17 MEZZANINE LOAN AGREEMENT
EXHIBIT
Loan No. 10061253
MEZZANINE LOAN AGREEMENT
Dated as of June 13, 2012
Between
TNP SRT PORTFOLIO II HOLDINGS, LLC
as Borrower
and
KEYBANK NATIONAL ASSOCIATION,
as Lender
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS; PRINCIPLES OF CONSTRUCTION 1
Section Definitions 1
Section Principles of Construction 26
ARTICLE II - GENERAL TERMS 27
Section Loan Commitment; Disbursement to Borrower 27
Agreement to Lend and Borrow 27
Single Disbursement to Borrower 27
The Note, Pledge Agreement and Loan Documents 27
Use of Proceeds 27
Section Interest Rate 27
Interest Rate 27
Interest Calculation 27
Default Rate 28
Usury Savings 28
Section Loan Payment 28
Section Prepayments 29
Section Liquidation Events 29
Section Lockbox Account/Cash Management 29
Lockbox Account 29
Cash Management 30
Mezzanine Collection Account 31
ARTICLE III - CONDITIONS PRECEDENT TO CLOSING 32
ARTICLE IV - REPRESENTATIONS AND WARRANTIES 32
Section Borrower Representations 32
Organization 32
Proceedings 33
No Conflicts 33
Litigation 33
Agreements 33
UCC Insurance; Mezzanine Lender Endorsement 34
Solvency 34
Full and Accurate Disclosure 35
No Plan Assets 35
Compliance 35
Financial Information 35
Condemnation 36
Federal Reserve Regulations 36
Not a Foreign Person 36
Enforceability 36
No Prior Assignment 36
Insurance 36
i
Leases 36
Filing and Recording Taxes 37
Special Purpose Entity/Separateness 37
Management Agreement 38
Illegal Activity 38
No Change in Facts or Circumstances; Disclosure 38
Investment Company Act 38
Embargoed Person 38
Principal Place of Business; State of Organization 39
Mortgage Loan Representations and Warranties 39
Title Insurance Proceeds 39
Section Survival of Representations 39
ARTICLE V - BORROWER COVENANTS 39
Section Affirmative Covenants 39
Existence; Compliance with Legal Requirements 39
Taxes and Other Charges 40
Litigation 41
Access to Property 41
Notice of Default 41
Cooperate in Legal Proceedings 41
Perform Loan Documents 42
Further Assurances 42
Principal Place of Business, State of Organization 42
Financial Reporting 43
Business and Operations 45
Title to the Property 45
Costs of Enforcement 45
Estoppel Statement 45
Loan Proceeds 46
Performance by Borrower 46
Leasing Matters 47
Alterations 47
Operation of Property 48
Embargoed Person 49
Mortgage Loan Reserve Funds 49
Special Distributions 49
Curing 49
Environmental Covenants 50
Mortgage Borrower Covenants 52
Section Negative Covenants 52
Operation of Property 52
Liens 52
Dissolution 52
Change In Business 53
Debt Cancellation 53
Zoning 53
ii
No Joint Assessment 53
ERISA 53
Transfers 54
Limitations on Distributions 57
Lost Note 57
Limitation on Securities Issuances 57
ARTICLE VI - INSURANCE; CASUALTY; CONDEMNATION 58
Section Insurance 58
Section Casualty 58
Section Condemnation 58
Section Restoration 59
ARTICLE VII - RESERVE FUNDS 59
Section Transfer of Reserve Funds under Mortgage Loan 59
Section Tax and Insurance Escrow Fund 60
Section Replacements and Replacement Reserve 60
Replacement Reserve Fund 60
Disbursements from Replacement Reserve Account 61
Performance of Replacements 62
Failure to Make Replacements 64
Balance in the Replacement Reserve Account 65
Waiver of Deposits to the Replacement Reserve Account 65
Section Rollover Reserve 65
Deposits to Rollover Reserve Fund 65
Withdrawal of Rollover Reserve Funds 65
Waiver of Rollover Reserve Fund 65
Section Excess Cash Flow Reserve Fund 66
Deposits to Excess Cash Flow Reserve Fund 66
Release of Excess Cash Flow Reserve Funds 67
Section Reserve Funds, Generally 67
ARTICLE VIII - DEFAULTS 68
Section Event of Default 68
Section Remedies 70
Section Remedies Cumulative; Waivers 73
ARTICLE IX - SPECIAL PROVISIONS 73
Section Securitization 73
Sale of Notes and Securitization 73
Securitization Costs 75
Section Right to Release Information 75
Section Exculpation 75
Section Matters Concerning Manager 75
Section Servicer 75
Section Dissemination of Information 76
ARTICLE X - MISCELLANEOUS 76
Section Survival 76
iii
Section Lender’s Discretion 77
Section Governing Law 77
Section Modification, Waiver in Writing 77
Section Delay Not a Waiver 77
Section Notices 78
Section Trial by Jury 79
Section Headings 79
Section Severability 79
Section Preferences 79
Section Waiver of Notice 79
Section Remedies of Borrower 80
Section Expenses; Indemnity 80
Section Schedules Incorporated 81
Section Offsets, Counterclaims and Defenses 81
Section No Joint Venture or Partnership; No Third Party .Beneficiaries 81
Section Publicity 82
Section Waiver of Marshalling of Assets 82
Section Waiver of Counterclaim 82
Section Conflict; Construction of Documents; Reliance 82
Section Brokers and Financial Advisors 83
Section Prior Agreements 83
Section Liability 83
Section Certain Additional Rights of Lender (VCOC) 83
Section OFAC 84
Section Duplicate Originals; Counterparts 84
ARTICLE XI - SPECIAL PROVISIONS 84
Section The Mortgage Loan and Additional Matters 84
Compliance with Mortgage Loan Documents 84
Other Limitations 85
Additional Representations and Warranties 86
Mortgage Loan Defaults 86
Acquisition of the Mortgage Loan 87
Deed in Lieu of Foreclosure 87
Refinancing or Prepayment of the Mortgage Loan 88
Intercreditor Agreement 88
Independent Approval Rights 88
iv
SCHEDULES
Schedule I – Rent Roll
Schedule II – Organizational Chart of Borrower
v
夹层贷款协议本
夹层贷款协议，日截至 2012 年 6 月 13 日 （经修正，重申、 替换、 补充或否则时而不时修
改这 《 协议 》），之间一路全国协会、 全国银行协会、 具有地址在 11501 Outlook、 套房
300、 欧弗兰帕克、 堪萨斯 66211 （连同与其继承人和，"贷款人"） 和 TNP SRT 组合 II
控股，有限责任公司特拉华州有限责任公司，其主要营业地的业务 1900 主街，套房 700，欧文，
加州 92614 ("借款人")。
WITNESSETh：
反之，借款人渴望从放款人 ； 获得贷款 （定义见下文）并且，而贷款人是愿意向借款人，贷
款，遵守并按照本协议及其它贷款文件 （定义见下文） 的职权范围。现在因此，考虑由贷款人
和公约、 协议、 陈述和保证本协议所述贷款作出时，缔约方双方契约、 同意、 代表和保证，
如下所示：
第一条 定义 ；建设的原则。
定义。为所有目的本协定中，都除非另有明确要求，或除非上下文明确
指出有相反的意思：
"权责发生制期间"指期间开始和包括第一 （1） 一天的每个日历月期限内的贷款和结束，
包括这种日历月 ； 最后日历日期然而，权责发生制初期应展开和包括关闭日期和应结束，包括
关闭日期发生的日历月份的最后的日历日期。
"行动"的涵义第 条规定。
"额外破产意见"是指任何随后的破产意见。
"额外允许转让"的涵义 (f) 一节所述。
"关联机构"指，对于任何人，任何其他人直接或间接地是在控制中，由控制
或与这样的人共同控制或董事或高级人员，这种人或这类人的一个附属机构。
"关联经理"是指任何在其中抵押贷款借款人、 借款人或担保人有，直接或间接的经理，任
何法律、 有益或经济利益。"聚合的债务服务"是指，任何特定的时间、 预定的本金和利息支付
期间欠注和抵押贷款说明，在聚合。"年度预算"是指经营预算，包括所有计划的资本支出，为适
用的会计年度或其它期间编写的抵押贷款借款人根据按揭贷款协议的属性。
本说明所载的"预计偿还日期"涵义。第 (f) 条规定的"批准年度预算"涵义。"可用性门
槛"按揭贷款协议中规定的涵义。"奖"指任何政府的权力就谴责任何赔偿。
"破产诉讼"指任何人： (a) 该等呈请自愿根据破产法 》 或任何其他联邦或州破产或无力
偿债法 ；(b) 提交的反对这样的人，根据破产法 》 或任何其他联邦或州破产或无力偿债法 ；
非自愿的请愿书(提交答案同意或否则为默许或参加任何非自愿的请愿书反对它，由任何其它人
根据破产法 》 或任何其他联邦或州破产或无力偿债法 ； c) 这种人(d) 这样的人同意或默许
或托管人、 接管人、 受托人或考官任命申请加入为这种人或其中任何部分的财产 ；或 (e) 这
样的人进行赋值债权人，或承认，以书面形式或在任何法律程序，其破产或无力偿还其债务到期。
"破产代码"是指标题 11 的美国法典 》，11 .§101、 及续后，同样可
从时间到时间，修正和任何继任者章程或章程和所有规则和规例不时都颁布条例，
以及任何可比性的外国法律，有关破产，破产债权人的权利或任何其他联邦国家
破产或无力偿债法。"碧 Lo"具有部分 (a) 本合同规定的意义。"碧露租赁"的
涵义节 (a) 本合同规定。"碧-罗/罗格翻转储备帐户"一节 (a) 本合同规定
的涵义。"碧-罗/罗格翻转储备基金"的涵义节 (a) 本合同规定。
2
"碧露空间"一节 (a) 本合同规定的涵义。"借用人"的涵义建立四引言段中双方，以及其
继任者和允许转让。"营业日"指赖以商业银行未经授权或法律要求在城市次又一次被指定为接收
付款的地方关闭一天。"资本支出"手段，为任何一段，为项目的开支总额大写根据公认会计准则
（包括为建筑改善或大修，租赁委员会和租户改进支出）。"现金扫事件"是指发生的： (a) 一个
违约事件 ；(b) 任何按揭借款人破产行动、 借款人或经理 ；或者 (c) DSCR 触发事件。
"现金扫事件治疗"手段 (a) 如果现金扫事件只引起的 DSCR 触发事件， 到 债务
服务覆盖率的成就发生或更大的两个 2 连续季度根据紧接的决心，(b) 如果现金扫事件造成的
违约事件的日期对尾随六 6 月由贷方的此类违约事件 （哪个治疗贷款人不是有义务接受和可
能拒绝或接受其自由裁量权），治疗方法接受或者 (c) 如果现金扫事件由破产管理行动引起，
如果借款人替换经理一个合格的经理根据更换管理协议在六十一届 60 日内发生的破产操作管
理器 ；规定，但是，，这种现金扫事件补救阐明在这个定义中，应符合以下条件： (i) 没有违
约事件应已发生和 (ii) 现金扫事件治疗可能会出现不超过两个的情况下根据本协议或任何其他
的贷款文件，继续 （2） 次合计贷款期限及 (iii) 借款人应支付所有贷款的合理费用 ； 这种现
金扫事件补救包括合理的律师费用和开支。
“Cash Sweep Period” means each period commencing on the occurrence of a Cash Sweep
Event and continuing until the earlier of (a) the Payment Date next occurring following the related
Cash Sweep Event Cure, or (b) until payment in full of all principal and interest on the Loan and all
other amounts payable under the Loan Documents.
“Casualty” has the meaning set forth in Section hereof.
“Closing Date” means the date of the funding of the Loan.
“Code” means 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 . Department of Treasury
regulations issued pursuant thereto in temporary or final form.
“Collateral” has the meaning set forth in the Pledge Agreement.
3
“Condemnation” means a temporary or permanent taking by any Governmental Authority as the
result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all
or any part of 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.
“Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of management, policies or activities of a Person, whether through ownership of voting
securities, by contract or otherwise. “Controlled” and “Controlling” have correlative meanings.
“Control Acknowledgment” means that certain Control Acknowledgment and Agreement
executed this same date for the benefit of Lender.
“Current Owner” has the meaning set forth in Section (f).
“Debt” means 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 (including any
Yield Maintenance Amount) due to Lender in respect of the Loan under the Note, this Agreement, the
Pledge Agreement or any other Loan Document.
“Debt Service” means, with respect to any particular period of time, the sum of scheduled
interest payments due under the Note.
“Debt Service Coverage Ratio” means a ratio for the applicable period in which:
(a) the numerator is the Net Operating Income (excluding interest on credit accounts and using
annualized operating expenses for any recurring expenses not paid monthly (., Taxes and Insurance
Premiums)) for such period as set forth in the statements required hereunder, without deduction for
(i) actual management fees incurred in connection with the operation of the Property, or (ii) amounts
paid to the Mortgage Loan Reserve Funds and the Reserve Funds, less (A) management fees equal to
the greater of (1) assumed management fees of 5% of Gross Income from Operations and (2) the actual
management fees incurred, (B) annual Replacement Reserve Fund contributions equal to $87,,
(C) annual Rollover Reserve Fund contributions equal to $212,, and (D) annual Bi-Lo/Kroger
Reserve Fund contributions equal to $122,; and
(b) the denominator is the Aggregate Debt Service for such period.
“Default” means 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” means, with respect to the Loan, a rate per annum equal to the lesser of (a) the
Maximum Legal Rate or (b) five percent (5%) above the Interest Rate.
4
“Disclosure Documents” means, collectively and as applicable, any offering circular, prospectus,
prospectus supplement, private placement memorandum or other offering document, in each case, in
connection with a Securitization.
“Division” shall mean an administrative or operating unit of a Person as opposed to a separate
entity wholly or partially owned by such Person.
“DSCR Trigger Event” has the meaning set forth in the Mortgage Loan Agreement.
“Eligible Account” means 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 a federal or state chartered depository
institution or trust company acting in its fiduciary capacity which, in the case of a state chartered
depository institution or trust company, is subject to regulations substantially similar to 12 .
§(b), having in either case a combined capital and surplus of at least $50,000, and subject to
supervision or examination by federal and state authority. An Eligible Account will not be evidenced
by a certificate of deposit, passbook or other instrument.
“Eligible Institution” means KeyBank National Association or 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 “Aa3” by Moody’s).
“Embargoed Person” means any Person, entity or government subject to trade restrictions under
. law, including The USA PATRIOT Act (including the anti terrorism provisions thereof), the
International Emergency Economic Powers Act, 50 . §§ 1701, et seq., The Trading with the
Enemy Act, 50 . App. 1 et seq., and any Executive Orders or regulations promulgated thereunder
including those related to Specially Designated Nationals and Specially Designated Global Terrorists,
with the result that the investment in Borrower or Guarantor, as applicable (whether directly or
indirectly), is prohibited by law or the Loan made by the Lender is in violation of law.
“Environmental Indemnity” means that certain Environmental Indemnity Agreement, dated as
of the date hereof, executed by Borrower and Guarantor in connection with the Loan for the benefit of
Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.
“Environmental Law” means any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law, relating to protection of human
health or the environment, relating to Hazardous Substances, relating to liability for or costs of
Remediation or prevention of Releases of Hazardous Substances or relating to liability for or costs of
other actual or threatened danger to human health or the environment.
5
Environmental Law includes, but is not limited to, the following statutes, as amended, any successor
thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including
Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act;
the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational
Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and
Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the River
and Harbors Appropriation Act. Environmental Law also includes, but is not limited to, any present
and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as
common law: conditioning transfer of property upon a negative declaration or other approval of a
governmental authority of the environmental condition of the Property; requiring notification or
disclosure of Releases of Hazardous Substances or other environmental condition of the Property to
any governmental authority or other Person, whether or not in connection with transfer of title to or
interest in property; imposing conditions or requirements in connection with permits or other
authorization for lawful activity; relating to nuisance, trespass or other causes of action related to the
Property; or relating to wrongful death, personal injury, or property or other damage in connection with
any physical condition or use of the Property.
“Environmental Lien” has the meaning set forth in Section hereof.
“Equity Interests” means (a) partnership interests (whether general or limited) in an entity that
is a partnership; (b) membership interests in an entity that is a limited liability company; or (c) the
shares or stock interests in an entity that is a corporation.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and the rulings issued thereunder.
“Event of Default” has the meaning set forth in Section (a) hereof.
“Excess Cash Flow” has the meaning set forth in the Mezzanine Cash Management Agreement.
“Excess Cash Flow Reserve Account” has the meaning set forth in Section hereof.
“Excess Cash Flow Reserve Fund” has the meaning set forth in Section hereof.
“Extraordinary Expense” has the meaning set forth in Section (g) hereof.
“Fiscal Year” means each twelve (12) month period commencing on January 1 and ending on
December 31 during each year of the term of the Loan.
“Fitch” means Fitch, Inc.
“GAAP” means generally accepted accounting principles in the United States of America as of
the date of the applicable financial report.
6
“Governing State” has the meaning set forth is Section hereof.
“Governmental Authority” means any court, board, agency, commission, office or other
authority of any nature whatsoever for any governmental unit (foreign, federal, state, county, district,
municipal, city or otherwise) whether now or hereafter in existence.
“Gross Income from Operations” means, during any period, all sustainable income as reported
on the financial statements delivered by Mortgage Borrower in accordance with the Mortgage Loan
Agreement, computed in accordance with GAAP, derived from the ownership and operation of the
Property from whatever source during such period, including, (i) Rents from Tenants that are in
occupancy, open for business and paying full contractual rent without right of offset or credit,
(ii) utility charges, (iii) escalations, (iv) forfeited security deposits, (v) interest on credit accounts,
(vi) service fees or charges, (vii) license fees, (viii) parking fees, (ix) rent concessions or credits,
(x) income from vending machines, (xi) business interruption or other loss of income or rental
insurance proceeds, (xii) other required pass-throughs and (xii) interest on Reserve Funds, if any,
but excluding (i) Rents from month-to-month Tenants, Tenants during a free-rent period, or Tenants
that are included in any Bankruptcy Action, (ii) sales, use and occupancy or other taxes on receipts
required to be accounted for by Mortgage Borrower to any Governmental Authority, (iii) refunds and
uncollectible accounts, (iv) sales of furniture, fixtures and equipment, (v) insurance proceeds (other
than business interruption or other loss of income or rental insurance), (vi) Awards, (vii) unforfeited
security deposits, (viii) utility and other similar deposits and (ix) any disbursements to Mortgage
Borrower from the Mortgage Loan Reserve Funds, if any. Gross income shall not be diminished as a
result of the Security Instrument or the creation of any intervening estate or interest in the Property or
any part thereof.
“Guarantor” means TNP Strategic Retail Trust, Inc., a Maryland corporation.
“Guaranty” means that certain Guaranty Agreement, dated as of the date hereof, executed and
delivered by Guarantor in connection with the Loan to and for the benefit of Lender, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to time.
“Hazardous Substances” means any and all substances (whether solid, liquid or gas) defined,
listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any
present or future Environmental Laws or that may have a negative impact on human health or the
environment, including petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables, explosives, mold,
mycotoxins, microbial matter and airborne pathogens (naturally occurring or otherwise), but excluding
substances of kinds and in amounts ordinarily and customarily used or stored in similar properties for
the purpose of cleaning or other maintenance or operations and otherwise in compliance with all
Environmental Laws.
“Immediate Family Member” has the meaning set forth in Section (f).
“Improvements” has the meaning set forth in the granting clause of the Security Instrument.
7
“Indebtedness” of a Person, at a particular date, means the sum (without duplication) at such
date of (a) all indebtedness or liability of such Person (including amounts for borrowed money and
indebtedness in the form of mezzanine debt or preferred equity); (b) obligations evidenced by bonds,
debentures, notes, or other similar instruments; (c) obligations for the deferred purchase price of
property or services (including trade obligations); (d) obligations under letters of credit; (e) obligations
under acceptance facilities; (f) all guaranties, endorsements (other than for collection or deposit in the
ordinary course of business) and other contingent obligations to purchase, to provide funds for payment,
to supply funds, to invest in any Person or entity, or otherwise to assure a creditor against loss; and
(g) obligations secured by any Liens, whether or not the obligations have been assumed (other than the
Permitted Encumbrances).
“Indemnified Liabilities” has the meaning set forth in Section (b) hereof.
“Indemnified Parties” means Lender and, its designee, (whether or not it is the Lender), any
Affiliate of Lender that has filed any registration statement relating to the Securitization or has acted as
the sponsor or depositor in connection with the Securitization, any Affiliate of Lender that acts as an
underwriter, placement agent or initial purchaser of Securities issued in the Securitization, any other co
underwriters, co placement agents or co initial purchasers of Securities issued in the Securitization, and
each of their respective officers, directors, partners, employees, representatives, agents and Affiliates
and each Person or entity who Controls any such Person within the meaning of Section 15 of the
Securities Act of 1933 as amended or Section 20 of the Security Exchange Act of 1934 as amended,
any Person who is or will have been involved in the origination of the Loan, any Person who is or will
have been involved in the servicing of the Loan secured hereby, any Person in whose name the
encumbrance created by the Security Instrument is or will have been recorded, any Person who may
hold or acquire or will have held a full or partial interest in the Loan secured hereby (including
investors or prospective investors in the Securities, as well as custodians, trustees and other fiduciaries
who hold or have held a full or partial interest in the Loan secured hereby for the benefit of third parties)
as well as the respective directors, officers, shareholders, partners, employees, agents, servants,
representatives, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns
of any and all of the foregoing (including any other Person who holds or acquires or will have held a
participation or other full or partial interest in the Loan, whether during the term of the Loan or as a
part of or following a foreclosure of the Loan and including any successors by merger, consolidation or
acquisition of all or a substantial portion of Lender’s assets and business).
“Independent Director” means a natural Person who (a) is not at the time of initial appointment,
or at any time while serving in such capacity, and is not, and has never been, and shall not while
serving as Independent Director be: (i) a stockholder, director (with the exception of serving as the
Independent Director of Borrower), officer, employee, partner, member (other than a “special member”
or “springing member”), manager, attorney or counsel of Borrower, equity owners of Borrower or
Guarantor or any Affiliate of Borrower or Guarantor; (ii) a customer, supplier or other person who
derives any of its purchases or revenues from its activities with Borrower or Guarantor, equity owners
of Borrower or Guarantor or any Affiliate of Borrower or Guarantor; (iii) a Person Controlling or under
common Control with any such stockholder, director, officer, employee, partner, member, manager,
attorney, counsel, equity owner, customer, supplier or other Person; or (iv) a member of the immediate
family of any such
8
stockholder, director, officer, employee, partner, member, manager, attorney, counsel, equity owner,
customer, supplier or other Person and (b) has (i) prior experience as an independent director or
independent manager for a corporation, a trust or limited liability company whose charter documents
required the unanimous consent of all independent directors or independent managers thereof before
such corporation, trust or limited liability company could consent to the institution of bankruptcy or
insolvency proceedings against it or could file a petition seeking relief under any applicable federal or
state law relating to bankruptcy and (ii) at least three years of employment experience with one or more
nationally-recognized companies that provides, inter alia, professional independent directors or
independent managers in the ordinary course of their respective business to issuers of securitization or
structured finance instruments, agreements or securities or lenders originating commercial real estate
loans for inclusion in securitization or structured finance instruments, agreements or securities (a
“Professional Independent Director”) and is at all times during his or her service as an Independent
Director of Borrower an employee of such a company or companies. A natural Person who satisfies the
foregoing definition except for being (or having been) the independent director or independent manager
of a “special purpose entity” affiliated with Borrower (provided such affiliate does not or did not own a
direct or indirect equity interest in an Borrower) shall not be disqualified from serving as an
Independent Director, provided that such natural Person satisfies all other criteria set forth above and
that the fees such individual earns from serving as independent director or independent manager of
affiliates of Borrower or in any given year constitute in the aggregate less than five percent (5%) of
such individual’s annual income for that year. A natural Person who satisfies the foregoing definition
other than subparagraph (a)(ii) shall not be disqualified from serving as an Independent Director of
Borrower if such individual is a Professional Independent Director and such individual complies with
the requirements of the previous sentence.
“Individual Property” shall mean each parcel of real property, the Improvements thereon and
all personal property owned by Mortgage Borrower and encumbered by the applicable Security
Instrument, together with all rights pertaining to such property and Improvements, as more particularly
described in the granting clauses of the applicable Security Instrument and referred to therein as the
“Property”; which shall include (a) that certain property commonly known as Florissant Marketplace
located at 8200 and 8182 N. Lindbergh Boulevard, Florissant, Missouri; (b) that certain property
commonly known as Bi-Lo Grocery Store located at 1436 J A Cochran Bypass, Chester, South
Carolina; (c) that certain property commonly known as Ensenada Square located at 301 South Bowen
Road, Arlington, Texas; (d) that certain property commonly known as Morningside Marketplace
located at 14574 Baseline Avenue, Fontana, California; and (e) that certain property commonly known
as Shops at Turkey Creek located at 10911 Turkey Drive, Knoxville, Tennessee.
“Initial Interest Payment Per Diem” means $
“Insolvency Opinion” means that certain non-consolidation opinion letter dated the date hereof
delivered by Kaplan Voekler Cunningham & Frank, PLC in connection with the Loan.
“Insurance Premiums” has the meaning set forth in Section (b) of the Mortgage Loan
Agreement.
9
“Intercreditor Agreement” means that certain Intercreditor Agreement dated as of the date
hereof between Lender and Mortgage Lender, as may be amended or modified.
“Interest Rate” means: (i) from and after the date hereof through and including the Anticipated
Repayment Date, a rate of ten percent (10%) per annum; and (ii) after the Anticipated Repayment Date,
a rate of fifteen percent (15%) per annum.
“Kroger” has the meaning specified in Section (a) hereof.
“Kroger Lease” has the meaning specified in Section (a) hereof.
“Kroger Space” has the meaning specified in Section (a) hereof.
“Late Charge” has the meaning set forth in Section 5 of the Note.
“Lease” means any lease, sublease or subsublease, letting, license, concession or other
agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any
Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in
the Property by or on behalf of Borrower, and (a) every modification, amendment or other agreement
relating to such lease, sublease, subsublease, or other agreement entered into in connection with such
lease, sublease, subsublease, or other agreement and (b) every guarantee of the performance and
observance of the covenants, conditions and agreements to be performed and observed by the other
party thereto.
“Legal Requirements” means, all federal, state, county, municipal and other governmental
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
or operation thereof, or any part thereof, whether now or hereafter enacted and in force, and all permits,
licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions
and encumbrances contained in any instruments, either of record or known to Borrower, at any time in
force affecting Borrower, the Mortgage Borrower, the Property or any part thereof, including 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.
“Lender” has the meaning set forth in the introductory paragraph hereto, together with its
successors and assigns.
“Lien” means, any mortgage, deed of trust, deed to secure debt, indemnity deed of trust, lien,
pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer of,
on or affecting Mortgage Borrower, Borrower, the Property, or the Collateral, any portion thereof or
any interest therein, including 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.
“Liquidation Event” shall have the meaning set forth in Section (a) hereof.
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“Loan” means the loan made by Lender to Borrower pursuant to this Agreement.
“Loan Documents” means, collectively, this Agreement, the Note, the Pledge Agreement, the
Guaranty, the Subordination of Management Agreement, the Environmental Indemnity Agreement, the
Proxy Agreement, Control Acknowledgment, Mezzanine Cash Management Agreement, and all other
documents now or hereafter executed and/or delivered in connection with the Loan.
“Lockbox Account” has the meaning set forth in the Mortgage Loan Agreement.
“Lockbox Agreement” has the meaning set forth in the Mortgage Loan Agreement.
“Lockbox Bank” has the meaning set forth in the Mortgage Loan Agreement.
“Management Agreement” means, individually or collectively (as the context may require),
each management agreement entered into by and between Mortgage Borrower and Manager, pursuant
to which Manager is to provide management and other services with respect to the Property, or, if the
context requires, a Qualified Manager who is managing the Property in accordance with the terms and
provisions of the Mortgage Loan Agreement.
“Manager” means TNP Property Manager, LLC, or if the context requires, a Qualified Manager
who is managing the Property in accordance with the terms and provisions of this Agreement pursuant
to a Replacement Management Agreement.
“Material Action” means to consolidate or merge Borrower with or into any Person, or sell all
or substantially all of the assets of Borrower, or to institute proceedings to have Borrower be
adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against Borrower or file a petition seeking, or consent to, reorganization or relief with respect to
Borrower under any applicable federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of
Borrower or a substantial part of its property, or make any assignment for the benefit of creditors of
Borrower, or admit in writing Borrower’s inability to pay its debts generally as they become due, or
take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or
liquidate Borrower.
“Maturity Date” means July 1, 2019, or such other date on which the final payment of principal
of the Note becomes due and payable as therein or herein provided, whether at such stated maturity
date, by declaration of acceleration, or otherwise.
“Maximum Legal Rate” means the maximum nonusurious interest rate, if any, that at any time
or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness
evidenced by the Note and as provided for herein or the other Loan Documents, under the laws of such
state or states whose laws are held by any court of competent jurisdiction to govern the interest rate
provisions of the Loan.
“Mezzanine Cash Management Agreement” means the Mezzanine Cash Management
Agreement, dated the date of this Agreement, among Borrower, Manager, Mortgage Borrower, Lender
and Mortgage Lender, together with any extensions, renewals, amendments or modifications thereof.
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“Mezzanine Collection Account” shall mean the Eligible Account at a bank acceptable to
Lender in the name of Lender as secured party, in which it has sole dominion and control, in which the
Monthly Debt Service Payment Amount is deposited each month in accordance with the Mortgage
Loan Documents.
“Monthly Debt Service Payment Amount” has the meaning set forth in the Note.
“Moody’s” means Moody’s Investors Service, Inc.
“Mortgage Borrower” means TNP SRT Portfolio II, LLC, a Delaware limited liability
company.
“Mortgage Borrower Company Agreement” means the Operating Agreement of Mortgage
Borrower.
“Mortgage Cash Management Account” means the Cash Management Account, as defined in
the Mortgage Loan Agreement.
“Mortgage Cash Management Agreement” means the Cash Management Agreement, as
defined in the Mortgage Loan Agreement.
“Mortgage Cash Management System” shall have the meaning set forth in Section (c).
“Mortgage Lender” means KeyBank National Association, ., and its successors and
assigns.
“Mortgage Loan” means the $26,000, loan from Mortgage Lender to Mortgage Borrower
pursuant to the Mortgage Loan Documents.
“Mortgage Loan Accounts” shall have the meaning set forth in Section (a).
“Mortgage Loan Agreement” means that certain Loan Agreement dated of even date herewith
between Mortgage Lender and Mortgage Borrower.
“Mortgage Loan Default” means an “Event of Default” as defined in the Mortgage Loan
Agreement.
“Mortgage Loan Documents” means the Loan Documents, as defined in the Mortgage Loan
Agreement.
“Mortgage Loan Reserve Funds” means the “Reserve Funds” as defined in the Mortgage Loan
Agreement.
“Mortgage Note” means the Promissory Note evidencing the Mortgage Loan.
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“Net Cash Flow” means, with respect to the Property for any period, the amount obtained by
subtracting Operating Expenses and Capital Expenditures for such period from Gross Income from
Operations for such period.
“Net Liquidation Proceeds After Debt Service” shall mean, with respect to any Liquidation
Event, all amounts paid to or received by or on behalf of Mortgage Borrower in connection with such
Liquidation Event, including proceeds of any sale, refinancing or other disposition or liquidation, less
(a) Lender’s and/or Mortgage Lender’s reasonable costs incurred in connection with the recovery
thereof, (b) the costs incurred by Mortgage Borrower in connection with a Restoration of all or any
portion of an Individual Property made in accordance with the Mortgage Loan Documents, (c) amounts
required or permitted to be deducted therefrom and amounts paid pursuant to the Mortgage Loan
Documents to Mortgage Lender, (d) in the case of a foreclosure sale, disposition or Transfer of each
applicable Individual Property in connection with realization thereon following an Event of Default
under the Mortgage Loan, such reasonable and customary costs and expenses of sale or other
disposition (including attorneys’ fees and brokerage commissions), (e) in the case of a foreclosure sale,
such costs and expenses incurred by Mortgage Lender under the Mortgage Loan Documents as
Mortgage Lender shall be entitled to receive reimbursement for under the terms of the Mortgage Loan
Documents, (f) in the case of a refinancing of the Mortgage Loan, such costs and expenses (including
attorneys’ fees) of such refinancing as shall be reasonably approved by Lender, (g) in the case of a sale
of any Individual Property in accordance with the provisions of the Mortgage Loan Agreement, such
fees, costs and expenses (including attorneys’ fees) of such sale as shall be reasonably approved by
Lender and (h) the amount of any prepayments required pursuant to the Mortgage Loan Documents,
and/or the Loan Documents, in connection with any such Liquidation Event.
“Net Operating Income” means the amount obtained by subtracting Operating Expenses from
Gross Income from Operations.
“Net Proceeds” has the meaning set forth in the Mortgage Loan Agreement.
“Note” means that certain Promissory Note, dated the date hereof, in the principal amount of
$2,000,, made by Borrower in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.
“OFAC” has the meaning set forth in Section hereof.
“Officer’s Certificate” means a certificate delivered to Lender by Borrower which is signed by
an authorized officer of Borrower or the general partner, managing member or sole member of
Borrower, as applicable.
“Operating Expenses” means the total of all expenditures, computed in accordance with GAAP,
of whatever kind relating to the operation, maintenance and management of the Property that are
incurred by Mortgage Borrower on a regular monthly or other periodic basis, including, bad debt,
utilities, ordinary repairs and maintenance, insurance, license fees, property taxes and assessments,
advertising expenses, management fees, payroll and related taxes, computer processing charges,
operational equipment or other lease payments as approved by Mortgage Lender, and other similar
costs, but excluding depreciation, debt service under the Mortgage Loan Documents, Capital
Expenditures and contributions to the Mortgage Loan Accounts.
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“Original Principal Amount” means $2,000,.
“Other Charges” means all ground rents, maintenance charges, impositions other than Taxes,
and any other charges, including 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.
“Outstanding Principal Balance” or “OPB” means the portion of the Original Principal
Amount that remains outstanding from time to time
“Payment Date” means the first (1st) day of each calendar month during the term of the Loan.
“Permitted Encumbrances” means, (a) with respect to the Collateral, the Liens created by the
Loan Documents and (b) with respect to the Property only, collectively, (i) the Liens and security
interests created by the Mortgage Loan Documents, (ii) all Liens, encumbrances and other matters
disclosed in the Title Insurance Policy, (iii) Liens, if any, for Taxes imposed by any Governmental
Authority not yet due or delinquent, and (iv) such other title and survey exceptions as Lender has
approved or may approve in writing in Lender’s discretion, which Permitted Encumbrances in the
aggregate do not materially adversely affect the value or use of the Property, Mortgage Borrower’s
ability to pay the Mortgage Loan obligations as they become due, or Borrower’s ability to repay the
Loan when it becomes due.
“Permitted Investments” means any one or more of the following obligations or securities
acquired at a purchase price of not greater than par, including those issued by Servicer, 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 first Payment Date following the date of
acquiring such investment and meeting one of the appropriate standards set forth below:
(i) 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
obligations of: the . Treasury (all direct or fully guaranteed obligations), the Farmers
Home Administration (certificates of beneficial ownership), the General Services
Administration (participation certificates), the . Maritime Administration (guaranteed
Title XI financing), the Small Business Administration (guaranteed participation certificates
and guaranteed pool certificates), the . 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 (A) have
a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating, (C) 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 (D) such
investments must not be subject to liquidation prior to their maturity;
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(ii) Federal Housing Administration debentures;
(iii) 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 (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) 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 (D) such investments must not be subject to
liquidation prior to their maturity;
(iv) 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 (A) have a predetermined fixed dollar of principal due at maturity that cannot
vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating,
(C) 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 (D) such investments must not be subject to liquidation prior to their maturity;
(v) fully Federal Deposit Insurance Corporation-insured demand and time deposits in,
or certificates of deposit of, or bankers’ acceptances 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 (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating, (C) 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 (D) such
investments must not be subject to liquidation prior to their maturity;
15
(vi) 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 (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter
affixed to their rating, (C) 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 (D) such investments must not be subject to liquidation
prior to their maturity;
(vii) 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 (A) have a predetermined fixed dollar of principal due at maturity that
cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (C) 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 (D) such investments must not be subject to liquidation prior to their maturity;
(viii) units of taxable money market funds, 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
(ix) any other security, obligation or investment which has been approved as a
Permitted Investment in writing by (a) Lender and (b) 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;
16
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 or (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 120% of the yield to maturity at par of such underlying
investment.
“Permitted Transfer” means any of the following: (a) any transfer, directly as a result of the
death of a natural person, of stock, membership interests, partnership interests or other ownership
interests previously held by the decedent in question to the Person or Persons lawfully entitled thereto,
(b) any transfer, directly as a result of the legal incapacity of a natural person, of stock, membership
interests, partnership interests or other ownership interests previously held by such natural person to the
Person or Persons lawfully entitled thereto, (c) subject to Section , any public issuance of
non-Controlling interests in TNP, (d) subject to Section , any issuance of non-Controlling interest
in TNP to employees or other Persons affiliated with TNP pursuant to employee or director
compensation programs, (e) subject to Section , any issuance of non-Controlling interests in TNP
in connection with the conversion of limited partnership interests in Operating Partnership, (f) subject
to Section , any issuance of non-Controlling interests in TNP in connection with a dividend
reinvestment plan sponsored by TNP, (g) subject to Section , any private sale or transfer of
non-Controlling interests in TNP through a transaction brokered by a FINRA licensed broker dealer,
(h) the issuance of limited partnership interests in Operating Partnership to TNP, and (i) subject to
Section , any private sale or transfer of non-Controlling limited partnership interests in Operating
Partnership; provided that as to clauses (c) through (i), at all times TNP must continue to (A) Control
Operating Partnership, (B) own one hundred percent (100%) of the general partnership interests in
Operating Partnership and (C) own, directly or indirectly, at least fifty-one percent (51%) of the limited
partnership interest in Operating Partnership.
“Person” means 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” has the meaning set forth in the granting clause of the Security Instrument.
“Pledge Agreement” means the Pledge and Security Agreement dated on this same date made
by Pledgor in favor of Lender.
“Pledgor” means Borrower and any other Person that is a pledgor under the Pledge Agreement.
“Policies” has the meaning set forth in Section (b) of the Mortgage Loan Agreement.
“Policy” has the meaning set forth in Section (b) of the Mortgage Loan Agreement.
“Property” means the parcel(s) of real property, the Improvements thereon and all personal
property owned by Mortgage Borrower and encumbered by the Security Instrument, together with all
rights pertaining to such property and Improvements, as more particularly described in the granting
clauses of the Security Instrument and referred to therein as the “Property”.
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“Provided Information” means any and all financial and other information provided to Lender
at any time prepared by, or on behalf of, Borrower, Mortgage Borrower, Guarantor and/or Manager.
“Proxy Agreement” means that certain Irrevocable Proxy Agreement entered into the same date
herewith for the benefit of Lender.
“Qualified Manager” means either (a) Manager; or (b) in the reasonable judgment of Lender, a
reputable and experienced management organization (which may be an Affiliate of Borrower)
possessing experience in managing properties similar in size, scope, use and value as the Property,
provided, that, if required by Lender, Borrower shall have obtained (i) prior written confirmation from
the applicable Rating Agencies that management of the Property by such entity will not cause a
downgrade, withdrawal or qualification of the then current ratings of the Securities or any class thereof
and (ii) if such entity is an Affiliate of Borrower, an Additional Insolvency Opinion.
“Rating Agencies” means each of S&P, Moody’s, Fitch, and Realpoint or any other nationally
recognized statistical rating agency which has been approved by Lender and designated by Lender to
assign a rating to the Securities.
“Realpoint” means Realpoint, LLC, a Pennsylvania limited liability company.
“Release” of any Hazardous Substance 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 Substances.
“Remediation” includes any response, remedial, removal, or corrective action, any activity to
cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance, any
actions to prevent, cure or mitigate any Release of any Hazardous Substance, any action to comply
with any Environmental Laws or with any permits issued pursuant thereto, any inspection,
investigation, study, monitoring, assessment, audit, sampling and testing, laboratory or other analysis,
or evaluation relating to any Hazardous Substances.
“REMIC Trust” means a “real estate mortgage investment conduit” within the meaning of
Section 860D of the Code that holds the Note or a portion thereof.
“Rents” means, all rents (including percentage rents), rent equivalents, moneys payable as
damages or in lieu of rent or rent equivalents, royalties (including all oil and gas or other mineral
royalties and bonuses), income, receivables, receipts, revenues, payments (including payments in
connection with the exercise of any purchase option or termination rights), deposits (including security,
utility and other deposits), accounts, cash, issues, profits, charges for services rendered, all other
amounts payable as rent under any Lease or other agreement relating to the Property, including charges
for electricity, oil, gas, water, steam, heat, ventilation, air-conditioning and any other energy,
telecommunication, telephone, utility or similar items or time use charges, HVAC equipment charges,
sprinkler charges, escalation charges, license fees,
18
maintenance fees, charges for Taxes, operating expenses or other reimbursables payable to Mortgage
Borrower (or to the Manager for the account of Mortgage Borrower) under any Lease, and other
consideration of whatever form or nature received by or paid to or for the account of or benefit of
Mortgage Borrower or its agents or employees from any and all sources arising from or attributable to
the Property.
“Replacement Management Agreement” means, collectively, (a) either (i) a management
agreement with a Qualified Manager substantially in the same form and substance as the Management
Agreement, or (ii) a management agreement with a Qualified Manager, which management agreement
shall be reasonably acceptable to Lender in form and substance, provided, with respect to this
subclause (ii), Lender, at its option, may require that Mortgage Borrower shall have obtained prior
written confirmation from the applicable Rating Agencies that such management agreement will not
cause a downgrade, withdrawal or qualification of the then current rating of the Securities or any class
thereof and (b) an assignment of management agreement and subordination of management fees
substantially in the form then used by Lender (or of such other form and substance reasonably
acceptable to Lender).
“Replacement Reserve Account” has the meaning set forth in Section hereof.
“Replacement Reserve Fund” has the meaning set forth in Section hereof.
“Replacement Reserve Monthly Deposit” has the meaning set forth in Section hereof.
“Replacements” has the meaning set forth in Section hereof.
“Required Repair Account” has the meaning set forth in the Mortgage Loan Agreement.
“Required Repair Fund” has the meaning set forth in the Mortgage Loan Agreement.
“Reserve Funds” means, collectively, the Tax and Insurance Escrow Fund, the Replacement
Reserve Fund, the Required Repair Fund, the Rollover Reserve Fund, the Excess Cash Flow Reserve
Fund, the Bi-Lo/Kroger Rollover Reserve Fund, any other Mortgage Loan Reserve Fund and any other
escrow fund established by this Agreement or the other Loan Documents.
“Restoration” means the repair and restoration of the Property (or the applicable portion thereof)
after a Casualty or Condemnation as nearly as possible to the condition the Property (or applicable
portion thereof) was in immediately prior to such Casualty or Condemnation, with such alterations as
may be reasonably approved by Lender.
“Restricted Party” means (a) Borrower, Mortgage Borrower, any Guarantor, and any Affiliated
Manager and (b) any shareholder, partner, member, non-member manager, any direct or indirect legal
or beneficial owner of, Borrower, any Guarantor (other than any shareholder or any other direct or
indirect legal or beneficial owner of interests in TNP and other than Persons that are indirect legal or
beneficial owners of Borrower solely by being a shareholder of TNP; provided, however, that any
shareholder or any other direct or indirect legal or beneficial owner
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of interests in TNP that owns nine and nine-tenths percent (%) or more of the outstanding stock of
TNP is deemed to be a Restricted Party), any Affiliated Manager or any non-member manager.
“Rollover Reserve Account” has the meaning set forth in Section hereof.
“Rollover Reserve Fund” has the meaning set forth in Section hereof.
“S&P” means Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies.
“Sale or Pledge” means a voluntary or involuntary sale, conveyance, assignment, transfer,
encumbrance, pledge, grant of option or other transfer or disposal of a legal or beneficial interest,
whether direct or indirect.
“Securities” has the meaning set forth in Section hereof.
“Securitization” has the meaning set forth in Section hereof.
“Security Instrument” means the Security Instrument as defined in the Mortgage Loan
Agreement.
“Servicer” has the meaning set forth in Section hereof.
“Servicing Agreement” has the meaning set forth in Section hereof.
“Severed Loan Documents” has the meaning set forth in Section (c) hereof.
“Special Purpose Entity” means a corporation, limited partnership or limited liability company
that, since the date of its formation and at all times on and after the date thereof, has complied with and
shall at all times comply with the following requirements unless it has received either prior consent to
do otherwise from Lender or a permitted administrative agent thereof, or, while the Loan is securitized,
confirmation from each of the applicable Rating Agencies that such noncompliance would not result in
the requalification, withdrawal, or downgrade of the ratings of any Securities or any class thereof:
(i) is and shall be organized solely for the purpose of, owning, holding, selling,
transferring, exchanging, managing and operating the Collateral, entering into and
performing its obligations under the Loan Documents with Lender, refinancing the Collateral
in connection with a permitted repayment of the Loan, and transacting lawful business that is
incident, necessary and appropriate to accomplish the foregoing;
(ii) has not engaged and shall not engage in any business unrelated to the acquisition,
ownership, management or operation of the Collateral, as applicable;
(iii) does not have, shall not have and at no time had any assets other than the
Collateral;
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(v) has not engaged in, sought, consented or permitted to and shall not engage in, seek,
consent to or permit (A) any dissolution, winding up, liquidation, consolidation or merger, or
(B) any sale or other transfer of all or substantially all of its assets or any sale of assets
outside the ordinary course of its business, except as permitted by the Loan Documents;
(vi) shall not cause, consent to or permit any amendment of its limited partnership
agreement, articles of incorporation, articles of organization, certificate of formation,
operating agreement or other formation document or organizational document (as applicable)
with respect to the matters set forth in this definition;
(vii) if such entity is a limited partnership, has and shall have at least one general
partner and has and shall have, as its only general partners, Special Purpose Entities each of
which (A) is a corporation or single-member Delaware limited liability company, (B) has one
Independent Directors, and (C) holds a direct interest as general partner in the limited
partnership of not less than %;
(viii) if such entity is a corporation, has and shall have at least one Independent
Director, and shall not cause or permit the board of directors of such entity to take any
Material Action or any action requiring the unanimous affirmative vote of one hundred
percent (100%) of the members of its board of directors unless the Independent Director shall
have participated in such vote and shall have voted in favor of such action;
(ix) if such entity is a limited liability company (other than a limited liability company
meeting all of the requirements applicable to a single-member limited liability company set
forth in this definition of “Special Purpose Entity”), has and shall have at least one
(1) member that is a Special Purpose Entity, that is a corporation, that has at least one
Independent Director and that directly owns at least one-half-of-one percent (%) of the
equity of the limited liability company;
(x) if such entity is a single-member limited liability company, (A) is and shall be a
Delaware limited liability company, (B) has and shall have at least one Independent Director,
(C) shall not take any Material Action and shall not cause or permit the members or
managers of such entity to take any Material Action unless the Independent Director shall
have consented in writing to such action, and (D) has and shall have either (1) a member
which owns no economic interest in the company, has signed the company’s limited liability
company agreement and has no obligation to make capital contributions to the company, or
(2) two natural persons or one entity that is not a member of the company, that has signed its
limited liability company agreement and that, under the terms of such limited liability
company agreement becomes a member of the company immediately prior to the withdrawal
or dissolution of the last remaining member of the company;
(xi) has not and shall not (and, if such entity is (a) a limited liability company, has and
shall have a limited liability agreement or an operating agreement, as applicable, (b) a limited
partnership, has a limited partnership agreement, or (c) a corporation, has a certificate of
incorporation or articles that, in each case, provide that such entity shall not)
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(1) dissolve, merge, liquidate, consolidate; (2) sell all or substantially all of its assets;
(3) amend its organizational documents with respect to the matters set forth in this definition
without the consent of Lender; or (4) without the affirmative vote of the Independent
Director: (A) file or consent to the filing of any bankruptcy, insolvency or reorganization
case or proceeding, institute any proceedings under any applicable insolvency law or
otherwise seek relief under any laws relating to the relief from debts or the protection of
debtors generally, file a bankruptcy or insolvency petition or otherwise institute insolvency
proceedings; (B) seek or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator, custodian or any similar official for the entity or a substantial portion of
its property; (C) make an assignment for the benefit of the creditors of the entity; or (D) take
any action in furtherance of any of the foregoing;
(xii) has at all times been and shall at all times remain solvent and has paid and shall
pay its debts and liabilities (including, a fairly-allocated portion of any personnel and
overhead expenses that it shares with any Affiliate) from its assets as the same shall become
due, and has maintained and shall 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 (unless any such insolvency, or failure to pay its debts and liabilities, or
failure to maintain adequate capital is solely due to an insufficiency in Gross Income from
Operations); provided, however, that the foregoing shall not require any member, partner or
beneficiary to make additional capital contributions;
(xiii) has not failed and shall not fail to correct any known misunderstanding regarding
the separate identity of such entity and has not identified and shall not identify itself as a
Division of any other Person;
(xiv) has maintained and shall maintain its bank accounts, books of account, books and
records separate from those of any other Person and, to the extent that it is required to file tax
returns under applicable law, has filed and shall file its own tax returns, except to the extent
that it is required by law to file consolidated tax returns and, if it is a corporation, has not
filed and shall not file a consolidated federal income tax return with any other corporation,
except to the extent that it is required by law to file consolidated tax returns;
(xv) has maintained and shall maintain its own records, books, resolutions and
agreements;
(xvi) has not commingled and shall not commingle its funds or assets with those of any
other Person and has not participated and shall not participate in any cash management
system with any other Person;
(xvii) has held and shall hold its assets in its own name;
(xviii) has conducted and shall conduct its business in its name or in a name franchised
or licensed to it by an entity other than an Affiliate of itself or of Borrower, except for
business conducted on behalf of itself by another Person under a business management
services agreement that is on commercially-reasonable terms, so long as the manager, or
equivalent thereof, under such business management services agreement holds itself out as an
agent of Borrower;
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(xix) (A) has maintained and shall maintain its financial statements, accounting records
and other entity documents separate from those of any other Person; (B) has shown and shall
show, in its financial statements, its asset and liabilities separate and apart from those of any
other Person; and (C) has not permitted and shall not permit its assets to be listed as assets on
the financial statement of any of its Affiliates except as required by GAAP; provided,
however, that any such consolidated financial statement contains a note indicating that the
Special Purpose Entity’s separate assets and credit are not available to pay the debts of such
Affiliate and that the Special Purpose Entity’s liabilities do not constitute obligations of the
consolidated entity;
(xx) has paid and shall pay its own liabilities and expenses, including the salaries of its
own employees, out of its own funds and assets, and has maintained and shall maintain a
sufficient number of employees in light of its contemplated business operations;
(xxi) has observed and shall observe all partnership, corporate or limited liability
company formalities, as applicable;
(xxii) has not incurred any Indebtedness other than (i) this Loan, (ii) unsecured trade
payables and operational debt not evidenced by a note, and (iii) Indebtedness incurred in the
financing of equipment and other personal property used on the Property;
(xxiii) shall have no Indebtedness other than (i) the Loan, (ii) liabilities incurred in the
ordinary course of business relating to the ownership and operation of the Collateral and the
routine administration of Borrower, in amounts not to exceed 2% of the amount of the Loan
which liabilities are not more than sixty (60) days past the date incurred, are not evidenced by
a note and are paid when due, and which amounts are normal and reasonable under the
circumstances, and (iii) such other liabilities that are permitted pursuant to this Agreement;
(xxiv) has not assumed, guaranteed or become obligated and shall not assume or
guarantee or become obligated for the debts of any other Person, has not held out and shall
not hold out its credit as being available to satisfy the obligations of any other Person or has
not pledged and shall not pledge its assets for the benefit of any other Person, in each case
except as permitted pursuant to this Agreement;
(xxv) has not acquired and shall not acquire obligations or securities of its partners,
members or shareholders or any other owner or Affiliate;
(xxvi) has allocated and shall allocate fairly and reasonably any overhead expenses that
are shared with any of its Affiliates, constituents, or owners, or any guarantors of any of their
respective obligations, or any Affiliate of any of the foregoing, including paying for shared
office space and for services performed by any employee of an Affiliate;
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(xxvii) has maintained and used and shall maintain and use separate stationery,
invoices and checks bearing its name and not bearing the name of any other entity unless
such entity is clearly designated as being the Special Purpose Entity’s agent;
(xxviii) has not pledged and shall not pledge its assets to or for the benefit of any other
Person, other than pursuant to the Pledge Agreement;
(xxix) has held itself out and identified itself and shall hold itself out and identify itself
as a separate and distinct entity under its own name or in a name franchised or licensed to it
by an entity other than an Affiliate of Borrower and not as a Division or part of any other
Person,
(xxx) has maintained and shall maintain its assets in such a manner that it shall not be
costly or difficult to segregate, ascertain or identify its individual assets from those of any
other Person;
(xxxi) has not made and shall not make loans to any Person and has not held and shall
not hold evidence of indebtedness issued by any other Person or entity (other than cash and
investment-grade securities issued by an entity that is not an Affiliate of or subject to
common ownership with such entity);
(xxxii) has not identified and shall not identify its partners, members or shareholders,
or any Affiliate of any of them, as a Division or part of it, and has not identified itself and
shall not identify itself as a Division of any other Person;
(xxxiii) other than capital contributions and distributions permitted under the terms of
its organizational documents, has not entered into or been a party to, and shall not enter into
or be a party to, any transaction with any of its partners, members, shareholders or Affiliates
except in the ordinary course of its business and on terms which are commercially reasonable
terms comparable to those of an arm’s-length transaction with an unrelated third party;
(xxxiv) has not had and shall not have any obligation to, and has not indemnified and
shall not indemnify its partners, officers, directors or members, as the case may be, in each
case unless such an obligation or indemnification is fully subordinated to the Debt and shall
not constitute a claim against it if its cash flow is insufficient to pay the Debt;
(xxxv) if such entity is a corporation, has considered and shall consider the interests of
its creditors in connection with all corporate actions;
(xxxvi) has not had and shall not have any of its obligations guaranteed by any
Affiliate except as provided by the Loan Documents;
(xxxvii) has not formed, acquired or held and shall not form, acquire or hold any
subsidiary;
(xxxviii) has complied and shall comply with all of the terms and provisions contained
in its organizational documents;
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(xxxix) has conducted and shall conduct its business so that each of the assumptions
made about it and each of the facts stated about it in the Insolvency Opinion are true;
(xl) has not permitted and shall not permit any Affiliate or constituent party
independent access to its bank accounts;
(xli) is, has always been and shall continue to be duly formed, validly existing, and in
good standing in the state of its incorporation or formation and in all other jurisdictions
where it is qualified to do business;
(xlii) has paid all taxes which it owes and is not currently involved in any dispute with
any taxing authority;
(xliii) is not now, nor has ever been, party to any lawsuit, arbitration, summons, or
legal proceeding that resulted in a judgment against it that has not been paid in full;
(xliv) has no judgments or Liens of any nature against it except for tax liens not yet due
and the Liens granted under the Pledge Agreement;
(xlv) has provided Lender with complete financial statements that reflect a fair and
accurate view of the entity’s financial condition; and
(xlvi) has no material contingent or actual obligations not related to the Collateral.
“State” means, the State or Commonwealth in which the Property or any part thereof is located.
“Substitute CMA Agreement” has the meaning set forth in Section (c).
“Subordination of Management Agreement” means that certain Subordination of Management
Agreement dated as of the date hereof, among Lender, Borrower, Mortgage Borrower and Manager, as
the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.
“Tax and Insurance Escrow Fund” has the meaning set forth in Section hereof.
“Taxes” means 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” means the lessee of all or a portion of the Property under a Lease.
“Threshold Amount” has the meaning set forth in Section hereof.
“Title Insurance Policy” means the mortgagee title insurance policy issued with respect to the
Property and insuring the lien of the Security Instrument.
“TNP” means TNP Strategic Retail Trust, Inc.
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“Transfer” has the meaning set forth in Section (b) hereof.
“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in effect in
the State in which the Property is located.
“. Obligations” means non redeemable, non prepayable, non callable securities evidencing
an obligation to timely pay principal and/or interest in a full and timely manner that constitute
“government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of
1940, as amended, and are (a) direct obligations of the United States of America for the payment of
which its full faith and credit is pledged, or (b) to the extent acceptable to the Rating Agencies, other
“government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of
1940, as amended.
“Yield Maintenance Amount” has the meaning set forth in the Note.
Section Principles of Construction. The following rules of construction shall be applicable
for all purposes of this Agreement and all documents or instruments supplemental hereto, unless the
context otherwise clearly requires:
(a) any pronoun used herein shall be deemed to cover all genders, and words importing the
singular number shall mean and include the plural number, and vice versa;
(c) the term “or” has, except where otherwise indicated, the inclusive meaning represented by
the phrase “and/or”;
(d) an Event of Default shall “continue” or be “continuing” until such Event of Default has
been waived in writing by Lender;
(f) no inference in favor of or against any party shall be drawn from the fact that such party
has drafted any portion hereof or any other Loan Document;
(g) the cover page (if any) of, all recitals set forth in, and all Exhibits to, this Agreement are
hereby incorporated herein;
(h) all references to sections and schedules are to sections and schedules in or to this
Agreement unless otherwise specified;
(i) all uses of the word “include,” “including” and similar terms shall be construed as if
followed by the phrase “without being limited to” unless the context shall indicate otherwise;
(j) 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; and
(k) 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.
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With respect to terms defined by cross-reference to the Mortgage Loan Documents, such defined
terms shall have the definitions set forth in the Mortgage Loan Documents as of the date hereof, and no
modifications to the Mortgage Loan Documents shall have the effect of changing such definitions for
the purposes of this Loan Agreement unless Lender expressly agrees that such definitions as used in the
is Loan Agreement have been revised.
Any (i) affirmative or negative covenant imposed under this Agreement upon Borrower with
respect to Mortgage Borrower or the Property, shall be deemed to impose a covenant upon Borrower to
cause such entity to perform in accordance with such covenant and (ii) representation made by
Borrower with respect to any such entity, any Guarantor, or the Property, shall be deemed to impose a
covenant upon Borrower to use all commercially reasonable efforts to make due inquiry and exercise
due diligence with respect to such applicable Person or the Property, in order to assure that such
representation is both accurate and complete.
ARTICLE II - GENERAL TERMS
Section Loan Commitment; Disbursement to Borrower.
Agreement to Lend and Borrow. 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.
Single Disbursement to Borrower. Borrower may request and receive only one
(1) borrowing hereunder in respect of the Loan and any amount borrowed and repaid hereunder in
respect of the Loan may not be reborrowed. Borrower acknowledges and agrees that the Loan has been
fully funded as of the Closing Date.
The Note, Pledge Agreement and Loan Documents. The Loan shall be evidenced by the
Note and secured by the Pledge Agreement and the other Loan Documents.
Use of Proceeds. Borrower shall use the proceeds of the Loan solely to (a) make an equity
contribution to Mortgage Borrower in order to cause Mortgage Borrower to use such amounts for any
use permitted pursuant to Section of the Mortgage Loan Agreement, (b) pay costs and expenses
incurred in connection with the closing of the Loan, as approved by Lender and (c) retain the balance,
if any.
Section Interest Rate.
Interest Rate. Interest on the outstanding principal balance of the Loan shall accrue at the
Interest Rate or as otherwise set forth in this Agreement from (and including) the Closing Date to but
excluding the Maturity Date.
Interest Calculation. Interest on the outstanding principal balance of the Loan shall be
calculated by multiplying (a) the actual
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number of days elapsed in the relevant Accrual Period by (b) a daily rate based on the Interest Rate and
a three hundred sixty (360) day year by (c) the outstanding principal balance of the Loan. Borrower
acknowledges that the calculation method for interest described herein results in a higher effective
interest rate than the numeric Interest Rate and Borrower hereby agrees to this calculation method.
Default Rate. Upon the occurrence of an Event of Default (including the failure of
Borrower to make full payment on the Maturity Date), Lender shall be entitled to receive and Borrower
shall pay interest on the Outstanding Principal Balance at the Default Rate but in no event greater than
the maximum rate permitted by applicable law. Interest shall accrue and be payable at the Default Rate
from the occurrence of an Event of Default until all Events of Default have been waived in writing by
Lender in its discretion. Such accrued interest shall be added to the Outstanding Principal Balance, and
interest shall accrue thereon at the Default Rate until fully paid. Such accrued interest shall be secured
by the Pledge Agreement and other Loan Documents. Borrower agrees that Lender’s right to collect
interest at the Default Rate is given for the purpose of compensating Lender at reasonable amounts for
Lender’s added costs and expenses that occur as a result of Borrower’s default and that are difficult to
predict in amount, such as increased general overhead, concentration of management resources on
problem loans, and increased cost of funds. Lender and Borrower agree that Lender’s collection of
interest at the Default Rate is not a fine or penalty, but is intended to be and shall be deemed to be
reasonable compensation to Lender for increased costs and expenses that Lender will incur if there
occurs an Event of Default hereunder. Collection of interest at the Default Rate shall not be construed
as an agreement or privilege to extend the Maturity Date or to limit or impair any rights and remedies
of Lender under any Loan Documents. If judgment is entered on this Note, interest shall continue to
accrue post-judgment at the greater of (a) the Default Rate or (b) the applicable statutory judgment rate.
Usury Savings. This Agreement, the Note and the other Loan Documents are subject to the
express condition that at no time shall Borrower be obligated or required to pay interest on the principal
balance of the Loan at a rate which could subject Lender to either civil or criminal liability as a result
of being in excess of the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the principal balance due
hereunder at a rate in excess of the Maximum Legal Rate, the Interest Rate or the Default Rate, as the
case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous
payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of
principal and not on account of the interest due hereunder. All sums paid or agreed to be paid to Lender
for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan
until payment in full so that the rate or amount of interest on account of the Loan does not exceed the
Maximum Legal Rate of interest from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding.
Section Loan Payment. Payments of principal, interest and Late Charges (as defined in the
Note) shall be made as provided in the Note.
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Section Prepayments. Except as otherwise provided in Section 9 of the Note, Borrower shall
not have the right to prepay the Loan in whole or in part prior to the Maturity Date.
Section Liquidation Events.
(a) Upon the occurrence of (i) any Casualty to all or any portion of an Individual Property,
(ii) any Condemnation of all or any portion of an Individual Property, (iii) a Transfer of an Individual
Property in connection with realization thereon following a Mortgage Loan Default, including a
foreclosure sale, (iv) any refinancing of the Property or the Mortgage Loan, or (v) a release of any
Individual Property in accordance with the provisions of the Mortgage Loan Agreement (each, a
“Liquidation Event”), Borrower shall cause the related Net Liquidation Proceeds After Debt Service
to be deposited directly into the Mezzanine Collection Account. On each date on which Lender actually
receives a distribution of Net Liquidation Proceeds After Debt Service, Borrower shall prepay the
outstanding principal balance of the Note in an amount equal to one hundred percent (100%) of such
Net Liquidation Proceeds After Debt Service, together with interest that would have accrued on such
amount through the next Payment Date. Any amounts of Net Liquidation Proceeds After Debt Service
in excess of the Debt shall be paid to Borrower. Any prepayment received by Lender pursuant to this
Section (a) on a date other than a Payment Date shall be held by Lender as collateral security for the
Loan in an interest bearing account, with such interest accruing to the benefit of Borrower, and shall be
applied by Lender on the next Payment Date.
(b) Borrower shall immediately notify Lender of any Liquidation Event once Borrower has
knowledge of such event. Borrower shall be deemed to have knowledge of (i) a sale (other than a
foreclosure sale) of an Individual Property on the date on which a contract of sale for such sale is
entered into, and a foreclosure sale, on the date notice of such foreclosure sale is given, and (ii) a
refinancing of the Property, on the date on which a commitment for such refinancing has been entered
into. The provisions of this Section (b) shall not be construed to contravene in any manner the
restrictions and other provisions regarding refinancing of the Mortgage Loan or Transfer of the
Property set forth in this Agreement, the other Loan Documents and the Mortgage Loan Documents.
Section Lockbox Account/Cash Management.
Lockbox Account.
(a) During the term of the Loan, Borrower shall cause Mortgage Borrower to establish
and maintain the Lockbox Account with Lockbox Bank in trust for the benefit of Mortgage
Lender, which Lockbox Account shall be under the sole dominion and control of Mortgage
Lender. The Lockbox Account shall be an Eligible Account and shall not be commingled
with other monies held by Mortgage Borrower, Manager or Lockbox Bank. Borrower shall
cause Mortgage Borrower, and shall cause Manager to, deposit all amounts received by
Mortgage Borrower or Manager constituting Rents into the Lockbox Account within one
(1) Business Day after receipt thereof.
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(b) Borrower shall cause Mortgage Borrower to obtain from Lockbox Bank its
agreement that funds deposited into the Lockbox Account shall be swept by the Lockbox
Bank on a daily basis into the Mortgage Cash Management Account and applied and
disbursed in accordance with the Mortgage Cash Management Agreement.
(c) Borrower shall not permit or cause Mortgage Borrower to further pledge, assign or
grant any security interest in the Lockbox Account or the monies deposited therein or permit
any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC
financing statements, except those naming Mortgage Lender as the secured party, to be filed
with respect thereto.
Cash Management.
(a) During the term of the Loan, Borrower shall cause Mortgage Borrower to establish
and maintain the Mortgage Cash Management Account and the other accounts in which the
Mortgage Loan Reserve Funds are held in accordance with the Mortgage Loan Documents
(collectively, the “Mortgage Loan Accounts”), which Mortgage Loan Accounts shall be
under the sole dominion and control of Mortgage Lender. Borrower shall not cause or permit
Mortgage Borrower in any way to alter or modify the Mortgage Loan Accounts and shall
notify Lender of the account numbers thereof. Mortgage Lender shall have the sole right to
make withdrawals from the Mortgage Loan Accounts to be applied in accordance with the
Mortgage Loan Documents.
(b) As of the date hereof, pursuant to the Mortgage Loan Documents (and subject to
the terms thereof), on each Payment Date, after payment of all sums due and payable to
Mortgage Lender, so long as no Mortgage Loan Default has occurred and is continuing, the
then-current Monthly Debt Service Payment Amount due and payable under the Loan
Documents shall be paid to Lender via federal wire transfer or automatic clearing house
funds (“ACH”) from the Mortgage Cash Management Account to the Mezzanine Collection
Account and maintained in accordance with the Mezzanine Cash Management Agreement.
Borrower shall also direct or cause Mortgage Borrower to direct all Net Liquidation Proceeds
After Debt Service to be deposited into the Mezzanine Collection Account.
(c) As a condition to (i) the satisfaction of the Mortgage Loan, (ii) Lender’s approval of
a new Mortgage Loan, or (iii) in the event that the Mortgage Lender no longer requires the
Mortgage Cash Management Agreement and related lockbox agreement (“Mortgage Cash
Management System”), Borrower shall enter into and/or shall cause Mortgage Borrower to
enter into a substitute lockbox agreement with Lender, acceptable to Lender, that shall direct
all Rents to be deposited directly by the Tenants or payors thereof (or, if received by
Mortgage Borrower or Manager, by such Persons) into the Mezzanine Collection Account or
other account designated by Lender (the “Substitute CMA Agreement”) on substantially the
same terms as the lockbox agreement entered into as of the date hereof in connection with the
Mortgage Loan. Borrower’s failure to: (A) provide Lender with timely notice of any
termination of the Mortgage Cash Management System, (B) in the case of (i) or (ii) above,
receive Lender’s consent prior to termination of the Mortgage Cash Management System, or
(C) promptly
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cause Mortgage Borrower and Manager to enter into the Substitute CMA Agreement, shall
be an immediate Event of Default hereunder (without the need for notice or any right to cure)
and entitle Lender to exercise its rights hereunder in the event of such an Event of Default.
To the extent that the Mortgage Loan (or a refinancing thereof) requires that all Rents be
deposited directly into a lockbox account controlled by Mortgage Lender (or a refinancing
mortgage lender), then the Substitute CMA Agreement shall be entered into for the benefit of
the Mortgage Lender and provide that all Rents, after payment of any sums due and payable
under the Mortgage Loan (or refinancing loan documents) shall be paid by federal wire
transfer or ACH to the Mezzanine Collection Account. Borrower hereby irrevocably directs
and authorizes Lender to withdraw funds from the Mezzanine Collection Account and any
lockbox account established under a Substitute CMA Agreement all in accordance with the
terms and conditions of the Mezzanine Cash Management Agreement and the Substitute
CMA Agreement and this Agreement. Borrower shall have no right of withdrawal in respect
of the Mezzanine Collection Account or any account established under a Substitute CMA
Agreement. Each transfer of funds to be made hereunder shall be made only to the extent that
funds are on deposit in the Mezzanine Collection Account, and Lender shall have no
responsibility to make additional funds available in the event that funds on deposit are
insufficient.
Mezzanine Collection Account.
(a) Borrower hereby grants to Lender a first priority security interest in the Mezzanine
Collection Account and all deposits at any time contained therein and the proceeds thereof
and shall take all actions necessary to maintain in favor of Lender a perfected first priority
security interest in the Mezzanine Collection Account, including filing UCC financing
statements and continuations thereof. Borrower shall not in any way alter or modify the
Mezzanine Collection Account. All costs and expenses for establishing and maintaining the
Mezzanine Collection Account shall be paid by Borrower. This Agreement, together with the
Mezzanine Cash Management Agreement and other Loan Documents, creates a valid and
continuing security interest (as defined in the Uniform Commercial Code of the State of
Delaware and New York) in the Mezzanine Collection Account in favor of Lender, which
security interest is prior to all other Liens, other than Permitted Encumbrances, and is
enforceable as such against creditors of and purchasers from Borrower. The Mezzanine
Collection Account constitutes a “deposit account” within the meaning of the Uniform
Commercial Code of the State of Delaware.
(b) On the Closing Date Borrower shall cause Mortgage Borrower to enter into an
irrevocable direction letter to Mortgage Lender, instructing Mortgage Lender to pay the
Monthly Debt Service Payment Amount to Lender to be deposited into the Mezzanine
Collection Account, to the extent funds are available for such purpose in the Mezzanine Loan
Reserve Account (as defined in the Mortgage Loan Agreement) pursuant to Lender’s
instructions.
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(c) Neither Borrower nor Mortgage Borrower nor any other Person shall have any right,
title or interest in or to any of the Monthly Debt Service Payment Amount from and after the
time at which the Mortgage Lender becomes obligated under the Mortgage Loan Documents
to transfer the Monthly Debt Service Payment Amount to Lender. No accounts shall be
maintained by Mortgage Borrower, Borrower or any other Person with respect to the
collection of rents, revenues, proceeds or other income from the Property or for the collection
of Rents, except for the Lockbox Account, the Mortgage Loan Mortgage Cash Management
Account, and the Mezzanine Collection Account.
(d) Upon the occurrence of an Event of Default, any funds on deposit in the Mezzanine
Collection Account and all other funds received by Lender in respect of the Loan, shall be
disbursed and applied in such order and such manner as Lender shall elect in its discretion. If
Borrower shall at any time receive any Rents other than in accordance with this Agreement,
Borrower shall hold all such payments in trust for Lender, shall not co-mingle such payments
with other funds of Borrower, and shall immediately pay and deliver in kind, all such
payments directly to Lender for application by Lender in accordance with this Agreement.
(e) Borrower hereby agrees for the benefit of itself and Mortgage Borrower that all
payments actually received by Lender shall be deemed payments to Borrower by Mortgage
Borrower. Lender shall apply any and all such payments actually received by Lender for
application in accordance with this Agreement.
(f) The insufficiency of funds on deposit in the Mezzanine Collection Account shall not
relieve Borrower from the obligation to make any payments, as and when due
