordance with Code Section 704(c) and the related Regulations, income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members by use of the “traditional method” and with regard to Code Section 704(c)(1)(C) so as to take account of any variation between the adjusted basis to the Company of the property for federal income tax purposes and the initial Gross Asset Value of the property (computed in accordance with Section 9.2).  If the Gross Asset Value of any Company asset is adjusted under Section 9.2(b), subsequent allocations of income, gain, loss and deduction with respect to that asset will take account of any variation between the adjusted basis of the asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the related Regulations.  Allocations under this Section 9.3(e) are solely for purposes of federal, state and local taxes and will not affect, or in any way be taken into account in computing, any Member’s Capital Account or distributions pursuant to any provision of this Agreement.

 

(g)           Reporting.   Members shall be bound by the provisions of this Section 9.3 in reporting their shares of Company income and loss for income tax purposes.

 

 

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Section 9.4.   Tax Returns.  The Administrative Member shall prepare or cause to be prepared and filed all necessary federal and state income tax returns for the Company and the Property Owners, including making the elections described in Section 9.5.  Each Member shall furnish to the Administrative Member all pertinent information in its possession relating to Company operations that is necessary to enable such income tax returns to be prepared and filed.  In addition, the Administrative Member shall cause to be delivered to each Member (A) on or before February 28 of each year for the preceding year, (i) a draft of Schedule K-1s, and (ii) a draft copy of the Company’s information return to be filed for federal income tax purposes for approval by the Managing Member, not to be unreasonably withheld, (B) within 45 days of the end of each calendar quarter, (i) estimates of unrealized appreciation/depreciation, material realized gain/loss due to currency valuation, realized gain/loss, income, expenses, management fee, other accrued fees, contributions, distributions and capital account balances (beginning and ending) and (ii) any information reasonably requested by any Member relating to characterization of income as “qualifying income” as defined in Section 7704(d) of the Code, (C) on or before April 15 of each year for the preceding year, (i) a Schedule K-1, and (ii) a copy of the Company’s information return as filed for federal income tax purposes and a report setting forth in sufficient detail such other information with respect to Company transactions as may be reasonably necessary for such Member to prepare its own tax return, and (D) such other items as reasonably requested by a Member from time to time, when reasonably available to the Administrative Member.

Section 9.5.   Tax Elections.  The following elections shall be made on the appropriate returns of the Company:

 

(a)           to adopt the calendar year as the Company’s fiscal year;

 

(b)           to adopt the accrual method of accounting and to keep the Company’s books and records (other than Capital Accounts, which shall be maintained in accordance with Section 9.2 hereof) on the income-tax method; and

 

(c)           if there is a distribution of Company property as described in section 734 of the Code or if there is a transfer of a Company interest as described in section 743 of the Code, upon written request of any Member, to elect, pursuant to section 754 of the Code, to adjust the basis of Company properties.

 

No election shall be made by the Company or any Member to exclude the Company from the application of the provisions of subchapter K of chapter 1 of subtitle A of the Code or any similar provisions of applicable state laws.

Section 9.6.   Tax Matters Member.  The Administrative Member shall be the “tax matters partner” of the Company pursuant to section 6231(a)(7) of the Code and Section 301.6231(a)(7)-2 of the Regulations.  The tax matters partner shall select an independent certified public accountant to prepare audited financial statements and prepare tax returns.  As tax matters partner, such Member shall take such action as may be necessary to cause each other Member to become a “notice partner” within the meaning of Section 6223 of the Code.  Such Member shall inform each other Member of all significant matters that may come to its attention in its capacity as tax matters partner by giving notice thereof within ten days after becoming aware thereof and, within such time, shall forward to each other Member copies of all significant written communications it may receive in such capacity.  This provision is not intended to authorize such Member to take any action left to the determination of an individual Member under sections 6222 through 6231 of the Code.

 

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Section 9.7.   Allocations on Transfer of Interests.  All items of income, gain, loss, deduction, and credit allocable to any interest in the Company that may have been transferred shall be allocated between the transferor and the transferee based upon the “interim closing of the books” method, provided, however, such allocation shall be made in accordance with a method permissible under section 706 of the Code and the Regulations thereunder.

 

ARTICLE 10­

DISSOLUTION, LIQUIDATION, AND TERMINATION

 

Section 10.1.   Dissolution, Liquidation, and Termination Generally.

 

(a)           The Company shall be dissolved upon the first to occur of any of the following:

 

(1)           the sale or disposition of all of the assets of the Company and the receipt in cash, of all consideration therefor;

 

(2)           the termination of the legal existence of the last remaining Member of the Company or the occurrence of any other event which terminates the continued membership of the last remaining Member of the Company unless the business of the Company is continued in a manner permitted by this Agreement or the Act; and

 

(3)           the entry of a decree of judicial dissolution under the Act.

 

(b)           Upon the occurrence of any event that causes the last remaining Member of the Company to cease to be a Member of the Company, to the fullest extent permitted by law, the personal representative of such Member is hereby authorized to, and shall, within 90 days after the occurrence of the event that terminated the continued membership of such Member in the Company, agree in writing (i) to continue the Company and (ii) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute Member of the Company, effective as of the occurrence of the event that terminated the continued membership of the last remaining Member of the Company in the Company.

 

(c)           Notwithstanding any other provision of this Agreement, the Bankruptcy of any Member shall not cause such Member, respectively, to cease to be a Member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution.

 

(d)           In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in the Act.

 

 

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Section 10.2.   Liquidation and Termination.  Upon dissolution of the Company, unless it is continued as provided above, the Managing Member shall act as liquidator or may appoint one or more other Persons as liquidating trustee; however, if the Company is dissolved because of an event occurring with respect to the Managing Member or if there is no Managing Member at the time of dissolution, the liquidating trustee shall be one or more Persons selected in writing by the other Members.  The liquidating trustee shall proceed diligently to wind up the affairs of the Company and make final distributions as provided herein.  The costs of liquidation shall be a Company expense.  The liquidating trustee may sell any or all Company property.  Until final distribution, the liquidating trustee shall continue to operate the Company properties with all of the power and authority of the Administrative Member hereunder.  The steps to be accomplished by the liquidating trustee are as follows:

 

(a)           as promptly as possible after dissolution and again after final liquidation, the liquidating trustee shall cause a proper accounting to be made by a firm of certified public accountants acceptable to the Members of the Company’s assets, liabilities, and operations through the last day of the calendar month in which the dissolution shall occur or the final liquidation shall be completed, as applicable;

 

(b)           the liquidating trustee shall satisfy (whether by payment or reasonable provision for payment) all of the debts and liabilities of the Company or otherwise make adequate provision therefor (including the establishment of a cash escrow fund for contingent liabilities in such amount and for such term as the liquidating trustee may reasonably determine); and

 

(c)           all remaining assets of the Company shall be distributed to the Members in accordance with their positive Capital Account balances.  In carrying out the provisions of this Article 10, the Managing Member shall comply (x) with the requirement of Regulations Section 1.704-1(b)(2)(ii)(b)(2) or (y) with any other then existing and applicable requirement for “substantial economic effect” within the meaning of Section 704(b) of the Code and the related Regulations.

 

Section 10.3.   Deficit Capital Accounts.   No Member shall be required to pay to the Company, to any other Member or to any third party any deficit balance which may exist from time to time in the Member’s Capital Account.

 

Section 10.4.   Cancellation of Certificate.  On completion of the distribution of Company assets, the Managing Member (or such other Person as the Act may require or permit) shall file a Certificate of Cancellation with the Secretary of State of Delaware, cancel any other filings made pursuant to Section 2.4, and take such other actions as may be necessary to terminate the existence of the Company.

 

 

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ARTICLE 11­

MISCELLANEOUS PROVISIONS

 

Section 11.1.   Notices.   All notices provided for or permitted to be given pursuant to this Agreement must be in writing and shall be given or served by (a) depositing the same in the United States mail addressed to the party to be notified, postpaid and certified with return receipt requested, (b) depositing the same with a national overnight delivery service company which tracks deliveries, addressed to the party to be notified, with all charges paid and proof of receipt requested, (c) by delivering such notice in person to such party, or (d) by prepaid telegram, telex, or telecopy.  All notices are to be sent to or made at the addresses set forth on Schedule A hereto and in the case of notices to the Glimcher Member with a copy to Squire, Sanders & Dempsey L.L.P., 2000 Huntington Center, 41 South High Street, Columbus, Ohio 43215 Attention: Steven F. Mount, Esq. and in the case of notices to the Blackstone Member, with a copy to Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017, Attention:  Sas Mehrara, Esq.  All notices given in accordance with this Agreement shall be effective upon delivery at the address of the addressee.  By giving written notice thereof, each Member shall have the right from time to time to change its address pursuant hereto.

 

Section 11.2.   Governing Law.  This Agreement and the obligations of the Members hereunder shall be construed and enforced in accordance with the laws of the State of Delaware, excluding any conflicts of law rule or principle which might refer such construction to the laws of another state or country.  Each Member submits to the jurisdiction of the state and federal courts in the State of Delaware.

 

Section 11.3.   Entireties; Amendments.   This Agreement and its exhibits constitute the entire agreement between the Members relative to the formation of the Company.  Except as otherwise provided herein, no amendments to this Agreement shall be binding upon any Member unless set forth in a document duly executed by such Member.  Notwithstanding the foregoing, the Managing Member shall have the right to execute any amendments to this Agreement without the consent or execution by the Glimcher Member if the Glimcher Member is removed as Administrative Member of the Company pursuant to the terms of this Agreement to effectuate the removal of the Glimcher Member as the Administrative Member and the appointment of a replacement Administrative Member; provided that no such amendment shall otherwise have an adverse economic effect on the Glimcher Member or decrease its rights or increase its obligations hereunder.

 

Section 11.4.   Waiver.  No consent or waiver, express or implied, by any Member of any breach or default by any other Member in the performance by the other Member of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Member of the same or any other obligation hereunder.  Failure on the part of any Member to complain of any act or to declare any other Member in default, irrespective of how long such failure continues, shall not constitute a waiver of rights hereunder.

 

Section 11.5.   Severability.  If any provision of this Agreement or the application thereof to any Person or circumstances shall be invalid or unenforceable to any extent, and such invalidity or unenforceability does not destroy the basis of the bargain between the parties, then the remainder of this Agreement and the application of such provisions to other Persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

 

 

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Section 11.6.   Ownership of Property and Right of Partition.  A Member’s interest in the Company shall be personal property for all purposes.  No Member shall have any right to partition the property owned by the Company.

 

Section 11.7.   Involvement of Members in Certain Proceedings.  Should any Member become involved in legal proceedings unrelated to the Company’s business in which the Company is required to provide books, records, an accounting, or other information, then such Member shall indemnify the Company from all expenses incurred in conjunction therewith.

 

Section 11.8.   Use of Blackstone Name; Confidentiality; Press Releases.

 

(a)           The Glimcher Member hereby acknowledges and agrees that neither the Glimcher Member nor any Affiliate thereof shall be entitled to use the name “Blackstone” in any way whatsoever, except with the prior written consent of the Blackstone Member.

 

(b)           The Members shall hold as confidential all information disclosed in connection with the transaction contemplated hereby and concerning each other, the Properties, The Property Owners, this Agreement and the transactions contemplated hereby and shall not release any such information to third parties without the prior written consent of the other Member (such consent not to be unreasonably withheld), except (i) any information which was previously or is hereafter publicly disclosed (other than in violation of this Agreement or other confidentiality agreements to which any Member is a party), (ii) to their partners, advisers, underwriters, analysts, employees, affiliates, officers, directors, consultants, lenders, investors, potential lenders and investors, accountants, legal counsel, title companies or other advisors of any of the foregoing, provided that they are advised as to the confidential nature of such information and are instructed to maintain such confidentiality, (iii) to comply with any federal and state securities laws or any other law, rule or regulation, and (iv) in any legal proceeding between the Blackstone Member and the Glimcher Member or their Affiliates in connection with this Agreement.  The foregoing shall constitute a modification of any prior confidentiality agreement that may have been entered into by the parties.  The provisions of this subsection shall survive the termination of this Agreement.

 

(c)           Notwithstanding anything in this Agreement to the contrary, to comply with Regulations Section 1.6011-4(b)(3)(i), a Member (and any employee, representative, or other agent of such Member) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Company or any transactions undertaken by the Company, it being understood and agreed, for this purpose, (i) the name of, or any other identifying information regarding, the Company or any existing or future investor (or any affiliate thereof) in the Company, or any investment or transaction entered into by the Company (ii) any specific performance information relating to the Company or its investments, and (iii) any performance or other information relating to previous funds or investments sponsored by Blackstone, does not constitute such tax treatment or tax structure information.

 

 

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(d)           Each Member may issue a press release with respect to this Agreement and the transactions contemplated hereby (including the identity of the ultimate controlling party of the Members to the extent required by any federal or state securities laws), provided that the content of any such press release shall be subject to the prior review, comment and written consent of the other Member prior to any such issuance.

 

Section 11.9.   Interest.  No amount charged as interest on loans hereunder shall exceed the maximum rate from time to time allowed by applicable law.

 

Section 11.10.   Attorneys’ Fees.  If the Blackstone Member, on the one hand, or the Glimcher Member, on the other hand, brings any action or suit against any other party by reason of any breach of any of the covenants, agreements or provisions of this Agreement, then, in such event, the substantially prevailing party, as determined in such action or suit, shall be entitled to have and recover from the other party or parties all costs and expenses of such action or suit, including, without limitation, reasonable attorneys’ fees and expenses resulting therefrom, it being understood and agreed that the determination of the substantially prevailing party shall be included in the matters which are the subject of such action or suit.

 

Section 11.11.   Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when signed by each of the parties hereto and delivered by each of the parties hereto, in person or by facsimile, to the other parties hereto.

 

Section 11.12.   Company Tax Treatment.  The Members intend for the Company to be treated as a partnership for U.S. federal income tax purposes and no election to the contrary shall be made.

 

Section 11.13.   REIT Covenant.  The Glimcher Member is substantially owned, indirectly, by GRT, which has elected to be treated as a real estate investment trust (a “REIT”) and therefore the Company’s business shall be conducted in such a manner as to permit, to the extent commercially reasonable, the Glimcher Member and any Member that has notified the Company in writing that it intends to be a REIT at all times to be qualified as a REIT for federal income tax purposes (including refraining from taking actions inconsistent with such qualification).  For purposes of the foregoing, qualification of any Member as a REIT shall be determined by presuming that the Member (a) has no items of income or deduction other than its share of such items of the Company, (b) has no assets other than its share of assets of the Company and (c) otherwise meets all requirements for REIT qualification (including, without limitation, the Section 857(a)(1) of the Code such that in no event shall this paragraph require distributions from the Company not otherwise provided for in this Agreement).

 

ARTICLE 12

REPRESENTATIONS AND WARRANTIES

 

Section 12.1.   Glimcher Member Representations.

 

The Glimcher Member represents and warrants to the Blackstone Member that:

 

 

45

 

(a)           The Glimcher Member has been duly formed and is validly existing under the laws of the State of Delaware with full power and authority to conduct its business to the extent contemplated in this Agreement.

 

(b)           This Agreement has been duly authorized, executed and delivered by the Glimcher Member and shall constitute the legal, valid and binding obligations of the Glimcher Member, enforceable against it in accordance with its terms.

 

(c)           Neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby, violate or conflict with, result in the breach or termination of, or constitute a default under, any provisions of any agreement, organizational or charter document, any note or instrument evidencing or securing indebtedness, or judicial order, judgment, injunction, law, rule or regulation to which it is a party or is subject or to which its assets or property are subject.

 

(d)           There is no litigation, investigation or other proceeding pending or, to the knowledge of the Glimcher Member, threatened, against it or any of its Affiliates which, if adversely determined, would materially adversely affect its ability to carry out its obligations under this Agreement.

 

(e)           No consent, approval or authorization of, or filing, registration or qualification with, any court or governmental authority on the part of the Glimcher Member is required for the execution and delivery of this Agreement and the performance of its obligations and duties hereunder.

 

(f)           Neither the Glimcher Member nor any persons having a direct or indirect beneficial interest in the Glimcher Member (i) appears on the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control in the United States Department of the Treasury (“OFAC”) or the Annex to United States Executive Order 132224-Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, or (ii) is a prohibited party under the laws of the United States.  The monies used to fund the Glimcher Member’s investment in the Company are not invested for the benefit of, or related in any way to, the government of, or persons within, any country under a U.S. embargo enforced by OFAC.   The monies used to fund the Glimcher Member’s investment in the Company are not derived from or related to any illegal activities, including without limitation, money laundering activities, and the proceeds from the Glimcher Member’s investment in the Company shall not be used to finance any illegal activities.

 

Section 12.2.   Blackstone Member Representations.  The Blackstone Member hereby represents and warrants to the Glimcher Member as follows:

 

(a)           The Blackstone Member has been duly formed and is validly existing under the laws of the jurisdiction of its organization with full power and authority to conduct its business to the extent contemplated in this Agreement.

 

(b)           This Agreement has been duly authorized, executed and delivered by the Blackstone Member and shall constitute the legal, valid and binding obligations of the Blackstone Member, enforceable against it in accordance with its terms.

 

 

46

 

(c)           Neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby, violate or conflict with, result in the breach or termination of, or constitute a default under, any provisions of any agreement, organizational or charter document, any note or instrument evidencing or securing indebtedness, or judicial order, judgment, injunction, law, rule or regulation to which it is a party or is subject or to which its assets or property are subject

 

(d)           There is no litigation, investigation or other proceeding pending or, to the knowledge of the Blackstone Member, threatened against it or any of its Affiliates which, if adversely determined, would materially adversely affect its ability to carry out its obligations under this Agreement.

 

(e)           No consent, approval or authorization of, or filing, registration or qualification with, any court or governmental authority on the part of the Blackstone Member is required for the execution and delivery of this Agreement and the performance of its obligations and duties hereunder.

 

(f)           Neither the Blackstone Member nor any persons having a direct or indirect beneficial interest in the Blackstone Member (i) appears on the Specially Designated Nationals and Blocked Persons List of OFAC or the Annex to United States Executive Order 132224-Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, or (ii) is a prohibited party under the laws of the United States.  The monies used to fund the Blackstone Member’s investment in the Company are not invested for the benefit of, or related in any way to, the government of, or persons within, any country under a U.S. embargo enforced by OFAC.   The monies used to fund the Blackstone Member’s investment in the Company are not derived from or related to any illegal activities, including without limitation, money laundering activities, and the proceeds from the Blackstone Member’s investment in the Company shall not be used to finance any illegal activities.

 

[Remainder of Page Intentionally Left Blank]

 

 

47

 

IN WITNESS WHEREOF, the parties have executed this Amended and Restated Limited Liability Company Agreement as of the day and year first above written.

Addresses:

BLACKSTONE MEMBER:

BRE/GRJV HOLDINGS LLC, a Delaware limited liability company

 

By: __________________________

Name:  Anthony Myers

Title:    Managing Director and Vice President

 

 

GLIMCHER MEMBER:

GRT WSP-LC HOLDINGS LLC, a Delaware limited liability company

By:  Glimcher Properties Limited Partnership, its sole member

By: Glimcher Properties Corporation, its general partner

By: __________________________

Name: George A. Schmidt

Title:   Executive Vice President

 

 

 

SCHEDULE A

MEMBERS

 

	
Members

	 	
Address

	 	
Capital Sharing Ratio as of Effective Date

	 	 	 	 	 
	Blackstone Member:	 	 	 	 
	 	 	 	 	 
	
BRE/GRJV Holdings LLC, a Delaware limited liability company

 

	 	
345 Park Avenue

31st Floor

New York, New York 10154

	 	
60%

	 	 	 	 	 
	Glimcher Member:	 	 	 	 
	 	 	 	 	 
	
GRT WSP-LC Holdings LLC, a Delaware limited liability company

	 	
180 East Broad Street

Columbus, Ohio 43215

	 	
40%

 

 

 

SCHEDULE B-1

LEGAL DESCRIPTION – LLOYD CENTER PROPERTY

 

PARCEL 1:

Parcel 1 of PARTITION PLAT 1999-146, in the City of Portland, County of Multnomah  and State of Oregon.

PARCEL2:

A tract of land situated in the Southwest one-quarter of Section 26, and the Northwest one-quarter of Section 35, Township 1 North, Range 1 East of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, said tract being all of Blocks 201,202, 203, and Lots 3, 4, 5, 6, 7 and 8, Block 204, HOLLADAY'S ADDITION TO EAST PORTLAND, in the City of Portland, County of Multnomah and State of Oregon.

TOGETHER WITH those portions of vacated NE  11th Street, NE 12th Street and NE 13th Street, which inured thereto by reason of vacation thereof.

EXCEPTING THEREFROM those portions lying within NE Halsey Street and NE Weidler Street, being those portions conveyed to the City of Portland for street purposes by Deed recorded September 20, 1957, in Book 1863, Page 141, and by Deed recorded April 4, 1958, in Book 1891, Page 374, and by Ordinance No. 56365, May 21, 1929, and Resolution No. 20159, June 1931.  Said Parcel 2 being more particularly described as follows:

Beginning at a point that bears North along the West line of said Block 204, a distance of 10.00 feet from the Southwest corner thereof; thence North along the West line of said Block 204, a distance of 90.00 feet to the Northwest corner of Lot 3, Block 204; thence East along the North line of said Lot 3, a distance of 99.99 feet to the Northeast corner thereof; thence North along the West line of Lots 7 and 8, said Block 204, a distance of 90.00 feet to a point 10.00 feet South of the North line of Block 204; thence East on a line parallel with the North line of Blocks 204, 203, 202 and 201, a distance of 879.93 feet to a point that bears South 10.00 feet from the Northeast corner of said

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL 2, Continued...:

Block 201; thence South along the East line of said Block 201, a distance of 180.00 feet to a point 10.00 feet North of the Southeast corner thereof; thence West parallel with the South line of Blocks 201,202, 203 and 204, a distance of 979.92 feet to the point of beginning.

PARCEL 3:

A tract of land situated in the Southwest one-quarter of Section 26, Township 1 North, Range 1 East of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, said tract being all of Blocks 223, 224, 225 and Lots 1, 2, 3, 4, 5 and 6 of Block 226, HOLLADAY'S ADDITION TO EAST PORTLAND, in the City of Portland, County of Multnomah and State of Oregon.

TOGETHER WITH those portions of vacated NE  11th Street, NE 12th Street and NE 13th Street which inured thereto by reason of vacation thereof.

EXCEPTING THEREFROM those portions lying within NE Weidler Street as conveyed to the City of Portland for street purposes by Deed recorded September 20, 1957, in Book 1863, Page 141, and those portions lying within NE Broadway as taken by the City of Portland for street purposes by Ordinance No. 57721, December 11, 1929 and Resolution No. 19786, and the Plat thereof, August 6, 1930 and Ordinance No. 56365, May 21, 1929 and Resolution 20159, June, 1931. Said Parcel 3 being more particularly described as follows:

Beginning at a point on the West line of said Block 223, said point being North 10.00 feet from the Southwest corner thereof; thence North along the West line of said Block 223, a distance of 180.01 feet to a point that bears South 10.00 feet from the Northwest corner thereof; thence East parallel with the North line of said Blocks 223, 224, 225 and 226, a distance of 879.93 feet to a point on the East line of Lot 1, Block 226, said point being South 10.00 feet from the Northeast corner thereof; thence South along the

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL 3, Continued...:

East line of Lots 1 and 2, said Block 226, a distance of 90.00 feet to the Northwest corner of Lot 6, said Block 226; thence East along the North line of said Lot 6, a distance of 99.99 feet to the Northeast corner thereof; thence South along the East line of Lot 6 and Lot 5, said Block 226, a distance of 90.00 feet to a point that bears North 10.00 feet from the Southeast corner of said Block 226; thence West, parallel with the South line of said Blocks 226, 225, 224 and 223, a distance of 979.92 feet to the point of beginning.

PARCEL 33:

A tract of land situated in the Northeast quarter of Section 35, Township 1 North, Range 1 East of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, and being a portion of Blocks 174 and 175, HOLLADAY'S ADDITION TO EAST PORTLAND, City of Portland, EXCEPT the East 10 feet of Block 175, and the East 10 feet and the South 10 feet of Block 174, as dedicated for public right of way pursuant to instrument recorded on April 4, 1958, in Book 1891, Page 374, and recorded on July 23, 1951, in Book 1488, Page 216, Multnomah County Deed Records, and TOGETHER WITH those portions of NE Clackamas Street, NE Wasco Street and NE 15th Avenue, inuring thereto as vacated pursuant to Ordinance No. 166704, recorded on December 23, 1993, in Book 2806, Page 281, as amended by instrument recorded on December 23, 1993, in Book 2806, Page 306 Multnomah County Deed Records, and subject to the rights of the public in and to those portions of Blocks 174 and 175 dedicated for public right of way pursuant to Ordinance No. 166704 and as further described in Dedication Deeds recorded on December 23, 1993, in Book 2806, Page 262, and Book 2806, Page 277, which instrument was re-recorded on July 15, 1994, in Recorder's Fee No. 94108110, and further re-recorded on August 1, 1994, as Recorder's Fee No. 94116499.  Said Parcel 33 of land being described as follows:

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL 33, Continued...

Beginning at a point on the center line of NE 15th Avenue and being located North 0000'00'' East, a distance of 40.00 feet from the center line of NE Multnomah Street and NE 15th Avenue and running thence North 0000'00'' East on the center line of NE 15th Avenue, a distance of 535.79 feet to the Westerly line of relocated NE 16th Avenue, the beginning of a non-tangent 293.00 foot radius curve left (radius point bears North 5809'05'' East); thence on said Westerly line, also being the

Northeasterly line of Parcels 4708-1e-V1 and 4708-1d-V2 and the Southwesterly line of Parcel 4708-1d-D and the Easterly line of Parcel 4708-1d-V2, Parcel 4708-2a-V and the West line of Parcels 708-2a-D and -1c-D, the following courses: on said curve through a central angle of 2928'01" (the long chord of which bears South 4634'52'' East, a distance of 149.03 feet), an arc distance of 150.69 feet to the beginning of a tangent 207.00 foot radius curve right; thence on said curve through a central angle of 6118' 52" (the long chord of which bears South 3039'26'' East, a distance of 211.10 feet), an arc distance of 221.52 feet to the end thereof; thence South 0000'00" West, a distance of 251.76 feet to a point located North 0000'00'' East, a distance of 10.00 feet and South 9000'00'' West, a distance of 14.08 feet from the Southeast corner of Block 174; thence North 9000'00'' West on the North line of property conveyed to the City of Portland for street purposes recorded on July 23, 1951, in Book 1488, Page 216, and recorded on April 4, 1958, in Book 1891, Page 374, a distance of 215.89 feet to the point of beginning.

PARCEL 38:

A tract of land situated in the Northeast one-quarter of Section 35, Township 1 North, Range 1 East of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, said tract being part of Blocks 161,172 and 173, HOLLADAY'S ADDITION TO EAST PORTLAND.

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL 38, Continued...:

TOGETHER WITH that portion of NE Hassalo Street, vacated by Ordinance No. 59118, and that portion of NE Holladay Way, vacated by Ordinance No. 156681, and a portion of NE 15th Avenue, vacated by Ordinance No. 59118, and a portion of NE 16th Avenue and all of Tax Lot 1, vacated by Ordinance Nos. 156681,  and 157954.

EXCEPTING that parcel conveyed to the City of Portland for widening of NE Multnomah Street as recorded in Book 1488, Page 216, and subject to the rights of the public in and to those portions of Block 173 dedicated for public right of way pursuant to Ordinance No. 166704, and as further described in Dedication Deed recorded December 23, 1993, Book 2806, Page 262, Deed Records of Multnomah County.  The said Parcel 38 herein described being more particularly described as follows:

Beginning at a point that bears South 10.00 feet and East 5.00 feet from the Northeast corner of Block 160, said HOLLADAY'S ADDITION; thence East along the South line tracts of land conveyed to the City of Portland for street purposes by Deed recorded in said Book 1488, Page 216 and parallel with the North line of said Block 173, a distance of 268.43 feet to the Northwest corner of Parcel R/W 5223-D described in a Deed for right of way purposes in document Number 95-36947, recorded March 29, 1995 (correcting a description labeled R/W 4708-1b-D in Ordinance No. 166704, recorded December 23, 1993, recorded in Book 2806, Page 281), said point being South 10.00 feet and East 13.45 feet of the Northeast corner of Block 173; thence along the Westerly line of said Document 95-36947, along the arc of a non tangent 13.00 foot radius curve to the right through a central angle of 1717'28" , an arc distance of 3.92 feet to a point of tangency (chord bears South 1302'51" East 3.91 feet); thence South 424'08"' East 65.14 feet to the end of said Westerly line; thence South 304'54'' West, a distance of 20.19 feet; thence along the arc of a 270.00 foot radius curve to the right through a central angle of 4809'07'' (the long chord of which bears South 2709'28''  West, 220.29 feet), a distance of 226.91 feet to a point of non tangency; thence South 5043'48'' West, a distance of 37.52 feet;

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL 38, Continued...:

thence South 5706'35'' West a distance of 112.62 feet to the most Westerly corner of said Tax Lot 1 as described in Ordinance No. 157954; thence along the Southerly and Westerly lines of the tract described in Ordinance No. 156681, the following courses: North 5207'22'' West, a distance of 30.47 feet to an intersection with a 214.00 foot radius curve; thence along the arc of a 214.00 foot radius curve to the right through a central angle of 3401'27'' (the long chord of which bears South 3750'53'' West 125.22 feet), a distance of 127.08 feet to a point on the Westerly extension of the North line of NE Holladay Street; thence West along said Westerly extension a distance of 123.16 feet to a point that bears East 30.00 feet from the Southwest corner of Lot 4, said Block 161; thence along the arc of a 174.98 foot radius curve to the left through a central angle of 9000'00'' (the long chord of which bears North 4500'00" East 247.46 feet), a distance of 274.86 feet to a point of tangency, said point being South 25.02 feet and East 5.00 feet from the Northeast corner of Lot 8, said Block 161; thence North a distance of 275.02 feet to the point of beginning.

PARCEL 44:

A tract of land situated in the North one-half of Section 35, Township 1 North, Range 1 East of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, said tract being all of Blocks 152, 153, 160 and a portion of Block 161, HOLLADAY'S ADDITION TO EAST PORTLAND.

TOGETHER WITH that portion of vacated NE Hassalo Street and NE 14th Avenue and NE Holladay Way, being those vacated portions which inured to said blocks by reason of vacation thereof.

EXCEPTING those parcels conveyed to the City of Portland by Deeds recorded in Book 1177, Page 22, and Book 1488, Page 214, Deed Records of Multnomah County.  Said Parcel 44 being more particularly described as follows:

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL 44, Continued...:

Beginning at a point that bears South 10.00 feet and East 10.00 feet from the Northwest corner of said Block 153; thence East on a line 10.00 feet South of and parallel with the North line of said Blocks 153 and 160, a distance of 454.96 feet to the Northwest corner of that tract described in Ordinance No. 156681, recorded in Book 1887, Page 1818, said point being South 10.00 feet and East 5.00 feet from the Northeast corner of said Block 160; thence South parallel with the East line of said Blocks 160 and 161, a distance of 275.02 feet to a point of curve; thence along the arc of a 174.98 foot radius curve to the right, through a central angle of 9000'00'' (the long chord of which bears South 4500'00'' West 247.46 feet), a distance of 274.86 feet to a point that bears East 30.00 feet from the Southwest corner of Lot 4, Block 161; thence West along the South line of Blocks 161 and 152, a distance of 279.98 feet to a point that bears East 10.00 feet from the Southwest corner of Block 152; thence North parallel with the West line of said Blocks 152 and 153, a distance of 450.00 feet to the point of beginning.

PARCEL E-I (OVERHEAD BRIDGE)

A LEASEHOLD INTEREST

In a 50.00 foot wide air space tract as set forth in that certain Air-Rights Lease dated July 20, 1989, recorded on August 28, 1989, in Book 2232 at Page 464, by and between the City of Portland, as lessor, and Si-Lloyd Associates Limited Partnership, as lessee, for an existing elevated vehicular bridge across NE Halsey Street, the tract being adjacent to Blocks 136 and 203, HOLLADAY'S ADDITION TO EAST PORTLAND, said tract being situated in the Southwest one-quarter of Section 26 and the Northwest one-quarter of Section 35, Township 1 North, Range 1 East of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, and more particularly described as follows:

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL E-I (OVERHEAD BRIDGE)

A LEASEHOLD INTEREST, Continued...

Beginning at a point on the East line of said Block 203 at the North line of NE Halsey Street as established 40.00 feet from the center line thereof by deed recorded in Book 1891, Page 374, Deed Records of Multnomah County, said point being North 10.00 feet from the Southeast corner thereof; thence East along said established North line of NE Halsey Street, a distance of 50.00 feet; thence South a distance of 80.00 feet to the South line of said established NE Halsey Street; thence West along the South line a distance of 50.00 feet to a point on the East line of said Block 136; thence North a distance of 80.00 feet to the point of beginning.

PARCEL E-2 (TUNNEL)

A leasehold interest as set forth in that certain Subsurface Lease dated July 20, 1989, recorded on August 28, 1989, in Book 2232 at Page 494, by and between the City of Portland, as lessor, and Si-Lloyd Associates Limited Partnership, as lessee, in the following described property:

A tract of land situated in the Southwest one-quarter of Section 26, and the Northwest one-quarter of Section 35, Township 1 North, Range 1 East of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, said tract being a portion of NE Halsey Street as widened to an 80.00 feet width of deed recorded April 4, 1958, in Book 1891, Page 374, Deed Records of said Multnomah County, said tract being a part of Blocks 136, 137, 202 and 203 and the adjacent street thereto as shown on the plat of HOLLADAY'S ADDITION TO EAST PORTLAND, said tract being more particularly described as follows:

 

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL E-2 (TUNNEL), Continued....

Beginning at a point that bears East along the center line of said NE Halsey 410.00 feet from the center line of NE 10th Street, said beginning point being West 80.00 feet and South 30.00 feet from the Southeast corner of said Block 203; thence North a distance of 40.00 feet to the North line of NE Halsey Street as now established by said deed; thence East along said line of NE Halsey Street, a distance of 325.00 feet to a point that bears North 10.00 feet and West 15.00 feet from the Southeast corner of said Block 202; thence South 511'40" East a distance of 55.23 feet to a point thence South 5314'28" East a distance of 41.77 feet to a point on the South line of NE Halsey Street as now established, said point being South 10.00 feet and East 23.46 feet from the Northeast corner of Block 137; thence West along said South line of NE Halsey Street, a distance of 363.46 feet to a point that bears South 10.00 feet and West 80.00 feet from the Northeast corner of said Block 136: thence North a distance of 40.00 feet to the point of beginning.

PARCEL E-4 (TUNNEL)

A leasehold interest as set forth in that certain Subsurface Lease dated July 20, 1989, recorded on August 28, 1989, in Book 2232 at Page 494, by and between the City of Portland, as lessor, and Si-Lloyd Associates Limited Partnership, as lessee, in the following described property:

A tract of land situated in the Southwest one-quarter of Section 26, Township 1 North, Range 1 East of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, said tract being a portion of Block 203, 224 and 225 and the adjoining streets as shown on the plat of HOLLADAY'S ADDITION TO EAST PORTLAND, and more particularly described as follows:

 

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL E-4 (TUNNEL), Continued...

Beginning at the Southeast corner of said Block 224 and running thence West along the South line thereof, a distance of48.11 feet; thence North 6442'00" West a distance of 23.40 feet to a point on the North line of NE Weidler Street as widened by deed to the City of Portland, recorded in Book 1863, Page 141, Deed Records of said Multnomah County; thence East along said line of NE Weidler Street, a distance of 236.83 feet; thence South 4446'30" West, a distance of 14.09 feet to a point on the South line of said Block 225, said point being East 97.64 feet from the Southwest corner thereof; thence West along said South line of Block 225, a distance of 63.36 feet; thence South 3653'00" West, a distance of 87.52 feet to a point on the South line of NE Weidler Street as widened by said Book 1863, Page 141; thence West along said South line a distance of 61.14 feet to a point that bears South 10.00 feet and West 19.38 feet from the Northeast corner of said Block 203; thence North 3653'00'' East a distance of 87.52 feet to a point that bears East 33.14 feet from the Southeast corner of said Block 224; thence West a distance of 33.14 feet to the point of beginning.

PARCEL E-5 (SKYBRIDGE EASEMENT)

A tract of land situated in the Northwest one-quarter, Section 35, Township I North, Range I East of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, said tract being an easement for an enclosed overhead pedestrian bridge between Block 115 and 98, HOLLADAY'S ADDITION TO EAST PORTLAND, and as contained in the Second Amendment and Restatement of Easement Agreement recorded October 23, 1990, Book 2355, Page 1856, and more particularly described as follows:

Commencing at a point which bears North 20.00 feet and East 10.00 feet from the Southwest corner of Block 114 of said HOLLADAY'S ADDITION, said point being on the East line of NE 9th Avenue as widened to an 80.00 foot width by deed recorded in Book 1865, Page 292, Deed Records of Multnomah County; thence North

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL E-5 (SKYBRIDGE EASEMENT), Continued...

along the East line of said NE 9th Avenue 250.50 feet to the point of beginning of the tract herein to be described; thence West at 90 to said East line of NE 9th Avenue 80.00 feet to the West line of said NE 9th Avenue; thence North along said West line 33.00 feet; thence East at 90 to said West line 80.00 feet to the East line of said NE 9th Avenue; thence South along said East line 33.00 feet to the point of beginning.

PARCEL E-6

Together with those rights and easements constituting rights in real property created defined and limited by that certain Construction, Operation and Reciprocal Easement Agreement, dated July 19, 1990, recorded September 5, 1990, Book 2340, Page 1635, amended December 23, 1993, Book 2806, Page 272, and recorded April 29, 1994, as Recorder's Fee No. 94068247, between Si-Lloyd Associates Limited Partnership, an Indiana limited partnership and Nordstroms, Inc., a Washington corporation; and that certain Second Amendment to Construction, Operation and Reciprocal Easement Agreement, recorded January 6, 2000, Recorder's Fee No. 2000-001863, over the following described property:

A tract of land situated in the Northwest one-quarter of Section 35, Township 1 North, Range 1 East of the Willamette Meridian, in the City of Portland, County of Multnomah and State of Oregon, said tract being a portion of Blocks 114 and 115 of HOLLADAY'S ADDITION TO EAST PORTLAND, and being more particularly described as follows:

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL E-6, Continued...

Commencing at the Southwest corner of said Block 114, HOLLADAY'S ADDITION; thence North along the West line of said Block 114 and the West line of a tract dedicated for street purposes by deed recorded in Book 1865, Page 292, Multnomah County Deed Records, a distance of 140.00 feet; thence East parallel with the South line of said Block 114, a distance of 10.00 feet to a point in the East line of said dedicated tract and the point of beginning of the tract herein to be described; thence North along the East line of said dedicated tract and parallel with the West line of said Blocks 114 and 115 a distance of 324.67 feet; thence East 15.67 feet; thence South 15.00 feet; thence East 17.33 feet to a point of curve; thence along the arc of a 5.17 foot radius curve to the right through a central angle of 9000'00'' an are length of 8.12 feet, said curve is subtended by a chord which bears South 4500'00'' East 7.31 feet; thence East 116.83 feet; thence South 20.42 feet; thence East 23.25 feet; thence South 251.08 feet; thence South 4500'00" West 46.67 feet; thence West 145.25 feet to the point of beginning.

PARCEL E-7

Rights and benefits of those certain easements created pursuant to that certain Memorandum of Lease dated August 29, 1990, recorded on September 5, 1990, in Book 2340 at Page 1384, by and between Si-Lloyd Associates Limited Partnership, as Lessor, and The May Department Stores Company, as Lessee, for maintenance and repair of existing footings which support the Southeast deck of the basement level and a non exclusive irrevocable easement to attach and maintain the pedestrian bridges from the Southeast parking deck and Southwest parking deck to the Meier and Frank building.

Continued...

 

 

 

LEGAL DESCRIPTION, Continued...

PARCEL E-8

Together with those rights and easements constituting rights in real property created, defined and limited by that certain Easement Agreement by and between Glimcher Lloyd Venture, LLC, a Delaware limited liability company and Sears, Roebuck and Co., a New York corporation. recorded January 6, 2000 in Recorder's Fee No. 2000-001862, in the Clerk's Office of Multnomah County, State of Oregon.

END

 

 

 

 

SCHEDULE B-2

LEGAL DESCRIPTION – WESTSHORE  PROPERTY

 

	
PARCEL I:

	
(O.R. 5871-616)

A tract in the North 1/2 of Section 20, Township 29 South, Range 18 East, Hillsborough County, Florida, described as follows:

BEGINNING at the point of intersection of the East boundary of Lot 2, Block 11, TAMPANIA SUBDIVISION, according to map or plat thereof recorded in Plat Book 8 on Page 71, public records of Hillsborough County, Florida, and the South Limited Access right-of-way line of State Road No. 400 (Interstate 75) (formerly Interstate 4), run South 0 49' 48" West a distance of 281.41 feet to the North right-of-way line of Gray Street; run thence North 89 35' 18" West along said North right-of-way line of Gray Street a distance of 79.85 feet; run thence South 0 48' 40" West a distance of 205.50 feet; run thence South 89 35' 18" East a distance of 236.0 feet; run thence North 0 48' 40" East a distance of 145.5 feet to the South right-of-way line of Gray Street; run thence South 89 35' 18" East a distance of 110.0 feet to a point which is 15.0 feet Westerly of the Northeast corner of lot 11, Block 8 of HANAN PARK REVISED, UNIT NO. 1 SUBDIVISION, according to map or plat thereof recorded in Plat Book 14 on Page 44, public records of Hillsborough County, Florida; run thence South 44 23'20" East a distance of 21.15 feet to a point on the West right-of-way line of West Shore Boulevard, which point is 15.0 feet Southerly from said Northeast corner of Lot 11, Block 8; run thence South 0 48' 40" West along the West right-of-way line of West Shore Boulevard a distance of 153.55 feet; run thence North 89 11' 12" West a distance of 633.48 feet; run thence South 15 03' 48" West a distance of 65.0 feet; run thence North 89  11' 12" West  a distance of 351.17 feet; run thence North 0 48' 48" East a distance of 78.0 feet; run thence North 89 11' 12" West a distance of 399.0 feet; run thence South 0 48' 48" West a distance of 204.0 feet; run thence North 89 11' 12" West a distance of 330.0 feet; run thence South 0 48' 48" West a distance of 80.8 feet; run thence North 89 11' 12" West a distance of 210.0 feet; run thence South 0 48' 48" West a distance of 64.3 feet; run thence South 89 11' 12" East a distance of 240.0 feet; run thence North 0 48' 48" East a distance of 105.1 feet; run thence South 89 11' 12" East a distance of 269.0 feet; run thence North 45 48' 48" East a distance of 43.84 feet; run thence South 89 11' 12" East a distance of 388.0 feet; run thence North 0 48' 48" East a distance of 105.0 feet; run thence South 89 11' 12" East a distance of 385.5 feet; run thence North 15 03' 48" East a distance of 65.0 feet; run thence South 0 48' 48" West a distance of 340.0 feet; run thence South 89 11' 12" East a distance of 271.0 feet; run thence North 0 48' 48" East a distance of 340.0 feet; run thence South 89 11' 12" East a distance of 339.15 feet to a point on the West right-of-way line of West Shore Boulevard; run thence South 0 48' 40" West along said West right-of-way line a distance of 396.45 feet to a point which is 15.0 feet Northerly of the Southeast corner of Lot 1, Block 5 of HANAN PARK, REVISED UNIT NO. 1 SUBDIVISION; run thence South 34 22' 22" West a distance of 18.15 feet to a point on the North right-of-way line of North "B" Street, which point is 10.0 feet Westerly from said Southeast corner of Lot 1, Block 5; run thence North 89 36' 18" West along said North right-of-way line of North "B" Street a distance of 489.5 feet; run thence North 0 48' 40" East a distance of 45.0 feet; run thence North 89 36' 18" West a distance of 40.0 feet; run thence South 0 48' 40" West a distance of 45.0 feet; run thence North 89 36' 18" West along the North right-of-way line of North "B" Street a distance of 102.25 feet to the West right-of-way line of Occident Street; run thence South 0 48' 48" West along said West right-of-way line of Occident Street a distance of 650.25 feet to the North right-of-way line of State Road No. 60 (Kennedy Boulevard), run thence North 89 36' 18" West along said North right-of-way line of State Road No. 60 a distance of 664.76 feet; run thence North 0 51' 42" East along said right-of-way line a distance of 11.51 feet; run thence Northwesterly along the transition right-of-way line between said Kennedy Boulevard (State Road No. 60) and Memorial Highway (continuation of State Road No. 60), which right-of-way line is a curve to the right (radius - 500.0 feet) an arc distance of 324.45 feet (chord - 318.78 feet, chord bearing - North 68 37' 20" West); run thence North 30 21' 42" West along the Northeasterly right-of-way line of Memorial Highway a distance of 703.72 feet to a point on the West right-of-way line of Sherrill Street (now closed); run thence North 0 47' 06" East along said West right-of-way line a distance of 135.19 feet to a point on the South Limited Access right-of-way line of State Road No. 400; run thence North 58 24' 30" East along said South Limited Access right-of-way line a distance of 370.07 feet to a point of curve, run thence Northeasterly along said South right-of-way line along a curve to the right (radius - 2,814.79 feet), which curve is subtended by the following chords: chord - 398.21 feet, chord bearing - North 62 31' 54" East; chord - 188.33 feet, chord bearing - North 67 56' 39" East; chord - 167.85 feet, chord bearing - North 68 20' 48" East; chord - 121.58 feet, chord bearing - North 70 52' 04" East; chord - 231.97 feet, chord bearing - North 73 23' 24" East; run thence North 73 23' 17" East along said right-of-way line a distance of 378.12 feet to the POINT OF BEGINNING.

 

 

 

LESS AND EXCEPT therefrom that portion of Lot 2, Block 11, TAMPANIA SUBDIVSION, according to the plat thereof as recorded in Plat Book 8, Page 71, as conveyed to the City of Tampa, a municipal corporation of the State of Florida, recorded in Official Records Book 12010, Page 100, all of the Public Records of Hillsborough County, Florida, and being more particularly described as follows:

BEGINNING at the intersection of the East boundary of said Lot 2, Block 11, and the South limited access right-of-way line of INTERSTATE HIGHWAY No. 75 (STATE ROAD 400), run thence along said East boundary of Lot 2, Block 11, S.00°53'50"W., 135.00 feet; thence N.89°06'10"W., 32.13 feet to a point on a curve; thence Northwesterly, 53.40 feet along the arc of a curve to the left having a radius of 165.50 feet and a central angle of 18°29'19" (chord bearing N.34°56'44"W., 53.17 feet) to a point of compound curvature; thence Northwesterly, 32.65 feet along the arc of a curve to the left having a radius of 90.50 feet and a central angle of 20°40'16" (chord bearing N.54°31'32"W., 32.47 feet); thence N.00°53'50"E., 45.07 feet to a point on the aforesaid South limited access right-of-way line of INTERSTATE HIGHWAY No. 75; thence along said South limited access right-of-way line, N.73°23'13"E., 94.37 feet to the POINT OF BEGINNING.

AND

 

 

 

TOGETHER WITH the West 1/2 of Occident Street and the North 1/2 of North B Street abutting said parcel as vacated by Ordinance #97-67 recorded in O.R. Book 8533, Page 114 of the Public Records of Hillsborough County, Florida.

TOGETHER WITH those rights and easements constituting rights in real property created defined and limited by that certain Operating and Reciprocal Easement Agreement dated June 9, 1972 and recorded June 14, 1972 in Official Record Book 2495 on Page 574 of the Public Records of Hillsborough County, Florida, to the extent not already not already insured under Parcel I, Tract M, Parcel II, Parcel III, Parcel IV, Parcel V, Parcel VI, Parcel VII, Parcel VIII and Parcel IX.

TOGETHER WITH all of insured's right, title and interest in and to the use of the air space above the following described real property, situate, lying and being in Hillsborough County, Florida, reserved in those certain deeds recorded June 14, 1972 in Official Record Book 2495 on pages 560 and 564 respectively.

	
TRACT M:

	
(O.R. 5871-616)

A tract in the North 1/2 of Section 20, Township 29 South, Range 18 East, Hillsborough County, Florida, described as follows:  From the Northeast corner of Lot 11, Block 8, of HANAN PARK, REVISED UNIT NO. 1 SUBDIVISION, according to map or plat thereof recorded in Plat Book 14 on Page 44 of the public records of Hillsborough County, Florida; run South 0 48' 40" West along the West right-of-way line of West Shore Boulevard a distance of 198.55 feet; run thence North 89 11' 12" West a distance of 610.15 feet; run thence South 0 48' 48" West a distance of 28.5 feet, run thence North 89 11' 12" West a distance of 4.0 feet; run thence North 0 48' 48" East a distance of 12.72 feet to a POINT OF BEGINNING; from said POINT OF BEGINNING, run South 15 03' 48" West a distance of 48.71 feet; run thence North 89 11' 12" West a distance of 374.5 feet; run thence North 0 48' 48" East a distance of 30.0 feet; run thence South 89 11' 12" East, a distance of 351.17 feet; run thence North 15 03' 48" East a distance of 65.0 feet; run thence South 89 11' 12" East a distance of 19.32 feet; run thence South 0 48' 48" West a distance of 45.78 feet to the POINT OF BEGINNING.

	
PARCEL II:

	
(O.R. 5871-616)

The East 336 feet of the North 132 feet of Block 4 of HANAN PARK SUBDIVISION, REVISED UNIT NO. 1, according to map or plat thereof as recorded in Plat Book 14 on Page 44 of the public records of Hillsborough County, Florida, LESS that part of the North 72 feet of the East 129 feet thereof lying within the following metes and bounds description:

Commence on the Easterly extension of the Northerly boundary of Lot 9 in Block 1, of HANAN PARK REVISED UNIT NO. 1, in Section 20, Township 29 South, Range 18 East, according to map or plat thereof as recorded in Plat Book 14 on Page 44, of the public records of Hillsborough County, Florida at a point 411.27 feet South 89 50' 31" East of the Northwest corner of said Lot 9; run thence North 0 37' 29" East 344.43 feet; thence South 89 46' 29" West 50.01 feet to a POINT OF BEGINNING; continue thence South 89 46' 29" West 10 feet; thence South 33 10' 33" East 17.90 feet' thence North 0 37' 29" East 15 feet to the POINT OF BEGINNING.

TOGETHER WITH the South 1/2 of North B Street lying North of and adjacent to the East 336 feet of the North 132 feet of said Block 4 as vacated by Ordinance #97-67 recorded in O.R. Book 8533, Page 114 of the Public Records of Hillsborough County, Florida.

 

 

 

 

	
PARCEL III:

	
(O.R. 5871-616)

Lots 12 through 15 inclusive in Block 8 of HANAN PARK REVISED, UNIT NO. 1, according to map or plat thereof recorded in Plat Book 14, Page 44, of the Public Records of Hillsborough County, Florida together with the 16.00 foot wide alleys lying South of said Lots 12 through 15 and East of said Lot 12 AND that portion of now closed GRAY STREET, all lying within the following described parcel:

Commence at the intersection of the East boundary of Lot 2, Block 11, TAMPANIA SUBDIVISION according to map or plat thereof recorded in Plat Book 8, PAGE 71, Public Records of Hillsborough County, Florida and the South right-of-way line of State Road 400 (Interstate 75), (formerly Interstate 4); thence on the East boundary of said Lot 2, South 00 49' 48" West, a distance of 281.41 feet to the Southeast corner of said Lot 2 and the POINT OF BEGINNING; thence on the Southerly projection of the East boundary of said Lot 2, South 00 49' 48" West, a distance of 60.00 feet to the intersection with the North boundary of Block 8 of said HANAN PARK REVISED, UNIT NO. 1; thence on the North boundary of said Block 8, South 89 35' 18" East, a distance of 156.17 feet to the Northwest corner of Lot 11, Block 8, also being the East boundary of a 16.00 foot wide alley; thence on said East boundary South 00 48' 40" West, a distance of 145.50 feet; thence on the North boundary of Lots 24, 25, 26, 27 and the Easterly projection of the North boundary of Lot 27, Block 8; North 89 35' 18" West, a distance of 236.00 feet to the Northwest corner of said Lot 24; thence on the West boundary of Lot 15, Block 8 and the Southerly extension of the West boundary thereof, North 00 48' 40" East, a distance of 145.50 feet to the Northwest corner of said Lot 15; thence on the Northerly projection of the West boundary of said Lot 15; North 00 48' 40" East, a distance of 60.0 feet to the intersection with the South boundary of aforesaid Lot 2, Block 11, TAMPANIA SUBDIVISION; thence on said South boundary South 8935'18" East, a distance of 79.85 feet to the POINT OF BEGINNING.

 

	
PARCEL IV:

	
(O.R. 6408-127)

The West 245.75 feet of the North 132.00 feet of Block 4, HANAN PARK REVISED UNIT NO. 1, according to map or plat thereof as recorded in Plat Book 14, page 44, Public Records of Hillsborough County, Florida.

TOGETHER WITH that part of the South 1/2 of vacated North B Street lying North of and adjacent to the West 245.75 feet of the North 132.00 feet of said Block 4 and that part of the East 1/2 of Occident Street lying West of and adjacent to the West 245.75 feet of the North 132.00 feet of Block 4 as vacated by Ordinance No. 97-67 recorded in O.R. Book 8533, Page 114 of the Public Records of Hillsborough County, Florida.

 

 

 

 

	
PARCEL V:

	
(O.R. 6408-127)

The South 133 feet of the East 270 feet of Block 4, HANAN PARK REVISED UNIT NO. 1, according to map or plat thereof as recorded in Plat Book 14, page 44, Public Records of Hillsborough County, Florida.

TOGETHER WITH that part of the North 1/2 of vacated North A Street lying South of and abutting the South 133 feet of the East 270 feet of said Block 4 as vacated by Ordinance No. 97-67 recorded in O.R. Book 8533, Page 114 of the Public Records of Hillsborough County, Florida.

 

	
PARCEL VI:

	
(O.R. 8540-1775)

A tract in the North 1/2 of Section 20, Township 29 South, Range 18 East, Hillsborough County, Florida, described as follows:

From the Northeast corner of Lot 11, Block 8 of HANAN PARK REVISED UNIT NO. 1 SUBDIVISION, according to map or plat thereof as recorded in Plat Book 14, on page 44, of the Public Records of Hillsborough County, Florida, run S.0048'40"W., along the West right-of-way line of West Shore Boulevard, a distance of 168.55 feet; thence N.8911'12"W., a distance of 633.48 feet; run thence S.1503'48"W., a distance of 65.00 feet; run thence N.8911'12"W., a distance of 351.17 feet; run thence N.0048'48"E., a distance of 78.00 feet; run thence N.8911'12"W., a distance of 399.00 feet; run thence S.0048'48"W., a distance of 204.00 feet; run thence N.8911'12"W., 38.35 feet to the POINT OF BEGINNING;  run thence S.0048'48"W., a distance of 40.00 feet;  run thence N.8911'12"W., a distance of 261.65 feet; run thence S.0048'48"W., a distance of 105.10 feet; run thence N.8911'12"W., a distance of 240.00 feet; run thence N.0048'48"E., a distance of 64.30 feet; run thence S.8911'12"E., a distance of 210.00 feet; run thence N.0048'48"E., a distance of 80.80 feet; run thence S.8911'12"E., a distance of 291.65 feet to the POINT OF BEGINNING.

	
Parcel No. VII

	
(O.R. 9333-1800)

A portion of Lots 7 through 13 inclusive, Block 1, HANAN PARK REVISED UNIT No. 1, according to map or plat thereof as recorded in Plat Book 14, Page 44, of the Public Records of Hillsborough County, Florida, together with a portion of Block 4, of said HANAN PARK REVISED UNIT No. 1, together with a portion of Occident Street, now closed, lying North of John F. Kennedy Boulevard, together with a portion of North "A: Street, now closed, being more particularly described as follows:

 

 

 

From the Northwest corner of Lot 13, Block 1, HANAN PARK REVISED UNIT No. 1, according to map or plat thereof as recorded in Plat Book 14, Page 44, of the Public Records of Hillsborough County, Florida, run thence South 00°48'02"West, 100.00 feet along the West boundary of said Lot 13 to a point on the South boundary of the North 100 feet of said Lot 13 and the POINT OF BEGINNING: thence North 89°40'58" West, 29.87 feet along the Westerly extension of the South boundary of the North 100 feet of said Lot 13 to a point on the centerline of said Occident Street (vacated); thence North 00°51'33" East, 313.39 feet along said centerline to a point on the Westerly extension of the North boundary of the South 133 feet of said Block 4; thence South 89°36'18" East, 341.80 feet along said North boundary and the Westerly extension thereof to a point on the West boundary of the East 270 feet of said Block 4; thence South 00°50'41" West, 173.04 feet along said West boundary and the Southerly extension thereof to a point on the centerline of said North "A" Street (vacated); thence South 89°39'37" East, 51.52 feet along said centerline; thence South 00°46'02" West, 157.39 feet, thence North 89°40'58" West, 215.98 feet; thence North 00°46'02" East, 17.53 feet to a point on the South boundary of the North 100 feet of said Lots 11, 12 and 13; thence North 89°40'58" West, 147.75 feet along said South boundary to the POINT OF BEGINNING.

	
Parcel No. VIII

	
(O.R. 11147-337)

A tract in the North 1/2 of Section 20, Township 29 South, Range 18 East, Hillsborough County, Florida, described as follows:

From the Northeast corner of Lot 11, Block 8 of HANAN PARK REVISED UNIT NO. 1 SUBDIVISION, according to map or plat thereof as recorded in Plat Book 14, on page 44, of the Public Records of Hillsborough County, Florida, run S.0048'40"W., along the West right-of-way line of West Shore Boulevard, a distance of 198.55 feet; run thence N.89’11'12"W., a distance of 339.15 feet to POINT OF BEGINNING; from said POINT OF BEGINNING, run thence N.8911'12"W., a distance of 271.00 feet; run thence S.0048'48"W., a distance of 340.00 feet; run thence S.8911'12"E., a distance of 271.00 feet; run thence N.0048'48"E., a distance of 340.00 feet to the POINT OF BEGINNING.

	
Parcel No. IX:

	
(O.R. 12010-103)

A portion of Lots 20 and 21, Block 5, of HANAN PARK REVISED UNIT NO. 1, according to the plat thereof as recorded in Plat Book 14, page 44, of the Public Records of Hillsborough County, Florida, and that part of North B Street, now vacated per City of Tampa Ordinance No. 97-67, abutting said Lots 20 and 21 on the South and being more particularly described as follows:

Commence at the Southwest corner of said Lot 20, run thence along the South boundary of said Block 5, S.89°38'18"E., 36.75 feet to the POINT OF BEGINNING; thence N.00°48'40"E., 45.00 feet; thence S.89°36'18"E., 40.00 feet; thence S.00°48'40"W., 75.00 feet; thence N.89°36'18"W., 40.00 feet; thence N.00°48'40"E., 30.00 feet to the POINT OF BEGINNING.

 

 

 

PARCEL X – Easements:

TOGETHER WITH those rights and easements constituting rights in real property created defined and limited by that certain Easement and Restriction Agreement by and between American Freeholds, a Nevada partnership, and NationsBank, N.A., a national banking association, dated November 13, 1998, recorded November 16, 1998 in Official Record Book 9333, page 1824, of the Public Records of Hillsborough County , Florida.

 

PARCEL XI – Right of Fist Refusal:

Right of First Refusal by and between NationsBank, N.A., a national banking association , and American Freeholds, a Nevada general partnership, dated November 13, 1998, recorded November 16, 2998 in Official Record Book 9333, page 1816 , of the Public Records of Hillsborough County, Florida.

End

 

 

 

 

EXHIBIT A

FORM OF MANAGEMENT RIGHTS LETTER

 

[attached]                                                                           __________ ___, 2009

 

LC Portland, LLC

Glimcher Westshore LLC (collectively, the “Owners”)

c/o GRT MALL JV LLC

_____________________

_____________________

_____________________

 

and

 

GRT MALL JV LLC

_____________________

_____________________

_____________________

Ladies and Gentlemen:

 

The Owners are direct wholly owned subsidiaries of GRT MALL JV LLC (the “Parent” and the Owners, each referred to herein as “Property Owners” or “Property Owner”).  On the date hereof, the Owners hold directly (and, in the case of Parent, indirectly through the Owners) the beneficial title of the retail outlet shopping centers listed opposite the Owner’s name on Schedule A hereto (each referred to herein as the “Property”).  Each Property Owner hereby agrees that in addition to, and without prejudice to, or limitation on, any of the rights of BRE/GRJV Holdings LLC (the “Company”) with respect to its indirect interests in the Property Owner, the Company shall have the right to:

 

(i) receive copies of all reports relating to the management or development of the Property including management and development services provided by any property manager or other third party retained by the Property Owner;

 

(ii) periodically inspect the Property and make recommendations to the Property Owner relating to the management or development of the Property;

 

(iii) participate in any decisions with respect to the retention or the termination of the services of any property manager with respect to the Property;

 

 

 

 

(iv) consult with appropriate officers of the Property Owner in advance with respect to any significant management and development matters including, without limitation, the management, participatory and development rights retained by the Property Owner under that certain [Management Agreement] dated ________ __, 2009 by and among Glimcher Properties Limited Partnership and the other entities listed on the signature pages thereof; and

 

(v) such other consultation rights with respect to the Property as may be reasonably determined by the Company to be necessary to qualify as a “real estate operating company” for purposes of the United States Department of Labor Regulation published at 29 C.F.R. Section 2510.3-101(d) (a “REOC”).

 

The Property Owners agree to consider, in good faith, the recommendations of the Company hereunder in connection with the matters on which it is consulted as described above.

 

In the event the Company transfers all or any portion of its investment in the Property Owner to an affiliated entity that is intended to qualify as a “real estate operating company” for purposes of the United States Department of Labor Regulation published at 29 C.F.R. Section 2510.3-101(d) (a “REOC”), such transferee shall be afforded the same rights with respect to the Property afforded to the Company hereunder.

 

The Owners will comply with the provisions of this letter agreement in a manner that is consistent with such Owners' strict compliance with provisions of their respective limited liability company agreement regarding their separate legal existence from any other person, in particular, but not limited to, [Section 9] of each Owners limited liability company agreement.

 

This letter agreement and the rights and the duties of the parties hereto shall be governed by, and construed in accordance with, the laws of the State of New York and may be executed in counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument.

 

[remainder of page intentionally left blank]

 

 

 

 

Executed this __ day of _______, 2009

 

GRT MALL JV LLC

By: ____________________

Name:

Title:

 

LC Portland, LLC

By: ____________________

Name:

Title:

 

Glimcher Westshore  LLC

By: ____________________

Name:

Title:

 

 

 

SCHEDULE A

 

The Properties

 

	
OWNER

	
PROPERTY

	
LC Portland, LLC

	
Lloyd Center; Portland, Oregon

	
Glimcher Westshore LLC

	
Westshore Plaza; Tampa, Florida

 

 

 

Exhibit B:  Form of Interest ROFO Sale Documents

[Assignment of Membership Interests]

 

ASSIGNMENT OF MEMBERSHIP INTERESTS

 

THIS ASSIGNMENT OF MEMBERSHIP INTERESTS (this “Assignment”), dated as of _____________________, is entered into between GRT WSP-LC HOLDINGS LLC, a Delaware limited liability company (“Glimcher Member”), and BRE/GRJV HOLDINGS LLC, a Delaware limited liability company (“Blackstone Member”).

 

WITNESSETH:

 

WHEREAS, GRT MALL JV LLC, a Delaware limited liability company (the “Company”), was formed pursuant to the terms and provisions of a Limited Liability Company Agreement, dated as of ____________________, 2009, as subsequently amended by that certain Amended and Restated Limited Liability Company Operating Agreement between Glimcher and Buyer, dated as of ____________________ (together, the “Agreement”; capitalized terms used but not defined herein shall have the meanings given such terms in the Agreement), and in accordance with the Certificate of Formation and the statutes and laws of the State of Delaware relating to limited liability companies, including the Delaware Limited Liability Company Act;

 

WHEREAS, immediately prior to the effectiveness of this Assignment, [Glimcher Member / Blackstone Member] (“Assignor”) was the owner of [___]% of the membership interests  in the Company (the “Ownership Interest”);

 

WHEREAS, Assignor desires to (i) assign, transfer and convey all of Assignor’s right, title and interest in and to the Ownership Interest to [Glimcher Member / Blackstone Member] (“Assignee”) and (ii) withdraw from the Company as a member of the Company; and

 

WHEREAS, Assignee desires to acquire the Ownership Interest;

 

NOW, THEREFORE, the undersigned, in consideration of the premises, covenants and agreement contained herein, and for other good and valuable consideration, do hereby agree as follows:

 

ARTICLE 13Assignment.  For value received, the receipt and sufficiency of which are hereby acknowledged, upon the execution of this assignment by the parties hereto, assignor does hereby assign, transfer and convey the ownership interest to assignee, free and clear of all liens, claims, encumbrances, options and rights of any kind.

 

ARTICLE 14Withdrawal.  Immediately following the assignment described in paragraph 1 of this assignment, assignor shall and does hereby withdraw from the company as a member of the company, and shall thereupon cease to be a member of the company, and shall thereupon cease to have or exercise any right or power as a member of the company.

 

 

 

 

ARTICLE 15Continuation of the company.  The assignment of the ownership interest and the withdrawal of assignor as a member of the company shall not dissolve the company and the business of the company shall continue.

 

ARTICLE 16Contribution.  Assignee has paid good and valuable consideration to assignor for the ownership interest.

 

ARTICLE 17Binding effect.  This assignment shall be binding upon, and shall inure to the benefit of the parties hereto and their respective successors and assigns.

 

ARTICLE 18Execution in counterparts.  This assignment may be (a) executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument and (b) by telecopy or other facsimile signature (which shall be deemed an original for all purposes).

 

ARTICLE 19Governing law.  This assignment shall be governed by and construed in accordance with the laws of the state of delaware.

 

ARTICLE 20Representations and warranties.  Assignor and assignee each represents and warrants that (i) it has all requisite power and authority to enter into and perform this assignment, (ii) the execution, delivery and performance of this assignment has been duly authorized, (iii) this assignment is a legal, valid and binding agreement, enforceable according to its terms (subject to bankruptcy and similar laws), (iv) no consent of any third party is required to execute, deliver or perform this assignment, and (v) the execution and delivery of this assignment will not conflict with assignor’s or assignee’s respective organizational documents or any law or contract.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS ASSIGNMENT TO BE DULY EXECUTED AS OF THE DAY AND YEAR FIRST-ABOVE WRITTEN.

 

GLIMCHER MEMBER:

GRT WSP-LC HOLDINGS LLC, a Delaware limited liability company

 

By:          __________________________ 

Name:

Title:

 

BLACKSTONE MEMBER:

BRE/GRJV HOLDINGS LLC, a Delaware limited liability company

 

By:          __________________________           

Name:

Title:

 

 

 

EXHIBIT C

FORM OF ASSET ROFO SALE DOCUMENTS

[attached]

 

 

 

 

Exhibit C:  Form of Deed

[Florida]

SPECIAL WARRANTY DEED

(Corporate)

 

Prepared by:

______________________

______________________

______________________

 

This Special Warranty Deed made this _____ day of_________, 20___ between Glimcher Westshore, LLC, a limited liability company organized and existing under the laws of the State of Delaware whose mailing address is _______________________________________________________________________________, hereinafter called the Grantor, and GRT WSP-LC Holdings LLC, a limited liability company [or nominee] organized and existing under the laws of the State of Delaware whose mailing address is _______________________________________________________________________________, hereinafter called the Grantee,

WITNESSETH, that the Grantor, for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable considerations, the receipt and sufficiency whereof is hereby acknowledged, has granted, bargained, sold and conveyed to the Grantee, its successors and assigns, in fee simple forever, the following described real property situate in Hillsborough County, Florida:

SEE EXHIBIT “A” ATTACHED HERETO AND MADE A PART HEREOF

TOGETHER WITH all the tenements, hereditaments, and appurtenances thereto belonging or any anywise appertaining;

AND the Grantor does hereby covenant with Grantee that it is lawfully seized of said property, that it has good right and lawful authority to sell the same, and does hereby fully warrant the title to said real property and will defend the same against the lawful claims of all persons whomsoever claiming by through, or under the Grantor, except taxes for the year _________ and subsequent years, and restrictions, limitations, covenants, and easements of record, if any.

IN WITNESS WHEREOF, the Grantor has caused this deed to be signed in its name by its ______________, and its corporate seal to be hereunto affixed, the day and year first above written.

 

[Signature Page Follows]

 

 

 

 

SIGNED, SEALED AND DELIVERED

IN THE PRESENCE OF:

 

	  	
GLIMCHER WESTSHORE, LLC, a Delaware limited liability company

 

	
_______________________________

(Witness Signature)

	
By: ___________________________________

	  	  
	
_______________________________

(Typed or Printed Witness Name)

	
Its __________

	  	  
	
_______________________________

(Witness Signature)

 

	
_____________________________________

(Typed or Printed Name)

	
_______________________________

	  
	
(Typed or Printed Witness Name)

	
(CORPORATE SEAL)

	  	  

 

STATE OF

COUNTY OF

 

I HEREBY CERTIFY that on this day, before me, an officer duly authorized in the state and county aforesaid to take acknowledgments, personally appeared ____________________________________, the person described as the ___________________ of  GLIMCHER WESTSHORE, LLC, a Delaware limited liability company, in and who executed the foregoing instrument, and acknowledged before me that that person executed the foregoing instrument in the name of and on behalf of that corporation; that as such corporate officer that person is duly authorized by that corporation to do so; that the foregoing instrument is the act and deed of the corporation; that such person is known to me or has presented _________________________________ as identification; and that such person did/did not take an oath.

WITNESS my signature and official seal in the County and State last aforesaid this _____ day of ______________, 200__.

____________________________________

Notary Public, State of

____________________________________

(Typed or Printed Name of Notary Public)

(NOTARIAL SEAL)

My Commission Expires:

 

 

 

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

[Insert]

 

 

 

 

Exhibit C:  Form of Deed

[Oregon]

 

	
RECORDING REQUESTED BY:

	  
	
 

GRANTOR’S NAME:

LC Portland, LLC,

a Delaware limited liability company

 

GRANTEE’S NAME:

GRT WSP-LC HOLDINGS LLC,

a Delaware limited liability company

 

SEND TAX STATEMENTS TO:

_________________________

_________________________

_________________________

 

AFTER RECORDING RETURN TO:

_________________________

_________________________

_________________________

 

Escrow No:

 

Property Address:

 

Tax Parcel  Nos.:

	  

SPACE ABOVE THIS LINE FOR RECORDER’S USE

 

BARGAIN AND SALE DEED – STATUTORY FORM

 

(INDIVIDUAL or CORPORATION)

LC Portland, LLC, a Delaware limited liability company, Grantor, conveys to GRT WSP-LC HOLDINGS LLC, a Delaware limited liability company, Grantee, the following described real property, situated in the County of Multnomah, State of Oregon,

See Exhibit “A” attached hereto and by reference made a part hereof.

 

 

 

BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON’S RIGHTS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007. THIS INSTRUMENT DOES NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS.  BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING TRANSFERRED IS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS 92.010 OR 215.010, TO VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES, AS DEFINED IN ORS 30.930, AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007.

 

The true consideration for this conveyance is $_____________________.  (See ORS 93.030).

Dated: ___________________________

 

	 	
LC PORTLAND, LLC, a Delaware limited liability company

 

BY:______________________________

 

State of ______________

County of _______________________

This instrument was acknowledged before me on ______________, 20___ by _________________________

as ______________________________ of LC PORTLAND, LLC.

____________________________________

Notary Public - State of ______________

My commission expires:  _________________

 

 

 

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

[Insert]

 

 

 

Exhibit C:  Form of Asset ROFO Sale Documents

[Bill of Sale]

 

BILL OF SALE

 

[OWNER ENTITY], a Delaware limited liability company, whose address is [_________________________________] (hereinafter referred to as “Seller”), in consideration of Ten ($10.00) Dollars in hand paid by GRT WSP-LC HOLDINGS LLC, a Delaware limited liability company [or nominee], whose address is [______________________] (hereinafter referred to as “Buyer”), the receipt and sufficiency of which is hereby acknowledged, does hereby sell, grant, assign, convey, transfer, set over, and quit-claim unto Buyer, its successors and assigns, Seller’s right, title and interest in and to: all furniture, fixtures, equipment, building materials, supplies, tradenames, trademarks, chattels and any other tangible and intangible personal property that is attached to or located in or upon the property described on Schedule A attached hereto or any portion thereof (the “Property”).

 

TO HAVE AND TO HOLD the Property unto Buyer, its successors and assigns forever.

 

This Bill of Sale is made without warranty or representation, express or implied, by or recourse against Seller of any kind or nature whatsoever.

 

This Bill of Sale has been duly executed by Seller as of the [___] day of [_____________________].

 

[OWNER ENTITY], a Delaware limited liability company

 

By:           ___________________________

Name:

Title:

 

 

 

 

[Signature Page to [Owner Entity] Bill of Sale]

 

 

 

 

Schedule A

 

LEGAL DESCRIPTION

[Insert]

 

 

 

Exhibit C:  Form of Asset ROFO Sale Documents

[Omnibus Assignment and Assumption]

 

OMNIBUS ASSIGNMENT AND ASSUMPTION

 

OMNIBUS ASSIGNMENT AND ASSUMPTION dated as of the ___ day of _____________________, between [PROPERTY OWNER ENTITY], a Delaware limited liability company, having an address ____________________________________________ (“Assignor”) and GRT WSP-LC HOLDINGS LLC, a Delaware limited liability company, [or nominee] having an address at _________________________________________ (“Assignee”).

 

Assignment and Assumption

 

In consideration of Ten ($10.00) Dollars in hand paid by Assignee and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor does hereby assign, transfer and set over unto Assignee, Assignor’s right, title and interest in and to:

 

	
  

	
(i)

	
All agreements, contracts or understandings of Assignor relating to the ownership, operation, maintenance, development and management of the property described on Schedule 1 attached hereto (the “Property”) owned by Assignor and the buildings and other improvements located thereon, or any portion thereof (collectively, the “Contracts”);

	
  

	
(ii)

	
All equipment leases and rental agreements relating to the equipment, services, vehicles, furniture or other type of personal property with regard to the Property owned by Assignor and the buildings and other improvements located thereon, or any portion thereof (collectively, the “Equipment Leases”);

	
  

	
(iii)

	
All licenses, registrations, certificates, permits, approvals and other governmental authorizations relating to the construction, operation, use or occupancy of the Property owned by Assignor and the buildings and other improvements located thereon, or any portion thereof (collectively, the “Permits”);

	
  

	
(iv)

	
All leases, licenses, occupancy agreements, residency agreements, contracts and other agreements for the use and occupancy of all or any part of any of the Property owned by Assignor (collectively, the “Agreements”), including, without limitation, all security and escrow deposits being held by Assignor in connection with the Agreements;

 

 

 

	
  

	
(v)

	
All claims, credits, causes of action, choses in action or rights of setoff against third parties relating to the Property owned by Assignor (collectively, the “Claims”);

	
  

	
(vi)

	
All warranties and guarantees, if any, including, without limitation, unliquidated rights under manufacturers’ and vendors’ warranties and guarantees, relating to the personal property located on the Property owned by Assignor or in the buildings and other improvements located thereon (collectively, the “Warranties”).

TO HAVE AND TO HOLD, the same unto Assignee, its successors and assigns, from and after the date hereof, without representation or warranty of any kind.

 

Assignee hereby assumes the performance of all of the terms, covenants and conditions of the Contracts, Agreements, and Equipment Leases on Assignor’s part to be performed thereunder from and after the date hereof and will perform all of the terms, covenants and conditions of such Contracts, Agreements, and Equipment Leases arising or accruing from and after the date hereof, all with the same force and effect as though Assignee had signed such Contracts, Agreements, and Equipment Leases as a party named therein.

 

IN WITNESS WHEREOF, Assignor and Assignee have duly executed this instrument as of the day first above written.

 

ASSIGNOR:

 

[PROPERTY OWNER ENTITY], a Delaware limited liability company

 

	
  

	
By:

	
__________________________________________

	
  

	
         

	
Name:

	
  

	
         

	
Title:

 

ASSIGNEE:

 

GRT WSP-LC HOLDINGS LLC, a Delaware limited liability company

 

	
  

	
By:

	
__________________________________________

	
  

	
         

	
Name:

	
  

	
         

	
Title:

 

 

 

 

Schedule 1

 

LEGAL DESCRIPTION

 

[Insert]

 

 

 

 

Exhibit C:  Form of Asset ROFO Sale Documents

[FIRPTA]

 

AFFIDAVIT OF NON-FOREIGN STATUS

(FIRPTA)

STATE OF             ________________

COUNTY OF       ________________

Before me, the undersigned authority, this day personally appeared _________________, (“Affiant”), the _______________ of GRT Mall JV LLC, a Delaware limited liability company, the sole member of [PROPERTY OWNER ENTITY], a Delaware limited liability company (the “Company”), who being first duly sworn, says:

 

1.           That Affiant understands and acknowledges that Section 1445 of the Internal Revenue Code (as amended, the “Code”) provides that a transferee (buyer) of a United States real property interest (as defined in Section 897(c) of the Internal Revenue Code) must withhold tax if the transferor is a foreign person;

 

2.           That Affiant understands and acknowledges that for federal income tax purposes (including Section 1445 of the Code), the owner of a disregarded entity (which has legal title to a United States real property interest under local law) will be the transferor of the real property interest and not the disregarded entity;

 

3.           That the Company owns all of the membership interests in [PROPERTY OWNER ENTITY], a Delaware limited liability company (which has legal title to a United States real property interest under local law, situated in [Portland, Oregon / Tampa, Florida]),  (the “Owner”), an entity that is disregarded as an entity separate from its owner under federal income tax law;

 

4.           That, because the Owner is a disregarded entity, for federal income tax purposes, the Company will be the transferor of such United States real property interests situated in (i) [Portland, Oregon / Tampa, Florida], known as [Lloyd Center / Westshore Plaza] (the “Property”).

 

5.           That the Company is not a foreign corpora­tion, for­eign part­ner­ship, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations).

 

6.           That the Company is not a disregarded entity as defined in Treasury Regulations, Subchapter A, Section 1.1445-2(b)(2)(iii).

 

7.           The Company’s address and United States taxpayer identification number are as follows:

 

______________________________

______________________________

Tax ID No.:  [______________]

8.           That Affiant understands that this affidavit may be disclosed to the Internal Revenue Service and that any false statement made herein could be punished by fine, imprisonment, or both.

 

 

 

 

Under penalties of perjury, Affiant declares that he has examined this affidavit, and to the best of his knowledge and belief, it is true, correct, and complete, and Affiant further declares that he has the authority to sign this affidavit on behalf of the Company.

 

Dated:  _____________, _______

 

_____________________, Affiant

 

SWORN TO AND SUBSCRIBED before me this ____ day of _______, ______, by ________________, the _______________ of GRT Mall JV LLC, a Delaware limited liability company, for the purposes stated herein, and that Affiant is o personally known to me or has o produced _______________________________ as identification.

 

Notary Public

 

Print Name: __________

 

My Commission Expires: __________

 

 

 

 

EXHIBIT “A”

 

LEGAL DESCRIPTION

 

[Insert]

 

 

 

Exhibit C:  Form of Asset ROFO Sale Documents

[Assignment of Membership Interests in Owner Entity]

 

ASSIGNMENT OF MEMBERSHIP INTERESTS

 

THIS ASSIGNMENT OF MEMBERSHIP INTERESTS (this “Assignment”), dated as of _____________________, is entered into between GRT MALL JV LLC, a Delaware limited liability company (“Assignor”), and GRT WSP-LC HOLDINGS LLC, a Delaware limited liability company (“Assignee”).

 

WITNESSETH:

 

WHEREAS, [PROPERTY OWNER ENTITY], a Delaware limited liability company (the “Company”), was formed pursuant to the terms and provisions of a Limited Liability Company Agreement, dated as of ________________________ (the “Agreement”; capitalized terms used but not defined herein shall have the meanings given such terms in the Agreement), and in accordance with the Certificate of Formation and the statutes and laws of the State of Delaware relating to limited liability companies, including the Delaware Limited Liability Company Act;

 

WHEREAS, immediately prior to the effectiveness of this Assignment, Assignor was the owner of 100% of the membership interests in the Company (the “Ownership Interest”);

 

WHEREAS, Assignor desires to (i) assign, transfer and convey all of Assignor’s right, title and interest in and to the Ownership Interest to Assignee and (ii) withdraw from the Company as a member of the Company; and

 

WHEREAS, Assignee desires to acquire the Ownership and to be admitted to the Company as a Member of the Company;

 

NOW, THEREFORE, the undersigned, in consideration of the premises, covenants and agreement contained herein, and for other good and valuable consideration, do hereby agree as follows:

 

Assignment.  For value received, the receipt and sufficiency of which are hereby acknowledged, upon the execution of this assignment by the parties hereto, assignor does hereby assign, transfer and convey the ownership interest to assignee, free and clear of all liens, claims, encumbrances, options and rights of any kind.

 

ARTICLE 21 Admission.  Contemporaneously with the assignment described in paragraph 1 of this assignment, assignee (a) shall be and is hereby admitted to the company as a member of the company and appointed as the sole “member” of the company under the agreement (which appointment assignee shall and does hereby accept), and (b) shall have the benefits, rights, liabilities and obligations as set forth in the agreement.

 

 

 

 

ARTICLE 22 Contribution.  Assignee has paid good and valuable consideration to assignor for the ownership interest.

 

ARTICLE 23 Binding effect.  This assignment shall be binding upon, and shall inure to the benefit of the parties hereto and their respective successors and assigns.

 

ARTICLE 24 Execution in Counterparts.  This assignment may be (a) executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument and (b) by telecopy or other facsimile signature (which shall be deemed an original for all purposes).

 

ARTICLE 25 Governing law.  This assignment shall be governed by and construed in accordance with the laws of the state of delaware.

 

ARTICLE 26 Representations and Warranties.  Assignor and assignee each represents and warrants that (i) it has all requisite power and authority to enter into and perform this assignment, (ii) the execution, delivery and performance of this assignment has been duly authorized, (iii) this assignment is a legal, valid and binding agreement, enforceable according to its terms (subject to bankruptcy and similar laws), (iv) no consent of any third party is required to execute, deliver or perform this assignment, and (v) the execution and delivery of this assignment will not conflict with assignor’s or assignee’s respective organizational documents or any law or contract.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS ASSIGNMENT TO BE DULY EXECUTED AS OF THE DAY AND YEAR FIRST-ABOVE WRITTEN.

 

ASSIGNOR:

GRT MALL JV LLC, a Delaware limited liability company

	
  

	
By:

	
BRE/GRJV HOLDINGS LLC, a Delaware limited liability company, its managing member

 

By:          _________________________ 

Name:

Title:

 

ASSIGNEE:

GRT WSP-LC HOLDINGS LLC, a Delaware limited liability company

 

By:          _________________________

Name:

Title:

 

 

 

EXHIBIT D

FORM OF ASSET ROFO DEEMED LIQUIDATION SALE DOCUMENTS

[attached]

 

 

 

 

Exhibit D:  Form of Asset ROFO Deemed Liquidation Sale Documents 

[Assignment of Membership Interests in JV Entity]

 

ASSIGNMENT OF MEMBERSHIP INTERESTS

 

THIS ASSIGNMENT OF MEMBERSHIP INTERESTS (this “Assignment”), dated as of _____________________, is entered into between BRE/GRJV HOLDINGS LLC, a Delaware limited liability company (“Assignor”), and GRT WSP-LC HOLDINGS LLC, a Delaware limited liability company [or nominee] (“Assignee”).

 

WITNESSETH:

 

WHEREAS, GRT MALL JV LLC, a Delaware limited liability company (the “Company”), was formed pursuant to the terms and provisions of a Limited Liability Company Agreement, dated as of ____________________, 2009, as subsequently amended by that certain Amended and Restated Limited Liability Company Operating Agreement between Glimcher and Buyer, dated as of ____________________ (together, the “Agreement”; capitalized terms used but not defined herein shall have the meanings given such terms in the Agreement), and in accordance with the Certificate of Formation and the statutes and laws of the State of Delaware relating to limited liability companies, including the Delaware Limited Liability Company Act;

 

WHEREAS, immediately prior to the effectiveness of this Assignment, Assignor was the owner of [___]% of the membership interests in the Company (the “Ownership Interest”);

 

WHEREAS, Assignor desires to (i) assign, transfer and convey all of Assignor’s right, title and interest in and to the Ownership Interest to Assignee and (ii) withdraw from the Company as a member of the Company; and

 

WHEREAS, Assignee desires to acquire the Ownership Interest;

 

NOW, THEREFORE, the undersigned, in consideration of the premises, covenants and agreement contained herein, and for other good and valuable consideration, do hereby agree as follows:

 

Assignment.  For value received, the receipt and sufficiency of which are hereby acknowledged, upon the execution of this assignment by the parties hereto, assignor does hereby assign, transfer and convey the ownership interest to assignee, free and clear of all liens, claims, encumbrances, options and rights of any kind.

 

ARTICLE 27 withdrawal.  Immediately following the assignment described in paragraph 1 of this assignment, assignor shall and does hereby withdraw from the company as a member of the company, and shall thereupon cease to be a member of the company, and shall thereupon cease to have or exercise any right or power as a member of the company.

 

 

 

 

ARTICLE 28Continuation of the company.  The assignment of the ownership interest and the withdrawal of assignor as a member of the company shall not dissolve the company and the business of the company shall continue.

 

ARTICLE 29Contribution.  Assignee has paid good and valuable consideration to assignor for the ownership interest.

 

ARTICLE 30Binding effect.  This assignment shall be binding upon, and shall inure to the benefit of the parties hereto and their respective successors and assigns.

 

ARTICLE 31Execution in counterparts.  This assignment may be (a) executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument and (b) by telecopy or other facsimile signature (which shall be deemed an original for all purposes).

 

ARTICLE 32Governing law.  This assignment shall be governed by and construed in accordance with the laws of the state of delaware.

 

ARTICLE 33Representations and warranties.  Assignor and assignee each represents and warrants that (i) it has all requisite power and authority to enter into and perform this assignment, (ii) the execution, delivery and performance of this assignment has been duly authorized, (iii) this assignment is a legal, valid and binding agreement, enforceable according to its terms (subject to bankruptcy and similar laws), (iv) no consent of any third party is required to execute, deliver or perform this assignment, and (v) the execution and delivery of this assignment will not conflict with assignor’s or assignee’s respective organizational documents or any law or contract.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS ASSIGNMENT TO BE DULY EXECUTED AS OF THE DAY AND YEAR FIRST-ABOVE WRITTEN.

 

ASSIGNOR:

GRT MALL JV LLC, a Delaware limited liability company

	
  

	
By:

	
BRE/GRJV HOLDINGS LLC, a Delaware limited liability company, its managing member

 

By:          _____________________ 

Name:

Title:

 

ASSIGNEE:

GRT WSP-LC HOLDINGS LLC, a Delaware limited liability company

 

By:          _____________________           

Name:

Title:ex10-112.htm

EXHIBIT 10.112

 

LOAN NO. 3411106

 

LOAN AGREEMENT

 

Dated as of March 31, 2010

 

Between

 

PTC COLUMBUS, LLC, a Delaware limited liability company,

as Borrower

 

and

 

BANK OF AMERICA, N.A.,

as Lender

 

 

1

 

TABLE OF CONTENTS

 

Page

 

	
ARTICLE 1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION

	1
	
Section 1.1

	
Definitions

	
1

	
Section 1.2

	
Principles of Construction

	
18

	
ARTICLE 2 GENERAL TERMS

	18
	
Section 2.1

	
The Loan

	
18

	
Section 2.2

	
Disbursement to Borrower

	
18

	
Section 2.3

	
The Note, Mortgage and Loan Documents

	
18

	
Section 2.4

	
Loan Payments

	
18

	
Section 2.5

	
Loan Prepayments

	
19

	
ARTICLE 3 CONDITIONS PRECEDENT

	19
	
Section 3.1

	
Conditions Precedent

	
19

	
ARTICLE 4 REPRESENTATIONS AND WARRANTIES

	19
	
Section 4.1

	
Organization

	
19

	
Section 4.2

	
Status of Borrower

	
19

	
Section 4.3

	
Validity of Documents

	
20

	
Section 4.4

	
No Conflicts

	
20

	
Section 4.5

	
Litigation

	
20

	
Section 4.6

	
Agreements

	
20

	
Section 4.7

	
Solvency

	
21

	
Section 4.8

	
Full and Accurate Disclosure

	
21

	
Section 4.9

	
No Plan Assets

	
21

	
Section 4.10

	
Not a Foreign Person

	
22

	
Section 4.11

	
Enforceability

	
22

	
Section 4.12

	
Business Purposes

	
22

	
Section 4.13

	
Compliance

	
22

	
Section 4.14

	
Financial Information

	
22

	
Section 4.15

	
Condemnation

	
23

	
Section 4.16

	
Utilities and Public Access; Parking

	
23

	
Section 4.17

	
Separate Lots

	
23

	
Section 4.18

	
Assessments

	
23

	
Section 4.19

	
Insurance

	
23

	
Section 4.20

	
Use of Property

	
24

	
Section 4.21

	
Certificate of Occupancy; Licenses

	
24

	
Section 4.22

	
Flood Zone

	
24

	
Section 4.23

	
Physical Condition

	
24

	
Section 4.24

	
Boundaries

	
24

	
Section 4.25

	
Leases and Rent Roll

	
25

	
Section 4.26

	
Filing and Recording Taxes

	
25

	
Section 4.27

	
Management Agreement

	
25

	
Section 4.28

	
Illegal Activity

	
26

	
Section 4.29

	
Construction Expenses

	
26

	
Section 4.30

	
Personal Property

	
26

	
Section 4.31

	
Taxes

	
26

 

 

-i-

 

	
Section 4.32

	
Title

	
26

	
Section 4.33

	
Federal Reserve Regulations

	
27

	
Section 4.34

	
Investment Company Act

	
27

	
Section 4.35

	
Reciprocal Easement Agreements

	
27

	
Section 4.36

	
No Change in Facts or Circumstances; Disclosure

	
28

	
Section 4.37

	
Intellectual Property

	
28

	
Section 4.38

	
Compliance with Anti-Terrorism Laws

	
28

	
Section 4.39

	
Patriot Act

	
28

	
Section 4.40

	
Brokers and Financial Advisors

	
29

	
Section 4.41

	
Survival

	
29

	
ARTICLE 5 BORROWER COVENANTS

	29
	
Section 5.1

	
Existence; Compliance with Requirements

	
29

	
Section 5.2

	
Maintenance and Use of Property

	
30

	
Section 5.3

	
Waste

	
30

	
Section 5.4

	
Taxes and Other Charges

	
30

	
Section 5.5

	
Litigation

	
31

	
Section 5.6

	
Access to Property

	
31

	
Section 5.7

	
Notice of Default

	
32

	
Section 5.8

	
Cooperate in Legal Proceedings

	
32

	
Section 5.9

	
Performance by Borrower

	
32

	
Section 5.10

	
Awards; Insurance Proceeds

	
32

	
Section 5.11

	
Financial Reporting

	
32

	
Section 5.12

	
Estoppel Statement

	
34

	
Section 5.13

	
Leasing Matters

	
34

	
Section 5.14

	
Property Management

	
36

	
Section 5.15

	
Liens

	
37

	
Section 5.16

	
Debt Cancellation

	
38

	
Section 5.17

	
Zoning

	
38

	
Section 5.18

	
ERISA

	
38

	
Section 5.19

	
No Joint Assessment

	
38

	
Section 5.20

	
Reciprocal Easement Agreements

	
39

	
Section 5.21

	
Alterations

	
39

	
ARTICLE 6 ENTITY COVENANTS

	39
	
Section 6.1

	
Single Purpose Entity/Separateness

	
39

	
Section 6.2

	
Change of Name, Identity or Structure

	
43

	
Section 6.3

	
Business and Operations

	
43

	
Section 6.4

	
Independent Director

	
43

	
ARTICLE 7 NO SALE OR ENCUMBRANCE

	44
	
Section 7.1

	
Transfer Definitions

	
44

	
Section 7.2

	
No Sale/Encumbrance

	
44

	
Section 7.3

	
Permitted Transfers

	
45

	
Section 7.4

	
Lender’s Rights

	
45

	
Section 7.5

	
Assumption

	
46

	
Section 7.6

	
Permitted Mezzanine Debt

	
49

	ARTICLE 8 INSURANCE; CASUALTY; CONDEMNATION; RESTORATION	49
	
Section 8.1

	
Insurance

	
49

	
Section 8.2

	
Casualty

	
53

	
Section 8.3

	
Condemnation

	
53

	
Section 8.4

	
Restoration

	
53

 

 

-ii-

 

	
ARTICLE 9 RESERVE FUNDS

	58
	
Section 9.1

	
Required Repairs

	
58

	
Section 9.2

	
Replacements

	
58

	
Section 9.3

	
Tenant Improvements and Leasing Commissions

	
58

	
Section 9.4

	
Required Work

	
59

	
Section 9.5

	
Release of Reserve Funds

	
61

	
Section 9.6

	
Tax and Insurance Reserve Funds

	
64

	
Section 9.7

	
Excess Cash; Operating Expenses; Extraordinary Expenses

	
64

	
Section 9.8

	
Holdback Reserve.

	
65

	
Section 9.9

	
Reserve Funds Generally

	
65

	
ARTICLE 10 CASH MANAGEMENT

	68
	
Section 10.1

	
Lockbox Account and Cash Management Account

	
68

	
Section 10.2

	
Deposits and Withdrawals

	
70

	
Section 10.3

	
Security Interest

	
74

	

ARTICLE 11 EVENTS OF DEFAULT; REMEDIES

	75
	
Section 11.1

	
Event of Default

	
75

	
Section 11.2

	
Remedies

	
77

	
Section 11.3

	
Provisions Regarding Letters of Credit

	
78

	

ARTICLE 12 ENVIRONMENTAL PROVISIONS

	78
	
Section 12.1

	
Environmental Representations and Warranties

	
78

	
Section 12.2

	
Environmental Covenants

	
79

	
Section 12.3

	
Lender’s Rights

	
79

	
Section 12.4

	
Operations and Maintenance

	
80

	
Section 12.5

	
Environmental Definitions

	
80

	
Section 12.6

	
Indemnification

	
81

	
ARTICLE 13 SECONDARY MARKET

	82
	
Section 13.1

	
Transfer of Loan

	
82

	
Section 13.2

	
Delegation of Servicing

	
82

	
Section 13.3

	
Dissemination of Information

	
82

	
Section 13.4

	
Cooperation

	
83

	
Section 13.5

	
Securitization

	
84

	
Section 13.6

	
Regulation AB Information

	
87

	
Section 13.7

	
Rating Surveillance

	
88

	
Section 13.8

	
New Mezzanine Loan

	
88

	
ARTICLE 14 INDEMNIFICATIONS

	89
	
Section 14.1

	
General Indemnification

	
89

	
Section 14.2

	
Mortgage and Intangible Tax Indemnification

	
89

	
Section 14.3

	
ERISA Indemnification

	
89

	
Section 14.4

	
Survival

	
90

	
ARTICLE 15 EXCULPATION

	90
	
Section 15.1

	
Exculpation

	
90

	
ARTICLE 16 NOTICES

	92
	
Section 16.1

	
Notices

	
92

	
ARTICLE 17 FURTHER ASSURANCES

	94
	
Section 17.1

	
Replacement Documents

	
94

	
Section 17.2

	
Recording of Mortgage, etc

	
94

	
Section 17.3

	
Further Acts, etc

	
95

 

 

-iii-

 

	
Section 17.4

	
Changes in Tax, Debt, Credit and Documentary Stamp Laws

	
95

	
Section 17.5

	
Expenses

	
96

	
Section 17.6

	
Cost of Enforcement.

	
96

	
ARTICLE 18 WAIVERS

	97
	
Section 18.1

	
Remedies Cumulative; Waivers

	
97

	
Section 18.2

	
Modification, Waiver in Writing

	
97

	
Section 18.3

	
Delay Not a Waiver

	
97

	
Section 18.4

	
Trial by Jury

	
97

	
Section 18.5

	
Waiver of Notice

	
98

	
Section 18.6

	
Remedies of Borrower

	
98

	
Section 18.7

	
Waiver of Marshalling of Assets

	
98

	
Section 18.8

	
Waiver of Statute of Limitations

	
99

	
Section 18.9

	
Waiver of Counterclaim

	
99

	

ARTICLE 19 GOVERNING LAW

	99
	
Section 19.1

	
Choice of Law

	
99

	
Section 19.2

	
Severability

	
99

	
Section 19.3

	
Preferences

	
99

	
ARTICLE 20 MISCELLANEOUS

	100
	
Section 20.1

	
Survival

	
100

	
Section 20.2

	
Lender’s Discretion

	
100

	
Section 20.3

	
Headings

	
100

	
Section 20.4

	
Schedules Incorporated

	
100

	
Section 20.5

	
Offsets, Counterclaims and Defenses

	
100

	
Section 20.6

	
No Joint Venture or Partnership; No Third Party Beneficiaries

	
100

	
Section 20.7

	
Publicity

	
101

	
Section 20.8

	
Conflict; Construction of Documents; Reliance

	
102

	
Section 20.9

	
Duplicate Originals; Counterparts

	
102

	
Section 20.10

	
Entire Agreement

	
102

 

 

-iv-

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT, dated as of March 31, 2010 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”), between BANK OF AMERICA, N.A., a national banking association, having an address at 214 North Tryon Street, Charlotte, North Carolina 28255 (together with its successors and/or assigns, “Lender”) and PTC COLUMBUS, LLC, a Delaware limited liability company having an address at 180 East Broad Street, Columbus, Ohio 43215 (together with its successors and/or assigns, “Borrower”).

 

RECITALS:

 

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

 

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

 

In consideration of the making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in this Agreement, the parties hereto hereby covenant, agree, represent and warrant as follows:

 

ARTICLE 1

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

Section 1.1                      Definitions

 

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

 

“Acceptable Accountant” shall mean (i) a “Big Four” accounting firm, (ii) BDO Seidman, LLP or (iii) another independent certified public accountant acceptable to Lender.

 

“Additional Replacement” shall have the meaning set forth in Section 9.5(g) hereof.

 

“Additional Required Repair” shall have the meaning set forth in Section 9.5(f) hereof.

 

“Affiliate” shall mean, as to any Person, any other Person that (i) owns directly or indirectly ten percent (10%) or more of all equity interests in such Person, and/or (ii) is in control of, is controlled by or is under common control with such Person, and/or (iii) is a director or officer of such Person or of an Affiliate of such Person.  As used in this definition, the term “control” means the power to direct the management and policies of a Person, directly or indirectly, whether through ownership of voting securities or other beneficial interests, by contract or otherwise.

 

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

 

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

 

 

 

 

“Alteration Threshold” means $1,000,000.00.

 

“Annual Budget” shall mean the operating budget, including all planned capital expenditures, for the Property approved by Lender in accordance with Section 5.11(a)(iv) hereof for the applicable calendar year or other period.

 

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

 

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

 

“Borrower’s Account” shall mean account # 0189-164-3594 maintained by Borrower or Borrower Principal at Huntington National Bank.

 

“Borrower Principal” shall mean Glimcher Properties Limited Partnership, a Delaware limited partnership.

 

“Business Day” shall mean a day on which Lender is open for the conduct of substantially all of its banking business at its office in the city in which the Note is payable (excluding Saturdays and Sundays).

 

“Cash Management Account” shall have the meaning set forth in Section 10.1(b) hereof.

 

“Cash Sweep Period” shall mean the period commencing on the date upon which the Debt Service Coverage Ratio for the Property, as reasonably determined by Lender, for the immediately preceding twelve (12) month period is less than 1.10 to 1.00, and ending on the date the Debt Service Coverage Ratio equals or exceeds 1.10 to 1.00 for the immediately preceding twelve (12) month period.

 

“Casualty” shall have the meaning set forth in Section 8.2.

 

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

 

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

 

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

 

“Cooperation Cap” shall mean $32,500 for UCC insurance, if applicable, and reimbursement of Lender’s costs and expenses (including, without limitation, Lender’s legal fees and fees of the Rating Agencies or any servicers or managers of a Securitization).

 

 

-2-

 

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

 

“Debt” shall mean the outstanding principal amount set forth in, and evidenced by, this Agreement and the Note together with all interest accrued and unpaid thereon and all other sums due to Lender in respect of the Loan under the Note, this Agreement, the Mortgage or any other Loan Document.

 

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

 

“Debt Service Coverage Ratio” shall mean, as of any date of determination, for the applicable period of calculation, the ratio, as determined by Lender, of (i) Net Operating Income to (ii) the aggregate amount of Debt Service which would be due for the same period assuming the maximum principal amount of the Loan is outstanding and calculated using an amortizing mortgage constant based on the Note Rate and, if applicable pursuant to Section 7.6 hereof, the Mezzanine Loan, that is outstanding on the date of such calculation using an assumed amortization schedule of thirty (30) years for such Mezzanine Loan.

 

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

 

“Default Rate” shall have the meaning set forth in the Note.

 

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

 

“Eligible Institution” shall mean a depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations or commercial paper of which are rated at least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by Fitch in the case of accounts in which funds are held for thirty (30) days or less (or, in the case of accounts in which funds are held for more than thirty (30) days, the long term unsecured debt obligations of which are rated at least “AA-” by Fitch and S&P and “Aa2” by Moody’s), or such other depository institution or trust company approved by the Rating Agencies from time to time.  Notwithstanding the foregoing, prior to a Securitization, Bank of America, N.A. shall be an Eligible Institution.

 

 

-3-

 

“Eligibility Requirements” means, with respect to any Person, that such Person (i) has, excluding any interest in the Property, total assets (in name or under management) in excess of $600,000,000 and (except with respect to a pension advisory firm or similar fiduciary) capital/statutory surplus or shareholder’s equity of $250,000,000 and (ii) is regularly engaged in the business of owning or operating commercial properties or interests therein, similar to the Property or, with respect to the making of a Mezzanine Loan only, making or owning commercial real estate loans.

 

“Embargoed Person” shall mean any person identified by OFAC or any other Person with whom a Person resident in the United States of America may not conduct business or transactions by prohibition of federal law or Executive Order of the President of the United States of America.

 

“Environmental Law” shall have the meaning set forth in Section 12.5 hereof.

 

“Environmental Liens” shall have the meaning set forth in Section 12.5 hereof.

 

“Environmental Report” shall have the meaning set forth in Section 12.5 hereof.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor statutes thereto and applicable regulations issued pursuant thereto in temporary or final form.

 

“Event of Default” shall have the meaning set forth in Section 11.1 hereof.

 

“Excess Cash” shall have the meaning set forth in Section 10.2(c) hereof .

 

“Excess Cash Reserve Account” shall have the meaning set forth in Section 9.7 hereof.

 

“Excess Cash Reserve Funds” shall have the meaning set forth in Section 9.7 hereof.

 

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

 

“Exchange Act Filing” shall have the meaning set forth in Section 13.6 hereof.

 

“Extraordinary Expense” shall mean an operating expense or capital expenditure with respect to the Property that (i) is not set forth on the Annual Budget approved by Lender, (ii) is not an Operating Expense that has been approved by Lender, and (iii) is not subject to payment by withdrawals from the Required Repair Account, the Replacement Reserve Account or the Leasing Reserve Account.  Borrower shall deliver promptly to Lender a reasonably detailed explanation of such proposed Extraordinary Expense for the approval of Lender.

 

“Fitch” shall mean Fitch, Inc.

 

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

 

 

-4-

 

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

 

“GRT” shall mean Glimcher Realty Trust.

 

“Hazardous Materials” shall have the meaning set forth in Section 12.5 hereof.

 

“Holdback Estoppel” shall mean a duly executed estoppel certificate attesting to such facts regarding the related Lease as Lender may require, including, but not limited to attestations that:  (a) such Lease is in full force and effect; (b) the premises demised under such Lease have been completed and the Tenant under the Lease has accepted possession of and is in occupancy of all of its respective demised premises; (c) the Tenant under such Lease has commenced the payment of rent under the Lease, there are no offsets, claims or defenses to the enforcement thereof, and Borrower has no monetary obligations to the Tenant under such Lease; (d) the rent payable under such Lease is the amount of fixed rent set forth in the Rent Roll, and there is no claim or basis for a claim by the Tenant thereunder for an offset or adjustment to the rent; (e) to Tenant’s knowledge, such Tenant does not have a claim of a default against the landlord under the Lease; (f) to Tenant’s knowledge there is no present default by Borrower under such Lease; and (g) such Lease is the valid, binding and enforceable obligation of the applicable Tenant thereunder and there are no agreements with the Tenant under the Lease other than as expressly set forth in the Lease.

 

“Holdback Reserve Account” shall have the meaning set forth in Section 9.8 hereof.

 

“Holdback Reserve Funds” shall have the meaning set forth in Section 9.8 hereof.

 

“Holdback Work” shall have the meaning set forth in Section 9.8 hereof.

 

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

 

“Indemnified Parties” shall mean (a) Lender, (b) any prior owner or holder of the Loan or Participations in the Loan, (c) any servicer or prior servicer of the Loan, (d) any Investor or any prior Investor in any Securities, (e) any trustees, custodians or other fiduciaries who hold or who have held a full or partial interest in the Loan for the benefit of any Investor or other third party, (f) any receiver or other fiduciary appointed in a foreclosure or other Creditors Rights Laws proceeding, (g) any officers, directors, shareholders, partners, members, employees, agents, servants, representatives, contractors, subcontractors, affiliates or subsidiaries of any and all of the foregoing, and (h) the heirs, legal representatives, successors and assigns of any and all of the foregoing (including, without limitation, any successors by merger, consolidation or acquisition of all or a substantial portion of the Indemnified Parties’ assets and business), in all cases whether during the term of the Loan or as part of or following a foreclosure of the Mortgage.

 

“Independent Director” of any corporation or limited liability company means an individual who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Independent Directors, another nationally-recognized company reasonably approved by Lender, in each case that is not an Affiliate of Borrower and that provides professional Independent Directors and other corporate services in the ordinary course of its business, and which individual is duly appointed as a member of the board of directors or board of managers of such corporation or limited liability company and is not, and has never been, and will not while serving as Independent Director be, any of the following:

 

 

-5-

 

(i)                a member, partner, equityholder, manager, director, officer or employee of Borrower, any SPE Component Entity, or any of their respective equityholders or Affiliates (other than as an Independent Director of an Affiliate of Borrower or any SPE Component Entity that is not in the direct chain of ownership of Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity, provided that such Independent Director is employed by a company that routinely provides professional Independent Directors or managers);

 

(ii)               a creditor, supplier or service provider (including provider of professional services) to Borrower, any SPE Component Entity, or any of their respective equityholders or Affiliates (other than a nationally-recognized company that routinely provides professional Independent Directors and other corporate services to Borrower, any SPE Component Entity, or any of their respective equityholders or Affiliates in the ordinary course of business);

 

(iii)              a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or

 

(iv)              a Person that controls (whether directly, indirectly or otherwise) any of (i), (ii) or (iii) above.

 

A natural person who otherwise satisfies the foregoing definition other than subparagraph (i) by reason of being the Independent Director of a “special purpose entity” affiliated with Borrower shall not be disqualified from serving as an Independent Director, provided that the fees that such individual earns from serving as Independent Directors of such Affiliates in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year.

 

“Insurance Premiums” shall have the meaning set forth in Section 8.1(b) hereof.

 

“Insurance Proceeds” shall have the meaning set forth in Section 8.4(b) hereof.

 

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

 

“Investor” shall have the meaning set forth in Section 13.3 hereof.

 

“Issuer Group” shall have the meaning set forth in Section 13.5(b) hereof.

 

“Issuer Person” shall have the meaning set forth in Section 13.5(b) hereof.

 

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

 

“Leasing Reserve Account” shall have the meaning set forth in Section 9.3(b) hereof.

 

 

-6-

 

“Leasing Reserve Funds” shall have the meaning set forth in Section 9.3(b) hereof.

 

“Leasing Reserve Monthly Deposit” shall have the meaning set forth in Section 9.3(b) hereof.

 

“Legal Requirements” shall mean all statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting the Property or any part thereof, or the construction, use, alteration, ownership or operation thereof, whether now or hereafter enacted and in force, and all permits, licenses, authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any time in force affecting the Property or any part thereof, including, without limitation, any which may (a) require repairs, modifications or alterations in or to the Property or any part thereof, or (b) in any way limit the use and enjoyment thereof.

 

“Letter of Credit” shall mean a transferable, clean, irrevocable, unconditional, standby letter of credit in form, substance and amount reasonably satisfactory to Lender in its reasonable discretion, issued or confirmed by a commercial bank with a long term debt obligation rating of “A” or better (or a comparable long term debt obligation rating) as assigned by the Rating Agencies (the “Minimum L/C Rating”) and otherwise satisfactory to Lender in its reasonable discretion (the “Issuing Bank”).  The Letter of Credit shall be payable upon presentation of a sight draft only to the order of Lender at a New York City bank.  The Letter of Credit shall have an initial expiration date of not less than one (1) year and shall be automatically renewed for successive twelve (12) month periods for the term of the Loan (unless such Letter of Credit provides either that (a) the issuing bank may elect not to renew the Letter of Credit or (b) the Letter of Credit will expire pursuant to its terms, in either case, upon written notice to the beneficiary at least thirty (30) days prior to its expiration date) and shall provide for multiple draws.  The Letter of Credit shall be transferable by Lender and its successors and assigns at a New York City bank.

 

“Lien” shall mean any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer of, on or affecting Borrower, the Property, any portion thereof or any interest therein, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, and mechanic’s, materialmen’s and other similar liens and encumbrances.

 

“LLC Agreement” shall have the meaning set forth in Section 6.1(c).

 

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

 

“Loan Documents” shall mean, collectively, this Agreement, the Note, the Mortgage, the Assignment of Management Agreement, the Lockbox Agreement, and any and all other documents, agreements and certificates executed and/or delivered in connection with the Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Lockbox” shall mean the post office address established pursuant to the Lockbox Agreement and maintained by Lockbox Bank on behalf of Borrower and Lender pursuant to the terms thereof and to which Borrower shall direct all Rents and other income from the Property be sent pursuant to the Tenant Direction Letters.

 

 

-7-

 

“Lockbox Account” shall have the meaning set forth in Section 10.1(a) hereof.

 

“Lockbox Agreement” shall mean that certain Deposit Control Account Agreement by and among Borrower, Lender and Lockbox Bank, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, relating to the operation and maintenance of, and application of funds in, the Lockbox Account.

 

“Lockbox Bank” shall mean Huntington National Bank or any successor Eligible Institution approved or appointed by Lender acting as Lockbox Bank under the Lockbox Agreement.

 

“Losses” shall mean any and all claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs, expenses, fines, penalties, charges, fees, judgments, awards, amounts paid in settlement of whatever kind or nature (including but not limited to legal fees and other costs of defense).

 

“Major Lease” shall mean as to the Property (i) any Lease which, individually or when aggregated with all other leases at the Property with the same Tenant or its Affiliate, either (A) accounts for five percent (5%) or more of the Property’s rental income, or (B) demises 10,000 square feet or more of the Property’s gross leasable area,  (ii) any Lease which contains any option, offer, right of first refusal or other similar entitlement to acquire all or any portion of the Property, or (iii) any instrument guaranteeing or providing credit support for any Lease meeting the requirements of (i) or (ii) above.

 

“Management Agreement” shall mean the management agreement entered into by and between Borrower and Manager pursuant to which Manager is to provide management and other services with respect to the Property, as the same may be amended, restated, replaced, supplemented or otherwise modified in accordance with the terms of this Agreement, including, without limitation, a Replacement Management Agreement, if applicable.

 

“Manager” shall mean Glimcher Properties Limited Partnership, a Delaware limited partnership, or such other entity selected as the manager of the Property in accordance with the terms of this Agreement.

 

“Material Action” shall mean, as to any Person, to file or consent to the filing of, institute, commence or seek relief under, any petition, proceeding, action or case under any Creditors Rights Laws, to seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for such Person or a substantial part of its property, to admit in writing the Company's inability to pay its debts generally as they become due, or to take action in furtherance of any of the foregoing.

 

“Maturity Date” shall have the meaning set forth in the Note.

 

“Member” shall have the meaning set forth in Section 6.1(c ).

 

“Mezzanine Loan” shall have the meaning set forth in Section 7.6 hereof.

 

 

-8-

 

“Mold” shall have the meaning set forth in Section 12.5 hereof.

 

“Monthly Payment Amount” shall have the meaning set forth in the Note.

 

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

 

“Mortgage” shall mean that certain first priority mortgage/deed of trust/deed to secure debt and security agreement dated the date hereof, executed and delivered by Borrower as security for the Loan and encumbering the Property, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Net Operating Income” shall mean, with respect to any period of time, the amount obtained by subtracting Operating Expenses (based on annualized amounts for any recurring expenses not paid monthly) from Operating Income, as such amount may be adjusted by Lender in its good faith discretion based on Lender’s underwriting standards, including without limitation, adjustments for vacancy allowance.

 

“Net Proceeds” shall have the meaning set forth in Section 8.4(b) hereof.

 

“Net Proceeds Deficiency” shall have the meaning set forth in Section 8.4(b)(vi) hereof.

 

“Note” shall mean that certain promissory note of even date herewith in the principal amount of $46,000,000.00, made by Borrower in favor of Lender, as the same may be amended, restated, replaced, severed, supplemented or otherwise modified from time to time.

 

“Note Rate” shall have the meaning set forth in the Note.

 

“OFAC” shall have the meaning set forth in Section 4.38 hereof.

 

“Operating Expenses” shall mean, with respect to any period of time, the total of all expenses actually paid or payable, computed in accordance with GAAP (or such other method of accounting acceptable to Lender), of whatever kind relating to the operation, maintenance and management of the Property, including without limitation, utilities, ordinary repairs and maintenance, Insurance Premiums, license fees, Taxes and Other Charges, advertising expenses, payroll and related taxes, computer processing charges, management fees equal to the greater of 4% of the Operating Income and the management fees actually paid under the Management Agreement, operational equipment or other lease payments set forth in the Annual Budget, if applicable, or otherwise approved by Lender, normalized capital expenditures equal to $137,372 per annum and normalized tenant improvement costs and/or leasing commissions equal to $264,509 per annum, but specifically excluding depreciation and amortization, non-recurring or extraordinary expenses, income taxes, Debt Service, any debt service due in connection a Mezzanine Loan, any incentive fees due under the Management Agreement, any item of expense that in accordance with GAAP should be capitalized but only to the extent the same would qualify for funding from the Reserve Accounts, any item of expense that would otherwise be covered by the provisions hereof but which is paid by any Tenant under such Tenant’s Lease or other agreement, and deposits into the Reserve Accounts.

 

 

-9-

 

“Operating Income” shall mean, with respect to any period of time, all income, computed in accordance with GAAP (or such other method of accounting acceptable to Lender), derived from the ownership and operation of the Property from whatever source, including, but not limited to, Rents, utility charges, escalations, forfeited security deposits, interest on credit accounts, service fees or charges, license fees, parking fees, rent concessions or credits, and other required pass-throughs but excluding sales, use and occupancy or other taxes on receipts required to be accounted for by Borrower to any Governmental Authority, tax rebates, refunds and uncollectible accounts, sales of furniture, fixtures and equipment, interest income from any source other than the escrow accounts, Reserve Accounts or other accounts required pursuant to the Loan Documents, Insurance Proceeds (other than business interruption or other loss of income insurance), Awards, unforfeited security deposits, utility and other similar deposits, non-recurring or extraordinary income, including, without limitation lease termination payments, and any disbursements to Borrower from the Reserve Accounts.

 

“Oshkosh” shall mean Carter’s Retail, Inc.

 

“Oshkosh Lease” shall mean that certain Lease dated March 4, 2010, between Polaris Center, LLC, as landlord, as assigned to Borrower, and Oshkosh, as tenant.

 

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

 

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

 

“Patriot Act” shall have the meaning set forth in Section 4.38 hereof.

 

“Permitted Encumbrances” shall mean collectively, (a) the Lien and security interests created by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed in the Title Insurance Policy, (c) Liens, if any, for Taxes imposed by any Governmental Authority not yet due or delinquent, and (d) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s sole discretion, all of which Lender determines in the aggregate as of the date hereof do not materially adversely affect the value or use of the Property or Borrower’s ability to repay the Loan.

 

“Permitted Fund Manager” means any Person that on the date of determination is (a) any nationally-recognized manager of investment funds investing in debt or equity interests relating to commercial real estate, (b) investing through or managing a fund with committed capital of at least $250,000,000 and (c) has not made an assignment for the benefit of creditors or taken advantage of any Creditors Rights Laws.

 

“Permitted Investments” shall mean to the extent available from Lender or Lender’s servicer for deposits in the Reserve Accounts and the Cash Management Account, any one or more of the following obligations or securities acquired at a purchase price of not greater than par, including those issued by a servicer of the Loan, the trustee under any securitization or any of their respective Affiliates, payable on demand or having a maturity date not later than the Business Day immediately prior to the date on which the funds used to acquire such investment are required to be used under this Agreement and meeting one of the appropriate standards set forth below:

 

 

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(a)           obligations of, or obligations fully guaranteed as to payment of principal and interest by, the United States or any agency or instrumentality thereof provided such obligations are backed by the full faith and credit of the United States of America including, without limitation, obligations of: the U.S. Treasury (all direct or fully guaranteed obligations), the Farmers Home Administration (certificates of beneficial ownership), the General Services Administration (participation certificates), the U.S. Maritime Administration (guaranteed Title XI financing), the Small Business Administration (guaranteed participation certificates and guaranteed pool certificates), the U.S. Department of Housing and Urban Development (local authority bonds) and the Washington Metropolitan Area Transit Authority (guaranteed transit bonds); provided, however, that the investments described in this clause must (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) be rated “AAA” or the equivalent by each of the Rating Agencies, (iii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iv) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (v) such investments must not be subject to liquidation prior to their maturity;

 

(b)           Federal Housing Administration debentures;

 

(c)           obligations of the following United States government sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System (consolidated systemwide bonds and notes), the Federal Home Loan Banks (consolidated debt obligations), the Federal National Mortgage Association (debt obligations), the Financing Corp. (debt obligations), and the Resolution Funding Corp. (debt obligations); provided, however, that the investments described in this clause must (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity;

 

(d)           federal funds, unsecured certificates of deposit, time deposits, bankers’ acceptances and repurchase agreements with maturities of not more than 365 days of any bank, the short term obligations of which at all times are rated in the highest short term rating category by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency in the highest short term rating category and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities); provided, however, that the investments described in this clause must (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity;

 

(e)           fully Federal Deposit Insurance Corporation-insured demand and time deposits in, or certificates of deposit of, or bankers’ acceptances with maturities of not more than 365 days and issued by, any bank or trust company, savings and loan association or savings bank, the short term obligations of which at all times are rated in the highest short term rating category by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency in the highest short term rating category and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities); provided, however, that the investments described in this clause must (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity;

 

 

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(f)           debt obligations with maturities of not more than 365 days and at all times rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities) in its highest long-term unsecured rating category; provided, however, that the investments described in this clause must (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity;

 

(g)           commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of issuance thereof) with maturities of not more than 365 days and that at all times is rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities) in its highest short-term unsecured debt rating; provided, however, that the investments described in this clause must (i) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (ii) if rated by S&P, must not have an “r” highlighter affixed to their rating, (iii) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (iv) such investments must not be subject to liquidation prior to their maturity;

 

(h)           units of taxable money market funds with maturities of not more than 365 days, which funds are regulated investment companies, seek to maintain a constant net asset value per share and invest solely in obligations backed by the full faith and credit of the United States, which funds have the highest rating available from each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities) for money market funds; and

 

 

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(i)           any other security, obligation or investment which has been approved as a Permitted Investment in writing by (i) Lender and (ii) each Rating Agency, as evidenced by a written confirmation that the designation of such security, obligation or investment as a Permitted Investment will not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities by such Rating Agency;

 

provided, however, that no obligation or security shall be a Permitted Investment if (A) such obligation or security evidences a right to receive only interest payments, (B) the right to receive principal and interest payments on such obligation or security are derived from an underlying investment that provides a yield to maturity in excess of one hundred twenty percent (120%) of the yield to maturity at par of such underlying investment or (C) such obligation or security has a remaining term to maturity in excess of one (1) year.

 

“Permitted LTV” shall mean a loan-to-value ratio (based upon a then current appraisal paid for by Borrower and delivered to Lender and otherwise reasonably acceptable to Lender) equal to or less than seventy percent (70%).

 

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

 

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

 

“Policies” shall have the meaning specified in Section 8.1(b) hereof.

 

“Prohibited Transfer” shall have the meaning set forth in Section 7.2 hereof.

 

“Property” shall mean the parcel of real property, the Improvements thereon and all Personal Property owned by Borrower and encumbered by the Mortgage, together with all rights pertaining to such property and Improvements, as more particularly described in the granting clause of the Mortgage and referred to therein as the “Property”.

 

“Property Condition Report” shall mean a report prepared by a company satisfactory to Lender regarding the physical condition of the Property, satisfactory in form and substance to Lender in its sole discretion.

 

“Provided Information” shall have the meaning set forth in Section 13.4 hereof.

 

“Qualified Manager” shall mean Manager or a reputable and experienced professional management organization (a) which manages, together with its affiliates, at least ten (10) retail community centers or “power centers” totaling at least 4,000,000 square feet of gross leasable area (including all anchor space), exclusive of the Property and (b) approved by Lender, which approval shall not have been unreasonably withheld and for which Lender shall have received (i) written confirmation from the Rating Agencies that the employment of such manager will not result in a downgrade, withdrawal or qualification of the initial, or if higher, then current ratings issued in connection with a Securitization, or if a Securitization has not occurred, any ratings to be assigned in connection with a Securitization, and (ii) with respect to any replacement Affiliated Manager, a revised substantive non-consolidation opinion acceptable to Lender and the Rating Agencies.

 

 

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“Qualified Mezzanine Lender” shall mean one or more of the following:

 

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

 

(b)           an investment company, money management firm or “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, or an institutional “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended, provided that any such Person referred to in this clause (b) satisfies the Eligibility Requirements;

 

(c)           an institution substantially similar to any of the foregoing entities described in clauses (a) or (b) that satisfies the Eligibility Requirements;

 

(d)           any entity Controlled by any of the entities described in clauses (a) or (c);

 

(e)           a Qualified Trustee in connection with a securitization of, the creation of collateralized debt obligations (“CDO”) secured by or financing through an “owner trust” of, the Mezzanine Loan (collectively, “Securitization Vehicles”), so long as (A) the special servicer or manager of such Securitization Vehicle has the Required Special Servicer Rating and (B) the entire “controlling class” of such Securitization Vehicle, other than with respect to a CDO Securitization Vehicle, is held by one or more entities that are otherwise Qualified Mezzanine Lenders under clauses (a), (b), (c), or (d) of this definition; provided that the operative documents of the related Securitization Vehicle require that (1) in the case of a CDO Securitization Vehicle, the “equity interest” in such Securitization Vehicle is owned by one or more entities that are Qualified Mezzanine Lenders under clauses (a), (b), (c), or (d) of this definition and (2) if any of the relevant trustee, special servicer, manager fails to meet the requirements of this clause (e), such Person must be replaced by a Person meeting the requirements of this clause (e) within thirty (30) days;

 

(f)           an investment fund, limited liability company, limited partnership or general partnership where a Permitted Fund Manager or an entity that is otherwise a Qualified Mezzanine Lender under clauses (a), (b), (c), or (d) of this definition acts as the general partner, managing member or fund manager and at least 50% of the equity interests in such investment vehicle are owned, directly or indirectly, by one or more entities that are otherwise Qualified Mezzanine Lender under clauses (a), (b), (c), or (d) of this definition.

 

“Qualified Transferee” means a single purpose entity meeting the requirements of Article 6 hereof which is wholly owned and Controlled by:

 

(A)           Borrower Principal;

 

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

 

 

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(B)           an investment fund or institution substantially similar to any of the foregoing entities described in clause (B) that satisfies the Eligibility Requirements.

 

“Qualified Trustee” means (i) a corporation, national bank, national banking association or a trust company, organized and doing business under the laws of any state or the United States of America, authorized under such laws to exercise corporate trust powers and to accept the trust conferred, having a combined capital and surplus of at least $100,000,000 and subject to supervision or examination by federal or state authority, (ii) an institution insured by the Federal Deposit Insurance Corporation or (iii) an institution whose long-term senior unsecured debt is rated either of the then in effect top two rating categories of each of the Rating Agencies.

 

“Rating Agencies” shall mean each of S&P, Moody’s, Fitch, Realpoint LLC and DBRS, Inc., or any other nationally-recognized statistical rating agency which has been approved by Lender; provided however, after a Securitization, the term “Rating Agencies” as used in this Agreement shall be limited to those statistical rating agencies that have, in fact, rated the Securities.

 

“REA” shall mean any construction, operation and reciprocal easement agreement or similar agreement (including any separate agreement or other agreement between Borrower and one or more other parties to an REA with respect to such REA) affecting the Property or portion thereof.

 

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

 

“Related Loan” shall have the meaning set forth in Section 13.6 hereof.

 

“Regulation Property” shall have the meaning set forth in Section 13.6 hereof.

 

“Release” shall have the meaning set forth in Section 12.5 hereof.

 

“Rent Roll” shall have the meaning set forth in Section 4.25 hereof, the form for which is attached to this Agreement as Exhibit C.

 

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

 

“Replacement Management Agreement” shall mean, collectively, (a) either (i) a management agreement with a replacement Qualified Manager substantially in the same form and substance as the Management Agreement, or (ii) a management agreement with a replacement Qualified Manager, which management agreement shall be acceptable to Lender in form and substance, provided, with respect to this subclause (ii), Lender, at its option, may require that Borrower obtain confirmation from the applicable Rating Agencies that such management agreement will not result in a downgrade, withdrawal or qualification of the initial, or if higher, then current rating of the Securities or any class thereof; and (b) a conditional assignment of management agreement substantially in the form of the Assignment of Management Agreement (or such other form acceptable to Lender), executed and delivered to Lender by Borrower and such replacement Qualified Manager at Borrower’s expense and (c) if such replacement manager is an Affiliated Manager, Borrower shall have delivered, or cause to be delivered, to Lender, an updated substantive non-consolidation opinion acceptable to Lender with respect to such Affiliated Manager.

 

 

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“Replacement Reserve Account” shall have the meaning set forth in Section 9.2(b) hereof.

 

“Replacement Reserve Funds” shall have the meaning set forth in Section 9.2(b) hereof.

 

“Replacement Reserve Monthly Deposit” shall have the meaning set forth in Section 9.2(b) hereof.

 

“Replacements” shall have the meaning set forth in Section 9.2(a) hereof.

 

“Required Repair Account” shall have the meaning set forth in Section 9.1(b) hereof.

 

“Required Repair Funds” shall have the meaning set forth in Section 9.1(b) hereof.

 

“Required Repairs” shall have the meaning set forth in Section 9.1(a) hereof.

 

“Required Special Servicer Rating” means (i) a rating of “CSS1” in the case of Fitch, (ii) on the S&P list of approved special servicers in the case of S&P and (iii) in the case of Moody’s, such special servicer is acting as special servicer in a commercial mortgage loan securitization that was rated by Moody’s within the twelve (12) month period prior to the date of determination, and Moody’s has not downgraded or withdrawn the then-current rating on any class of commercial mortgage securities or placed any class of commercial mortgage securities on watch citing the continuation of such special servicer as special servicer of such commercial mortgage securities.

 

“Required Work” shall have the meaning set forth in Section 9.4 hereof.

 

“Reserve Accounts” shall mean the Required Repair Account, the Tax and Insurance Reserve Account, the Replacement Reserve Account, the Excess Cash Reserve Account, the Leasing Reserve Account, the Holdback Reserve Account or any other escrow account established by the Loan Documents.

 

“Reserve Funds” shall mean the Tax and Insurance Reserve Funds, the Replacement Reserve Funds, the Required Repair Funds, the Excess Cash Reserve Funds, the Holdback Reserve Funds, the Leasing Reserve Funds or any other escrow funds established by the Loan Documents.

 

“Restoration” shall mean, following the occurrence of a Casualty or a Condemnation which is of a type necessitating the repair of the Property, the completion of the repair and restoration of the Property to a condition such that the Property shall be at least equal in value to that immediately prior to such Casualty or Condemnation, and as near as possible to the condition the Property was in immediately prior to such Casualty or Condemnation, with such alterations as may be reasonably approved by Lender.

 

 

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“Restoration Consultant” shall have the meaning set forth in Section 8.4(b)(iii) hereof.

 

“Restoration Retainage” shall have the meaning set forth in Section 8.4(b)(iv) hereof.

 

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

 

“Sale or Pledge” shall have the meaning set forth in Section 7.1 hereof.

 

“Scheduled Payment Date” shall have the meaning set forth in the Note.

 

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

 

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

 

“Securities Liabilities” shall have the meaning set forth in Section 13.5(b) hereof.

 

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

 

“Short Term Lease” shall mean any Lease at the Property which is (i) has an original term, including any extension options, of not more than thirteen (13) months, (ii) demises 1,000 square feet or less of the Property’s gross leasable area and (iii) is cancellable by Borrower, without penalty or other expense, on not more than ninety (90) days notice to the applicable Tenant.

 

“Special Member” shall have the meaning set forth in Section 6.1(c).

 

“SPE Component Entity” shall have the meaning set forth in Section 6.1(b) hereof.

 

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

 

“State” shall mean the state in which the Property or any part thereof is located.

 

“Tax and Insurance Reserve Funds” shall have the meaning set forth in Section 9.6 hereof.

 

“Tax and Insurance Reserve Account” shall have the meaning set forth in Section 9.6 hereof.

 

“Taxes” shall mean all real estate and personal property taxes, assessments, water rates or sewer rents, now or hereafter levied or assessed or imposed against the Property or part thereof.

 

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

 

“Tenant Direction Letter” shall have the meaning set forth in Section 10.2(a)(i) hereof.

 

“Termination Fee Deposit” shall have the meaning set forth in Section 9.3(b).

 

“Terrorism Insurance” shall have the meaning set forth in Section 8.1(e)(v).

 

 

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“Terrorism Insurance Cap” shall have the meaning set forth in Section 8.1(e)(v).

 

“Title Insurance Policy” shall mean that certain ALTA (or its equivalent) mortgagee title insurance policy issued with respect to the Property and insuring the lien of the Mortgage.

 

“Transferee” shall have the meaning set forth in Section 7.5 hereof.

 

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in the State where the applicable Property is located.

 

“Underwriter Group” shall have the meaning set forth in Section 13.5(b) hereof.

 

“Ulta” shall mean Ulta Salon, Cosmetics & Fragrance, Inc..

 

“Ulta Lease” shall mean that certain Lease dated March 26, 2010, between Polaris Center, LLC, as landlord, as assigned to Borrower, and Ulta as tenant.

 

Section 1.2                      Principles of Construction

 

All references to sections and schedules are to sections and schedules in or to this Agreement unless otherwise specified.  All uses of the word “including” shall mean “including, without limitation” unless the context shall indicate otherwise.  Unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  Unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined.

 

ARTICLE 2

GENERAL TERMS

 

Section 2.1                      The Loan

 

Subject to and upon the terms and conditions set forth herein, Lender hereby agrees to make and Borrower hereby agrees to accept the Loan on the Closing Date.

 

Section 2.2                      Disbursement to Borrower

 

Borrower may request and receive only one borrowing in respect of the Loan and any amount borrowed and repaid in respect of the Loan may not be reborrowed.

 

Section 2.3                      The Note, Mortgage and Loan Documents

 

The Loan shall be evidenced by the Note and secured by the Mortgage and the other Loan Documents.

 

Section 2.4                      Loan Payments

 

The Loan and interest thereon shall be payable pursuant to the terms of the Note.

 

 

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Section 2.5                      Loan Prepayments

 

The Loan may not be prepaid, in whole or in part, except in strict accordance with the express terms and conditions of the Note.

 

ARTICLE 3

CONDITIONS PRECEDENT

 

Section 3.1                      Conditions Precedent

 

The obligation of Lender to make the Loan hereunder is subject to the fulfillment by Borrower or waiver by Lender of all of the conditions precedent to closing set forth in the application or term sheet for the Loan delivered by Borrower to Lender and the commitment or commitment rider, if any, to the application for the Loan issued by Lender.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

 

Borrower and, where specifically indicated, each Borrower Principal, represents and warrants to Lender as of the Closing Date that:

 

Section 4.1                      Organization

 

Borrower and each Borrower Principal (when not an individual) (a) has been duly organized and is validly existing and in good standing with requisite power and authority to own its properties and to transact the businesses in which it is now engaged, (b) is duly qualified to do business and is in good standing in each jurisdiction where it is required to be so qualified in connection with its properties, businesses and operations, (c) possesses all rights, licenses, permits and authorizations, governmental or otherwise, necessary to entitle it to own its properties and to transact the businesses in which it is now engaged, and the sole business of Borrower is the ownership, management and operation of the Property, and (d) in the case of Borrower, has full power, authority and legal right to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the Property pursuant to the terms of the Loan Documents, and in the case of Borrower and each Borrower Principal, has full power, authority and legal right to keep and observe all of the terms of the Loan Documents to which it is a party.  Borrower and each Borrower Principal represent and warrant that the chart attached hereto as Exhibit A sets forth an accurate listing of the direct and indirect owners of the equity interests in Borrower, each SPE Component Entity (if any) and each Borrower Principal (when not an individual).

 

Section 4.2                      Status of Borrower

 

Borrower’s exact legal name is correctly set forth on the first page of this Agreement, on the Mortgage and on any UCC-1 Financing Statements filed in connection with the Loan.  Borrower is an organization of the type specified on the first page of this Agreement.  Borrower is incorporated in or organized under the laws of the state of Delaware. Borrower’s principal place of business and chief executive office, and the place where Borrower keeps its books and records, including recorded data of any kind or nature, regardless of the medium of recording, including software, writings, plans, specifications and schematics, has been for the preceding four months (or, if less, the entire period of the existence of Borrower) the address of Borrower set forth on the first page of this Agreement.  Borrower’s organizational identification number, if any, assigned by the state of incorporation or organization is correctly set forth on the first page of the Note.

 

 

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Section 4.3                      Validity of Documents

 

Borrower and each Borrower Principal have taken all necessary action to authorize the execution, delivery and performance of this Agreement and the other Loan Documents to which they are parties.  This Agreement and such other Loan Documents have been duly executed and delivered by or on behalf of Borrower and each Borrower Principal and constitute the legal, valid and binding obligations of Borrower and each Borrower Principal enforceable against Borrower and each Borrower Principal in accordance with their respective terms, subject only to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

Section 4.4                      No Conflicts

 

The execution, delivery and performance of this Agreement and the other Loan Documents by Borrower and each Borrower Principal will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance (other than pursuant to the Loan Documents) upon any of the property or assets of Borrower or any Borrower Principal pursuant to the terms of any agreement or instrument to which Borrower or any Borrower Principal is a party or by which any of Borrower’s or Borrower Principal’s property or assets is subject, nor will such action result in any violation of the provisions of any statute or any order, rule or regulation of any Governmental Authority having jurisdiction over Borrower or any Borrower Principal or any of Borrower’s or Borrower Principal’s properties or assets, and any consent, approval, authorization, order, registration or qualification of or with any Governmental Authority required for the execution, delivery and performance by Borrower or Borrower Principal of this Agreement or any of the other Loan Documents has been obtained and is in full force and effect.

 

Section 4.5                      Litigation

 

There are no actions, suits or proceedings at law or in equity by or before any Governmental Authority or other agency now pending or, to Borrower’s or Borrower Principal’s knowledge, threatened against or affecting Borrower, any Borrower Principal, Manager or the Property, which actions, suits or proceedings, if determined against Borrower, any Borrower Principal, Manager or the Property, would materially adversely affect the condition (financial or otherwise) or business of Borrower or any Borrower Principal or the condition or ownership of the Property.

 

Section 4.6                      Agreements

 

Borrower is not a party to any agreement or instrument or subject to any restriction which would materially and adversely affect Borrower or the Property, or Borrower’s business, properties or assets, operations or condition, financial or otherwise.  Borrower is not in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which it is a party or by which Borrower or the Property is bound.  Borrower has no material financial obligation under any agreement or instrument to which Borrower is a party or by which Borrower or the Property is otherwise bound, other than (a) obligations incurred in the ordinary course of the operation of the Property and (b) obligations under the Loan Documents.

 

 

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Section 4.7                      Solvency

 

Borrower and each Borrower Principal have (a) not entered into the transaction or executed the Note, this Agreement or any other Loan Documents with the actual intent to hinder, delay or defraud any creditor and (b) received reasonably equivalent value in exchange for their obligations under such Loan Documents.  Giving effect to the Loan, the fair saleable value of the assets of Borrower and each Borrower Principal exceeds and will, immediately following the making of the Loan, exceed the total liabilities of Borrower and each Borrower Principal, including, without limitation, subordinated, unliquidated, disputed and contingent liabilities.  No petition in bankruptcy has been filed against Borrower, any Borrower Principal, any SPE Component Entity (if any) or Manager in the last ten (10) years, and neither Borrower nor any Borrower Principal, any SPE Component Entity (if any) or Manager in the last ten (10) years has made an assignment for the benefit of creditors or taken advantage of any Creditors Rights Laws.  Neither Borrower nor any Borrower Principal, any SPE Component Entity (if any) or Manager is contemplating either the filing of a petition by it under any Creditors Rights Laws or the liquidation of all or a major portion of Borrower’s assets or property, and Borrower has no knowledge of any Person contemplating the filing of any such petition against Borrower or  any Borrower Principal, any SPE Component Entity (if any) or Manager.

 

Section 4.8                      Full and Accurate Disclosure

 

No statement of fact made by or on behalf of Borrower or any Borrower Principal in this Agreement or in any of the other Loan Documents or in any other document or certificate delivered by or on behalf of Borrower or any Borrower Principal contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading.  There is no material fact presently known to Borrower or any Borrower Principal which has not been disclosed to Lender which adversely affects, nor as far as Borrower or any Borrower Principal can reasonably foresee, might adversely affect, the Property or the business, operations or condition (financial or otherwise) of Borrower or any Borrower Principal.

 

Section 4.9                      No Plan Assets

 

Borrower is not an “employee benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and none of the assets of Borrower constitutes or will constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101.  In addition, (a) Borrower is not a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions by or with Borrower are not subject to state statutes regulating investment of, and fiduciary obligations with respect to, governmental plans similar to the provisions of Section 406 of ERISA or Section 4975 of the Internal Revenue Code currently in effect, which prohibit or otherwise restrict the transactions contemplated by this Agreement.

 

 

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Section 4.10                    Not a Foreign Person

 

Neither Borrower nor Borrower Principal is a foreign corporation, foreign partnership, foreign trust, foreign estate or nonresident alien or a disregarded entity owned by any of them (as those terms are defined in the Internal Revenue Code of 1986), and if requested by Lender, Borrower or Borrower Principal will so certify (or in the case of a disregarded entity, its owner will certify) to Lender or a person designated by Lender under penalties of perjury to the accuracy of this representation, and will provide in such certification such additional information as Lender may reasonably request.

 

Section 4.11                    Enforceability

 

The Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by Borrower or Borrower Principal, including the defense of usury, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right thereunder, render the Loan Documents unenforceable, and neither Borrower nor Borrower Principal has asserted any right of rescission, set-off, counterclaim or defense with respect thereto.  No Default or Event of Default exists under or with respect to any Loan Document.

 

Section 4.12                    Business Purposes

 

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

 

Section 4.13                    Compliance

 

Borrower and the Property, and the use and operation thereof, comply in all material respects with all Legal Requirements, including, without limitation, building and zoning ordinances and codes and the Americans with Disabilities Act.  To Borrower’s knowledge, Borrower is not in default or violation of any order, writ, injunction, decree or demand of any Governmental Authority and Borrower has received no written notice of any such default or violation.  There has not been committed by Borrower or, to Borrower’s knowledge, any other Person in occupancy of or involved with the operation or use of the Property any act or omission affording any Governmental Authority the right of forfeiture as against the Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents.

 

Section 4.14                    Financial Information

 

All financial data, including, without limitation, the balance sheets, statements of cash flow, statements of income and operating expense and Rent Rolls, that have been delivered to Lender in respect of Borrower, any Borrower Principal and/or the Property (a) are true, complete and correct in all material respects, (b) accurately represent the financial condition of Borrower, Borrower Principal or the Property, as applicable, as of the date of such reports, and (c) to the extent prepared or audited by an independent certified public accounting firm, have been prepared in accordance with GAAP throughout the periods covered, except as disclosed therein.  Borrower does not have any contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments that are known to Borrower and reasonably likely to have a material adverse effect on the Property or the current and/or intended operation thereof, except as referred to or reflected in said financial statements.  Since the date of such financial statements, there has been no materially adverse change in the financial condition, operations or business of Borrower or Borrower Principal from that set forth in said financial statements.

 

 

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Section 4.15                    Condemnation

 

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

 

Section 4.16                    Utilities and Public Access; Parking

 

The Property has adequate rights of access to public ways and is served by water, sewer, sanitary sewer and storm drain facilities adequate to service the Property for full utilization of the Property for its intended uses.  All public utilities necessary to the full use and enjoyment of the Property as currently used and enjoyed are located either in the public right-of-way abutting the Property (which are connected so as to serve the Property without passing over other property) or in recorded easements serving the Property and such easements are set forth in and insured by the Title Insurance Policy.  All roads necessary for the use of the Property for its current purposes have been completed and dedicated to public use and accepted by all Governmental Authorities.  The Property has, or is served by, parking to the extent required to comply with all Legal Requirements.

 

Section 4.17                    Separate Lots

 

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

 

Section 4.18                    Assessments

 

To Borrower’s knowledge, there are no pending or proposed special or other assessments for public improvements or otherwise affecting the Property, nor are there any contemplated improvements to the Property that may result in such special or other assessments.

 

Section 4.19                    Insurance

 

Borrower has obtained and has delivered to Lender certified copies of all Policies or, to the extent such Policies are not available as of the Closing Date, certificates of insurance with respect to all such Policies reflecting the insurance coverages, amounts and other requirements set forth in this Agreement.  No claims have been made under any of the Policies, and to Borrower’s knowledge, no Person, including Borrower, has done, by act or omission, anything which would impair the coverage of any of the Policies.

 

 

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Section 4.20                    Use of Property

 

The Property is used exclusively for retail purposes and other appurtenant and related uses.

 

Section 4.21                    Certificate of Occupancy; Licenses

 

All certifications, permits, licenses and approvals, including, without limitation, certificates of completion or occupancy and any applicable liquor license required for the legal use, occupancy and operation of the Property for the purpose intended herein, have been obtained and are valid and in full force and effect.  Borrower shall keep and maintain (or cause to be kept and maintained) all licenses necessary for the operation of the Property for the purpose intended herein.  The use being made of the Property is in conformity with the final certificate of occupancy (or compliance, if applicable) and any other permits or licenses issued for the Property.

 

Section 4.22                    Flood Zone

 

None of the Improvements on the Property are located in an area identified by the Federal Emergency Management Agency as an area having special flood hazards, or, if any portion of the Improvements is located within such area, Borrower has obtained the insurance prescribed in Section 8.1(a)(i).

 

Section 4.23                    Physical Condition

 

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

 

Section 4.24                    Boundaries

 

(a)           None of the Improvements which were included in determining the appraised value of the Property lie outside the boundaries and building restriction lines of the Property to any material extent, and (b) no improvements on adjoining properties encroach upon the Property and no easements or other encumbrances upon the Property encroach upon any of the Improvements so as to materially affect the value or marketability of the Property.

 

 

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Section 4.25                    Leases and Rent Roll

 

Borrower has delivered to Lender a true, correct and complete rent roll for the Property which includes all Leases (other than Short Term Leases) affecting the Property (including schedules for all executed Leases for Tenants not yet in occupancy or under which the rent commencement date has not occurred) (a “Rent Roll”) .  Except as set forth in (i) the Rent Roll (as same has been updated by written notice thereof to Lender), (ii) Schedule 4.25 attached hereto and (iii) estoppel certificates delivered to Lender on or prior to the Closing Date:  (a) each Lease is in full force and effect; (b) the premises demised under the Leases have been completed and the Tenants under the Leases have accepted possession of and are in occupancy of all of their respective demised premises; (c) the Tenants under the Leases have commenced the payment of rent under the Leases, there are no offsets, claims or defenses to the enforcement thereof, and Borrower has no monetary obligations to any Tenant under any Lease; (d) all Rents due and payable under the Leases have been paid and no portion thereof has been paid for any period more than thirty (30) days in advance; (e) the rent payable under each Lease is the amount of fixed rent set forth in the Rent Roll, and there is no claim or basis for a claim by the Tenant thereunder for an offset or adjustment to the rent; (f) no Tenant has made any written claim of a material default against the landlord under any Lease which remains outstanding nor has Borrower or Manager received, by telephonic, in-person, e-mail or other communication, any notice of a material default under any Lease; (g) to Borrower’s knowledge there is no present material default by the Tenant under any Lease; (h) all security deposits under the Leases have been collected by Borrower; (i) Borrower is the sole owner of the entire landlord’s interest in each Lease; (j) each Lease is the valid, binding and enforceable obligation of Borrower and the applicable Tenant thereunder and there are no agreements with the Tenants under the Leases other than as expressly set forth in the Leases; (k) no Person has any possessory interest in, or right to occupy, the Property or any portion thereof except under the terms of a Lease;  (l) none of the Leases contains any option or offer to purchase or right of first refusal or right of first offer to purchase the Property or any part thereof; (m) neither the Leases nor the Rents have been assigned, pledged or hypothecated except to Lender, and no other Person has any interest therein except the Tenants thereunder; and (n) no conditions exist which now give any Tenant or party the right to “go dark” pursuant to the provision of its Lease and/or the REA.

 

Section 4.26                     Filing and Recording Taxes

 

All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid by any Person under applicable Legal Requirements currently in effect in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including, without limitation, the Mortgage, have been paid or will be paid by Borrower, and, under current Legal Requirements, the Mortgage is enforceable in accordance with its terms by Lender (or any subsequent holder thereof).

 

Section 4.27                     Management Agreement

 

The Management Agreement is in full force and effect and there is no default thereunder by any party thereto and, to Borrower’s knowledge, no event has occurred that, with the passage of time and/or the giving of notice would constitute a default thereunder.  No management fees under the Management Agreement are accrued and unpaid.

 

 

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Section 4.28                     Illegal Activity

 

No portion of the Property has been or will be purchased, improved, equipped or fixtured with proceeds of any illegal activity, and no part of the proceeds of the Loan will be used in connection with any illegal activity.

 

Section 4.29                     Construction Expenses

 

All costs and expenses of any and all labor, materials, supplies and equipment used in the construction maintenance or repair of the Improvements have been paid in full.  To Borrower’s knowledge after due inquiry, there are no claims for payment for work, labor or materials affecting the Property which are or may become a lien prior to, or of equal priority with, the Liens created by the Loan Documents.

 

Section 4.30                     Personal Property

 

Borrower has paid in full for, and is the owner of, all Personal Property (other than tenants’ property) used in connection with the operation of the Property, free and clear of any and all security interests, liens or encumbrances, except for Permitted Encumbrances and the Lien and security interest created by the Loan Documents.

 

Section 4.31                     Taxes

 

Borrower and Borrower Principal have filed all federal, state, county, municipal, and city income, personal property and other tax returns required to have been filed by them and have paid all taxes and related liabilities which have become due pursuant to such returns or pursuant to any assessments received by them. Neither Borrower nor Borrower Principal knows of any basis for any additional assessment in respect of any such taxes and related liabilities for prior years.

 

Section 4.32                     Title

 

Borrower has good, marketable and insurable fee simple title to the real property comprising part of the Property and good title to the balance of the Property, free and clear of all Liens whatsoever except the Permitted Encumbrances.  None of the Permitted Encumbrances, individually or in the aggregate, materially interferes with the benefits of the security intended to be provided by the Loan Documents, materially and adversely affects the value of the Property, impairs the use or the operation of the Property or impairs Borrower’s ability to pay its obligations in a timely manner.  The Mortgage, when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create (a) a valid, perfected first priority lien on the Property, subject only to Permitted Encumbrances and (b) perfected security interests in and to, and perfected collateral assignments of, all personalty (including the Leases), all in accordance with the terms hereof, in each case subject only to Permitted Encumbrances.  There are no claims for payment for work, labor or materials affecting the Property which are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents.

 

 

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Section 4.33                      Federal Reserve Regulations

 

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

 

Section 4.34                      Investment Company Act

 

Borrower is not (a) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (b) a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company Act of 1935, as amended; or (c) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.

 

Section 4.35                      Reciprocal Easement Agreements

 

(a)           Neither Borrower, nor any other party is currently in default (nor has any notice been given or received with respect to an alleged or current default) under any of the terms and conditions of the REA, and the REA remains unmodified and in full force and effect;

 

(b)           All easements granted pursuant to the REA which were to have survived the site preparation and completion of construction (to the extent that the same has been completed), remain in full force and effect and have not been released, terminated, extinguished or discharged by agreement or otherwise;

 

(c)           All sums due and owing by Borrower to the other parties to the REA (or by the other parties to the REA to Borrower) pursuant to the terms of the REA, including without limitation, all sums, charges, fees, assessments, costs, and expenses in connection with any taxes, site preparation and construction, non-shareholder contributions, and common area and other property management activities have been paid, are current, and no lien has attached on the Property (or threat thereof been made) for failure to pay any of the foregoing;

 

(d)           The terms, conditions, covenants, uses and restrictions contained in the REA do not conflict in any manner with any terms, conditions, covenants, uses and restrictions contained in any Lease or in any agreement between Borrower and occupant of any peripheral parcel, including without limitation, conditions and restrictions with respect to kiosk placement, tenant restrictions (type, location or exclusivity), sale of certain goods or services, and/or other use restrictions; and

 

(e)           The terms, conditions, covenants, uses and restrictions contained in each Lease do not conflict in any manner with any terms, conditions, covenants, uses and restrictions contained in the REA, any other Lease or in any agreement between Borrower and occupant of any peripheral parcel, including without limitation, conditions and restrictions with respect to kiosk placement, tenant restrictions (type, location or exclusivity), sale of certain goods or services, and/or other use restrictions.

 

 

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Section 4.36                      No Change in Facts or Circumstances; Disclosure

 

All information submitted by Borrower or its agents to Lender and in all financial statements, rent rolls, reports, certificates and other documents submitted in connection with the Loan or in satisfaction of the terms thereof and all statements of fact made by Borrower in this Agreement or in any other Loan Document, are accurate, complete and correct in all material respects.  There has been no material adverse change in any condition, fact, circumstance or event that would make any such information inaccurate, incomplete or otherwise misleading in any material respect or that otherwise materially and adversely affects or might materially and adversely affect the Property or the business operations or the financial condition of Borrower.  Borrower has disclosed to Lender all material facts and has not failed to disclose any material fact that could cause any representation or warranty made herein to be materially misleading.

 

Section 4.37                      Intellectual Property

 

All trademarks, trade names and service marks necessary to the business of Borrower as presently conducted or as Borrower contemplates conducting its business are in good standing and, to the extent of Borrower’s actual knowledge, uncontested.  Borrower has not infringed, is not infringing, and has not received notice of infringement with respect to asserted trademarks, trade names and service marks of others.  To Borrower’s knowledge, there is no infringement by others of trademarks, trade names and service marks of Borrower.

 

Section 4.38                      Compliance with Anti-Terrorism Laws

 

None of Borrower, Borrower Principal or any Person who Controls Borrower or Borrower Principal currently is identified by the Office of Foreign Assets Control, Department of the Treasury (“OFAC”) or otherwise qualifies as a Embargoed Person, and Borrower has implemented procedures to ensure that no Person who now or hereafter owns a direct or indirect equity interest in Borrower or Borrower Principal is an Embargoed Person or is Controlled by an Embargoed Person. None of Borrower or Borrower Principal is in violation of any applicable law relating to anti-money laundering or anti-terrorism, including, without limitation, those related to transacting business with Embargoed Persons or the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and the related regulations issued thereunder,  including temporary regulations (collectively, as the same may be amended from time to time, the “Patriot Act”). To the best of Borrower’s knowledge, no tenant at the Property is currently identified by OFAC or otherwise qualifies as an Embargoed Person, or is owned or Controlled by an Embargoed Person.  Borrower has determined that Manager has implemented procedures approved by Borrower to ensure that no tenant at the Property is currently  identified by OFAC or otherwise qualifies as an Embargoed Person, or is owned or Controlled by an Embargoed Person.

 

Section 4.39                      Patriot Act

 

Neither Borrower nor Borrower Principal shall (a) be or become subject at any time to any law, regulation, or list of any government agency (including, without limitation, the list maintained by OFAC and accessible through the OFAC website) that prohibits or limits any lender from making any advance or extension of credit to Borrower or from otherwise conducting business with Borrower and Borrower Principal, or (b) fail to provide documentary and other evidence of Borrower’s identity as may be requested by any lender at any time to enable any lender to verify Borrower’s identity or to comply with any applicable law or regulation, including, without limitation, the Patriot Act. In addition, Borrower hereby agrees to provide to Lender any additional information that Lender deems necessary from time to time in order to ensure compliance with all applicable laws concerning money laundering and similar activities.

 

 

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Section 4.40                      Brokers and Financial Advisors

 

Borrower has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement other than Eastdil Secured LLC, whose fees shall be paid in full by Borrower on or prior to the date hereof.

 

Section 4.41                      Survival

 

Borrower agrees that, unless expressly provided otherwise, all of the representations and warranties of Borrower set forth in this Article 4 and elsewhere in this Agreement and in the other Loan Documents shall survive for so long as any portion of the Debt remains owing to Lender.  All representations, warranties, covenants and agreements made in this Agreement or in the other Loan Documents by Borrower shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf.

 

ARTICLE 5

BORROWER COVENANTS

 

From the date hereof and until repayment of the Debt in full and performance in full of all obligations of Borrower under the Loan Documents or the earlier release of the Lien of the Mortgage (and all related obligations) in accordance with the terms of this Agreement and the other Loan Documents, Borrower hereby covenants and agrees with Lender that:

 

Section 5.1                      Existence; Compliance with Requirements

 

(a)           Borrower shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence, rights, licenses, permits and franchises and comply with all Legal Requirements applicable to it and the Property.  Borrower hereby covenants and agrees not to commit, permit or suffer to exist any act or omission affording any Governmental Authority the right of forfeiture as against the Property or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents.  Borrower shall at all times maintain, preserve and protect all franchises and trade names used in connection with the operation of the Property.

 

(b)           After prior written notice to Lender, Borrower, at its own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the Legal Requirements affecting the Property, provided that (i) no Default or Event of Default has occurred and is continuing; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower or the Property is subject and shall not constitute a default thereunder; (iii) neither the Property, any part thereof or interest therein, any of the tenants or occupants thereof, nor Borrower shall be affected in any material adverse way as a result of such proceeding; (iv) non-compliance with the Legal Requirements shall not impose civil or criminal liability on Borrower or Lender; (v) Borrower shall have furnished the security as may be required in the proceeding or by Lender to ensure compliance by Borrower with the Legal Requirements; and (vi) Borrower shall have furnished to Lender all other items reasonably requested by Lender.

 

 

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Section 5.2                      Maintenance and Use of Property

 

Borrower shall cause the Property to be maintained in a good, safe and insurable condition and in compliance with all applicable Legal Requirements, and shall promptly make all repairs to the Property, above grade and below grade, interior and exterior, structural and nonstructural, ordinary and extraordinary, unforeseen and forseen.  All repairs made by Borrower shall be made with first-class materials, in a good and workmanlike manner, shall be equal or better in quality and class to the original work and shall comply with all applicable Legal Requirements and insurance requirements.  The Improvements and the Personal Property shall not be removed, demolished or other than in accordance with the provisions of Section 5.21, materially altered (except for normal replacement of the Personal Property) without the prior written consent of Lender.  If under applicable zoning provisions the use of all or any portion of the Property is or shall become a nonconforming use, Borrower will not cause or permit the nonconforming use to be discontinued or the nonconforming Improvement to be abandoned without the express written consent of Lender.

 

Section 5.3                      Waste

 

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

 

Section 5.4                      Taxes and Other Charges

 

(a)           Borrower shall pay all Taxes and Other Charges now or hereafter levied or assessed or imposed against the Property or any part thereof as the same become due and payable; provided, however, Borrower’s obligation to directly pay Taxes shall be suspended for so long as Borrower complies with the terms and provisions of Section 9.6 hereof.  Borrower shall furnish to Lender receipts for the payment of the Taxes and the Other Charges at least five (5) days prior to the date the same shall become delinquent (provided, however, that Borrower is not required to furnish such receipts for payment of Taxes in the event that such Taxes have been paid by Lender pursuant to Section 9.6 hereof).  Borrower shall not suffer and shall promptly cause to be paid and discharged any Lien or charge whatsoever which may be or become a Lien or charge against the Property, and shall promptly pay for all utility services provided to the Property.  If Borrower shall fail to pay any Taxes or Other Charges in accordance with this Section 5.4 and is not contesting or causing a contesting of such Taxes or Other Charges in accordance with Section 5.4(b) below, or if there are insufficient funds in the Tax and Insurance Reserve Account to pay any Taxes or Other Charges, Lender shall have the right, but shall not be obligated, to pay such Taxes or Other Charges, and Borrower shall repay to Lender, on demand, any amount paid by Lender, with interest thereon at the Default Rate from the date of the advance thereof to the date of repayment, and such amount shall constitute a portion of the Debt secured by the Mortgage.

 

 

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(b)           After prior written notice to Lender, Borrower, at its own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the amount or validity or application in whole or in part of any Taxes or Other Charges, provided that (i) no Default or Event of Default has occurred and remains uncured; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower is subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable Legal Requirements; (iii) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, canceled or lost; (iv) Borrower shall promptly upon final determination thereof pay the amount of any such Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith; (v) such proceeding shall suspend the collection of such contested Taxes or Other Charges from the Property (unless Borrower first pays the Imposition or charge; (vi) Borrower shall furnish such security as may be required in the proceeding, or deliver to Lender such reserve deposits as may be requested by Lender, to insure the payment of any such Taxes or Other Charges, together with all interest and penalties thereon (unless Borrower has paid all of the Taxes or Other Charges under protest); (vii) failure to pay such Taxes or Other Charges will not subject Lender to any civil or criminal liability; (viii) such contest shall not affect the ownership, use or occupancy of the Property; and (ix) Borrower shall, upon request by Lender, give Lender prompt notice of the status of such proceedings and/or confirmation of the continuing satisfaction of the conditions set forth in clauses (i) –(viii) of this Section 5.4(b).  Lender may pay over any such cash deposit or part thereof held by Lender to the claimant entitled thereto at any time when, in the judgment of Lender, the entitlement of such claimant is established or the Property (or part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, canceled or lost or there shall be any danger of the Lien of the Mortgage being primed by any related Lien.

 

Section 5.5                      Litigation

 

Borrower shall give prompt written notice to Lender of any litigation or governmental proceedings pending or threatened in writing against any of Borrower, Borrower Principal or the Property which might materially adversely affect either Borrower’s or Borrower Principal’s condition (financial or otherwise) or business or the Property.

 

Section 5.6                      Access to Property

 

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

 

 

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Section 5.7                      Notice of Default

 

Borrower shall promptly advise Lender of any material adverse change in the condition (financial or otherwise) of Borrower, any Borrower Principal or the Property or of the occurrence of any Default or Event of Default of which Borrower has knowledge.

 

Section 5.8                      Cooperate in Legal Proceedings

 

Borrower shall at Borrower’s expense cooperate fully with Lender with respect to any proceedings before any court, board or other Governmental Authority which may in any way affect the rights of Lender hereunder or any rights obtained by Lender under any of the other Loan Documents and, in connection therewith, permit Lender, at its election, to participate in any such proceedings.

 

Section 5.9                      Performance by Borrower

 

Borrower shall in a timely manner observe, perform and fulfill each and every covenant, term and provision to be observed and performed by Borrower under this Agreement and the other Loan Documents and any other agreement or instrument affecting or pertaining to the Property and any amendments, modifications or changes thereto.

 

Section 5.10                    Awards; Insurance Proceeds

 

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

 

Section 5.11                    Financial Reporting

 

(a)           Borrower and Borrower Principal shall keep adequate books and records of account in accordance with GAAP (or such other method of accounting acceptable to Lender), consistently applied and shall furnish to Lender:

 

(i)            a Rent Roll, prepared and certified by Borrower monthly in the form attached hereto as Exhibit C, within thirty (30) days after the end of each calendar month;

 

(ii)           monthly and year-to-date operating statements of the Property, prepared and certified by Borrower in the form attached hereto as Exhibit D, within thirty (30) days after the end of each calendar month;

 

(iii)          annual balance sheets, profit and loss statements, statements of cash flows, and statements of change in financial position of Borrower and Borrower Principal in the form required by Lender, prepared and certified by Borrower and Borrower Principal (or if required by Lender, annual audited financial statements prepared by an Acceptable Accountant), within ninety (90) days after the close of each fiscal year of Borrower and Borrower Principal, as the case may be;

 

 

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(iv)           an Annual Budget not later than thirty (30) days prior to the commencement of each fiscal year of Borrower in form reasonably satisfactory to Lender.  Only during a Cash Sweep Period, in the event that Lender objects to a proposed Annual Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise such Annual Budget and resubmit the same to Lender.  Lender shall advise Borrower of any objections to such revised Annual Budget within ten (10) days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise the same in accordance with the process described in this subsection until Lender approves the Annual Budget.  Only during a Cash Sweep Period, until such time that Lender approves a proposed Annual Budget, which approval shall not be unreasonably withheld, conditioned or delayed, the most recent Annual Budget shall apply; provided that, such approved Annual Budget shall be adjusted to reflect actual increases in Taxes, Insurance Premiums, utilities expenses and expenses under the Management Agreement; and

 

(v)            a monthly calculation of the Debt Service Coverage Ratio for the immediately preceding twelve (12) month period as of the last day of such month, prepared and certified by Borrower in the form required by Lender.

 

(b)           Upon request from Lender during a Cash Sweep Period or in connection with a Securitization, Borrower shall promptly furnish to Lender:

 

(i)            a property management report for the Property, showing the number of inquiries made and/or rental applications received from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender, in reasonable detail and certified by Borrower to be true and complete, but no more frequently than quarterly;

 

(ii)           an accounting of all security deposits held in connection with any Lease of any part of the Property, including the name and account number of the accounts in which such security deposits are held, the name and address of the financial institutions in which such security deposits are held and the name of the Person to contact at such financial institution, along with any authority or release necessary for Lender to obtain information regarding such accounts directly from such financial institutions; and

 

(iii)           a report of all letters of credit provided by any Tenant in connection with any Lease of any part of the Property, including the account numbers of such letters of credit, the names and addresses of the financial institutions that issued such letters of credit and the names of the Persons to contact at such financial institutions, along with any authority or release necessary for Lender to obtain information regarding such letters of credit directly from such financial institutions.

 

 

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(c)           Borrower and Borrower Principal shall furnish Lender with such other additional financial or management information (including state and federal tax returns) as may, from time to time, be reasonably required by Lender in form and substance reasonably satisfactory to Lender (including, without limitation, any financial reports required to be delivered by any Tenant or any guarantor of any Lease pursuant to the terms of such Lease or otherwise in Borrower’s possession), and shall furnish to Lender and its agents convenient facilities for the examination and audit of any such books and records.

 

(d)           All items requiring the certification of Borrower shall, except where Borrower is an individual, require a certificate executed by an authorized officer of Borrower or the general partner or managing member of Borrower, as applicable, and shall contain a statement by Borrower as to whether there exists, to Borrower’s knowledge, an Event of Default under the Loan Documents, and if an Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same.

 

(e)           Without limiting any other rights available to Lender under this Loan Agreement or any of the other Loan Documents, in the event Borrower shall fail to timely furnish Lender any financial document or statement in accordance with this Section 5.11 within ten (10) days of Lender’s written request therefor, Borrower shall promptly pay to Lender a non-refundable charge in the amount of $1,000 for each such failure.  The payment of such amount shall not be construed to relieve Borrower of any Event of Default hereunder arising from such failure.

 

Section 5.12                      Estoppel Statement

 

(a)           After request by Lender, Borrower shall within ten (10) Business Days furnish Lender with a statement, duly acknowledged and certified, setting forth (i) the amount of the original principal amount of the Note, (ii) the rate of interest on the Note, (iii) the unpaid principal amount of the Note, (iv) the date installments of interest and/or principal were last paid, (v) the Maturity Date, (vi) any known offsets or defenses to the payment of the Debt, if any, and (vii) that the Note, this Agreement, the Mortgage and the other Loan Documents are valid, legal and binding obligations and have not been modified or if modified, giving particulars of such modification.

 

(b)           Borrower shall use its commercially reasonable efforts to deliver to Lender, consistent with the terms of the Leases, promptly upon request, duly executed estoppel certificates from any one or more Tenants as required by Lender attesting to such facts regarding the related Lease as Lender may require, including, but not limited to attestations that each Lease covered thereby is in full force and effect with no defaults thereunder on the part of any party, that none of the Rents have been paid more than one month in advance, except as security, and that the Tenant claims no defense or offset against the full and timely performance of its obligations under the Lease; provided, however, other than in connection with a Securitization, Borrower shall not be obligated to request tenant estoppel certificates more than once in any eighteen (18) month period.

 

Section 5.13                      Leasing Matters

 

(a)           Borrower may enter into a proposed Lease (including the renewal or extension of an existing Lease (a “Renewal Lease”)) without the prior written consent of Lender, provided such proposed Lease or Renewal Lease (i) provides for rental rates and terms comparable to existing local market rates and terms (taking into account the type and quality of the tenant) as of the date such Lease is executed by Borrower (unless, in the case of a Renewal Lease, the rent payable during such renewal, or a formula or other method to compute such rent, is provided for in the original Lease), (ii) is an arm’s-length transaction with a bona fide, independent third party tenant, (iii) does not have a materially adverse effect on the value of the Property taken as a whole, (iv) is subject and subordinate to the Mortgage and requires the Tenant thereunder to attorn to Lender, (v) does not contain any option, offer, right of first refusal, right of first offer or other similar right to acquire all or any portion of the Property, (vi) has no rent, credits, free rents or concessions granted thereunder other than those which are reasonable and customary and comparable to existing local market terms, (vii) other than with respect to a Short Term Lease, is written on the standard form of lease approved by Lender with such reasonable and customary modifications as would not have a material and adverse affect on the value of the Property, and (viii) is not a Major Lease.  All proposed Leases which do not satisfy the requirements set forth in this subsection shall be subject to the prior approval of Lender and its counsel, at Borrower’s expense (not to exceed $5,000).  Borrower shall promptly deliver to Lender copies of all Leases which are entered into pursuant to this subsection together with Borrower’s certification that it has satisfied all of the conditions of this Section.

 

 

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(b)           Borrower (i) shall observe and perform all the obligations imposed upon the landlord under the Leases and shall not do or permit to be done anything to impair the value of any of the Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall send pursuant to a Major Lease or Borrower shall receive pursuant to a Major Lease; (iii) shall enforce all of the material terms, covenants and conditions contained in the Leases (other than the Short Term Leases) upon the part of the tenant thereunder to be observed or performed; (iv) shall not collect any of the Rents more than one (1) month in advance (except security deposits shall not be deemed Rents collected in advance); (v) except as expressly permitted pursuant to Article 7 hereof, shall not execute any other assignment of the landlord’s interest in any of the Leases or the Rents; and (vi) except as expressly permitted pursuant to Article 7 hereof, shall not consent to any assignment of or subletting under any Leases not in accordance with their terms if such assignment or sublet could have a material adverse effect on the Property or the current and/or intended operation thereof, without the prior written consent of Lender.

 

(c)           Borrower may, without the prior written consent of Lender, amend, modify or waive the provisions of any Lease or terminate, reduce Rents under, accept a surrender of space under, or shorten the term of, any Lease (including any guaranty, letter of credit or other credit support with respect thereto) provided that (i) such action (taking into account, in the case of a termination, reduction in rent, surrender of space or shortening of term, the planned alternative use of the affected space) does not have a materially adverse effect on the value of the Property taken as a whole, (ii) such action is in the normal course of business and in a manner which is consistent with sound and customary leasing and management practices for similar properties in the community in which the Property is located, and (iii) such Lease, as amended, modified or waived, is otherwise in compliance with the requirements of this Agreement and any subordination agreement binding upon Lender with respect to such Lease.  A termination of a Lease with a tenant who is in default beyond applicable notice and grace periods shall not be considered an action which has a materially adverse effect on the value of the Property taken as a whole.  Any amendment, modification, waiver, termination, rent reduction, space surrender or term shortening which does not satisfy the requirements set forth in this subsection shall be subject to the prior written approval of Lender (not to be unreasonably withheld, conditioned or delayed), at Borrower’s expense.  Borrower shall promptly deliver to Lender copies of amendments, modifications and waivers of any Major Lease which are entered into pursuant to this subsection together with Borrower’s certification that it has satisfied all of the conditions of this subsection.

 

 

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(d)           Notwithstanding anything contained herein to the contrary, Borrower shall not, without the prior written consent of Lender, enter into, renew, extend, amend, modify, waive any provisions of, terminate, reduce Rents under, accept a surrender of space under, or shorten the term of any Major Lease.

 

(e)           Notwithstanding anything contained herein to the contrary, Borrower shall not, without the prior written consent of Lender, enter into, renew, extend, amend, modify, waive any provisions of, terminate, reduce Rents under, accept a surrender of space under, or shorten the term of any Lease (other than a Short Term Lease) during a Cash Sweep Period.

 

(f)           Notwithstanding the provisions of Section 5.13, to the extent that Lender’s prior written consent or approval is required pursuant to this Section 5.13, Borrower may, at Borrower’s option, submit to Lender a summary of the economic and other material terms of the proposed transaction (together with the current draft of the documents memorializing the terms contemplated in such term sheet).  Such summary shall include, among other things, the lease term, rental rate, capital expenditures (lease commissions and tenant improvements, if any), other concessions (free rent, moving allowance, etc.), and lease options (termination, renewal, contraction and expansion, including the financial terms, if any, associated with such lease options), if any, for the proposed transaction.  The summary of economic terms shall be deemed approved by Lender if Lender shall have failed to notify Borrower of its approval or disapproval within ten (10) Business Days after such submission; provided, however, all such request to Lender must be marked in bold lettering with the following language: “LENDER’S RESPONSE IS REQUIRED WITHIN A SPECIFIED TIME FRAME OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER” and, unless sent via overnight carrier, the envelope containing the request must be marked “PRIORITY”. If (i) Borrower has not submitted such a summary to Lender for approval or (ii) if the actual terms of the proposed Lease differ from the Lender approved summary of economic and other material terms, Borrower shall submit the Lease (or amendment or modification thereto) to Lender for its approval which shall be deemed approved by Lender if Lender shall have failed to notify Borrower of its approval or disapproval within ten (10) Business Days after such submission; provided, however, all such request to Lender must be marked in bold lettering with the following language: “LENDER’S RESPONSE IS REQUIRED WITHIN A SPECIFIED TIME FRAME OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER” and, unless sent via overnight carrier, the envelope containing the request must be marked “PRIORITY”.

 

Section 5.14                      Property Management

 

(a)           Borrower shall (i) promptly perform and observe all of the covenants required to be performed and observed by it under the Management Agreement and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly notify Lender of any default under the Management Agreement of which it is aware; (iii) promptly deliver to Lender a copy of any notice of default or other material notice received by Borrower under the Management Agreement; (iv) promptly give notice to Lender of any notice or information that Borrower receives which indicates that Manager is terminating the Management Agreement or that Manager is otherwise discontinuing its management of the Property; and (v) promptly enforce the performance and observance of all of the covenants required to be performed and observed by Manager under the Management Agreement.

 

 

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(b)           If at any time, (i) Manager shall become insolvent or a debtor in a bankruptcy proceeding; (ii) an Event of Default has occurred and is continuing; (iii) a default has occurred and is continuing under the Management Agreement, or (iv) Manager has engaged in gross negligence, fraud, willful misconduct or misappropriation of funds as determined by Lender and described in a written notice to Borrower, and as to any item of either gross negligence or willful misconduct, Borrower has not cured same within ten (10) Business Days of receipt of such notice,  Borrower shall, at the request of Lender, terminate the Management Agreement upon thirty (30) days prior notice to Manager and replace Manager with a Qualified Manager reasonably approved by Lender on terms and conditions reasonably satisfactory to Lender, it being understood and agreed that the management fee for such replacement Manager shall not exceed then prevailing market rates.

 

(c)           Borrower shall not, without the prior written consent of Lender (which consent shall not be unreasonably withheld, conditioned or delayed): (i) surrender, terminate or cancel the Management Agreement or otherwise replace Manager or enter into any other management agreement with respect to the Property; (ii) reduce or consent to the reduction of the term of the Management Agreement; (iii) increase or consent to the increase of the amount of any charges under the Management Agreement; or (iv) otherwise modify, change, supplement, alter or amend, or waive or release any of its rights and remedies under, the Management Agreement in any material respect.  In the event that Borrower replaces Manager at any time during the term of Loan pursuant to this subsection, such Manager shall be a Qualified Manager.

 

(d)           In connection with any Sale or Pledge as permitted by the terms of Article 7 of this Agreement, Borrower shall have the right, without payment of any fee other than payment of Lender’s reasonable and customary out-of-pocket costs and expenses, to terminate the Management Agreement upon thirty (30) days prior notice to Manager and replace Manager with a Qualified Manager operating pursuant to a Replacement Management Agreement reasonably approved by Lender on terms and conditions reasonably satisfactory to Lender, it being understood and agreed that the management fee for such replacement Manager shall not exceed the then prevailing market rate.

 

Section 5.15                      Liens

 

Subject to Borrower’s right to contest same pursuant to the terms of the Mortgage, Borrower shall not, without the prior written consent of Lender, create, incur, assume or suffer to exist any Lien on any portion of the Property or permit any such action to be taken, except Permitted Encumbrances.

 

 

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Section 5.16                      Debt Cancellation

 

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

 

Section 5.17                      Zoning

 

Borrower shall not (i) initiate or consent to any zoning reclassification of any portion of the Property or seek any variance under any existing zoning ordinance or (ii) use or permit the use of any portion of the Property in any manner that could result in such use becoming a non-conforming use under any zoning ordinance or any other applicable land use law, rule or regulation, in each case without the prior written consent of Lender.

 

Section 5.18                      ERISA

 

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

 

(b)           Borrower further covenants and agrees to deliver to Lender such certifications or other evidence from time to time throughout the term of the Loan, as requested by Lender in its sole discretion, that (i) Borrower is not and does not maintain an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(3) of ERISA; (ii) Borrower is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans; and (iii) one or more of the following circumstances is true:

 

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

 

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

 

(iii)           Borrower qualifies as an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).

 

Section 5.19                      No Joint Assessment

 

Borrower shall not suffer, permit or initiate the joint assessment of the Property with (a) any other real property constituting a tax lot separate from the Property, or (b) any portion of the Property which may be deemed to constitute personal property, or any other procedure whereby the Lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to the Property.

 

 

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Section 5.20                      Reciprocal Easement Agreements

 

Borrower shall not enter into, terminate or modify any REA without Lender’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  Borrower shall enforce, comply with, and cause each of the parties to the REA to comply with all of the material economic terms and conditions contained in the REA.

 

Section 5.21                      Alterations

 

Lender’s prior written approval shall be required in connection with any alterations to any Improvements, exclusive of alterations to tenant spaces required under any Lease, (a) that may have a material adverse effect on the Property, (b) that are structural in nature or have an adverse affect on any utility or HVAC system contained in the Improvements or the exterior of any building constituting a part of any Improvements or (c) that, together with any other alterations undertaken at the same time (including any related alterations, improvements or replacements), are reasonably anticipated to have a cost in excess of the Alteration Threshold.  If the total unpaid amounts incurred and to be incurred with respect to such alterations to the Improvements shall at any time exceed the Alteration Threshold, Borrower shall deposit into the Replacement Reserve Account that is established pursuant to the requirements of Section 9.2(b) below, in cash or a Letter of Credit in an amount equal to the difference between the projected amount for the cost of such alterations to the Improvements and the Alteration Threshold.

 

ARTICLE 6

ENTITY COVENANTS

 

Section 6.1                      Single Purpose Entity/Separateness

 

Until the Debt has been paid in full, Borrower represents, warrants and covenants as follows:

 

(a)           Borrower has not and will not:

 

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

 

(ii)           acquire or own any assets other than (A) the Property, and (B) such incidental Personal Property as may be necessary for the operation of the Property;

 

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

 

(iv)          fail to observe all organizational formalities, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or amend, modify, terminate or fail to comply with the provisions of its organizational documents;

 

 

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(v)           own any subsidiary, or make any investment in, any Person;

 

(vi)          commingle its assets with the assets of any other Person, or permit any Affiliate or constituent party independent access to its bank accounts;

 

(vii)         incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt, (B) trade and operational indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness is (1) unsecured, (2) not evidenced by a note, (3) on commercially reasonable terms and conditions, and (4) due not more than sixty (60) days past the date incurred and paid on or prior to such date, and/or (C) financing leases and purchase money indebtedness incurred in the ordinary course of business relating to Personal Property on commercially reasonable terms and conditions; provided, however, the aggregate amount of the indebtedness described in (B) and (C) shall not exceed at any time two percent (2%) of the outstanding principal amount of the Note;

 

(viii)         fail to maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person; except that Borrower’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that (A) appropriate notation shall be made on such consolidated financial statements to indicate the separate identity of Borrower from such Affiliate and that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person, and (B) Borrower’s assets, liabilities and net worth shall also be listed on Borrower’s own separate balance sheet;

 

(ix)           enter into any contract or agreement with any general partner, member, shareholder, principal, guarantor of the obligations of Borrower, or any Affiliate of the foregoing, except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with unaffiliated third parties;

 

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

 

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

 

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

 

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

 

(xiv)         fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name or fail to correct any known misunderstanding regarding its separate identity;

 

 

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(xv)            fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

 

(xvi)           if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, and the written consent of 100% of the managers of Borrower, including, without limitation, each Independent Director, take any Material Action or action that might cause such entity to become insolvent;

 

(xvii)           fail to allocate shared expenses (including, without limitation, shared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses and to use separate stationery, invoices and checks;

 

(xviii)          fail to remain solvent or pay its own liabilities (including, without limitation, salaries of its own employees) only from its own funds;

 

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

 

(xx)             violate or cause to be violated the assumptions made with respect to Borrower and its principals in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the Loan; or

 

    (xxi)            fail to maintain a sufficient number of employees in light of its contemplated business operations.

 

(b)           If Borrower is a partnership or limited liability company, each general partner in the case of a partnership, or the managing member in the case of a limited liability company (each an “SPE Component Entity”) of Borrower, as applicable, shall be a corporation or a limited liability company whose sole asset is its interest in Borrower, provided that if such SPE Component Entity is a limited liability company, each of its managing members shall also be a SPE Component Entity.  Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 6.1(a)(iii) - (vi) and (viii) - (xxi), as if such representation, warranty or covenant was made directly by such SPE Component Entity; (ii) will not engage in any business or activity other than owning an interest in Borrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower; (iv) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (v) will cause Borrower to comply with the provisions of this Section 6.1 and Section 6.4.  Prior to the withdrawal or the disassociation of any SPE Component Entity from Borrower, Borrower shall immediately appoint a new general partner or managing member whose articles of incorporation or organization, as applicable, are substantially similar to those of such SPE Component Entity and deliver a new opinion letter pertaining to substantive consolidation acceptable to Lender and the Rating Agencies with respect to the new SPE Component Entity and its equity owners.  Notwithstanding the foregoing, to the extent Borrower is a single member Delaware limited liability company, so long as Borrower maintains such formation status and complies with the requirements set forth in subsections (c) and (d) below, no SPE Component Entity shall be required.

 

 

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(c)           In the event Borrower is a single-member Delaware limited liability company, the limited liability company agreement of Borrower (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the sole member of Borrower (“Member”) to cease to be the member of Borrower (other than (A) upon an assignment by Member of all of its limited liability company interest in Borrower and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, or (B) the resignation of Member and the admission of an additional member of Borrower, in either case in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower (“Special Member”) shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower, automatically be admitted to Borrower and shall continue Borrower without dissolution and (ii) Special Member may not resign from Borrower or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower as Special Member in accordance with requirements of Delaware law and (B) such successor Special Member has also accepted its appointment as an Independent Director.  The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower upon the admission to Borrower of a substitute Member, (ii) Special Member shall be a member of Borrower that has no interest in the profits, losses and capital of Borrower and has no right to receive any distributions of Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the “Act”), Special Member shall not be required to make any capital contributions to Borrower and shall not receive a limited liability company interest in Borrower, (iv) Special Member, in its capacity as Special Member, may not bind Borrower, and (v) except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, Borrower, including, without limitation, the merger, consolidation or conversion of Borrower; provided, however, such prohibition shall not limit the obligations of Special Member, in its capacity as Independent Director, to vote on such matters required by the Loan Documents or the LLC Agreement.  In order to implement the admission to Borrower of Special Member, Special Member shall execute a counterpart to the LLC Agreement.  Prior to its admission to Borrower as Special Member, Special Member shall not be a member of Borrower.

 

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

 

 

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(e)           The organizational documents of Borrower and each SPE Component Entity shall provide an express acknowledgment that Lender is an intended third-party beneficiary of the “special purpose” provisions of such organizational documents.

 

Section 6.2                      Change of Name, Identity or Structure

 

Borrower shall not change or permit to be changed (a) Borrower’s name, (b) Borrower’s identity (including its trade name or names), (c) Borrower’s principal place of business set forth on the first page of this Agreement, (d) other than as expressly permitted pursuant to Article 7 hereof, the corporate, partnership or other organizational structure of Borrower, each SPE Component Entity (if any), or Borrower Principal, (e) Borrower’s state of organization, or (f) Borrower’s organizational identification number, without in each case notifying Lender of such change in writing at least thirty (30) days prior to the effective date of such change and, other than as expressly permitted pursuant to Article 7 hereof, in the case of a change in Borrower’s structure, without first obtaining the prior written consent of Lender.  In addition, Borrower shall not change or permit to be changed any organizational documents of Borrower or any SPE Component Entity (if any) if such change would adversely impact the covenants set forth in Section 6.1 and 6.4 hereof.  Borrower authorizes Lender to file any financing statement or financing statement amendment required by Lender to establish or maintain the validity, perfection and priority of the security interest granted herein.  At the request of Lender, Borrower shall execute a certificate in form satisfactory to Lender listing the trade names under which Borrower intends to operate the Property, and representing and warranting that Borrower does business under no other trade name with respect to the Property.  If Borrower does not now have an organizational identification number and later obtains one, or if the organizational identification number assigned to Borrower subsequently changes, Borrower shall promptly notify Lender of such organizational identification number or change.

 

Section 6.3                      Business and Operations

 

Borrower will qualify to do business and will remain in good standing under the laws of the State as and to the extent the same are required for the ownership, maintenance, management and operation of the Property.

 

Section 6.4                      Independent Director

 

The organizational documents of Borrower shall include the following provisions: (a) at all times there shall be, and Borrower shall cause there to be, at least two (2) Independent Directors; (b) the board of managers of Borrower shall not take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock, requires unanimous vote of the board of managers of Borrower unless at the time of such action there shall be at least two members of the board of managers who are Independent Directors; (c) Borrower shall not, without the unanimous written consent of its board of managers including the Independent Directors, on behalf of itself or Borrower, take any Material Action or any action that might cause such entity to become insolvent, and when voting with respect to such matters, the Independent Directors shall consider only the interests of Borrower, including its creditors; and (d) no Independent Director of Borrower may be removed or replaced unless Borrower provides Lender with not less than three (3) Business Days’ prior written notice of (i) any proposed removal of an Independent Director, together with a statement as to the reasons for such removal, and (ii) the identity of the proposed replacement Independent Director, together with a certification that such replacement satisfies the requirements set forth in the organizational documents for an Independent Director.

 

 

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ARTICLE 7

NO SALE OR ENCUMBRANCE

 

Section 7.1                      Transfer Definitions

 

For purposes of this Article 7 an “Affiliated Manager” shall mean any managing agent in which Borrower, Borrower Principal, any SPE Component Entity (if any) or any affiliate of such entities has, directly or indirectly, any legal, beneficial or economic interest; “Control” shall mean the power to direct the management and policies of a Restricted Party, directly or indirectly, whether through the ownership of voting securities or other beneficial interests, by contract or otherwise; “Restricted Party” shall mean Borrower, Borrower Principal, any SPE Component Entity (if any), any Affiliated Manager, or any shareholder, partner, member or non-member manager, or any direct or indirect legal or beneficial owner of Borrower, Borrower Principal, any SPE Component Entity (if any), any Affiliated Manager or any non-member manager; and a “Sale or Pledge” shall mean a voluntary or involuntary sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, grant of any options with respect to, or any other transfer or disposition of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) of a legal or beneficial interest.

 

Section 7.2                      No Sale/Encumbrance

 

(a)           Except as otherwise permitted by this Agreement, Borrower shall not (i) cause or permit a Sale or Pledge of the Property or any part thereof or any legal or beneficial interest therein (other than pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.13) or (ii) permit a Sale or Pledge of an equity interest in any Restricted Party (in each case, a “Prohibited Transfer”), without the prior written consent of Lender.

 

(b)           Except as otherwise expressly permitted by this Article 7, a Prohibited Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock in one or a series of transactions; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general or limited partner or any profits or proceeds relating to such partnership interests or the creation or issuance of new partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of any member or any profits or proceeds relating to such membership interest; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of Manager (including, without limitation, an Affiliated Manager) other than in accordance with Section 5.14.

 

 

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Section 7.3                      Permitted Transfers

 

Notwithstanding the provisions of Section 7.2, each of the following Sales or Pledges shall not be deemed to be Prohibited Transfers: (a) a transfer by devise or descent or by operation of law upon the death of a member, partner or shareholder of a Restricted Party, so long as following the death of such member, partner or shareholder there is no change in Control of such Restricted Party as a result of such transfer; (b) transfers for estate planning purposes of an individual's interests in any Restricted Party to the spouse or any lineal descendant of such individual, or to a trust for the benefit of any one or more of such individual, spouse or lineal descendant, so long as following such transfer and there is no change in Control of such Restricted Party as a result of such transfer; (c) the Sale or Pledge, in one or a series of transactions, of not more than forty-nine percent (49%) of the stock, limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, (i) no such transfers shall result in a change in Control in the Restricted Party or change in control of the Property, (ii) following any transfers, Borrower and any SPE Component Entity shall continue to satisfy the requirements of Section 6.1 hereof and (iii) as a condition to each such transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed transfer; (d) a Sale or Pledge in connection with any Mezzanine Loan entered into in accordance with the terms of Section 7.6 hereof (and the transfer to the mezzanine lender under such Mezzanine Loan in connection with the exercise of any rights such mezzanine lender may have under the Mezzanine Loan); (e) a Sale or Pledge or issuance of limited partnership interests in Borrower Principal; or (f) the sale, transfer or issuance of stock in GRT provided (I) such stock is then listed on the New York Stock Exchange or such other nationally recognized publicly-traded stock exchange or (II) in connection with the privatization of GRT, provided that after such privatization, further transfers of the shares of GRT shall be subject to the transfer restrictions of this Article 7. Notwithstanding anything to the contrary contained in this Section 7.3, (i) GRT must continue to own, directly or indirectly, one hundred percent (100%) of the interests in, and Control, the general partner of Borrower Principal and (ii) any transfer that results in any Person and its Affiliates owning in excess of forty-nine percent (49%) of the ownership interests in a Restricted Party shall comply with the requirements of Section 7.4 hereof, provided, however, for the purposes of this Subsection (ii) only, in connection with a privatization of GRT in accordance with Section 7.3(f)(II) above, (1) Lender’s prior written consent shall not be required and (2) Borrower shall not be required to comply with the provisions of Section 7.4(b) below and, unless the existing Management Agreement is being terminated in connection with such privatization, Section 7.4(e) below.

 

Section 7.4                      Lender’s Rights

 

Borrower shall have the right to request Lender to consent to a Sale or Pledge that is a Prohibited Transfer, but Lender reserves the right to condition the consent to a Prohibited Transfer requested hereunder upon, among other things, (a) a modification of the terms hereof and an assumption of the Note and the other Loan Documents as so modified by the proposed Prohibited Transfer, (b) receipt of payment of a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan and all of Lender’s expenses incurred in connection with such Prohibited Transfer, (c) receipt of written confirmation from the Rating Agencies that the Prohibited Transfer will not result in a downgrade, withdrawal or qualification of the initial, or if higher, then current ratings issued in connection with a Securitization, or if a Securitization has not occurred, any ratings to be assigned in connection with a Securitization, (d) the proposed transferee’s continued compliance with the covenants set forth in this Agreement (including, without limitation, the covenants in Article 6) and the other Loan Documents, (e) the appointment of a new Manager for the Property under a new Management Agreement reasonably satisfactory to Lender, (f) to the extent such transferee shall own twenty percent (20%) or more of the direct or indirect ownership interests in Borrower immediately following such transfer (provided such transferee owned less than twenty percent (20%) of the direct or indirect ownership interests in Borrower as of the Closing Date), delivery by Borrower, at Borrower’s sole cost and expense, customary searches (including without limitation credit, judgment, lien, litigation, bankruptcy, criminal and watch list) reasonably acceptable to Lender with respect to such transferee, and (g) the satisfaction of such other customary and commercially reasonable conditions and/or legal opinions as Lender shall determine in its reasonable discretion to be in the interest of Lender.  All expenses incurred by Lender shall be payable by Borrower whether or not Lender consents to the Prohibited Transfer.  Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon a Prohibited Transfer made without Lender’s consent. This provision shall apply to each and every Prohibited Transfer, whether or not Lender has consented to any previous Prohibited Transfer.  If any Sale or Pledge permitted under this Article 7 results in any Person and its Affiliates owning in excess of forty-nine percent (49%) of the ownership interests in a Restricted Party, Borrower shall, prior to such transfer, and in addition to any other requirement for Lender consent contained herein, deliver a revised opinion letter pertaining to substantive consolidation to Lender, which opinion shall be in a customary and commercially reasonable form, scope and substance reasonably acceptable to Lender and the Rating Agencies.

 

 

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Section 7.5                      Assumption

 

Notwithstanding the foregoing provisions of this Article 7, other than with respect to the period beginning sixty (60) days prior to a Securitization or sale, transfer or assignment of the Loan and ending sixty (60) days after the closing of such Securitization or sale, transfer or assignment of the Loan, Lender shall not unreasonably withhold consent to a transfer of the Property in its entirety to or the transfer of one hundred percent (100%) of the equity interests in Borrower, and the related assumption of the Loan by, any Person (a “Transferee”); provided, however, Lender’s consent shall not be required if the Transferee qualifies as Qualified Transferee; provided, further, that in all cases each of the following terms and conditions are satisfied:

 

(a)           no Default or Event of Default has occurred;

 

(b)           Borrower shall have (i) delivered written notice to Lender of the terms of such prospective transfer not less than sixty (60) days before the date on which such transfer is scheduled to close and, concurrently therewith, all such information concerning the proposed Transferee as Lender shall reasonably require and (ii) paid to Lender a non-refundable processing fee in the amount of $25,000.  Unless the Transferee is a Qualified Transferee, Lender shall have the right to approve or disapprove the proposed transfer based on its then current underwriting and credit requirements for similar loans secured by similar properties which loans are sold in the secondary market, such approval not to be unreasonably withheld. Unless the Transferee is a Qualified Transferee, in determining whether to give or withhold its approval of the proposed transfer, Lender shall consider the experience and track record of Transferee and its principals in owning and operating facilities similar to the Property, the financial strength of Transferee and its principals, the general business standing of Transferee and its principals and Transferee’s and its principals’ relationships and experience with contractors, vendors, tenants, lenders and other business entities; provided, however, that, notwithstanding Lender’s agreement to consider the foregoing factors in determining whether to give or withhold such approval, such approval shall be given or withheld based on what Lender determines to be commercially reasonable and, if given, may be given subject to such conditions as Lender may deem reasonably appropriate;

 

 

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(c)           Borrower shall have paid to Lender, concurrently with the closing of such transfer, (i) a non-refundable assumption fee in an amount equal to (1) with respect to an assumption by a Transferee who qualifies as Qualified Transferee, one-half of one percent (0.5 %) of the then outstanding principal balance of the Note or (2) with respect to an assumption by a Transferee who does not qualify as a Qualified Transferee, one percent (1.0%) of the then outstanding principal balance of the Note, and (ii) all out-of-pocket costs and expenses, including reasonable attorneys’ fees and Rating Agency fees, incurred by Lender in connection with the transfer;

 

(d)           (i) Transferee shall have assumed and agreed to pay the Debt as and when due and shall have assumed all other obligations of Borrower under the Loan Documents subject to the provisions of Article 15 hereof and, prior to or concurrently with the closing of such transfer, Transferee shall have executed, without any cost or expense to Lender, such documents and agreements as Lender shall reasonably require to evidence and effectuate said assumption and (ii) if required by Lender, a Person affiliated with Transferee and acceptable to Lender (a “Transferee Principal”) shall, subject to the provisions of Article 15, have assumed the obligations of Borrower Principal under the Loan Documents with respect to all acts and events occurring or arising after the transfer of the Property pursuant to this Section 7.5;

 

(e)            Borrower and Transferee, without any cost to Lender, shall furnish any information requested by Lender for the preparation of, and shall authorize Lender to file, new financing statements and financing statement amendments and other documents to the fullest extent permitted by applicable law, and shall execute any additional documents reasonably requested by Lender;

 

(f)             In connection with any transfer of the Property (but not in connection with the transfer of the entire equity interests in Borrower), Borrower shall have delivered to Lender, without any cost or expense to Lender, such endorsements to Lender’s Title Insurance Policy insuring that fee simple or leasehold title to the Property, as applicable, is vested in Transferee (subject to Permitted Encumbrances), hazard insurance endorsements or certificates and other similar materials as Lender may deem necessary at the time of the transfer, all in form and substance satisfactory to Lender;

 

 

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(g)            Transferee shall have furnished to Lender, if Transferee is a corporation, partnership, limited liability company or other entity, all appropriate papers evidencing Transferee’s organization and good standing, and the qualification of the signers to execute the assumption of the Debt, which papers shall include certified copies of all documents relating to the organization and formation of Transferee and of the entities, if any, which are partners or members of Transferee.  Transferee and, as applicable, such constituent partners, members or shareholders of Transferee (as the case may be), as Lender shall require, shall comply with the applicable covenants set forth in Article 6 hereof;

 

(h)            Transferee shall assume the obligations of Borrower under any Management Agreement or provide a new Management Agreement with a new Manager which meets with the requirements of Section 5.14 hereof and assign to Lender as additional security such new Management Agreement;

 

(i)             Transferee shall furnish an opinion of counsel satisfactory to Lender and its counsel (A) that Transferee’s formation documents provide for the matters described in subparagraph (g) above, (B) that the assumption of the Debt has been duly authorized, executed and delivered, and that the Note, the Mortgage, this Agreement, the assumption agreement and the other Loan Documents are valid, binding and enforceable against Transferee in accordance with their terms, (C) that Transferee and any entity which is a controlling stockholder, member or general partner of Transferee, have been duly organized, and are in existence and good standing, and (E) with respect to such other matters as Lender may reasonably request;

 

(j)              if required by Lender, Lender shall have received confirmation in writing from the Rating Agencies that rate the Securities to the effect that the transfer will not result in a qualification, downgrade or withdrawal of any rating initially assigned or to be assigned to the Securities;

 

(k)             Borrower’s obligations under the contract of sale pursuant to which the transfer is proposed to occur shall expressly be subject to the satisfaction of the terms and conditions of this Section 7.5; and

 

(l)              Transferee shall, prior to such transfer, deliver a substantive non-consolidation opinion to Lender, which opinion shall be in form, scope and substance reasonably acceptable in all respects to Lender and the Rating Agencies.

 

A consent by Lender with respect to a transfer of the Property in its entirety or the entire equity interests in Borrower, to, and the related assumption of the Loan by, a Transferee pursuant to this Section 7.5 shall not be construed to be a waiver of the right of Lender to consent to any subsequent Sale or Pledge of the Property or the entire equity interests in Borrower.  Upon the transfer of the Property pursuant to this Section 7.5, Borrower and Borrower Principal (if a Transferee Principal has assumed the obligations of Borrower Principal under the Loan Documents with respect to all acts and events occurring or arising after the transfer of the Property pursuant to this Section 7.5) shall be relieved of all liability under the Loan Documents for acts, events, conditions, or circumstances occurring or arising after the date of such transfer, except to the extent that such acts, events, conditions, or circumstances are the proximate result of acts, events, conditions, or circumstances that existed prior to the date of such transfer, whether or not discovered prior or subsequent to the date of such transfer.  All out-of-pocket costs and expenses incurred by Lender pursuant to this Section 7.5 shall be payable by Borrower whether or not the transfer contemplated hereunder actually occurs.

 

 

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Section 7.6                      Permitted Mezzanine Debt

 

Provided no Event of Default has occurred and is continuing, at any time after sixty (60) months after the date hereof, and in connection with a sale of the Property, or the transfer of one hundred percent (100%) of the equity interests in Borrower, to an unaffiliated third party and an assumption of the Loan pursuant to Section 7.5 hereof, the owners of the beneficial interests in Borrower may incur indebtedness (the “Mezzanine Loan”), provided (a) Lender has received not less than sixty (60) days prior written notice to Lender; (b) the amount of such Mezzanine Loan shall not exceed at the time of closing of such Mezzanine Loan, an amount which, when added to the outstanding principal balance of the Note, results in a loan-to-value ratio not in excess of the Permitted LTV and a minimum Debt Service Coverage Ratio of 1.25 to 1:00; (c) the Mezzanine Loan may be secured by a pledge of the direct and/or indirect interests in Borrower (provided, however, the pledge of SPE Component Entity’s interest in Borrower shall not be permitted) but such Mezzanine Loan shall be subordinate to any New Mezzanine Loan already created, or in the future created, pursuant to Section 13.9 hereof, (d) the holder of the Mezzanine Loan shall at all times be a Qualified Mezzanine Lender, (e) Lender shall receive written confirmation from the Rating Agencies that the making of the Mezzanine Loan shall not, in and of itself, result in a downgrade, qualification or withdrawal of the then current ratings assigned to the Securities and (f) all documents and instruments evidencing or securing the Mezzanine Loan including, without limitation, a subordination and intercreditor agreement, shall be in form and substance reasonably satisfactory to Lender.

 

ARTICLE 8

INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

 

Section 8.1                      Insurance

 

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

 

(i)           comprehensive “special causes of loss” form of insurance (or its equivalent) on the Improvements and the Personal Property (A) in an amount equal to not less than one hundred percent (100%) of the “Full Replacement Cost,” which for purposes of this Agreement shall mean actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings); (B) written on a replacement cost basis and containing either an agreed amount endorsement with respect to the Improvements and Personal Property or a waiver of all co-insurance provisions; (C) providing for no deductible in excess of $25,000 for all such insurance coverage; (D) at all times insuring against at least those hazards that are commonly insured against under a “special causes of loss” form of policy, as the same shall exist on the date hereof, and together with any increase in the scope of coverage provided under such form after the date hereof; and (E)  if any of the Improvements or the use of the Property shall at any time constitute legal non-conforming structures or uses, providing coverage for contingent liability from Operation of Building Laws, Demolition Costs and Increased Cost of Construction Endorsements and containing an “Ordinance or Law Coverage” or “Enforcement” endorsement.  In addition, Borrower shall obtain: (y) if any portion of the Improvements is currently or at any time in the future located in a “special flood hazard area” designated by the Federal Emergency Management Agency, flood hazard insurance in an amount equal to the maximum amount of such insurance available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended, together with such “excess flood” insurance in such amount and with such deductible as Lender may reasonably require; and (z) earthquake insurance in amounts and in form and substance reasonably satisfactory to Lender in the event the Property is located in an area with a high degree of seismic risk, provided that the insurance pursuant to clauses (y) and (z) hereof shall be on terms consistent with the special causes of loss form required under this subsection (i);

 

 

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(ii)           commercial general liability insurance against claims for personal injury, bodily injury, death or property damage occurring upon, in or about the Property, with such insurance (A) to be on the so-called “occurrence” form with a general aggregate limit of not less than $2,000,000 and a per occurrence limit of not less than $1,000,000; (B) to continue at not less than the aforesaid limit until required to be changed by Lender in writing by reason of changed economic conditions making such protection inadequate; and (C) to cover at least the following hazards: (1) premises and operations; (2) products and completed operations; (3) independent contractors; and (4) contractual liability;

 

(iii)           loss of rents insurance or business income insurance, as applicable, (A) with loss payable to Lender; (B) covering all risks required to be covered by the insurance provided for in subsection (i) above; and (C) which provides that after the physical loss to the Improvements and Personal Property occurs, the loss of rents or income, as applicable, will be insured until completion of Restoration or the expiration of eighteen (18) months, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period; and (D) which contains an extended period of indemnity endorsement which provides that after the physical loss to the Improvements and Personal Property has been repaired, the continued loss of income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration of twelve (12) months from the date that the Property is repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period.  For hotels, motels, health care, and other property types without a standard rent roll, the amount of business income insurance required shall be not less than eighteen (18) months of debt service, taxes, insurance, and other fixed expenses. The amount of such loss of rents or business income insurance, as applicable, shall be determined prior to the date hereof and at least once each year thereafter based on Borrower’s reasonable estimate of the gross income from the Property for the succeeding period of coverage as required above.  All proceeds payable to Lender pursuant to this subsection shall be held by Lender and shall be applied to the obligations secured by the Loan Documents from time to time due and payable hereunder and under the Note; provided, however, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the obligations secured by the Loan Documents on the respective dates of payment provided for in the Note, this Agreement and the other Loan Documents except to the extent such amounts are actually paid out of the proceeds of such loss of rents or business income insurance, as applicable;

 

 

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(iv)           at all times during which structural construction, repairs or alterations are being made with respect to the Improvements, and only if the Property coverage form does not otherwise apply, (A) owner’s contingent or protective liability insurance covering claims not covered by or under the terms or provisions of the above mentioned commercial general liability insurance policy; and (B) the insurance provided for in subsection (i) above written in a so-called Builder’s Risk Completed Value form (1) on a non-reporting basis, (2) against “special causes of loss” insured against pursuant to subsection (i) above, (3) including permission to occupy the Property, and (4) with an agreed amount endorsement waiving co-insurance provisions;

 

(v)           workers’ compensation, subject to the statutory limits of the State, and employer’s liability insurance in respect of any work or operations on or about the Property, or in connection with the Property or its operation (if applicable);

 

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

 

(vii)          excess liability insurance in an amount not less than $25,000,000 per occurrence on terms consistent with the commercial general liability insurance required under subsection (ii) above; and

 

(viii)         upon sixty (60) days’ written notice, such other reasonable insurance and in such reasonable amounts as Lender from time to time may reasonably request against such other insurable hazards (including, but not limited to, sinkhole, mine subsidence, mold, spores or fungus) which at the time are commonly insured against for property similar to the Property located in or around the region in which the Property is located.

 

(b)           All insurance provided for in Section 8.1(a) shall be obtained under valid and enforceable policies (collectively, the “Policies” or in the singular, the “Policy”), and shall be subject to the approval of Lender as to insurance companies, amounts, deductibles, loss payees and insureds. The Policies shall be issued by financially sound and responsible insurance companies authorized to do business in the State and having a claims paying ability rating of “A-” or better by S&P (and the equivalent ratings for Moody’s and Fitch) or such other ratings approved by Lender.  The Policies described in Section 8.1(a) shall designate Lender and its successors and assigns as additional insureds, mortgagees and/or loss payee as deemed appropriate by Lender.  To the extent such Policies are not available as of the Closing Date, Borrower shall deliver to Lender prior to the Closing Date an Acord 28 or similar certificate of insurance evidencing the coverages and amounts required hereunder and, upon request of Lender as soon as available after the Closing Date, certified copies of all Policies.  Not less than ten (10) days prior to the expiration dates of any insurance coverage in place with respect to the Property, Borrower shall deliver to Lender an Acord 28 or similar certificate, accompanied by evidence satisfactory to Lender of payment of the premiums due in connection therewith (the “Insurance Premiums”), and, as soon as available thereafter, certified copies of all renewal Policies.

 

 

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(c)           Any blanket insurance Policy shall provide the same protection as would a separate Policy insuring only the Property in compliance with the provisions of Section 8.1(a) hereof; provided, however, any blanket insurance policy that does not specifically allocate to the Property the amount of coverage from time to time required hereunder shall be subject to Lender’s reasonable approval after taking into account, among other things, the amount, location, number and type of properties covered by such blanket insurance policy.

 

(d)           All Policies provided for or contemplated by Section 8.1(a), except for the Policy referenced in Section 8.1(a)(v), shall name Borrower as the insured and Lender as the additional insured, as its interests may appear, and in the case of property damage, boiler and machinery, flood and earthquake insurance, shall contain a standard non-contributing mortgagee clause in favor of Lender providing that the loss thereunder shall be payable to Lender.

 

(e)           All Policies provided for in Section 8.1(a) shall contain clauses or endorsements to the effect that:

 

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

 

(ii)           the Policies shall not be materially changed (other than to increase the coverage provided thereby) or canceled without at least thirty (30) days’ prior written notice to Lender and any other party named therein as an additional insured;

 

(iii)          the issuers thereof shall give written notice to Lender if the Policies have not been renewed thirty (30) days prior to its expiration;

 

(iv)          Lender shall not be liable for any Insurance Premiums thereon or subject to any assessments thereunder; and

 

(v)           the Policies do not contain an exclusion for acts of terrorism (“Terrorism Insurance”); provided however, Borrower shall not be obligated to expend more than $40,000 in any fiscal year on Insurance Premiums for Terrorism Insurance (the “Terrorism Insurance Cap”) and if the cost of the Terrorism Insurance exceeds the Terrorism Insurance Cap, Borrower shall purchase the maximum amount of Terrorism Insurance available with funds equal to the Terrorism Insurance Cap.

 

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

 

 

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Section 8.2                      Casualty

 

If the Property shall be damaged or destroyed, in whole or in part, by fire or other casualty (a “Casualty”), Borrower shall give prompt notice of such damage to Lender and shall promptly commence and diligently prosecute the Restoration of the Property in accordance with Section 8.4.  Borrower shall pay all costs of such Restoration whether or not such costs are covered by insurance.  Lender may, but shall not be obligated to make proof of loss if not made promptly by Borrower.  Borrower shall adjust all claims for Insurance Proceeds in consultation with, and approval of, Lender; provided, however, if an Event of Default has occurred and is continuing, Lender shall have the exclusive right to participate in the adjustment of all claims for Insurance Proceeds.

 

Section 8.3                      Condemnation

 

Borrower shall promptly give Lender notice of the actual or threatened commencement of any proceeding for the Condemnation of the Property of which Borrower has knowledge and shall deliver to Lender copies of any and all papers served in connection with such proceedings.  Lender may participate in any such proceedings, and Borrower shall from time to time deliver to Lender all instruments requested by it to permit such participation.  Borrower shall, at its expense, diligently prosecute any such proceedings, and shall consult with Lender, its attorneys and experts, and cooperate with them in the carrying on or defense of any such proceedings.  Notwithstanding any taking by any public or quasi-public authority through Condemnation or otherwise (including but not limited to any transfer made in lieu of or in anticipation of the exercise of such taking), Borrower shall continue to pay the Debt at the time and in the manner provided for its payment in the Note and in this Agreement and the Debt shall not be reduced until any Award shall have been actually received and applied by Lender, after the deduction of expenses of collection, to the reduction or discharge of the Debt.  Lender shall not be limited to the interest paid on the Award by the condemning authority but shall be entitled to receive out of the Award interest at the rate or rates provided herein or in the Note.  If the Property or any portion thereof is taken by a condemning authority, Borrower shall promptly commence and diligently prosecute the Restoration of the Property and otherwise comply with the provisions of Section 8.4, whether or not Lender makes any Net Proceeds available pursuant to Section 8.4.  If the Property is sold, through foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender shall have the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive the Award, or a portion thereof sufficient to pay the Debt.

 

Section 8.4                      Restoration

 

The following provisions shall apply in connection with the Restoration of the Property:

 

(a)           If the Net Proceeds shall be less than $1,000,000 and the costs of completing the Restoration shall be less than $1,000,000, the Net Proceeds will be disbursed by Lender to Borrower upon receipt, provided that all of the conditions set forth in Section 8.4(b)(i) are met and Borrower delivers to Lender a written undertaking to expeditiously commence and to satisfactorily complete with due diligence the Restoration in accordance with the terms of this Agreement.

 

 

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(b)           If the Net Proceeds are equal to or greater than $1,000,000 or the costs of completing the Restoration are equal to or greater than $1,000,000, Lender shall make the Net Proceeds available for the Restoration subject to the conditions of and in accordance with the provisions of this Section 8.4.  The term “Net Proceeds” for purposes of this Section 8.4 shall mean: (i) the net amount of all insurance proceeds received by Lender pursuant to Section 8.1(a)(i), (iv), (vi) and (viii) as a result of a Casualty, after deduction of its reasonable costs and expenses (including, but not limited to, reasonable counsel fees), if any, in collecting the same (“Insurance Proceeds”), or (ii) the net amount of the Award as a result of a Condemnation, after deduction of its reasonable costs and expenses (including, but not limited to, reasonable counsel fees), if any, in collecting the same (“Condemnation Proceeds”), whichever the case may be.

 

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

 

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

 

(B)           (1)  in the event the Net Proceeds are Insurance Proceeds, less than thirty percent (30%) of the total floor area of the Improvements on the Property has been damaged, destroyed or rendered unusable as a result of a Casualty and the amount of damage does not exceed thirty percent (30%) of the Property’s fair market value immediately prior to the occurrence of such Casualty, or (2) in the event the Net Proceeds are Condemnation Proceeds, less than ten percent (10%) of the land constituting the Property is taken, such land is located along the perimeter or periphery of the Property, and less than fifteen percent (15%) of the aggregate floor area of the Improvements is taken and the taking does not exceed fifteen percent (15%) of the Property’s fair market value immediately prior to the occurrence of such taking;

 

(C)           Leases covering in the aggregate at least seventy-five percent (75%) of the total rentable space in the Property which has been demised under executed and delivered Leases in effect as of the date of the occurrence of such Casualty or Condemnation, whichever the case may be, and each Major Lease in effect as of such date shall remain in full force and effect during and after the completion of the Restoration without abatement of rent beyond the time required for Restoration;

 

(D)           Borrower shall covenant to commence the Restoration as soon as reasonably practicable (but in no event later than sixty (60) days after receiving the Net Proceeds from such Casualty or Condemnation, whichever the case may be, occurs) and shall diligently pursue the same to satisfactory completion;

 

(E)           Lender shall be satisfied that any operating deficits, including all scheduled payments of principal and interest under the Note, which will be incurred with respect to the Property as a result of the occurrence of any such Casualty or Condemnation, whichever the case may be, will be covered out of the insurance coverage referred to in Section 8.1(a)(iii) above;

 

 

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(F)           Lender shall be satisfied that the Restoration will be completed on or before the earliest to occur of (1) six (6) months prior to the Maturity Date, (2) the earliest date required for such completion under the terms of any Leases or material agreements affecting the Property, (3) such time as may be required under applicable zoning law, ordinance, rule or regulation, or (4) the expiration of the insurance coverage referred to in Section 8.1(a)(iii);

 

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

 

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

 

(I)             such Casualty or Condemnation, as applicable, does not result in the loss of access to the Property or the Improvements;

 

(J)            Borrower shall deliver, or cause to be delivered, to Lender a signed detailed budget approved in writing by Borrower’s architect or engineer stating the entire cost of completing the Restoration, which budget shall be acceptable to Lender;

 

(K)           the Net Proceeds together with any cash or cash equivalent deposited by Borrower with Lender are sufficient in Lender’s reasonable judgment to cover the cost of the Restoration; and

 

(L)            Lender shall be satisfied that the Debt Service Coverage Ratio for the Property, after giving effect to the Restoration, shall be equal or greater than 1.10 to 1.0.

 

(ii)           The Net Proceeds shall be held by Lender until disbursements commence, and, until disbursed in accordance with the provisions of this Section 8.4(b), shall constitute additional security for the Debt and other obligations under the Loan Documents.  The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower from time to time during the course of the Restoration, upon receipt of evidence satisfactory to Lender that (A) all the conditions precedent to such advance, including those set forth in Section 8.4(b)(i), have been satisfied, (B) all materials installed and work and labor performed (except to the extent that they are to be paid for out of the requested disbursement) in connection with the related Restoration item have been paid for in full, and (C) there exist no notices of pendency, stop orders, mechanic’s or materialman’s liens or notices of intention to file same, or any other liens or encumbrances of any nature whatsoever on the Property which have not either been fully bonded to the satisfaction of Lender and discharged of record or in the alternative fully insured to the satisfaction of Lender by the title company issuing the Title Insurance Policy.  Notwithstanding the foregoing, Insurance Proceeds from the Policies required to be maintained by Borrower pursuant to Section 8.1(a)(iii) shall be controlled by Lender at all times, shall not be subject to the provisions of this Section 8.4 and shall be used solely for the payment of the obligations under the Loan Documents and Operating Expenses.

 

 

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(iii)           All plans and specifications required in connection with the Restoration shall be subject to prior review and acceptance in all respects by Lender and by an independent consulting engineer selected by Lender (the “Restoration Consultant”).  Lender shall have the use of the plans and specifications and all permits, licenses and approvals required or obtained in connection with the Restoration.  The identity of the contractors, subcontractors and materialmen engaged in the Restoration, as well as the contracts in excess of $500,000 under which they have been engaged, shall be subject to prior review and acceptance by Lender and the Restoration Consultant not to be unreasonably withheld, delayed or conditioned.  All costs and expenses incurred by Lender in connection with making the Net Proceeds available for the Restoration, including, without limitation, reasonable counsel fees and disbursements and the Restoration Consultant’s fees, shall be paid by Borrower.

 

(iv)           In no event shall Lender be obligated to make disbursements of the Net Proceeds in excess of an amount equal to the costs actually incurred from time to time for work in place as part of the Restoration, as certified by the Restoration Consultant, minus the Restoration Retainage.  The term “Restoration Retainage” shall mean an amount equal to ten percent (10%) of the costs actually incurred for work in place as part of the Restoration, as certified by the Restoration Consultant, until the Restoration has been completed.  The Restoration Retainage shall be reduced to five percent (5%) of the costs incurred upon receipt by Lender of satisfactory evidence that fifty percent (50%) of the Restoration has been completed.  The Restoration Retainage shall in no event, and notwithstanding anything to the contrary set forth above in this Section 8.4(b), be less than the amount actually held back by Borrower from contractors, subcontractors and materialmen engaged in the Restoration.  The Restoration Retainage shall not be released until the Restoration Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this Section 8.4(b)and that all approvals necessary for the re-occupancy and use of the Property have been obtained from all appropriate Governmental Authorities, and Lender receives evidence satisfactory to Lender that the costs of the Restoration have been paid in full or will be paid in full out of the Restoration Retainage; provided, however, that Lender will release the portion of the Restoration Retainage being held with respect to any contractor, subcontractor or materialman engaged in the Restoration as of the date upon which the Restoration Consultant certifies to Lender that the contractor, subcontractor or materialman has satisfactorily completed all work and has supplied all materials in accordance with the provisions of the contractor’s, subcontractor’s or materialman’s contract, the contractor, subcontractor or materialman delivers the lien waivers and evidence of payment in full of all sums due to the contractor, subcontractor or materialman as may be reasonably requested by Lender or by the title company issuing the Title Insurance Policy, and Lender receives an endorsement to the Title Insurance Policy insuring the continued priority of the lien of the Mortgage and evidence of payment of any premium payable for such endorsement.  If required by Lender, the release of any such portion of the Restoration Retainage shall be approved by the surety company, if any, which has issued a payment or performance bond with respect to the contractor, subcontractor or materialman.

 

 

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

 

(vi)           If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the reasonable opinion of Lender in consultation with the Restoration Consultant, be sufficient to pay in full the balance of the costs which are estimated by the Restoration Consultant to be incurred in connection with the completion of the Restoration, Borrower shall deposit the deficiency (the “Net Proceeds Deficiency”) with Lender before any further disbursement of the Net Proceeds shall be made.  The Net Proceeds Deficiency deposited with Lender shall be held by Lender and shall be disbursed for costs actually incurred in connection with the Restoration on the same conditions applicable to the disbursement of the Net Proceeds, and until so disbursed pursuant to this Section 8.4(b) shall constitute additional security for the Debt and other obligations under the Loan Documents.

 

(vii)           The excess, if any, of the Net Proceeds and the remaining balance, if any, of the Net Proceeds Deficiency deposited with Lender after the Restoration Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this Section 8.4(b), and the receipt by Lender of evidence satisfactory to Lender that all costs incurred in connection with the Restoration have been paid in full, shall be remitted by Lender to Borrower, provided no Event of Default shall have occurred and shall be continuing under the Note, this Agreement or any of the other Loan Documents.

 

(c)           All Net Proceeds not required (i) to be made available for the Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant to Section 8.4(b)(vii) may (x) be retained and applied by Lender toward the payment of the Debt whether or not then due and payable in such order, priority and proportions as Lender in its sole discretion shall deem proper, or, (y) at the sole discretion of Lender, the same may be paid, either in whole or in part, to Borrower for such purposes and upon such conditions as Lender shall designate.  If, pursuant to this Section 8.4, Lender shall receive and retain Net Proceeds, the Debt shall be reduced only by the amount thereof received and retained by Lender and actually applied by Lender in reduction thereof.

 

(d)           In the event of foreclosure of the Mortgage, or other transfer of title to the Property in extinguishment in whole or in part of the Debt, all right, title and interest of Borrower in and to the Policies then in force concerning the Property and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure, Lender or other transferee in the event of such other transfer of title.

 

 

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ARTICLE 9

RESERVE FUNDS

 

Section 9.1                      Required Repairs

 

(a)           Borrower shall make the repairs and improvements to the Property set forth on Schedule 9.1 and as more particularly described in the Property Condition Report prepared in connection with the closing of the Loan (such repairs hereinafter referred to as “Required Repairs”).  Borrower shall complete the Required Repairs in a good and workmanlike manner on or before the date that is twelve (12) months from the date hereof or within such other time frame for completion specifically set forth on Schedule 9.1.

 

(b)           Borrower shall establish on the date hereof an Eligible Account with Lender or Lender’s agent to fund the Required Repairs (the “Required Repair Account”) into which Borrower shall deposit on the date hereof the amount of $328,125, which amount equals 125% of the estimated cost for the completion of the Required Repairs.  Amounts so deposited shall hereinafter be referred to as the “Required Repair Funds.”

 

Section 9.2                      Replacements

 

(a)           On an ongoing basis throughout the term of the Loan, Borrower shall make capital repairs, replacements and improvements necessary to keep the Property in good order and repair and in a good marketable condition or prevent deterioration of the Property, including, but not limited to, those repairs, replacements and improvements more particularly described in the Property Condition Report prepared in connection with the closing of the Loan (collectively, the “Replacements”).  Borrower shall complete all Replacements in a good and workmanlike manner as soon as commercially reasonable after commencing to make each such Replacement.

 

(b)           Borrower shall establish on the date hereof an Eligible Account with Lender or Lender’s agent to fund the Replacements (the “Replacement Reserve Account”).  Borrower shall deposit $11,447.71 (the “Replacement Reserve Monthly Deposit”) into the Replacement Reserve Account on each Scheduled Payment Date.  Amounts so deposited shall hereinafter be referred to as “Replacement Reserve Funds.”

 

Section 9.3                      Tenant Improvements and Leasing Commissions

 

(a)           Borrower hereby agrees to (a) perform, or cause to be performed, tenant improvements required under any Lease entered into in accordance with the provisions of Section 5.13 of this Agreement (collectively, the “Tenant Improvements”), and (b) pay the costs of leasing commissions incurred by Borrower in connection with the leasing of the Property or a portion thereof (collectively, “Leasing Commissions”).

 

(b)           Borrower shall establish on the date hereof an Eligible Account with Lender or Lender’s agent to fund Tenant Improvements and Leasing Commissions (the “Leasing Reserve Account”).  Borrower shall deposit with Lender into the Leasing Reserve Account (i) $22,042.42 (the “Leasing Reserve Monthly Deposit”) on each Scheduled Payment Date and (ii) any sum or termination fee payable to Borrower in connection with any Tenant’s election to exercise any early termination option contained in its respective lease of space at the Property (the “Termination Fee Deposit”) on the date of Borrower’s receipt thereof; provided, however, Borrower’s obligation to make the Leasing Reserve Monthly Deposit shall be suspended for so long as the Leasing Reserve Account contains at least $1,300,000.00.  Amounts so deposited shall hereinafter be referred to as the “Leasing Reserve Funds.”

 

 

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Section 9.4                      Required Work

 

Borrower shall diligently pursue all Required Repairs and Replacements and Tenant Improvements (collectively, the “Required Work”) to completion in accordance with the following requirements:

 

(a)           Lender reserves the right, at its option, to approve all contracts or work orders with materialmen, mechanics, suppliers, subcontractors, contractors or other parties providing labor or materials in connection with the Required Work to the extent such contracts or work orders exceed $500,000, which approval shall not be unreasonably withheld, delayed or conditioned.  Upon Lender’s request, Borrower shall assign any contract or subcontract to Lender.

 

(b)           In the event Lender determines in its reasonable discretion that any Required Work is not being or has not been performed in a workmanlike or timely manner, Lender shall have the option to (i) withhold disbursement for such unsatisfactory Required Work and/or (ii) after giving ten (10) days prior written notice to Borrower describing in reasonable particularity the lack of performance or deficient performance in any Required Work being done, and Borrower’s failure to either cure such deficiency within such ten (10) day period to proceed under existing contracts or to contract with third parties to complete such Required Work and to apply the Required Repair Funds or the Replacement Reserve Funds, as applicable, toward the labor and materials necessary to complete such Required Work and to exercise any and all other remedies available to Lender upon an Event of Default hereunder.

 

(c)           In order to facilitate Lender’s completion of the Required Work, Borrower grants Lender the right to enter onto the Property and perform any and all work and labor necessary to complete the Required Work and/or employ watchmen to protect the Property from damage.  All sums so expended by Lender, to the extent not from the Reserve Funds, shall be deemed to have been advanced under the Loan to Borrower and secured by the Mortgage.  For this purpose Borrower constitutes and appoints Lender its true and lawful attorney-in-fact with full power of substitution to complete or undertake the Required Work in the name of Borrower upon Borrower’s failure to do so in a workmanlike and timely manner.  Such power of attorney shall be deemed to be a power coupled with an interest and cannot be revoked.  Borrower empowers said attorney-in-fact as follows: (i) to use any of the Reserve Funds for the purpose of making or completing the Required Work; (ii) to make such additions, changes and corrections to the Required Work as shall be necessary or desirable to complete the Required Work; (iii) to employ such contractors, subcontractors, agents, architects and inspectors as shall be required for such purposes; (iv) to pay, settle or compromise all existing bills and claims which are or may become Liens against the Property, or as may be necessary or desirable for the completion of the Required Work, or for clearance of title; (v) to execute all applications and certificates in the name of Borrower which may be required by any of the contract documents; (vi) to prosecute and defend all actions or proceedings in connection with the Property or the rehabilitation and repair of the Property; and (vii) to do any and every act which Borrower might do on its own behalf to fulfill the terms of this Agreement.

 

 

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(d)           Nothing in this Section 9.4 shall: (i) make Lender responsible for making or completing the Required Work; (ii) require Lender to expend funds in addition to the Reserve Funds to make or complete any Required Work; (iii) obligate Lender to proceed with the Required Work; or (iv) obligate Lender to demand from Borrower additional sums to make or complete any Required Work.

 

(e)           Borrower shall permit Lender and Lender’s agents and representatives (including, without limitation, Lender’s engineer, architect, or inspector) or third parties performing Required Work pursuant to this Section 9.4 to enter onto the Property during normal business hours (subject to the rights of tenants under their Leases) to inspect the progress of any Required Work and all materials being used in connection therewith, to examine all plans and shop drawings relating to such Required Work which are or may be kept at the Property, and to complete any Required Work made pursuant to this Section 9.4.  Borrower shall cause all contractors and subcontractors to cooperate with Lender and Lender’s representatives or such other persons described above in connection with inspections described in this Section 9.4 or the completion of Required Work pursuant to this Section 9.4.

 

(f)           Lender may, to the extent any Required Work would reasonably require an inspection of the Property, inspect the Property at Borrower’s expense prior to making a disbursement of the Reserve Funds in order to verify completion of the Required Work for which reimbursement is sought.  Borrower shall pay Lender a reasonable inspection fee not exceeding $1,000 for each such inspection.  Lender may require that such inspection be conducted by an appropriate independent qualified professional selected by Lender and/or may require a copy of a certificate of completion by an independent qualified professional acceptable to Lender prior to the disbursement of the Reserve Funds.  Borrower shall pay the expense of the inspection as required hereunder, whether such inspection is conducted by Lender or by an independent qualified professional.

 

(g)           The Required Work and all materials, equipment, fixtures, or any other item comprising a part of any Required Work shall be constructed, installed or completed, as applicable, free and clear of all mechanic’s, materialman’s or other Liens (except for Permitted Encumbrances).

 

(h)           Before each disbursement of the Reserve Funds for Required Work of $250,000 or more, Lender may require Borrower to provide Lender with a search of title to the Property effective to the date of the disbursement, which search shows that no mechanic’s or materialmen’s or other Liens of any nature have been placed against the Landlord’s interest in the Property since the date of recordation of the Mortgage and that title to the Landlord’s interest in the Property is free and clear of all Liens (except for Permitted Encumbrances).

 

(i)            All Required Work shall comply with all Legal Requirements and applicable insurance requirements including, without limitation, applicable building codes, special use permits, environmental regulations, and requirements of insurance underwriters.

 

(j)            Borrower hereby assigns to Lender all rights and claims Borrower may have against all Persons supplying labor or materials in connection with the Required Work; provided, however, that Lender may not pursue any such rights or claims unless an Event of Default has occurred and remains uncured.

 

 

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Section 9.5                      Release of Reserve Funds

 

(a)           Upon written request from Borrower and satisfaction of the requirements set forth in this Agreement, Lender shall disburse to Borrower amounts from (i) the Required Repair Account to the extent necessary to pay for or reimburse Borrower for the actual costs of each Required Repair (but not exceeding 125% of the original estimated cost of such Required Repair as set forth on Schedule 9.1, unless Lender has agreed to reimburse Borrower for such excess cost pursuant to Section 9.5(f)),  (ii) the Replacement Reserve Account to the extent necessary to pay for or reimburse Borrower for the actual costs of any approved Replacements or (iii) the Leasing Reserve Account to the extent necessary to pay for or reimburse Borrower for the actual costs of Tenant Improvements and/or Leasing Commissions incurred in connection with Leases entered into in accordance with the Loan Documents, provided that (A) such Leasing Commissions are reasonable and customary for properties similar to the Property and the portion of the Property leased for which such Leasing Commissions are due, and (B) the amount of such Leasing Commissions are determined pursuant to arm’s-length transactions between Borrower and any leasing agent to which a Leasing Commission is due, and excluding any Leasing Commissions which shall be due any member, general partner or shareholder of Borrower or any Affiliate of Borrower.  Notwithstanding the preceding sentence, in no event shall Lender be required to (x) disburse any amounts which would cause the amount of funds remaining in the Required Repair Account after any disbursement (other than with respect to the final disbursement) to be less than 125% of the then current estimated cost of completing all remaining Required Repairs for the Property, (y) disburse funds from any of the Reserve Accounts if an Event of Default exists, or (z) disburse funds from the Replacement Reserve Account to reimburse Borrower for the costs of routine repairs or maintenance to the Property or for costs which are to be reimbursed from funds held in the Required Repair Account or for Tenant Improvements and Leasing Commissions.

 

(b)           With each request for disbursement, Borrower shall certify in writing to Lender that all Required Work has been performed in accordance with all Legal Requirements and that all such Required Work has been completed lien free and paid for in full or will be paid for in full upon disbursement of the requested funds. In addition, each request for disbursement in excess of $50,000 shall be on a form provided or approved by Lender and shall (i) include copies of invoices for all items or materials purchased and all labor or services provided, (ii) specify (A) the Required Work for which the disbursement is requested, (B) the quantity and price of each item purchased, if the Required Work includes the purchase or replacement of specific items, (C) the price of all materials (grouped by type or category) used in any Required Work other than the purchase or replacement of specific items, and (D) the cost of all contracted labor or other services applicable to each Required Work for which such request for disbursement is made, (iii) if requested by Lender, conditional lien waivers from each contractor, supplier, materialman, mechanic or subcontractor with respect to the completion of its work or delivery of its materials, and (iv) include, if such request for disbursement is in connection with Tenant Improvements, a certificate from the Tenant(s) for which the Tenant Improvements have been performed stating that such Tenant Improvements have been completed in a manner satisfactory and acceptable to such Tenant(s) and (unless disbursement is requested pursuant to Section 9.5(d)), such Tenant(s) has accepted the premises demised under the applicable Lease(s), and containing such other information as Lender may require, in form and substance reasonably satisfactory to Lender, and/or if such request for disbursement is in connection with Leasing Commissions, a certificate from the leasing agent that no further sums are due to it in connection with the applicable Lease.  Except as provided in Section 9.5(d), each request for disbursement shall be made only after completion of the Required Repair, Replacement or Tenant Improvement (or the portion thereof completed in accordance with Section 9.5(d)), or the full performance by the leasing agent of its obligations (in the case of Leasing Commissions), as applicable, for which disbursement is requested.  Borrower shall provide Lender evidence satisfactory to Lender in its reasonable judgment of such completion or performance.

 

 

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(c)           Any lien waiver delivered hereunder shall conform to all Legal Requirements and shall cover all work performed and materials supplied (including equipment and fixtures) for the Property by that contractor, supplier, subcontractor, mechanic or materialman through the date covered by the current disbursement request.  In the case of Leasing Commissions, payment shall be made to any leasing agent to which a Leasing Commission is due in the amount of invoices submitted by such leasing agent, provided all of the other conditions for disbursements for such Leasing Commissions are satisfied in the judgment of Lender.

 

(d)           If (i) the cost of any item of Required Work exceeds $50,000, (ii) the contractor performing such Required Work requires periodic payments pursuant to terms of a written contract, and (iii) Lender has approved in writing in advance such periodic payments, a request for disbursement from the Reserve Accounts may be made after completion of a portion of the work under such contract, provided (A) such contract requires payment upon completion of such portion of work, (B) the materials for which the request is made are on site at the Property and are properly secured or have been installed in the Property, (C) all other conditions in this Agreement for disbursement have been satisfied, and (D) in the case of a Replacement, funds remaining in the Replacement Reserve Account are, in Lender’s judgment, sufficient to complete such Replacement and other Replacements when required.

 

(e)           Borrower shall not make a request for, nor shall Lender have any obligation to make, any disbursement from any Reserve Account more frequently than once in any calendar month and (except in connection with the final disbursement) in any amount less than the lesser of (i) $10,000 or (ii) the total cost of the Required Work or Leasing Commission for which the disbursement is requested.

 

(f)            In the event any Borrower requests a disbursement from the Required Repair Account to pay for or to reimburse Borrower for the actual cost of labor or materials used in connection with repairs or improvements other than the Required Repairs specified on Schedule 9.1, or for a Required Repair to the extent the cost of such Required Repair exceeds 125% of the estimated cost of such Required Repair as set forth on Schedule 9.1 (in either case, an “Additional Required Repair”), Borrower shall disclose in writing to Lender the reason why funds in the Required Repair Account should be used to pay for such Additional Required Repair.  If Lender determines that (i) such Additional Required Repair is of the type intended to be covered by the Required Repair Account, (ii) such Additional Required Repair is not covered or is not of the type intended to be covered by the Replacement Reserve Account, (iii) costs for such Additional Required Repair are reasonable, (iv) the funds in the Required Repair Account are sufficient to pay for such Additional Required Repair and all other Required Repairs for the Property specified on Schedule 9.1, and (v) all other conditions for disbursement under this Agreement have been met, Lender may disburse funds from the Required Repair Account.

 

 

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(g)           In the event any Borrower requests a disbursement from the Replacement Reserve Account to pay for or to reimburse Borrower for the actual cost of labor or materials used in connection with repairs or improvements other than the Replacements specified in the Property Condition Report prepared in connection with the closing of the Loan (an “Additional Replacement”), Borrower shall disclose in writing to Lender the reason why funds in the Replacement Reserve Account should be used to pay for such Additional Replacement.  If Lender determines that (i) such Additional Replacement is of the type intended to be covered by the Replacement Reserve Account, (ii) such Additional Replacement is not covered or is not of the type intended to be covered by the Required Repair Account, (iii) costs for such Additional Replacement are reasonable, (iv) the funds in the Replacement Reserve Account are sufficient to pay for such Additional Replacement and all other Replacements for the Property specified in the Property Condition Report, and (v) all other conditions for disbursement under this Agreement have been met, Lender may disburse funds from the Replacement Reserve Account.

 

(h)           Lender’s disbursement of any Reserve Funds or other acknowledgment of completion of any Required Work in a manner satisfactory to Lender shall not be deemed a certification or warranty by Lender to any Person that the Required Work has been completed in accordance with Legal Requirements.

 

(i)            If the funds in any Reserve Account should exceed the amount of payments actually applied by Lender for the purposes of the account, Lender in its sole discretion shall either return any excess to Borrower or credit such excess against future payments to be made to that Reserve Account.  If at any time Lender reasonably determines that the Reserve Funds are not or will not be sufficient to make the required payments, Lender shall notify Borrower of such determination and Borrower shall pay to Lender any amount necessary to make up the deficiency within ten (10) days after notice from Lender to Borrower requesting payment thereof.

 

(j)            The insufficiency of any balance in any of the Reserve Accounts shall not relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents.

 

(k)           Upon the earlier to occur of (i) the timely completion of all Required Repairs and any Additional Required Repairs, if any, in accordance with the requirements of this Agreement, as verified by Lender in its reasonable discretion, or (ii) the payment in full of the Debt, all amounts remaining on deposit, if any, in the Required Repair Account shall be returned to Borrower or the Person shown on Lender's records as being the owner of the Property and no other party shall have any right or claim thereto.

 

(l)            Upon payment in full of the Debt, all amounts remaining on deposit, if any, in the Replacement Reserve Account shall be returned to Borrower or the Person shown on Lender's records as being the owner of the Property and no other party shall have any right or claim thereto.

 

(m)          Upon the payment in full of the Debt, all amounts remaining on deposit, if any, in the Leasing Reserve Account shall be returned to Borrower or the Person shown on Lender's records as being the owner of the Property and no other party shall have any right or claim thereto.

 

 

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Section 9.6                      Tax and Insurance Reserve Funds

 

Borrower shall establish on the date hereof an Eligible Account with Lender or Lender’s agent sufficient to discharge Borrower’s obligations for the payment of Taxes and Insurance Premiums pursuant to Section 5.4 and Section 8.1 hereof (the “Tax and Insurance Reserve Account”) into which Borrower shall deposit an amount, when added to the required monthly deposits set forth in the next sentence, is sufficient to make the payments of Taxes and Insurance Premiums as required herein.  Borrower shall deposit into the Tax and Insurance Reserve Account on each Scheduled Payment Date (a) one-twelfth of the Taxes that Lender estimates will be payable during the next ensuing twelve (12) months or such higher amount necessary to accumulate with Lender sufficient funds to pay all such Taxes at least thirty (30) days prior to the earlier of (i) the date that the same will become delinquent and (ii) the date that additional charges or interest will accrue due to the non-payment thereof, and (b) except to the extent the insurance required hereunder is maintained under a blanket insurance Policy acceptable to Lender in accordance with Section 8.1(c), one-twelfth of the Insurance Premiums that Lender estimates will be payable during the next ensuing twelve (12) months for the renewal of the coverage afforded by the Policies upon the expiration thereof or such higher amount necessary to accumulate with Lender sufficient funds to pay all such Insurance Premiums at least thirty (30) days prior to the expiration of the Policies (said amounts in (a) and (b) above hereinafter called the “Tax and Insurance Reserve Funds”).  Lender will apply the Tax and Insurance Reserve Funds to payments of Taxes and Insurance Premiums required to be made by Borrower pursuant to Section 5.4 and Section 8.1 hereof.  In making any disbursement from the Tax and Insurance Reserve Account, Lender may do so according to any bill, statement or estimate procured from the appropriate public office or tax lien service (with respect to Taxes) or insurer or agent (with respect to Insurance Premiums), without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof.  If the amount of the Tax and Insurance Reserve Funds shall exceed the amounts due for Taxes and Insurance Premiums pursuant to Section 5.4 and Section 8.1 hereof, Lender shall, in its sole discretion, return any excess to Borrower or credit such excess against future payments to be made to the Tax and Insurance Reserve Account.  In allocating any such excess, Lender may deal with the person shown on Lender’s records as being the owner of the Property.  Any amount remaining in the Tax and Insurance Reserve Account after the Debt has been paid in full shall be returned to Borrower or the person shown on Lender’s records as being the owner of the Property and no other party shall have any right or claim thereto.  If at any time Lender reasonably determines that the Tax and Insurance Reserve Funds are not or will not be sufficient to pay Taxes and Insurance Premiums by the dates set forth in (a) and (b) above, Lender shall notify Borrower of such determination and Borrower shall pay to Lender any amount necessary to make up the deficiency within ten (10) days after notice from Lender to Borrower requesting payment thereof.

 

Section 9.7                      Excess Cash; Operating Expenses; Extraordinary Expenses

 

(a)           Borrower shall establish on the date hereof an Eligible Account with Lender or Lender’s agent into which Borrower shall deposit all Excess Cash on each Scheduled Payment Date during the continuation of a Cash Sweep Period (the “Excess Cash Reserve Account”) to be held by Lender as additional security for the Loan.  Amounts so deposited shall hereinafter be referred to as the “Excess Cash Reserve Funds.”  Provided no Event of Default has occurred and is continuing, all sums on deposit in the Excess Cash Reserve Account shall be disbursed to Borrower’s Account upon the earlier to occur of (a) payment in full of the Debt or (b) the discontinuation of a Cash Sweep Period.  In the event a Cash Sweep Period occurs twice during the term of the Loan, Borrower shall not be entitled to any disbursement of Excess Cash Reserve Funds during the remaining term of the Loan, the Cash Sweep Period shall continue, and Borrower shall continue to be obligated to pay Excess Cash to Lender on each Scheduled Payment Date until the Debt is paid in full.

 

 

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(b)           During the continuation of a Cash Sweep Period, Borrower shall submit to Lender not later than the twentieth (20th) day of each calendar month, a statement certified by Borrower in the form required by Lender (i) setting forth those Operating Expenses and Extraordinary Expenses to be paid by Borrower during the following calendar month, (ii) stating that no Operating Expenses or Extraordinary Expenses are more than sixty (60) days past due.  Together with each such request, Borrower shall furnish Lender with bills and all other documents necessary for the payment of the Operating Expenses and/or Extraordinary Expenses which are the subject of such request.  Only those Operating Expenses which are consistent with the Annual Budget, as well as those Operating Expenses and Extraordinary Expenses otherwise approved by Lender in writing in its reasonable discretion, shall be approved for payment and shall be disbursed to Borrower’s Account on the next Scheduled Payment Date.

 

Section 9.8                      Holdback Reserve.

 

(a)           Borrower hereby agrees to perform, or cause to be performed, tenant improvements, tenant’s work and similar items required under the Ulta Lease and the Oshkosh Lease in accordance with the applicable Lease (collectively, the “Holdback Work”).

 

(b)           Borrower shall establish on the date hereof an Eligible Account with Lender or Lender’s agent to fund the Holdback Work (the “Holdback Reserve Account”) into which Borrower shall deposit on the date hereof [$1,400,000]. Amounts so deposited shall hereinafter be referred to as the “Holdback Reserve Funds.”

 

(c)           Lender shall disburse to Borrower (i) [$125,000], upon Lender’s receipt of a Holdback Estoppel reasonably acceptable to Lender from Oshkosh and (ii) [$1,275,000] upon Lender’s receipt of a Holdback Estoppel reasonably acceptable to Lender from Ulta.

 

Section 9.9                      Reserve Funds Generally

 

(a)                      (i) Except for the Required Repair Account, the Replacement Reserve Account, the Leasing Reserve Account, the Holdback Reserve Account and the Excess Cash Reserve Account, no earnings or interest on the Reserve Accounts shall be payable to Borrower.  Neither Lender nor any loan servicer that at any time holds or maintains such non-interest-bearing Reserve Accounts shall have any obligation to keep or maintain such Reserve Accounts or any funds deposited therein in interest-bearing accounts.  If Lender or any such loan servicer elects in its sole and absolute discretion to keep or maintain any non-interest-bearing Reserve Account or any funds deposited therein in an interest-bearing account, the account shall be an Eligible Account and (A) such funds shall not be invested except in Permitted Investments, and (B) all interest earned or accrued thereon shall be for the account of and be retained by Lender or such loan servicer.

 

 

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(ii)           Funds deposited in the Required Repair Account, the Replacement Reserve Account, the Holdback Reserve Account, the Leasing Reserve Account and the Excess Cash Reserve Account shall be held in an interest-bearing business savings account and interest shall be credited to Borrower.  In no event shall Lender or any loan servicer that at any time holds or maintains such Reserve Accounts be required to select any particular interest-bearing account or the account that yields the highest rate of interest, provided that selection of the account shall be consistent with the general standards at the time being utilized by Lender or the loan servicer, as applicable, in establishing similar accounts for loans of comparable type.  All such interest shall be and become part of the applicable Reserve Account and shall be disbursed in accordance with the terms hereof; provided, however, that Lender may, at its election, retain any such interest for its own account during the occurrence and continuance of an Event of Default.  Borrower agrees that it shall include all interest on the interest-bearing Reserve Funds as the income of Borrower (and, if Borrower is a partnership or other pass-through entity, the partners, members or beneficiaries of Borrower, as the case may be), and shall be the owner of the such Reserve Funds for federal and applicable state and local tax purposes, except to the extent that Lender retains any interest for its own account during the occurrence and continuance of an Event of Default as provided herein.

 

(b)           Borrower grants to Lender a first-priority perfected security interest in, and assigns and pledges to Lender, each of the Reserve Accounts and any and all Reserve Funds now or hereafter deposited in the Reserve Accounts as additional security for payment of the Debt.  Until expended or applied in accordance herewith, the Reserve Accounts and the Reserve Funds shall constitute additional security for the Debt.  The provisions of this Section 9.9 are intended to give Lender or any subsequent holder of the Loan “control” of the Reserve Accounts within the meaning of the UCC.

 

(c)           The Reserve Accounts and any and all Reserve Funds now or hereafter deposited in the Reserve Accounts shall be subject to the exclusive dominion and control of Lender, which shall hold the Reserve Accounts and any or all Reserve Funds now or hereafter deposited in the Reserve Accounts subject to the terms and conditions of this Agreement.  Borrower shall have no right of withdrawal from the Reserve Accounts or any other right or power with respect to the Reserve Accounts or any or all of the Reserve Funds now or hereafter deposited in the Reserve Accounts, except as expressly provided in this Agreement.

 

(d)           Lender shall furnish or cause to be furnished to Borrower, without charge, an annual accounting of each Reserve Account in the normal format of Lender or its loan servicer, showing credits and debits to such Reserve Account and the purpose for which each debit to each Reserve Account was made.

 

(e)           As long as no Event of Default has occurred, Lender shall make disbursements from the Reserve Accounts in accordance with this Agreement.  All such disbursements shall be deemed to have been expressly pre-authorized by Borrower, and shall not be deemed to constitute the exercise by Lender of any remedies against Borrower unless an Event of Default has occurred and is continuing and Lender has expressly stated in writing its intent to proceed to exercise its remedies as a secured party, pledgee or lienholder with respect to the Reserve Accounts.

 

 

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(f)           If any Event of Default occurs, Borrower shall immediately lose all of its rights to receive disbursements from the Reserve Accounts until the earlier to occur of (i) the date on which such Event of Default is cured to Lender’s satisfaction, or (ii) the payment in full of the Debt.  In addition, at Lender's election, Borrower shall lose all of its rights to receive interest on the interest-bearing Reserve Accounts during the occurrence and continuance of an Event of Default. Upon the occurrence of any Event of Default, Lender may exercise any or all of its rights and remedies as a secured party, pledgee and lienholder with respect to the Reserve Accounts.  Without limitation of the foregoing, upon any Event of Default, Lender may use and disburse the Reserve Funds (or any portion thereof) for any of the following purposes: (A) repayment of the Debt, including, but not limited to, principal prepayments and the prepayment premium applicable to such full or partial prepayment (as applicable); (B) reimbursement of Lender for all losses, fees, costs and expenses (including, without limitation, reasonable legal fees) suffered or incurred by Lender as a result of such Event of Default; (C) payment of any amount expended in exercising any or all rights and remedies available to Lender at law or in equity or under this Agreement or under any of the other Loan Documents; (D) payment of any item from any of the Reserve Accounts as required or permitted under this Agreement; or (E) any other purpose permitted by applicable law; provided, however, that any such application of funds shall not cure or be deemed to cure any Event of Default.  Without limiting any other provisions hereof, each of the remedial actions described in the immediately preceding sentence shall be deemed to be a commercially reasonable exercise of Lender's rights and remedies as a secured party with respect to the Reserve Funds and shall not in any event be deemed to constitute a setoff or a foreclosure of a statutory banker's lien.  Nothing in this Agreement shall obligate Lender to apply all or any portion of the Reserve Funds to effect a cure of any Event of Default, or to pay the Debt, or in any specific order of priority.  The exercise of any or all of Lender's rights and remedies under this Agreement or under any of the other Loan Documents shall not in any way prejudice or affect Lender's right to initiate and complete a foreclosure under the Mortgage.

 

(g)           The Reserve Funds shall not constitute escrow or trust funds and may be commingled with other monies held by Lender.  Notwithstanding anything else herein to the contrary, Lender may commingle in one or more Eligible Accounts any and all funds controlled by Lender, including, without limitation, funds pledged in favor of Lender by other borrowers, whether for the same purposes as the Reserve Accounts or otherwise; provided, however, such commingling by Lender shall not constitute a default by Borrower pursuant to the Section of Section 6.1 hereof.  Without limiting any other provisions of this Agreement or any other Loan Document, the Reserve Accounts may be established and held in such name or names as Lender or its loan servicer, as agent for Lender, shall deem appropriate, including, without limitation, in the name of Lender or such loan servicer as agent for Lender.  In the case of any Reserve Account which is held in a commingled account, Lender or its loan servicer, as applicable, shall maintain records sufficient to enable it to determine at all times which portion of such account is related to the Loan.  The Reserve Accounts are solely for the protection of Lender to be used in accordance with the terms hereof.  With respect to the Reserve Accounts, Lender shall have no responsibility beyond the allowance of due credit for the sums actually received by Lender or beyond the reimbursement or payment of the costs and expenses for which such accounts were established in accordance with their terms.  Upon assignment of the Loan by Lender, any Reserve Funds shall be turned over to the assignee and any responsibility of Lender as assignor shall terminate.  The requirements of this Agreement concerning the Reserve Accounts in no way supersede, limit or waive any other rights or obligations of the parties under any of the Loan Documents or under applicable law.

 

 

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(h)           Borrower shall not, without obtaining the prior written consent of Lender, further pledge, assign or grant any security interest in the Reserve Accounts or the Reserve Funds deposited therein or permit any Lien to attach thereto, except for the security interest granted in this Section 9.9, or any levy to be made thereon, or any UCC Financing Statements, except those naming Lender as the secured party, to be filed with respect thereto.

 

(i)            Borrower will maintain the security interest created by this Section 9.9 as a first priority perfected security interest and will defend the right, title and interest of Lender in and to the Reserve Accounts and the Reserve Funds against the claims and demands of all Persons whomsoever.  At any time and from time to time, upon the written request of Lender, and at the sole expense of Borrower, Borrower will promptly and duly execute and deliver such further instruments and documents and will take such further actions as Lender reasonably may request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted.

 

(j)            Lender shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other paper, document or signature believed by Lender to be genuine, and it may be assumed conclusively that any Person purporting to give any of the foregoing in connection with the Reserve Account’s has been duly authorized to do so.  Lender may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by them hereunder and in good faith in accordance therewith.  Lender shall not be liable to Borrower for any act or omission done or omitted to be done by Lender in reliance upon any instruction, direction or certification received by Lender and without gross negligence or willful misconduct.

 

(k)           Beyond the exercise of reasonable care in the custody thereof, Lender shall have any duty as to any Reserve Funds in its possession or control as agent therefor or bailee thereof or any income thereon or the preservation of rights against any person or otherwise with respect thereto.  In no event shall Lender or its Affiliates, agents, employees or bailees, be liable or responsible for any loss or damage to any of the Reserve Funds, or for any diminution in value thereof, by reason of the act or omission of Lender, except to the extent that such loss or damage results from Lender’s gross negligence or willful misconduct or intentional nonperformance by Lender of its obligations under this Agreement.

 

ARTICLE 10

CASH MANAGEMENT

 

Section 10.1                      Lockbox Account and Cash Management Account

 

(a)           Borrower acknowledges and confirms that Borrower has established, and Borrower covenants that it shall maintain, pursuant to the Lockbox Agreement, a non-interest bearing Eligible Account into which Borrower shall, and shall cause Manager to, deposit or cause to be deposited, all Rents and other revenue from the Property (such account, all funds at any time on deposit therein and any proceeds, replacements or substitutions of such account or funds therein, are collectively referred to herein as the “Lockbox Account”).  In the event Lockbox Bank ceases to qualify as an Eligible Institution, Borrower shall cooperate with Lender in designating a successor financial institution that meets such qualifications and is otherwise acceptable to Lender and transferring the Lockbox Account to such institution, each within thirty (30) days after request by Lender.  In the event Borrower fails to do so, Lender shall have the right, and Borrower hereby grants to Lender a power of attorney (which power of attorney shall be coupled with an interest and irrevocable so long as any portion of the Debt remains outstanding), to designate a successor institution to serve as Lockbox Bank.

 

 

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(b)           Simultaneously herewith, Lender shall establish a non-interest bearing Eligible Account into which funds in the Lockbox Account shall be transferred pursuant to the terms of Section 10.2(b) hereof (such account, the sub-accounts thereof, all funds at any time on deposit therein and any proceeds, replacements or substitutions of such account or funds therein, are collectively referred to herein as the “Cash Management Account”).  The following subaccounts of the Cash Management Account shall be established and maintained on a ledger-entry basis:

 

(i)            A subaccount into which amounts required to be deposited into the Tax and Insurance Reserve Account pursuant to Section 9.6 hereof (the “Tax and Insurance Reserve Subaccount”) shall be allocated;

 

(ii)           A subaccount into which amounts required to be paid by Borrower pursuant to Lockbox Bank or Lender pursuant to Section 10.1(e) hereof (the “Account Maintenance Subaccount”) shall be allocated;

 

(iii)          A subaccount into which the Monthly Payment Amount and other amounts required to be paid to Lender pursuant to the Note, this Agreement and the other Loan Documents (the “Debt Service Subaccount”) shall be allocated;

 

(iv)          A subaccount into which amounts required to be deposited into the Replacement Reserve Account pursuant to Section 9.2 hereof (the “Replacement Reserve Subaccount”) shall be allocated;

 

(v)           A subaccount into which amounts required to be deposited into the Leasing Reserve Account pursuant to Section 9.3 hereof (the “Leasing Reserve Subaccount”) shall be allocated;

 

(vi)          A subaccount into which amounts required to be paid to Borrower for Operating Expenses pursuant to Section 9.7(b) hereof (the “Operating Expense Subaccount”) shall be allocated;

 

(vii)         A subaccount into which amounts required to be paid to Borrower for Extraordinary Expenses pursuant to Section 9.7(b) hereof (the “Extraordinary Expense Subaccount”) shall be allocated;

 

(viii)        A subaccount into which all Excess Cash required to be deposited into the Excess Cash Reserve Account pursuant to Section 9.7(a) hereof (the “Excess Cash Subaccount”) shall be allocated; and

 

(ix)           A subaccount into which all amounts required to be paid to Borrower after application of all disbursements required pursuant to Section 10.2(c) hereof (the “Borrower Subaccount”) shall be allocated.

 

 

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(c)           The Lockbox Account and Cash Management Account shall each be in the name of Borrower for the benefit of Lender, provided that Borrower shall be the owner of all funds on deposit in such accounts for federal and applicable state and local tax purposes.  Sums on deposit in the Cash Management Account shall not be invested except in such Permitted Investments as determined and directed by Lender and all income earned thereon shall be the income of Borrower and be applied to and become part of the Cash Management Account, to be disbursed in accordance with this Article 10.  Neither Lockbox Bank nor Lender shall have any liability for any loss resulting from the investment of funds in Permitted Investments in accordance with the terms and conditions of this Agreement.

 

(d)           The Lockbox Account and Cash Management Account shall be subject to the exclusive dominion and control of Lender and, except as otherwise expressly provided herein, neither Borrower, Manager nor any other party claiming on behalf of, or through, Borrower or Manager, shall have any right of withdrawal therefrom or any other right or power with respect thereto.

 

(e)           Borrower agrees to pay the reasonable and customary fees, expenses and charges (which fees, expenses and charges shall be subject to change from time to time) of (i) Lockbox Bank in connection with administering and maintaining the Lockbox Account and processing all items for payment therefrom, and (ii) Lender in connection with administering and maintaining the Cash Management Account and processing all distributions therefrom.

 

(f)           Lender shall be responsible for the performance only of such duties with respect to the Cash Management Account as are specifically set forth herein, and no duty shall be implied from any provision hereof.  Lender shall not be under any obligation or duty to perform any act which would involve it in expense or liability or to institute or defend any suit in respect hereof, or to advance any of its own monies.  Borrower shall indemnify and hold Lender and its directors, employees, officers and agents harmless from and against any loss, cost or damage (including, without limitation, reasonable attorneys’ fees and disbursements) incurred by such parties in connection with the Cash Management Account other than such as result from the gross negligence or willful misconduct of Lender or intentional nonperformance by Lender of its obligations under this Agreement.

 

Section 10.2                      Deposits and Withdrawals

 

(a)           Borrower represents, warrants and covenants that:

 

(i)           Concurrently with the execution of this Agreement, Borrower shall notify and advise each Tenant under each Lease in effect as of the date hereof and Borrower shall notify and advise each Tenant under any Lease executed after the date hereof to send directly to the Lockbox all payments of Rents or any other item payable under such Leases pursuant to an instruction letter in the form of Exhibit B attached hereto (a “Tenant Direction Letter”).  If Borrower fails to provide any such notice (and without prejudice to Lender’s rights with respect to such default), Lender shall have the right, and Borrower hereby grants to Lender a power of attorney (which power of attorney shall be coupled with an interest and irrevocable so long as any portion of the Debt remains outstanding), to sign and deliver a Tenant Direction Letter;

 

 

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(ii)           Borrower shall, and shall cause Manager to, instruct all Persons that maintain open accounts with Borrower or Manager with respect to the Property or with whom Borrower or Manager does business on an “accounts receivable” basis with respect to the Property to deliver all payments due under such accounts to the Lockbox.  Neither Borrower nor Manager shall direct any such Person to make payments due under such accounts in any other manner;

 

(iii)           All Rents or other income from the Property shall (A) be deemed additional security for payment of the Debt and shall be held in trust for the benefit, and as the property, of Lender, (B) not be commingled with any other funds or property of Borrower or Manager, and (C) if received by Borrower or Manager notwithstanding the delivery of a Tenant Direction Letter, be deposited in the Lockbox Account within one (1) Business Day of receipt;

 

(iv)           Without the prior written consent of Lender, so long as any portion of the Debt remains outstanding, neither Borrower nor Manager shall terminate, amend, revoke or modify any Tenant Direction Letter in any manner whatsoever or direct or cause any Tenant to pay any amount in any manner other than as provided in the related Tenant Direction Letter; and

 

(v)            So long as any portion of the Debt remains outstanding, neither Borrower, Manager nor any other Person shall open or maintain any accounts other than the Lockbox Account into which revenues from the ownership and operation of the Property are deposited.  The foregoing shall not prohibit Borrower from utilizing one or more separate accounts for the disbursement or retention of funds that have been transferred to Borrower pursuant to the express terms of this Agreement.

 

(b)           Borrower hereby irrevocably authorizes Lender to instruct Lockbox Bank to transfer, or cause to be transferred, on each Business Day by wire transfer or other method of transfer mutually agreeable to Lockbox Bank and Lender of immediately available funds, all collected and available balances in the Lockbox Account (subject to any minimum retained or “peg” balance that may be required pursuant to the terms of the Lockbox Agreement) to the Cash Management Account to be held until disbursed by Lender pursuant to Section 10.2(d).

 

(c)           Provided no Event of Default shall have occurred and be continuing, on or before each Scheduled Payment Date Lender shall apply all funds on deposit in the Cash Management Account to the following subaccounts of the Cash Management Account in the following amounts and order of priority:

 

(i)           First, to the Tax and Insurance Reserve Subaccount, in an amount up to the monthly deposit to the Tax and Insurance Reserve Account due on the next Scheduled Payment Date;

 

 

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(ii)           Second, to the Account Maintenance Subaccount, up to the amount due and payable by Borrower to Lockbox Bank or Lender pursuant to Section 10.1(e) hereof;

 

(iii)          Third, to the Debt Service Subaccount, in an amount up to the Monthly Payment Amount due on the next Scheduled Payment Date;

 

(iv)          Fourth, to the Replacement Reserve Subaccount, in an amount up to the Replacement Reserve Monthly Deposit due on the next Scheduled Payment Date;

 

(v)           Fifth, to the Leasing Reserve Subaccount, in an amount up to the Leasing Reserve Monthly Deposit due on the next Scheduled Payment Date and any Termination Fee Deposit due;

 

(vi)          Sixth, to the Debt Service Subaccount, in an amount up to any interest accruing at the Default Rate, late payment charges, and any other sums due and payable to Lender under the Note, this Agreement or the other Loan Documents;

 

(vii)         Seventh, during the continuation of a Cash Sweep Period, to the Operating Expense Subaccount, up to the amount approved pursuant to Section 9.7(b) for disbursement to Borrower for Operating Expenses on the next Scheduled Payment Date;

 

(viii)        Eighth, during the continuation of a Cash Sweep Period, to the Extraordinary Expense Subaccount, up to the amount approved pursuant to Section 9.7(b) for disbursement to Borrower for Extraordinary Expenses on the next Scheduled Payment Date; and

 

(ix)           Ninth, during the continuation of a Cash Sweep Period, to the Excess Cash Subaccount, otherwise to the Borrower Subaccount, all amounts remaining in the Cash Management Account after all prior allocations under this Section 10.2(c) (the “Excess Cash”).

 

(d)           Provided no Event of Default shall have occurred and be continuing, on each Scheduled Payment Date (and if such day is not a Business Day, then the immediately preceding day which is a Business Day) commencing the month during which the first Scheduled Payment Date occurs, Borrower hereby irrevocably authorizes Lender to withdraw all funds on deposit in the Cash Management Account and disburse such funds as follows:

 

(i)            Funds on deposit in the Tax and Insurance Reserve Subaccount, to Lender for deposit into the Tax and Insurance Reserve Account to be held and disbursed in accordance with Section 9.6;

 

(ii)           Funds on deposit in the Account Maintenance Subaccount, to Lockbox Bank or Lender, as applicable, for amounts payable pursuant to Section 10.1(e);

 

(iii)          Funds on deposit in the Debt Service Subaccount, to Lender for payment of the Monthly Payment Amount due on such Scheduled Payment Date together with any interest accruing at the Default Rate, late payment charges, and any other sums due and payable to Lender under the Note, this Agreement or the other Loan Documents;

 

 

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(iv)          Funds on deposit in the Replacement Reserve Subaccount, to Lender for deposit into the Replacement Reserve Account to be held and disbursed in accordance with Section 9.5;

 

(v)           Funds on deposit in the Leasing Reserve Subaccount, to Lender for deposit into the Leasing Reserve Account to be held and disbursed in accordance with Section 9.5;

 

(vi)          During the continuation of a Cash Sweep Period, funds on deposit in the Operating Expense Subaccount, to Borrower’s Account for payment of Operating Expenses for such month pursuant to Section 9.7(b);

 

(vii)         During the continuation of a Cash Sweep Period, funds on deposit in the Extraordinary Expense Subaccount, to Borrower’s Account for payment of Extraordinary Expenses for such month pursuant to Section 9.7(b);

 

(viii)        During the continuation of a Cash Sweep Period, funds on deposit in the Excess Cash Subaccount, to Lender for deposit into the Excess Cash Reserve Account to be held and disbursed in accordance with Section 9.7(a); and

 

(ix)           Funds on deposit in the Borrower Subaccount, to Borrower’s Account.

 

(e)           Notwithstanding anything to the contrary herein, Borrower acknowledges that Borrower is responsible for monitoring the sufficiency of funds deposited in the Cash Management Account and that Borrower is liable for any deficiency in available funds, irrespective of whether Borrower has received any account statement, notice or demand from Lender or Lender’s servicer.  If the amount on deposit in the Cash Management Account is insufficient to allocate the full amounts required pursuant to Section 10.2(c)(i) through (vi) above, Borrower shall deposit such deficiency into the Cash Management Account within five (5) days (provided that such five day period shall not constitute a grace period for any default or Event of Default under this Agreement or any other Loan Document based on a failure to satisfy any monetary obligation provided in any Loan Document).

 

(f)           If an Event of Default shall have occurred and be continuing, Borrower hereby irrevocably authorizes Lender to make any and all withdrawals from the Lockbox Account and Cash Management Account and transfers between any of the Reserve Accounts as Lender shall determine in Lender’s sole and absolute discretion and Lender may use all funds contained in any such accounts for any purpose, including but not limited to repayment of the Debt in such order, proportion and priority as Lender may determine in its sole and absolute discretion.  Lender’s right to withdraw and apply funds as stated herein shall be in addition to all other rights and remedies provided to Lender under this Agreement, the Note, the Mortgage and the other Loan Documents.

 

 

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Section 10.3                      Security Interest

 

(a)           To secure the full and punctual payment of the Debt and performance of all obligations of Borrower now or hereafter existing under this Agreement and the other Loan Documents, Borrower hereby grants to Lender a first-priority perfected security interest in the Lockbox Account and Cash Management Account, all interest, cash, checks, drafts, certificates and instruments, if any, from time to time deposited or held therein, any and all amounts invested in Permitted Investments, and all “proceeds” (as defined in the UCC as in effect in the state in which the Lockbox Account and Cash Management Account are located or maintained) of any or all of the foregoing.  Furthermore, Borrower shall not, without obtaining the prior written consent of Lender, further pledge, assign or grant any security interest in any of the foregoing or permit any Lien to attach thereto or any levy to be made thereon or any UCC Financing Statements to be filed with respect thereto.  Borrower will maintain the security interest created by this Section 10.3(a) as a first priority perfected security interest and will defend the right, title and interest of Lender in and to the Lockbox Account and Cash Management Account against the claims and demands of all Persons whomsoever.

 

(b)           Borrower authorizes Lender to file any financing statement or statements required by Lender to establish or maintain the validity, perfection and priority of the security interest granted herein in connection with the Lockbox Account and Cash Management Account.  Borrower  agrees that at any time and from time to time, at the expense of Borrower, Borrower will promptly and duly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby (including, without limitation, any security interest in and to any Permitted Investments) or to enable Lender to exercise and enforce its rights and remedies hereunder.

 

(c)           Upon the occurrence of an Event of Default, Lender may exercise any or all of its rights and remedies as a secured party, pledgee and lienholder with respect to the Lockbox Account and Cash Management Account.  Without limitation of the foregoing, upon any Event of Default, Lender may use the Lockbox Account and Cash Management Account for any of the following purposes: (A) repayment of the Debt, including, but not limited to, principal prepayments and the prepayment premium applicable to such full or partial prepayment (as applicable); (B) reimbursement of Lender for all losses, fees, costs and expenses (including, without limitation, reasonable legal fees) suffered or incurred by Lender as a result of such Event of Default; (C) payment of any amount expended in exercising any or all rights and remedies available to Lender at law or in equity or under this Agreement or under any of the other Loan Documents; (D) payment of any item as required or permitted under this Agreement; or (E) any other purpose permitted by applicable law; provided, however, that any such application of funds shall not cure or be deemed to cure any Event of Default.  Without limiting any other provisions hereof, each of the remedial actions described in the immediately preceding sentence shall be deemed to be a commercially reasonable exercise of Lender's rights and remedies as a secured party with respect to the Lockbox Account and Cash Management Account and shall not in any event be deemed to constitute a setoff or a foreclosure of a statutory banker's lien.  Nothing in this Agreement shall obligate Lender to apply all or any portion of the Lockbox Account or Cash Management Account to effect a cure of any Event of Default, or to pay the Debt, or in any specific order of priority.  The exercise of any or all of Lender's rights and remedies under this Agreement or under any of the other Loan Documents shall not in any way prejudice or affect Lender's right to initiate and complete a foreclosure under the Mortgage.

 

 

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(d)           Notwithstanding anything to the contrary contained herein, For purposes of this Article 10 only, “Business Day” shall mean a day on which Lender and Lockbox Bank are both open for the conduct of substantially all of their respective banking business at the office in the city in which the Note is payable, with respect to Lender, and at the office in the city where the Lockbox Account is maintained, with respect to Lockbox Bank (in both instances, excluding Saturdays and Sundays).

 

ARTICLE 11

EVENTS OF DEFAULT; REMEDIES

 

Section 11.1                      Event of Default

 

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

 

(a)           if any portion of the Debt is not paid prior to the fifth (5th) day following the date the same is due or if the entire Debt is not paid on or before the Maturity Date;

 

(b)           except as otherwise expressly provided in the Loan Documents, if any of the Taxes or Other Charges are not paid when the same are due and payable, unless there is sufficient money in the Tax and Insurance Reserve Account for payment of amounts then due and payable and Lender’s access to such money has not been constrained or restricted in any manner;

 

(c)           if (i) the Policies are not kept in full force and effect, (ii) the Acord  28 (or similar) certificate is not delivered to Lender in accordance with Section 8.1 or (iii) certified copies of the Policies are not delivered to Lender upon request, provided such copies are available;

 

(d)           if Borrower is in material breach of any covenant with respect to itself or any SPE Component Entity (if any) contained in Article 6 or any covenant contained in Article 7 hereof;

 

(e)           if any representation or warranty of, or with respect to, Borrower, Borrower Principal, any SPE Component Entity, or any member, general partner, principal or beneficial owner of any of the foregoing, made herein, in any other Loan Document, or in any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan shall have been false or misleading in any material respect when made;

 

(f)           if (i) Borrower, or any managing member or general partner of Borrower, Borrower Principal, or any SPE Component Entity (if any) shall commence any case, proceeding or other action (A) under any Creditors Rights Laws, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Borrower, any managing member or general partner of Borrower, Borrower Principal, or any SPE Component Entity (if any) shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Borrower, any managing member or general partner of Borrower, Borrower Principal, or any SPE Component Entity (if any) any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against Borrower, any managing member or general partner of Borrower, Borrower Principal, or any SPE Component Entity (if any) any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of any order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) Borrower, any managing member or general partner of Borrower, Borrower Principal, or any SPE Component Entity (if any) shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Borrower, any managing member or general partner of Borrower, Borrower Principal, or any SPE Component Entity (if any) shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;

 

 

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

 

(h)           if the Property becomes subject to any mechanic’s, materialman’s or other Lien other than a Lien for any Taxes or Other Charges not then due and payable and the Lien shall remain undischarged of record (by payment, bonding or otherwise) for a period of ninety (90) days;

 

(i)           if any federal tax lien is filed against Borrower, any member or general partner of Borrower, Borrower Principal, or any SPE Component Entity (if any) or the Property and same is not discharged of record within thirty (30) days after same is filed;

 

(j)           if a judgment is filed against Borrower in excess of $100,000 which is not vacated, discharged or bonded within thirty (30) days but only with respect to judgments that are not covered by the insurance maintained by Borrower pursuant to the terms of this Agreement;

 

(k)           if any default occurs under any guaranty or indemnity executed in connection herewith and such default continues after the expiration of applicable grace periods, if any;

 

(l)           if Borrower shall permit any event within its control to occur that would cause any REA to terminate without notice or action by any party thereto or would entitle any party to terminate any REA and the term thereof by giving notice to Borrower; or any REA shall be surrendered, terminated or canceled for any reason or under any circumstance whatsoever except as provided for in such REA; or any term of any REA shall be modified or supplemented without Lender’s prior written consent; or Borrower shall fail, within ten (10) Business Days after demand by Lender, to exercise its option to renew or extend the term of any REA or shall fail or neglect to pursue diligently all actions necessary to exercise such renewal rights pursuant to such REA except as provided for in such REA

 

 

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(m)          if any Letter of Credit is not renewed, replaced or substituted with cash in accordance with the terms hereof at least thirty (30) days prior to the expiration date of such Letter of Credit;

 

(n)           in the event that the long term credit rating of the Issuing Bank falls below the Minimum L/C Rating and Borrower fails to deliver to Lender within fifteen (15) Business Days cash into the respective Reserve Account or a Letter of Credit in an amount equal to the amount of the Letter of Credit being replaced from an Issuing Bank having a credit rating of no less than the Minimum L/C Rating; or

 

(o)           if Borrower shall continue to be in default under any other term, covenant or condition of this Agreement or any of the Loan Documents for more than ten (10) days after notice from Lender in the case of any default which can be cured by the payment of a sum of money or for thirty (30) days after notice from Lender in the case of any other default, provided that if such default cannot reasonably be cured within such thirty (30) day period and Borrower shall have commenced to cure such default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for so long as it shall require Borrower in the exercise of due diligence to cure such default, it being agreed that no such extension shall be for a period in excess of sixty (60) days.

 

Section 11.2                      Remedies

 

(a)           Upon the occurrence of an Event of Default (other than an Event of Default described in Section 11.1(f) above) and at any time thereafter Lender may, in addition to any other rights or remedies available to it pursuant to this Agreement and the other Loan Documents or at law or in equity, take such action, without notice or demand, that Lender deems advisable to protect and enforce its rights against Borrower and in the Property, including, without limitation, declaring the Debt to be immediately due and payable, and Lender may enforce or avail itself of any or all rights or remedies provided in the Loan Documents against Borrower and the Property, including, without limitation, all rights or remedies available at law or in equity; and upon any Event of Default described in Section 11.1(f) above, the Debt and all other obligations of Borrower hereunder and under the other Loan Documents shall immediately and automatically become due and payable, without notice or demand, and Borrower hereby expressly waives any such notice or demand, anything contained herein or in any other Loan Document to the contrary notwithstanding.

 

(b)           Upon the occurrence of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to Lender against Borrower under this Agreement or any of the other Loan Documents executed and delivered by, or applicable to, Borrower or at law or in equity may be exercised by Lender at any time and from time to time, whether or not all or any of the Debt shall be declared due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under any of the Loan Documents with respect to the Property.  Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singularly, successively, together or otherwise, at such time and in such order as Lender may determine in its sole discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of Lender permitted by law, equity or contract or as set forth herein or in the other Loan Documents.

 

 

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Section 11.3                      Provisions Regarding Letters of Credit

 

(a)           Any Letter of Credit delivered under this Agreement shall be additional security for the payment of the Debt.  Upon the occurrence and continuance of an Event of Default, Lender shall have the right, at its option, to draw on any such Letter of Credit and to apply all or any part thereof to payment of the Debt in such order, proportion or priority as Lender may determine.  On the Maturity Date if the Debt is not paid in full, any such Letter of Credit may be applied to reduce the Debt.

 

(b)           In addition to any other right Lender may have to draw upon a Letter of Credit pursuant to the terms and conditions of this Agreement, Lender shall have the additional rights to draw in full on any Letter of Credit: (i) if Lender has received a notice from the Issuing Bank that the Letter of Credit will not be renewed and a substitute Letter of Credit in the amount of the Letter of Credit is not provided at least thirty (30) days prior to the date on which the outstanding Letter of Credit is scheduled to expire; (ii) upon receipt of notice from the Issuing Bank that the Letter of Credit will be terminated; or (iii) if the Issuing Bank shall cease to satisfy the Minimum L/C Rating and Borrower fails to deliver cash into the respective Reserve Account or a substitute Letter of Credit in the amount of the Letter of Credit within fifteen (15) Business Days of such event.  Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw down on any Letter of Credit upon the happening of an event specified in (i), (ii) or (iii) above and shall not be liable for any losses sustained by Borrower due to the insolvency of the Issuing Bank if Lender has not drawn the Letter of Credit and in the event of the insolvency of the Issuing Bank or if the Issuing Bank ceases to satisfy the Minimum L/C Rating, Borrower shall provide to Lender within the time frames set forth above substitute Letter of Credit meeting the requirements hereof.

 

ARTICLE 12

ENVIRONMENTAL PROVISIONS

 

Section 12.1                      Environmental Representations and Warranties

 

Borrower represents and warrants, based upon an Environmental Report of the Property and information that Borrower knows or should reasonably have known, that:  (a) there are no Hazardous Materials or underground storage tanks in, on, or under the Property, except those that are both (i) in compliance with Environmental Laws and with permits issued pursuant thereto (if such permits are required), if any, and (ii) either (A) in the case of Hazardous Materials, in amounts not in excess of that necessary to operate the Property for the purposes set forth herein or (B) fully disclosed to and approved by Lender in writing pursuant to an Environmental Report; (b) there are no past, present or threatened Releases of Hazardous Materials in violation of any Environmental Law or which would require remediation by a Governmental Authority in, on, under or from the Property except as described in the Environmental Report; (c) there is no threat of any Release of Hazardous Materials migrating to the Property except as described in the Environmental Report; (d) there is no past or present non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with the Property except as described in the Environmental Report; (e) Borrower does not know of, and has not received, any written or oral notice or other communication from any Person relating to Hazardous Materials in, on, under or from the Property; (f) the Property is free of Mold; and (g) Borrower has truthfully and fully provided to Lender, in writing, any and all information relating to environmental conditions in, on, under or from the Property known to Borrower or contained in Borrower’s files and records, including but not limited to any reports relating to Hazardous Materials in, on, under or migrating to or from the Property and/or to the environmental condition of or the presence of Mold at the Property.

 

 

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Section 12.2                      Environmental Covenants

 

Borrower covenants and agrees that so long as Borrower owns, manages, is in possession of, or otherwise controls the operation of the Property:  (a) all uses and operations on or of the Property, whether by Borrower or any other Person, shall be in compliance with all Environmental Laws and permits issued pursuant thereto; (b) there shall be no Releases of Hazardous Materials in, on, under or from the Property; (c) there shall be no Hazardous Materials in, on, or under the Property, except those that are both (i) in compliance with all Environmental Laws and with permits issued pursuant thereto, if and to the extent required, and (ii) (A) in amounts not in excess of that necessary to operate the Property for the purposes set forth herein or (B) fully disclosed to and approved by Lender in writing or (C) with respect to Mold, not in a condition, location, or of a type which may pose a risk to human health or safety or the environment or which may result in damage to or would adversely affect or impair the value or marketability of the Property; (d) Borrower shall keep the Property free and clear of all Environmental Liens; (e) Borrower shall, at its sole cost and expense, fully and expeditiously cooperate in all activities pursuant to Section 12.4 below, including but not limited to providing all relevant information and making knowledgeable persons available for interviews; (f) Borrower shall, at its sole cost and expense, perform any environmental site assessment or other investigation of environmental conditions in connection with the Property, pursuant to any reasonable written request of Lender, upon Lender’s reasonable belief that the Property is not in full compliance with all Environmental Laws, and share with Lender the reports and other results thereof, and Lender and other Indemnified Parties shall be entitled to rely on such reports and other results thereof; (g) Borrower shall keep the Property free of Mold; (h) Borrower shall, at its sole cost and expense, comply with all reasonable written requests of Lender to (i) reasonably effectuate remediation of any Hazardous Materials in, on, under or from the Property; and (ii) comply with any Environmental Law; (i) Borrower shall not allow any tenant or other user of the Property to violate any Environmental Law; and (j) Borrower shall immediately notify Lender in writing after it has become aware of (A) any presence or Release or threatened Release of Hazardous Materials in, on, under, from or migrating towards the Property; (B) any non-compliance with any Environmental Laws related in any way to the Property; (C) any actual or potential Environmental Lien against the Property; (D) any required or proposed remediation of environmental conditions relating to the Property; and (E) any written or oral notice or other communication of which Borrower becomes aware from any source whatsoever (including but not limited to a Governmental Authority) relating in any way to Hazardous Materials.  Any failure of Borrower to perform its obligations pursuant to this Section 12.2 shall constitute bad faith waste with respect to the Property.

 

Section 12.3                      Lender’s Rights

 

Lender and any other Person designated by Lender, including but not limited to any representative of a Governmental Authority, and any environmental consultant, and any receiver appointed by any court of competent jurisdiction, shall have the right, but not the obligation, to enter upon the Property at all reasonable times to assess any and all aspects of the environmental condition of the Property and its use, including but not limited to conducting any environmental assessment or audit (the scope of which shall be determined in Lender’s sole discretion) and taking samples of soil, groundwater or other water, air, or building materials, and conducting other invasive testing.  Borrower shall cooperate with and provide access to Lender and any such person or entity designated by Lender.

 

 

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Section 12.4                      Operations and Maintenance

 

If recommended by the Environmental Report or any other environmental assessment or audit of the Property,  Borrower shall establish and comply with an operations and maintenance program with respect to the Property, in form and substance reasonably acceptable to Lender, prepared by an environmental consultant reasonably acceptable to Lender, which program shall address any asbestos-containing material or lead based paint or Mold that may now or in the future be detected at or on the Property.  Without limiting the generality of the preceding sentence, Lender may require (a) periodic notices or reports to Lender in form, substance and at such intervals as Lender may specify, (b) an amendment to such operations and maintenance program to address changing circumstances, laws or other matters, (c) at Borrower’s sole expense, supplemental examination of the Property by consultants specified by Lender, (d) access to the Property by Lender, its agents or servicer, to review and assess the environmental condition of the Property and Borrower’s compliance with any operations and maintenance program, and (e) variation of the operations and maintenance program in response to the reports provided by any such consultants.

 

Section 12.5                      Environmental Definitions

 

“Environmental Law” means any present and future federal, state and local laws, statutes, ordinances, rules, regulations, standards, policies and other government directives or requirements, as well as common law, including but not limited to the Comprehensive Environmental Response, Compensation and Liability Act and the Resource Conservation and Recovery Act, that apply to Borrower or the Property and relate to Hazardous Materials or protection of human health or the environment.  “Environmental Liens” means all Liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of Borrower or any other Person.  “Environmental Report” means the written reports resulting from the environmental site assessments of the Property delivered to Lender in connection with the Loan.  “Hazardous Materials” shall mean petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives, flammable materials; radioactive materials; polychlorinated biphenyls and compounds containing them; lead and lead-based paint; asbestos or asbestos-containing materials in any form that is or could become friable; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which on the Property is prohibited by any federal, state or local authority; any substance that requires special handling; and any other material or substance now or in the future defined as a “hazardous substance,” “hazardous material”, “hazardous waste”, “toxic substance”, “toxic pollutant”, “contaminant”, or “pollutant” within the meaning of any Environmental Law.  “Mold” shall mean any mold, fungi, bacterial or microbial matter present at or in the Property, including, without limitation, building materials which is in a condition, location or a type which may pose a risk to human health or safety or the environment, may result in damage to or would adversely affect or impair the value or marketability of the Property.  “Release” of any Hazardous Materials includes but is not limited to any release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Materials.

 

 

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Section 12.6                      Indemnification

 

(a)           Borrower and Borrower Principal covenant and agree at their sole cost and expense, to protect, defend, indemnify, release and hold Indemnified Parties harmless from and against any and all Losses imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following:  (i) any presence of any Hazardous Materials in, on, above, or under the Property; (ii) any past, present or threatened Release of Hazardous Materials in, on, above, under or from the Property; (iii) any activity by Borrower, any Person affiliated with Borrower, and any Tenant or other user of the Property in connection with any actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other Release, generation, production, manufacturing, processing, refining, control, management, abatement, removal, handling, transfer or transportation to or from the Property of any Hazardous Materials at any time located in, under, on or above the Property or any actual or proposed remediation of any Hazardous Materials at any time located in, under, on or above the Property, whether or not such remediation is voluntary or pursuant to court or administrative order, including but not limited to any removal, remedial or corrective action; (iv) any past, present or threatened non-compliance or violations of any Environmental Laws (or permits issued pursuant to any Environmental Law) in connection with the Property or operations thereon, including but not limited to any failure by Borrower, any person or entity affiliated with Borrower, and any tenant or other user of the Property to comply with any order of any Governmental Authority in connection with any Environmental Laws; (v) the imposition, recording or filing or the threatened imposition, recording or filing of any Environmental Lien encumbering the Property; (vi) any acts of Borrower, any person or entity affiliated with Borrower, and any tenant or other user of the Property in (A) arranging for disposal or treatment, or arranging with a transporter for transport for disposal or treatment, of Hazardous Materials at any facility or incineration vessel containing such or similar Hazardous Materials or (B) accepting any Hazardous Materials for transport to disposal or treatment facilities, incineration vessels or sites from which there is a Release, or a threatened Release of any Hazardous Substance which causes the incurrence of costs for remediation; and (vii) any misrepresentation or inaccuracy in any representation or warranty or material breach or failure to perform any covenants or other obligations pursuant to this Agreement relating to environmental matters.

 

(b)           Upon written request by any Indemnified Party, Borrower and Borrower Principal shall defend same (if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals approved by the Indemnified Parties.  Notwithstanding the foregoing, any Indemnified Parties may, in their sole discretion, engage their own attorneys and other professionals to defend or assist them, and, at the option of Indemnified Parties, their attorneys shall control the resolution of any claim or proceeding.  Upon demand, Borrower and Borrower Principal shall pay or, in the sole discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith.

 

 

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(c)           Notwithstanding the foregoing, neither Borrower nor Borrower Principal shall have any liability for any Losses imposed upon or incurred by or asserted against any Indemnified Parties and described in subsection (a) above to the extent that Borrower and/or Borrower Principal can conclusively prove both that such Losses were caused solely by actions, conditions or events that occurred after the date that Lender (or any purchaser at a foreclosure sale) actually acquired title to the Property and that such Losses were not caused by the direct or indirect actions of Borrower, Borrower Principal, or any partner, member, principal, officer, director, trustee or manager of Borrower or Borrower Principal or any employee, agent, contractor or Affiliate of Borrower or Borrower Principal.  The obligations and liabilities of Borrower and Borrower Principal under this Section 12.6 shall fully survive indefinitely notwithstanding any termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of foreclosure of the Mortgage, except that, upon payment in full of the Loan, Borrower and Borrower Principal shall be released from liability under this Section 12.6 upon delivery to Lender of an environmental report indicating that the Property is in compliance with all Environmental Laws and otherwise in form and substance and from an environmental consultant acceptable to Lender and dated no earlier than the date on which the Loan is paid in full.

 

ARTICLE 13

SECONDARY MARKET

 

Section 13.1                      Transfer of Loan

 

Lender may, at any time, sell, transfer or assign the Loan Documents, or grant participations therein (“Participations”) or syndicate the Loan (“Syndication”) or issue mortgage pass-through certificates or other securities evidencing a beneficial interest in a rated or unrated public offering or private placement (“Securities”) (a Syndication or the issuance of Participations and/or Securities, a “Securitization”).

 

Section 13.2                      Delegation of Servicing

 

At the option of Lender, the Loan may be serviced by a servicer/trustee selected by Lender and Lender may delegate all or any portion of its responsibilities under this Agreement and the other Loan Documents to such servicer/trustee pursuant to a servicing agreement between Lender and such servicer/trustee.

 

Section 13.3                      Dissemination of Information

 

Lender may forward to each purchaser, transferee, assignee, or servicer of, and each participant, or investor in, the Loan, or any Participations and/or Securities or any of their respective successors (collectively, the “Investor”) or any Rating Agency rating the Loan, or any Participations and/or Securities, each prospective Investor, and any organization maintaining databases on the underwriting and performance of commercial mortgage loans, all documents and information which Lender now has or may hereafter acquire relating to the Debt and to Borrower, any managing member or general partner thereof, Borrower Principal, any SPE Component Entity (if any) and the Property, including financial statements, whether furnished by Borrower or otherwise, as Lender determines necessary or desirable.  Borrower irrevocably waives any and all rights it may have under applicable Legal Requirements to prohibit such disclosure, including but not limited to any right of privacy.

 

 

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Section 13.4                      Cooperation

 

In connection with a Securitization, at the request of the holder of the Note and, to the extent not already required to be provided by Borrower under this Agreement, Borrower and Borrower Principal shall use reasonable efforts to provide information not in the possession of the holder of the Note in order to satisfy the market standards to which the holder of the Note customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies in connection with such sales or transfers, including, without limitation, to:

 

(a)           provide updated financial, budget and other information with respect to the Property, Borrower and Borrower Principal and provide modifications and/or updates to the appraisals, market studies, environmental reviews and reports (Phase I reports and, if appropriate, Phase II reports) and engineering reports of the Property obtained in connection with the making of the Loan (all of the foregoing being referred to as the “Provided Information”), together, if customary, with appropriate verification and/or consents of the Provided Information through letters of auditors or opinions of counsel of independent attorneys acceptable to Lender and the Rating Agencies;

 

(b)           make changes to the organizational documents of Borrower, any SPE Component Entity and their respective principals;

 

(c)           cause counsel to render or update existing opinion letters as to enforceability and non-consolidation, and a 10b-5 comfort letter, which may be relied upon by the holder of the Note, the Rating Agencies and their respective counsel, which shall be dated as of the closing date of the Securitization;

 

(d)           permit site inspections, appraisals, market studies and other due diligence investigations of the Property, as may be reasonably requested by the holder of the Note or the Rating Agencies or as may be necessary or appropriate in connection with the Securitization;

 

(e)           make the representations and warranties with respect to the Property, Borrower,  Borrower Principal and the Loan Documents as are made in the Loan Documents and such other representations and warranties as may be reasonably requested by the holder of the Note or the Rating Agencies;

 

(f)            execute such amendments to the Loan Documents as may be requested by the holder of the Note or the Rating Agencies or otherwise to effect the Securitization including, without limitation, bifurcation of the Loan into two or more components and/or separate notes and/or creating a senior/subordinate note structure; provided, however, that Borrower shall not be required to modify or amend any Loan Document if such modification or amendment would (i) change the interest rate, the stated maturity or the amortization of principal set forth in the Note, except in connection with a bifurcation of the Loan which may result in varying fixed interest rates and amortization schedules, but which shall have the same initial weighted average coupon of the original Note, or (ii) modify or amend any other material economic term of the Loan, or (iii) materially increase Borrower’s obligations and liabilities under the Loan Documents;

 

 

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(g)           deliver to Lender and/or any Rating Agency, (i) one or more certificates executed by an officer of Borrower certifying as to the accuracy, as of the closing date of the Securitization, of all representations made by Borrower in the Loan Documents as of the Closing Date in all relevant jurisdictions or, if such representations are no longer accurate, certifying as to what modifications to the representations would be required to make such representations accurate as of the closing date of the Securitization, and (ii) certificates of the relevant Governmental Authorities in all relevant jurisdictions indicating the good standing and qualification of Borrower as of the date of the closing date of the Securitization;

 

(h)           have reasonably appropriate personnel participate in a bank meeting and/or presentation for the Rating Agencies or Investors; and

 

(i)            cooperate with and assist Lender in obtaining ratings of the Securities from two (2) or more of the Rating Agencies; and

 

(j)            supply to Lender such documentation, financial statements and reports in form and substance required for Lender to comply with Regulations S-X and AB of the federal securities laws, if applicable.

 

In the event that Borrower requests any consent or approval hereunder and the provisions of this Agreement or any Loan Documents require the receipt of written confirmation from each of the Rating Agencies with respect to the ratings on the Securities, or, in accordance with the terms of the transaction documents relating to a Securitization, such a rating confirmation is required in order for the consent of Lender to be given, Borrower shall pay all of the costs and expenses of Lender, Lender’s servicer and each Rating Agency in connection therewith, and, if applicable, shall pay any fees imposed by any Rating Agency as a condition to the delivery of such confirmation.  Notwithstanding the provisions of this Article 13 to the contrary, Borrower shall not be obligated to spend more than the Cooperation Cap in the aggregate in connection with complying with the provisions of this Article 13, but Borrower shall still be obligated to pay for other costs and expenses (including, without limitation, it’s own legal fees) in excess of such limitation.

 

Section 13.5                      Securitization

 

(a)           Borrower and Borrower Principal understand that certain of the Provided Information may be included in disclosure documents in connection with the Securitization, including, without limitation, a prospectus, prospectus supplement, offering memorandum or private placement memorandum (each, a “Disclosure Document”) and may also be included in filings with the Securities and Exchange Commission pursuant to the Securities Act or the Exchange Act, or provided or made available to investors or prospective investors in the Securities, the Rating Agencies, and service providers relating to the Securitization.  In the event that the Disclosure Document is required to be revised prior to the sale of all Securities, Borrower and Borrower Principal will cooperate with the holder of the Note in updating the Disclosure Document by providing all current information necessary to keep the Disclosure Document accurate and complete in all material respects.

 

 

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(b)           Borrower and Borrower Principal agree to provide in connection with each of (i) a preliminary and a final offering memorandum or private placement memorandum or similar document (including any Investor or Rating Agency “term sheets” or presentations relating to the Property and/or the Loan) or (ii) a preliminary and final prospectus or prospectus supplement, as applicable, an indemnification certificate (A) certifying that Borrower and Borrower Principal have carefully examined such memorandum or prospectus or other document (including any Investor or Rating Agency “term sheets” or presentations relating to the Property and/or the Loan), as applicable, including without limitation, the sections entitled “Special Considerations,” and/or “Risk Factors,” and “Certain Legal Aspects of the Mortgage Loan,” or similar sections, and all sections relating to Borrower, Borrower Principal, Manager, their Affiliates, the Loan, the Loan Documents and the Property, and any risks or special considerations relating thereto, and that, to the best of Borrower’s knowledge, such sections (and any other sections reasonably requested) do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, (B) indemnifying Lender (and for purposes of this Section 13.5, Lender hereunder shall include its officers and directors) and the Affiliate of Lender that (i) has filed the registration statement, if any, relating to the Securitization and/or (ii) which is acting as issuer, depositor, sponsor and/or a similar capacity with respect to the Securitization (any Person described in (i) or (ii), an “Issuer Person”), and each director and officer of any Issuer Person, and each Person or entity who controls any Issuer Person within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Issuer Group”), and each Person which is acting as an underwriter, manager, placement agent, initial purchaser or similar capacity with respect to the Securitization, each of its directors and officers and each Person who controls any such Person within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act (collectively, the “Underwriter Group”) for any Losses to which Lender, the Issuer Group or the Underwriter Group may become subject insofar as the Losses arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in such sections (including any Investor or Rating Agency “term sheets” or presentations relating to the Property and/or the Loan) or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated in such sections (including any Investor or Rating Agency “term sheets” or presentations relating to the Property and/or the Loan) or necessary in order to make the statements in such sections (including any Investor or Rating Agency “term sheets” or presentations relating to the Property and/or the Loan) or in light of the circumstances under which they were made, not misleading (collectively the “Securities Liabilities”) and (C) agreeing to reimburse Lender, the Issuer Group and the Underwriter Group for any legal or other expenses reasonably incurred by Lender and Issuer Group in connection with investigating or defending the Securities Liabilities; provided, however, that Borrower will be liable in any such case under clauses (B) or (C) above only to the extent that any such Securities Liabilities arise out of or is based upon any such untrue statement or omission made therein in reliance upon and in conformity with information furnished to Lender or any member of the Issuer Group or Underwriter Group by or on behalf of Borrower or Borrower Principal in connection with the preparation of the memorandum or prospectus or other document (including any Investor or Rating Agency “term sheets” or presentations relating to the Property and/or the Loan) or in connection with the underwriting of the Loan, including, without limitation, financial statements of Borrower or Borrower Principal, operating statements, Rent Rolls, environmental site assessment reports and Property condition reports with respect to the Property.  This indemnity agreement will be in addition to any liability which Borrower and Borrower Principal may otherwise have.  Moreover, the indemnification provided for in clauses (B) and (C) above shall be effective whether or not an indemnification certificate described in (A) above is provided and shall be applicable based on information previously provided by Borrower and Borrower Principal or their Affiliates if Borrower or Borrower Principal do not provide the indemnification certificate.

 

 

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(c)           In connection with filings under the Exchange Act or any information provided to holders of Securities on an ongoing basis, Borrower and Borrower Principal agree to indemnify (i) Lender, the Issuer Group and the Underwriter Group for Losses to which Lender, the Issuer Group or the Underwriter Group may become subject insofar as the Securities Liabilities arise out of or are based upon the omission or alleged omission to state in the Provided Information a material fact required to be stated in the Provided Information in order to make the statements in the Provided Information, in light of the circumstances under which they were made not misleading and (ii) reimburse Lender, the Issuer Group or the Underwriter Group for any legal or other expenses reasonably incurred by Lender, the Issuer Group or the Underwriter Group in connection with defending or investigating the Securities Liabilities arising from the errors and/or omissions referenced in subsection (i) immediately above.

 

(d)           Promptly after receipt by an indemnified party under this Section 13.5 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 13.5, notify the indemnifying party in writing of the commencement thereof, but the omission to so notify the indemnifying party will not relieve the indemnifying party from any liability which the indemnifying party may have to any indemnified party hereunder except to the extent that failure to notify causes prejudice to the indemnifying party.  In the event that any action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled, jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party.  After notice from the indemnifying party to such indemnified party under this Section 13.5 the indemnifying party shall be responsible for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there are any legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties.  The indemnifying party shall not be liable for the expenses of more than one such separate counsel unless an indemnified party shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to another indemnified party.

 

(e)           In order to provide for just and equitable contribution in circumstances in which the indemnity agreements provided for in Section 13.5(c) or Section 13.5(d) is or are for any reason held to be unenforceable by an indemnified party in respect of any losses, claims, damages or liabilities (or action in respect thereof) referred to therein which would otherwise be indemnifiable under Section 13.5(c) or Section 13.5(d), the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages or liabilities (or action in respect thereof); provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  In determining the amount of contribution to which the respective parties are entitled, the following factors shall be considered:  (i) the indemnified party’s, Borrower’s and Borrower Principal’s relative knowledge and access to information concerning the matter with respect to which claim was asserted; (ii) the opportunity to correct and prevent any statement or omission; and (iii) any other equitable considerations appropriate in the circumstances.  Lender, Borrower and Borrower Principal hereby agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation.

 

 

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(f)           The liabilities and obligations of Borrower, Borrower Principal and Lender under this Section 13.5 shall survive the satisfaction of this Agreement and the satisfaction and discharge of the Debt.

 

Section 13.6                      Regulation AB Information

 

(a)           If, at the time one or more Disclosure Documents are being prepared for a securitization, Lender expects that Borrower alone or Borrower and one or more affiliates of Borrower collectively, or the Property alone or the Property and any other parcel(s) of real property, together with improvements thereon and personal property related thereto, that is “related”, within the meaning of the definition of Significant Obligor (as defined in Item 1101(k) of Regulation AB), to the Property (a “Related Property”) collectively, will be a Significant Obligor, Borrower shall furnish to Lender upon request (i) the selected financial data or, if applicable, net operating income, required under Item 1112(b)(1) of Regulation AB and meeting the requirements thereof, if Lender expects that the principal amount of the Loan, together with any loans made to an affiliate of Borrower or secured by a Related Property that is included in a securitization with the Loan (a “Related Loan”), as of the cut-off date for such securitization may, or if the principal amount of the Loan together with any Related Loans as of the cut-off date for such securitization and at any time during which the Loan and any Related Loans are included in a securitization does, equal or exceed ten percent (10%) (but less than twenty percent (20%)) of the aggregate principal amount of all mortgage loans included or expected to be included, as applicable, in the securitization or (ii) the financial statements required under Item 1112(b)(2) of Regulation AB and meeting the requirements thereof, if Lender expects that the principal amount of the Loan together with any Related Loans as of the cut-off date for such securitization may, or if the principal amount of the Loan together with any Related Loans as of the cut-off date for such securitization and at any time during which the Loan and any Related Loans are included in a securitization does, equal or exceed twenty percent (20%) of the aggregate principal amount of all mortgage loans included or expected to be included, as applicable, in the securitization.  Such financial data or financial statements shall be furnished to Lender (A) within ten (10) Business Days after notice from Lender in connection with the preparation of Disclosure Documents for the securitization, (B) not later than thirty (30) days after the end of each fiscal quarter of Borrower and (C) not later than seventy-five (75) days after the end of each fiscal year of Borrower; provided, however, that Borrower shall not be obligated to furnish financial data or financial statements pursuant to clauses (B) or (C) of this sentence with respect to any period for which a filing pursuant to the Exchange Act in connection with or relating to the securitization (an “Exchange Act Filing”) is not required.

 

(b)           If requested by Lender, Borrower shall furnish, or shall cause the applicable tenant to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any tenant of any Property if, in connection with a securitization, Lender expects there to be, with respect to such tenant or group of affiliated tenants, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such securitization such that such tenant or group of affiliated tenants would constitute a Significant Obligor; provided, however, that in the event the related lease does not require the related tenant to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable tenant to furnish such information.

 

 

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Section 13.7                      Rating Surveillance

 

Borrower will retain the Rating Agencies to provide rating surveillance services on any certificates issued in a Securitization.  Such rating surveillance will be at the expense of Borrower in an amount determined by Lender in its reasonable discretion prior to the occurrence of a Securitization and such expense will be paid at the closing of the Securitization.

 

Section 13.8                      New Mezzanine Loan

 

Lender, without in any way limiting Lender’s other rights hereunder, shall have the right, in its sole and absolute discretion, at any time to require Borrower to restructure a portion of the Loan and create a mezzanine loan (the “New Mezzanine Loan”) to the owners of the direct equity interests in Borrower which shall be secured by a pledge of such direct equity interests (which New Mezzanine Loan shall be superior to any Mezzanine Loan created pursuant to Section 7.6 hereof), and for which different interest rates and debt service payments may be established for the Loan and the New Mezzanine Loan in such order of priority as may be designated by Lender; provided, that (a) (i) the total amounts of the Loan and the New Mezzanine Loan shall equal the amount of the Loan immediately prior to the restructuring, (ii) the weighted average interest rate of the Loan and the New Mezzanine Loan, shall on the date created equal the interest rate which was applicable to the Loan immediately prior to the restructuring and (iii) the debt service payments on the Loan and the New Mezzanine Loan shall on the date created equal the debt service payment which was due under the Loan immediately prior to the restructuring; and provided further that any such restructuring carried out after the closing of the Loan shall be at no material cost to Borrower.  At Borrower’s expense, Borrower shall cooperate with all reasonable requests of Lender in order to restructure the Loan and create the New Mezzanine Loan and shall (A) execute and deliver such documents including, without limitation, in the case of the New Mezzanine Loan, a mezzanine note, a mezzanine loan agreement, a pledge and security agreement and a mezzanine deposit account agreement, (B) cause Borrower’s counsel to deliver such legal opinions and (C) create such bankruptcy remote borrower under the New Mezzanine Loan as, in the case of each of (A), (B) and (C) above, shall be reasonably required by Lender and required by any Rating Agency in connection therewith, all in form and substance reasonably satisfactory to Lender and satisfactory to any such Rating Agency, including the severance of this Agreement, the Mortgage and other Loan Documents if requested.  In the event Borrower fails to execute and deliver such documents to Lender within ten (10) Business Days following such request by Lender, Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect such transactions, Borrower ratifying all that such attorney shall do by virtue thereof.  It shall be an Event of Default if Borrower fails to comply with any of the terms, covenants or conditions of this Section 13.9 after the expiration of ten (10) Business Days after notice thereof.  Notwithstanding the provisions of this Article 13 to the contrary, Borrower shall not be obligated to spend more than the Cooperation Cap in the aggregate in connection with complying with the provisions of this Article 13, but Borrower shall still be obligated to pay for other costs and expenses (including, without limitation, it’s own legal fees) in excess of such limitation.

 

 

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ARTICLE 14

INDEMNIFICATIONS

 

Section 14.1                      General Indemnification

 

Borrower shall indemnify, defend and hold harmless the Indemnified Parties from and against any and all Losses imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following: (a) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (b) any use, nonuse or condition in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (c) performance of any labor or services or the furnishing of any materials or other property in respect of the Property or any part thereof; (d) any failure of the Property to be in compliance with any applicable Legal Requirements; (e) any and all claims and demands whatsoever which may be asserted against Lender by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained in any Lease; (f) the holding or investing of the Reserve Accounts or the performance of the Required Work, Additional Required Repairs or Additional Replacements, or (g) the payment of any commission, charge or brokerage fee to anyone which may be payable in connection with the funding of the Loan (collectively, the “Indemnified Liabilities”); provided, however, that Borrower shall not have any obligation to Lender hereunder to the extent that such Indemnified Liabilities arise from the gross negligence, illegal acts, fraud, willful misconduct of Lender or Lender’s failure to comply with any applicable obligations imposed upon it by the terms of this Agreement.  To the extent that the undertaking to indemnify, defend and hold harmless set forth in the preceding sentence may be unenforceable because it violates any law or public policy, Borrower shall pay the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Lender.

 

Section 14.2                      Mortgage and Intangible Tax Indemnification

 

Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any tax on the making and/or recording of the Mortgage, the Note or any of the other Loan Documents, but excluding any income, franchise or other similar taxes.

 

Section 14.3                      ERISA Indemnification

 

Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses (including, without limitation, reasonable attorneys’ fees and costs incurred in the investigation, defense, and settlement of Losses incurred in correcting any prohibited transaction or in the sale of a prohibited loan, and in obtaining any individual prohibited transaction exemption under ERISA that may be required, in Lender’s sole discretion) that Lender may incur, directly or indirectly, as a result of a default under Section 4.9 or Section 5.18 of this Agreement.

 

 

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Section 14.4                      Survival

 

The obligations and liabilities of Borrower under this Article 14 shall fully survive indefinitely notwithstanding any termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of foreclosure of the Mortgage.

 

ARTICLE 15

EXCULPATION

 

Section 15.1                      Exculpation

 

(a)           Except as otherwise provided herein or in the other Loan Documents, Lender shall not enforce the liability and obligation of Borrower or Borrower Principal, as applicable, to perform and observe the obligations contained herein or in the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against Borrower or Borrower Principal, except that Lender may bring a foreclosure action, action for specific performance or other appropriate action or proceeding to enable Lender to enforce and realize upon this Agreement, the Note, the Mortgage and the other Loan Documents, and the interest in the Property, the Rents and any other collateral given to Lender created by this Agreement, the Note, the Mortgage and the other Loan Documents; provided, however, that any judgment in any such action or proceeding shall be enforceable against Borrower or Borrower Principal, as applicable, only to the extent of Borrower’s or Borrower Principal’s interest in the Property, in the Rents and in any other collateral given to Lender.  Lender, by accepting this Agreement, the Note, the Mortgage and the other Loan Documents, agrees that it shall not, except as otherwise provided in this Section 15.1, sue for, seek or demand any deficiency judgment against Borrower or Borrower Principal in any such action or proceeding, under or by reason of or under or in connection with this Agreement, the Note, the Mortgage or the other Loan Documents.  The provisions of this Section 15.1 shall not, however, (i) constitute a waiver, release or impairment of any obligation evidenced or secured by this Agreement, the Note, the Mortgage or the other Loan Documents; (ii) impair the right of Lender to name Borrower or Borrower Principal as a party defendant in any action or suit for judicial foreclosure and sale under this Agreement and the Mortgage; (iii) affect the validity or enforceability of any indemnity (including, without limitation, those contained in Section 12.6 and Article 14 of this Agreement), guaranty, master lease or similar instrument made in connection with this Agreement, the Note, the Mortgage and the other Loan Documents; (iv) impair the right of Lender to obtain the appointment of a receiver; (v) impair the enforcement of the assignment of leases provisions contained in the Mortgage; or (vi) impair the right of Lender to obtain a deficiency judgment or other judgment on the Note against Borrower or Borrower Principal if necessary to obtain any Insurance Proceeds or Awards to which Lender would otherwise be entitled under this Agreement; provided, however, Lender shall only enforce such judgment to the extent of the Insurance Proceeds and/or Awards.

 

 

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(b)           Notwithstanding the provisions of this Section 15.1 to the contrary, Borrower and Borrower Principal shall be personally liable to Lender on a joint and several basis for Losses due to:

 

(i)           fraud or intentional misrepresentation by Borrower, Borrower Principal or any other Affiliate of Borrower or Borrower Principal in connection with the execution and the delivery of this Agreement, the Note, the Mortgage, any of the other Loan Documents, or any certificate, report, financial statement or other instrument or document furnished to Lender at the time of the closing of the Loan or during the term of the Loan;

 

(ii)           Borrower’s misapplication or misappropriation of Rents received by Borrower after the occurrence of an Event of Default;

 

(iii)          Borrower’s misapplication or misappropriation of tenant security deposits or Rents collected in advance;

 

(iv)          the misapplication or the misappropriation of Insurance Proceeds or Awards;

 

(v)           Borrower’s failure to pay Taxes, Other Charges (except to the extent that (A) sums sufficient to pay such amounts have been deposited in escrow with Lender pursuant to the terms hereof and there exists no impediment to Lender’s utilization thereof or (B) there is insufficient cash flow from the operation of the Property);

 

(vi)          Borrower’s failure to return or to reimburse Lender for all Personal Property taken from the Property by or on behalf of Borrower and not replaced with Personal Property of the same utility and of the same or greater value;

 

(vii)         any act of actual waste or arson by Borrower, any principal, Affiliate, member or general partner thereof or by Borrower Principal, any principal, Affiliate, member or general partner thereof; or

 

(viii)        the breach of any representation, warranty, covenant or indemnification set forth in Article 12 or Article 14 hereof or in any other Loan Document concerning environmental laws, hazardous substances and asbestos and any indemnification of Lender with respect thereto in any document.

 

(c)           Notwithstanding the foregoing, the agreement of Lender not to pursue recourse liability as set forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no further force and effect and the Debt shall be fully recourse to Borrower and Borrower Principal on a joint and several basis in the event (i) of a breach by Borrower, Borrower Principal or any SPE Component Entity (if any) of any of the covenants set forth in Article 6 hereof, to the extent that such breach is (A) material and (B) is not cured within fifteen (15) days of the earlier to occur of notice from Lender or such breach becomes actually known by a officer of Borrower, (ii) of a material breach of any of the covenants set forth in Article 7 hereof, (iii) the Property or any part thereof shall become an asset in a voluntary bankruptcy or voluntary insolvency proceeding of Borrower, (iv) Borrower, Borrower Principal or any Affiliate, officer, director, or representative which controls, directly or indirectly, Borrower or Borrower Principal files, or joins in the filing of, an involuntary petition against Borrower under any Creditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower from any Person; (v)  Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under any Creditors Rights Laws, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (vi) any Affiliate, officer, director, or representative which controls Borrower consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any portion of the Property; or (vii) Borrower fails to obtain Lender’s prior written consent to any subordinate financing or other voluntary Lien encumbering the Property, if such consent is required by the Loan Documents.

 

 

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(d)           Nothing herein shall be deemed to be a waiver of any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provision of the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness secured by the Mortgage or to require that all collateral shall continue to secure all of the indebtedness owing to Lender in accordance with this Agreement, the Note, the Mortgage or the other Loan Documents.

 

(e)           Subject to the terms of Section 12.6, upon payment in full of the Loan, Borrower Principal shall be relieved of its obligations under this Article 15.

 

ARTICLE 16

NOTICES

 

Section 16.1                      Notices

 

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

 

	 	If to Lender:	Bank of America, N.A.
	 	 	Real Estate Structured Finance - Servicing
	 	 	900 West Trade Street
	 	 	Suite 650
	 	 	NC1-026-06-01
	 	 	Charlotte, North Carolina 28255
	 	 	Attn:  Servicing Manager
	 	 	Telephone No: (866) 531-0957
	 	 	Facsimile No.: (704) 317-4501
	 	 	 
	 	With a copy to: 	Sonnenschein Nath & Rosenthal LLP
	 	 	Two World Financial Center
	 	 	
New York, New York 10281

	 	 	Attention:  David S. Hall, Esq.
	 	 	Telephone No.:  (212) 768-6806
	 	 	Facsimile No.:  (212) 768-6800

 

 

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	 	If to Borrower: 	PTC Columbus, LLC
	 	 	180 East Broad Street, 21st Floor
	 	 	Columbus, Ohio 43215
	 	 	Attention:  Richard Burkhart
	 	 	Telephone No.:  (614) 887-5889
	 	 	Facsimile No.:  (614) 621-2326
	 	 	 
	 	With a copy to:	PTC Columbus, LLC
	 	 	180 East Broad Street, 21st Floor
	 	 	Columbus, Ohio 43215
	 	 	Attention:  General Counsel
	 	 	Telephone No.:  (614) 887-5623
	 	 	Facsimile No.:  (614) 621-8863
	 	 	 
	 	 	and
	 	 	 
	 	 	John I. Cadwallader, Esq.
	 	 	Frost Brown Todd LLC
	 	 	One Columbus
	 	 	10 West Broad Street
	 	 	
Suite 2300

	 	 	Columbus, OH 43215
	 	 	Phone:  (614) 464-1211
	 	 	Fax:  (614) 464-1737
	 	 	 
	 	If to Borrower	 
	 	Principal:  	Glimcher Properties Limited Partnership
	 	 	180 East Broad Street, 21st Floor
	 	 	Attention:  Richard Burkhart
	 	 	Telephone No.:  (614) 887-5889
	 	 	Facsimile No.:  (614) 621-2326
	 	 	 
	 	With a copy to:  	Glimcher Properties Limited Partnership
	 	 	180 East Broad Street, 21st Floor
	 	 	Attention:  General Counsel
	 	 	Telephone No.:  (614) 889-5623
	 	 	Facsimile No.:  (614) 621-8863
	 	 	 
	 	 	and
	 	 	 
	 	 	John I. Cadwallader, Esq.
	 	 	Frost Brown Todd LLC
	 	 	One Columbus
	 	 	10 West Broad Street
	 	 	Suite 2300
	 	 	Columbus, OH 43215
	 	 	Phone:  (614) 464-1211
	 	 	Fax:  (614) 464-1737

 

 

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A notice shall be deemed to have been given:  in the case of hand delivery, at the time of delivery; in the case of registered or certified mail, when delivered or the first attempted delivery on a Business Day; or in the case of expedited prepaid delivery and telecopy, upon the first attempted delivery on a Business Day.

 

ARTICLE 17

FURTHER ASSURANCES

 

Section 17.1                      Replacement Documents

 

Upon receipt of an affidavit of an officer of Lender as to the loss, theft, destruction or mutilation of the Note or any other Loan Document which is not of public record:  (i) with respect to any Loan Document other than the Note, Borrower will issue, in lieu thereof, a replacement of such other Loan Document, dated the date of such lost, stolen, destroyed or mutilated Loan Document in the same principal amount thereof and otherwise of like tenor and (ii) with respect to the Note, (a) Borrower will execute a reaffirmation of the Debt as evidenced by such Note acknowledging that Lender has informed Borrower that the Note was lost, stolen destroyed or mutilated and that such Debt continues to be an obligation and liability of Borrower as set forth in the Note, a copy of which shall be attached to such reaffirmation and (b) if requested by Lender, Borrower will execute a replacement note and Lender or Lender’s custodian (at Lender’s option) shall provide to Borrower Lender’s (or Lender’s custodian’s) then standard form of lost note affidavit and indemnity, which such form shall be reasonably acceptable to Borrower.

 

Section 17.2                      Recording of Mortgage, etc

 

Borrower forthwith upon the execution and delivery of the Mortgage and thereafter, from time to time, will cause the Mortgage and any of the other Loan Documents creating a lien or security interest or evidencing the lien hereof upon the Property and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or future law in order to publish notice of and fully to protect and perfect the lien or security interest hereof upon, and the interest of Lender in, the Property.  Borrower will pay all taxes, filing, registration or recording fees, and all expenses incident to the preparation, execution, acknowledgment and/or recording of the Note, the Mortgage, the other Loan Documents, any note, deed of trust or mortgage supplemental hereto, any security instrument with respect to the Property and any instrument of further assurance, and any modification or amendment of the foregoing documents, and all federal, state, county and municipal taxes, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of the Mortgage, any deed of trust or mortgage supplemental hereto, any security instrument with respect to the Property or any instrument of further assurance, and any modification or amendment of the foregoing documents, except where prohibited by law so to do.

 

 

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Section 17.3                      Further Acts, etc

 

Borrower will, at the cost of Borrower, and without expense to Lender, do, execute, acknowledge and deliver all and every further acts, deeds, conveyances, deeds of trust, mortgages, assignments, security agreements, control agreements, notices of assignments, transfers and assurances as Lender shall, from time to time, reasonably require, for the better assuring, conveying, assigning, transferring, and confirming unto Lender the property and rights hereby mortgaged, deeded, granted, bargained, sold, conveyed, confirmed, pledged, assigned, warranted and transferred or intended now or hereafter so to be, or which Borrower may be or may hereafter become bound to convey or assign to Lender, or for carrying out the intention or facilitating the performance of the terms of this Agreement or for filing, registering or recording the Mortgage, or for complying with all Legal Requirements.  Borrower, on demand, will execute and deliver, and in the event it shall fail to so execute and deliver, hereby authorizes Lender to execute in the name of Borrower or without the signature of Borrower to the extent Lender may lawfully do so, one or more financing statements and financing statement amendments to evidence more effectively, perfect and maintain the priority of the security interest of Lender in the Property.  Borrower grants to Lender an irrevocable power of attorney coupled with an interest for the purpose of exercising and perfecting any and all rights and remedies available to Lender at law and in equity, including without limitation, such rights and remedies available to Lender pursuant to this Section 17.3.

 

Section 17.4                      Changes in Tax, Debt, Credit and Documentary Stamp Laws

 

(a)           If any law is enacted or adopted or amended after the date of this Agreement which deducts the Debt from the value of the Property for the purpose of taxation or which imposes a tax, either directly or indirectly, on the Debt or Lender’s interest in the Property, Borrower will pay the tax, with interest and penalties thereon, if any.  If Lender is advised by counsel chosen by it that the payment of tax by Borrower would be unlawful or taxable to Lender or unenforceable or provide the basis for a defense of usury then Lender shall have the option by written notice of not less than one hundred twenty (120) days to declare the Debt immediately due and payable.

 

(b)           Borrower will not claim or demand or be entitled to any credit or credits on account of the Debt for any part of the Taxes or Other Charges assessed against the Property, or any part thereof, and no deduction shall otherwise be made or claimed from the assessed value of the Property, or any part thereof, for real estate tax purposes by reason of the Mortgage or the Debt.  If such claim, credit or deduction shall be required by law, Lender shall have the option, by written notice of not less than one hundred twenty (120) days, to declare the Debt immediately due and payable.

 

If at any time the United States of America, any State thereof or any subdivision of any such State shall require revenue or other stamps to be affixed to the Note, the Mortgage, or any of the other Loan Documents or impose any other tax or charge on the same, Borrower will pay for the same, with interest and penalties thereon, if any.

 

 

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Section 17.5                      Expenses

 

Borrower covenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lender upon receipt of written notice from Lender for all reasonable costs and expenses (including reasonable, actual attorneys’ fees and disbursements and the allocated costs of internal legal services and all actual disbursements of internal counsel) reasonably incurred by Lender in accordance with this Agreement (all of which shall be deemed part of the Debt) in connection with (a) the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents and the consummation of the transactions contemplated hereby and thereby and all the costs of furnishing all opinions by counsel for Borrower (including without limitation any opinions requested by Lender as to any legal matters arising under this Agreement or the other Loan Documents with respect to the Property); (b) Borrower’s ongoing performance of and compliance with Borrower’s respective agreements and covenants contained in this Agreement and the other Loan Documents on its part to be performed or complied with after the Closing Date, including, without limitation, confirming compliance with environmental and insurance requirements; (c) following a request by Borrower, Lender’s ongoing performance and compliance with all agreements and conditions contained in this Agreement and the other Loan Documents on its part to be performed or complied with after the Closing Date; (d) the negotiation, preparation, execution, delivery and administration of any consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents and any other documents or matters requested by Lender; (e) securing Borrower’s compliance with any requests made pursuant to the provisions of this Agreement; (f) the filing and recording fees and expenses, title insurance and reasonable fees and expenses of counsel for providing to Lender all required legal opinions, and other similar expenses incurred in creating and perfecting the Lien in favor of Lender pursuant to this Agreement and the other Loan Documents; (g) enforcing or preserving any rights, in response to third party claims or the prosecuting or defending of any action or proceeding or other litigation, in each case against, under or affecting Borrower, this Agreement, the other Loan Documents, the Property, or any other security given for the Loan; and (h) enforcing any obligations of or collecting any payments due from Borrower under this Agreement, the other Loan Documents or with respect to the Property or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work-out” or of any insolvency or bankruptcy proceedings; provided, however, that Borrower shall not be liable for the payment of any such costs and expenses to the extent the same arise by reason of the gross negligence, illegal acts, fraud or willful misconduct of Lender.

 

Section 17.6                      Cost of Enforcement.

 

In the event (a) that the Mortgage is foreclosed in whole or in part, (b) of the bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of Borrower or any of its constituent Persons or an assignment by Borrower or any of its constituent Persons for the benefit of its creditors, or (c) Lender exercises any of its other remedies under this Agreement or any of the other Loan Documents, Borrower shall be chargeable with and agrees to pay all costs of collection and defense, including attorneys’ fees and costs, incurred by Lender or Borrower in connection therewith and in connection with any appellate proceeding or post-judgment action involved therein, together with all required service or use taxes, all of which shall be deemed part of the Debt.  In addition, Borrower shall be responsible for any fees and expenses of any servicer and any third-party fees and expenses, including, without limitation, special servicing fees, work-out fees and attorneys fees and disbursements in connection with a prepayment, release of the Property, assumption or modification of the Loan, special servicing or work-out of the Loan or enforcement of the Loan Documents.

 

 

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ARTICLE 18

WAIVERS

 

Section 18.1                      Remedies Cumulative; Waivers

 

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

 

Section 18.2                      Modification, Waiver in Writing

 

No modification, amendment, extension, discharge, termination or waiver of any provision of this Agreement, or of the Note, or of any other Loan Document, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given.  Except as otherwise expressly provided herein, no notice to, or demand on Borrower, shall entitle Borrower to any other or future notice or demand in the same, similar or other circumstances.

 

Section 18.3                      Delay Not a Waiver

 

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

 

Section 18.4                      Trial by Jury

 

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

 

 

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Section 18.5                      Waiver of Notice

 

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

 

Section 18.6                      Remedies of Borrower

 

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

 

Section 18.7                      Waiver of Marshalling of Assets

 

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

 

 

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Section 18.8                      Waiver of Statute of Limitations

 

Borrower hereby expressly waives and releases, to the fullest extent permitted by law, the pleading of any statute of limitations as a defense to payment of the Debt or performance of its Other Obligations.

 

Section 18.9                      Waiver of Counterclaim

 

Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or its agents.

 

ARTICLE 19

GOVERNING LAW

 

Section 19.1                      Choice of Law

 

This Agreement shall be governed, construed, applied and enforced in accordance with the laws of the State and applicable laws of the United States of America, except that, with respect to the security interest in each of the Reserve Accounts, the Lockbox Account and the Cash Management Account, the laws of the state where each such account is located shall apply.

 

Section 19.2                      Severability

 

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

 

Section 19.3                      Preferences

 

Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by Borrower to any portion of the obligations of Borrower hereunder.  To the extent Borrower makes a payment or payments to Lender, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any Creditors Rights Laws, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds received, the obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by Lender.

 

 

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ARTICLE 20

MISCELLANEOUS

 

Section 20.1                      Survival

 

This Agreement and all covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by Lender of the Loan and the execution and delivery to Lender of the Note, and shall continue in full force and effect so long as all or any of the Debt is outstanding and unpaid unless a longer period is expressly set forth herein or in the other Loan Documents.  Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the legal representatives, successors and assigns of such party.  All covenants, promises and agreements in this Agreement,  by or on behalf of Borrower, shall inure to the benefit of the legal representatives, successors and assigns of Lender.

 

Section 20.2                      Lender’s Discretion

 

Whenever pursuant to this Agreement, Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically herein provided) be in the sole discretion of Lender and shall be final and conclusive.

 

Section 20.3                      Headings

 

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

 

Section 20.4                      Schedules Incorporated

 

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

 

Section 20.5                      Offsets, Counterclaims and Defenses

 

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

 

Section 20.6                      No Joint Venture or Partnership; No Third Party Beneficiaries

 

(a)           Borrower and Lender intend that the relationships created hereunder and under the other Loan Documents be solely that of borrower and lender.  Nothing herein or therein is intended to create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor to grant Lender any interest in the Property other than that of mortgagee, beneficiary or lender.

 

 

-100-

 

(b)           This Agreement and the other Loan Documents are solely for the benefit of Lender and Borrower and nothing contained in this Agreement or the other Loan Documents shall be deemed to confer upon anyone other than Lender and Borrower any right to insist upon or to enforce the performance or observance of any of the obligations contained herein or therein.  All conditions to the obligations of Lender to make the Loan hereunder are imposed solely and exclusively for the benefit of Lender and no other Person shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that Lender will refuse to make the Loan in the absence of strict compliance with any or all thereof and no other Person shall under any circumstances be deemed to be a beneficiary of such conditions, any or all of which may be freely waived in whole or in part by Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable to do so.

 

(c)           The general partners, members, principals and (if Borrower is a trust) beneficial owners of Borrower are experienced in the ownership and operation of properties similar to the Property, and Borrower and Lender are relying solely upon such expertise and business plan in connection with the ownership and operation of the Property.  Borrower is not relying on Lender’s expertise, business acumen or advice in connection with the Property.

 

(d)           Notwithstanding anything to the contrary contained herein, Lender is not undertaking the performance of (i) any obligations under the Leases; or (ii) any obligations with respect to such agreements, contracts, certificates, instruments, franchises, permits, trademarks, licenses and other documents.

 

(e)           By accepting or approving anything required to be observed, performed or fulfilled or to be given to Lender pursuant to this Agreement, the Mortgage, the Note or the other Loan Documents, including, without limitation, any officer’s certificate, balance sheet, statement of profit and loss or other financial statement, survey, appraisal, or insurance policy, Lender shall not be deemed to have warranted, consented to, or affirmed the sufficiency, the legality or effectiveness of same, and such acceptance or approval thereof shall not constitute any warranty or affirmation with respect thereto by Lender.

 

(f)           Borrower recognizes and acknowledges that in accepting this Agreement, the Note, the Mortgage and the other Loan Documents, Lender is expressly and primarily relying on the truth and accuracy of the representations and warranties set forth in Article 4 of this Agreement without any obligation to investigate the Property and notwithstanding any investigation of the Property by Lender; that such reliance existed on the part of Lender prior to the date hereof, that the warranties and representations are a material inducement to Lender in making the Loan; and that Lender would not be willing to make the Loan and accept this Agreement, the Note, the Mortgage and the other Loan Documents in the absence of the warranties and representations as set forth in Article 4 of this Agreement.

 

Section 20.7                      Publicity

 

All news releases, publicity or advertising by Borrower or its Affiliates through any media intended to reach the general public which refers to the Loan, Lender, Banc of America Securities LLC, or any of their Affiliates shall be subject to the prior written approval of Lender, not to be unreasonably withheld.  Lender shall be permitted to make any news, releases, publicity or advertising by Lender or its Affiliates through any media intended to reach the general public which refers to the Loan, the Property, Borrower, Borrower Principal and their respective Affiliates without the approval of Borrower or any such Persons.  Borrower also agrees that Lender may share any information pertaining to the Loan with Bank of America Corporation, including its bank subsidiaries, Banc of America Securities LLC and any other Affiliates of the foregoing, in connection with the sale or transfer of the Loan or any Participations and/or Securities created; provided however, nothing in this Section shall in any way restrict or inhibit Borrower, Borrower Principal or any of its Affiliates from issuing any press releases or from making any filings required by any of the aforesaid due to obligations imposed by applicable laws or regulations, including without limitation, all applicable securities laws and regulations.

 

 

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Section 20.8                      Conflict; Construction of Documents; Reliance

 

In the event of any conflict between the provisions of this Agreement and any of the other Loan Documents, the provisions of this Agreement shall control.  The parties hereto acknowledge that they were represented by competent counsel in connection with the negotiation, drafting and execution of the Loan Documents and that such Loan Documents shall not be subject to the principle of construing their meaning against the party which drafted same.  Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely on its own judgment and advisors in entering into the Loan without relying in any manner on any statements, representations or recommendations of Lender or any parent, subsidiary or Affiliate of Lender.  Lender shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available to it under any of the Loan Documents or any other agreements or instruments which govern the Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them may acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take any action on the basis of the foregoing with respect to Lender’s exercise of any such rights or remedies.  Borrower acknowledges that Lender engages in the business of real estate financings and other real estate transactions and investments which may be viewed as adverse to or competitive with the business of Borrower or its Affiliates.

 

Section 20.9                      Duplicate Originals; Counterparts

 

This Agreement and each of the other Loan Documents may be executed in any number of duplicate originals, and each duplicate original shall be deemed to be an original.  This Agreement and each of the other Loan Documents (and each duplicate original) also may be executed in any number of counterparts, each of which shall be deemed an original and all of which together constitute a fully executed agreement even though all signatures do not appear on the same document.

 

Section 20.10                    Entire Agreement

 

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

 

 

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[NO FURTHER TEXT ON THIS PAGE]

 

-103-

 

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

 

BORROWER:

 

PTC COLUMBUS, LLC, a Delaware limited liability company

	
  

	
By:

	
POLARIS CENTER, LLC, a Delaware limited liability company, its sole member

By:           GLIMCHER PTC, INC., a Delawarecorporation, its Managing Member

 

By:  ________________________                                                    

        Mark E. Yale

        Executive Vice President

        Chief Financial Officer and

        Treasurer

 

BORROWER PRINCIPAL:

 

Acknowledged and agreed to with respect to its obligations set forth in Article 4, Section 12.6, Article 15 and Article 18 hereof:

 

GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership

 

By:  Glimcher Properties Corporation, a

        Delaware corporation, sole general

        partner

By:  ________________________                                                        

        Mark E. Yale

        Executive Vice President

        Chief Financial Officer and

        Treasurer

LENDER:

 

BANK OF AMERICA, N.A., a national banking association

 

By:          ________________________ 

Name:

Title:

 

 

 

 

EXHIBIT A – BORROWER EQUITY OWNERSHIP STRUCTURE

 

POLARIS TOWNE CENTER

PROPOSED BORROWER STRUCTURE CHART

PTC COLUMBUS, LLC

 

[Note: Excepting existing owner, Polaris Center, LLC & Glimcher PTC, Inc. and the new SPE, PTC Columbus, LLC, ownership percentages are as of 12/31/09 for other entities.]

 

 

 

 

 

 

EXHIBIT B

Form of Tenant Direction Letter

 

PTC COLUMBUS, LLC

c/o Glimcher Properties Limited Partnership

180 East Broad Street, 21st Floor

Columbus, Ohio 43215

 

March 31, 2010

 

VIA CERTIFIED MAIL – RETURN RECEIPT REQUESTED

[Tenant name & address]

 

	
  

	
Re:

	
DBA Name

	
  

	
Polaris Towne Center

	
  

	
Columbus, Ohio (the "Property")

Dear Tenant:

Please be advised that effective as of the date of this Notice, in connection with a refinancing of the mortgage on the above-referenced Property, Polaris Center, LLC has transferred ownership of the Property to a newly formed subsidiary, PTC COLUMBUS, LLC, and PTC COLUMBUS, LLC is now your new landlord (“Landlord”).  You are further advised that Landlord, has granted a mortgage in favor of BANK OF AMERICA, N.A., a national banking association (together with its successors and assigns "Lender") on the above-referenced Property in which you are a tenant.  Pursuant to the mortgage, the Landlord has granted a security interest in favor of Lender in the leases relating to the Property and all rents, additional rent and all other monetary obligations to Landlord thereunder (collectively, "Rent").  The Landlord hereby irrevocably instructs and authorizes you to disregard any and all previous notices sent to you in connection with Rent and hereafter to deliver all Rent to the following new address:

PTC Columbus, LLC

L-2017

Columbus, OH 43260

All checks should be made payable to “PTC Columbus, LLC”.

These payment instructions cannot be withdrawn or modified without the prior written consent of Lender or its agent (“Servicer”), or pursuant to a joint written instruction from Landlord and Lender or the Servicer.

You are hereby further advised that the Property will continue to be managed by Glimcher Properties Limited Partnership, as property manager.  In accordance with the terms of your lease, copies of all future notices to landlord should be sent to:

 

-3-

 

PTC Columbus, LLC

c/o Glimcher Properties Limited Partnership

180 East Broad Street, 21st Floor

Columbus, Ohio 43215

Attention: General Counsel

Also, in accordance with the provisions of your lease, please send an updated Certificate of Insurance naming the Landlord (PTC Columbus, LLC) as Holder and additional insured; as well as naming the property manager (Glimcher Properties Limited Partnership) as additional insured parties.  The Certificate of Insurance should be sent to Landlord, Attention: Risk Management, at the address above.

Enclosed is a copy of an IRS W-9 form certifying the Federal Tax ID number for Glimcher MJC, LLC, as well as a blank gross sales reporting form, with instructions, for future use.  Please forward these items to the appropriate personnel of your company.

If you have any questions or need any additional information, please feel free to contact the management office at (614) 621-9000.

 

	(i)           POLARIS CENTER, LLC, 	PTC COLUMBUS, LLC,	 
	a Delaware limited liability company	a Delaware limited liability company	 
	 	 	 
	By:  Glimcher PTC, Inc., 	By:  Polaris Center, LLC,	 
	a Delaware corporation,	a Delaware limited liability company,	 
	its managing member	its sole member	 
	 	 	 
	By:______________________________  	By:  Glimcher PTC, Inc.,	 
	Kim A. Rieck 	a Delaware corporation,	 
	Senior Vice President	its managing member	 
	 	 	 
	 	By:______________________________  	 
	 	Kim A. Rieck 	 
	 	Senior Vice President	 

 

Enclosures:

(1)           Copy of IRS Form W-9

(2)           Blank Gross Sales Reporting Form

 

 

 

 

EXHIBIT C

 

FORM OF RENT ROLL

 

 

 

 

EXHIBIT D

 

FORM OF OPERATING STATEMENTS

 

 

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SCHEDULE 4.25

SPECIAL DISCLOSURES RELATING TO CERTAIN OF THE LEASES

 

NONE.

 

-3-

 

SCHEDULE 9.1

 

REQUIRED REPAIRS

 

	
REPAIR

	 	
RESERVE AMOUNT

	
Concrete Sidewalk Repairs

	 	
$82,500

	
Full depth asphalt repairs

	 	
$180,000

 

-4-

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