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EXHIBIT 10.1
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USRP FUNDING 2001-A, L.P.
as Issuer
and
WELLS FARGO BANK MINNESOTA, N.A.
as Indenture Trustee
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INDENTURE
Dated as of January 9, 2001
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$175,000,000
USRP Funding 2001-A, L.P.
Triple Net Lease Mortgage Notes
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TABLE OF CONTENTS
Page
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PRELIMINARY STATEMENT
GRANTING CLAUSE
GENERAL COVENANT
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.................................................2
Section 1.02. Rules of Construction......................................17
ARTICLE II THE NOTES
Section 2.01. Forms; Denominations.......................................18
Section 2.02. Execution, Authentication, Delivery and Dating.............18
Section 2.03. Options to Extend the Stated Maturity......................19
Section 2.04. The Notes Generally........................................19
Section 2.05. Registration of Transfer and Exchange of Notes.............20
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes.................22
Section 2.07. Noteholder Lists...........................................22
Section 2.08. Persons Deemed Owners......................................23
Section 2.09. Certification of Receipt of the Lease Files................23
Section 2.10. Payments on the Notes......................................23
Section 2.11. Final Payment Notice.......................................25
Section 2.12. Compliance with Withholding Requirements and Reporting.....25
Section 2.13. Cancellation...............................................25
Section 2.14. Capital Adequacy...........................................25
Section 2.15. Compensation...............................................26
ARTICLE III ACCOUNTS
Section 3.01. Lockbox Account............................................26
Section 3.02. Payment Account............................................27
Section 3.03. Account Collateral.........................................29
ARTICLE IV SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture....................29
Section 4.02. Application of Trust Money.................................30
ARTICLE V EVENTS OF DEFAULT; REMEDIES
Section 5.01. Events of Default..........................................30
Section 5.02. Acceleration of Maturity; Rescission and Annulment.........32
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee...........................32
Section 5.04. Remedies...................................................34
Section 5.05. Application of Money Collected.............................35
Section 5.06. Limitation on Suits........................................35
Section 5.07. Unconditional Right of Noteholders to
Receive Principal and Interest.............................36
Section 5.08. Restoration of Rights and Remedies.........................36
Section 5.09. Rights and Remedies Cumulative.............................36
Section 5.10. Delay or Omission Not Waiver...............................36
Section 5.11. Waiver of Past Defaults....................................36
Section 5.12. Undertaking for Costs......................................37
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Section 5.13. Waiver of Stay or Extension Laws...........................37
Section 5.14. Sale of Collateral.........................................38
Section 5.15. Action on Notes............................................38
Section 5.16. Directing Noteholder.......................................38
ARTICLE VI THE INDENTURE TRUSTEE
Section 6.01. Certain Duties and Responsibilities........................39
Section 6.02. Notice of Defaults.........................................41
Section 6.03. Certain Rights of Indenture Trustee........................42
Section 6.04. Compensation and Reimbursement.............................43
Section 6.05. Corporate Indenture Trustee Required; Eligibility..........44
Section 6.06. Authorization of Indenture Trustee.........................45
Section 6.07. Merger, Conversion, Consolidation or
Succession to Business.....................................45
Section 6.08. Resignation and Removal; Appointment of Successor..........45
Section 6.09. Acceptance of Appointment by Successor.....................46
Section 6.10. Unclaimed Funds............................................47
Section 6.11. Illegal Acts...............................................47
Section 6.12. Communications by the Indenture Trustee....................47
Section 6.13. Separate Indenture Trustees and Co-Trustees................48
Section 6.14. Execution of Security Documents............................49
ARTICLE VII REPORTS TO NOTEHOLDERS
Section 7.01. Reports to Noteholders and Others...........................50
Section 7.02. Access to Certain Information...............................50
ARTICLE VIII PROPERTY RELEASES, REDEMPTION AND SUBSTITUTION
Section 8.01. Property Releases...........................................52
Section 8.02. Redemption of the Notes.....................................53
Section 8.03. Substitution................................................53
ARTICLE IX SUPPLEMENTAL INDENTURES; AMENDMENTS
Section 9.01. Supplemental Indentures or Amendments
Without Consent of Noteholders............................53
Section 9.02. Supplemental Indentures With Consent of Noteholders.........54
Section 9.03. Delivery of Supplements and Amendments......................55
Section 9.04. Execution of Supplemental Indentures, etc. .................56
ARTICLE X COVENANTS; WARRANTIES
Section 10.01. Maintenance of Office or Agency.............................57
Section 10.02. Existence...................................................57
Section 10.03. Payment of Taxes and Other Claims...........................57
Section 10.04. Validity of the Notes; Title to the Collateral; Lien........57
Section 10.05. Protection of Collateral....................................59
Section 10.06. Negative Covenants..........................................60
Section 10.07. Statement as to Compliance..................................60
Section 10.08. Cooperation.................................................61
ARTICLE XI REAL ESTATE PROVISIONS
Section 11.01. Insurance...................................................62
Section 11.02. Restoration After Casualty / Condemnation...................65
Section 11.03. Leases and Rents............................................69
Section 11.04. Compliance with Laws........................................70
Section 11.05. Management..................................................71
Section 11.06. Property Use................................................72
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Section 11.07. ERISA.......................................................73
Section 11.08. Single Purpose Entity.......................................73
Section 11.09. Estoppel Certificates.......................................76
Section 11.10. No Sale / Encumbrance.......................................77
Section 11.11. Environmental Provisions....................................79
Section 11.12. Indemnification.............................................81
Section 11.13. Marshalling and Other Matters...............................83
Section 11.14. Sole Discretion of the Indenture Trustee and the
Directing Noteholder........................................83
Section 11.15. Performance at the Issuer's Expense.........................83
ARTICLE XII MISCELLANEOUS
Section 12.01. Execution Counterparts......................................84
Section 12.02. Compliance Certificates and Opinions, etc. .................84
Section 12.03. Form of Documents Delivered to Indenture Trustee............84
Section 12.04. Acts of Noteholders.........................................85
Section 12.05. Computation of Percentage of Noteholders....................86
Section 12.06. Notice to the Indenture Trustee, the Issuer
and Certain Other Persons...................................86
Section 12.07. Notices to Noteholders; Notification Requirements
and Waiver..................................................86
Section 12.08. Successors and Assigns......................................86
Section 12.09. Separability Clause.........................................87
Section 12.10. Governing Law...............................................87
Section 12.11. Effect of Headings and Table of Contents....................87
Section 12.12. Benefits of Indenture.......................................87
Section 12.13. Recording of Indenture......................................88
Section 12.14. Trust Obligation............................................88
Section 12.15. Inspection..................................................88
Section 12.16. Method of Payment...........................................88
Section 12.17. Recourse Provisions.........................................88
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EXHIBITS
Exhibit A Form of Class A Note
Exhibit B Form of Payment Date Statement
Exhibit C-1A Form I of Transferor Certificate for Transfers of Notes
Exhibit C-1B Form II of Transferor Certificate for Transfers of Notes
Exhibit C-2A Form of Transferee Certificate for Transfers of Notes to
Qualified Institutional Buyers
Exhibit C-2B Form of Transferee Certificate for Transfers of Notes to
Institutional Accredited Investors
Exhibit D-1 Form of Certificate Regarding Information Requested by
Noteholder
Exhibit D-2 Form of Certificate Regarding Information Requested by
Prospective Purchaser
Exhibit E Notice of Request For Release
Exhibit F Form of Certification of Indenture Trustee
Schedule A Property Schedule
Schedule B Related Property Schedule
Schedule C Litigation Schedule
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INDENTURE, dated as of January 9, 2001, between USRP Funding 2001-A,
L.P., as Issuer (the "Issuer") and Wells Fargo Bank Minnesota, N.A., a national
banking association, not in its individual capacity, but solely as Indenture
Trustee (the "Indenture Trustee") under this Indenture.
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of the Notes to be issued pursuant to this
Indenture.
All things necessary to make the Notes, when the Notes are executed by
the Issuer and authenticated and delivered by the Indenture Trustee hereunder
and duly issued by the Issuer, the valid and legally binding obligations of the
Issuer enforceable in accordance with its terms, and to make this Indenture a
valid and legally binding agreement of the Issuer enforceable in accordance with
its terms, have been done.
GRANTING CLAUSE
In addition to the Collateral Granted pursuant to the Security
Instruments and the other Security Documents, the Issuer hereby Grants to the
Indenture Trustee effective as of the Closing Date, as Indenture Trustee for the
benefit of the Noteholders, all of the Issuer's right, title and interest in and
to (i) such funds as from time to time are deposited in the Payment Account, the
Lockbox Account, the Collection Account and all other accounts established under
this Indenture, the Security Instruments or the Property Management Agreement ,
(ii) all rights of the Issuer under the Contribution Agreement and the Property
Management Agreement and (iii) all proceeds of the foregoing of every kind and
nature whatsoever, including, without limitation, all proceeds of the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property that at any
time constitute all or part of or are included in the proceeds of the foregoing.
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
GENERAL COVENANT
AND IT IS HEREBY COVENANTED AND DECLARED that the Notes are to be
authenticated and delivered by the Indenture Trustee, that the Collateral is to
be held and applied by or on behalf of the Indenture Trustee for the benefit of
the Noteholders, subject to the further covenants, conditions and trusts
hereinafter set forth, and the Issuer hereby represents and warrants, and
covenants and agrees, to and with the Indenture Trustee, for the equal and
proportionate benefit and security of each Noteholder, as follows:
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. DEFINITIONS.
Whenever used in this Indenture, including in the Preliminary
Statement, the Granting Clause and the General Covenant hereinabove set forth,
the following words and phrases, unless the context otherwise requires, shall
have the meanings specified in this Section 1.01 or, if not specified in this
Section 1.01, then in the Security Instruments, or if not specified in the
Security Instruments, then in the Property Management Agreement.
"Account Collateral": The Lockbox Account, the Collection Account and
all sums at any time held, deposited or invested therein, together with any
interest or other earnings thereon, and all proceeds thereof (including, without
limitation, proceeds of sales and other dispositions), whether accounts, general
intangibles, chattel paper, deposit accounts, instruments, documents or
securities.
"Act": As defined in Section 12.04 hereof.
"Affiliate": With respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the person specified. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities or
other beneficial interest, by contract or otherwise; and the terms "controlling"
and "controlled" have the meanings correlative to the foregoing.
"Allocated Loan Amount": With respect to any Property, the portion of
the Loan Amount allocated thereto, as set forth on Schedule A hereto.
"Applicable Laws": shall mean all existing and future federal, state
and local laws, orders, ordinances, governmental rules and regulations or court
orders affecting any Property, or the use thereof.
"Assignment of Agreements": With respect to each Property, the
Assignment of Agreements, Permits and Contracts, dated as of the date hereof,
from the Issuer, as assignor, to the Indenture Trustee, as assignee, together
with any amendments thereto.
"Authenticating Agent": As defined in Section 2.02(b).
"Bankruptcy Code": Title 11 of the United States Code entitled
"Bankruptcy" as the same may be amended, modified, succeeded or replaced, from
time to time.
"BAMCC": Bank of America Mortgage Capital Corporation.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions are authorized or obligated by law or executive order
to remain closed in New York,
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New York and Minneapolis, Minnesota or in any other city in which the Corporate
Trust Office of the Indenture Trustee or the Lockbox Account Bank is located.
"Calculation Balance": With respect to any Related Property, the amount
indicated as such of Schedule B hereto.
"Casualty Consultant": As defined in Section 11.02.
"Class A Note" or "Note": Any of the Notes executed by the Issuer and
authenticated by the Indenture Trustee or the Authenticating Agent, if any,
substantially in the form of Exhibit A attached hereto.
"Class Exemption": A class exemption granted by the DOL, which provides
relief from some or all of the prohibited transaction provisions of ERISA and
the related excise tax provisions of the Code.
"Closing Date": January 9, 2001.
"Code": The Internal Revenue Code of 1986 and regulations promulgated
thereunder, including proposed regulations to the extent that, by reason of
their proposed effective date, could, as of the date of any determination or
opinion as to the tax consequences of any action or proposed action or
transaction, be applied to the Notes.
"Collateral": All of the collateral Granted hereunder, under the
Security Instruments and under the other Security Documents to the Indenture
Trustee for the benefit of the Noteholders, including, without limitation, (i)
the Properties, (ii) the related leases, rents and contracts, (iii) all personal
property, fixtures, cash management accounts and reserves and escrows of the
Issuer related to the Properties, (iv) all rights of the Issuer under the
Contribution Agreement and the Property Management Agreement and (v) the Payment
Account, the Collection Account and the Lockbox Account, and all funds and
Permitted Investments from time to time deposited therein or credited thereto.
"Collection Account": As defined in the Property Management Agreement.
"Collection Period": With respect to any Payment Date, the period
commencing on the day following the Determination Date in the calendar month
preceding such Payment Date (or, in the case of the initial Collection Period,
commencing on the Closing Date) and ending on the Determination Date immediately
preceding such Payment Date.
"Combined NOI": With respect to any Performing Property (including any
Related Property) and for any period of time, the excess, if any, of (i) all
cash income received by the Issuer (or the owner of the Related Property)
relating to the operation of such Property (or Related Property) during such
period other than non-recurring or extraordinary income such as lease
termination payments over (ii) all expenses paid by the Issuer during such
period (or the owner of the Related Property) related to the operation of such
Property other than non-recurring or extraordinary expenses approved by the
Directing Noteholder (or Related Property), including, without limitation, a
monthly management fee equal to not less than 0.35% per annum of the value for
such Property (or Calculation Balance for any such Related Property). With
respect to any
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Property (or Related Property) that is not a Performing Property, the Combined
NOI for such Property (or Related Property) shall be deemed to be zero so long
as such Property (or Related Property) is not a Performing Property.
"Contribution Agreement": The Contribution Agreement dated as of
January 9, 2001 between the Issuer and USRP.
"Control": With respect to a Person that is a corporation, the right to
exercise, directly or indirectly, more than fifty percent (50%) of the voting
rights attributable to the shares of the controlled corporation, including the
ability to exercise a veto, and, with respect to a Person that is not a
corporation, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of the controlled Person.
"Controlling" and "Controlled" have meanings correlative thereto.
"Control Person": With respect to any Person, any other Person that
constitutes a "controlling person" within the meaning of Section 15 of the 1933
Act.
"Corporate Trust Office": The principal corporate trust office of the
Indenture Trustee at which at any particular time its corporate trust business
with respect to the Issuer shall be administered, which office at the Closing
Date is for Note transfer purposes located at Wells Fargo Center, Sixth Street
and Marquette Avenue, Minneapolis, Minnesota 55479-0113, ATTN: Corporate Trust
Services (CMBS) - USRP Funding 2001-A, L.P., and for all other purposes at 11000
Broken Land Parkway, Columbia, Maryland 21044-3562, ATTN: Corporate Trust
Services (CMBS) - USRP Funding 2001-A, L.P.
"Damages": To a party means any and all liabilities, obligations,
losses, damages, penalties, assessments, actions, judgments, suits, claims,
costs, expenses (including, without limitation, reasonable attorneys' fees
whether or not suit is brought), settlement costs and disbursements imposed on,
incurred by or asserted against such party.
"Debt Service Coverage Ratio": As of any date of determination, a ratio
in which (a) the numerator is the aggregate Combined NOI for the Properties and
the Related Properties for the 12-month period immediately preceding such date
(or, with respect to any Property (or Related Property) for which the Property
Manager does not have the information necessary to calculate the applicable
Combined NOI for such 12-month period, the annualized Combined NOI for such
Property (or Related Property) based on the Combined NOI for such Property (or
Related Property) for the period of time for which the Property Manager does
have the necessary information, but in no event based on less than 6 months of
information) (or, with respect to any Property (or Related Property) owned by
USRP and its Affiliates for less than 12 months as of such date of
determination, the annualized Combined NOI for such Property (or Related
Property) based on the Combined NOI for such Property (or Related Property) for
the period of time owned by USRP or its Affiliates) and (b) the denominator is
the product of (i) 12 and (ii) the Monthly Debt Service Payment Amount in
respect of the Notes for the Payment Date immediately following such date,
assuming a Note Interest Rate equal to the actual Note Interest Rate for the
Payment Date immediately following such date of determination.
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"Default": The occurrence of any event under any of the Security
Documents which, but for the giving of notice or passage of time, or both, would
be an Event of Default.
"Determination Date": With respect to any Payment Date, the fifth
Business Day preceding such Payment Date.
"Directing Noteholder": Banc of America Mortgage Capital Corporation
until such time, if any, as Banc of America Mortgage Capital Corporation resigns
from such role and thereafter, the Noteholder selected by a majority of the
Noteholders, by Note Principal Balance, as certified by the Note Registrar from
time to time; provided, however, that (i) absent such a selection or (ii) until
a Directing Noteholder is so selected, the Noteholder that owns the largest
aggregate Note Principal Balance of the Outstanding Notes will be the Directing
Noteholder.
"DOL": The United States Department of Labor or any successor in
interest.
"DOL Regulations": The regulations promulgated by the DOL at 29
C.F.R.ss.2510.3-101.
"Eligible Account": Any of (i) an account maintained with a federal or
state chartered depository institution or trust company, the long-term deposit
or long-term unsecured debt obligations of which (or of such institution's
parent holding company) are rated "A" or better by each Rating Agency other than
S&P, and "AA-" or better by S&P, if the deposits are to be held in the account
for more than 30 days, or the short- term deposit or short-term unsecured debt
obligations of which (or of such institution's parent holding company) are rated
"F-1+" by Fitch, "P-1" by Moody's and "A-1+" by S&P if the deposits are to be
held in the account for 30 days or less, in any event at any time funds are on
deposit therein, or (ii) a segregated trust account 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 regarding fiduciary funds on deposit
therein substantially similar to 12 C.F.R ss. 9.10(b), and which, in either
case, has a combined capital and surplus of at least $50,000,000 and is subject
to supervision or examination by federal or state authority.
"Engagement Letter": As defined in Section 3.01(a).
"Environmental Indemnity": The Environmental Indemnity Agreement, dated
as of the date hereof, executed by the Issuer and the Sponsors in connection
with the Loan for the benefit of the Indenture Trustee.
"Environmental Laws": Any and all present and future federal, state or
local laws, statutes, ordinances or regulations, any judicial or administrative
orders, decrees or judgments thereunder, and any permits, approvals, licenses,
registrations, filings and authorizations, in each case as now or hereafter in
effect, relating to the pollution, protection or cleanup of the environment, the
impact of Hazardous Substances on property, health or safety, or the Use or
Release of Hazardous Substances.
"Environmental Liens": As defined in Section 11.11.
"Environmental Reports": As defined in Section 11.11.
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"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Event": As defined in Section 11.15.
"Event of Default": As defined in Section 5.01.
"Exit Fee": With respect to any date on or prior to February 23, 2001,
$750,000. With respect to any date after February 23, 2001, either (i) if either
(a) Banc of America Securities LLC has been notified by USRP on or prior to
February 23, 2001 that USRP does not intend to pursue the securitization
contemplated in the Engagement Letter or (b) Banc of America Securities LLC has
notified USRP that it will not be possible to execute a securitization with (I)
a minimum term of five years, (II) a loan to value ratio (calculated in the
manner contemplated in the Engagement Letter) of no less than 55% and (III) an
interest rate for the transaction (including trustee fee, servicing fee, surety
wrap fee and note interest) of LIBOR plus 200 basis points or less or a fixed
rate equivalent thereof, $750,000 or (ii) in all other cases, $1,500,000.
"Extension Fee": The fee payable to the Directing Noteholder by the
Issuer in connection with an election by the Issuer to extend the Stated
Maturity pursuant to Section 2.03 hereof in an amount equal to the product of
(i) 0.50% and (ii) the aggregate Note Principal Balance of the Notes Outstanding
on July 9, 2001.
"401(c) Regulations": The regulations promulgated under Section 401(c)
of ERISA.
"FDIC": Federal Deposit Insurance Corporation or any successor.
"Final Payment Date": The Payment Date on which the final payment on
the Notes is made hereunder by reason of all principal, interest and other
amounts due and payable on such Notes having been paid or the assets
constituting the Collateral having been exhausted.
"Fitch": Fitch, Inc.
"Flood Insurance Act": As defined in Section 11.01.
"GAAP": Generally accepted accounting principles in the United States
of America as of the relevant date in question, consistently applied.
"Governmental Authority": Any national or federal government, any
state, regional, local or other political subdivision thereof with jurisdiction
and any Person with jurisdiction exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government or
quasi-governmental issues (including, without limitation, any court).
"Grant": To mortgage, pledge, bargain, sell, warrant, alienate, demise,
convey, assign, transfer, create and grant a security interest in and right of
setoff against, deposit, set over and confirm. A Grant of an asset constituting
a portion of the Collateral shall include all rights, powers and options (but
none of the obligations) of the granting party thereunder, including without
limitation the immediate and continuing right to claim for, collect, receive and
give receipt for principal and interest payments in respect of such asset and
all other monies and proceeds payable
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thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the granting party or otherwise, and generally to do
and receive anything which the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Ground Lease": The leases or licenses in which the Issuer is the
lessee (or licensee) thereunder relating to or affecting the use and occupancy
of the Properties, or any part thereof, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
"Ground Leased Property": With respect to any Ground Lease and any
Property, that portion of such Property demised to the Issuer under such Ground
Lease.
"Ground Rents": All rent, additional rent and all other sums due by the
ground lessee pursuant to any Ground Lease.
"Guaranty":
"Guarantors": USV, USRP and each of their Affiliates specified as
guarantors in the Guaranty.
"Hazardous Materials": As defined in Section 11.11.
"Improvements": The buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter erected or located on the Land.
"Indemnified Parties": As defined in Section 11.12.
"Indenture": This instrument as originally executed or as it may be
supplemented or amended from time to time by one or more amendments or
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof.
"Indenture Trustee": Wells Fargo Bank Minnesota, N.A., a national
banking association, in its capacity as trustee under this Indenture, or its
successor in interest, or any successor trustee appointed as provided in this
Indenture.
"Indenture Trustee Fee": The monthly fee payable to the Indenture
Trustee in an amount equal to 1/12 of (i) 0.0175% multiplied by (ii) the
aggregate Note Principal Balance of the Notes Outstanding as of the first day of
the related Collection Period.
"Independent Director": As defined in Section 11.08.
"Initial Purchaser": Banc of America Mortgage Capital Corporation.
"Initial Reserve Amount": An amount equal to Payable Note Interest in
respect of the Notes for the initial Interest Accrual Period.
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"Institutional Accredited Investor": An "accredited investor" as
defined in any of paragraphs (1), (2), (3) and (7) of Rule 501(a) under the 1933
Act or any entity in which all of the equity owners come within such paragraphs.
"Insurance Premiums": As defined in Section 11.01
"Interest Accrual Period": With respect to any Payment Date, the period
commencing on the Payment Date in the calendar month preceding such Payment Date
(or, in the case of the initial Interest Accrual Period, the Closing Date) and
ending on the day immediately preceding such Payment Date.
"Interested Person": As of any date of determination, the Issuer or any
of its respective Affiliates.
"IRS": The United States Internal Revenue Service.
"Issuer": USRP Funding 2001-A, L.P.
"Issuer's Request" or "Issuer's Order": A written request or order
signed in the name of the Issuer by an authorized officer of the Issuer.
"Land": The parcel of real property in which the Issuer owns a fee or
leasehold interest and which is encumbered by a Security Instrument.
"Lease": Any lease, sublease, sub-sublease, license, letting,
concession, occupancy agreement or other agreement (whether written or oral and
whether now or hereafter in effect) (excluding Ground Leases), existing as of
the date hereof or hereafter entered into by the Issuer 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 a Property, and every modification, amendment or other
agreement relating to such lease, sublease, sub-sublease, or other agreement
entered into, in accordance with the terms of the Security Documents, in
connection with such lease, sublease, sub-sublease, or other agreement and all
agreements related thereto, and every guarantee of the performance and
observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto.
"Lease File": With respect to any Property, collectively the following
documents:
(i) the related Lease;
(ii) (A) the executed original recorded Security Instrument in favor
of Wells Fargo Bank Minnesota, N.A., in its capacity as Indenture
Trustee under the Indenture, dated January 9, 2001, between USRP
Funding 2001-A, L.P., as Issuer and Wells Fargo Bank Minnesota,
N.A., as Indenture Trustee with respect to the county, or other
applicable jurisdiction in which the related Franchise Unit is
located, or, if such original Security Instrument has not been
returned from the applicable public recording office, a copy of
such Security Instrument as submitted for recording; and (B) a
file stamped copy of any UCC Financing Statements in favor of
Wells Fargo Bank Minnesota, N.A., in its capacity as Indenture
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Trustee under the Indenture, dated January 9, 2001, between USRP
Funding 2001-A, L.P., as Issuer and Wells Fargo Bank Minnesota,
N.A., as Indenture Trustee required to be filed with respect to
such Franchise Unit in order to perfect the Indenture Trustee's
lien with respect to such Lease or, if a file stamped copy has
not been returned from one applicable filing office, a copy of
such UCC Financing Statement as submitted for recording;
(iii) either (x) an executed original lender's title insurance policy
relating to the Security Instrument for such Franchise Unit,
together with all riders thereto showing the Wells Fargo Bank
Minnesota, N.A., in its capacity as Indenture Trustee under the
Indenture, dated January 9, 2001, between USRP Funding 2001-A,
L.P., as Issuer and Wells Fargo Bank Minnesota, N.A., as
Indenture Trustee and its successors and assigns, as the named
insured, or (y) in the event of an original title binder, an
original preliminary title report, or an original title
commitment, or copy thereof certified by the title company;
(iv) a Lease abstract relating to the related Lease;
(v) a Tenant estoppel certificate with respect to the related Lease;
and
(vi) if the related Franchise Unit is a ground leasehold, a photocopy
of the ground lease between the owner of the fee or lessor (or
the sublessor, if the fee is owned by a master lessor), and the
Issuer, as lessee and an estoppel letter from the related ground
lessor.
"Legal Requirements" shall mean:
(a) all governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of Governmental
Authorities (including, without limitation, Environmental Laws)
affecting the Issuer or a Property or any part thereof or the
construction, ownership, use, alteration or operation thereof, or
any part thereof (whether now or hereafter enacted and in force),
(b) all permits, licenses and authorizations and regulations relating
thereto, and
(c) all covenants, conditions and restrictions contained in any
instruments at any time in force (whether or not involving
Governmental Authorities) affecting a Property or any part
thereof which, in the case of this clause (c), require repairs,
modifications or alterations in or to a Property or any part
thereof, or in any material way limit or restrict the existing
use and enjoyment thereof.
"LIBOR": With respect to each Interest Accrual Period and the Payment
Date for each month, or, if that day is not a LIBOR Business Day, the next
succeeding LIBOR Business Day, the rate for deposits in U.S. dollars, for a
period of one month, which appears on the Telerate Page 3750 as of 11:00 a.m.,
London time, on the related LIBOR Determination Date. If such rate does not
appear on Telerate Page 3750, the rate for that Interest Accrual Period and the
related Payment Date, or, if that day is not a LIBOR Business Day, the next
succeeding LIBOR Business Day, shall be determined on the basis of the rates at
which deposits in U.S. dollars are offered by any four (4) major reference banks
in the London interbank market selected by the Trustee to provide such bank's
offered quotation of such rates at approximately 11:00 a.m., London time, on the
related LIBOR Determination date to prime banks in the London interbank market
for a period of one month, commencing on the first day of such Interest Accrual
Period and in an amount that is representative for a single such transaction in
the relevant market at the relevant time. The Indenture Trustee shall request
the principal London office of any four (4) major reference banks in the London
interbank market selected by the Indenture Trustee to provide a quotation of
such rates, as offered by each such bank. If at least two (2) such quotations
are provided, the rate for that Interest Accrual Period and the related
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Payment Date, shall be the arithmetic mean of the quotations. If fewer than two
(2) quotations are provided as requested, the rate for that Interest Accrual
Period and the related Payment Date, shall be the arithmetic mean of the rates
quoted by major banks in New York City selected by the Indenture Trustee, at
approximately 11:00 a.m., New York City time, on the first day of such Interest
Accrual Period for loans in U.S. dollars to leading European banks for a period
of one month, commencing on the first day of such Interest Accrual Period and in
an amount that is representative for a single such transaction in the relevant
market at the relevant time. The Indenture Trustee shall determine LIBOR for
each Interest Accrual Period and the related Payment Date and the determination
of LIBOR by the Indenture Trustee shall be binding absent manifest error.
"LIBOR Business Day": Any day on which commercial banks are open for
international business (including dealings in U.S. Dollar deposits in London,
England).
"LIBOR Determination Date": With respect to any Interest Accrual
Period, the second (2nd) Business Day preceding the first day of such Interest
Accrual Period.
"Loan": The indebtedness evidenced by the Notes in the original
principal amount of the Loan Amount and secured by this Indenture, the Security
Instruments and the other Security Documents.
"Loan Amount": $175,000,000.
"Loan-To-Value Ratio": With respect to any date of determination, a
fraction expressed as a percentage, the numerator of which is the aggregate Note
Principal Balance of all of the Notes Outstanding on such date of determination,
and the denominator of which is the aggregate Value of all of the Properties
that are Performing Properties (including any Related Properties that are
Performing Properties) as of such date.
"Lockbox Account": As defined in Section 3.01.
"Lockbox Account Agreement": An agreement among the Issuer, the
Indenture Trustee and the Lockbox Account Bank, relating to the collection and
application of all the Rents from each Property, which agreement shall be in
substantially the form attached hereto as Exhibit F, with such changes therein
as shall be mutually agreeable to the parties thereto and the Directing
Noteholder.
"Lockbox Account Bank": Any financial institution acceptable to the
Directing Noteholder and the Indenture Trustee.
"Losses": As defined in Section 11.12.
"Management Fee": As defined in the Property Management Agreement.
"Maturity": With respect to any Note, the date as of which the
principal of and interest on such Note has become due and payable as herein
provided, whether at Stated Maturity, by acceleration or otherwise.
"Material Adverse Effect": A material adverse effect upon (i) the
business operations, assets or condition (financial or otherwise) of the Issuer,
(ii) the ability of the Issuer to perform, or of the Indenture Trustee to
enforce, any material provision of any Security Document, or (iii) with respect
to a Property, the value, use or enjoyment of such Property or the operation
thereof.
"Monthly Debt Service Payment Amount": The monthly payment of interest
due in respect of the Notes on each Payment Date pursuant to this Indenture
which for any Payment Date will equal the aggregate amounts set forth in clause
(ii) of Section 3.02(b) in respect of such Payment Date.
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"Moody's": Moody's Investors Service, Inc.
"Net Proceeds": As defined in Section 11.02.
"Net Proceeds Availability Threshold": As defined in Section 11.02.
"Net Proceeds Deficiency": As defined in Section 11.02.
"Note Interest Rate": (i) with respect to any Payment Date on which an
Event of Default is not then continuing, a per annum rate equal to the sum of
LIBOR as determined with respect to the related LIBOR Determination Date plus
2.25% and (ii) with respect to any Payment Date which occurs during the
continuation of an Event of Default, a per annum rate equal to the sum of the
Prime Rate as determined with respect to the related LIBOR Determination Date
plus 5.00%.
"Note Principal Balance": With respect to the Notes Outstanding as of
any date of determination, the Original Note Principal Balance reduced by any
distributions of principal actually made on the Notes prior to such date of
determination.
"Note Register": As defined in Section 2.05(a) hereof.
"Note Registrar": As defined in Section 2.05(a) hereof.
"Noteholder" or "Holder": With respect to any Note, the Person in whose
name such Note is registered on the Note Register maintained pursuant to Section
2.05 hereof.
"1933 Act": The Securities Act of 1933, as amended, and the rules,
regulations and published interpretations of the Securities and Exchange
Commission promulgated thereunder from time to time.
"1934 Act": The Securities Exchange Act of 1934, as amended, and the
rules, regulations and published interpretations of the Securities and Exchange
Commission promulgated thereunder from time to time.
"1939 Act": The Trust Indenture Act of 1939, as amended, and the rules,
regulations and published interpretations of the Securities and Exchange
Commission promulgated thereunder from time to time.
"1940 Act": The Investment Company Act of 1940, as amended, and the
rules, regulations and published interpretations of the Securities and Exchange
Commission promulgated thereunder from time to time.
"Obligations": All of the Issuer's obligations hereunder.
"Officer's Certificate": A certificate made by an individual authorized
to act on behalf of the Issuer and, to the extent applicable, any constituent
Person with respect to the Issuer. Without limiting the foregoing, if the
individual signing the certificate is doing so on behalf of a corporation, then
such individual shall hold the office of President, Vice President, senior or
executive vice president or Chief Financial Officer (or the equivalent) with
respect to such corporation.
"Opinion of Counsel": A written opinion of counsel, who shall be
selected by the Issuer (and reasonably acceptable to the Indenture Trustee). The
cost of obtaining such opinion shall be borne by the Issuer.
"Original Note Principal Balance": $175,000,000.
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"OTS": Office of Thrift Supervision or any successor thereto.
"Outstanding": When used with respect to Notes, means, as of the date
of determination, any Note theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation (other than any Note
as to which any amount that has become due and payable in respect
thereof has not been paid in full); and
(ii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture, other than
any such Notes in respect of which there shall have been presented to
the Note Registrar proof satisfactory to it that such Notes are held by
a bona fide purchaser in whose hands such Notes are valid obligations
of the Issuer;
provided, however, that in determining whether the Holders of the requisite
aggregate Note Principal Balance of Outstanding Notes have given any request,
demand, authorization, vote, direction, notice, consent or waiver hereunder,
Notes owned by an Interested Person shall be disregarded and deemed not to be
Outstanding (unless any such Person or Persons owns all the Notes), except that,
in determining whether the Indenture Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Notes which the Note Registrar knows to be so owned shall be so
disregarded. Notes owned by an Interested Person which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Note Registrar in its sole discretion the pledgee's right to
act with respect to such Notes and that the pledgee is not an Interested Person.
"Ownership Interest": As to any Note, any ownership or security
interest in such Note as held by the Holder thereof and any other interest
therein, whether direct or indirect, legal or beneficial, as owner or as
pledgee.
"Payable Note Interest": For any Payment Date, an amount equal to
interest accrued during the related Interest Accrual Period at the Note Interest
Rate applicable to the Notes for such Payment Date on the Note Principal Balance
immediately prior to such Payment Date. Payable Note Interest will be calculated
on the basis of a 360-day year and the actual number of days elapsed in the
applicable Interest Accrual Period.
"Payment Account": The segregated account established in the name of
the Indenture Trustee pursuant to Section 3.02 hereof.
"Payment Date": The 20th day of each calendar month, or, if such 20th
day is not a Business Day, the next succeeding Business Day, commencing in
January 2001. The Final Payment Date shall be on the Stated Maturity.
"Payment Date Statement": As defined in Section 7.01(a).
"PCBs": As defined in Section 11.11.
"Performing Properties": As of any date of determination, the
Properties (or Related Properties) other than the Properties (or Related
Properties) for which the related Tenant is either (i) over 60 days delinquent
in the payment of any amount due under the related Lease or (ii) the subject of
a bankruptcy, insolvency or similar proceeding. Notwithstanding the foregoing,
any Property (or Related Property) for which the related Tenant is not (i)
delinquent in the payment of any amount greater than $2,000 due under the
related Lease or (ii) the subject of a bankruptcy, insolvency or similar
proceeding will be considered a Performing Property; provided that, if the
Tenant delinquencies that satisfy clause (i) of this sentence, in the
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aggregate, total more than $15,000, the foregoing exception shall not apply
unless the Borrower designates, in writing, to the Lender: (A) a group of
Properties (or Related Properties), that satisfy clause (i) of this sentence but
do not, in the aggregate, total more than $15,000, to be considered as
Performing Properties and (B) the remaining Properties (or Related Properties),
that satisfy clause (i) of this sentence, to not be considered as Performing
Properties.
"Permitted Investments": Any one or more of the following obligations
or securities:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and
interest by, the United States of America or any
agency or instrumentality thereof, provided that such
obligations are backed by the full faith and credit
of the United States of America and have a
predetermined, fixed amount of principal due at
maturity (that cannot vary or change) and that each
such obligation a fixed interest rate or has its
interest rate tied to a single interest rate index
plus a single fixed spread;
(ii) obligations of agencies or instrumentalities of the
United States of America that are not backed by the
full faith and credit of the United States of
America, provided that such obligations have a
predetermined, fixed amount of principal due at
maturity (that cannot vary or change), do not have an
"r" highlight attached to any rating and that each
such obligation has a fixed interest rate or has its
interest rate tied to a single interest rate index
plus a single fixed spread;
(iii) uncertificated certificates of deposit, time
deposits, bankers' acceptances and repurchase
agreements having maturities of not more than 365
days, of any bank or trust company organized under
the laws of the United States of America or any state
thereof, provided that such items are rated in the
highest short-term debt rating category of each
Rating Agency (or, if not rated by either Rating
Agency, have a comparable rating from another
nationally recognized statistical rating
organization), do not have an "r" highlight affixed
to its rating and have a predetermined fixed amount
of principal due at maturity (that cannot vary or
change);
(iv) commercial paper (having original maturities of not
more than 365 days) of any corporation incorporated
under the laws of the United States of America or any
state thereof (or of any corporation not so
incorporated, provided that the commercial paper is
denominated in United States dollars and amounts
payable thereunder are not subject to any withholding
imposed by any non-United States jurisdiction) which
is rated in the highest short-term debt rating
category of each Rating Agency, does not have an "r"
highlight affixed to its rating, has a predetermined
fixed amount of principal due at maturity (that
cannot vary or change) and has a fixed interest rate
or has its interest rate tied to a single interest
rate index plus a single fixed spread, or any demand
notes that constitute vehicles for commercial paper
rated in the highest unsecured commercial or finance
company paper rating category of each Rating Agency;
(v) units of money market funds which have as one of
their investment objectives the maintenance of a
constant net asset value and which are rated in the
highest applicable rating category of each Rating
Agency; and
(vi) repurchase agreements collateralized by United States
Treasury securities or securities guaranteed by GNMA,
FNMA or FHLMC with any registered
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broker/dealer subject to SIPC jurisdiction or any
commercial bank insured by the FDIC if such
broker/dealer or bank has an uninsured, unsecured and
unguaranteed obligation rated by each Rating Agency
in its highest short-term category;
provided that (1) no investment described hereunder shall evidence either the
right to receive (x) only interest with respect to such investment or (y) a
yield to maturity greater than 120% of the yield to maturity at par of the
underlying obligations, and (2) no investment described hereunder may be
purchased at a price greater than par if such investment may be prepaid or
called at a price less than its purchase price prior to stated maturity (that
cannot vary or change).
"Person": Any individual, sole proprietorship, corporation, general
partnership, limited partnership, limited liability company or partnership,
joint venture, association, joint stock company, bank, trust, estate,
unincorporated organization, any federal, state, county or municipal government
(or any agency or political subdivision thereof), endowment fund or any other
form of entity.
"Plan": As defined in Section 2.05(c) hereof.
"Policy" or "Policies": As defined in Section 11.01 hereof.
"Prime Rate": The per annum floating rate of interest established from
time to time by Banc of America Mortgage Capital Corporation as its prime rate,
which rate may not be the lowest rate of interest charged by Banc of America
Mortgage Capital Corporation to its customers.
"Principal Payment Amount": With respect to any Payment Date, any
principal payments made by the Issuer in connection with (i) the release of one
or more Properties in accordance with Section 8.01 or Section 8.03, (ii) a
voluntary redemption, in whole or in part, of the Notes in accordance with
Section 8.02, (iii) casualty or condemnation events in respect of a Property, in
accordance with Article XI of this Indenture, in each case during the related
Collection Period.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Prohibited Transfer": As defined in Section 11.10.
"Properties": The parcel or parcels of real property and improvements
thereon owned by the Issuer and the Issuer's leasehold interest in any Ground
Leased Property and encumbered by a Security Instrument, together with all
rights pertaining to such property, improvements and leasehold interests, as
more particularly described in the preliminary statement of each Security
Instrument and referred to therein as the "Property" or the "Mortgaged
Property", as the case may be. "Property" shall mean any one of the Properties.
"Properties" shall include any real property transferred (pursuant to a
substitution or otherwise) to the Issuer and encumbered by a Security Interest
after the closing date. "Properties" shall not include any real property that
has been released from the lien of the related Security Instrument pursuant to a
release, substitution or otherwise.
"Property Management Agreement": The Property Management Agreement
dated as of January 9, 2001 between the Issuer, the Property Manager and the
Indenture Trustee.
"Property Manager": USRP, a Delaware limited partnership, in its
capacity as property manager under the Property Management Agreement, or its
successor in interest, or any successor property manager appointed as provided
in the Property Management Agreement and in all cases acceptable to the
Directing Noteholder in its sole and absolute discretion.
"Property Release": As defined in Section 8.01.
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"Property Release Expenses": As defined in Section 8.01(e).
"QIB": A "qualified institutional buyer" as defined in Rule 144A under
the 1933 Act.
"Qualified Insurer"": As defined in Section 11.01.
"Qualified Property Manager"": As defined in Section 11.05.
"Rating Agency": Fitch, Moody's, S&P or other respective successors in
interest.
"Record Date": With respect to any Payment Date, the last Business Day
of the prior calendar month.
"Redemption Date": The Payment Date specified by the Issuer for the
redemption of Notes pursuant to Section 8.02.
"Redemption Price": An amount equal to the sum of (i) the amount of the
Note Principal Balance of the Notes to be redeemed, plus (ii) accrued and unpaid
interest thereon to the last day of the related Interest Accrual Period, plus
(iii) if the amount to be prepaid will result in the payment in full of the
entire Note Principal Balance of the Notes Outstanding, any Exit Fee due in
accordance with Section 2.10(a)(iii).
"Related Property": Any of the properties listed on Schedule B hereto
for so long as such property is owned by the Affiliate of the Issuer that
currently owns such property.
"Release Amount": With respect to a Property, (i) the amount set forth
on Schedule A hereto, but in no event less than 100% of the Allocated Loan
Amount relating to such Property, plus (ii) if the payment of the amount set
forth in clause (i) will result in the payment in full of the Note Principal
Balance of the Notes Outstanding, any Exit Fee due in accordance with Section
2.10(a)(iii).
"Release Premises": As defined in Section 8.01.
"Release Premises Transfer": As defined in Section 8.01.
"Release Premises Transferee": As defined in Section 8.01.
"Remittance Date": With respect to any Payment Date, the third Business
Day preceding such Payment Date.
"Rents": As defined in the Security Instrument.
"Request for Release": As defined in Section 8.01.
"Responsible Officer": With respect to the Indenture Trustee, any
officer of the Indenture Trustee working in its Corporate Trust Services
department and customarily performing functions with respect to corporate trust
matters and having direct responsibility for the administration of this
Indenture and, with respect to a particular corporate trust matter under this
Indenture, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Restoration": As defined in Section 11.03.
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"Revolving Credit Facility": The Credit Agreement, dated as of January
9, 2001, by and among USRP, USV, the "Subsidiary Guarantors" (as defined
therein), the Issuer, the "Lenders" (as defined therein) and BAMCC.
"Rule 144A": Rule 144A promulgated under the 1933 Act.
"S&P": Standard & Poor's Rating Services, a Division of The McGraw-Hill
Companies, Inc.
"Security Documents": Collectively, this Indenture, the Security
Instruments, the Assignment of Agreements, the Environmental Indemnity, the
Lockbox Account Agreement, the Guaranty and any other document now or hereafter
executed and/or delivered by the Issuer or either Sponsor or any Affiliate of
such Persons pursuant to the requirements hereof or of any other Security
Document in connection with the Notes.
"Security Instrument": With respect to a Property, that certain first
priority Mortgage (or Deed of Trust or Deed to Secure Debt or Indemnity Deed of
Trust), Security Agreement, Assignment of Leases and Rents and Fixture Filing,
dated as of the date hereof, executed and delivered by the Issuer as security
for the Notes and encumbering such Property, as the same may be amended,
restated, replaced, supplemented, consolidated or otherwise modified from time
to time pursuant to the provisions thereof or of the other Security Documents
from time to time.
"Senior Management Fee": With respect to any Payment Date, the portion,
if any, of the Management Fee payable to any successor Property Manager pursuant
to clause (ii) of Section 3.02(b) as determined by the Directing Noteholder in
its sole and absolute discretion. The Directing Noteholder shall give written
notice of any Senior Management Fee to the Indenture Trustee at least two
Business Days prior to the related Payment Date and such notice may take the
form of a standing revocable or irrevocable direction to the Indenture Trustee
to pay such Senior Management Fee.
"Significant Capital Event": As defined in the Guaranty.
"SPE Component Entity": As defined in Section 11.08.
"Sponsors": Each of USRP and USV.
"Stated Maturity": With respect to any Note, the date specified in such
Note and Section 2.04(a) as the date, as the same may be extended in accordance
with Section 2.03 hereof, on which the final payment of principal of and
interest on such Note becomes finally due and payable, which will be July 9,
2001.
"Tax Opinion": An opinion of counsel that a contemplated action will
not cause a tax to be imposed on the Issuer or any Person having an Ownership
Interest in any Note.
"Taxes": All real estate and personal property taxes, assessments,
fees, taxes on rents or rentals, water rates or sewer rents, and other
governmental charges now or hereafter levied or assessed or imposed against the
Issuer or the Properties or rents therefrom or which may become Liens.
"Telerate Page 3750": The display designated as "3750" on the
Associated Press-Dow Jones Telerate Service (or such other page as may replace
page 3750 on that Service for the purpose of displaying London interbank offered
rates of major banks).
"Tenant": Any Person liable by contract or otherwise to pay monies
(including a percentage of gross income, revenue or profits) pursuant to a
Lease.
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"Treasury Regulations": Temporary, final or proposed regulations (to
the extent that by reason of their proposed effective date such proposed
regulations would apply to the Issuer) of the United States Department of the
Treasury.
"UCC": The Uniform Commercial Code as in effect in any applicable
jurisdiction.
"UCC Financing Statement": A financing statement executed and in form
sufficient for filing pursuant to the UCC, as in effect in the relevant
jurisdiction.
"Use": Any handling, treatment, storage, disposal, transportation, use,
reuse, recycling, reclamation, manufacture, generation, formulation, processing
or distribution.
"USRP": U.S. Restaurant Properties Operating L.P.
"USV": U.S. Restaurant Properties, Inc.
"Value": With respect to any Property as of any date of determination,
the amount indicated as such on Schedule A hereto.
"Waste": Any material abuse or destructive use (whether by action or
inaction of the Issuer or either Sponsor or any of their Affiliates) of a
Property which causes the Indenture Trustee to suffer a loss or a diminution in
the value of its interest therein.
"Waterfall Payments": As defined in Section 3.02(b).
Section 1.02. RULES OF CONSTRUCTION.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder means such accounting principles as are
generally accepted in the United States;
(3) the word "including" shall be construed to be followed by the words
"without limitation";
(4) article and section headings are for the convenience of the reader
and shall not be considered in interpreting this Indenture or the intent of the
parties hereto;
(5) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
article, section or other subdivision; and
(6) the pronouns used herein are used in the masculine and neuter
genders but shall be construed as feminine, masculine or neuter, as the context
requires.
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ARTICLE II
THE NOTES
Section 2.01. FORMS; DENOMINATIONS.
The Notes will be initially issued as one or more registered and
certificated Notes substantially in the form of Exhibit A hereto. The Notes will
be issued in denominations of not less than $10,000 in initial Note Principal
Balance and in integral multiples of $1 in excess thereof. The Issuer hereby
directs the Indenture Trustee to authenticate and deliver the Notes to or upon
the order of the Initial Purchaser.
Section 2.02. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
(a) The Notes shall be executed by manual or facsimile signature on
behalf of the Issuer by an authorized officer of the Issuer. Notes bearing the
manual or facsimile signatures of individuals who were at any time the
authorized officers of the Issuer shall be entitled to all benefits under this
Indenture, subject to the following sentence, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Notes or did not hold such offices at the
date of such Notes. No Note shall be entitled to any benefit under this
Indenture, or be valid for any purpose, however, unless there appears on such
Note a certificate of authentication substantially in the form provided for
herein executed by the Indenture Trustee by manual signature, and such
certificate of authentication upon any Note shall be conclusive evidence, and
the only evidence, that such Note has been duly authenticated and delivered
hereunder. All Notes shall be dated the date of their authentication.
(b) The Indenture Trustee may appoint one or more agents (each an
"Authenticating Agent") with power to act on its behalf and subject to its
direction in the authentication of Notes in connection with transfers and
exchanges under Sections 2.05 and 2.06, as fully to all intents and purposes as
though each such Authenticating Agent had been expressly authorized by those
Sections to authenticate the Notes. For all purposes of this Indenture, the
authentication of Notes by an Authenticating Agent shall be deemed to be the
authentication of Notes "by the Indenture Trustee". The Indenture Trustee shall
be the initial Authenticating Agent.
Any corporation, bank, trust company or association into which any
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation, bank, trust company or association resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation, bank, trust company or association
succeeding to the corporate trust business of any Authenticating Agent, shall be
the successor of such Authenticating Agent hereunder, without the execution or
filing of any further act on the part of the parties hereto or such
Authenticating Agent or such successor corporation, bank, trust company or
association.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Indenture Trustee and the Issuer. The Indenture
Trustee may at any time terminate the agency
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of any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Issuer. Upon receiving such notice of resignation
or upon such a termination, the Indenture Trustee may, or at the direction of
the Issuer shall, promptly appoint a successor Authenticating Agent, give
written notice of such appointment to the Issuer and give notice of such
appointment to the Noteholders. Upon the resignation or termination of the
Authenticating Agent and prior to the appointment of a successor, the Indenture
Trustee shall act as Authenticating Agent.
Each Authenticating Agent shall be entitled to all limitations on
liability, rights of reimbursement and indemnities that the Indenture Trustee is
entitled to hereunder as if it were the Indenture Trustee.
Section 2.03. OPTIONS TO EXTEND THE STATED MATURITY.
(a) Upon satisfaction of the conditions set forth in subclause (b) of
this Section 2.03 and upon at least 30 days but not more than 90 days prior
written notice to the Indenture Trustee and the Directing Noteholder, the
Issuer, at its option, shall have the right to extend the Stated Maturity of the
Notes then Outstanding to December 31, 2001.
(b) The option to extend the Stated Maturity of the Notes set forth in
subclause (a) above is subject to the satisfaction, on the original Stated
Maturity, of the following conditions:
(i) there is no Default or Event of Default then occurring;
(ii) the Extension Fee has been paid to the Directing
Noteholder;
(iii) the owner of each Related Property shall have granted a
mortgage in respect of such Related Property satisfactory as to all respects to
the Directing Noteholder to secure the obligations of both (i) the Guarantors
under the Guaranty and (ii) USRP under the Revolving Credit Facility; and
(iv) Banc of America Securities LLC has not been notified that
the securitization contemplated by the Engagement Letter will not be pursued.
Section 2.04. THE NOTES GENERALLY.
(a) The aggregate Note Principal Balance of the Notes that may be
authenticated and delivered under this Indenture is limited to $175,000,000,
except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes pursuant to Sections 2.05 and
2.06 below. Such aggregate Note Principal Balance shall be issued in one Class
having the Class designation, initial Note Principal Balance and Assumed Final
Payment Date as follows:
CLASS INITIAL
DESIGNATION NOTE PRINCIPAL BALANCE
----------- ----------------------
Class A $175,000,000
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The Stated Maturity for the Notes is July 9, 2001, provided that the
Issuer may extend the Stated Maturity of the Notes in accordance with Section
2.03.
(b) Each Note shall rank pari passu with each other Note and be equally
and ratably secured by the Collateral. All Notes shall be substantially
identical except as to denominations and as expressly permitted in this
Indenture.
Section 2.05. REGISTRATION OF TRANSFER AND EXCHANGE OF NOTES.
(a) At all times during the term of this Indenture, there shall be
maintained at the office of a registrar appointed by the Indenture Trustee (the
"Note Registrar") a register (the "Note Register") in which, subject to such
reasonable regulations as the Note Registrar may prescribe, the Note Registrar
shall provide for the registration of Notes and of transfers and exchanges of
Notes as herein provided. The Office of the Note Registrar shall initially be
located at Wells Fargo Center, Sixth and Marquette, Minneapolis, Minnesota
55479, ATTN: Corporate Trust Services (CMBS) - USRP 2001-A, L.P., MAC #
N9303-121 (and thereafter be such other address as the Note Registrar may
designate by notice to the Issuer, the Directing Noteholder and the Indenture
Trustee, if different). The Indenture Trustee is hereby initially appointed (and
hereby agrees to act in accordance with the terms hereof) as Note Registrar for
the purpose of registering Notes and transfers and exchanges of Notes as herein
provided. The Indenture Trustee may appoint, by a written instrument delivered
to the Issuer and the Directing Noteholder, any other bank or trust company to
act as Note Registrar under such conditions as the Indenture Trustee may
prescribe, provided that the Indenture Trustee shall not be relieved of any of
its duties or responsibilities hereunder as Note Registrar by reason of such
appointment. If the Indenture Trustee resigns or is removed in accordance with
the terms hereof, the successor trustee shall immediately succeed to its
predecessor's duties as Note Registrar. The Issuer and the Directing Noteholder
shall have the right to inspect the Note Register or to obtain a copy thereof at
all reasonable times upon reasonable prior notice, and to rely conclusively upon
a certificate of the Note Registrar as to the information set forth in the Note
Register.
(b) No transfer, sale, pledge or other disposition of any Note or
interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the 1933 Act and any applicable state securities laws, or is otherwise made in
accordance with the 1933 Act and such state securities laws. If a transfer of
any Note is to be made without registration under the 1933 Act (other than in
connection with the initial issuance thereof or a transfer thereof by the Issuer
or a transfer thereof by the Directing Noteholder, then the Note Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) (i) a certificate from the Noteholder desiring to effect
such transfer substantially in the form attached as Exhibit C-1A hereto or such
other certification reasonably acceptable to the Indenture Trustee; or (ii) a
certificate from such Noteholder substantially in the form attached as Exhibit
C-1B hereto or such other certification reasonably acceptable to the Indenture
Trustee and a certificate from such Noteholder's prospective transferee
substantially in the form attached hereto as Exhibit C-2A or C-2B hereto or such
other certification reasonably acceptable to the Indenture Trustee; or (iii) an
opinion of counsel satisfactory to the Indenture Trustee to the effect that such
transfer may be made without registration under the 1933 Act (which
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opinion of counsel will not be an expense of the Issuer, the Indenture Trustee
or the Note Registrar in their respective capacities as such), together with the
written certifications as to the facts surrounding such transfer from the
Noteholder desiring to effect such transfer or such Noteholder's prospective
transferee on which such opinion of counsel is based.
(c) No transfer of a Note or any interest therein shall be made to any
employee benefit plan or other retirement arrangement, including individual
retirement accounts and annuities, Keogh plans and bank collective investment
funds, insurance company general separate accounts and other entities in which
such plans, accounts or arrangements are invested, that is subject to ERISA or
the Code (each, a "Plan"), or to any Person who is directly or indirectly
purchasing such Note or interest therein on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan, if any such transfer will result in any
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.
Accordingly, each purchaser of a Note will be deemed to represent and warrant
that either (i) no part of the assets to be used by it to acquire and hold the
Notes constitutes assets of any Plan or (ii) one or more statutory or
administrative exemptions applies, such that its acquisition and holding of the
Notes does not and will not constitute or otherwise result in a non-exempt
prohibited transaction in violation of Section 406 of ERISA or Section 4975 of
the Code.
(d) If a Person is acquiring any Note or interest therein as a
fiduciary or agent for one or more accounts, such Person shall be deemed to
certify that it has (i) sole investment discretion with respect to each such
account and (ii) full power to make the foregoing acknowledgments,
representations, warranties, certifications and agreements with respect to each
such account as set forth in subsections (b) and (c) of this Section 2.05.
(e) Subject to the preceding provisions of this Section 2.05, upon
surrender for registration of transfer of any Note at the offices of the Note
Registrar maintained for such purpose, the Issuer shall execute and the
Indenture Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of a like aggregate Note
Principal Balance.
(f) At the option of any Noteholder, its Notes may be exchanged for
other Notes of authorized denominations of a like aggregate Note Principal
Balance, upon surrender of the Notes to be exchanged at the offices of the Note
Registrar maintained for such purpose. Whenever any Notes are so surrendered for
exchange, the Issuer shall execute and the Indenture Trustee shall authenticate
and deliver the Notes which the Noteholder making the exchange is entitled to
receive.
(g) Every Note presented or surrendered for transfer or exchange shall
(if so required by the Note Registrar) be duly endorsed by, or be accompanied by
a written instrument of transfer in the form satisfactory to the Note Registrar
duly executed by, the Holder thereof or his attorney duly authorized in writing.
(h) No service charge shall be imposed for any transfer or exchange of
Notes, but the Indenture Trustee or the Note Registrar may require payment by
the Noteholder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any transfer or exchange of Notes.
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(i) All Notes surrendered for transfer and exchange shall be physically
canceled by the Note Registrar, and the Note Registrar shall dispose of such
canceled Notes in accordance with its standard procedures.
(j) The Note Registrar or the Indenture Trustee shall provide to the
Issuer or the Directing Noteholder upon reasonable written request and at the
expense of the requesting party, an updated copy of the Note Register.
Section 2.06. MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
If any mutilated Note is surrendered to the Note Registrar, the Issuer
shall execute and the Indenture Trustee shall authenticate and deliver, in
exchange therefor, a new Note of the same principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Issuer, the Indenture Trustee and
the Note Registrar (i) evidence to their satisfaction of the destruction
(including mutilation tantamount to destruction), loss or theft of any Note and
the ownership thereof, and (ii) such security or indemnity as may be reasonably
required by them to hold each of them, and any agent of any of them harmless,
then, in the absence of notice to the Issuer, the Indenture Trustee or the Note
Registrar that such Note has been acquired by a bona fide purchaser, the Issuer
shall execute and the Indenture Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Note, a new Note of the same tenor and
denomination registered in the same manner, dated the date of its authentication
and bearing a number not contemporaneously outstanding.
Upon the issuance of any new Note under this Section 2.06, the
Indenture Trustee and the Note Registrar may require the payment by the
Noteholder of an amount sufficient to pay or discharge any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the reasonable fees and expenses of the
Authenticating Agent and the Indenture Trustee) in connection therewith.
Every new Note issued pursuant to this Section 2.06 in lieu of any
destroyed, mutilated, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the destroyed,
mutilated, lost or stolen Note shall be at any time enforceable by any Person,
and such new Note shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 2.06 are exclusive and shall preclude
(to the extent permitted by applicable law) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Notes.
Section 2.07. NOTEHOLDER LISTS.
The Note Registrar shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders, which list, upon request, will be made available to the Indenture
Trustee insofar as the Indenture Trustee is no longer the Note Registrar. Upon
written request of any Noteholder made for purposes of communicating with other
Noteholders with respect to their rights under this Indenture, the Note
Registrar shall promptly
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furnish such Noteholder with a list of the other Noteholders of record
identified in the Note Register at the time of the request. Every Noteholder, by
receiving such access, agrees with the Note Registrar that the Note Registrar
will not be held accountable in any way by reason of the disclosure of any
information as to the names and addresses of any Noteholder regardless of the
source from which such information was derived.
Section 2.08. PERSONS DEEMED OWNERS.
The Issuer, the Indenture Trustee, the Note Registrar and any agents of
any of them, may treat the Person in whose name a Note is registered as the
owner of such Note for the purpose of receiving payments of principal, interest
and other amounts in respect of such Note and for all other purposes, whether or
not such Note shall be overdue, and none of the Issuer, the Indenture Trustee,
the Note Registrar or any agents of any of them, shall be affected by notice to
the contrary.
Section 2.09. CERTIFICATION OF RECEIPT OF THE LEASE FILES.
(a) The Indenture Trustee, by its execution and delivery of this
Indenture, acknowledges receipt by it of all assets Granted to it and included
in the Collateral, in good faith and without notice of any adverse claim, and
declares that it holds and will hold such assets on behalf of all present and
future Noteholders.
(b) No later than 90 days following the Closing Date (and, if any
exceptions are noted, again not later than December 31, 2001), the Indenture
Trustee shall deliver to the Issuer, the Property Manager, the Directing
Noteholder and USRP an executed certificate substantially in the form of Exhibit
F hereto to the effect that, as to each Property listed on Schedule 1 to the
Contribution Agreement, (i) all documents specified in the definition of "Lease
File" are in its possession and (ii) all such documents received by it with
respect to such Lease and the related Restaurant Unit appear regular on their
face and appear to relate to such Lease or the related Franchise Unit.
(c) The Indenture Trustee shall not be under any duty or obligation to
inspect, review or examine any of the documents, instruments, certificates or
other papers relating to the Properties and Leases delivered to it to determine
that the same are valid, legal, effective, genuine, enforceable, in recordable
form, sufficient or appropriate of the represented purpose or that they are
other than what they purport to be on their face.
Section 2.10. PAYMENTS ON THE NOTES.
(a) Subject to Section 2.10(b), the Issuer agrees to pay
(i) on each Payment Date prior to Stated Maturity of the
Notes, the Payable Note Interest in respect of the Notes for such
Payment Date and, to the extent not previously paid, for all prior
Payment Dates (plus interest on such unpaid amount at the applicable
Note Interest Rate) and the Principal Payment Amount for the related
Payment Date;
(ii) at Stated Maturity of the Notes, the entire Note
Principal Balance of each Note, together with all accrued and unpaid
interest and other amounts due under the Notes and this Indenture
thereon; and
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(iii) upon any payment of the entire Note Principal Balance of
the Notes (whether at the Stated Maturity, prior to the Stated
Maturity, following acceleration of the Notes or at any other time)
unless such payment is funded with the proceeds of the securitization
contemplated by the Engagement Letter, an amount equal to the Exit Fee.
Amounts properly withheld under the Code by any Person from a payment
to any Holder of a Note of interest, principal or other amounts, or any such
payment set aside on the Final Payment Date for such Note as provided in Section
2.10(b), shall be considered as having been paid by the Issuer to such
Noteholder for all purposes of this Indenture.
(b) With respect to each Payment Date, any interest, principal and
other amounts payable on the Notes shall be paid in accordance with Section
3.02(b) to the Person that is the registered holder thereof at the close of
business on the related Record Date; provided, however, that interest, principal
and other amounts payable at the Final Payment Date of any Note shall be payable
only against surrender thereof at the offices of the Indenture Trustee
designated in the notice provided pursuant to Section 2.11(b). Payments of
interest, principal and other amounts on the Notes shall be made on the
applicable Payment Date other than the Final Payment Date, subject to applicable
laws and regulations, by wire transfer to such account as such Noteholder shall
designate by written instruction received by the Indenture Trustee not later
than the Record Date related to the applicable Payment Date or otherwise by
check mailed on or before the Payment Date to the Person entitled thereto at
such Person's address appearing on the Note Register. The Indenture Trustee
shall pay the Note Principal Balance for each Note Outstanding plus Payable Note
Interest due thereon in whole or in part as provided herein on its Final Payment
Date in immediately available funds from funds in the Payment Account as
promptly as possible after presentation to the Indenture Trustee of such Note at
the office of the Note Registrar but shall initiate such payment no later than
3:00 p.m., New York City time, on the day after such presentation, provided,
that such presentation has been made no later than 1:00 p.m., New York City time
on the day prior to its Final Payment Date. If presentation is made after 1:00
p.m., New York City time, on any day, such presentation shall be deemed to have
been made on the immediately succeeding Business Day.
Except as provided in the following sentence, if a Note is issued in
exchange for any other Note during the period commencing at the close of
business at the office or agency where such exchange occurs on any Record Date
and ending before the opening of business at such office or agency on the
related Payment Date, no interest, principal or other amounts will be payable on
such Payment Date in respect of such new Note, but will be payable on such
Payment Date only in respect of the prior Note. Interest, principal and other
amounts payable on any Note issued in exchange for any other Note during the
period commencing at the close of business at the office or agency where such
exchange occurs on the Record Date immediately preceding the Final Payment Date
for such Notes and ending on the Final Payment Date for such Notes, shall be
payable to the Person that surrenders the new Note as provided in this Section
2.10(b).
All payments of interest, principal and other amounts made with
respects to any of the Notes will be allocated pro rata among the Outstanding
Notes based on the Note Principal Balance thereof.
If any Note on which the final payment was due is not presented for
payment on its Final Payment Date, then the Indenture Trustee shall set aside
and hold such payment uninvested in a
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segregated account or sub-account separate from the Payment Account but which
constitutes an Eligible Account, and the Indenture Trustee and the Issuer shall
act in accordance with Section 6.10 in respect of the unclaimed funds.
Section 2.11. FINAL PAYMENT NOTICE.
(a) Notice of final payment under Section 2.10(b) shall be given by the
Indenture Trustee as soon as possible but not later than two Business Days prior
to the Final Payment Date to each Noteholder as of the close of business on the
Record Date preceding the Final Payment Date at such Noteholder's address
appearing in the Note Register.
(b) All notices of final payment in respect of the Notes shall state
(i) the Final Payment Date for the Notes, (ii) the amount of the final payment
for the Notes and (iii) the place where the Notes are to be surrendered for
payment.
(c) Notice of final payment of the Notes shall be given by the
Indenture Trustee in the name of the Indenture Trustee. Failure to give notice
of final payment, or any defect therein, to any Noteholder shall not impair or
affect the validity of the final payment of any other Note.
Section 2.12. COMPLIANCE WITH WITHHOLDING REQUIREMENTS AND REPORTING.
Notwithstanding any other provision of this Indenture, the Indenture
Trustee shall comply with all Federal withholding requirements with respect to
payments to Noteholders of interest, original issue discount, or other amounts
that the Indenture Trustee reasonably believes are applicable under the Code.
The consent of Noteholders shall not be required for any such withholding.
The Issuer shall (i) cause to be prepared and forwarded to Holders of
the Notes and (ii) cause to be prepared and filed with the Internal Revenue
Service all required tax forms and such other information with respect to the
income and deductions of the Collateral at the time or times and in the manner
required by the Code.
Section 2.13. CANCELLATION.
The Issuer may at any time deliver to the Note Registrar for
cancellation any Notes previously authenticated and delivered hereunder which
the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Note Registrar.
All Notes delivered to the Indenture Trustee for payment shall be
forwarded to the Note Registrar. All such Notes and all Notes surrendered for
transfer and exchange in accordance with the terms hereof shall be canceled and
disposed of by the Note Registrar in accordance with its customary procedures.
Section 2.14. CAPITAL ADEQUACY.
If any Noteholder has determined, after the date hereof, that the
adoption or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or
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comparable agency charged with the interpretation or administration thereof in
the interpretation or administration of, any applicable law, rule or regulation
regarding capital adequacy, or compliance by such Noteholder with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Noteholder's capital or assets as
a consequence of its commitments or obligations hereunder to a level below that
which such Noteholder could have achieved but for such adoption, effectiveness,
change or compliance (taking into consideration such Noteholder's policies with
respect to capital adequacy), then, upon notice from such Noteholder to the
Indenture Trustee, the Indenture Trustee shall promptly forward such notice to
the Issuer and the Issuer shall be obligated to pay to such Noteholder such
additional amount or amounts as will compensate such Noteholder for such
reduction. Each determination by any such Noteholder of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto.
Section 2.15. COMPENSATION.
Upon the request of any Noteholder, the Issuer shall pay, from amounts
on deposit in the Payment Account and subject to the priorities set forth in
Section 3.02(b) to such Noteholder such amount or amounts as shall be sufficient
(in the reasonable opinion of such Noteholder) to compensate it for any loss,
cost, or expense (excluding loss of anticipated profits) incurred by it as a
result of:
(a) any payment, prepayment or redemption of the Notes for any reason
(including, without limitation, in connection with any acceleration of the Loan
following the occurrence of an Event of Default) on a date other than the last
day of the applicable Interest Accrual Period; or
(b) any failure by the Issuer for any reason to redeem the Notes on the
date for such redemption specified in the relevant notice of redemption under
this Indenture.
Such indemnification may include an amount equal to the excess, if any,
of (a) the amount of interest which would have accrued on the amount so redeemed
for the period from the date of such redemption to the last day of the
applicable Interest Accrual Period in each case at the applicable Note Interest
Rate over (b) the amount of interest (as reasonably determined by such
Noteholder) which would have accrued to such Noteholder on such amount by
placing such amount on deposit for a comparable period with leading banks in the
interbank Eurodollar market.
ARTICLE III
ACCOUNTS
Section 3.01. LOCKBOX ACCOUNT.
(a) On or before the earlier of (i) the occurrence of a Default
hereunder or (ii) the 120th day (unless prior to such 120th day either (i) the
Engagement Letter dated December 15, 2000 between USRP and Banc of America
Securities LLC (the "Engagement Letter") has been terminated by USRP in
accordance with its terms or (ii) Banc of America Securities LLC has otherwise
been
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notified by USRP that USRP will not pursue the securitization contemplated in
the Engagement Letter) following the Closing Date (such date, the "Lockbox
Trigger Date"), the Issuer shall establish and thereafter maintain with the
Lockbox Account Bank a Lockbox Account (the "Lockbox Account"), which shall be
an Eligible Account in the name of the Indenture Trustee as secured party and
under the sole dominion and control of the Indenture Trustee. Neither the Issuer
nor the Property Manager shall have any right to make withdrawals from the
Lockbox Account. On or before the Lockbox Trigger Date, (y) the Lockbox Account
Bank and the Issuer shall execute and deliver to the Indenture Trustee a Lockbox
Account Agreement which provides, inter alia, that no party other than the
Indenture Trustee shall have the right to withdraw funds from the Lockbox
Account, and (z) the Issuer shall send notices, in a form acceptable to the
Directing Noteholder, to each Tenant (the "Tenant Direction Notice") occupying
space at any Property directing them to pay all Rent and other sums due under
the Lease to which they are a party into the Lockbox Account. If,
notwithstanding the Tenant Direction Notice the Issuer or the Property Manager
receives any Rents or any other moneys, cash, rights to deposit or savings
accounts or other items of legal tender obtained from or for use in connection
with the ownership or operation of the Properties at any time following the
Lockbox Trigger Date, the Issuer hereby covenants to deposit or cause the
Property Manager to deposit all such amounts in the Lockbox Account (other than
any Tenant security deposits and Tenant escrows which shall be deposited in the
appropriate Escrow Account) within 24 hours of receipt by the Issuer or the
Property Manager, as the case may be.
(b) On each Remittance Date, the Indenture Trustee shall transfer from
the Lockbox Account into the Payment Account, all amounts available therein
(other than any amounts therein that represent collections in respect of the
Properties of amounts due thereon after the related Determination Date which
amount shall be retained in the Lockbox Account for distribution on future
Payment Dates). On any date which Tenant security deposits or Tenant escrows are
on deposit in the Lockbox Account the Indenture Trustee, to the extent that the
Property Manager or Issuer has notified it that such deposits are Tenant
security deposits or Tenant escrows, shall transfer such amounts to the Property
Manager for deposit in the appropriate escrow account.
Section 3.02. PAYMENT ACCOUNT.
(a) On or prior to the date hereof, the Indenture Trustee shall
establish a segregated trust account (the "Payment Account") at its Corporate
Trust Office (or such other financial institution as necessary to ensure that
the Payment Account is at all times an Eligible Account) in its name, as
Indenture Trustee, bearing a designation clearly indicating that such account
and all funds deposited therein are held for the exclusive benefit of the
Noteholders and the Issuer. The Indenture Trustee shall deposit or cause to be
deposited in the Payment Account (i) on the Closing Date, the Initial Reserve
Amount, (ii) on each Remittance Date, all amounts remitted to the Indenture
Trustee from the Property Manager in accordance with the Property Management
Agreement and all amounts required to be transferred into the Payment Account
pursuant to Section 3.01(b), (iii) any amounts required to be deposited in the
Payment Account pursuant to Section 8.01 (iv) any Redemption Price paid pursuant
to Section 8.02 and (v) any Exit Fee paid pursuant to Section 2.10(a). Except as
provided in this Indenture, the Indenture Trustee, in accordance with the terms
of this Indenture, shall have exclusive control and sole right of withdrawal
with respect to the Payment Account. Funds in the Payment Account shall not be
commingled with any other monies. All monies deposited from time to time in the
Payment Account shall be held by and under the control of the Indenture Trustee
in the Payment Account for the benefit of the Noteholders and the Issuer as
herein
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provided and, so long as no Default is continuing, shall be invested by the
Indenture Trustee in Permitted Investments in accordance with the prior written
instructions of the Issuer. Any investment of amounts on deposit in the Payment
Account in Permitted Investments shall mature no later than one Business Day
prior to the Payment Date. Any gain on such Permitted Investments shall be added
to the Payment Account and any loss shall be charged to the Payment Account.
During the continuation of any Default or in the absence of prior written
instruction regarding investment of amount on deposit in the Payment Account,
such amounts in the Payment Account shall remain uninvested.
(b) The Indenture Trustee is authorized to make withdrawals from the
Payment Account (the order set forth hereafter in this subsection (b) not
constituting an order of priority for such withdrawals) (i) to make the
Waterfall Payments and (ii) to withdraw any amounts deposited in the Payment
Account in error.
On each Payment Date, the Indenture Trustee shall apply all funds
available in the Payment Account in the following order of priority (the
"Waterfall Payments"):
(i) to the Indenture Trustee and the Directing Noteholder, in
that order, any amounts due to the Indenture Trustee (including the
earned and unpaid Indenture Trustee Fee and any amounts owed to the
Indenture Trustee under Section 6.04(a)(2) of this Indenture) and the
Directing Noteholder pursuant to this Indenture;
(ii) to any successor property manager, the Senior Management
Fee then payable to such successor property manager, if any;
(iii) to the Noteholders, in respect of interest, up to an
amount equal to the Payable Note Interest in respect of the Notes for
such Payment Date and, to the extent not previously paid, for all prior
Payment Dates (plus interest on such unpaid amount at the applicable
Note Interest Rate);
(iv) to the Noteholders, in respect of principal, up to an
amount equal to the Principal Payment Amount for such Payment Date;
(v) to the Noteholders, any Exit Fee paid by the Issuer during
the related Collection Period;
(vi) to BAMCC, as Agent under the Revolving Credit Facility,
any amount owed by the Issuer under the Revolving Credit Facility as
set forth in writing from BAMCC delivered to the Indenture Trustee at
least two Business Days prior to such Payment Date;
(vii) to the Property Manager, an amount equal to the
Management Fee then payable to the Property Manager; and
(viii) so long as no Event of Default is then continuing, to a
single account of the Issuer as the Issuer may direct.
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(c) In the event that on any Remittance Date the amount in the
Collection Account or the Lockbox Account, as applicable, shall be insufficient
to make all of the payments described in 3.02(b)(i) through (v), the Issuer
shall deposit into the Payment Account on such Remittance Date the amount of
such deficiency (without the need for any notice or demand from the Indenture
Trustee), and if the Issuer shall fail to make such deposit, the same shall
constitute an Event of Default.
Section 3.03. ACCOUNT COLLATERAL.
(a) Pursuant to the Granting Clause, the Issuer has granted a perfected
first-priority security interest in favor of the Indenture Trustee in and to the
Account Collateral as security for the Loan, together with all rights of a
secured party with respect thereto. The Issuer shall execute any additional
documents that the Indenture Trustee or the Directing Noteholder in its
reasonable discretion may require and shall provide all other evidence
reasonably requested by the Indenture Trustee or the Directing Noteholder to
evidence or perfect the Indenture Trustee's first-priority security interest in
the Account Collateral.
(b) So long as no Event of Default shall be continuing, the Issuer
shall be permitted to direct, by written direction, the investment of the funds
from time to time held in the Lockbox Account in Permitted Investments and to
sell and reinvest proceeds from the sale or liquidation of Permitted Investments
in other Permitted Investments, with all such proceeds and reinvestments to be
held in the Lockbox Account; provided, however, that the maturity of an adequate
portion of the Permitted Investments on deposit in the Lockbox Account shall be
no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn therefrom pursuant to this Indenture. All
income and gains from the investment of funds in the Lockbox Account shall be
credited to the Lockbox Account, provided, however, that if there is any loss on
any such investment, the Issuer shall promptly deposit into the Lockbox Account
an amount sufficient to replenish the deficiency therefrom. As between the
Issuer and the Indenture Trustee, the Issuer shall treat all income, gains and
losses from the investment of amounts in the Lockbox Account as its income or
loss for federal, state and local income tax purposes and the Issuer shall
receive all benefit from such income.
(c) After the Notes and all other amounts hereunder have been paid in
full, each of the Lockbox Account and the Payment Account shall be closed and
the balance, if any, therein shall be disbursed to the Issuer.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect except as to (i) any
surviving rights herein expressly provided for, including any rights of transfer
or exchange of Notes herein expressly provided for, (ii) in the case of clause
(1)(B) below, the rights of the Noteholders hereunder to receive payment of the
Note Principal Balance of and interest on the Notes and any other rights of the
Noteholders hereunder, and (iii) the provisions of Section 4.02, when
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(1) either (A) all Notes theretofore authenticated and delivered (other
than (i) Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.06 and (ii) Notes for which payment of
money has theretofore been deposited in the Payment Account by the Indenture
Trustee and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 6.10) have been delivered to the Note Registrar for
cancellation; or (B) all such Notes not theretofore delivered to the Note
Registrar for cancellation (i) have become due and payable, or (ii) will become
due and payable on the next Payment Date, and in the case of clause (B)(i) or
(B)(ii) above, cash in an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the Note Registrar for
cancellation or sufficient to pay the Note Principal Balance thereof and any
interest thereon accrued to the date of such deposit (in the case of Notes which
have become due and payable) or to the end of the Interest Accrual Period for
the next Payment Date has been deposited with the Indenture Trustee as trust
funds in trust for these purposes;
(2) the Issuer has paid or caused to be paid all other sums payable or
reasonably expected to become payable by the Issuer to the Indenture Trustee,
the Property Manager and each of the Noteholders (in each case, if any);
(3) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate of the Issuer stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with; and
(4) the Issuer has furnished to the Indenture Trustee a Tax Opinion
with respect to the actions contemplated by this Section 4.01.
Notwithstanding the foregoing, the obligations of the Issuer to the
Indenture Trustee under Section 5.04 hereof and the obligations of the Indenture
Trustee to the Noteholders under Section 4.01 hereof shall survive satisfaction
and discharge of this Indenture.
Section 4.02. APPLICATION OF TRUST MONEY.
Subject to the provisions of Section 2.10 and Section 6.10, all cash
deposited with the Indenture Trustee pursuant to Section 4.01 shall be held in
the Payment Account and applied by the Indenture Trustee, in accordance with the
provisions of the Notes and this Indenture to pay the Persons entitled thereto,
the interest, principal and other amounts payable on the Notes.
Upon the satisfaction and discharge of this Indenture pursuant to
Section 4.01 of this Indenture, the Indenture Trustee shall pay to the Issuer as
it shall direct by Issuer's Order all amounts, if any, held by it remaining as
part of the Collateral.
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
Section 5.01. EVENTS OF DEFAULT.
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"Event of Default," wherever used herein with respect to the Notes,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) if the Issuer fails to pay when due any installment of
principal or interest payable in respect of the Notes or any other sums
due under this Indenture;
(ii) if at any time the Debt Service Coverage Ratio is less
than 2.00 to 1.00 for 30 consecutive days;
(iii) if at any time the Loan-To-Value Ratio is greater than
55% for 30 consecutive days;
(iv) if the Issuer transfers or encumbers all or any portion
of the Properties, or if any direct or indirect interest in the Issuer
is transferred or assigned, other than, in each case, as is expressly
permitted under the Security Documents;
(v) if any representation or warranty made by the Issuer, any
Guarantor or any indemnitor in any Security Document, certificate,
report, financial statement or other document is false or misleading in
any material respect as of the date the representation or warranty was
made;
(vi) if the Issuer, managing member or general partner of the
Issuer or any Guarantor or any indemnitor commence any proceeding
relating to bankruptcy, insolvency, reorganization or conservatorship
or makes an assignment for the benefit of creditors, or is not paying
its debts as they become due or has admitted in writing its inability
to pay its debts; or if a receiver, liquidator or trustee is appointed
or if the Issuer, managing member or general partner of the Issuer or
any Guarantor or any indemnitor is adjudicated bankrupt or insolvent,
or if any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state
law, is filed by or against, consented to, or acquiesced in by, the
Issuer, managing member or general partner of the Issuer or any
Guarantor or any indemnitor, or if any proceeding for the dissolution
or liquidation of the Issuer, managing member or general partner of the
Issuer or any Guarantor or any indemnitor is instituted; provided,
however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by the Issuer, upon the same not being
discharged, stayed or dismissed within sixty (60) days;
(vii) if the Issuer is in default under any of the other
terms, covenants or conditions of the Property Management Agreement,
this Indenture or any of the other Security Documents (except for any
such default that provides for a different cure period), for fifteen
days after notice to the Issuer, in the case of any default which can
be cured by the payment of a sum of money, or for thirty days after
notice in the case of any other default; provided, however, that if a
nonmonetary default cannot reasonably be cured within such 30-day
period and the Issuer has commenced to cure such default within such
30-day period and thereafter diligently and expeditiously proceeds to
cure the same (as evidenced by Officer's Certificates of the Issuer),
such 30-day period will extended for an additional 30-day period;
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(viii) the occurrence of a Significant Capital Event that does
not result in a redemption of all of the Notes on or before the date of
occurrence of such Significant Capital Event;
(ix) if at any time 15% or more of the aggregate Combined NOI
for the most recently ended Collection Period is received from a single
Tenant or a single group of Tenants that are Affiliates;
(x) if at any time 40% or more of the aggregate Combined NOI
for the most recently ended Collection Period is received from five or
fewer Tenants or five or fewer groups of Tenants that are Affiliates;
(xi) if at any time, more than 10% of the Performing
Properties (determined by the Value of such Properties and not
including any Related Properties) are Ground Lease Properties;
(xii) if, at any time following an extension of the Stated
Maturity pursuant to Section 2.03, Banc of America Securities LLC is
notified that the securitization contemplated by the Engagement Letter
will not be pursued;
(xiii) if any default occurs under the Revolving Credit
Facility regardless of whether such default is declared or results in
an acceleration of the debt due thereunder and regardless of whether
such default has been waived;
(xiv) if any default occurs under any guaranty or indemnity
executed in connection herewith (including, without limitation, the
Guaranty or the Environmental Indemnity; or
(xv) if any default occurs under any of the Security
Documents.
Section 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default should occur and be continuing, the Directing
Noteholder may direct the Indenture Trustee to declare and, upon such direction,
the Indenture Trustee shall declare all of the Notes to be immediately due and
payable, by a notice in writing to the Issuer, and upon any such declaration the
unpaid Note Principal Balance of the Notes, together with Payable Note Interest
thereon through the date of acceleration, shall become immediately due and
payable.
Section 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) If the Issuer fails to pay all amounts due upon an acceleration of
the Notes under Section 5.02 forthwith upon demand and such declaration and its
consequences shall not have been rescinded and annulled, the Indenture Trustee,
in its capacity as Indenture Trustee and as trustee of an express trust shall,
at the direction of the Directing Noteholder, institute one or more judicial
proceedings for the collection of the sums so due and unpaid, may prosecute such
proceedings to judgment or final decree and may enforce the same against the
Issuer or any other obligor upon the Notes and collect the monies adjudged or
decreed to be payable in the manner provided by law out
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of the Collateral, wherever situated, or may institute and prosecute such
non-judicial proceedings in lieu of judicial proceedings as are then permitted
by applicable law.
(b) If an Event of Default occurs and is continuing, the Indenture
Trustee, at the direction of the Directing Noteholder, shall proceed to protect
and enforce its rights and the rights of the Noteholders by such appropriate
proceedings as the Directing Noteholder shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.
(c) In case (x) there shall be pending, relative to the Issuer or any
Person having or claiming an ownership interest in the Collateral, proceedings
under Title 11 of the United States Code or any other applicable Federal or
state bankruptcy, insolvency or other similar law, (y) a receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or shall have taken possession of the
Issuer or its property or such Person or (z) there shall be pending a comparable
judicial proceeding brought by creditors of the Issuer or affecting the property
of the Issuer, the Indenture Trustee, at the direction of the Directing
Noteholder shall irrespective of whether the principal of or interest on any
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Indenture Trustee shall have made any
demand pursuant to the provisions of this Section, shall be entitled and
empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Indenture Trustee (including any
claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective attorneys, and for
reimbursement of all reasonable expenses and liabilities incurred, and
all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of willful misconduct, negligence
or bad faith of the Indenture Trustee) and of the Noteholders allowed
in such proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Noteholders in any election of a trustee, a
standby trustee or Person performing similar functions in any such
proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their and its behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Noteholders allowed in any judicial
proceedings relative to the Issuer, their creditors and their property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such
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Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective attorneys, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of willful misconduct,
negligence or bad faith of the Indenture Trustee or predecessor Indenture
Trustee.
(d) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any related Noteholder or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(e) In any proceedings brought by the Indenture Trustee at the
direction of the Directing Noteholder (and also any proceedings involving the
interpretation of any provision of this Indenture to which the Indenture Trustee
shall be a party), the Indenture Trustee shall be held to represent all the
Noteholders, and it shall not be necessary to make any Noteholder a party to any
such proceedings.
(f) In the event that the Indenture Trustee following an Event of
Default hereunder institutes proceedings to foreclose on the Collateral, the
Indenture Trustee shall promptly give a notice to that effect to the Issuer and
the Directing Noteholder.
(g) All rights of action and claims under this Indenture or the Notes
may be prosecuted and enforced by the Indenture Trustee at the direction of the
Directing Noteholder, without the possession of any of the Notes or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Indenture Trustee at the direction of the Directing
Noteholder, shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee, the Directing Noteholder and their counsel, be for the ratable benefit
of the Noteholders in respect of which such judgment has been recovered.
Section 5.04. REMEDIES.
If an Event of Default has occurred and is continuing, and the Notes
have been declared due and payable pursuant to Section 5.02 hereof and such
declaration and its consequences have not been rescinded and annulled, the
Indenture Trustee may (in addition to its rights and remedies under the Security
Instruments), and, at the direction of the Directing Noteholder, shall do one or
more of the following:
(a) institute, or cause to be instituted, Proceedings for the
collection of all amounts then payable on or under this Indenture with respect
to the Notes, whether by declaration of acceleration or otherwise, enforce any
judgment obtained, and collect from the Collateral monies adjudged due;
(b) sell, or cause to be sold, the Collateral or any portion thereof or
rights or interest therein, at one or more public or private sales called and
conducted in any manner permitted by applicable law, provided, however, that the
Indenture Trustee shall give the Issuer written notice of
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any private sale called by or on behalf of the Indenture Trustee pursuant to
this Section 5.04(b) at least 10 days prior to the date fixed for such private
sale;
(c) institute, or cause to be instituted, Proceedings from time to time
for the complete or partial foreclosure with respect to the Collateral;
(d) exercise, or cause to be exercised, any remedies of a secured party
under the Uniform Commercial Code and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture Trustee or the
Holders of the Notes hereunder;
(e) maintain possession of the Collateral and, in its own name or in
the name of the Issuer or otherwise, collect and otherwise receive any money or
property at any time payable or receivable on account of or in exchange for any
of the assets of the Collateral; and
(f) take any other action and pursue any other remedy permitted under
any Security Instrument or Security Document;
provided, however, that the Indenture Trustee, shall not, unless required by
law, sell or otherwise liquidate all or any portion of the Collateral following
any Event of Default except in accordance with the instructions of the Directing
Noteholder.
Section 5.05. APPLICATION OF MONEY COLLECTED.
On and after the Stated Maturity or upon the occurrence of an Event of
Default pursuant to which the Notes have been declared due and payable in
accordance with Section 5.02 hereof and such declaration and its consequences
have not been rescinded, the Indenture Trustee will apply all funds received by
the Indenture Trustee in respect of the Collateral from the Issuer, pursuant to
the exercise of any rights or remedies set forth in this Article V, in this
Indenture or otherwise, promptly after receipt, for the following purposes and
in the following order of priority:
(i) to the Indenture Trustee and the Directing Noteholder, in
that order, any amounts due to the Indenture Trustee and the Directing
Noteholder pursuant to this Indenture and the other Security Documents;
(ii) to the holders of the Class A Notes, all accrued and
unpaid interest in respect of such Notes (plus interest on such unpaid
amount at the applicable Note Interest Rate);
(iii) to the holders of the Class A Notes in respect of
principal, up to an amount equal to the Note Principal Balance of the
Class A Notes then Outstanding;
(iv) to the Property Manager, accrued and unpaid Management
Fees and any other amounts due to the Property Manager under the
Property Management Agreement; and
(iv) to the Issuer, the balance, if any.
Section 5.06. LIMITATION ON SUITS.
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Except as provided in Section 5.07, no Noteholder shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder.
Section 5.07. UNCONDITIONAL RIGHT OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payments of interest, principal and other amounts then due on such Note on or
before the Stated Maturity and the Indenture Trustee, at the direction of the
Directing Noteholder, shall (or if the Indenture Trustee fails to do so, the
Holder of any Note shall have the right to) institute suit for the enforcement
of any such payment. The Issuer shall, however, be subject to only one
consolidated lawsuit by the Noteholders, or by the Indenture Trustee on behalf
of the Noteholders, for any one cause of action arising under this Indenture or
otherwise.
Section 5.08. RESTORATION OF RIGHTS AND REMEDIES.
If the Indenture Trustee has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued,
waived, rescinded or abandoned for any reason, or has been determined adversely
to the Indenture Trustee, then and in every such case, subject to any
determination in such proceeding, the Issuer, the Indenture Trustee and the
Noteholders shall be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such proceeding had been
instituted.
Section 5.09. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes in Section 2.06, no right or
remedy herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.10. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Indenture Trustee or any Noteholder to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Indenture or by law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, to the extent permitted by
applicable law, by the Indenture Trustee or the Noteholders, as the case may be.
Section 5.11. WAIVER OF PAST DEFAULTS.
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Prior to the acceleration of the maturity of the Notes, the Directing
Noteholder may on behalf of the Noteholders of all the Notes waive any past
default hereunder and its consequences, except a default
(1) in the payment of principal of or interest on any Note or
any other amount due to any Noteholder under this Indenture, which
waiver shall require the waiver by Noteholders holding 100% in
aggregate Note Principal Balance of the Outstanding Notes affected; or
(2) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the
Holder of each Outstanding Note affected, which waiver shall require
the waiver by each Holder of an Outstanding Note affected;
(3) depriving the Indenture Trustee or any Noteholder of a
lien or the benefit of a lien, as the case may be, upon any part of the
Collateral, which waiver shall require the consent of the Indenture
Trustee or such Noteholder, as the case may be; or
(4) depriving the Indenture Trustee of any fee, reimbursement
for any expense incurred, or any indemnification to which the Indenture
Trustee is entitled, which waiver shall require the consent of the
Indenture Trustee.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon. Any costs or expenses
incurred by the Indenture Trustee in connection with such waiver shall be
reimbursable to the Indenture Trustee from amounts on deposit in the Lockbox
Account pursuant to Section 3.01(b) hereof.
Section 5.12. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Noteholder by its
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses based on time expended, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Issuer, or to any suit instituted by the
Indenture Trustee or the Directing Noteholder, or to any suit instituted by any
Noteholder, or group of Noteholders, holding in the aggregate at least 25% in
aggregate Note Principal Balance of Outstanding Notes or to any suit instituted
by any Noteholder for the enforcement of the payment of the principal of or
interest on any Note on or after the Maturity of such Note.
Section 5.13. WAIVER OF STAY OR EXTENSION LAWS.
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The Issuer hereby covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim to take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of such law and
covenants that it will not hinder, delay or impede the exercise of any power
herein granted to the Indenture Trustee, but will suffer and permit the exercise
of every such power as though no such law had been enacted.
Section 5.14. SALE OF COLLATERAL.
The power to effect any public or private sale of any portion of the
Collateral pursuant to Section 5.04 hereof shall not be exhausted by any one or
more sales as to any portion of the Collateral remaining unsold, but shall
continue unimpaired until either the entire Collateral shall have been sold or
all amounts payable on the Notes and under this Indenture with respect thereto
shall have been paid. At the direction of the Directing Noteholder, the
Indenture Trustee may from time to time postpone any sale by public announcement
made at the time and place of such sale. The Indenture Trustee hereby expressly
waives its right to any amount fixed by law as compensation for any such sale
but such waiver does not apply to any amounts to which the Indenture Trustee is
otherwise entitled under Section 6.04 of this Indenture.
Section 5.15. ACTION ON NOTES.
The Indenture Trustee's right to seek and recover judgment on the Notes
or under this Indenture shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this Indenture. Neither
the lien of this Indenture nor any rights or remedies of the Indenture Trustee
or the Noteholders shall be impaired by the recovery of any judgment by the
Indenture Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Collateral.
Section 5.16. DIRECTING NOTEHOLDER.
(a) Notwithstanding anything to the contrary contained herein, the
Indenture Trustee shall follow all directions related to this Indenture or the
Collateral given to the Indenture Trustee by the Directing Noteholder and the
Indenture Trustee shall incur no liability to any Person for any actions taken
or not taken by the Indenture Trustee in accordance with such directions.
(b) The Issuer hereby agrees to reimburse, indemnify and hold harmless
the Directing Noteholder, and any director, officer, employee, agent, Affiliate
or Control Person of the Directing Noteholder for any loss, liability, expense
or disbursements (including without limitation costs and expenses of litigation,
and of investigation, reasonable counsel fees, damages, judgments and amounts
paid in settlement) incurred in connection with any request of the Directing
Noteholder for consent, waiver, approval or the like, any direction or
instruction given by the Directing Noteholder, or any act (including any actions
taken by the Directing Noteholder or its agents pursuant to Article V) or
omission on the part of the Directing Noteholder with respect to this Indenture,
the Collateral or the Notes. The foregoing indemnification shall survive the
termination of this Indenture.
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ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. CERTAIN DUTIES AND RESPONSIBILITIES.
The Issuer hereby irrevocably constitutes and appoints the Indenture
Trustee and any Responsible Officer thereof, with full power of substitution, as
their true and lawful attorney-in-fact with full irrevocable power and authority
in place and stead of the Issuer and in the name of the Issuer or in its own
name or in the name of a nominee, from time to time in the Indenture Trustee's
discretion, for the purpose of enforcing the rights, powers and remedies, but
not the exercise of obligations, of the Issuer and to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Indenture, all
as set forth in this Section.
(a) The rights, duties and liabilities of the Indenture Trustee in
respect of this Indenture shall be as follows:
(i) Subject to Section 5.16, the Indenture Trustee shall have
the full power and authority to do all things not inconsistent with the
provisions of this Indenture that it may deem advisable in order to
enforce the provisions hereof or to take any action with respect to a
default or an Event of Default hereunder, or to institute, appear in or
defend any suit or other proceeding with respect hereto, or to protect
the interests of the Noteholders. The Indenture Trustee shall not be
answerable or accountable except for its own bad faith, willful
misconduct or negligence. The Issuer shall prepare, execute and file or
cause to be filed, at the Issuer's expense, and, upon request by the
Issuer, the Indenture Trustee shall execute, a UCC Financing Statement,
describing the Issuer as debtor, the Indenture Trustee as secured party
and the Collateral as the collateral, in all appropriate locations
promptly following the initial issuance of the Notes, and the Issuer
shall prepare and file at each such office, and, upon request by the
Issuer, the Indenture Trustee shall execute, continuation statements
with respect thereto, in each case within six months prior to each
fifth anniversary of the original filing. The Indenture Trustee shall
be under no affirmative duty to determine the sufficiency of such UCC
Financing Statements or to determine whether they have been filed in
all appropriate locations. The Issuer is hereby authorized and
obligated to make, at the expense of the Issuer, all required filings
and refilings of which the Issuer becomes aware, necessary to preserve
the liens created by this Indenture as provided herein. The Indenture
Trustee shall not be required to take any action to exercise or enforce
the trusts hereby created (and shall not take any such action except as
directed by the Directing Noteholder) which, in the opinion of the
Indenture Trustee, shall be likely to involve expense or liability to
the Indenture Trustee, unless the Indenture Trustee shall have received
an agreement satisfactory to it in its sole reasonable discretion to
indemnify it against such liability and expense. Except as otherwise
expressly provided herein, the Indenture Trustee shall not be required
to ascertain or inquire as to the performance or observance of any of
the covenants or agreements contained herein, or in any other
instruments to be performed or observed by the Issuer.
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(ii) Subject to the other provisions of this Article VI, the
Indenture Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders, or other instruments
furnished to the Indenture Trustee that are specifically required to be
furnished pursuant to any provisions of this Indenture, shall examine
them to determine whether they are on their face in the form required
by this Indenture to the extent expressly set forth herein. If any such
instrument is found on its face not to conform to the requirements of
this Indenture in a material manner, the Indenture Trustee shall take
such action as it deems appropriate to have the instrument corrected,
and if the instrument is not corrected to the Indenture Trustee's
reasonable satisfaction, the Indenture Trustee will provide notice
thereof to the Noteholders. The Indenture Trustee shall not be under
any duty to independently verify the accuracy or contents of any such
item. The Indenture Trustee shall not incur any liability in acting
upon any signature, notice, request, consent, certificate, opinion, or
other instrument reasonably believed by it to be genuine. In
administering the trusts hereunder, the Indenture Trustee may execute
any of the trusts or powers or perform any of its obligations hereunder
directly or through its agents or attorneys, provided that it shall
remain liable for the acts of all such agents and attorneys. The
Indenture Trustee may, at its own expense (except as otherwise provided
in Section 6.04), consult with counsel, accountants and other
professionals to be selected and employed by it, and the Indenture
Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the advice of any such Person nor
for any error of judgment made in good faith by a Responsible Officer
of the Indenture Trustee, unless it shall be proved that the Indenture
Trustee was negligent in ascertaining the pertinent facts.
(iii) The Indenture Trustee shall not have any duty to make,
arrange or ensure the completion of any recording, filing or
registration of any instrument or other document (including any UCC
Financing Statements), or any amendments or supplements to any of said
instruments or to determine if any such instrument or other document is
in a form suitable for recording, filing or registration, and the
Indenture Trustee shall not have any duty to make, arrange or ensure
the completion of the payment of any fees, charges or taxes in
connection therewith.
(iv) Whenever in performing its duties hereunder, the
Indenture Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Indenture Trustee may, in the absence of bad faith on
the part of the Indenture Trustee, rely upon (unless other evidence in
respect thereof be specifically prescribed herein) an Officer's
Certificate of the Issuer, and such Officer's Certificate shall be full
warrant to the Indenture Trustee for any action taken, suffered or
omitted by it on the faith thereof.
(v) The Indenture Trustee shall not be concerned with or
accountable to any Person for the use or application of any deposited
monies or of any property or securities or the proceeds thereof that
shall be released or withdrawn in accordance with the provisions hereof
or of any property or securities or the proceeds thereof that shall be
released from the lien hereof or thereof in accordance with the
provisions hereof or thereof and the Indenture Trustee shall not have
any liability for the acts of other parties that are not in accordance
with the provisions.
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(b) The rights, duties and liabilities of the Indenture Trustee in
respect of the Collateral and this Indenture, in addition to those set forth in
Section 6.01(a), shall be as follows:
(i) subject to Section 6.01(c), the Indenture Trustee
undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Indenture
Trustee; and
(ii) the Indenture Trustee may, in the absence of bad faith on
its part, conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Indenture Trustee, the Indenture
Trustee shall be under a duty to examine the same to determine whether
or not they conform on their face to the requirements of this
Indenture, to the extent expressly set forth herein.
(c) Subject to Sections 5.11 and 5.16, in case an Event of Default
known to the Indenture Trustee with respect to the Notes has occurred and is
continuing, the Indenture Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs (it being the intent that the
Indenture Trustee will undertake actions with respect to the Notes only at the
direction of the Directing Noteholder).
(d) No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that
(i) this subsection shall not be construed to limit the effect
of subsections (a), (b) or (c) of this Section;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Indenture Trustee, unless it shall be proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Indenture Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the directions of the Directing Noteholder; and
(iv) the Indenture Trustee shall not be charged with knowledge
of a default in the observance of any covenant contained in Section
10.06 unless either (i) a Responsible Officer of the Indenture Trustee
shall have actual knowledge of such default or (ii) written notice of
such default shall have been given by the Issuer or by any Noteholder
to and received by a Responsible Officer of the Indenture Trustee.
Section 6.02. NOTICE OF DEFAULTS.
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(a) The Indenture Trustee, promptly but not later than five (5)
Business Days after a Responsible Officer of the Indenture Trustee acquires
actual knowledge of the occurrence of any Default or Event of Default under this
Indenture, shall notify the Issuer and the Noteholders of any such Default or
Event of Default, unless all such defaults known to the Indenture Trustee shall
have been cured before the giving of such notice or unless the same is rescinded
and annulled, or waived pursuant to Section 5.01 or Section 5.11.
(b) The Indenture Trustee also agrees, promptly but no later than five
(5) Business Days after a Responsible Officer of the Indenture Trustee acquires
actual knowledge of the occurrence of any event of default under the Property
Management Agreement, to notify the Issuer and the Noteholders of such event of
default.
Section 6.03. CERTAIN RIGHTS OF INDENTURE TRUSTEE.
Subject to the provisions of this Indenture, in connection with this
Indenture:
(a) the Indenture Trustee may request and rely and shall be protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties as may be required by such party or
parties pursuant to the terms of this Indenture;
(b) any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request or Issuer Order and any resolution
of the board of managers of the General Partner of the Issuer may be
sufficiently evidenced by a Resolution;
(c) whenever in the administration of this Indenture the Indenture
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Indenture Trustee
(unless other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate;
(d) the Indenture Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel rendered thereby shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Indenture Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders (other than the Directing Noteholder)
pursuant to this Indenture, unless such Noteholders shall have offered to the
Indenture Trustee reasonable security or indemnity against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction;
(f) the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
security, debenture, note, coupon, other evidence of indebtedness or other paper
or document, but the Indenture Trustee in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Indenture Trustee shall determine
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to make such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Issuer, personally or by agent or
attorney;
(g) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys of the Indenture Trustee, provided that it shall remain
liable for the acts of all such attorneys and agents;
(h) the Indenture Trustee shall not be required to provide any surety
or security of any kind in connection with the execution or performance of its
duties hereunder; and
(i) except with respect to the representations made by it in Section
6.06, the Indenture Trustee shall not make any representations as to the
validity or sufficiency of this Indenture.
Section 6.04. COMPENSATION AND REIMBURSEMENT.
(a) Subject to Section 6.04(b), the Issuer hereby agrees:
(1) to pay or cause to be paid, from amounts on deposit
in the Payment Account or otherwise from the proceeds
of the Collateral to the Indenture Trustee, in
accordance with Section 3.02(b) hereof, monthly the
Indenture Trustee Fee as compensation for all
services rendered by it hereunder (which compensation
shall not be limited by any provision of law in
regard to the compensation of a trustee of an express
trust);
(2) to reimburse, indemnify and hold harmless, from
amounts on deposit in the Payment Account or
otherwise from the proceeds of the Collateral the
Indenture Trustee, and any director, officer,
employee, agent, Affiliate or Control Person of the
Indenture Trustee for any loss, liability, expense or
disbursements (including without limitation costs and
expenses of litigation, and of investigation,
reasonable counsel fees, damages, judgments and
amounts paid in settlement) incurred in connection
with any act (including any actions taken by the
Indenture Trustee or its agents pursuant to Article
V) or omission on the part of the Indenture Trustee
with respect to this Indenture, the Collateral or the
Notes (other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith
or negligence in the performance of duties, or as may
arise from a breach of any representation or warranty
of the Indenture Trustee set forth herein). The
foregoing indemnification shall survive the
termination of this Indenture.
With respect to any third party claim in which the Indenture Trustee is
not adverse to the Issuer or Directing Noteholder:
(i) the Indenture Trustee shall give the Issuer and
the Noteholders written notice thereof promptly after the
Indenture Trustee shall have knowledge thereof;
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(ii) while maintaining control over its own defense,
the Indenture Trustee shall cooperate and consult fully with
the Issuer and the Directing Noteholder in preparing such
defense; and
(iii) notwithstanding the foregoing provisions of
this Section 6.04(a), so long as no Default or Event of
Default is occurring, the Indenture Trustee shall not be
entitled to reimbursement out of the Lockbox Account for
settlement of any such claim by the Indenture Trustee entered
into without the prior consent of the Issuer and the Directing
Noteholder.
The Indenture Trustee agrees to fully perform its duties under
this Indenture notwithstanding any failure on the part of the Issuer to make any
payments, reimbursements or indemnifications to the Indenture Trustee pursuant
to this Section 6.04(a); provided, however, that (subject to Sections 6.04(b)
and 6.04(c)) nothing in this Section 6.04 shall be construed to limit the
exercise by the Indenture Trustee of any right or remedy permitted under this
Indenture in the event of the Issuer's failure to pay any sums due the Indenture
Trustee pursuant to this Section 6.04.
(b) The obligations of the Issuer set forth in Section 6.04(a) are
nonrecourse obligations solely of the Issuer and will be payable only from
amounts on deposit in the Payment Account or otherwise from the proceeds of the
Collateral with respect to the Notes. The Indenture Trustee hereby agrees that
it has no rights or claims against the Issuer directly and shall only look to
the Collateral to satisfy the Issuer's obligations under Section 6.04(a). The
Indenture Trustee also hereby agrees not to file or join in filing any petition
in bankruptcy or commence any similar proceeding in respect of the Issuer.
(c) Upon the occurrence of an Event of Default resulting in an
acceleration of maturity of the Notes, the Indenture Trustee shall have, as
security for the performance by the Issuer of its obligations under this Section
6.04, a lien ranking senior to the lien of the Notes upon all property and funds
held or collected as part of the Collateral. The Indenture Trustee shall not
institute any proceeding seeking the enforcement of such lien against the
Collateral unless such proceeding is in connection with a proceeding in
accordance with Article V hereof for enforcement of the lien of this Indenture
for the benefit of the Noteholders after the occurrence of an Event of Default
and a resulting declaration of acceleration of maturity of such Notes that has
not been rescinded and annulled.
Section 6.05. CORPORATE INDENTURE TRUSTEE REQUIRED; ELIGIBILITY.
The Issuer hereby agrees, for the benefit of the Noteholders, that
there shall at all times be an Indenture Trustee hereunder which shall be a bank
(within the meaning of Section 2(a)(5) of the 1940 Act) organized and doing
business under the laws of the United States or any State thereof, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, and subject to supervision or examination
by Federal or State authority, and is otherwise acceptable to the Directing
Noteholder. If such bank publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined
capital and surplus of such bank shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. The
Indenture Trustee shall at all times meet the requirements of Section 26(a)(1)
of the 1940 Act
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and shall in no event be an Affiliate of the Issuer or an Affiliate of any
Person involved in the organization or operation of the Issuer or be directly or
indirectly controlled by the Issuer. If at any time a Responsible Officer of the
Indenture Trustee becomes aware that the Indenture Trustee has ceased to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 6.06. AUTHORIZATION OF INDENTURE TRUSTEE.
The Indenture Trustee represents and warrants as to itself: that it is
duly authorized under applicable Federal law and the law of the state of its
organization, its charter and its by-laws to execute and deliver this Indenture,
and to perform its obligations hereunder, including, without limitation, that it
is duly authorized to accept the Grant to it for the benefit of the Noteholders
of the Collateral and is authorized to authenticate the Notes, and that all
corporate action necessary or required therefor has been duly and effectively
taken or obtained and all federal and state governmental consents and approvals
required with respect thereto have been obtained.
Section 6.07. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation, bank, trust company or association into which the
Indenture Trustee may be merged or converted or with which it may be
consolidated, or any corporation, bank, trust company or association resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation, bank, trust company or association
succeeding to all or substantially all the corporate trust business of the
Indenture Trustee, shall be the successor of the Indenture Trustee hereunder,
provided such corporation, bank, trust company or association shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
Section 6.08. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No removal of the Indenture Trustee and no appointment of a
successor Indenture Trustee pursuant to this Article shall become effective
until (i) the acceptance of appointment by the successor Indenture Trustee in
accordance with the applicable requirements of Section 6.09 and (ii) repayment
to the predecessor Indenture Trustee of all unpaid fees and expenses. No
resignation of the Indenture Trustee and no appointment of a successor Indenture
Trustee pursuant to this article shall become effective until the acceptance of
appointment by the successor Indenture Trustee in accordance with the applicable
requirements of Section 6.09. Promptly upon such resignation, the predecessor
Indenture Trustee shall be reimbursed for all unpaid fees and expenses.
(b) The Indenture Trustee may resign at any time by giving written
notice thereof to the Issuer and the Directing Noteholder. If the respective
instruments of acceptance by a successor Indenture Trustee required by Section
6.09 shall not have been delivered to each such party within 30 days after the
giving of such notice of resignation, the resigning Indenture Trustee may
petition any court of competent jurisdiction for the appointment of its
successor.
(c) The Indenture Trustee may be removed at any time by the Directing
Noteholder and any costs associated with such removal shall be borne by the
Issuer if such removal is without cause.
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(d) If at any time:
(i) the Indenture Trustee shall cease to be eligible under
Section 6.05 or the representations of the Indenture Trustee in Section
6.06 shall prove to be untrue in any material respect, and the
Indenture Trustee shall fail to resign after written request therefor
by the Issuer or Noteholders of 10% of the aggregate Note Principal
Balance of the Outstanding Notes; or
(ii) the Indenture Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Indenture Trustee or its property shall be appointed or any public
officer shall take charge or control of the Indenture Trustee or its
property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then, in any such case, (i) the Directing Noteholder may remove the Indenture
Trustee or (ii) subject to Section 5.12, any Noteholder may, on its own behalf
and on behalf of all others similarly situated, petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Indenture
Trustee for any cause, the Directing Noteholder shall promptly remove the
Indenture Trustee and appoint a successor Indenture Trustee who shall comply
with the applicable requirements of Section 6.09.
If, within 30 days after such resignation, removal or incapacity, or
the occurrence of such vacancy, no successor Indenture Trustee shall have been
so appointed and accepted appointment in the manner required by Section 6.09,
the resigning Indenture Trustee may, on its own behalf and on behalf of all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
(f) The Issuer shall give notice of any resignation or removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee by giving
notice of such event to the Noteholders. Each notice shall include the name of
the successor Indenture Trustee and the address of its Corporate Trust Office.
Section 6.09. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Indenture Trustee,
the successor Indenture Trustee so appointed shall execute, acknowledge and
deliver to the Issuer, the Directing Noteholder and to the retiring Indenture
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Indenture Trustee shall become effective and such
successor Indenture Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Indenture Trustee; but, on the request of the Issuer, the Directing Noteholder
or the successor Indenture Trustee, such retiring Indenture Trustee shall, upon
payment of each of its fees, execute and deliver an instrument transferring to
such successor Indenture Trustee all the rights, powers and trusts of the
retiring Indenture Trustee, shall duly assign, transfer and deliver to such
successor Indenture Trustee all property and money held by such retiring
Indenture Trustee hereunder, shall take such action as may be requested by the
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Issuer or the Directing Noteholder to provide for the appropriate interest in
the Collateral to be vested in such successor Indenture Trustee, but shall not
be responsible for the recording of such documents and instruments as may be
necessary to give effect to the foregoing.
Upon request of any such successor Indenture Trustee, the Issuer or the
Directing Noteholder shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Indenture Trustee all such
rights, powers and trusts referred to in this Section.
No successor Indenture Trustee shall accept its appointment unless at
the time of such acceptance such successor Indenture Trustee (i) shall be
qualified and eligible under this Article and (ii) is acceptable to the
Directing Noteholder.
Section 6.10. UNCLAIMED FUNDS.
The Indenture Trustee is required to hold any payments received by it
with respect to the Notes that are not paid to the Noteholders in trust for the
Noteholders. Notwithstanding the foregoing, and subject to applicable abandoned
property law, at the expiration of two years following the Final Payment Date
for the Notes, any monies set aside in accordance with Section 2.10(b) for
payment of principal, interest and other amounts on such Notes remain unclaimed
by any lawful owner thereof, such unclaimed funds and, to the extent required by
applicable law, any accrued interest thereon shall be remitted to the Issuer to
be held in trust by the Issuer for the benefit of the applicable Noteholder
until distributed in accordance with applicable law, and all liability of the
Indenture Trustee with respect to such money shall thereupon cease; provided,
that the Indenture Trustee, before being required to make any such repayment,
may, at the expense of the applicable Noteholder, payable out of such unclaimed
funds, to the extent permitted by applicable law, and otherwise at the expense
of the Issuer, cause to be published at least once but not more than three times
in two newspapers in the English language customarily published on each Business
Day and of general circulation, in New York, New York, a notice to the effect
that such monies remain unclaimed and have not been applied for the purpose for
which they were deposited, and that after a date specified therein, which shall
be not less than 30 days after the date of first publication of said notice, any
unclaimed balance of such monies then remaining in the hands of the Indenture
Trustee will be paid to the Issuer upon their written directions to be held in
trust for the benefit of the applicable Noteholder until distributed in
accordance with applicable law. Any successor to the Issuer through merger,
consolidation or otherwise or any recipient of substantially all the assets of
the Issuer in a liquidation of the Issuer shall remain liable for the amount of
any unclaimed balance paid to the Issuer pursuant to this Section 6.10.
SECTION 6.11. ILLEGAL ACTS.
No provision of this Indenture or any amendment or supplement hereto
shall be deemed to impose any duty or obligation on the Indenture Trustee to do
any act in the performance of its duties hereunder or to exercise any right,
power, duty or obligation conferred or imposed on it, which under any present or
future law shall be unlawful, or which shall be beyond the corporate powers,
authorization or qualification of the Indenture Trustee.
Section 6.12. COMMUNICATIONS BY THE INDENTURE TRUSTEE.
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The Indenture Trustee shall send to the Issuer, within one Business Day
after the Stated Maturity thereof, if any principal of or interest on such Notes
due and payable hereunder is not paid, a written demand for payment thereof.
Section 6.13. SEPARATE INDENTURE TRUSTEES AND CO-TRUSTEES.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting legal requirements applicable to it in the
performance of its duties hereunder, the Indenture Trustee shall have the power
to, and shall execute and deliver all instruments to, appoint one or more
Persons to act as separate trustees or co-trustees hereunder, jointly with the
Indenture Trustee, of any of the Collateral subject to this Indenture, and any
such Persons shall be such separate trustee or co-trustee, with such powers and
duties consistent with this Indenture as shall be specified in the instrument
appointing such Person but without thereby releasing the Indenture Trustee from
any of its duties hereunder. If the Indenture Trustee shall request the Issuer
to do so, the Issuer shall join with the Indenture Trustee in the execution of
such instrument, but the Indenture Trustee shall have the power to make such
appointment without making such request. A separate trustee or co-trustee
appointed pursuant to this Section 6.13 need not meet the eligibility
requirements of Section 6.05.
(b) Every separate trustee and co-trustee shall, to the extent not
prohibited by law, be subject to the following terms and conditions:
(i) the rights, powers, duties and obligations conferred or
imposed upon such separate or co-trustee shall be conferred or imposed
upon and exercised or performed by the Indenture Trustee and such
separate or co-trustee jointly, as shall be provided in the appointing
instrument, except to the extent that under any law of any jurisdiction
in which any particular act is to be performed any nonresident trustee
shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and
performed by such separate trustee or co-trustee;
(ii) all powers, duties, obligations and rights conferred upon
the Indenture Trustee, in respect of the custody of all cash deposited
hereunder shall be exercised solely by the Indenture Trustee; and
(iii) the Indenture Trustee may at any time by written
instrument accept the resignation of or remove any such separate
trustee or co-trustee, and, upon the request of the Indenture Trustee,
the Issuer shall join with the Indenture Trustee in the execution,
delivery and performance of all instruments and agreements necessary or
proper to make effective such resignation or removal, but the Indenture
Trustee shall have the power to accept such resignation or to make such
removal without making such request. A successor to a separate trustee
or co-trustee so resigning or removed may be appointed in the manner
otherwise provided herein.
(c) Such separate trustee or co-trustee, upon acceptance of such trust,
shall be vested with the estates or property specified in such instrument,
jointly with the Indenture Trustee, and the Indenture Trustee shall take such
action as may be necessary to provide for (i) the appropriate
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interest in the Collateral to be vested in such separate trustee or co-trustee,
(ii) the execution and delivery of any transfer documentation or Note powers
that may be necessary to give effect to transfer of the Collateral to the
co-trustee. Any separate trustee or co-trustee may, at any time, by written
instrument constitute the Indenture Trustee, its agent or attorney in fact with
full power and authority, to the extent permitted by law, to do all acts and
things and exercise all discretion authorized or permitted by it, for and on
behalf of it and in its name. If any separate trustee or co-trustee shall be
dissolved, become incapable of acting, resign, be removed or die, all the
estates, property, rights, powers, trusts, duties and obligations of said
separate trustee or co-trustee, so far as permitted by law, shall vest in and be
exercised by the Indenture Trustee, without the appointment of a successor to
said separate trustee or co-trustee, until the appointment of a successor to
said separate trustee or co-trustee is necessary as provided in this Indenture.
(d) Any notice, request or other writing, by or on behalf of any
Noteholder, delivered to the Indenture Trustee shall be deemed to have been
delivered to all separate trustees and co-trustees.
(e) Although co-trustees may be jointly liable, no co-trustee or
separate trustee shall be severally liable by reason of any act or omission of
the Indenture Trustee or any other such trustee hereunder.
Section 6.14. EXECUTION OF SECURITY DOCUMENTS.
The Indenture Trustee is hereby authorized and directed to execute and
deliver, in its capacity as Indenture Trustee hereunder, the Property Management
Agreement, and such of the other Security Documents as by their terms
contemplate or call for the signature of the Indenture Trustee (and any
ancillary documents or instruments called for or contemplated by the terms
thereof to be executed by the Indenture Trustee). The execution and delivery
thereof by the Indenture Trustee shall not indicate or imply that the Indenture
Trustee has reviewed or evaluated, or that it is under any duty or
responsibility to review or evaluate, the terms or contents thereof (including
any evaluations on behalf of Noteholders with regard to the sufficiency,
validity, or enforceability thereof); and it is hereby expressly acknowledged
that the Indenture Trustee is under no such duty or responsibility.
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ARTICLE VII
REPORTS TO NOTEHOLDERS
Section 7.01. REPORTS TO NOTEHOLDERS AND OTHERS.
(a) Based on information provided in monthly reports prepared by the
Property Manager and delivered to the Indenture Trustee, the Indenture Trustee
will prepare and forward on each Payment Date to each Noteholder, the Initial
Purchaser, the Property Manager, and, if requested, any potential investor in
the Notes a report (the "Payment Date Statement") containing the information
contemplated in the form of Payment Date Statement attached hereto as Exhibit B
and any other information reasonably requested by the Directing Noteholder.
(b) Within a reasonable period of time after the end of each calendar
year (but in no event more than 60 days following the end of such calendar
year), the Indenture Trustee shall prepare, or cause to be prepared, and mail to
each Person who at any time during the calendar year was a Noteholder (i) a
statement summarizing the items set forth in the Payment Date Statements for
such calendar year or applicable portion thereof during which such person was a
Noteholder and (ii) such other customary information as the Indenture Trustee
deems necessary or desirable for Noteholders to prepare their federal, state and
local income tax returns including, without limitation (and to the extent
provided to it by the Issuer which shall so cause such information to be
provided), the amount of original issue discount accrued on the Notes, if
applicable. The obligations of the Indenture Trustee in the immediately
preceding sentence shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Indenture Trustee
pursuant to any requirements of the Code. As soon as practicable following the
request of any Noteholder in writing, the Indenture Trustee shall furnish to
such Noteholder such information in the possession of the Indenture Trustee
regarding the Collateral as such holder may reasonably request.
Section 7.02. ACCESS TO CERTAIN INFORMATION.
(a) The Indenture Trustee shall afford to the Property Manager and any
Holder or Holders of Notes, and to any banking or insurance regulatory authority
that may exercise authority over any Noteholder, reasonable access to any
documentation regarding the Collateral within its control that may be required
to be provided by this Indenture or by applicable law. Such access shall be
afforded without charge but only upon reasonable prior written request and
during normal business hours at the offices of the Indenture Trustee designated
by it.
(b) The Indenture Trustee shall maintain at its Corporate Trust Office
and shall deliver to the Issuer, the Directing Noteholder and, subject to the
succeeding paragraph, any Noteholder or Person identified to the Indenture
Trustee as a prospective transferee of a Note or an interest therein (at the
reasonable written request), copies of the following items (to the extent that
such items have been delivered to the Indenture Trustee or the Indenture Trustee
can cause such items to be delivered to it without unreasonable burden or
expense): (i) this Indenture, the Property Management Agreement and any
amendments hereto or thereto; (ii) all reports prepared by, and all reports
delivered to, the Indenture Trustee or the Property Manager since the Closing
Date; (iii) all Officer's Certificates delivered by the Property Manager since
the Closing Date pursuant to the Property Management Agreement and all Officer's
Certificates delivered by the Issuer since the Closing Date
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pursuant to this Indenture; (iv) all reports, statements, certifications,
notices or other documents caused to be delivered by the Property Manager to the
Indenture Trustee since the Closing Date and (v) all modifications, waivers and
amendments of the terms of this Indenture and any other Security Documents
entered into and delivered to the Indenture Trustee. The Indenture Trustee shall
make available copies of any and all of the foregoing items upon written request
of any party set forth in the previous sentence. However, the Indenture Trustee
shall be permitted to require of such party the payment of a sum sufficient to
cover the reasonable costs and expenses of providing such copies as are
requested by such party.
The Indenture Trustee will make available, upon reasonable
advance written notice and at the expense of the requesting party, copies of the
above items to any Noteholder and to prospective purchasers of Notes; provided,
that, as a condition to making such items available, the Indenture Trustee shall
require (a) in the case of Noteholders, a confirmation executed by the
requesting Person substantially in the form of Exhibit D-1 hereto generally to
the effect that such Person is a Noteholder, is requesting the information
solely for use in evaluating such Person's investment in the related Notes and
will otherwise keep such information confidential and (b) in the case of a
prospective purchaser, confirmation executed by the requesting Person and such
Person's prospective transferor substantially in the form of Exhibit D-2 hereto
generally to the effect that such Person is a prospective purchaser of Notes, is
requesting the information solely for use in evaluating a possible investment in
such Notes and will otherwise keep such information confidential.
(c) The Indenture Trustee shall not be liable for any dissemination of
information made in accordance with Section 7.02(a) or (b), nor for the accuracy
of any such information not prepared by the Indenture Trustee, nor for the
sufficiency of such information for any purpose.
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ARTICLE VIII
PROPERTY RELEASES, REDEMPTION AND SUBSTITUTION
Section 8.01. PROPERTY RELEASES. Subject to the terms and conditions
set forth herein, the Issuer shall have the right, from time to time, on any
Payment Date, to obtain a release (a "Property Release") of a Property from the
lien of the related Security Instrument and the Security Documents either (A) to
the extent that USRP is required to repurchase or substitute a Property in
accordance with the Contribution Agreement or (B) (i) provided that no Event of
Default under this Indenture, the Security Instrument or any other Security
Document has occurred and is continuing and (ii) subject to compliance with the
provisions set forth below in this Section 8.01, legal, record, economic and
beneficial ownership of the Property for which a Property Release is being
requested (the "Release Premises") is simultaneously with the granting of the
Property Release transferred (a "Release Premises Transfer") to and shall be
owned immediately after such Property Release by a person(s), party(ies) or
entity(ies) other than the Issuer or its general partner ("Release Premises
Transferee"). In the event that the Issuer seeks to release a Property from the
lien of the related Security Instrument and the Security Documents, the
Indenture Trustee shall release such Property from the lien of the related
Security Instrument and the Security Documents (and upon the Property Manager's
written request and certification as to the satisfaction of the requirements of
this Section, the Indenture Trustee shall execute and deliver to the Property
Manager such instruments and other documents, prepared by the Property Manager,
as the Property Manager may request), but only upon receipt by the Indenture
Trustee of the following:
(a) At least thirty (30) days but no more than ninety (90) days prior
to the Determination Date on which the Issuer is requesting such Property
Release, a written notice of the Issuer in the form attached hereto as Exhibit E
(a "Request for Release"), which includes an Officer's Certificate of the Issuer
certifying that the requirements set forth in Section 8.01(f) of this Indenture
shall be true after giving effect to such transfer;
(b) At least five (5) Business Days prior to such Property Release
notice of prepayment with respect to the Release Amount applicable to the
related Premises;
(c) A wire transfer into the Payment Account of immediately available
federal funds in an amount equal to the sum of (i) the Release Amount and (ii)
all accrued and unpaid interest with respect to the Release Amount through the
end of the current Interest Accrual Period and any other amounts owing to the
Indenture Trustee in connection with the Release Premises;
(d) If applicable, all proposed documents related to the Release
Premises Transferee and such documents, certificates and assurances that the
Indenture Trustee shall reasonably request to evidence and confirm that the
Release Premises is simultaneously with the Property Release being transferred
to a Release Premises Transferee;
(e) Payment of all the Indenture Trustee's costs and expenses,
including due diligence review costs and reasonable counsel fees and
disbursements incurred in connection with the Property Release and the review
and approval of the documents and information required to be delivered in
connection therewith ("Property Release Expenses");
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(f) After giving effect to such Property Release, each of the following
conditions will be satisfied: (i) no Default or Event of Default will exist;
(ii) the Debt Service Coverage Ratio will be no less than 2.00 to 1.00; and
(iii) the Loan-To-Value Ratio will be no greater than 60%;
(g) After giving effect to such Property Release and the application of
the Principal Payment Amount on the following Payment Date, the aggregate Note
Principal Balance on the following Payment Date will be either (i) greater than
$150,000,000 or (ii) reduced to zero; and
(h) Such Property Release is consented to by the Directing Noteholder,
such consent (i) not to be unreasonably withheld and (ii) to be granted or
refused within three Business Days of receipt by the Directing Noteholder of a
written request to consent from the Property Manager to such Property Release.
Section 8.02. REDEMPTION OF THE NOTES.
The Notes may be redeemed in whole or in part upon not less than five
(5) Business Days' prior irrevocable written notice to the Indenture Trustee
specifying the date of redemption, by paying the applicable Redemption Price,
together with any costs and expenses relating to such redemption, including,
without limitation, any indemnification due under Section 2.15.
Section 8.03. SUBSTITUTION. The Issuer shall be entitled to substitute
one or more properties either (A) to the extent that USRP is required to
repurchase or substitute (and elects to substitute) a Property in accordance
with the Contribution Agreement or (B) to the extent that the Directing
Noteholder consents to such substitution.
ARTICLE IX
SUPPLEMENTAL INDENTURES; AMENDMENTS
Section 9.01. SUPPLEMENTAL INDENTURES OR AMENDMENTS WITHOUT CONSENT OF
NOTEHOLDERS.
Without the consent of the Noteholders but with the consent of the
Directing Noteholder, the Issuer and the Indenture Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, or one
or more amendments hereto or to the Notes, the Property Management Agreement
(with the consent of the Property Manager) or any other Security Document, for
any of the following purposes:
(1) to convey, transfer, assign, mortgage or pledge any
property to the Indenture Trustee so long as the interests of the
Noteholders would not be adversely affected;
(2) to correct any manifestly incorrect description, or
amplify the description, of any property subject to the lien of this
Indenture;
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(3) to modify the Indenture, the Property Management Agreement
or any other Security Document so long as the interests of the
Noteholders would not be adversely affected;
(4) to add to the covenants of the Issuer or any other Person
for the benefit of the Noteholders or to surrender any right or power
herein or therein conferred upon the Issuer;
(5) to add any additional events of default hereunder or under
the Property Management Agreement or any other Security Document,
provided such action shall not adversely affect the interests of the
Noteholders;
(6) to evidence and provide for the acceptance of appointment
by a successor Indenture Trustee or Property Manager; or
(7) to correct any typographical error or cure any ambiguity,
or to cure, correct or supplement any defective or inconsistent
provision herein or in the Notes, the Property Management Agreement or
any other Security Document provided such action shall not adversely
affect the interests of the Noteholders.
No such supplemental indenture or amendment shall be effective unless
(i) the Issuer obtains a Tax Opinion and an Opinion of Counsel to the effect
that such supplemental indenture or amendment would not cause any of the Notes
to be characterized other than as indebtedness for federal income tax purposes
or cause any of the Notes to be deemed to have been exchanged for a new debt
instrument pursuant to Treasury Regulation ss.1.001-3, and furnished each such
Opinion of Counsel to the Indenture Trustee in connection therewith and (ii) the
party requesting such supplemental indenture or amendment furnishes to the
Indenture Trustee and the Issuer an opinion of counsel that, where required
above, such action will not adversely affect the interests of Noteholders.
Section 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
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With the consent of the Noteholders of not less than 66 2/3% in
aggregate Note Principal Balance of the Outstanding Notes and with the consent
of the Directing Noteholder, the Issuer and the Indenture Trustee may enter into
one or more indentures supplemental hereto, or one or more amendments hereto or
to the Notes or the Property Management Agreement, for the purpose of adding any
provisions hereto or thereto, changing in any manner or eliminating any of the
provisions hereof or thereof or modifying in any manner the rights of the
Noteholders hereunder or thereunder; provided that no such supplemental
indenture or amendment shall be effective unless the Issuer obtains a Tax
Opinion and obtain an Opinion of Counsel to the effect that such supplemental
indenture or amendment would not cause any of the Notes to be characterized
other than as indebtedness for federal income tax purposes or cause any of the
Notes to be deemed to have been exchanged for a new debt instrument pursuant to
Treasury Regulation 1.001-3 and, furnish each such Opinion of Counsel to the
Indenture Trustee in connection therewith; and provided, further, that no such
supplemental indenture or amendment shall, without the consent of the
Noteholders of 100% in aggregate Note Principal Balance of the Outstanding Notes
affected thereby,
(1) change the Stated Maturity or the Payment Date of any
principal, interest or other amount on any Note, or reduce the Note
Principal Balance thereof or the Note Interest Rate thereon, or
authorize the Indenture Trustee to agree to delay the timing of, or
reduce the payments to be made on or in respect of, the Notes, or
change the coin or currency in which the principal of any Note or
interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity
thereof;
(2) reduce the percentage of the then aggregate Note Principal
Balance of the Outstanding Notes, the consent of whose Noteholders is
required for any such supplemental indenture or amendment, or the
consent of whose Noteholders is required for any waiver of defaults
hereunder and their consequences provided for in this Indenture, or for
any other reason under this Indenture (including for actions taken by
the Indenture Trustee pursuant to Section 6.01(a) hereof);
(3) change any obligation of the Issuer to maintain an office
or agency in the places and for the purposes specified in Section
10.01;
(4) except as otherwise expressly provided in this Indenture,
deprive any Noteholder of the benefit of a first priority security
interest in the Collateral as provided in this Indenture;
(5) modify Section 2.10; or
(6) release from the lien of the Indenture (except as
specifically permitted hereby on the date of execution hereof) all or
any part of the Collateral.
It shall not be necessary for the consent of the Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance thereof.
Section 9.03. DELIVERY OF SUPPLEMENTS AND AMENDMENTS.
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Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture or amendment pursuant to the provisions hereof, the
Indenture Trustee, at the expense of the Issuer payable from amounts on deposit
in the Payment Account or otherwise out of the proceeds of Collateral pursuant
to Section 6.04, shall furnish a notice setting forth in general terms the
substance of such supplemental indenture or amendment to each Noteholder at the
address for such Noteholder set forth in the Note Register.
Section 9.04. EXECUTION OF SUPPLEMENTAL INDENTURES, ETC.
In executing, or accepting the additional trusts created by, any
supplemental indenture or amendment permitted by this Article or in accepting
the modifications thereby of the trusts created by this Indenture or in giving
any consent to any modification of any Note under Section 6.01(a) hereunder, the
Indenture Trustee shall be entitled to receive, at the Issuer's expense payable
from amounts on deposit in the Payment Account or otherwise out of the proceeds
of Collateral pursuant to Section 6.04, and shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture, amendment or modification is authorized or permitted by this
Indenture. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture or amendment or consent to any such modification
which affects the Indenture Trustee's own rights, duties or immunities under
this Indenture or otherwise.
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ARTICLE X
COVENANTS; WARRANTIES
Section 10.01. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer shall maintain or cause to be maintained an office or agency
in the continental United States where notices and demands to or upon the Issuer
in respect of the Notes and this Indenture may be served. The Issuer shall give
prompt written notice to the Indenture Trustee and the Noteholders of the
location, and any change in the location, of such office or agency.
Section 10.02. EXISTENCE.
Subject to Section 10.08, the Issuer will keep in full effect its
existence, rights and franchises under the laws of its jurisdiction of
organization.
Section 10.03. PAYMENT OF TAXES AND OTHER CLAIMS.
The Issuer shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all taxes, assessments and governmental
charges levied or imposed upon the Issuer or upon the income, profits or
property of the Issuer, or shown to be due on the tax returns filed by the
Issuer, except any such taxes, assessments, governmental charges or claims which
the Issuer is in good faith contesting in appropriate proceedings and with
respect to which reserves are established if required in accordance with GAAP,
provided, that such failure to pay or discharge will not cause a forfeiture of,
or a lien to encumber, any property included in the Collateral. The Indenture
Trustee is authorized to pay out of the Lockbox Account, prior to making any
other payments, any such taxes, assessments, governmental charges or claims
which, as determined by the Indenture Trustee or the Directing Noteholder, if
not paid, would cause a forfeiture of, or a lien to encumber, any property
included in the Collateral.
Section 10.04. VALIDITY OF THE NOTES; TITLE TO THE COLLATERAL; LIEN.
(a) The Issuer represents and warrants that the Issuer is duly
authorized under applicable law to create and issue the Notes, and the Issuer
represents and warrants that it is duly authorized under applicable law to
execute and deliver this Indenture, the other documents referred to herein to
which it is a party and all instruments included in the Collateral which it has
executed and delivered, and that all corporate action and governmental consents,
authorizations and approvals necessary or required therefor have been duly and
effectively taken or obtained. The Notes, when issued, will be, and this
Indenture and such other documents are, valid and legally binding obligations of
the Issuer and enforceable in accordance with their terms.
(b) The Issuer represents and warrants that, immediately prior its
Grant of the Collateral provided for herein, it had good title to, and was the
sole owner of, each Property, free and clear of any pledge, lien, encumbrance or
security interest.
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(c) The Issuer represents and warrants that, upon the issuance of the
Notes, the Indenture Trustee has a valid and enforceable first priority security
interest in the Collateral, subject only to exceptions permitted hereby.
(d) The Issuer represents and warrants that the Indenture is not
required to be qualified under the 1939 Act and that the Issuer is not required
to be registered as an "investment company" under the 1940 Act.
(e) The Issuer represents and warrants that the execution, delivery and
performance of the Notes, the Indenture, the Security Instruments and the other
Security Documents and the borrowing evidenced by the Notes and the Indenture,
(i) are within the power and authority of the Issuer; (ii) have been authorized
by all requisite organizational action; (iii) have received all necessary
approvals and consents, organizational, governmental or otherwise; (iv) will not
violate, conflict with, result in a breach of or constitute (with notice or
lapse of time, or both) a material default under any provision of law, any order
or judgment of any court or governmental authority, the partnership agreement of
the Issuer, or any indenture, agreement or other instrument to which the Issuer
is a party or by which it or any of its assets or the Properties are or may be
bound or affected; (v) will not result in the creation or imposition of any
lien, charge or encumbrance whatsoever upon any of its assets, except the lien
and security interest created by the Security Instruments; and (vi) will not
require any authorization or license from, or any filing with, any governmental
or other body (except for the recordation of the Security Instruments in
appropriate land records in the State where the Properties are located and
except for Uniform Commercial Code filings relating to the security interest
created hereby).
(f) The Issuer represents and warrants that the Notes, the Indenture,
the Security Instruments and the other Security Documents constitute the legal,
valid and binding obligations of Issuer.
(g) Except as set forth on Schedule C, the Issuer represents and
warrants that there is no action, suit or proceeding, judicial, administrative
or otherwise (including any condemnation or similar proceeding), pending or, to
the best of the Issuer's knowledge, threatened or contemplated against, or
affecting, the Issuer, any Guarantor or any of the Properties that in the case
of any Guarantor or any of the Properties could result in a judgment of more
than $25,000 with respect to any one such action, suit or proceeding or
$1,000,000 in the aggregate.
(h) The Issuer represents and warrants that the Issuer is not a
"foreign person" within the meaning of Section 1445(f)(3) of the Internal
Revenue Code of 1986, as amended and the related Treasury Department
regulations, including temporary regulations.
(i) The Issuer represents and warrants that (i) as of the date hereof
and throughout the term of the Loan, (x) the Issuer is not and will not be an
"employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA, and (y) the assets of the Issuer do not and will not
constitute "plan assets" of one or more such plans for purposes of Title I of
ERISA; and (ii) as of the date hereof and throughout the term of the Loan (x)
the Issuer is not and will not be a "governmental plan" within the meaning of
Section 3(3) of ERISA and (y) transactions by or with the Issuer are not and
will not be subject to state statutes applicable to the Issuer regulating
investments of and fiduciary obligations with respect to governmental plans.
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(j) The Issuer represents and warrants that (i) the Issuer is solvent,
and no bankruptcy, reorganization, insolvency or similar proceeding under any
state or federal law with respect to Issuer has been initiated, and (ii) the
Issuer has received reasonably equivalent value for the granting of the Security
Instruments.
(k) The Issuer represents and warrants that no petition in bankruptcy
has ever been filed by or against the Issuer or any Guarantor, and neither the
Issuer nor any Guarantor has ever made any assignment for the benefit of
creditors or taken advantage of any insolvency act or any act for the benefit of
debtors.
(l) The Issuer represents and warrants that the Issuer and any
Guarantor have filed all federal, state, county, municipal, and city income and
other tax returns required to have been filed by them and have paid all taxes
and related liabilities which have become due pursuant to such returns or
pursuant to any assessments received by them. Neither the Issuer nor any
Guarantor knows of any basis for any additional assessment in respect of any
such taxes and related liabilities for prior years.
(m) The Issuer represents and warrants that all financing statements,
rent rolls, reports, certificates and other documents and information prepared
and submitted by the Issuer in connection with the Loan and, to the best of the
Issuer's knowledge, prepared and submitted by third parties on behalf of the
Issuer in connection with the Loan, are accurate, complete and correct in all
material respects. There has been no Material Adverse Effect in any condition,
fact, circumstance or event that would make any such information inaccurate,
incomplete or otherwise misleading.
(n) The Issuer represents and warrants that no part of the proceeds of
the Loan will be used for the purpose of (i) purchasing or acquiring any "margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or for any other purpose which would be inconsistent with
such Regulation U or any other Regulations of such Board of Governors, (ii)
financing the acquisition of any acquisition of mortgage backed securities,
(iii) purchasing or acquiring stock or other equity interest in any of the
Issuer's Affiliates, (iv) making any dividend payments in respect of the stock
or other equity interests of any of the Issuer's Affiliates, or (v) for any
purposes prohibited by Legal Requirements or by the terms and conditions of the
Security Instruments, the Notes, the Indenture, or the other Security Documents.
Section 10.05. PROTECTION OF COLLATERAL.
The Issuer and, to the extent directed by the Property Manager or the
Directing Noteholder, the Indenture Trustee will from time to time execute and
deliver all such amendments and supplements hereto (subject to Sections 8.01 and
8.02) and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(a) Grant more effectively all or any portion of the Collateral
securing the Notes;
(b) maintain or preserve the lien (and the priority thereof) of this
Indenture or carry out more effectively the purposes hereof;
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(c) perfect, publish notice of, or protect the validity of any Grant
made or to be made by this Indenture;
(d) enforce any of the Security Documents; or
(e) preserve and defend title to the Collateral securing the Notes and
the rights of the Indenture Trustee, and of the Noteholders, in the Collateral
against the claims of all Persons and parties.
The Issuer hereby designates the Indenture Trustee, its agent and
attorney-in-fact, to execute any financing statement, continuation statement or
other instrument required pursuant to this Section 10.05; provided that, subject
to and consistent with Section 6.01, the Indenture Trustee will not be obligated
to prepare or file any such statements or instruments.
Section 10.06. NEGATIVE COVENANTS.
The Issuer shall not (except as otherwise permitted in the Security
Instruments):
(a) sell, transfer, exchange or otherwise dispose of any of the assets
of the Collateral, except as expressly permitted by this Indenture;
(b) dissolve or liquidate in whole or in part;
(c) engage, directly or indirectly, in any business other than that
arising out of the issue of the Notes, and the actions contemplated or required
to be performed under this Indenture, the Property Management Agreement or any
other Security Document;
(d) incur, create or assume any indebtedness for borrowed money other
than the Notes;
(e) make or permit to remain outstanding, any loan or advance to, or
own or acquire any stock or securities of, any Person other than the Notes and
any other instruments constituting part of the Collateral;
(f) voluntarily file a petition for bankruptcy, reorganization,
assignment for the benefit of creditors or similar proceeding; or
(g) permit transfers of the Properties to any Person except in
accordance with the Security Documents;
Section 10.07. STATEMENT AS TO COMPLIANCE.
The Issuer shall deliver beginning in 2002 to the Indenture Trustee,
within 120 days after the end of each calendar year, Officer's Certificates of
the Issuer stating that, in the course of the performance by the officer
executing each such Officer's Certificate of such officer's present duties as an
officer of the Issuer, such officer would normally obtain knowledge or have made
due inquiry as to the existence of any condition or event which would constitute
an Event of Default after notice
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or lapse of time or both and that to the best of the officer's knowledge, (a)
the Issuer has fulfilled all of its obligations under this Indenture in all
material respects throughout such year, or, if there has been a default in the
fulfillment of any such obligation in any material respect, specifying each such
default known to such officer and the nature and status thereof, and (b) no
event has occurred and is continuing which is, or after notice or lapse of time
or both would become, an Event of Default, or, if such an event has occurred and
is continuing, specifying each such event known to such officer and the nature
and status thereof.
Section 10.08. COOPERATION.
(a) At any time upon the request of the Directing Noteholder, the
Issuer shall assist the Directing Noteholder in forming a syndicate of lenders,
selling participations in the Loan or selling securities backed by the
properties in a "securitization" transaction and to provide the Directing
Noteholder, promptly upon request, all information deemed reasonably necessary
by it to successfully complete such syndication, sale or securitization
including, but not limited to, (x) an information package for delivery to
potential syndicate members and participants and (y) all information and
projections prepared by the Issuer or its advisers relating to the transactions
contemplated hereby.
(b) The Issuer shall cooperate with the Directing Noteholder in
connection with any transaction contemplated by this Section 10.08, including,
without limitation, (A) entering into any and all amendments and modifications
to the Security Documents reasonably required to give effect thereto, (B)
obtaining ratings from the Rating Agencies, (C) reviewing prepared offering
materials relating to the Issuer, Properties and the Loan, (D) making certain
representations and warranties with regard to such offering materials, the
Properties, the Issuer and the Tenants, (E) delivering updated information on
the Issuer, Tenants and the Properties, (F) participating in investor or Rating
Agency meetings requested by the Directing Noteholder, (G) permitting
bifurcation of the Loan into two or more separate loan facilities (which may
have different terms but which, in the aggregate, will have the same economic
terms as the Loan) which may be included in separate securitization or
syndication transactions, or a portion of which may not be included in a
securitization or syndication, including the creation of a mezzanine loan
secured by a collateral assignment of equity interests in the Issuer, (H)
permitting adjustment of the Collateral to permit a senior/subordinate or other
structure to enhance a capital market transaction with respect to a
securitization and (I) permit the Directing Noteholder access to the Properties.
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ARTICLE XI
REAL ESTATE PROVISIONS
Section 11.01. INSURANCE.
(a) For each of the Properties subject to a lease in effect as of the
date of this Indenture, the Issuer shall obtain and maintain, or shall cause the
tenant under the Lease to obtain and maintain, for so long as such Lease is in
effect, (i) insurance for the Issuer and for the related Property in accordance
with the provisions of the Lease and (ii) so long as Banc of America Securities
LLC has not been notified that USRP will not pursue the securitization
contemplated in the Engagement Letter, such other insurance with respect to the
Property against loss or damage of the kinds from time to time customarily
insured against and in such amounts as are required by institutional lenders for
properties comparable to the Property (such other insurance to be obtained
within 30 days from notice from the Directing Noteholder).
(b) For each Property not subject to a Lease in effect as of the date
of this Indenture, the Issuer shall obtain and maintain, or cause to be
maintained, insurance for the Issuer and for each of the Properties providing at
least the following coverages:
(i) PROPERTY INSURANCE. Insurance with respect to the
Improvements and building equipment insuring against any peril now or
hereafter included within the classification "All Risks of Physical
Loss" in amounts at all times sufficient to prevent either the Issuer
or the Indenture Trustee from becoming a co-insurer within the terms of
the applicable policies and under applicable law, but in any event such
insurance shall be maintained in an amount which, after application of
deductible, shall be equal to the full insurable value of the
Improvements and building equipment, the term "full insurable value" to
mean the actual replacement cost of the Improvements and building
equipment (without taking into account any depreciation, and exclusive
of excavations, footings and foundations, landscaping and paving)
determined annually by an insurer, a recognized independent insurance
broker or an independent appraiser selected and paid by the Issuer and
in no event less than the coverage required pursuant to the terms of
any Lease;
(ii) LIABILITY INSURANCE. Comprehensive general liability
insurance, including bodily injury, death and property damage
liability, insurance against any and all claims, including all legal
liability to the extent insurable and imposed upon the Indenture
Trustee or the Noteholder and all court costs and attorneys' fees and
expenses, arising out of or connected with the possession, use,
leasing, operation, maintenance or condition of such Property,
including "Dram Shop" or other liquor liability coverage if alcoholic
beverages are sold from or may be consumed at the Property, in such
amounts as are generally available at commercially reasonable premiums
and are generally required by institutional lenders for properties
comparable to such Property but in any event for a combined single
limit of at least $2,000,000;
(iii) WORKERS' COMPENSATION INSURANCE. Statutory workers'
compensation insurance with respect to any work on or about such
Property;
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(iv) BUSINESS INTERRUPTION INSURANCE. Business interruption
and/or loss of "rental income" insurance in an amount sufficient to
avoid any co-insurance penalty and to provide proceeds which will cover
a period of not less than six (6) months, from the date of casualty or
loss, the term "rental income" to mean the sum of (A) the total then
ascertainable Rents payable under the Leases and (B) the total
ascertainable amount of all other amounts to be received by the Issuer
from third parties which are the legal obligation of the tenants,
reduced to the extent such amounts would not be received because of
operating expenses not incurred during a period of non-occupancy of
that portion of such Property then not being occupied;
(v) BOILER AND MACHINERY INSURANCE. Broad form boiler and
machinery insurance (without exclusion for explosion) covering all
boilers or other pressure vessels, machinery, and equipment located in,
on or about such Property and insurance against loss of occupancy or
use arising from any breakdown in such amounts as are generally
required by institutional lenders for properties comparable to the
Property;
(vi) FLOOD INSURANCE. If any portion of the Improvements is
located in an area identified by the Secretary of Housing and Urban
Development or any successor thereto as an area having special flood
hazards pursuant to the National Flood Insurance Act of 1968, The Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform
Act of 1994, as each may be amended (the "Flood Insurance Acts"), flood
insurance in an amount at least equal to the maximum limit of coverage
available for such Property under the Flood Insurance Acts;
(vii) BUILDER'S RISK INSURANCE. At all times during which
structural construction, repairs or alterations are being made with
respect to the Improvements (A) owner's contingent or protective
liability insurance covering claims not covered by or under the terms
or provisions of the above mentioned commercial general liability
insurance policy; and (B) the insurance provided for in Subsection
11.01(a)(i) written in a so-called builder's risk completed value form
(1) on a non-reporting basis, (2) against all risks insured against
pursuant to Subsection 11.01(a)(i), (3) including permission to occupy
the Property, and (4) with an agreed amount endorsement waiving
co-insurance provisions;
(viii) SPECIAL HAZARD INSURANCE. Earthquake and sinkhole
insurance, hurricane and windstorm insurance, and mine subsidence
insurance, if required, in amounts, form and substance satisfactory to
the Directing Noteholder, provided that any such insurance coverages
shall be on terms consistent with the all risk insurance policy
required pursuant to Subsection 11.1(a)(i) hereof;
(ix) ENVIRONMENTAL INSURANCE. If required by the Directing
Noteholder, environmental insurance; and
(x) OTHER INSURANCE. Such other insurance with respect to the
Property against loss or damage of the kinds from time to time
customarily insured against and in such amounts as are required by
institutional lenders for properties comparable to the Property (such
other insurance to be obtained within 30 days from notice from the
Directing Noteholder).
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(c) All insurance provided for in Subsection 11.01(b) hereof shall be
obtained under valid and enforceable policies (the "Policies" or in the
singular, the "Policy"), and shall be issued by either the insurers who insure
the Improvements on the date of this Security Instrument or one or more other
domestic primary insurer(s) having a general policy rating of A or better and a
financial class of VI or better by A.M. Best Company, Inc. and, if there are any
Notes issued which have been assigned a rating by a Rating Agency, the insurance
company(ies) shall have a claims paying ability rating by such Rating Agency of
not less than one rating category below the highest rating at any time assigned
to the Notes, but in no event less than BBB by S&P or such comparable rating by
such other Rating Agency (each such insurer shall be referred to below as a
"Qualified Insurer"). Each insurer providing insurance required by this Security
Instrument shall be authorized to issue insurance in the state in which the
Properties being insured by such insurer is located. The Policies referred to in
Subsection 11.01(b)(ii) above shall name the Indenture Trustee as an additional
named insured and the Policies referred to in Subsection 11.01(b)(i), (iv), (v),
(vi) and (vii), and as applicable (viii), above shall provide that all proceeds
be payable to the Indenture Trustee. The Policies referred to in Subsections
11.01(b)(i), (v), (vi) and (vii) shall also contain: (i) a standard
"non-contributory mortgagee" endorsement or its equivalent relating, inter alia,
to recovery by the Indenture Trustee notwithstanding the negligent or willful
acts or omission of the Indenture Trustee or the Directing Noteholder; (ii) to
the extent available at commercially reasonable rates, a waiver of subrogation
endorsement as to the Indenture Trustee; and (iii) an endorsement providing for
a deductible per loss of an amount not more than that which is customarily
maintained by prudent owners of similar properties in the general vicinity of
the Properties being insured, but in no event in excess of $10,000. The Policies
referred to in Subsection 11.01(b)(i) above shall provide coverage for
contingent liability from Operation of Building Laws, Demolition Costs and
Increased Cost of Construction Endorsements together with an "Ordinance or Law
Coverage" or "Enforcement" endorsement if any of the Improvements or the use of
any Property shall at any time constitute legal non- conforming structures or
uses. The Policies referred to in Subsection 11.01(b)(ix) shall provide for
coverage and shall contain provisions reasonably satisfactory to the Indenture
Trustee. All Policies shall contain (i) a provision that such Policies shall not
be cancelled or terminated, nor shall they expire, without at least thirty (30)
days' prior written notice to the Indenture Trustee and the Directing Noteholder
in each instance; and (ii) include effective waivers by the insurer of all
claims for Insurance Premiums (defined below) against any loss payees,
additional insureds and named insureds (other than the Issuer). Certificates of
insurance with respect to all renewal and replacement Policies shall be
delivered to the Indenture Trustee and the Directing Noteholder not less than
twenty (20) days prior to the expiration date of any of the Policies required to
be maintained hereunder, which certificates shall bear notations evidencing
payment of applicable premiums (the "Insurance Premiums"). Originals or
certificates of such replacement Policies shall be delivered to the Indenture
Trustee and the Directing Noteholder promptly after the Issuer's receipt thereof
but in any case within thirty (30) days after the effective date thereof. If the
Issuer or the Property Manager fails to maintain and deliver to the Indenture
Trustee and the Directing Noteholder the original Policies or certificates of
insurance required by the related Security Instrument, upon ten (10) days' prior
notice to the Issuer, the Indenture Trustee or its agent may (or, at the
direction of the Directing Noteholder, shall) procure such insurance at the
Issuer's sole cost and expense.
(d) The Issuer shall comply with all insurance requirements and shall
not bring or keep or permit to be brought or kept any article upon any of the
Properties or cause or permit any condition to exist thereon which would be
prohibited by an insurance requirement, or would
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invalidate the insurance coverage required hereunder to be maintained by the
Issuer on or with respect to any part of the Properties pursuant to this Section
11.01.
Section 11.02. RESTORATION AFTER CASUALTY / CONDEMNATION. In the event
of a casualty or a taking by eminent domain of a Property subject to a Lease in
effect as of the date of this Indenture, for so long as such Lease is in effect,
the provisions of such Lease with respect to insurance proceeds and restoration
shall control. In the event of a casualty or a taking by eminent domain of each
other Property, the following provisions shall apply in connection with the
Restoration (defined below) of a Property:
(1) If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty, or if
the Property or any portion thereof is taken by the
power of eminent domain, the Issuer shall give prompt
notice of such damage or taking to the Indenture
Trustee and the Directing Noteholder and shall
promptly commence and diligently prosecute the
completion of the repair and restoration of the
Property as nearly as possible to the condition the
Property was in immediately prior to such fire or
other casualty or taking, with such alterations as
may be approved by the Directing Noteholder (the
"Restoration").
(2) The term "Net Proceeds" for purposes of this Section
11.02 shall mean: (i) the net amount of all insurance
proceeds under the Policies carried pursuant to
subsections 11.01(b)(i), (iv), (v), (vi), (vii) and
(viii) of this Indenture as a result of such damage
or destruction, after deduction of the Indenture
Trustee's and the Directing Noteholder's reasonable
costs and expenses (including, but not limited to
reasonable counsel fees), if any, in collecting the
same, or (ii) the net amount of all awards and
payments received by the Indenture Trustee with
respect to a taking referenced in Section 3.05 of the
related Security Instrument, after deduction of the
Indenture Trustee's and the Directing Noteholder's
reasonable costs and expenses (including, but not
limited to reasonable counsel fees), if any, in
collecting the same, whichever the case may be. If
(i) the Net Proceeds do not exceed $100,000 (the "Net
Proceeds Availability Threshold"); (ii) the costs of
completing the Restoration as reasonably estimated by
the Issuer shall be less than or equal to the Net
Proceeds; (iii) no Event of Default shall have
occurred and be continuing; (iv) the Property and the
use thereof after the Restoration will be in
compliance with, and permitted under, all applicable
zoning laws, ordinances, rules and regulations
(including, without limitation, all applicable
Environmental Laws (defined in Section 11.11); (v)
(A) in the event that the Net Proceeds are insurance
proceeds, less than twenty-five percent (25%) of the
total floor area of the Improvements has been damaged
or destroyed, or rendered unusable as a result of
such fire or other casualty; or (B) in the event that
the Net Proceeds are condemnation awards, less than
25% of the Land constituting the Property is taken,
such Land that is taken is located along the
perimeter or periphery of the Property, no portion of
the Improvements is located in such Lands, and such
taking does not materially impair access to the
Property; and (vi) the Directing Noteholder shall be
satisfied that any
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operating deficits, including all scheduled payments
of principal and interest under the Notes which will
be incurred with respect to the Property as a result
of the occurrence of any such fire or other casualty
or taking, whichever the case may be, will be covered
out of (1) the Net Proceeds, or (2) other funds of
the Issuer, then the Net Proceeds will be disbursed
directly to the Issuer.
(3) If the Net Proceeds are greater than the Net Proceeds
Availability Threshold, such Net Proceeds shall be
forthwith paid to the Indenture Trustee to be held by
the Indenture Trustee in a segregated account to be
made available to the Issuer for the Restoration in
accordance with the provisions of this Subsection
11.02(3).
The Net Proceeds held by the Indenture Trustee pursuant to Subsection
11.02(3) shall be made available to the Issuer for payment or reimbursement of
the Issuer's expenses in connection with the Restoration, subject to the
following conditions:
(a) no Event of Default shall have occurred and be continuing;
(b) the Indenture Trustee and the Directing Noteholder shall,
within a reasonable period of time prior to request for initial
disbursement, be furnished with an estimate of the cost of the
Restoration accompanied by an independent architect's certification as
to such costs and appropriate plans and specifications for the
Restoration, such plans and specifications and cost estimates to be
subject to the Directing Noteholder's approval;
(c) the Net Proceeds, together with any cash or cash
equivalent deposited by the Issuer with the Indenture Trustee, are
sufficient to cover the cost of the Restoration as such costs are
certified by the independent architect;
(d) (A) in the event that the Net Proceeds are insurance
proceeds, less than fifty percent (50%) of the total floor area of the
Improvements has been damaged or destroyed, or rendered unusable as a
result of such fire or other casualty; or (B) in the event that the Net
Proceeds are condemnation awards, less than 25% of the Land
constituting the Property is taken, such Land that is taken is located
along the perimeter or periphery of the Property, no portion of the
Improvements is located in such Lands and such taking does not
materially impair access to the Property;
(e) the Directing Noteholder shall be satisfied that any
operating deficits, which will be incurred with respect to the Property
as a result of the occurrence of any such fire or other casualty or
taking, whichever the case may be, will be covered out of (1) the Net
Proceeds, (2) rent payments by the tenant under the Lease, or (3) other
funds of the Issuer;
(f) the Directing Noteholder shall be satisfied that, upon the
completion of the Restoration, the net cash flow of the Property will
be restored to a level sufficient to cover all carrying costs and
operating expenses of the Property;
(g) the Restoration can reasonably be completed on or before
the earliest to occur of (A) the earliest date required for such
completion under the terms of any Lease and (B)
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such time as may be required under applicable zoning law, ordinance,
rule or regulation in order to repair and restore the Property to as
nearly as possible the condition it was in immediately prior to such
fire or other casualty or to such taking, as applicable;
(h) the Property and the use thereof after the Restoration
will be in compliance with, and permitted under, all applicable zoning
laws, ordinances, rules and regulations (including, without limitation,
all applicable Environmental Laws); and
(i) each Lease in effect as of the date of the occurrence of
such fire or other casualty and covering any portion of the Property
shall remain in full force and effect during and after the completion
of the Restoration without abatement of rent beyond the time required
for Restoration.
(4) The Net Proceeds held by the Indenture Trustee until
disbursed in accordance with the provisions of this
Section 11.02 shall constitute additional security
for the Obligations. The Net Proceeds shall be
disbursed by the Indenture Trustee to the Property
Manager to be applied in accordance with the
provisions hereof. The Net Proceeds other than the
Net Proceeds paid under the Policy described in
Subsection 11.01(b)(iv) shall be disbursed by the
Property Manager to, or as directed by, the Tenant,
in an amount equal to the costs actually incurred
from time to time for work in place as part of the
Restoration less customary retainage from time to
time during the course of the Restoration, not more
frequently than once per month, upon receipt of
evidence satisfactory to the Property Manager that
(A) all materials installed and work and labor
performed (except to the extent that they are to be
paid for out of the requested disbursement) in
connection with the Restoration have been paid for in
full, and (B) there exist no notices of pendency,
stop orders, mechanic's or materialman's liens or
notices of intention to file same, or any other liens
or encumbrances of any nature whatsoever on the
Property arising out of the Restoration which have
not either been fully bonded and discharged of record
or in the alternative fully insured to the
satisfaction of the Property Manager by the title
company insuring the lien of this Security
Instrument. The Net Proceeds paid under the Policy
described in Subsection 11.01(b)(iv) shall be
disbursed by the Property Manager to pay for debt
service under the Loan evidenced by the Notes, to pay
other expenses incurred by the Issuer in connection
with the ownership and operation of the Property, and
the remainder thereof, to, or as directed by, the
Issuer to pay for the cost of the Restoration in
accordance with this Section 11.02(4). Final payment
shall be made after submission to the Indenture
Trustee and the Directing Noteholder of all licenses,
permits, certificates of occupancy and other required
approvals of governmental authorization having
jurisdiction and the certification of the Casualty
Consultant (defined below) that the Restoration has
been fully completed.
(5) the Property Manager and the Directing Noteholder
shall have the use of the plans and specifications
and all permits, licenses and approvals required or
obtained in connection with the Restoration. The
identity of the contractors,
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subcontractors and materialmen engaged in the
Restoration, as well as the contracts under which
they have been engaged, shall be subject to prior
review and acceptance by the Property Manager, if
necessary, and an independent consulting engineer
selected by the Property Manager (the "Casualty
Consultant"), such acceptance not to be unreasonably
withheld or delayed. All costs and expenses incurred
by the Indenture Trustee or the Directing Noteholder
in connection with making the Net Proceeds available
for the Restoration including, without limitation,
reasonable counsel fees and disbursements and the
Casualty Consultant's fees, shall be paid by the
Issuer.
(6) If at any time the Net Proceeds or the undisbursed
balance thereof shall not, in the reasonable opinion
of the Property Manager, be sufficient to pay in full
the balance of the costs which are estimated by the
Casualty Consultant to be incurred in connection with
the completion of the Restoration, the Tenant shall
deposit the deficiency (the "Net Proceeds
Deficiency") with the Property Manager before any
further disbursement of the Net Proceeds shall be
made. The Net Proceeds Deficiency deposited with the
Property Manager shall be held by the Property
Manager and shall be disbursed for costs actually
incurred in connection with the Restoration on the
same conditions applicable to the disbursement of the
Net Proceeds, and until so disbursed pursuant to this
Section 11.02 shall constitute additional security
for the Obligations.
(7) Except upon the occurrence and continuance of an
Event of Default, the Issuer shall settle any
insurance claims with respect to the Net Proceeds
which in the aggregate are less than the Net Proceeds
Availability Threshold. The Property Manager and the
Issuer shall have the right to participate in and
reasonably approve any settlement for insurance
claims with respect to the Net Proceeds which in the
aggregate are greater than the Net Proceeds
Availability Threshold. If an Event of Default shall
have occurred and be continuing, the Issuer hereby
irrevocably empowers the Indenture Trustee and the
Directing Noteholder, in the name of the Issuer as
its true and lawful attorney-in-fact, to file and
prosecute such claim and to collect and to make
receipt for any such payment. If the Net Proceeds are
received by the Issuer, such Net Proceeds shall,
until the completion of the related work, be held in
trust for the Indenture Trustee and the Noteholder
and shall be segregated from other funds of the
Issuer to be used to pay for the cost of the
Restoration in accordance with the terms hereof.
(8) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds
Deficiency deposited with the Property Manager after
(i) the Casualty Consultant certifies to the
Indenture Trustee and the Directing Noteholder that
the Restoration has been completed in accordance with
the provisions of this Section 11.02, and (ii) the
receipt by the Property Manager and the Directing
Noteholder of evidence satisfactory to the Indenture
Trustee that all costs incurred in connection with
the Restoration have been paid in full and all
required permits, licenses, certificates of occupancy
and
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other required approvals of governmental authorities
having jurisdiction have been issued, shall be
remitted by the Property Manager to the Issuer,
provided no Event of Default shall have occurred and
shall be continuing.
(9) All Net Proceeds not required (i) to be made
available for the Restoration or (ii) to be returned
to the Issuer as excess Net Proceeds pursuant to
Subsection 11.02(8) shall be retained and applied by
the Indenture Trustee toward the payment of the Loan
whether or not then due and payable in such order,
priority and proportions as the Directing Noteholder
in its discretion shall deem proper or, at the
discretion of the Directing Noteholder the same shall
be paid, either in whole or in part, to the Issuer.
If the Indenture Trustee shall receive and retain Net
Proceeds, the lien of the related Security Instrument
shall be reduced only by the amount received and
retained by the Indenture Trustee and actually
applied by the Indenture Trustee in reduction of the
Loan.
Section 11.03. LEASES AND RENTS.
(a) All proposed Leases shall be subject to the prior approval
of the Directing Noteholder. The Issuer (i) shall observe and perform
all the obligations imposed upon the lessor under the Leases and shall
not do or permit to be done anything to impair the value of any of the
Leases as security for the Loan; (ii) shall promptly send copies to the
Directing Noteholder of all notices of default which the Issuer shall
send or receive thereunder; (iii) shall notify the Directing Noteholder
in writing of any material change in the status of any tenancy at any
Property, including, without limitation, the vacating, surrender or
going dark of any tenant, even if such action is expressly permitted by
the terms of such Tenant's Lease; (iv) shall enforce all of the
material terms, covenants and conditions contained in the Leases upon
the part of the Tenant thereunder to be observed or performed, (v)
shall not collect any of the Rents more than one (1) month in advance
(except security deposits shall not be deemed Rents collected in
advance); (vi) shall not execute any other assignment of the lessor's
interest in any of the Leases or the Rents; and (vii) shall not consent
to any assignment of or subletting under any Leases except as provided
in the Lease, without the prior written consent of the Directing
Noteholder.
(b) The Issuer may, without the consent of the Directing
Noteholder, amend, modify or waive the provisions of any Lease or
terminate, reduce rents under, accept a surrender of space under, or
shorten the term of, any Lease (including any guaranty, letter of
credit or other credit support with respect thereto) provided that such
action (taking into account, in the case of a termination, reduction in
rent, surrender of space or shortening of term, the planned alternative
use of the affected space) does not have a materially adverse effect on
the Value of a Property, and provided that such Lease, as amended,
modified or waived, is otherwise in compliance with the requirements of
the relevant Security Instrument and any subordination agreement
binding upon the Indenture Trustee with respect to such Lease. A
termination of a Lease with a tenant who is in default beyond
applicable notice and grace periods shall not be considered an action
which has a materially adverse effect on the Value of the Property. Any
amendment, modification, waiver, termination, rent reduction, space
surrender or term shortening which does not satisfy the requirements
set forth in this
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subsection shall be subject to the prior approval of the Directing
Noteholder and its counsel, at the Issuer's expense. The Issuer shall
promptly deliver to the Directing Noteholder copies of amendments,
modifications and waivers which are entered into pursuant to this
subsection together with the Issuer's certification that it has
satisfied all of the conditions of this subsection.
(c) Notwithstanding anything to the contrary contained in this
Section 11.03, to the extent the Directing Noteholder's prior written
approval is required pursuant to the provisions of this Section 11.03,
the Directing Noteholder shall, with respect to such proposed Leases,
have ten (10) Business Days from receipt of the Issuer's written
request in which to approve or disapprove such Lease, provided, such
request to the Directing Noteholder is marked in bold lettering with
the following language: "YOUR RESPONSE IS REQUIRED WITHIN TEN (10)
BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A
MORTGAGE AND SECURITY AGREEMENT BETWEEN THE UNDERSIGNED AND THE
INDENTURE TRUSTEE" and the envelope containing the request must be
marked "PRIORITY". In the event the Directing Noteholder fails to
respond to the proposed Lease and/or renewal, modification, amendment
or termination of, or waiver with respect to, an existing Lease within
such time, the Directing Noteholder's approval shall be deemed given.
If the Directing Noteholder disapproves any new Leases, the Directing
Noteholder shall provide the Issuer with a written explanation of its
disapproval and, if relevant to the Directing Noteholder's disapproval,
modifications to the Lease which, if adopted, would render the Lease or
other documentation acceptable to the Directing Noteholder. The
reasonable attorney's fees incurred by the Directing Noteholder in
connection with any such proposed Lease shall be payable by the Issuer
to the Directing Noteholder within ten (10) Business Days after the
Directing Noteholder's written request therefor, which request shall
include a copy of a reasonably detailed bill from the Directing
Noteholder's counsel.
Section 11.04. COMPLIANCE WITH LAWS.
(a) The Issuer shall promptly comply with, or cause Tenants
under Leases to comply with, all existing and future federal, state and
local laws, orders, ordinances, governmental rules and regulations or
court orders affecting the Properties, or the use thereof ("Applicable
Laws").
(b) The Issuer shall from time to time, upon the Directing
Noteholder's reasonable request, provide the Directing Noteholder with
evidence reasonably satisfactory to the Directing Noteholder that the
Properties comply with all Applicable Laws or are exempt from
compliance with Applicable Laws.
(c) Notwithstanding any provisions set forth herein or in any
document regarding the Indenture Trustee's or the Directing
Noteholder's approval of alterations of the Properties, the Issuer
shall not alter any of the Properties in any manner which would
materially increase the Issuer's responsibilities for compliance with
Applicable Laws without the prior written approval of the Directing
Noteholder. The Directing Noteholder's approval of the plans,
specifications, or working drawings for alterations of any Property
shall create no responsibility or liability on behalf of the Directing
Noteholder for their completeness,
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design, sufficiency or their compliance with Applicable Laws. The
foregoing shall apply to tenant improvements constructed by the Issuer
or by any of its Tenants. The Directing Noteholder may condition any
such approval upon receipt of a certificate of compliance with
Applicable Laws from an independent architect, engineer, or other
person acceptable to the Directing Noteholder.
(d) The Issuer shall give prompt notice to the Indenture
Trustee and the Directing Noteholder of the receipt by the Issuer of
any notice related to a violation of any Applicable Laws and of the
commencement of any proceedings or investigations which relate to
compliance with Applicable Laws.
(e) After prior written notice to the Indenture Trustee and
the Directing Noteholder, the Issuer, at its own expense, may contest
or may permit the Tenant to contest, by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence,
the Applicable Laws affecting any Property, provided that (i) no Event
of Default has occurred and is continuing; (ii) such proceeding shall
be permitted under and be conducted in accordance with the provisions
of any other instrument to which the Issuer or the Property is subject
and shall not constitute a default thereunder; (ii) neither the
Property, any part thereof or interest therein, any of the tenants or
occupants thereof, nor the Issuer shall be affected in any material
adverse way as a result of such proceeding; (iv) non-compliance with
the Applicable Laws shall not impose civil or criminal liability on the
Issuer or the Indenture Trustee; and (v) the Issuer shall have
furnished to the Indenture Trustee and the Directing Noteholder all
other items reasonably requested by the Indenture Trustee and the
Directing Noteholder.
Section 11.05. MANAGEMENT.
(a) The Properties are operated under the terms and conditions of the
Property Management Agreement. The Issuer shall (i) diligently perform and
observe all of the terms, covenants and conditions of the Property Management
Agreement on the part of the Issuer to be performed and observed to the end that
all things shall be done which are necessary to keep unimpaired the rights of
the Issuer under the Property Management Agreement and (ii) promptly notify the
Indenture Trustee and the Directing Noteholder of the giving of any notice to
the Issuer of any default by the Issuer in the performance or observance of any
of the terms, covenants or conditions of the Property Management Agreement on
the part of the Issuer to be performed and observed and deliver to the Indenture
Trustee and the Directing Noteholder a true copy of each such notice. The Issuer
shall not surrender the Property Management Agreement, consent to the assignment
by the Property Manager of its interest under the Property Management Agreement,
or terminate or cancel the Property Management Agreement or materially modify,
change, supplement, alter or amend the Property Management Agreement, in any
respect, either orally or in writing without the consent of the Directing
Noteholder unless expressly permitted under the terms of the Property Management
Agreement. The Issuer hereby assigns to the Indenture Trustee for the benefit of
the Noteholders as further security for the payment of the Loan and for the
performance and observance of the terms, covenants and conditions of this
Security Instrument, all the rights, privileges and prerogatives of the Issuer
to surrender the Property Management Agreement or to terminate, cancel, modify,
change, supplement, alter or amend the Property Management Agreement in any
respect, and any such surrender of the Property Management Agreement or
termination,
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cancellation, modification, change, supplement, alteration or amendment of the
Property Management Agreement without the prior consent of the Directing
Noteholder shall be void and of no force and effect. If the Issuer shall default
in the performance or observance of any material term, covenant or condition of
the Property Management Agreement on the part of the Issuer to be performed or
observed, then, without limiting the generality of the other provisions of this
Indenture, and without waiving or releasing the Issuer from any of its
obligations hereunder, the Indenture Trustee (at the direction of the Directing
Noteholder) or the Directing Noteholder shall have the right, but shall be under
no obligation, to pay any sums and to perform any act or take any action as may
be appropriate to cause all the terms, covenants and conditions of the Property
Management Agreement on the part of the Issuer to be performed or observed to be
promptly performed or observed on behalf of the Issuer, to the end that the
rights of the Issuer in, to and under the Property Management Agreement shall be
kept unimpaired and free from default. The Indenture Trustee, the Directing
Noteholder and any person designated by the Indenture Trustee or the Directing
Noteholder shall have, and are hereby granted, the right to enter upon any
Property at any time and from time to time for the purpose of taking any such
action. If the Property Manager under the Property Management Agreement shall
deliver to the Indenture Trustee or the Directing Noteholder a copy of any
notice sent to the Issuer of default under the Property Management Agreement,
such notice shall constitute full protection to the Indenture Trustee and the
Directing Noteholder for any action taken or omitted to be taken by the
Indenture Trustee or the Directing Noteholder in good faith, in reliance
thereon. The Issuer shall notify the Indenture Trustee and the Directing
Noteholder if the Property Manager sub-contracts to a third party any or all of
its management responsibilities under the Property Management Agreement. The
Issuer shall, from time to time, use its best efforts to obtain from the
Property Manager under the Property Management Agreement such certificates of
estoppel with respect to compliance by the Issuer with the terms of the Property
Management Agreement as may be requested by the Directing Noteholder. Any sums
expended by the Indenture Trustee or the Directing Noteholder pursuant to this
paragraph shall bear interest at the Note Interest Rate from the date such cost
is incurred to the date of payment to the Indenture Trustee or the Directing
Noteholder, shall be deemed to constitute a portion of the Loan, shall be
secured by the lien of the Security Instruments and the other Security Documents
and shall be immediately due and payable upon demand by the Indenture Trustee or
the Directing Noteholder therefor, as applicable.
(b) Without limitation of the foregoing, the Issuer, upon the request
of the Directing Noteholder, shall terminate the Property Management Agreement
and replace the Property Manager, without penalty or fee, if at any time during
the Loan: (a) the Property Manager shall become insolvent or a debtor in any
bankruptcy or insolvency proceeding, (b) there exists an Event of Default, (c)
there exists an event which entitles the Issuer to terminate the Property
Management Agreement, or (d) the Property Manager is not acceptable to the
Directing Noteholder in its sole and absolute discretion. At such time as the
Property Manager may be removed, a Qualified Property Manager shall assume
management of the Property and shall receive a property management fee not to
exceed then current market rates, provided that such Qualified Property Manager
shall be acceptable to the Directing Noteholder. The term "Qualified Property
Manager" as used herein shall mean a reputable and experienced professional
management organization that has substantial experience in managing net lease
assets of a type and size similar to the Properties.
Section 11.06. PROPERTY USE. The Issuer covenants and agrees that the
Properties shall be used only for general commercial uses, and for no other use,
without the prior written consent of the Directing Noteholder.
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Section 11.07. ERISA.
(a) The Issuer shall not engage in any transaction which would cause
any obligation, or action taken or to be taken, hereunder (or the exercise by
the Indenture Trustee or the Directing Noteholder of any of its rights under
this Indenture, the Security Instruments and the other Security Documents) to be
a non- exempt (under a statutory or administrative class exemption) prohibited
transaction under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
(b) The Issuer further covenants and agrees to deliver to the Indenture
Trustee and the Directing Noteholder such certifications or other evidence from
time to time throughout the term of the Security Instrument, as requested by the
Indenture Trustee or the Directing Noteholder in its sole discretion, that (i)
the Issuer is not an "employee benefit plan" as defined in Section 3(3) of
ERISA, which is subject to Title I of ERISA, or a "governmental plan" within the
meaning of Section 3(32) of ERISA; (ii) the Issuer is not subject to state
statutes regulating investments and fiduciary obligations with respect to
governmental plans; and (iii) one or more of the following circumstances is
true:
(A) Equity interests in the Issuer are publicly
offered securities, within the meaning of 29 C.F.R. ss.
2510.3-101(b)(2);
(B) Less than 25 percent of each outstanding class of
equity interests in the Issuer are held by "benefit plan
investors" within the meaning of 29 C.F.R. ss.
2510.3-01(f)(2); or
(C) The Issuer qualifies as an "operating company" or
a "real estate operating company" within the meaning of 29
C.F.R. ss. 2510.3-101(c) or (e) or an investment company
registered under the Investment Company Act of 1940.
Section 11.08. SINGLE PURPOSE ENTITY.
(a) The Issuer has not and will not:
(i) engage in any business or activity
other than the ownership, operation
and maintenance of the Properties,
and activities incidental thereto;
(ii) acquire or own any assets other than
(A) the Properties, and (B) such
incidental Personal Property (as
defined in the Security Instruments)
as may be necessary for the
operation of the Properties;
(iii) merge into or consolidate with any
Person, or dissolve, terminate,
liquidate in whole or in part,
transfer or otherwise dispose of all
or substantially all of its assets
or change its legal structure;
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(iv) fail to observe all organizational
formalities, or fail to preserve its
existence as an entity duly
organized, validly existing and in
good standing (if applicable) under
the Applicable Laws of the
jurisdiction of its organization or
formation, or amend, modify,
terminate or fail to comply with the
provisions of its organizational
documents;
(v) own any subsidiary, or make any
investment in, any Person;
(vi) commingle its assets with the assets
of any other Person;
(vii) except as contemplated in the
Revolving Credit Facility, incur any
debt, secured or unsecured, direct
or contingent (including
guaranteeing any obligation), other
than the Loan, unsecured trade
payables and unsecured equipment
leases (both of which must be
incurred in the ordinary course of
business relating to the ownership
and operation of the Property,)
provided the same (x) do not exceed
at any time in the aggregate a
maximum amount of two percent (2%)
of the outstanding principal amount
of the Notes, and (y) are paid
within sixty (60) days after the
date incurred;
(viii) fail to maintain its records, books
of account, bank accounts, financial
statements, accounting records and
other entity documents separate and
apart from those of any other
Person;
(ix) enter into any contract or agreement
with any general partner, member,
shareholder, principal or affiliate,
except upon terms and conditions
that are intrinsically fair and
substantially similar to those that
would be available on an
arm's-length basis with unaffiliated
third parties;
(x) maintain its assets in such a manner
that it will be costly or difficult
to segregate, ascertain or identify
its individual assets from those of
any other Person;
(xi) assume or guaranty the debts of any
other Person, hold itself out to be
responsible for the debts of any
other Person, or otherwise pledge
its assets for the benefit of any
other Person or hold out its credit
as being available to satisfy the
obligations of any other Person;
(xii) make any loans or advances to any
Person;
(xiii) fail to file its own tax returns
(unless prohibited by Applicable
Laws from doing so);
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(xiv) fail either to hold itself out to
the public as a legal entity
separate and distinct from any other
Person or to conduct its business
solely in its own name or fail to
correct any known misunderstanding
regarding its separate identity;
(xv) fail to maintain adequate capital
for the normal obligations
reasonably foreseeable in a business
of its size and character and in
light of its contemplated business
operations;
(xvi) without the unanimous written
consent of all of its partners and
the written consent of 100% of the
members of the board of directors of
the SPE Component Entity including
without limitation the Independent
Director, (a) file or consent to the
filing of any petition, either
voluntary or involuntary, to take
advantage of any applicable
insolvency, bankruptcy, liquidation
or reorganization statute, (b) seek
or consent to the appointment of a
receiver, liquidator or any similar
official, (c) take any action that
might cause such entity to become
insolvent, or (d) make an assignment
for the benefit of creditors;
(xvii) fail to allocate shared expenses
(including, without limitation,
shared office space) and to use
separate stationery, invoices and
checks;
(xviii) fail to pay its own liabilities
(including, without limitation,
salaries of its own employees) from
its own funds; and
(xix) acquire obligations or securities of
its partners, members, shareholders
or other affiliates, as applicable.
(b) Each general partner (each an "SPE Component Entity") of the
Issuer, shall be a corporation whose sole asset is its interest in the Issuer
and each SPE Component Entity (i) will at all times comply with each of the
covenants, terms and provisions contained in Section 11.08(a), as if such
representation, warranty or covenant was made directly by such SPE Component
Entity; (ii) will not engage in any business or activity other than owning an
interest in the Issuer; (iii) will not acquire or own any assets other than its
partnership, membership, or other equity interest in the Issuer, (iv) will not
incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation) other than unsecured trade payables incurred in the
ordinary course of business related to the ownership of an interest in the
Issuer are paid within sixty (60) days after the date incurred and other than
any liability as a general partner for the debts of the Issuer, and (v) will
cause the Issuer to comply with the provisions of this Section 11.08.
(c) The organizational documents of the SPE Component Entity shall
provide that at all times there shall be at least one duly appointed member of
the board of directors (an "Independent Director") of the SPE Component Entity
reasonably satisfactory to the Directing Noteholder who
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shall not have been at the time of such individual's initial appointment, and
shall not have been at any time during the preceding five years, and shall not
be at any time while serving as a director of such SPE Component Entity, either
(i) a shareholder (or other equity owner) of, or an officer, director, partner,
member or employee of, the Issuer or any of its respective shareholders,
partners, members, subsidiaries or affiliates, (ii) a customer of, or supplier
to, the Issuer or any of its respective shareholders, partners, members,
subsidiaries or affiliates, (iii) a Person who Controls or is under common
Control with any such shareholder, officer, director, partner, member, employee
supplier or customer, or (iv) a member of the immediate family of any such
shareholder, officer, director, partner, member, employee, supplier or customer.
(d) The organizational documents of the SPE Component Entity shall
provide that the board of directors of the SPE Component Entity shall not take
any action which, under the terms of any certificate of incorporation, by-laws
or any voting trust agreement with respect to any common stock, requires an
unanimous vote of the board of directors of the SPE Component Entity of the
Issuer unless at the time of such action there shall be at least one member of
the board of directors who is an Independent Director. The SPE Component Entity
will not without the unanimous written consent of its Board of Directors
including the Independent Director, on behalf of itself or the Issuer (a) file
or consent to the filing of any petition, either voluntary or involuntary, to
take advantage of any applicable insolvency, bankruptcy, liquidation or
reorganization statute, (b) seek or consent to the appointment of a receiver,
liquidator or any similar official, (c) take any action that might cause such
entity to become insolvent, or (d) make an assignment for the benefit of
creditors.
(e) Notwithstanding the foregoing, the SPE Component Entity may be a
single member limited liability company, provided that (i) such SPE Component
Entity complies with the requirements of subsection (b) above, (ii) the day to
day management of such SPE Component Entity shall be by a non- member manager,
(iii) the organizational documents of the SPE Component Entity shall provide
that at all times there shall be at least one duly appointed independent manager
which satisfies the requirements set forth in subsection (c) above, and (iv) the
organizational documents of the SPE Component Entity provided that the matters
described in subsection (d) above require the vote of the independent manager.
Section 11.09. ESTOPPEL CERTIFICATES.
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(a) After request by the Directing Noteholder, the Issuer, within ten
(10) days, shall furnish the Indenture Trustee and the Directing Noteholder or
any proposed assignee with a statement, duly acknowledged and certified, setting
forth (i) the original principal amount of the Notes, (ii) the unpaid principal
amount of the Notes, (iii) the rate of interest of the Notes, (iv) the terms of
payment and maturity date of the Notes, (v) the date installments of interest
and/or principal were last paid, (vi) that, except as provided in such
statement, there are no defaults or events which with the passage of time or the
giving of notice or both, would constitute an Event of Default, (vii) that the
Notes, the Security Instrument and the Indenture are valid, legal and binding
obligations and have not been modified or if modified, giving particulars of
such modification, (viii) whether any offsets or defenses exist against the
obligations secured hereby and, if any are alleged to exist, a detailed
description thereof, (ix) that all Leases are in full force and effect and have
not been modified (or if modified, setting forth all modifications), (x) the
date to which the Rents thereunder have been paid pursuant to the Leases, (xi)
whether or not, to the best knowledge of the Issuer, any of the lessees under
the Leases are in default under the Leases, and, if any of the lessees are in
default, setting forth the specific nature of all such defaults, (xii) the
amount of security deposits held by the Issuer under each Lease and that such
amounts are consistent with the amounts required under each Lease, and (xiii) as
to any other matters reasonably requested by the Directing Noteholder and
reasonably related to the Leases, the obligations secured hereby, the
Properties, the Security Instrument or the Indenture.
(b) The Issuer shall use its best efforts to deliver to the Indenture
Trustee and the Directing Noteholder, promptly upon request, duly executed
estoppel certificates from any one or more lessees as required by the Directing
Noteholder attesting to such facts regarding the Lease as the Directing
Noteholder may require, including but not limited to attestations that each
Lease covered thereby is in full force and effect with no defaults thereunder on
the part of any party, that none of the Rents have been paid more than one month
in advance, and that the lessee claims no defense or offset against the full and
timely performance of its obligations under the Lease.
(c) Upon any transfer or proposed transfer of any of the Notes
contemplated by Section 2.05 hereof, at the Indenture Trustee's or the Directing
Noteholder's request, the Issuer, any Guarantors and any indemnitor(s) shall
provide an estoppel certificate to any prospective Noteholder in such form,
substance and detail as the Indenture Trustee, the Directing Noteholder, such
Noteholder or prospective Noteholder may require.
Section 11.10. NO SALE / ENCUMBRANCE.
(a) NO SALE OR PLEDGE. Except as provided in Article VIII, the Issuer
shall not cause or permit a Sale or Pledge of any Property or any part thereof
or any legal or beneficial interest therein nor permit a Sale or Pledge of an
interest in any Restricted Party (collectively, a "Prohibited Transfer"),
without the prior written consent of the Directing Noteholder.
(b) PROHIBITED TRANSFERS. A Prohibited Transfer shall include, but not
be limited to, (i) an installment sales agreement wherein the Issuer agrees to
sell any Property or any part thereof for a price to be paid in installments;
(ii) an agreement by the Issuer leasing all or a substantial part of any
Property for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in, the
Issuer's right, title and interest in and to any Leases or any Rents; (iii) if a
Restricted Party is a corporation, any merger, consolidation or Sale
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or Pledge of such corporation's stock or the creation or issuance of new stock
in one or a series of transactions; (iv) if a Restricted Party is a limited or
general partnership or joint venture, any merger or consolidation or the change,
removal, resignation or addition of a general partner or the Sale or Pledge of
the partnership interest of any general or limited partner or any profits or
proceeds relating to such partnership interests or the creation or issuance of
new limited partnership interests; (v) if a Restricted Party is a limited
liability company, any merger or consolidation or the change, removal,
resignation or addition of a managing member or non-member manager (or if no
managing member, any member) or the Sale or Pledge of the membership interest of
a managing member (or if no managing member, any member) or any profits or
proceeds relating to such membership interest, or the Sale or Pledge of
non-managing membership interests or the creation or issuance of new
non-managing membership interests; (vi) if a Restricted Party is a trust or
nominee trust, any merger, consolidation or the Sale or Pledge of the legal or
beneficial interest in a Restricted Party or the creation or issuance of new
legal or beneficial interests; or (vii) the removal or the resignation of the
managing agent (including, without limitation, an Affiliated Property Manager)
other than in accordance with Section 11.05.
(c) PERMITTED TRANSFERS. Notwithstanding the provisions of Sections
11.10(a) and (b), the following transfers shall not be deemed to be a Prohibited
Transfer: (i) a transfer by devise or descent or by operation of law upon the
death of a member, partner or shareholder of a Restricted Party; (ii) the Sale
or Pledge, in one or a series of transactions, of not more than forty-nine
percent (49%) of the stock, limited partnership interests or non-managing
membership interests (as the case may be) in a Restricted Party; provided,
however, no such transfers shall result in a change in Control in the Restricted
Party, and as a condition to each such transfer, the Indenture Trustee and the
Directing Noteholder shall receive not less than ten (10) days prior written
notice of such proposed transfer, provided, however, as a condition to each such
transfer, the Indenture Trustee and the Directing Noteholder shall receive not
less than ten (10) days prior written notice of such proposed transfer and (iii)
the sale, transfer or issuance of stock in U.S. Restaurant Properties, Inc.
provided such stock is listed on the New York Stock Exchange or such other
nationally recognized stock exchange. Notwithstanding anything to the contrary
contained in this Section 11.10, (x) U.S. Restaurant Properties Operating L.P.
must at all times continue to own and control, directly or indirectly, a 100%
interest in the Issuer, each Guarantor and any Affiliated Property Manager and
(y) U.S. Restaurant Properties, Inc. must at all times continue to own and
control, directly or indirectly, at least an 80% interest in USRP.
(d) THE DIRECTING NOTEHOLDER'S RIGHTS. The Directing Noteholder
reserves the right to condition the consent to a Prohibited Transfer requested
hereunder upon a modification of the terms hereof and on assumption of the
Notes, the Indenture, the Security Instruments and the other Security Documents
as so modified by the proposed Prohibited Transfer, payment of a transfer fee,
and all of the Directing Noteholder's expenses incurred in connection with such
Prohibited Transfer, the proposed transferee's continued compliance with the
covenants set forth in this Security Instrument, including, without limitation,
the covenants in Section 11.08 or such other conditions and/or legal opinions as
the Directing Noteholder shall determine in its sole discretion to be in the
interest of the Directing Noteholder. All expenses incurred by the Directing
Noteholder shall be payable by the Issuer whether or not the Directing
Noteholder consents to the Prohibited Transfer. The Directing Noteholder shall
not be required to demonstrate any actual impairment of its security or any
increased risk of default hereunder in order to declare the Loan immediately due
and payable upon a Prohibited Transfer without the Directing Noteholder's
consent. This provision shall apply to every
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Prohibited Transfer, whether or not the Directing Noteholder has consented to
any previous Prohibited Transfer. Notwithstanding anything to the contrary
contained in this Section 11.10, in the event any Prohibited Transfer results in
any entity or party owning in excess of forty nine percent (49%) of the
ownership interest in a Restricted Party, the Issuer shall, prior to such
transfer, deliver a substantive non- consolidation opinion to the Directing
Noteholder, which opinion shall be in form, scope and substance acceptable in
all respects to the Directing Noteholder.
(e) TRANSFER DEFINITIONS. For purposes of this Section 11.10, an
"Affiliated Property Manager" shall mean any managing agent in which the Issuer,
any guarantor, indemnitor or SPE Component Entity has, directly or indirectly,
any legal, beneficial or economic interest; "Control" shall mean the power to
direct the management and policies of a Restricted Party, directly or
indirectly, whether through the ownership of voting securities or other
beneficial interests, by contract or otherwise; "Restricted Party" shall mean
the Issuer, any Guarantor, indemnitor or SPE Component Entity, or any Affiliated
Property Manager or any shareholder, partner, member or non-member manager, or
any direct or indirect legal or beneficial owner of the Issuer, any guarantor,
indemnitor or SPE Component Entity, or Affiliated Property Manager or any
non-member manager; and a "Sale or Pledge" shall mean a voluntary or involuntary
sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment,
grant of any options with respect to, or any other transfer or disposition of
(directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) of a legal or
beneficial interest.
Section 11.11. ENVIRONMENTAL PROVISIONS.
(a) ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. The Issuer represents
and warrants, based upon environmental site assessments of the Properties and
information that the Issuer knows or should reasonably have known, that, except
as disclosed to the Directing Noteholder in writing: (i) there are no Hazardous
Materials (defined below) or underground storage tanks in, on, or under the
Properties, except those that are both (A) in compliance with Environmental Laws
(defined below) and with permits issued pursuant thereto (if such permits are
required), if any, and (B) either (1) in amounts not in excess of that necessary
to operate the Properties or (2) fully disclosed to and approved by the
Directing Noteholder in writing pursuant to the written reports resulting from
the environmental site assessments of the Properties delivered to the Directing
Noteholder (the "Environmental Reports"); (ii) there are no past, present or
threatened Releases (defined below) of Hazardous Materials in violation of any
Environmental Law and which would require remediation by a governmental
authority in, on, under or from the Properties except as described in the
Environmental Reports; (iii) there is no threat of any Release of Hazardous
Materials migrating to the Properties except as described in the Environmental
Reports; (iv) there is no past or present non-compliance with Environmental
Laws, or with permits issued pursuant thereto, in connection with the Property
except as described in the Environmental Reports; (v) the Issuer does not know
of, and has not received, any written or oral notice or other communication from
any person or entity (including but not limited to a governmental entity)
relating to Hazardous Materials in, on, under or from the Properties; and (vi)
the Issuer has made available to the Directing Noteholder, in writing, any and
all information relating to environmental conditions in, on, under or from the
Properties known to the Issuer or contained in the Issuer's files and records,
including but not limited to any reports relating to Hazardous Materials in, on,
under or migrating to or from the Properties and/or to the environmental
condition of the Properties. "Environmental Law" means any present and future
federal, state and local laws, statutes, ordinances, rules, regulations,
standards, policies and
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other government directives or requirements, as well as common law, including
but not limited to the Comprehensive Environmental Response, Compensation and
Liability Act and the Resource Conservation and Recovery Act, that apply to the
Issuer or the Properties and relate to Hazardous Materials. "Hazardous
Materials" shall mean petroleum and petroleum products and compounds containing
them, including gasoline, diesel fuel and oil; explosives, flammable materials;
radioactive materials; polychlorinated biphenyls ("PCBs") and compounds
containing them; lead and lead-based paint; asbestos or asbestos-containing
materials in any form that is or could become friable; underground or above-
ground storage tanks, whether empty or containing any substance; any substance
the presence of which on any Property is prohibited by any federal, state or
local authority; any substance that requires special handling; and any other
material or substance now or in the future defined as a "hazardous substance,"
"hazardous material", hazardous waste", toxic substance", "toxic pollutant",
"contaminant", or pollutant" within the meaning of any Environmental Law.
"Release" of any Hazardous Materials includes but is not limited to any release,
deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting,
pumping, pouring, emptying, escaping, dumping, disposing or other movement of
Hazardous Materials.
(b) ENVIRONMENTAL COVENANTS. The Issuer covenants and agrees that so
long as the Issuer owns, manages, is in possession of, or otherwise controls the
operation of the Properties: (i) all uses and operations on or of the
Properties, whether by the Issuer or any other person or entity, shall be in
compliance with all Environmental Laws and permits issued pursuant thereto; (ii)
there shall be no Releases of Hazardous Materials in, on, under or from the
Properties which are not remediated within a reasonable time period in
accordance with Environmental Laws; (iii) there shall be no Hazardous Materials
in, on, or under the Properties, except those that are both (A) in compliance
with all Environmental Laws and with permits issued pursuant thereto, if and to
the extent required, and (B) (1) in amounts not in excess of that necessary to
operate the Properties or (2) fully disclosed to the Directing Noteholder and
approved by the Directing Noteholder in writing; (iv) the Issuer shall keep, or
shall cause the Tenants to keep, the Properties free and clear of all liens and
other encumbrances imposed pursuant to any Environmental Law, whether due to any
act or omission of the Issuer or any other person or entity (the "Environmental
Liens"); (v) the Issuer shall, at its sole cost and expense, fully and
expeditiously cooperate in all activities pursuant to Section 11.11(c) below,
including but not limited to providing all relevant information and making
knowledgeable persons available for interviews; (vi) the Issuer shall, at its
sole cost and expense, perform any environmental site assessment or other
investigation of environmental conditions in connection with the Properties,
pursuant to any reasonable written request of the Indenture Trustee or the
Directing Noteholder, upon the Indenture Trustee's or the Directing Noteholder's
reasonable belief that the Properties is not in full compliance with all
Environmental Laws, and share with the Indenture Trustee and the Directing
Noteholder the reports and other results thereof, and the Indenture Trustee, the
Directing Noteholder and other Indemnified Parties shall be entitled to rely on
such reports and other results thereof; (vii) the Issuer shall, at its sole cost
and expense, comply with all reasonable written requests of the Indenture
Trustee or the Directing Noteholder to (A) reasonably effectuate remediation of
any Hazardous Materials in, on, under or from the Properties; and (B) comply
with any Environmental Law; (viii) the Issuer shall not allow any tenant or
other user of the Property to violate any Environmental Law; and (ix) the Issuer
shall immediately notify the Indenture Trustee and the Directing Noteholder in
writing after it has become aware of (A) any presence or Release or threatened
Releases of Hazardous Materials in, on, under, from or migrating towards the
Properties; (B) any non-compliance with any Environmental Laws related in any
way to the Properties; (C) any actual or potential Environmental Lien; (D) any
required or proposed remediation
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of environmental conditions relating to the Properties; and (E) any written or
oral notice or other communication of which the Issuer becomes aware from any
source whatsoever (including but not limited to a governmental entity) relating
in any way to Hazardous Materials. Any failure of the Issuer to perform its
obligations pursuant to this Section 11.11(b) shall constitute bad faith Waste
with respect to the Properties.
(c) THE DIRECTING NOTEHOLDER'S RIGHTS. The Directing Noteholder and any
other person or entity designated by the Directing Noteholder, including but not
limited to any representative of a governmental entity, and any environmental
consultant, and any receiver appointed by any court of competent jurisdiction,
shall have the right, but not the obligation, to enter upon the Properties at
all reasonable times to assess any and all aspects of the environmental
condition of the Properties and its use, including but not limited to conducting
any environmental assessment or audit (the scope of which shall be determined in
the Directing Noteholder's sole discretion) and taking samples of soil,
groundwater or other water, air, or building materials, and conducting other
invasive testing. The Issuer shall cooperate with and provide access to the
Directing Noteholder and any such person or entity designated by the Directing
Noteholder.
(d) OPERATIONS AND MAINTENANCE PROGRAMS. Where recommended by the
Environmental Report or as a result of any other environmental assessment or
audit of the Properties, the Issuer shall establish and comply with an
operations and maintenance program with respect to the Properties, in form and
substance reasonably acceptable to the Directing Noteholder, prepared by an
environmental consultant reasonably acceptable to the Directing Noteholder,
which program shall address any asbestos containing material or lead based paint
that may now or in the future be detected at or on the Properties. Without
limiting the generality of the preceding sentence, the Directing Noteholder may
require (i) periodic notices or reports to the Directing Noteholder in form,
substance and at such intervals as the Directing Noteholder may specify, (ii) an
amendment to such operations and maintenance program to address changing
circumstances, laws or other matters, (iii) at the Issuer's sole expense,
supplemental examination of the Properties by consultants specified by the
Directing Noteholder, (iv) access to the Properties by the Directing Noteholder,
its agents or servicer, to review and assess the environmental condition of the
Properties and the Issuer's compliance with any operations and maintenance
program, and (v) variation of the operations and maintenance program in response
to the reports provided by any such consultants.
Section 11.12. INDEMNIFICATION.
(a) GENERAL INDEMNIFICATION. The Issuer shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties (defined below) from and against any and all Losses (defined below)
imposed upon or incurred by or asserted against any Indemnified Parties and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (a) any accident, injury to or death of persons or loss of or
damage to property occurring in, on or about the Properties or any part thereof
or on the adjoining sidewalks, curbs, adjacent property or adjacent parking
areas, streets or ways; (b) any use, nonuse or condition in, on or about the
Properties or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (c) performance of any
labor or services or the furnishing of any materials or other property in
respect of the Properties or any part thereof; (d) any failure of the Properties
to be in compliance with any Applicable Laws; (e) any and all claims and demands
whatsoever which may be asserted against any Indemnified Party by reason of any
alleged
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obligations or undertakings on its part to perform or discharge any of the
terms, covenants, or agreements contained in any Lease; or (f) the payment of
any commission, charge or brokerage fee to anyone which may be payable in
connection with the funding of the Loan evidenced by the Notes and secured by
this Security Instruments. Any amounts payable to any Indemnified Party by
reason of the application of this Section 11.12 shall become immediately due and
payable and shall bear interest at the Note Interest Rate from the date loss or
damage is sustained by such Indemnified Party until paid.
The term "Losses" shall mean any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, fines, penalties, charges,
fees, expenses, judgments, awards, amounts paid in settlement of whatever kind
or nature (including but not limited to attorneys' fees and other costs of
defense). The term "Indemnified Parties" shall mean (a) the Indenture Trustee,
(b) the Noteholders and any prior owner or holder of the Notes, (c) any servicer
or prior servicer of the Loan, (d) the officers, directors, shareholders,
partners, members, employees and trustees of any of the foregoing, and (e) the
heirs, legal representatives, successors and assigns of each of the foregoing.
(b) MORTGAGE AND/OR INTANGIBLE TAX. The Issuer shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making and/or recording
of the Security Instruments, the Notes, this Indenture or any of the other
Security Documents.
(c) DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND EXPENSES. Upon
written request by any Indemnified Party, the Issuer shall defend such
Indemnified Party (if requested by any Indemnified Party, in the name of the
Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may,
in their sole discretion, engage their own attorneys and other professionals to
defend or assist them, and, at the option of Indemnified Parties, their
attorneys shall control the resolution of any claim or proceeding. Upon demand,
the Issuer shall pay or, in the sole discretion of the Indemnified Parties,
reimburse, the Indemnified Parties for the payment of reasonable fees and
disbursements of attorneys, engineers, environmental consultants, laboratories
and other professionals in connection therewith.
(d) ENVIRONMENTAL INDEMNITY. Simultaneously with this Security
Instrument, the Issuer and other persons or entities defined therein have
executed and delivered that certain environmental indemnity agreement dated the
date hereof to the Indenture Trustee (the "Environmental Indemnity").
(e) ERISA INDEMNITY. The Issuer shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless the Indemnified Parties
from and against any and all Losses (including, without limitation, actual and
reasonable attorneys' fees and costs incurred in the investigation, defense, and
settlement of Losses incurred in correcting any prohibited transaction or in the
sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in the Directing
Noteholder's reasonable discretion) that the Indenture Trustee may incur,
directly or indirectly, as a result of a default under Section 11.07.
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Section 11.13. MARSHALLING AND OTHER MATTERS. The Issuer hereby waives,
to the extent permitted by law, the benefit of all appraisement, valuation,
stay, extension, reinstatement and redemption laws now or hereafter in force and
all rights of marshalling in the event of any sale hereunder of the Properties
or any part thereof or any interest therein. Further, the Issuer hereby
expressly waives any and all rights of redemption from sale under any order or
decree of foreclosure of any of the Security Instruments on behalf of the
Issuer, and on behalf of each and every person acquiring any interest in or
title to the Properties subsequent to the date of the Security Instruments and
on behalf of all persons to the extent permitted by Applicable Laws.
Section 11.14. SOLE DISCRETION OF THE INDENTURE TRUSTEE AND THE
DIRECTING NOTEHOLDER. Wherever pursuant to this Indenture, the Security
Instruments or the Other Security Documents (a) the Indenture Trustee or the
Directing Noteholder exercises any right given to it to approve or disapprove,
(b) any arrangement or term is to be satisfactory to the Indenture Trustee or
the Directing Noteholder, or (c) any other decision or determination is to be
made by the Indenture Trustee or the Directing Noteholder, the decision of the
Indenture Trustee and/or the Directing Noteholder, as applicable, to approve or
disapprove, all decisions that arrangements or terms are satisfactory or not
satisfactory and all other decisions and determinations made by the Indenture
Trustee or the Directing Noteholder, as applicable, shall be in the sole
discretion of the Indenture Trustee or the Directing Noteholder, as applicable,
except as may be otherwise expressly and specifically provided herein.
Section 11.15. PERFORMANCE AT THE ISSUER'S EXPENSE. The Issuer
acknowledges and confirms that the Indenture Trustee and/or the Directing
Noteholder shall impose certain administrative processing and/or commitment fees
in connection with (a) the extension, renewal, modification, amendment and
termination of the Loan, (b) the release or substitution of collateral therefor,
(c) obtaining certain consents, waivers and approvals with respect to any
Property, or (d) the review of any Lease or proposed Lease or the preparation or
review of any subordination, non-disturbance agreement (the occurrence of any of
the above shall be called an "Event"). The Issuer further acknowledges and
confirms that it shall be responsible for the payment of all costs of
reappraisal of any Property or any part thereof, whether required by law,
regulation, the Indenture Trustee, the Directing Noteholder or any governmental
or quasi-governmental authority. The Issuer hereby acknowledges and agrees to
pay, immediately, with or without demand, all such fees (as the same may be
increased or decreased from time to time), and any additional fees of a similar
type or nature which may be imposed by the Indenture Trustee and/or the
Directing Noteholder from time to time, upon the occurrence of any Event or
otherwise. Wherever it is provided for herein that the Issuer pay any costs and
expenses, such costs and expenses shall include, but not be limited to, all
reasonable legal fees and disbursements of the Indenture Trustee and/or the
Directing Noteholder, as applicable, whether with respect to retained firms, the
reimbursement for the expenses of in-house staff or otherwise.
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ARTICLE XII
MISCELLANEOUS
Section 12.01. EXECUTION COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 12.02. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
Section 12.03. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of an Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an
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officer or officers of the Issuer, stating that the information with respect to
such factual matters is in the possession of the Issuer, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that any Person
shall deliver any document as a condition of the granting of such application,
or as evidence of such Person's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of such Person to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article V.
Section 12.04. ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section. With respect to authorization to be given or taken by Noteholders,
the Indenture Trustee shall be authorized to follow the written direction of the
Directing Noteholder or in the absence of such direction from the Directing
Noteholder, the written directions or the vote of Noteholders of Notes
representing more than 50% of the aggregate Note Principal Balance of the
Outstanding Notes, unless any greater or lesser percentage is required by the
terms hereunder.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The Note Principal Balance and certificate numbers of Notes held by
any Person, and the date of holding the same, shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, declaration, waiver or other act of any Noteholder shall bind every
future Noteholder of the same Note and the Noteholder of every Note issued upon
the transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, suffered or omitted to be done by the Indenture Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.
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Section 12.05. COMPUTATION OF PERCENTAGE OF NOTEHOLDERS.
Whenever this Indenture states that any action may be taken by a
specified percentage of the Noteholders, such statement shall mean that such
action may be taken by the Noteholders of such specified percentage of the
aggregate Note Principal Balance of the Outstanding Notes.
Section 12.06. NOTICE TO THE INDENTURE TRUSTEE, THE ISSUER AND CERTAIN
OTHER PERSONS.
Any communication provided for or permitted hereunder shall be in
writing and, unless otherwise expressly provided herein, shall be deemed to have
been duly given if delivered by courier or mailed by first class mail, postage
prepaid, or if transmitted by telecopier and confirmed in a writing delivered or
mailed as aforesaid, to: (a) in the case of the Indenture Trustee, Wells Fargo
Center, Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479-0113,
ATTN: Corporate Trust Services (CMBS) - USRP Funding 2001-A, L.P., telecopy
number 410-884-2360, telephone number 410-884-2000 and (b) in the case of the
Issuer, USRP Funding 2001-A, L.P., 12240 Inwood Road, Suite 300, Dallas, Texas
75244, attention: Asset Management Department, telecopy number 972-490-9119,
telephone number 972-387-1487.
Section 12.07. NOTICES TO NOTEHOLDERS; NOTIFICATION REQUIREMENTS AND
WAIVER.
Where this Indenture provides for notice to Noteholders of any event,
such notice shall be sufficiently given if in writing and delivered by courier
or mailed by first-class mail, postage prepaid to each Noteholder affected by
such event, at its address as it appears on the Note Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is delivered or mailed in the
manner herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular courier and mail
service as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Section 12.08. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Issuer shall bind
their successors and permitted assigns, whether so expressed or not.
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Section 12.09. SEPARABILITY CLAUSE.
In case any provision of this Indenture or of the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall, to the extent permitted by law, not in any way
be affected or impaired thereby.
Section 12.10. GOVERNING LAW.
(A) THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT THAT AT ALL TIMES THE
PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND
SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER SECURITY
DOCUMENTS AND THE DETERMINATION OF DEFICIENCY JUDGMENTS SHALL BE GOVERNED BY AND
CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE PROPERTY IS
LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND THE
ENFORCEABILITY OF ALL SECURITY DOCUMENTS AND ALL OF THE INDEBTEDNESS OR
OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY
LAW, THE ISSUER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY CLAIM TO ASSERT
THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTES, AND
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO ss. 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.
(b) Any action or proceeding against any of the parties hereto relating
in any way to this Indenture or any Note or the Collateral may be brought and
enforced in the courts of the State of New York sitting in the borough of
Manhattan or of the United States District Court for the Southern District of
New York and the Issuer irrevocably submits to the jurisdiction of each such
court in respect of any such action or proceeding. The Issuer hereby waives, to
the fullest extent permitted by law, any right to remove any such action or
proceeding by reason of improper venue or inconvenient forum. As long as any of
the Notes remain Outstanding, service of process upon CT Corporation Systems,
1633 Broadway, New York, New York 10019, shall, to the fullest extent permitted
by law, be deemed in every respect effective service upon the Issuer in any such
legal action or proceeding.
Section 12.11. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 12.12. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the Noteholders and any other party secured
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hereunder or named as a beneficiary of any provision hereof, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
Section 12.13. RECORDING OF INDENTURE.
If this Indenture is subject to recording in any appropriate public
recording offices, such recording is to be effected by and at the expense of the
Issuer and accompanied by an Opinion of Counsel (which may be rendered by
counsel to the Indenture Trustee or any other counsel reasonably acceptable to
the Indenture Trustee and which shall be an expense of the Issuer) to the effect
that such recording is necessary either for the protection of the Noteholders or
any other Person secured hereunder or for the enforcement of any right or remedy
granted to the Indenture Trustee under this Indenture.
Section 12.14. TRUST OBLIGATION.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer on the Notes or under this Indenture (other than with
respect to Permitted Investments as to which such Person is the issuer) or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee in its individual capacity or (ii) any
partner, issuer, beneficiary, agent, officer, director, employee, agent or
Control Person of the Indenture Trustee in its individual capacity, or of any
successor or assignee of the Indenture Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
the Indenture Trustee does not have any such obligations in its individual
capacity).
Section 12.15. INSPECTION.
The Issuer shall agree that, on reasonable prior notice, it will permit
any representative of the Indenture Trustee or the Directing Noteholder, during
the Issuer's normal business hours, to examine all the books of account,
records, reports, and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees, and independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The
Indenture Trustee and the Directing Noteholder shall and shall cause its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) or the Indenture Trustee or the Directing
Noteholder may reasonably determine that such disclosure is consistent with its
obligations hereunder.
Section 12.16. METHOD OF PAYMENT.
Except as otherwise provided in Section 2.10(b), all amounts payable or
to be remitted pursuant to this Indenture shall be paid or remitted or caused to
be paid or remitted in immediately available funds by wire transfer to an
account specified in writing by the recipient thereof.
Section 12.17. RECOURSE PROVISIONS.
Reserved.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
USRP FUNDING 2001-A, L.P.
By: USRP (SFGP), LLC
By: /s/ Fred Margolin
------------------------------------------
Name: Fred Margolin
Title: Manager
WELLS FARGO BANK MINNESOTA, N.A.
as Indenture Trustee
By:
------------------------------------------
Name:
Title:
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STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 9th day of January 2001, before me, the undersigned officer,
personally appeared _______________, and acknowledged himself to me to be the
_____________ of _____________, acting in its capacity as ________________, and
that as such officer, being duly authorized to do so pursuant to such entity's
by-laws or a resolution of its board of directors, executed and acknowledged the
foregoing instrument for the purposes therein contained, by signing the name of
such entity by himself or herself as such officer as his or her free and
voluntary act and deed and the free and voluntary act and deed of said entity.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
--------------------------------
Notary Public
NOTARIAL SEAL
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STATE OF NEW YORK )
): ss.:
COUNTY OF NEW YORK )
On this 9th day of January 2001, before me, the undersigned officer,
personally appeared __________, and acknowledged himself to me to be the
___________ of _______________, and that as such officer, being duly authorized
to do so pursuant to such entity's by-laws or a resolution of its board of
directors, executed and acknowledged the foregoing instrument for the purposes
therein contained, by signing the name of such entity by himself or herself as
such officer as his or her free and voluntary act and deed and the free and
voluntary act and deed of said entity.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
--------------------------------
Notary Public
NOTARIAL SEAL
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EXHIBIT A
FORM OF CLASS A NOTE
USRP FUNDING 2001-A, L.P.
TRIPLE NET LEASE MORTGAGE NOTES
Note Interest Rate: Adjustable Note Principal Balance of the Class A
Notes as of the Closing Date:
[$____________]
Date of Indenture: As of January 9, 2001 Initial Note Principal Balance of this
Class A Note as of the Closing Date:
[$____________]
Closing Date: January 9, 2001 Initial Aggregate Note Principal Balance as
of the Closing Date: [$____________]
First Payment Date: January 22, 2001 Stated Maturity: July 9, 2001, unless
extended in accordance with Section 2.03 of
the Indenture
Issuer: USRP Funding 2001-A, L.P. [CUSIP]: [____________]
Registered Holder: [____________]
Indenture Trustee:
Wells Fargo Bank Minnesota, N.A.
Note No. [__]
A-1-1
98
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE. THE
ISSUER HAS NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF
1940, AS AMENDED (THE "1940 ACT"). ANY SALE, OFFER, PLEDGE, TRANSFER OR OTHER
DISPOSITION OF THIS NOTE OR ANY INTEREST HEREIN WITHOUT SUCH REGISTRATION OR
QUALIFICATION MAY BE MADE ONLY TO A NON- U.S. PERSON PURSUANT TO REGULATION S
UNDER THE SECURITIES ACT OR A PERSON WHO THE SELLER REASONABLY BELIEVES IS (I) A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, IN
A TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION OR (II)
AN INSTITUTIONAL ACCREDITED INVESTOR AS SPECIFIED IN RULE 501(A)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT AND WHICH IS IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 2.05 OF THE INDENTURE REFERRED TO HEREIN.
NO TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY EMPLOYEE
BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"), OR (B) TO ANY PERSON WHO IS DIRECTLY OR
INDIRECTLY PURCHASING THIS NOTE OR SUCH INTEREST HEREIN ON BEHALF OF, AS NAMED
FIDUCIARY OF, AS TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 2.05 OF THE INDENTURE REFERRED TO HEREIN.
NEITHER THIS NOTE NOR THE COLLATERAL THEREFOR IS INSURED OR GUARANTEED BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR BY ANY OTHER PERSON.
PAYMENTS IN REDUCTION OF THE NOTE PRINCIPAL BALANCE OF THIS NOTE MAY BE MADE AS
SET FORTH IN THE INDENTURE REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that the Registered Holder is the registered
owner of this Note which is one of a series of notes (collectively, the "Notes")
issued by the Issuer referred to above pursuant to the Indenture, dated as of
January 9, 2001 (the "Indenture"), between the Issuer and the Indenture Trustee
referred to above, on behalf of the holders of the Notes (the "Noteholders"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, capitalized terms used herein have the
respective meanings assigned in the Indenture. This Note is issued under and is
subject to the terms, provisions and conditions of the Indenture, to which
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.
The Issuer, for value received, hereby promises to pay to the
Registered Holder hereof, or registered assigns, the principal sum of
[$____________] no later than July 9, 2001, unless such date is extended to no
later than December 31, 2001 in accordance with Section 2.03 of the Indenture.
Pursuant to the terms of the Indenture, payments will be made
on the Notes, pro rata among all of the Notes based on their respective Note
Principal Balance, on the 20th day of each month or, if any such day is not a
business day, then on the next succeeding business day (each, a "Payment Date"),
commencing on the first Payment Date specified above, to the Person in whose
name this Note is registered at the close of business on the related Record
Date. All payments made under the Indenture on this Note will be made by the
Indenture Trustee by wire transfer of immediately available funds to the account
of the
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99
Person entitled thereto at a bank or other entity having appropriate facilities
therefor, if such Noteholder shall have provided the Indenture Trustee with
wiring instructions prior to the related Record Date (which wiring instructions
may be in the form of a standing order applicable to all subsequent payments),
or otherwise by check mailed to the address of such Noteholder as it appears in
the Note Register. Notwithstanding the foregoing, the final payment on this Note
will be made in like manner, but only upon presentation and surrender of this
Note at the offices of the Indenture Trustee or such other location specified in
the notice to the Holder hereof of such final payment. Notwithstanding anything
herein to the contrary, no payments will be made with respect to a Note that has
previously been surrendered as contemplated by the preceding sentence or, with
limited exception, that should have been surrendered as contemplated by the
preceding sentence.
Any payment to the Holder of this Note in reduction of the
Note Principal Balance hereof is binding on such Holder and all future Holders
of this Note and any Note issued upon the transfer hereof or in exchange herefor
or in lieu hereof whether or not notation of such payment is made upon this
Note.
The Notes are issuable in fully registered form only without
coupons in minimum denominations specified in the Indenture. As provided in the
Indenture and subject to certain limitations therein set forth, this Note is
exchangeable for new Notes in authorized denominations evidencing the same
aggregate Note Principal Balance, as requested by the Holder surrendering the
same.
No transfer, sale, pledge or other disposition of this Note or
interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws. If a
transfer of this Note is to be made without registration under the Securities
Act (other than in connection with the initial issuance thereof or a transfer
thereof by the Issuer), then the Note Registrar shall refuse to register such
transfer unless it receives (and upon receipt, may conclusively rely upon) (i) a
certificate from the Noteholder desiring to effect such transfer substantially
in the form attached as Exhibit C-1A of the Indenture or such other
certification reasonably acceptable to the Indenture Trustee; or (ii) a
certificate from such Noteholder substantially in the form attached as Exhibit
C-1B of the Indenture or such other certification reasonably acceptable to the
Indenture Trustee and a certificate from such Noteholder's prospective
transferee substantially in the form attached hereto as Exhibit C-2A or C-2B of
the Indenture or such other certification reasonably acceptable to the Indenture
Trustee; or (iii) an opinion of counsel satisfactory to the Indenture Trustee to
the effect that such transfer may be made without registration under the
Securities Act (which opinion of counsel will not be an expense of the Issuer,
the Indenture Trustee or the Note Registrar in their respective capacities as
such), together with the written certifications as to the facts surrounding such
transfer from the Noteholder desiring to effect such transfer or such
Noteholder's prospective transferee on which such opinion of counsel is based.
Any purchaser of this Note will be deemed to have represented
that either (a) it is not an ERISA Plan, an IRA or a Keogh Plan and is not
purchasing this Note by or on behalf of or with "plan assets" of an ERISA Plan,
an IRA or a Keogh Plan or (b) the purchase of this Note by or on behalf of or
with "plan assets" of an ERISA Plan, an IRA or a Keogh Plan is permissible under
applicable law, will not result in any non-exempt prohibited transaction under
ERISA or Section 4975 of the Code.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is registrable in the
Note Register upon surrender of this Note for registration of transfer at the
offices of the Note Registrar, duly endorsed by, or accompanied by a written
instrument of transfer in the form satisfactory to the Note Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes in authorized denominations evidencing the same
aggregate Note Principal Balance will be issued to the designated transferee or
transferees.
A-1-3
100
No service charge will be imposed for any registration of
transfer or exchange of this Note, but the Indenture Trustee or the Note
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of this Note.
The Issuer, the Indenture Trustee, the Note Registrar and any
agent thereof may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, and none of the Issuer, the Indenture Trustee,
the Note Registrar or any such agent shall be affected by notice to the
contrary.
The Indenture will be discharged (except with respect to
certain continuing rights specified in the Indenture) (a)(1) upon the delivery
to the Indenture Trustee for cancellation of all of the Notes other than Notes
which have been mutilated, lost or stolen and have been replaced or paid and
Notes for which money has been deposited in trust for the full payment thereof
(and thereafter repaid to the Issuer and discharged from such trust) as provided
in the Indenture or (2) at such time as all Notes not previously cancelled by
the Indenture Trustee have become, or, on the next Payment Date, will become,
due and payable or called for redemption and the Issuer shall have deposited
with the Indenture Trustee an amount sufficient to repay all of the Notes and
(b) the Issuer shall have paid all other amounts payable under the Indenture.
Unless the certificate of authentication hereon has been
executed by the Note Registrar, by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid for any purpose.
This Note shall be construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
in said State, and the obligations, rights and remedies of the Holder hereof
shall be determined in accordance with such laws.
A-1-4
101
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed.
Dated: January 9, 2001
USRP FUNDING 2001-A, L.P.
By: USRP (SFGP), LLC
By:
---------------------------------------
Name:
Title:
A-1-5
102
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes referred to in the
within-mentioned Indenture.
Dated: January 9, 2001
----------------------------------------------
as [Indenture Trustee][Authenticating Agent]
By:
-------------------------------------------
Authorized Officer
A-1-6
103
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
(please print or typewrite name and address including postal zip code of
assignee)
the within Note and hereby authorize(s) the registration of transfer of such
Note to assignee on the Note Register.
I (we) further direct the Note Registrar to issue a new Note
of a like Note Principal Balance to the above named assignee and deliver such
Note to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
Signature by or on behalf of Assignor
Signature Guaranteed
PAYMENT INSTRUCTIONS
The Assignee should include the following for purposes of payment:
Payments shall, if permitted, be made by wire transfer or otherwise, in
immediately available funds, to
______________________________________________________________________________
_________________________________________________________________ for the
account of______________________________________.
Payments made by check (such check to be made payable to
____________________) and all applicable statements and notices should be mailed
to ________________________________________________________________.
This information is provided by ___________________________, the
Assignee named above, or ____________________________________, as its agent.
104
EXHIBIT B
FORM OF PAYMENT DATE STATEMENT
B-1
105
EXHIBIT C-1A
FORM I OF TRANSFEROR CERTIFICATE FOR
TRANSFERS OF NOTES
Date
Attention:
Wells Fargo Bank Minnesota, N.A.
Wells Fargo Center
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479-0113
Attention: Corporate Trust Services (CMBS) - MAC # N9303-121
Re: USRP Funding 2001-A, L.P.
Triple Net Lease Mortgage Notes (the "Notes")
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_________________ (the "Transferor") to (the "Transferee") of Class A Notes (the
"Transferred Notes") having an initial Note Principal Balance as of (the
"Closing Date") of $________________________ evidencing a % Percentage Interest
in such Class. The Notes, including the Transferred Notes, were issued pursuant
to an Indenture, dated as of January 9, 2001, relating to the referenced Notes.
All terms used herein and not otherwise defined shall have the meanings set
forth in the Indenture. The Transferor hereby certifies, represents and warrants
to you, as Note Registrar, that:
1. The Transferor is the lawful Owner of the Transferred Notes
with the full right to transfer such Notes free from any and all claims
and encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has
(a) offered, transferred, pledged, sold or otherwise disposed of any
Note, any interest in any Note or any other similar security to any
person in any manner, (b) solicited any offer to buy or accept a
transfer, pledge or other disposition of any Note, any interest in any
Note or any other similar security from any person in any manner, (c)
otherwise approached or negotiated with respect to any Note, any
interest in any Note or any other similar security with any person in
any manner, (d) made any general solicitation by means of general
advertising or in any other manner, or (e) taken any other action,
which (in the case of any of the acts described in clauses (a) through
(e) hereof) would constitute a payment of any Transferred Note under
the Notes Act of 1933, as amended (the "Securities Act"), or would
render the disposition of any Transferred Note a violation of Section 5
of the Securities Act or any state securities laws, or would require
registration or qualification of any Transferred Note pursuant to the
Securities Act or any state securities laws.
3. The Transferor and any person acting on behalf of the
Transferor in this matter reasonably believe that the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A
("Rule 144A") under the Securities Act (a "Qualified Institutional
Buyer") purchasing for its own account or for the account of a
Qualified Institutional Buyer. In determining whether the Transferee is
a Qualified Institutional Buyer, the Transferor and any person acting
on behalf of the Transferor in this matter have relied upon the
following method(s) of establishing the Transferee's ownership and
discretionary investments of securities (check one or more):
C-1A-1
106
-- (a) The Transferee's most recent publicly available
financial statements, which statements present the information as of a
date within 16 months preceding the date of sale of the Transferred
Note in the case of a U.S. purchaser and within 18 months preceding
such date of sale for a foreign purchaser; or
-- (b) The most recent publicly available information
appearing in documents filed by the Transferee with the Securities and
Exchange Commission or another United States federal, state, or local
governmental agency or self-regulatory organization, or with a foreign
governmental agency or self-regulatory organization, which information
is as of a date within 16 months preceding the date of sale of the
Transferred Note in the case of a U.S. purchaser and within 18 months
preceding such date of sale for a foreign purchaser; or
-- (c) The most recent publicly available information
appearing in a recognized securities manual, which information is as of
a date within 16 months preceding the date of sale of the Transferred
Note in the case of a U.S. purchaser and within 18 months preceding
such date of sale for a foreign purchaser; or
-- (d) A certification by the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of
the Transferee, specifying the amount of securities owned and invested
on a discretionary basis by the Transferee as of a specific date on or
since the close of the Transferee's most recent fiscal year, or, in the
case of a Transferee that is a member of a "family of investment
companies," as that term is defined in Rule 144A, a certification by an
executive officer of the investment adviser specifying the amount of
securities owned by the "family of investment companies" as of a
specific date on or since the close of the Transferee's most recent
fiscal year.
4. The Transferor and any person acting on behalf of the
Transferor understand that in determining the aggregate amount of
securities owned and invested on a discretionary basis by an entity for
purposes of establishing whether such entity is a Qualified
Institutional Buyer:
(a) the following instruments and interests shall be excluded:
securities of the Issuer that are affiliated with the Transferee;
securities that are part of an unsold allotment to or subscription by
the Transferee, if the Transferee is a dealer; securities of the Issuer
that are part of the Transferee's "family of investment companies," if
the Transferee is a registered investment company; bank deposit notes
and certificates of deposit; loan participations; repurchase
agreements; securities owned but subject to a repurchase agreement; and
currency, interest rate and commodity swaps;
(b) aggregate value of the securities shall be the cost of
such securities, except where the entity reports its securities
holdings in its financial statements on the basis of their market
value, and no current information with respect to the cost of those
securities has been published, in which case the securities may be
valued at market;
(c) securities owned by subsidiaries of the entity that are
consolidated with the entity in its financial statements prepared in
accordance with generally accepted accounting principles may be
included if the investments of such subsidiaries are managed under the
direction of the entity, except that, unless the entity is a reporting
company under Section 13 or 15(d) of the Exchange Act, securities owned
by such subsidiaries may not be included if the entity itself is a
majority owned subsidiary that would be included in the consolidated
financial statements of another enterprise.
5. The Transferor or a person acting on its behalf has taken
reasonable steps to ensure that the Transferee is aware that the
Transferor is relying on the exemption from the provisions of Section 5
of the Securities Act provided by Rule 144A.
C-1A-2
107
6. The Transferor or a person acting on its behalf has
furnished, or caused to be furnished, to the Transferee all information
regarding (a) the Transferred Notes and payments thereon, (b) the
nature, performance and servicing of the Loan, (c) the Indenture, the
Property Management Agreement and the Security Documents and (d) any
credit enhancement mechanism associated with the Transferred Notes,
that the Transferee has requested.
Very truly yours,
________________________________
(Transferor)
By:_____________________________
Name:___________________________
Title:__________________________
C-1A-3
108
EXHIBIT C-1B
FORM II OF TRANSFEROR CERTIFICATE
FOR TRANSFERS OF NOTES
Date
Wells Fargo Bank Minnesota, N.A.
Wells Fargo Center
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479-0113
Attention: Corporate Trust Services (CMBS) - MAC # N9303-121
Re: USRP Funding 2001-A, L.P.
Triple Net Lease Mortgage Notes (the "Notes")
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by (the
"Transferor") to (the "Transferee") of Class A Notes (the "Transferred Notes")
having an initial Note Principal Balance as of (the "Closing Date") of $
evidencing a % Percentage Interest in such Class. The Notes, including the
Transferred Notes, were issued pursuant to an Indenture, dated as of January 9,
2001, relating to the referenced Notes. All terms used herein and not otherwise
defined shall have the meanings set forth in the Indenture. The Transferor
hereby certifies, represents and warrants to you, as Note Registrar, that:
1. The Transferor is the lawful Owner of the Transferred Notes
with the full right to transfer such Notes free from any and all claims
and encumbrances whatsoever.
C-1B-1
109
2. Neither the Transferor nor anyone acting on its behalf has
(a) offered, transferred, pledged, sold or otherwise disposed of any
Note, any interest in any Note or any other similar security to any
person in any manner, (b) solicited any offer to buy or accept a
transfer, pledge or other disposition of any Note, any interest in any
Note or any other similar security from any person in any manner, (c)
otherwise approached or negotiated with respect to any Note, any
interest in any Note or any other similar security with any person in
any manner, (d) made any general solicitation by means of general
advertising or in any other manner, or (e) taken any other action,
which (in the case of any of the acts described in clauses (a) through
(e) hereof) would constitute a payment of any Transferred Note under
the Securities Act of 1933, as amended (the "Securities Act"), or would
render the disposition of any Transferred Note a violation of Section 5
of the Securities Act or any state securities laws, or would require
registration or qualification of any Transferred Note pursuant to the
Securities Act or any state securities laws.
Very truly yours,
____________________________________
(Transferor)
By:_________________________________
Name:_______________________________
Title:______________________________
C-1B-2
110
EXHIBIT C-2A
FORM OF TRANSFEREE CERTIFICATE FOR TRANSFERS OF
NOTES TO QUALIFIED INSTITUTIONAL BUYERS
Date
Wells Fargo Bank Minnesota, N.A.
Wells Fargo Center
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479-0113
Attention: Corporate Trust Services (CMBS) - MAC # N9303-121
Re: USRP Funding 2001-A, L.P.
Triple Net Lease Mortgage Notes (the "Notes")
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by (the
"Transferor") to (the "Transferee") of Class A Notes (the "Transferred Notes")
having an initial Notes Principal Balance as of (the "Closing Date") of $
evidencing a % Percentage Interest in such Class. The Notes, including the
Transferred Notes, were issued pursuant to an Indenture, dated as of January 9,
2001, relating to the referenced Notes. All terms used herein and not otherwise
defined shall have the meanings set forth in the Indenture. The Transferee
hereby certifies, represents and warrants to you, as Note Registrar, that:
1. The Transferee is a "qualified institutional buyer" (a
"Qualified Institutional Buyer") as that term is defined in Rule 144A
("Rule 144A") under the Securities Act of 1933, as amended, and has
completed one of the forms of certification to that effect attached
hereto as Annex A and Annex B. The Transferee is aware that the sale to
it of the Transferred Notes is being made in reliance on Rule 144A. The
Transferee is acquiring the Transferred Notes for its own account or
for the account of a Qualified Institutional Buyer, and understands
that such Transferred Notes may be resold, pledged or transferred only
(i) to a person reasonably believed to be a Qualified Institutional
Buyer that purchases for its own account or for the account of a
Qualified Institutional Buyer to whom notice is given that the resale,
pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities
Act.
C-2A-1
111
2. The Transferee has been furnished with all information
regarding (a) the Transferred Notes and payments thereon, (b) the
nature, performance and servicing of the Loan, (c) the Indenture, the
Property Management Agreement and the Security Documents and (d) any
credit enhancement mechanism associated with the Transferred Notes,
that it has requested.
Very truly yours,
________________________________________
(Transferor)
By:_____________________________________
Name:___________________________________
Title:__________________________________
C-2A-2
112
ANNEX A TO EXHIBIT C-2A
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
for Transferees other than Registered Investment Companies
The undersigned hereby certifies as follows to name of Transferor (the
"Transferor") and name of Note Registrar, as Note Registrar, with respect to the
Notes being transferred (the "Transferred Notes") as described in the Transferee
Note to which this certification relates and to which this certification is an
Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other executive
officer of the entity purchasing the Transferred Notes (the
"Transferee").
2. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A under the Securities Act of 1933 ("Rule
144A") because (i) the Transferee owned and/or invested on a
discretionary basis $ 2 in securities (other than the excluded
securities referred to below) as of the end of the Transferee's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.
-- Corporation, etc. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
-- Bank. The Transferee (a) is a national bank or a banking
institution organized under the laws of any State, U.S.
territory or the District of Columbia, the business of which
is substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto, as of a date not more than 16 months
preceding the date of sale of the Note in the case of a U.S.
bank, and not more than 18 months preceding such date of sale
for a foreign bank or equivalent institution.
-- Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto, as of a date not more than 16 months
preceding the date of sale of the Note in the case of a U.S.
savings and loan association, and
- ----------
2 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that
case, Transferee must own and/or invest on a discretionary basis at
least $10,000,000 in securities.
C-2A-3
113
not more than 18 months preceding such date of sale for a
foreign savings and loan association or equivalent
institution.
-- Broker-dealer. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
-- Insurance Company. The Transferee is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, U.S. territory or the District of Columbia.
-- State or Local Plan. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
-- ERISA Plan. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
-- Investment Advisor. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
-- Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under
subsection (a)(1) of Rule 144A pursuant to which it qualifies.
Note that registered investment companies should complete
Annex B rather than this Annex A.)
3. The term "securities" as used herein does not include (i)
securities of the Issuer that are affiliated with the Transferee, (ii)
securities that are part of an unsold allotment to or subscription by
the Transferee, if the Transferee is a dealer, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement
and (vii) currency, interest rate and commodity swaps. For purposes of
determining the aggregate amount of securities owned and/or invested on
a discretionary basis by the Transferee, the Transferee did not include
any of the securities referred to in this paragraph.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the
Transferee, the Transferee used the cost of such securities to the
Transferee, unless the Transferee reports its securities holdings in
its financial statements on the basis of their market value, and no
current information with respect to the cost of those securities has
been published, in which case the securities were valued at market.
Further, in determining such aggregate amount, the Transferee may have
included securities owned by subsidiaries of the Transferee, but only
if such subsidiaries are consolidated with the Transferee in its
financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are
managed under the Transferee's direction. However, such securities were
not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a
reporting company under the Securities Exchange Act of 1934.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to
the Transferred Notes are relying and will continue to rely on the
statements made herein because one or more sales to the Transferee may
be in reliance on Rule 144A.
---- ---- Will the Transferee be purchasing the
Transferred Notes only for the
C-2A-4
114
Yes No Transferee's own account?
6. If the answer to the foregoing question is "no," then in
each case where the Transferee is purchasing for an account other than
its own, such account belongs to a third party that is itself a
"qualified institutional buyer" within the meaning of Rule 144A, and
the "qualified institutional buyer" status of such third party has been
established by the Transferee through one or more of the appropriate
methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and
conclusions herein. Until such notice is given, the Transferee's
purchase of the Transferred Notes will constitute a reaffirmation of
this certification as of the date of such purchase. In addition, if the
Transferee is a bank or savings and loan as provided above, the
Transferee agrees that it will furnish to such parties any updated
annual financial statements that become available on or before the date
of such purchase, promptly after they become available.
--------------------------------
Print Name of Transferee
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Date:
---------------------------
C-2A-5
115
ANNEX B TO EXHIBIT C-2A
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
for Transferees that are Registered Investment Companies
The undersigned hereby certifies as follows to name of Transferor (the
"Transferor") and name of Note Registrar, as Note Registrar, with respect to the
Notes being transferred (the "Transferred Notes") as described in the Transferee
Note to which this certification relates and to which this certification is an
Annex:
1. As indicated below, the undersigned is the chief financial
officer, a person fulfilling an equivalent function, or other executive
officer of the entity purchasing the Transferred Notes (the
"Transferee") or, if the Transferee is a "qualified institutional
buyer" as that term is defined in Rule 144A under the Securities Act of
1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is an executive officer of the
investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as
defined in Rule 144A because (i) the Transferee is an investment
company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Transferee alone owned and/or invested on a
discretionary basis, or the Transferee's Family of Investment Companies
owned, at least $100,000,000 in securities (other than the excluded
securities referred to below) as of the end of the Transferee's most
recent fiscal year. For purposes of determining the amount of
securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used, unless the
Transferee or any member of the Transferee's Family of Investment
Companies, as the case may be, reports its securities holdings in its
financial statements on the basis of their market value, and no current
information with respect to the cost of those securities has been
published, in which case the securities of such entity were valued at
market.
-- The Transferee owned and/or invested on a discretionary basis
$_____________ in securities (other than the excluded
securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
-- The Transferee is part of a Family of Investment Companies
which owned in the aggregate in securities (other than the
excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof)
that have the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the same
parent or because one investment adviser is a majority owned subsidiary
of the other).
4. The term "securities" as used herein does not include (i)
securities of the Issuer that are affiliated with the Transferee or are
part of the Transferee's Family of Investment Companies, (ii) bank
deposit notes and certificates of deposit, (iii) loan participations,
(iv) repurchase agreements, (v) securities owned but subject to a
repurchase agreement and (vi) currency, interest rate and commodity
swaps. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, or
owned by the Transferee's Family of Investment Companies, the
securities referred to in this paragraph were excluded.
C-2A-6
116
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying
and will continue to rely on the statements made herein because one or
more sales to the Transferee will be in reliance on Rule 144A.
Will the Transferee be purchasing the Transferred Notes only for the
Yes No Transferee's own account?
6. If the answer to the foregoing question is "no," then in
each case where the Transferee is purchasing for an account other than
its own, such account belongs to a third party that is itself a
"qualified institutional buyer" within the meaning of Rule 144A, and
the "qualified institutional buyer" status of such third party has been
established by the Transferee through one or more of the appropriate
methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice, the Transferee's purchase of the Transferred
Notes will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
------------------------------------------------
Print Name of Transferee or Adviser
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
IF AN ADVISER:
------------------------------------------------
Print Name of Transferee
Date:
-------------------------------------------
C-2A-7
117
EXHIBIT C-2B
FORM OF TRANSFEREE CERTIFICATE FOR TRANSFERS OF
NOTES TO INSTITUTIONAL ACCREDITED INVESTORS
Date
Wells Fargo Bank Minnesota, N.A.
Wells Fargo Center
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479-0113
Attention: Corporate Trust Services (CMBS) - MAC # N9303-121
Re: USRP Funding 2001-A, L.P.
Triple Net Lease Mortgage Notes (the "Notes")
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by (the
"Transferor") to (the "Transferee") of Class Notes (the "Transferred Notes")
having an initial Note Principal Balance as of (the "Closing Date") of $
evidencing % Percentage Interest in such Class. The Notes, including the
Transferred Notes, were issued pursuant to an Indenture, dated as of January 9,
2001, relating to the referenced Notes. All terms used herein and not otherwise
defined shall have the meanings set forth in the Indenture. The Transferee
hereby certifies, represents and warrants to you, as Note Registrar, that:
1. The Transferee is acquiring the Transferred Notes for its
own account for investment and not with a view to or for sale or
transfer in connection with any payment thereof, in whole or in part,
in any manner which would violate the Securities Act of 1933, as
amended (the "Securities Act"), or any applicable state securities
laws.
2. The Transferee understands that (a) the Notes have not been
and will not be registered under the Securities Act or registered or
qualified under any applicable state securities laws, (b) none of the
Issuer, the Trustee, the Note Registrar or any other person is
obligated so to register or qualify the Notes, and (c) no Transferred
Note may be resold or transferred unless it receives: (i) a certificate
from the Noteholder desiring to effect such transfer substantially in
the form attached as Exhibit C-1A hereto or such other certification
reasonably acceptable to the Trustee; or (ii) a certificate from such
Noteholder substantially in the form attached as Exhibit C-1B hereto or
such other certification reasonably acceptable to the Trustee and a
certificate from such Noteholder's prospective transferee substantially
in the form attached hereto as Exhibit C-2A or C- 2B hereto or such
other certification reasonably acceptable to the Trustee; or (iii) an
opinion of counsel satisfactory to the Trustee to the effect that such
transfer may be made without registration under the Securities Act
(which opinion of counsel will not be an expense of the Issuer, the
Trustee or the Note Registrar in their respective capacities as such),
together with the written certifications as to the facts surrounding
such transfer from the Noteholder desiring to effect such transfer or
such Noteholder's prospective transferee on which such opinion of
counsel is based.
3. The Transferee understands that it may not sell or
otherwise transfer any Transferred Note except in compliance with the
provisions of the Indenture, which provisions it has carefully
reviewed, and that each Transferred Note will bear the following
legends:
C-2B-1
118
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
THE SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR
OTHER DISPOSITION OF THIS NOTE OR ANY INTEREST HEREIN WITHOUT
SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND WHICH IS IN ACCORDANCE WITH THE PROVISIONS
OF THE INDENTURE REFERRED TO HEREIN.
NO TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN MAY BE MADE
(A) TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986 (THE "CODE"), OR (B) TO ANY
PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS NOTE OR
SUCH INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN
OR OTHER RETIREMENT ARRANGEMENT, EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF THE TRUST AGREEMENT REFERRED TO HEREIN.
4. Neither the Transferee nor anyone acting on its behalf has
(a) offered, pledged, sold, disposed of or otherwise transferred any
Note, any interest in any Note or any other similar security to any
person in any manner, (b) solicited any offer to buy or accept a
pledge, disposition or other transfer of any Note, any interest in any
Note or any other similar security from any person in any manner, (c)
otherwise approached or negotiated with respect to any Note, any
interest in any Note or any other similar security with any person in
any manner, (d) made any general solicitation with respect to any Note,
any interest in any Note or any other similar security by means of
general advertising or in any other manner, or (e) taken any other
action with respect to any Note, any interest in any Note or any other
similar security, which (in the case of any of the acts described in
clauses (a) through (e) above) would constitute a payment of the
Transferred Notes under the Securities Act, would render the
disposition of the Transferred Notes a violation of Section 5 of the
Securities Act or any state securities law or would require
registration or qualification of the Transferred Notes pursuant
thereto. The Transferee will not act, nor has it authorized or will it
authorize any person to act, in any manner set forth in the foregoing
sentence with respect to any Note, any interest in any Note or any
other similar security.
5. The Transferee has been furnished with all information
regarding (a) the Issuer, (b) the Transferred Notes, (c) the Indenture,
the Property Management Agreement and the Security Documents, (d) the
nature, performance and servicing of the Loan and (e) all related
matters, that it has requested.
6. The Transferee is an "accredited investor" as defined in
paragraph (1), (2), (3) or (7) of Rule 501(a) under the Securities Act
or an entity in which the equity owner comes within such paragraphs.
The Transferee has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
an investment in the Transferred Note; the Transferee has sought such
accounting, legal and tax advice as it has considered necessary to make
an informed investment decision; and the Transferee is able to bear the
economic risks of such investment and can afford a complete loss of
such investment.
Very truly yours,
C-2B-2
119
------------------------------------------------
(Transferor)
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
C-2B-3
120
EXHIBIT D-1
FORM OF CERTIFICATE REGARDING INFORMATION
REQUEST BY NOTEHOLDER
[Date]
Wells Fargo Bank Minnesota, N.A.
11000 Broken Land Parkway
Columbia, Maryland 21044
Attention: Corporate Trust Services (CMBS) / USRP Funding 2001-A
In accordance with Section 7.02 of the Indenture, dated as of
January 9, 2001 (the "Indenture"), between USRP Funding 2001-A, L.P., as issuer
(the "Issuer") and Wells Fargo Bank Minnesota, N.A., a national banking
association, not in its individual capacity, but solely as Indenture Trustee
(the "Indenture Trustee"), with respect to the Triple Net Lease Mortgage Notes
(the "Notes"), the undersigned hereby certifies and agrees as follows:
1. The undersigned is the beneficial owner of the Class A
Notes.
2. The undersigned is requesting the information identified on
the schedule attached hereto pursuant to Section 7.02 of the Indenture
(the "Information") for use in evaluating its investment in the Class A
Notes.
3. In consideration of the Indenture Trustee's disclosure to
the undersigned of the Information, the undersigned will keep the
Information confidential (except from such outside persons as are
assisting it in making the evaluation described in paragraph 2), and
such Information will not, without the prior written consent of the
Indenture Trustee, be disclosed by the undersigned or by its officers,
directors, partners employees, agents or representatives (collectively,
the "Representatives") in any manner whatsoever, in whole or in part.
4. The undersigned will not use or disclose the Information in
any manner which could result in a violation of any provision of the
Securities Act of 1933, as amended (the "Securities Act"), or the
Securities Exchange Act of 1934, as amended, or would require
registration of any Note pursuant to Section 5 of the Securities Act.
5. The undersigned shall be fully liable for any breach of
this agreement by itself or any of its Representatives and shall
indemnify the Issuer and the Indenture Trustee for any loss, liability
or expense incurred thereby with respect to any such breach by the
undersigned or any of its Representatives.
Capitalized terms used but not defined herein shall have the
respective meanings assigned thereto in the Indenture.
IN WITNESS WHEREOF, the undersigned has caused its name to be
signed hereto by its duly authorized officer, as of the day and year written
above.
D-1-1
121
[NOTEHOLDER OF A NOTE]
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
Phone Number:
-----------------------------------
D-1-2
122
EXHIBIT D-2
FORM OF CERTIFICATE REGARDING INFORMATION
REQUEST BY PROSPECTIVE PURCHASER
[Date]
Wells Fargo Bank Minnesota, N.A.
11000 Broken Land Parkway
Columbia, Maryland 21044
Attention: Corporate Trust Services (CMBS) / USRP Funding 2001-A
In accordance with Section 7.02 of the Indenture, dated as of
January 9, 2001 (the "Indenture"), between USRP Funding 2001-A, L.P., as issuer
(the "Issuer") and ____________________, a ____________________________, not in
its individual capacity, but solely as Indenture Trustee (the "Indenture
Trustee"), with respect to the Triple Net Lease Mortgage Notes (the "Notes"),
the undersigned hereby certifies and agrees as follows:
1. The undersigned is contemplating an investment in the Class
A Notes.
2. The undersigned is requesting the information identified on
the schedule attached hereto pursuant to Section 7.02 of the Indenture
(the "Information") solely for use in evaluating such possible
investment.
3. In consideration of the Indenture Trustee's disclosure to
the undersigned of the Information, the undersigned will keep the
Information confidential (except from such outside persons as are
assisting it in making the investment decision described in paragraphs
1 and 2), and such Information will not, without the prior written
consent of the Indenture Trustee, be disclosed by the undersigned or by
its officers, directors, partners employees, agents or representatives
(collectively, the "Representatives") in any manner whatsoever, in
whole or in part.
4. The undersigned will not use or disclose the Information in
any manner which could result in a violation of any provision of the
Securities Act of 1933, as amended (the "Securities Act"), or the
Securities Exchange Act of 1934, as amended, or would require
registration of any Note pursuant to Section 5 of the Securities Act.
5. The undersigned shall be fully liable for any breach of
this agreement by itself or any of its Representatives and shall
indemnify the Issuer and the Indenture Trustee for any loss, liability
or expense incurred thereby with respect to any such breach by the
undersigned or any of its Representatives.
Capitalized terms used but not defined herein shall have the respective
meanings assigned thereto in the Indenture.
D-2-1
123
IN WITNESS WHEREOF, the undersigned has caused its name to be signed
hereto by its duly authorized officer, as of the day and year written above.
[PROSPECTIVE PURCHASER]
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
The undersigned is a beneficial owner of Class A Notes contemplating a
transfer of all or a portion of such Notes to the prospective purchaser named
above.
[PROSPECTIVE TRANSFEROR]
By:
-----------------------
Name:
Title:
D-2-2
124
EXHIBIT E
NOTICE OF REQUEST FOR RELEASE
______________________ , 20____
Wells Fargo Bank Minnesota, N.A.
11000 Broken Land Parkway
Columbia, Maryland 21044
Attention: Corporate Trust Services (CMBS) / USRP Funding 2001-A
Ladies and Gentlemen:
We refer to those certain Notes made by us in the original principal
sum of $___________ secured by premises known as , [CITY], [STATE], [ , [CITY],
[STATE], and , [CITY], [STATE] pursuant to [THOSE CERTAIN] Mortgage(s)/Deed(s)
of Trust covering said premises ([COLLECTIVELY] the "SECURITY INSTRUMENTS") and
the Indenture made by and between us and the Indenture Trustee, each dated as of
January 9, 2001 (the "Loan"). This certificate is delivered to you as Indenture
Trustee, pursuant to Section 8.01 of the Indenture. All capitalized terms used
herein shall have the same meanings herein as they have in the Indenture.
On or about ___________ ____, 20___ (the "RELEASE DATE"), we shall
deliver to you $ , together with all other sums required under the Indenture.
Upon receipt of such funds, please execute the Property Release documentation
attached hereto (the "RELEASE DOCUMENTS") and confirm that the conditions set
forth in Section 8.01 of the Indenture to making a Property Release have been
satisfied by signing the acknowledgment below.
We request a Property Release of the premises known as , [CITY],
[STATE] (the "RELEASE PREMISES") pursuant to Section 8.01 of the Indenture
covering the Release Premises. In order to induce you to make a Property Release
of the Release Premises from the lien of the related Security Instruments, the
undersigned hereby represents and certifies as follows:
(a) No Event of Default has occurred and is continuing.
(b) All legal, record, beneficial and economic interests of the
Release Premises shall, on the Release Date, simultaneously
with the Property Release, be transferred and conveyed to a
Release Premises Transferee.
(c) Each other condition to such Property Release set forth in
Section 8.01 of the Indenture has been satisfied.
The Issuer hereby requests a Property Release of the Release Premises
from the lien of the Security Instrument and related Security Documents by
returning the executed Release Documentation and a copy of this Request for
Release with the signed acknowledgment to the following address [_____________].
E-1
125
USRP Funding 2001-A, L.P.
Acknowledged this ___ day of
______________, 20__.
Wells Fargo Bank Minnesota, N.A.,
as Indenture Trustee
E-2
126
EXHIBIT F
FORM OF CERTIFICATION OF INDENTURE TRUSTEE
USRP Funding 2001-A, L.P.
12240 Inwood Road, Suite 300
Dallas, Texas 75244
Attention.: Asset Management Department
Telephone: (972) 387-1487
Facsimile: (972) 490-9119
U.S. Restaurant Properties Operating, L.P.
12240 Inwood Road, Suite 300
Dallas, Texas 75244
Attention.: Asset Management Department
Telephone: (972) 387-1487
Facsimile: (972) 490-9119
Banc of America Mortgage Capital Corporation
100 North Tyron Street
Charlotte, NC 28255
Attention: Jeffrey B. Hoyle
Telephone: 704-388-4385
Facsimile: 704-388-8841
U.S. Restaurant Properties Operating, L.P.
12240 Inwood Road, Suite 300
Dallas, Texas 75244
Attention.: Asset Management Department
Telephone: (972) 387-1487
Facsimile: (972) 490-9119
Re: USRP Funding 2000-A, LP, Triple Net Lease Mortgage Notes
(the "Notes")
Ladies and Gentlemen:
In accordance with the provisions of Section 2.09 of the Indenture,
dated as of January 9, 2001 (the "Indenture"), between USRP Funding 2000-A, LP,
as issuer, and Wells Fargo Bank Minnesota, N.A., as indenture trustee, the
undersigned, as Indenture Trustee, hereby certifies that, as to each Property
listed on Schedule 1 to the Contribution Agreement and except as otherwise
indicated on the exception report attached hereto (i) all documents specified in
the definition of "Lease File" in the Indenture are in its possession and (ii)
all such documents received by it with respect to such Property and the related
Franchise Unit appear regular on their face and appear to relate to such
Property or the related Franchise Unit.
The Indenture Trustee is not under any duty or obligation to inspect,
review or examine any of the documents, instruments, certificates or other
papers relating to the Leases delivered to it to determine that the same are
valid, legal, effective, genuine, enforceable, in recordable form sufficient or
appropriate for the represented purpose or that they are other than what they
purport to be on their face.
F-1
127
Capitalized terms used herein without definition have the meanings
ascribed to them in the Indenture.
Wells Fargo Bank Minnesota, N.A.,
as Indenture Trustee
By:
----------------------------------------
Name:
Title: