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Exhibit 10.1
LOAN AGREEMENT
Dated as of July 19, 2005
Between
YSI VI LLC,
as Borrower
and
LEHMAN BROTHERS BANK, FSB,
as Lender
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TABLE OF CONTENTS
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I. DEFINITIONS;
PRINCIPLES OF CONSTRUCTION............................ 1
Section
1.1
Definitions....................................... 1
Section
1.2 Principles
of Construction........................ 19
II. GENERAL
TERMS......................................................
19
Section
2.1 Loan
Commitment; Disbursement to Borrower......... 19
2.1.1 The
Loan.......................................... 19
2.1.2
Disbursement to Borrower.......................... 19
2.1.3 The
Note, Security Instruments and Loan
Documents......................................... 19
2.1.4 Use
of Proceeds................................... 19
Section
2.2 Interest;
Loan Payments; Late Payment Charge...... 20
2.2.1
Interest Generally................................ 20
2.2.2
Interest Calculation.............................. 20
2.2.3
Payments.......................................... 20
2.2.4
Intentionally Deleted............................. 20
2.2.5
Payment on Maturity Date.......................... 20
2.2.6
Payments after Default............................ 20
2.2.7 Late
Payment Charge............................... 21
2.2.8
Usury Savings..................................... 21
2.2.9
Making of Payments................................ 21
2.2.10
Indemnified Taxes................................. 21
Section
2.3
Prepayments....................................... 22
2.3.1
Voluntary Prepayments............................. 22
2.3.2
Mandatory Prepayments............................. 23
2.3.3
Prepayments After Default......................... 23
Section
2.4
Defeasance........................................ 23
2.4.1
Voluntary Defeasance.............................. 23
2.4.2
Successor Borrower................................ 25
Section
2.5 Release of
Property............................... 26
2.5.1
Release of all Properties......................... 26
2.5.2
Release of Individual Property.................... 26
2.5.3
Release on Payment in Full........................ 27
Section
2.6 Manner of
Making Payments; Cash Management........ 27
2.6.1
Deposits into Lockbox Account..................... 27
2.6.2
Payments Received in the Lockbox Account.......... 28
2.6.3 No
Deductions, etc................................ 28
Section
2.7 Substitute
Property............................... 28
III. CONDITIONS
PRECEDENT...............................................
35
Section
3.1 Conditions
Precedent to Closing................... 35
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3.1.1
Representations and Warranties; Compliance with
Conditions........................................ 35
3.1.2 Loan
Agreement and Note........................... 35
3.1.3
Delivery of Loan Documents; Title Insurance;
Reports; Leases................................... 35
3.1.4
Related Documents................................. 37
3.1.5
Delivery of Organizational Documents.............. 37
3.1.6
Opinions of Borrower's Counsel.................... 37
3.1.7
Budgets........................................... 37
3.1.8
Basic Carrying Costs.............................. 37
3.1.9
Completion of Proceedings......................... 37
3.1.10
Payments.......................................... 37
3.1.11 Tenant
Estoppels.................................. 37
3.1.12
Transaction Costs................................. 38
3.1.13 Material
Adverse Effect........................... 38
3.1.14 Leases
and Rent Roll.............................. 38
3.1.15 Tax
Lot........................................... 38
3.1.16 Physical
Conditions Reports....................... 38
3.1.17
Management Agreement.............................. 38
3.1.18
Appraisal......................................... 38
3.1.19 Financial
Statements.............................. 38
3.1.20 Further
Documents................................. 38
IV. REPRESENTATIONS AND
WARRANTIES..................................... 38
Section
4.1 Borrower
Representations.......................... 38
4.1.1
Organization...................................... 39
4.1.2
Proceedings....................................... 39
4.1.3 No
Conflicts...................................... 39
4.1.4
Litigation........................................ 39
4.1.5
Agreements........................................ 39
4.1.6
Title............................................. 40
4.1.7
Solvency / No Bankruptcy Filing................... 40
4.1.8 Full
and Accurate Disclosure...................... 41
4.1.9 No
Plan Assets.................................... 41
4.1.10
Compliance........................................ 41
4.1.11 Financial
Information............................. 41
4.1.12
Condemnation...................................... 41
4.1.13 Federal
Reserve Regulations....................... 42
4.1.14 Utilities
and Public Access....................... 42
4.1.15 Not a
Foreign Person.............................. 42
4.1.16 Separate
Lots..................................... 42
4.1.17
Assessments....................................... 42
4.1.18
Enforceability.................................... 42
4.1.19 No Prior
Assignment............................... 42
4.1.20
Insurance......................................... 42
4.1.21 Use of
Property................................... 43
4.1.22
Certificate of Occupancy; Licenses................ 43
4.1.23 Flood
Zone........................................ 43
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4.1.24 Physical
Condition................................ 43
4.1.25
Boundaries........................................ 43
4.1.26
Leases............................................ 43
4.1.27
Survey............................................ 44
4.1.28 Loan to
Value..................................... 44
4.1.29 Filing
and Recording Taxes........................ 44
4.1.30 Single
Purpose Entity/Separateness................ 45
4.1.31
Management Agreement.............................. 48
4.1.32 Illegal
Activity.................................. 48
4.1.33 No Change
in Facts or Circumstances; Disclosure... 48
4.1.34
Intellectual Property............................. 48
4.1.35
Investment Company Act............................ 49
4.1.36 Principal
Place of Business; State of
Organization...................................... 49
4.1.37 Business
Purposes................................. 49
4.1.38
Taxes............................................. 49
4.1.39
Forfeiture........................................ 49
4.1.40
Environmental Representations and Warranties...... 49
4.1.41 Taxpayer
Identification Number.................... 50
4.1.42
OFAC.............................................. 50
4.1.43
Intentionally Deleted............................. 50
4.1.44 Embargoed
Person.................................. 50
Section
4.2 Survival
of Representations....................... 51
V. BORROWER
COVENANTS.................................................
51
Section
5.1
Affirmative Covenants............................. 51
5.1.1
Existence; Compliance with Legal Requirements;
Insurance......................................... 51
5.1.2
Taxes and Other Charges........................... 52
5.1.3
Litigation........................................ 53
5.1.4
Access to Properties.............................. 53
5.1.5
Notice of Default................................. 53
5.1.6
Cooperate in Legal Proceedings.................... 53
5.1.7
Perform Loan Documents............................ 53
5.1.8
Awards or Insurance Benefits...................... 53
5.1.9
Further Assurances................................ 53
5.1.10
Supplemental Security Instrument Affidavits....... 54
5.1.11 Financial
Reporting............................... 54
5.1.12 Business
and Operations........................... 56
5.1.13 Title to
the Properties........................... 56
5.1.14 Costs of
Enforcement.............................. 56
5.1.15 Estoppel
Statement................................ 56
5.1.16 Loan
Proceeds..................................... 57
5.1.17
Performance by Borrower........................... 57
5.1.18
Confirmation of Representations................... 57
5.1.19 No Joint
Assessment............................... 57
5.1.20 Leasing
Matters................................... 57
5.1.21
Alterations....................................... 58
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5.1.22
Environmental Covenants........................... 59
5.1.23
OFAC.............................................. 60
5.1.24 O&M
Program....................................... 60
Section
5.2 Negative
Covenants................................ 60
5.2.1
Operation of Property............................. 61
5.2.2
Liens............................................. 61
5.2.3
Dissolution....................................... 61
5.2.4
Change In Business................................ 61
5.2.5 Debt
Cancellation................................. 61
5.2.6
Affiliate Transactions............................ 61
5.2.7
Zoning............................................ 61
5.2.8
Assets............................................ 62
5.2.9
Debt.............................................. 62
5.2.10 No Joint
Assessment............................... 62
5.2.11 Principal
Place of Business....................... 62
5.2.12
ERISA............................................. 62
5.2.13
Transfers......................................... 62
Section
5.3 Traded
Shares..................................... 66
VI. INSURANCE; CASUALTY;
CONDEMNATION; REQUIRED REPAIRS................ 66
Section
6.1
Insurance......................................... 66
Section
6.2
Casualty.......................................... 70
Section
6.3
Condemnation...................................... 70
Section
6.4
Restoration....................................... 70
VII. RESERVE
FUNDS......................................................
75
Section
7.1 Required
Repair Funds............................. 75
7.1.1
Deposits.......................................... 75
7.1.2
Release of Required Repair Funds.................. 75
Section
7.2 Tax and
Insurance Escrow Fund..................... 76
Section
7.3
Replacements and Replacement Reserve.............. 77
7.3.1
Replacement Reserve Fund.......................... 77
7.3.2
Disbursements from Replacement Reserve Account.... 77
7.3.3
Performance of Replacements....................... 79
7.3.4
Failure to Make Replacements...................... 81
7.3.5
Balance in the Replacement Reserve Account........ 81
Section
7.4
Intentionally Deleted............................. 81
Section
7.5 Leasing
Reserve Fund.............................. 81
7.5.1
Deposits to Leasing Reserve Fund.................. 81
7.5.2
Withdrawals of Leasing Reserve Funds.............. 82
Section
7.6 Reserve
Funds, Generally.......................... 82
VIII.
DEFAULTS...........................................................
83
Section
8.1 Event of
Default.................................. 83
Section
8.2
Remedies.......................................... 86
Section
8.3 Remedies
Cumulative; Waivers...................... 87
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IX. SPECIAL
PROVISIONS.................................................
87
Section
9.1 Sale of
Notes and Securitization.................. 87
Section
9.2
Securitization Indemnification.................... 89
Section
9.3
Intentionally Deleted............................. 91
Section
9.4
Exculpation....................................... 91
Section
9.5 Management
Agreement.............................. 93
Section
9.6
Servicer.......................................... 95
Section
9.7
Restructuring of Mortgage and/or Mezzanine Loan... 95
X.
MISCELLANEOUS......................................................
97
Section
10.1
Survival.......................................... 97
Section
10.2
Lender's Discretion............................... 97
Section
10.3
Governing Law..................................... 97
Section 10.4
Modification, Waiver in Writing................... 99
Section
10.5
Delay Not a Waiver................................ 99
Section
10.6
Notices........................................... 99
Section
10.7
Trial by Jury..................................... 100
Section
10.8
Headings.......................................... 100
Section
10.9
Severability...................................... 101
Section
10.10
Preferences....................................... 101
Section
10.11
Waiver of Notice.................................. 101
Section
10.12
Remedies of Borrower.............................. 101
Section
10.13
Expenses; Indemnity............................... 101
Section
10.14
Schedules Incorporated............................ 103
Section
10.15
Offsets, Counterclaims and Defenses............... 103
Section
10.16 No
Joint Venture or Partnership; No Third Party
Beneficiaries.................................. 103
Section
10.17
Publicity......................................... 104
Section
10.18
Cross-Default; Cross-Collateralization; Waiver
of
Marshalling of Assets....................... 104
Section
10.19
Waiver of Counterclaim............................ 105
Section
10.20
Conflict; Construction of Documents; Reliance..... 105
Section
10.21
Brokers and Financial Advisors.................... 105
Section
10.22
Prior Agreements.................................. 105
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SCHEDULES
Schedule I -
Properties - Allocated Loan Amounts
Schedule II - O&M
Program Properties
Schedule 4.1.1 - Organizational Chart
Schedule 4.1.4 - Litigation
Schedule 4.1.5 - Material Agreements
Schedule 4.1.26 - Major Leases
Schedule 4.1.30 - Non-Consolidation
Opinion
Schedule 4.1.31 - Properties Not Operated
as a U-Store-It Facility
Schedule 7.1.1 - Required Repairs
Schedule 7.3.2 - Replacement Reserves
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of July 19, 2005 (as amended,
restated,
replaced, supplemented or otherwise
modified from time to time, this
"AGREEMENT"), between LEHMAN BROTHERS BANK,
FSB, a federal stock savings bank,
having an address at 1000 West Street,
Suite 200, Wilmington, Delaware 19801
("LENDER") and YSI VI LLC, a Delaware
limited liability company, having an
address at 6745 Engle Road, Suite 300,
Middleburg Heights, Ohio 44130
("BORROWER").
WITNESSETH:
WHEREAS, Borrower desires to obtain the Loan (as hereinafter
defined)
from Lender; and
WHEREAS, Lender is willing to make the Loan to Borrower, subject
to
and in accordance with the terms of this
Agreement and the other Loan Documents
(as hereinafter defined).
NOW, THEREFORE, in consideration of the making of the Loan by
Lender
and the covenants, agreements,
representations and warranties set forth in this
Agreement, the parties hereto hereby
covenant, agree, represent and warrant as
follows:
DEFINITIONS;
PRINCIPLES OF CONSTRUCTION
SECTION .1
DEFINITIONS.
For all purposes of this Agreement, except as otherwise
expressly
required or unless the context clearly
indicates a contrary intent:
"ACCEPTABLE ACCOUNTANT" shall mean a "Big Four" accounting firm
or
other independent certified public
accountant acceptable to Lender.
"ACCOUNTS" shall have the meaning set forth in the Cash
Management
Agreement.
"AFFILIATE" shall mean, as to any Person, any other Person
that,
directly or indirectly, is in control of,
is controlled by or is under common
control with such Person or is a director
or officer of such Person or of an
Affiliate of such Person.
"AGENT" shall have the meaning set forth in the Cash Management
Agreement.
"ALLOCATED LOAN AMOUNT" shall mean, for an Individual Property,
the
amount set forth on Schedule I attached
hereto.
"ALTA" shall mean American Land Title Association or any
successor
thereto.
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"ANNUAL BUDGET" shall mean the operating budget, including all
planned
capital expenditures, for the Properties
prepared by Borrower for the applicable
Fiscal Year or other period.
"APPLICABLE INTEREST RATE" shall mean 5.13% per annum.
"APPROVED APPRAISAL" shall mean, with respect to an Individual
Property, an appraisal of such Individual
Property (i) executed and delivered to
Lender by a qualified MAI appraiser having
no direct or indirect interest in
such Individual Property or any loan
secured in whole or in part thereby and
whose compensation is not affected by the
approval or disapproval of such
appraisal by Lender; (ii) addressed to
Lender and its successors and assigns;
(iii) satisfying the requirements of the
Federal National Mortgage Association
or the Federal Home Loan Mortgage
Corporation and Title XI of the Federal
Institutions Reform, Recovery and
Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on
the date of such calculation, with
respect to such appraisal and the appraiser
making such appraisal and (iv)
otherwise satisfactory to Lender in all
respects in Lender's sole discretion.
"ASSIGNMENT OF LEASES" shall mean, with respect to each
Individual
Property, that certain first priority
Assignment of Leases and Rents, dated as
of the date hereof, from Borrower, as
assignor, to Lender, as assignee,
assigning to Lender all of Borrower's
interest in and to the Leases and Rents of
such Individual Property as security for
the Loan, as the same may be amended,
restated, replaced, supplemented or
otherwise modified from time to time.
"ASSIGNMENT OF MANAGEMENT AGREEMENT" shall mean that certain
Assignment of Management Agreement and
Subordination of Management Fees dated as
of the date hereof among Lender, Borrower
and Manager, as the same may be
amended, restated, replaced, supplemented
or otherwise modified from time to
time.
"AWARD" shall mean any compensation paid by any Governmental
Authority
in connection with a Condemnation in
respect of all or any part of any
Individual Property.
"BANKRUPTCY CODE" shall mean Title 11 U.S.C.Section 101 et seq.,
and
the regulations adopted and promulgated
pursuant thereto (as the same may be
amended from time to time).
"BASIC CARRYING COSTS" shall mean, with respect to each
Individual
Property, the sum of the following costs
associated with such Individual
Property for the relevant Fiscal Year or
payment period: (i) Taxes and (ii)
Insurance Premiums.
"BORROWER" shall mean YSI VI LLC, a Delaware limited liability
company, together with its successors and
permitted assigns.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
any
other day on which national banks in New
York, New York are not open for
business.
"CAPITAL EXPENDITURES" shall mean, for any period, the amount
expended
for items capitalized under GAAP (including
expenditures for building
improvements or major repairs, leasing
commissions and tenant improvements).
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"CASH MANAGEMENT AGREEMENT" shall mean that certain Cash
Management
Agreement by and among Borrower, Manager,
Agent and Lender dated the date
hereof, as the same may be amended,
restated, replaced, supplemented or
otherwise modified from time to time.
"CASUALTY" shall have the meaning specified in Section 6.2
hereof.
"CASUALTY CONSULTANT" shall have the meaning set forth in
Section
6.4(b)(iii) hereof.
"CASUALTY RETAINAGE" shall have the meaning set forth in
Section
6.4(b)(iv) hereof.
"CLOSING DATE" shall mean the date of the funding of the Loan.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, as
it
may be further amended from time to time,
and any successor statutes thereto,
and applicable U.S. Department of Treasury
regulations issued pursuant thereto
in temporary or final form.
"CONDEMNATION" shall mean a temporary or permanent taking by
any
Governmental Authority as the result or in
lieu or in anticipation of the
exercise of the right of condemnation or
eminent domain, of all or any part of
any Individual Property, or any interest
therein or right accruing thereto,
including any right of access thereto or
any change of grade affecting such
Individual Property or any part
thereof.
"CONDEMNATION PROCEEDS" shall have the meaning set forth in
Section
6.4(b).
"CREDITORS RIGHTS LAWS" shall mean with respect to any Person,
any
existing or future law of any jurisdiction,
domestic or foreign, relating to
bankruptcy, insolvency, reorganization,
conservatorship, arrangement,
adjustment, winding-up, liquidation,
dissolution, composition or other relief
with respect to its debts or debtors.
"DEBT" shall mean the outstanding principal amount set forth in,
and
evidenced by, this Agreement and the Note
together with all interest accrued and
unpaid thereon and all other sums
(including the Yield Maintenance Premium) due
to Lender in respect of the Loan under the
Note, this Agreement, the Security
Instruments or any other Loan Document.
"DEBT SERVICE" shall mean, with respect to any particular period
of
time, all principal and/or interest
payments under the Note.
"DEBT SERVICE COVERAGE RATIO" shall mean a ratio for the
applicable
period in which:
(a) the numerator is
the Net Operating Income (excluding interest on
credit accounts) for such period as set forth in the statements
required
hereunder, without deduction for (i) actual management
fees incurred in connection with the operation of the
Properties,
or (ii) amounts paid to the Reserve Funds, less (A) management
fees equal to the greater of (1) assumed
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management fees of four percent (4%) of Gross Income from
Operations or (2) the actual management fees incurred, and (B)
actual Replacement Reserve Fund contributions equal to an
annual
amount of $0.15 per square foot of gross leaseable area at the
Properties; and
(b) the denominator is
the aggregate amount of principal and interest
due
and payable on the Note or, in the event a Defeasance Event
has occurred, the Undefeased Note, for such period.
"DEFAULT" shall mean the occurrence of any event hereunder or
under
any other Loan Document which, but for the
giving of notice or passage of time,
or both, would be an Event of Default.
"DEFAULT RATE" shall mean, with respect to the Loan, a rate per
annum
equal to the lesser of (a) the Maximum
Legal Rate or (b) three percent (3%)
above the Applicable Interest Rate.
"DEFEASANCE DATE" shall have the meaning set forth in Section
2.4.1(a)(i) hereof.
"DEFEASANCE DEPOSIT" shall mean an amount equal to the
remaining
principal amount of the Note or the
Defeased Note, as applicable, the Yield
Maintenance Premium, any costs and expenses
incurred or to be incurred in the
purchase of U.S. Obligations necessary to
meet the Scheduled Defeasance Payments
and any revenue, documentary stamp or
intangible taxes or any other tax or
charge due in connection with the transfer
of the Note or the Defeased Note, as
applicable, the creation of the Defeased
Note and the Undefeased Note, if
applicable, or otherwise required to
accomplish the agreements of Sections 2.3
and 2.4 hereof.
"DEFEASANCE EVENT" shall have the meaning set forth in Section
2.4.1(a) hereof.
"DEFEASED NOTE" shall have the meaning set forth in Section
2.4.1(a)(v) hereof.
"DISCLOSURE DOCUMENT" shall have the meaning set forth in
Section
9.2(a) hereof.
"ELIGIBLE
ACCOUNT" shall mean a separate and identifiable account from
all other funds held by the holding
institution that is either (a) an account or
accounts maintained with a Federal or
State-chartered depository institution or
trust company which complies with the
definition of Eligible Institution or (b)
a segregated trust account or accounts
maintained with a Federal or
State-chartered depository institution or
trust company acting in its fiduciary
capacity which, in the case of a
State-chartered depository institution or trust
company, is subject to regulations
substantially similar to 12 C.F.R. Section
9.10(b), having in either case a combined
capital and surplus of at least
$50,000,000 and subject to supervision or
examination by Federal and State
authority. An Eligible Account will not be
evidenced by a certificate of
deposit, passbook or other instrument.
"ELIGIBLE INSTITUTION" shall mean a depository institution or
trust
company insured by the Federal Deposit
Insurance Corporation, the short term
unsecured debt obligations or commercial
paper of which are rated at least A-1
by S&P, P-1 by Moody's and F-1+ by
Fitch in the case of accounts in which funds
are held for 30 days or less (or, in the
case of accounts in
4
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which funds are held for more than 30 days,
the long term unsecured debt
obligations of which are rated at least
"AA" by Fitch and S&P and "Aa2" by
Moody's).
"EMBARGOED PERSON" shall have the meaning set forth in Section
4.1.44
hereof.
"ENVIRONMENTAL INDEMNITY" shall mean that certain Environmental
and
Hazardous Substance Indemnification
Agreement executed by Borrower in connection
with the Loan for the benefit of Lender, as
the same may be amended, restated,
replaced, supplemented or otherwise
modified from time to time.
"ENVIRONMENTAL LAWS" shall have the meaning set forth in the
Environmental Indemnity.
"ENVIRONMENTAL LIENS" shall have the meaning set forth in
Section
5.1.22 hereof.
"ENVIRONMENTAL REPORT" shall have the meaning set forth in
Section
4.1.40 hereof.
"ERISA" shall mean the Employee Retirement Income Security Act
of
1974, as amended.
"EVENT OF DEFAULT" shall have the meaning set forth in Section
8.1(a)
hereof.
"EXCHANGE ACT" shall have the meaning set forth in Section
9.2(a)
hereof.
"FISCAL YEAR" shall mean each twelve (12) month period commencing
on
January 1 and ending on December 31 during
each year of the term of the Loan.
"FITCH" shall mean Fitch IBCA, Inc.
"GAAP" shall mean generally accepted accounting principles in
the
United States of America as of the date of
the applicable financial report
consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
commission, office or other authority of
any nature whatsoever for any
governmental unit (Federal, State, county,
district, municipal, city or
otherwise) whether now or hereafter in
existence.
"GROSS INCOME FROM OPERATIONS" shall mean all income, computed
in
accordance with GAAP, derived from the
ownership and operation of the Properties
from whatever source, including, but not
limited to, Rents, utility charges,
escalations, forfeited security deposits,
interest on credit accounts, service
fees or charges, license fees, parking
fees, rent concessions or credits, and
other required pass-throughs but excluding
sales, use and occupancy or other
taxes on receipts required to be accounted
for by Borrower to any Governmental
Authority, refunds and uncollectible
accounts, sales of furniture, fixtures and
equipment, Insurance Proceeds (other than
business interruption or other loss of
income insurance), Awards, unforfeited
security deposits, utility and other
similar deposits and any disbursements to
Borrower from the Reserve Funds, all
as approved by Lender. Gross income
5
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shall not be diminished as a result of the
Security Instrument or the creation
of any intervening estate or interest in
the Properties or any part thereof.
"GUARANTOR" shall mean U-Store-It, L.P., a Delaware limited
partnership.
"GUARANTY" shall mean that certain Guaranty executed by
Guarantor,
dated the date hereof, as the same may be
amended, restated, replaced,
supplemented, or otherwise modified from
time to time.
"HAZARDOUS SUBSTANCES" shall have the meaning set forth in the
Environmental Indemnity.
"IMPROVEMENTS" shall have the meaning set forth in the granting
clause
of the related Security Instrument with
respect to each Individual Property.
"INDEBTEDNESS" of a Person, at a particular date, means the sum
(without duplication) at such date of (a)
indebtedness or liability for borrowed
money; (b) obligations evidenced by bonds,
debentures, notes, or other similar
instruments; (c) obligations for the
deferred purchase price of property or
services (including trade obligations); (d)
obligations under letters of credit;
(e) obligations under acceptance
facilities; (f) all guaranties, endorsements
(other than for collection or deposit in
the ordinary course of business) and
other contingent obligations to purchase,
to provide funds for payment, to
supply funds, to invest in any Person or
entity, or otherwise to assure a
creditor against loss; and (g) obligations
secured by any Liens, whether or not
the obligations have been assumed.
"INDEMNIFIED PARTIES" shall mean Lender, any Person who is or
will
have been involved in the origination of
the Loan, any Person who is or will
have been involved with the servicing of
the Loan, any Person in whose name the
encumbrance created by the Security
Instrument is or will have been recorded,
Persons and entities who may hold or
acquire or will have held a full or partial
interest in the Loan (including, but not
limited to, Investors or prospective
Investors in the Securities, as well as
custodians, trustees and other
fiduciaries who hold or have held a full or
partial interest in the Loan for the
benefit of third parties) as well as the
respective directors, officers,
shareholders, partners, employees, agents,
servants, representatives,
contractors, subcontractors, affiliates,
subsidiaries, participants, successors
and assigns of any and all of the foregoing
(including but not limited to any
other Person who holds or acquires or will
have held a participation or other
full or partial interest in the Loan or the
Properties, whether during the term
of the Loan or as a part of or following a
foreclosure of the Loan and
including, but not limited to, any
successors by merger, consolidation or
acquisition of all or a substantial portion
of Indemnitee's assets and
business).
"INDEMNIFIED TAXES" shall mean any present or future income, stamp
or
other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings,
now or hereafter imposed, levied,
collected, withheld or assessed by any
Governmental Authority.
"INDEPENDENT DIRECTOR" shall have the meaning set forth in
Section
4.1.30(p) hereof.
6
<PAGE>
"INDIVIDUAL LTV RATIO" shall mean, with respect to an
Individual
Property, the ratio of (a) the Allocated
Loan Amount for such Individual
Property to (b) fair market value of such
Individual Property set forth in an
Approved Appraisal.
"INDIVIDUAL PROPERTY" shall mean each parcel of real property,
the
Improvements thereon and all personal
property owned by Borrower and encumbered
by a Security Instrument, together with all
rights pertaining to such property
and Improvements, as more particularly
described in the granting clauses of each
Security Instrument and referred to therein
as the "Property"; a list of all
Individual Properties on the date hereof
appears on Schedule I attached hereto.
"INSOLVENCY OPINION" shall mean that certain opinion letter dated
the
date hereof delivered by Hogan &
Hartson L.L.P. in connection with the Loan.
"INSURANCE PREMIUMS" shall have the meaning set forth in
Section
6.1(b) hereof.
"INSURANCE PROCEEDS" shall have the meaning set forth in
Section
6.4(b) hereof.
"INTELLECTUAL PROPERTY" shall mean patents, licenses,
franchises,
trademarks, trademark rights, trade names,
trade name rights, trade secrets and
copyrights.
"INTEREST ONLY PAYMENT AMOUNT" shall have the meaning set forth
in
Section 2.2.3 hereof.
"INTEREST PERIOD" shall mean, with respect to the application of
the
Interest Only Payment Amount and the
Monthly Debt Service Payment Amount paid by
Borrower on a Payment Date, the period
commencing on the eleventh (11th) day of
the prior calendar month to and including
the tenth (10th) day of the calendar
month in which such Payment Date
occurs.
"INVESTOR" shall mean each purchaser, transferee, assignee,
servicer,
participant or investor in such Securities
or any credit rating agency rating
such Securities.
"LEASE" shall mean any lease, sublease or subsublease, letting,
license, concession or other agreement
(whether written or oral and whether now
or hereafter in effect) pursuant to which
any Person is granted a possessory
interest in, or right to use or occupy all
or any portion of any space in any
Individual Property and every modification,
amendment or other agreement
relating to such lease, sublease,
subsublease, or other agreement entered into
in connection with such lease, sublease,
subsublease, or other agreement and
every guarantee of the performance and
observance of the covenants, conditions
and agreements to be performed and observed
by the other party thereto.
"LEASING RESERVE ACCOUNT" shall have the meaning set forth in the
Cash
Management Agreement.
"LEASING RESERVE FUND" shall have the meaning set forth in
Section
7.5.1 hereof.
"LEASE TERMINATION PAYMENTS" shall mean all payments made to
Borrower
in connection with any termination,
cancellation, surrender, sale or other
disposition of any Lease.
7
<PAGE>
"LEGAL REQUIREMENTS"
shall mean, with respect to each Individual
Property, all Federal, State, county,
municipal and other governmental statutes,
laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions
of Governmental Authorities affecting such
Individual Property or any part
thereof, or the construction, use,
alteration or operation thereof, or any part
thereof, whether now or hereafter enacted
and in force, and all permits,
licenses and authorizations and regulations
relating thereto, and all covenants,
agreements, restrictions and encumbrances
contained in any instruments, either
of record or known to Borrower, at any time
in force affecting such Individual
Property or any part thereof, including,
without limitation, any which may (a)
require repairs, modifications or
alterations in or to such Individual Property
or any part thereof, or (b) in any way
limit the use and enjoyment thereof.
"LEHMAN" shall have the meaning set forth in Section 9.2(b)
hereof.
"LEHMAN GROUP" shall have the meaning set forth in Section
9.2(b)
hereof.
"LENDER" shall mean Lehman Brothers Bank, FSB, a federal stock
savings
bank, together with its successors and
assigns.
"LIABILITIES" shall have the meaning set forth in Section
9.2(b)
hereof.
"LICENSES" shall have the meaning set forth in Section 4.1.22
hereof.
"LIEN" shall mean, with respect to an Individual Property, any
mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security
interest, or any other encumbrance (but
excluding any easements permitted by
Section 5.2.13 hereof), charge or transfer
of, on or affecting Borrower, the
related Individual Property, any portion
thereof or any interest therein,
including, without limitation, any
conditional sale or other title retention
agreement, any financing lease having
substantially the same economic effect as
any of the foregoing, the filing of any
financing statement, and mechanic's,
materialmen's and other similar liens and
encumbrances.
"LOAN" shall mean the loan made by Lender to Borrower pursuant to
this
Agreement.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Note,
the Security Instrument, the Assignment of
Leases, the Environmental Indemnity,
the Assignment of Management Agreement, the
Cash Management Agreement and all
other documents executed and/or delivered
in connection with the Loan.
"LOAN TO VALUE RATIO" shall mean, as of the date of its
calculation,
the ratio of (i) the sum of the outstanding
principal amount of the Loan as of
the date of such calculation to (ii) the
most recent appraised value of the
Properties (according to the most recent
Approved Appraisal available to
Lender).
"LOCKBOX ACCOUNT" shall mean the account, if any, specified in
the
Cash Management Agreement for deposit of
Rents and other receipts from the
Properties.
8
<PAGE>
"MAJOR LEASE" shall mean any Lease which together with all
other
Leases to the same tenant and to all
Affiliates of such tenant, (i) provides for
rental income representing ten percent
(10%) or more of the total rental income
for the applicable Individual Property; or
(ii) covers (A) ten percent (10%) or
more, or (B) 4,000 square feet or more, of
the total leaseable area of the
related Individual Property.
"MANAGEMENT AGREEMENT" shall mean, with respect to any
Individual
Property, the management agreement entered
into by and between Borrower and the
Manager, pursuant to which the Manager is
to provide management and other
services with respect to such Individual
Property.
"MANAGER" shall mean YSI Management LLC, a Delaware limited
liability
company, or, if the context requires, a
Qualifying Manager who is managing the
Properties or any Individual Property in
accordance with the terms and
provisions of this Agreement.
"MATERIAL ADVERSE EFFECT" shall mean any condition which causes
or
continues the occurrence of an Event of
Default or has a material adverse effect
upon (i) the business, operations,
properties, assets, prospects, corporate
structure or condition (financial or
otherwise) of Borrower or any Guarantor,
individually or taken as a whole, (ii) the
ability of Borrower or any Guarantor
to perform, or of Lender to enforce, any of
their obligations under the Loan
Documents or (iii) the value of the
Properties, individually or taken as a
whole.
"MATURITY DATE" shall mean August 11, 2012, or such other date
on
which the final payment of principal of the
Note becomes due and payable as
therein or herein provided, whether at such
stated maturity date, by declaration
of acceleration, or otherwise.
"MAXIMUM LEGAL RATE" shall mean the maximum nonusurious interest
rate,
if any, that at any time or from time to
time may be contracted for, taken,
reserved, charged or received on the
indebtedness evidenced by the Note and as
provided for herein or the other Loan
Documents, under the laws of such State or
States whose laws are held by any court of
competent jurisdiction to govern the
interest rate provisions of the Loan.
"MONTHLY DEBT SERVICE PAYMENT AMOUNT" shall mean a constant
monthly
payment of $435,836.00.
"MOODY'S" shall mean Moody's Investors Service, Inc.
"NET CASH FLOW" for any period shall mean the amount obtained
by
subtracting Operating Expenses and Capital
Expenditures for such period from
Gross Income from Operations for such
period.
"NET CASH FLOW AFTER DEBT SERVICE" for any period shall mean
the
amount obtained by subtracting Debt Service
for such period from Net Cash Flow
for such period.
"NET CASH FLOW SCHEDULE" shall have the meaning set forth in
Section
5.1.11(b) hereof.
9
<PAGE>
"NET OPERATING INCOME" shall mean the amount obtained by
subtracting
Operating Expenses from Gross Income from
Operations.
"NET PROCEEDS" shall have the meaning set forth in Section
6.4(b)
hereof.
"NET PROCEEDS DEFICIENCY" shall have the meaning set forth in
Section
6.4(b)(vi) hereof.
"NONDISQUALIFICATION OPINION" shall mean an opinion of tax
counsel,
which shall be independent outside counsel,
to the effect that a contemplated
action would not materially adversely
affect the Federal income tax status as a
REMIC, trust or other vehicle of any REMIC,
trust or other vehicle in which the
Loan may be included at the time such
opinion is required.
"NON-U.S. ENTITY" shall have the meaning set forth in Section
2.2.10(b) hereof.
"NOTE" shall mean that certain note of even date herewith in
the
principal amount of EIGHTY MILLION AND
00/100 DOLLARS ($80,000,000.00), made by
Borrower in favor of Lender, as the same
may be amended, restated, replaced,
supplemented or otherwise modified from
time to time, including any Defeased
Note and Undefeased Note that may exist
from time to time.
"O&M PROGRAM" shall mean, with respect to each Individual
Property
listed on Schedule II attached hereto, the
asbestos operations and maintenance
program developed by Borrower and approved
by Lender, as the same may be
amended, replaced, supplemented or
otherwise modified from time to time.
"OFFICER'S CERTIFICATE" shall mean a certificate delivered to
Lender
by Borrower which is signed by an
authorized senior officer of the general
partner of the sole member Borrower.
"OPERATING EXPENSES" shall mean the total of all expenditures,
computed in accordance with GAAP, of
whatever kind relating to the operation,
maintenance and management of the
Properties that are incurred on a regular
monthly or other periodic basis, including
without limitation, utilities,
ordinary repairs and maintenance,
insurance, license fees, property taxes and
assessments, advertising expenses,
management fees, payroll and related taxes,
computer processing charges, operational
equipment or other lease payments, all
as approved by Lender, and other similar
costs, but excluding depreciation, Debt
Service, Capital Expenditures and
contributions to the Reserve Funds.
"OTHER CHARGES" shall mean all maintenance charges, impositions
other
than Taxes, and any other charges,
including, without limitation, vault charges
and license fees for the use of vaults,
chutes and similar areas adjoining any
Individual Property, now or hereafter
levied or assessed or imposed against such
Individual Property or any part
thereof.
"PAYMENT DATE" shall mean the eleventh (11th) day of each
calendar
month during the term of the Loan or, if
such day is not a Business Day, the
immediately succeeding Business Day.
10
<PAGE>
"PERMITTED ENCUMBRANCES" shall mean, with respect to an
Individual
Property, collectively, (a) the Liens and
security interests created by the Loan
Documents, (b) all Liens, encumbrances and
other matters disclosed in the Title
Insurance Policies relating to such
Individual Property or any part thereof, (c)
Liens, if any, for Taxes imposed by any
Governmental Authority not yet due or
delinquent, and (d) such other title and
survey exceptions as Lender has
approved or may approve in writing in
Lender's sole discretion, which Permitted
Encumbrances in the aggregate do not
materially adversely affect the value or
use of such Individual Property or
Borrower's ability to repay the Loan.
"PERMITTED INVESTMENTS" shall mean any one or more of the
following
obligations or securities acquired at a
purchase price of not greater than par,
including those issued by Servicer, the
trustee under any Securitization or any
of their respective Affiliates, payable on
demand or having a maturity date not
later than the Business Day immediately
prior to the first Monthly Payment Date
following the date of acquiring such
investment and meeting one of the
appropriate standards set forth below:
(i) obligations of, or obligations fully guaranteed as to
payment
of principal and interest by, the United
States or any agency or instrumentality
thereof provided such obligations are
backed by the full faith and credit of the
United States of America including, without
limitation, obligations of: the U.S.
Treasury (all direct or fully guaranteed
obligations), the Farmers Home
Administration (certificates of beneficial
ownership), the General Services
Administration (participation
certificates), the U.S. Maritime Administration
(guaranteed Title XI financing), the Small
Business Administration (guaranteed
participation certificates and guaranteed
pool certificates), the U.S.
Department of Housing and Urban Development
(local authority bonds) and the
Washington Metropolitan Area Transit
Authority (guaranteed transit bonds);
provided, however, that the investments
described in this clause must (A) have a
predetermined fixed dollar of principal due
at maturity that cannot vary or
change, (B) if rated by S&P, must not
have an "r" highlighter affixed to their
rating, (C) if such investments have a
variable rate of interest, such interest
rate must be tied to a single interest rate
index plus a fixed spread (if any)
and must move proportionately with that
index, and (D) such investments must not
be subject to liquidation prior to their
maturity;
(ii) Federal Housing Administration debentures;
(iii) obligations of the following United States government
sponsored agencies: Federal Home Loan
Mortgage Corp. (debt obligations), the
Farm Credit System (consolidated systemwide
bonds and notes), the Federal Home
Loan Banks (consolidated debt obligations),
the Federal National Mortgage
Association (debt obligations), the Student
Loan Marketing Association (debt
obligations), the Financing Corp. (debt
obligations), and the Resolution Funding
Corp. (debt obligations); provided,
however, that the investments described in
this clause must (A) have a predetermined
fixed dollar of principal due at
maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if
such investments have a variable
rate of interest, such interest rate must
be tied to a single interest rate
index plus a fixed spread (if any) and must
move proportionately with that
index, and (D) such investments must not be
subject to liquidation prior to
their maturity;
11
<PAGE>
(iv) Federal funds, unsecured certificates of deposit, time
deposits, bankers' acceptances and
repurchase agreements with maturities of not
more than 365 days of any bank, the short
term obligations of which at all times
are rated in the highest short term rating
category by each Rating Agency (or,
if not rated by all Rating Agencies, rated
by at least one Rating Agency in the
highest short term rating category and
otherwise acceptable to each other Rating
Agency, as confirmed in writing that such
investment would not, in and of
itself, result in a downgrade,
qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to
the Securities); provided, however,
that the investments described in this
clause must (A) have a predetermined
fixed dollar of principal due at maturity
that cannot vary or change, (B) if
rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if
such investments have a variable rate of
interest, such interest rate must be
tied to a single interest rate index plus a
fixed spread (if any) and must move
proportionately with that index, and (D)
such investments must not be subject to
liquidation prior to their maturity;
(v) fully Federal Deposit Insurance Corporation-insured demand
and time deposits in, or certificates of
deposit of, or bankers' acceptances
issued by, any bank or trust company,
savings and loan association or savings
bank, the short term obligations of which
at all times are rated in the highest
short term rating category by each Rating
Agency (or, if not rated by all Rating
Agencies, rated by at least one Rating
Agency in the highest short term rating
category and otherwise acceptable to each
other Rating Agency, as confirmed in
writing that such investment would not, in
and of itself, result in a downgrade,
qualification or withdrawal of the initial,
or, if higher, then current ratings
assigned to the Securities); provided,
however, that the investments described
in this clause must (A) have a
predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if
such investments have a variable
rate of interest, such interest rate must
be tied to a single interest rate
index plus a fixed spread (if any) and must
move proportionately with that
index, and (D) such investments must not be
subject to liquidation prior to
their maturity;
(vi) debt obligations with maturities of not more than 365 days
and at all times rated by each Rating
Agency (or, if not rated by all Rating
Agencies, rated by at least one Rating
Agency and otherwise acceptable to each
other Rating Agency, as confirmed in
writing that such investment would not, in
and of itself, result in a downgrade,
qualification or withdrawal of the
initial, or, if higher, then current
ratings assigned to the Securities) in its
highest long-term unsecured rating
category; provided, however, that the
investments described in this clause must
(A) have a predetermined fixed dollar
of principal due at maturity that cannot
vary or change, (B) if rated by S&P,
must not have an "r" highlighter affixed to
their rating, (C) if such
investments have a variable rate of
interest, such interest rate must be tied to
a single interest rate index plus a fixed
spread (if any) and must move
proportionately with that index, and (D)
such investments must not be subject to
liquidation prior to their maturity;
(vii) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing
obligations payable on demand or on a
specified date not more than one year after
the date of issuance thereof) with
maturities of not more than 365 days and
that at all times is rated by each
Rating Agency (or, if not rated by all
Rating Agencies, rated by at least one
Rating Agency and otherwise acceptable to
each other Rating Agency, as confirmed
in writing that such investment would not,
in and of itself, result in a
downgrade, qualification or
12
<PAGE>
withdrawal of the initial, or, if higher,
then current ratings assigned to the
Securities) in its highest short-term
unsecured debt rating; provided, however,
that the investments described in this
clause must (A) have a predetermined
fixed dollar of principal due at maturity
that cannot vary or change, (B) if
rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if
such investments have a variable rate of
interest, such interest rate must be
tied to a single interest rate index plus a
fixed spread (if any) and must move
proportionately with that index, and (D)
such investments must not be subject to
liquidation prior to their maturity;
(viii) units of taxable money market funds or mutual funds,
which
funds are regulated investment companies,
seek to maintain a constant net asset
value per share and invest solely in
obligations backed by the full faith and
credit of the United States, which funds
have the highest rating available from
each Rating Agency (or, if not rated by all
Rating Agencies, rated by at least
one Rating Agency and otherwise acceptable
to each other Rating Agency, as
confirmed in writing that such investment
would not, in and of itself, result in
a downgrade, qualification or withdrawal of
the initial, or, if higher, then
current ratings assigned to the Securities)
for money market funds or mutual
funds; and
(ix) any other security, obligation or investment which has
been
approved as a Permitted Investment in
writing by (a) Lender and (b) each Rating
Agency, as evidenced by a written
confirmation that the designation of such
security, obligation or investment as a
Permitted Investment will not, in and of
itself, result in a downgrade,
qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to
the Securities by such Rating
Agency;
provided, however, that no obligation or security shall be a
Permitted
Investment if (A) such obligation or
security evidences a right to receive only
interest payments or (B) the right to
receive principal and interest payments on
such obligation or security are derived
from an underlying investment that
provides a yield to maturity in excess of
120% of the yield to maturity at par
of such underlying investment.
"PERMITTED OWNER" shall mean a Person who satisfies (i), (ii) or
(iii)
below:
(i) a Qualified Transferee;
(ii) a Sponsor; or
(iii) any Person, prior to a Securitization, approved by Lender
(such
approval not to be unreasonably withheld)
or, regarding which, after a
Securitization, Lender has received
confirmation from the Rating Agencies that
such transfer shall not result in a
downgrade, qualification or withdrawal of
the then-current ratings assigned to the
Securities.
"PERMITTED PREPAYMENT DATE" shall have the meaning set forth in
Section 2.3.1 hereof.
"PERMITTED RELEASE DATE" shall mean the date that is the earlier
of
(a) three (3) years from the Closing Date
or (b) two (2) years from the "startup
day" within the meaning of Section
860G(a)(9) of the Code of the REMIC Trust.
13
<PAGE>
"PERSON" shall mean any individual, corporation, partnership,
joint
venture, limited liability company, estate,
trust, unincorporated association,
any Federal, State, county or municipal
government or any bureau, department or
agency thereof and any fiduciary acting in
such capacity on behalf of any of the
foregoing.
"PERSONAL PROPERTY" shall have the meaning set forth in the
granting
clause of the Security Instrument with
respect to each Individual Property.
"PHYSICAL CONDITIONS REPORT" shall mean, with respect to each
Individual Property, a report prepared by a
company satisfactory to Lender
regarding the physical condition of such
Individual Property, satisfactory in
form and substance to Lender in its sole
discretion, which report shall, among
other things, (a) confirm that such
Individual Property and its use complies, in
all material respects, with all applicable
Legal Requirements (including,
without limitation, zoning, subdivision and
building laws) and (b) to the extent
available, include a copy of a final
certificate of occupancy with respect to
all Improvements on such Individual
Property.
"PLAN" shall mean an employee benefit plan (as defined in section
3(3)
of ERISA) whether or not subject to ERISA
or a plan or other arrangement within
the meaning of Section 4975 of the
Code.
"PLAN ASSETS" shall mean assets of a Plan within the meaning of
section 29 C.F.R. Section 2510.3-101 or
similar law.
"POLICIES" shall have the meaning specified in Section 6.1(b)
hereof.
"PROHIBITED PERSON" shall mean any Person:
(a) listed in the Annex to, or otherwise subject to the provisions
of,
the Executive Order No. 13224 on Terrorist
Financing, effective September 24,
2001, and relating to Blocking Property and
Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or
Support Terrorism (the "EXECUTIVE
Order");
(b) that is owned or controlled by, or acting for or on behalf of,
any
person or entity that is listed to the
Annex to, or is otherwise subject to the
provisions of, the Executive Order;
(c) with whom Lender is prohibited from dealing or otherwise
engaging
in any transaction by any terrorism or
money laundering law, including the
Executive Order;
(d) who commits, threatens or conspires to commit or supports
"terrorism" as defined in the Executive
Order;
(e) that is named as a "specially designated national and
blocked
person" on the most current list published
by the U.S. Treasury Department
Office of Foreign Assets Control at its
official website,
http://www.treas.gov.ofac/t11sdn.pdf or at
any replacement website or other
replacement official publication of such
list; or
(f) who is an Affiliate of or affiliated with a Person listed
above.
14
<PAGE>
"PROPERTIES" shall mean, collectively, each and every
Individual
Property which is subject to the terms of
this Agreement.
"PROVIDED INFORMATION" shall have the meaning set forth in
Section
9.1(a) hereof.
"QUALIFIED TRANSFEREE" shall mean any one of the following
Persons:
(i) a pension fund,
pension trust or pension account that (a) has
total real estate assets of at least $1 Billion and (b) is
managed by a Person who controls at least $1 Billion of real
estate equity assets; or
(ii) a pension fund advisor who (a) immediately prior to such
transfer, controls at least $1 Billion of real estate equity
assets and (b)
is acting on behalf of one or more pension funds
that, in the aggregate, satisfy the requirements of clause (i)
of
this definition; or
(iii) an insurance company which is subject to supervision by
the
insurance commissioner, or a similar official or agency, of a
State or territory of the United States (including the District
of Columbia) (a) with a net worth, as of a date no more than
six
(6) months prior to the date of the transfer of at least $500
Million and (b) who, immediately prior to such transfer,
controls
real estate equity assets of at least $1 Billion; or
(iv) a corporation organized under the banking laws of the
United
States or any State or territory of the United States
(including
the District of Columbia) (a) with a combined capital and
surplus
of at least $500 Million and (b) who, immediately prior to such
transfer, controls real estate equity assets of at least $1
Billion; or
(v) any Person (a)
with a long-term unsecured debt rating from each
of the Rating Agencies of at least investment grade or (b) who
(i) owns or operates at least one hundred (100) self-service
storage facilities totaling at least 5 million square feet of
gross leasable area, (ii) has a net worth, as of a date no more
than six (6) months prior to the date of such transfer, of at
least $500 Million and (iii) immediately prior to such
transfer,
controls real estate equity assets of at least $1 Billion.
"QUALIFYING MANAGER" shall mean (i) YSI Management LLC, a
Delaware
limited liability company or (ii) a
reputable and experienced management
organization possessing experience in
managing properties similar in size, scope
and value to the Property, provided that
(a) prior to a Securitization, Borrower
shall have obtained the prior written
consent of Lender for such entity which
consent shall not be unreasonably withheld
and (b) after a Securitization,
Borrower shall have obtained prior written
confirmation from the Rating Agencies
that management of the Property by such
entity will not, in and of itself, cause
a downgrade, withdrawal or qualification of
the then current ratings of the
Securities issued pursuant to the
Securitization.
15
<PAGE>
"RATING AGENCIES" shall mean each of S&P, Moody's and Fitch, or
any
other nationally-recognized statistical
rating agency which has been approved by
Lender.
"REGISTRATION STATEMENT" shall have the meaning set forth in
Section
9.2(b) hereof.
"RELEASE" shall have the meaning set forth in the Environmental
Indemnity.
"RELEASE AMOUNT" shall mean, for an Individual Property, the
product
of the Allocated Loan Amount for such
Individual Property and one hundred
twenty-five percent (125%).
"RELEASED INDIVIDUAL PROPERTY" shall have the meaning set forth
in
Section 2.5.2 hereof.
"REMIC TRUST" shall mean a "real estate mortgage investment
conduit"
within the meaning of Section 860D of the
Code that holds the Note.
"RENTS" shall mean, with respect to each Individual Property,
all
rents, rent equivalents, moneys payable as
damages or in lieu of rent or rent
equivalents, royalties (including, without
limitation, all oil and gas or other
mineral royalties and bonuses), income,
receivables, receipts, revenues,
deposits (including, without limitation,
forfeited security deposits, utility
and other deposits), accounts, cash,
issues, profits, charges for services
rendered, and other consideration of
whatever form or nature received by or paid
to or for the account of or benefit of
Borrower or its agents or employees from
any and all sources arising from or
attributable to the Individual Property, and
proceeds, if any, from business
interruption or other loss of income insurance.
"REPLACED PROPERTY" shall have the meaning set forth in Section
2.7(a)
hereof.
"REPLACEMENT MANAGEMENT AGREEMENT" shall mean, collectively,
(a)
either (i) a management agreement with a
Qualifying Manager substantially in the
same form and substance as the Management
Agreement, or (ii) a management
agreement with a Qualifying Manager, which
management agreement shall be
acceptable to Lender in form and substance,
provided, with respect to this
subclause (ii), Lender, at its option, may
require that Borrower obtain
confirmation from the applicable Rating
Agencies that such management agreement
will not result in a downgrade, withdrawal
or qualification of the initial, or
if higher, then current rating of the
Securities or any class thereof; and (b) a
conditional assignment of management
agreement substantially in the form of the
Assignment of Management Agreement (or such
other form acceptable to Lender),
executed and delivered to Lender by
Borrower and such Qualifying Manager at
Borrower's expense.
"REPLACEMENT RESERVE ACCOUNT" shall have the meaning set forth
in
Section 7.3.1 hereof.
"REPLACEMENT RESERVE FUND" shall have the meaning set forth in
Section
7.3.1 hereof.
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"REPLACEMENT RESERVE MONTHLY DEPOSIT" shall mean (i) $18,370.00,
or
(ii) following the release of an Individual
Property from the lien of its
related Security Instrument pursuant to
Section 2.5 hereof or following the
release and substitution of an Individual
Property pursuant to Section 2.7
hereof, an amount equal to (A) the
aggregate square footage of all Improvements
at the Properties after giving effect to
such release or substitution times (B)
$0.15, divided by 12.
"REPLACEMENTS" shall have the meaning set forth in Section
7.3.1
hereof.
"REQUIRED REPAIR ACCOUNT" shall have the meaning set forth in the
Cash
Management Agreement.
"REQUIRED REPAIR FUND" shall have the meaning set forth in
Section
7.1.1 hereof.
"REQUIRED REPAIRS" shall have the meaning set forth in Section
7.1.1
hereof.
"RESERVE FUNDS" shall mean the Required Repair Fund, the Tax
and
Insurance Escrow Fund, the Replacement
Reserve Fund or any other escrow fund
established or required by the Loan
Documents.
"RESTORATION" shall have the meaning set forth in Section 6.2
hereof.
"RESTRICTED PARTY" shall mean Borrower, SPC Party, Guarantor,
Sponsor
or any affiliated Manager or any
shareholder, partner, member or non-member
manager, or any direct or indirect legal or
beneficial owner of, Borrower, SPC
Party, Guarantor, Sponsor, any affiliated
Manager or any non-member manager.
"SCHEDULED DEFEASANCE PAYMENTS" shall have the meaning set forth
in
Section 2.4.1(b) hereof.
"SECURITIES" shall have the meaning set forth in Section 9.1
hereof.
"SECURITIES ACT" shall have the meaning set forth in Section
9.2(a)
hereof.
"SECURITIZATION" shall have the meaning set forth in Section
9.1
hereof.
"SECURITY AGREEMENT" shall have the meaning set forth in
Section
2.4.1(a)(vi) hereof.
"SECURITY INSTRUMENT" shall mean, with respect to each
Individual
Property, that certain first priority
Mortgage (or Deed of Trust or Deed to
Secure Debt, as applicable) and Security
Agreement, executed and delivered by
Borrower as security for the Loan and
encumbering such Individual Property, as
the same may be amended, restated,
replaced, supplemented or otherwise modified
from time to time.
"SERVICER" shall have the meaning set forth in Section 9.6
hereof.
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"SERVICING AGREEMENT" shall have the meaning set forth in Section
9.6
hereof.
"SEVERED LOAN DOCUMENTS" shall have the meaning set forth in
Section
8.2(c) hereof.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of The
McGraw-Hill Companies.
"SPC PARTY" shall have the meaning set forth in Section
4.1.30(o)
hereof.
"SPECIAL PURPOSE ENTITY" shall mean a Person which satisfies
the
requirements of Section 4.1.30 hereof.
"SPONSOR" shall mean U-Store-It Trust, a Maryland real estate
investment trust.
"STATE" shall mean, with respect to an Individual Property, the
State
or Commonwealth in which such Individual
Property or any part thereof is
located.
"SUBSTITUTE PROPERTY" shall have the meaning set forth in
Section
2.7(a) hereof.
"SUBSTITUTE SECURITY INSTRUMENT" shall have the meaning set forth
in
Section 2.7(a) hereof.
"SUBSTITUTION" shall have the meaning set forth in Section
2.7(a)
hereof.
"SUBSTITUTION DATE" shall have the meaning set forth in Section
2.7(c)(iv) hereof.
"SUCCESSOR BORROWER" shall have the meaning set forth in Section
2.4.2
hereof.
"SURVEY" shall mean a survey of the Individual Property in
question
delivered to Lender and which survey has
been prepared by a surveyor licensed in
the State and satisfactory to Lender and
the company or companies issuing the
Title Insurance Policies, and containing a
certification of such surveyor
satisfactory to Lender.
"TAX AND INSURANCE ESCROW FUND" shall have the meaning set forth
in
Section 7.2 hereof.
"TAXES" shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents,
now or hereafter levied or assessed or
imposed against any Individual Property or
part thereof.
"TAX OPINION" shall mean an opinion of competent counsel to the
effect
that a contemplated action (a) will not
result in any deemed exchange pursuant
to Section 1001 of the Code of the Note;
and (b) will not adversely affect the
Note status as indebtedness for Federal
income tax purposes.
"TITLE INSURANCE POLICY" shall mean, with respect to each
Individual
Property, an ALTA mortgagee title insurance
policy in the form (acceptable to
Lender) (or, if an Individual Property is
in a State which does not permit the
issuance of such ALTA policy, such form
as
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shall be permitted in such State and
acceptable to Lender) issued with respect
to such Individual Property and insuring
the lien of the Security Instrument
encumbering such Individual Property.
"TRADED ENTITY" shall have the meaning set forth in Section
5.2.13(h)
hereof.
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform
Commercial
Code as in effect in the applicable State
in which an Individual Property is
located.
"UNDEFEASED NOTE" shall have the meaning set forth in Section
2.4.1(a)(v) hereof.
"UNDERWRITER GROUP" shall have the meaning set forth in Section
9.2(b)
hereof.
"U.S. OBLIGATIONS" shall mean direct non-callable obligations of
the
United States of America.
"YIELD MAINTENANCE PREMIUM" shall mean the amount (if any) which,
when
added to the remaining principal amount of
the Note or the principal amount of a
Defeased Note, as applicable, will be
sufficient to purchase U.S. Obligations
providing the required Scheduled Defeasance
Payments.
SECTION .2
PRINCIPLES OF CONSTRUCTION.
All references to sections and schedules are to sections and
schedules
in or to this Agreement unless otherwise
specified. All uses of the word
"including" shall mean "including, without
limitation" unless the context shall
indicate otherwise. Unless otherwise
specified, the words "hereof," "herein" and
"hereunder" and words of similar import
when used in this Agreement shall refer
to this Agreement as a whole and not to any
particular provision of this
Agreement. Unless otherwise specified, all
meanings attributed to defined terms
herein shall be equally applicable to both
the singular and plural forms of the
terms so defined.
GENERAL
TERMS
SECTION .1 LOAN
COMMITMENT; DISBURSEMENT TO BORROWER.
.1.1 THE LOAN.
Subject to and upon the terms and conditions set forth
herein, Lender hereby agrees to make and
Borrower hereby agrees to accept the
Loan on the Closing Date.
.1.2
DISBURSEMENT TO BORROWER. Borrower may request and receive only
one
borrowing hereunder in respect of the Loan
and any amount borrowed and repaid
hereunder in respect of the Loan may not be
reborrowed.
.1.3 THE NOTE,
SECURITY INSTRUMENTS AND LOAN DOCUMENTS. The Loan shall be
evidenced by the Note and secured by the
Security Instrument, the Assignment of
Leases and the other Loan Documents.
.1.4 USE OF
PROCEEDS. Borrower shall use the proceeds of the Loan to (a)
pay the cost of the acquisition of the
Properties, (b) repay and discharge any
existing loans relating to the
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Properties, (c) pay all past-due Basic
Carrying Costs, if any, in respect of the
Properties, (d) make deposits into the
Reserve Funds on the Closing Date in the
amounts provided herein, (e) pay costs and
expenses incurred in connection with
the Closing of the Loan, as approved by
Lender, (f) fund any working capital
requirements of the Properties, and (g)
distribute the balance, if any, to
Borrower.
SECTION .2
INTEREST; LOAN PAYMENTS; LATE PAYMENT CHARGE.
.2.1 INTEREST
GENERALLY. Interest on the outstanding principal balance of
the Loan shall accrue from the Closing Date
to but excluding the Maturity Date
at the Applicable Interest Rate.
.2.2 INTEREST
CALCULATION. Interest on the outstanding principal balance of
the Loan shall be calculated by multiplying
(a) the actual number of days
elapsed in the period for which the
calculation is being made by (b) a daily
rate based on a three hundred sixty (360)
day year by (c) the outstanding
principal balance.
.2.3 PAYMENTS.
Borrower shall pay to Lender (a) on the Closing Date, an
amount equal to interest only on the
outstanding principal balance of the Loan
from the Closing Date up to but not
including the eleventh day of the next
succeeding calendar month, (b) on September
11, 2005 and on each Payment Date
thereafter through and including the
Payment Date occurring on August 11, 2007,
interest only on the outstanding principal
balance of the Loan (the "INTEREST
ONLY PAYMENT AMOUNT"), and (c) on each
Payment Date commencing with the Payment
Date occurring on September 11, 2007 up to
and including the Maturity Date, an
amount equal to the Monthly Debt Service
Payment Amount, which payments shall be
applied first to accrued and unpaid
interest on the Loan for the prior Interest
Period and the balance to the outstanding
principal of the Loan.
.2.4
INTENTIONALLY DELETED.
.2.5 PAYMENT ON
MATURITY DATE. Borrower shall pay to Lender on the Maturity
Date, the outstanding principal balance of
the Loan, all accrued and unpaid
interest and all other amounts due
hereunder and under the Note, the Security
Instruments and the other Loan
Documents.
.2.6 PAYMENTS
AFTER DEFAULT. Upon the occurrence and during the continuance
of an Event of Default, (a) interest on the
outstanding principal balance of the
Loan and, to the extent permitted by law,
overdue interest and other amounts due
in respect of the Loan, shall accrue at the
Default Rate, calculated from the
date such payment was due without regard to
any grace or cure periods contained
herein and (b) Lender shall be entitled to
receive and Borrower shall pay to
Lender on each Payment Date an amount equal
to the Net Cash Flow After Debt
Service for the prior month, such amount to
be applied by Lender to the payment
of the Debt in such order as Lender shall
determine in its sole discretion,
including, without limitation, alternating
applications thereof between interest
and principal. Interest at the Default Rate
and Net Cash Flow After Debt Service
shall both be computed from the occurrence
of the Event of Default until the
actual receipt and collection of the Debt
(or that portion thereof that is then
due). To the extent permitted by applicable
law, interest at the Default Rate
shall be added to the Debt, shall
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<PAGE>
itself accrue interest at the same rate as
the Loan and shall be secured by the
Security Instruments. This paragraph shall
not be construed as an agreement or
privilege to extend the date of the payment
of the Debt, nor as a waiver of any
other right or remedy accruing to Lender by
reason of the occurrence of any
Event of Default; the acceptance of any
payment of Net Cash Flow After Debt
Service shall not be deemed to cure or
constitute a waiver of any Event of
Default; and Lender retains its rights
under this Note to accelerate and to
continue to demand payment of the Debt upon
the happening of any Event of
Default, despite any payment of Net Cash
Flow After Debt Service.
.2.7 LATE
PAYMENT CHARGE. If any principal, interest or any other sums
due
under the Loan Documents is not paid by
Borrower on or prior to the date on
which it is due, Borrower shall pay to
Lender upon demand an amount equal to the
lesser of five percent (5%) of such unpaid
sum or the maximum amount permitted
by applicable law in order to defray the
expense incurred by Lender in handling
and processing such delinquent payment and
to compensate Lender for the loss of
the use of such delinquent payment. Any
such amount shall be secured by the
Security Instruments and the other Loan
Documents to the extent permitted by
applicable law.
.2.8 USURY
SAVINGS. This Agreement and the Note are subject to the express
condition that at no time shall Borrower be
obligated or required to pay
interest on the principal balance of the
Loan at a rate which could subject
Lender to either civil or criminal
liability as a result of being in excess of
the Maximum Legal Rate. If, by the terms of
this Agreement or the other Loan
Documents, Borrower is at any time required
or obligated to pay interest on the
principal balance due hereunder at a rate
in excess of the Maximum Legal Rate,
the Applicable Interest Rate or the Default
Rate, as the case may be, shall be
deemed to be immediately reduced to the
Maximum Legal Rate and all previous
payments in excess of the Maximum Legal
Rate shall be deemed to have been
payments in reduction of principal and not
on account of the interest due
hereunder. All sums paid or agreed to be
paid to Lender for the use,
forbearance, or detention of the sums due
under the Loan, shall, to the extent
permitted by applicable law, be amortized,
prorated, allocated, and spread
throughout the full stated term of the Loan
until payment in full so that the
rate or amount of interest on account of
the Loan does not exceed the Maximum
Legal Rate of interest from time to time in
effect and applicable to the Loan
for so long as the Loan is outstanding.
.2.9 MAKING OF
PAYMENTS. Each payment by Borrower hereunder or under the
Note shall be made in funds settled through
the New York Clearing House
Interbank Payments System or other funds
immediately available to Lender by
noon, New York City time, on the date such
payment is due, to Lender by deposit
to such account as Lender may designate by
written notice to Borrower. Whenever
any payment hereunder or under the Note
shall be stated to be due on a day which
is not a Business Day, such payment shall
be made on the immediately preceding
Business Day.
.2.10
INDEMNIFIED TAXES.
(a) All payments
made by Borrower hereunder shall be made free and clear
of, and without reduction for or on account
of, Indemnified Taxes, excluding (i)
Indemnified Taxes measured by Lender's net
income, and franchise taxes imposed
on it, by the jurisdiction under
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<PAGE>
the laws of which Lender is resident or
organized, or any political subdivision
thereof, (ii) taxes measured by Lender's
overall net income, and franchise taxes
imposed on it, by the jurisdiction of
Lender's applicable lending office or any
political subdivision thereof or in which
Lender is resident or engaged in
business, and (iii) withholding taxes
imposed by the United States of America,
any State, commonwealth, protectorate
territory or any political subdivision or
taxing authority thereof or therein as a
result of the failure of Lender which
is a Non-U.S. Entity to comply with the
terms of paragraph (b) below. If any non
excluded Indemnified Taxes are required to
be withheld from any amounts payable
to Lender hereunder, the amounts so payable
to Lender shall be increased to the
extent necessary to yield to Lender (after
payment of all non excluded
Indemnified Taxes) interest or any such
other amounts payable hereunder at the
rate or in the amounts specified hereunder.
Whenever any non excluded
Indemnified Tax is payable pursuant to
applicable law by Borrower, Borrower
shall send to Lender an original official
receipt showing payment of such non
excluded Indemnified Tax or other evidence
of payment reasonably satisfactory to
Lender. Borrower hereby indemnifies Lender
for any incremental taxes, interest
or penalties that may become payable by
Lender which may result from any failure
by Borrower to pay any such non excluded
Indemnified Tax when due to the
appropriate taxing authority or any failure
by Borrower to remit to Lender ender
the required receipts or other required
documentary evidence.
(b) In the event
that Lender or any successor and/or assign of Lender is
not incorporated under the laws of the
United States of America or a State
thereof (a "NON-U.S. ENTITY") Lender agrees
that, prior to the first date on
which any payment is due such entity
hereunder, it will deliver to Borrower two
duly completed copies of United States
Internal Revenue Service Form W-8BEN or
W-8ECI or successor applicable form, as the
case may be, certifying in each case
that such entity is entitled to receive
payments under the Note, without
deduction or withholding of any United
States Federal income taxes. Each entity
required to deliver to Borrower a Form
W-8BEN or W-8ECI pursuant to the
preceding sentence further undertakes to
deliver to Borrower two further copies
of such forms, or successor applicable
forms, or other manner of certification,
as the case may be, on or before the date
that any such form expires (which, in
the case of the Form W-8ECI, is the last
day of each U.S. taxable year of the
Non-U.S. Entity) or becomes obsolete or
after the occurrence of any event
requiring a change in the most recent form
previously delivered by it to
Borrower, and such other extensions or
renewals thereof as may reasonably be
requested by Borrower, certifying in the
case of a Form W-8BEN or W-8ECI that
such entity is entitled to receive payments
under the Note without deduction or
withholding of any United States Federal
income taxes, unless in any such case
an event (including, without limitation,
any change in treaty, law or
regulation) has occurred prior to the date
on which any such delivery would
otherwise be required which renders all
such forms inapplicable or which would
prevent such entity from duly completing
and delivering any such form with
respect to it and such entity advises
Borrower that it is not capable of
receiving payments without any deduction or
withholding of United States Federal
income tax.
SECTION .3
PREPAYMENTS.
.3.1 VOLUNTARY
PREPAYMENTS. Except as otherwise provided herein, Borrower
shall not have the right to prepay the Loan
in whole or in part prior to the
Maturity Date. On May 11, 2012 (the
"PERMITTED PREPAYMENT DATE") or on any
Payment Date thereafter, Borrower may, at
its option and upon thirty (30) days
prior written notice to Lender, prepay the
Debt in whole or in
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part without payment of the Yield
Maintenance Premium, provided, Borrower pays
to Lender all accrued and unpaid interest
on the amount of principal being
prepaid through and including the date of
prepayment. Any partial prepayment
shall be applied to the last payments of
principal due under the Loan.
.3.2 MANDATORY
PREPAYMENTS. On each date on which Borrower actually
receives any Net Proceeds, if Lender is not
obligated to make such Net Proceeds
available to Borrower for the restoration
of any Individual Property, Borrower
shall prepay the outstanding principal
balance of the Note in an amount equal to
one hundred percent (100%) of such Net
Proceeds. No Yield Maintenance Premium
shall be due in connection with any
prepayment made pursuant to this Section
2.3.2. Any partial prepayment under this
Section shall be applied to the last
payments of principal due under the
Loan.
.3.3 PREPAYMENTS
AFTER DEFAULT. If, following an Event of Default, payment
of all or any part of the Debt is tendered
by Borrower or otherwise recovered by
Lender, such tender or recovery shall be
deemed a voluntary prepayment by
Borrower in violation of the prohibition
against prepayment set forth in Section
2.3.1 hereof and, if such payment is made
prior to the Permitted Prepayment
Date, Borrower shall pay, in addition to
the Debt, (i) an amount equal to the
greater of (a) one percent (1%) of the
outstanding principal amount of the Loan
to be prepaid or satisfied, or (b) the
Yield Maintenance Premium that would be
required if a Defeasance Event had occurred
in an amount equal to the
outstanding principal amount of the Loan to
be satisfied or prepaid and (ii) all
accrued and unpaid interest on the amount
of principal being prepaid through and
including the date of prepayment.
SECTION .4
DEFEASANCE.
.4.1 VOLUNTARY
DEFEASANCE. (a) Provided no Event of Default shall then
exist, Borrower shall have the right at any
time after the Permitted Release
Date to voluntarily defease all or any
portion of the Loan by and upon
satisfaction of the following conditions
(such event being a "DEFEASANCE
EVENT"):
(i) Borrower shall provide not less than thirty (30) days prior
written notice
to Lender specifying the Payment Date (the "DEFEASANCE
DATE") on which
the Defeasance Event will occur and the principal amount of
the Loan to be
defeased;
(ii) Borrower shall pay to Lender all accrued and unpaid interest
on
the principal
balance of the Note to and including the Defeasance Date;
(iii) Borrower shall pay to Lender all other sums, not
including
scheduled
interest or principal payments, then due under the Note, this
Agreement, the
Security Instruments, and the other Loan Documents;
(iv) Borrower shall deliver to Lender the Defeasance Deposit
applicable to
the Defeasance Event;
(v) In the event only a portion of the Loan is the subject of
the
Defeasance
Event, Borrower shall prepare all necessary documents to modify
this Agreement
and to amend and restate the Note and issue two substitute
notes for the
Note, one note having a
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principal
balance equal to the defeased portion of the original Note and
a
maturity date
equal to the Permitted Prepayment Date (the "DEFEASED NOTE")
and the other
note having a principal balance equal to the undefeased
portion of the
original Note and a maturity date equal to the Maturity Date
(the "UNDEFEASED
NOTE"). The Defeased Note and the Undefeased Note shall
otherwise have
terms identical to the original Note, except that a Defeased
Note cannot be
the subject of any further Defeasance Event. The Undefeased
Note may be the
subject of a further Defeasance Event in accordance with
the terms and
provisions of this Section 2.4 (the term "Note", as used in
this clause (v)
for such purpose, being deemed to refer to the Undefeased
Note that is the
subject of further defeasance), provided, however, that no
such partial
defeasance shall take place unless the conditions outlined in
Section 2.5 are
satisfied;
(vi) Borrower shall execute and deliver a security agreement, in
a
form and
substance that would be reasonably satisfactory to a prudent
institutional
lender, creating a first priority lien on the Defeasance
Deposit and the
U.S. Obligations purchased with the Defeasance Deposit in
accordance with
the provisions of this Section 2.4 (the "SECURITY
AGREEMENT");
(vii) Borrower shall deliver an opinion of counsel for Borrower in
a
form and
substance that would be reasonably satisfactory to a prudent
institutional
lender stating, among other things, that Borrower has legally
and validly
transferred and assigned the U.S. Obligations and all
obligations,
rights and duties under and to the Note or the Defeased Note
(as applicable)
to the Successor Borrower, that Lender has a perfected
first priority
security interest in the Defeasance Deposit and the U.S.
Obligations
delivered by Borrower and that any REMIC Trust formed pursuant
to a
Securitization will not fail to maintain its status as a "real
estate
mortgage
investment conduit" within the meaning of Section 860D of the
Code
as a result of
such Defeasance Event;
(viii) Borrower shall deliver confirmation in writing from the
applicable
Rating Agencies to the effect that such defeasance and release
will not result
in a downgrading, withdrawal or qualification of the
respective
ratings in effect immediately prior to such Defeasance Event
for
the Securities
issued in connection with the Securitization which are then
outstanding. If
required by the applicable Rating Agencies, Borrower shall
also deliver or
cause to be delivered a non-consolidation opinion with
respect to the
Successor Borrower in form and substance satisfactory to
Lender and the
applicable Rating Agencies;
(ix) Borrower shall deliver an Officer's Certificate certifying
that
the requirements
set forth in this Section 2.4.1(a) have been satisfied;
(x) Borrower shall deliver a certificate of an Acceptable
Accountant
certifying that
the U.S. Obligations purchased with the Defeasance Deposit
generate monthly
amounts equal to or greater than the Scheduled Defeasance
Payments;
(xi) Borrower shall deliver such other certificates, documents
or
instruments as
Lender may reasonably request; and
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<PAGE>
(xii) Borrower shall pay all costs and expenses of Lender incurred
in
connection with
the Defeasance Event, including, without limitation, (A)
any costs and
expenses associated with a release of the Lien of the related
Security
Instrument as provided in Section 2.5 hereof, (B) Lender's
reasonable
attorneys' fees and expenses, (C) the costs and expenses of the
Rating Agencies,
(D) any revenue, documentary stamp or intangible taxes or
any other tax or
charge due in connection with the transfer of the Note, or
otherwise
required to accomplish the defeasance and (E) the reasonable
costs and
expenses actually incurred by Servicer and any trustee,
including
reasonable
attorneys' fees.
(b) In connection with each Defeasance Event, Borrower hereby
appoints Lender as its agent and
attorney-in-fact for the purpose of using the
Defeasance Deposit to purchase U.S.
Obligations which provide payments on or
prior to, but as close as possible to, all
successive scheduled payment dates
after the Defeasance Date upon which
interest and principal payments are
required under the Note, in the case of a
Defeasance Event for the entire
outstanding principal balance of the Loan,
or the Defeased Note, in the case of
a Defeasance Event for only a portion of
the outstanding principal balance of
the Loan, as applicable, and in amounts
equal to the scheduled payments due on
such dates under this Agreement and the
Note or the Defeased Note, as
applicable, (including without limitation
scheduled payments of principal,
interest, servicing fees (if any), the
Rating Surveillance Charge and any other
amounts due under the Loan Documents on
such dates) and assuming such Note or
Defeased Note, as applicable, is prepaid in
full on the Permitted Prepayment
Date (the "SCHEDULED DEFEASANCE PAYMENTS").
Borrower, pursuant to the Security
Agreement or other appropriate document,
shall authorize and direct that the
payments received from the U.S. Obligations
may be made directly to the Lockbox
Account (unless otherwise directed by
Lender) and applied to satisfy the
obligations of Borrower under the Note or
the Defeased Note, as applicable. Any
portion of the Defeasance Deposit in excess
of the amount necessary to purchase
the U.S. Obligations required by this
Section 2.4 and satisfy Borrower's other
obligations under this Section 2.4 and
Section 2.5 hereof shall be remitted to
Borrower.
.4.2 SUCCESSOR
BORROWER. In connection with any Defeasance Event, Borrower
shall establish or designate a successor
entity (the "SUCCESSOR BORROWER") which
shall be a single purpose bankruptcy remote
entity with one (1) Independent
Director approved by Lender (two (2) if
required by any Rating Agency), and
Borrower shall transfer and assign all
obligations, rights and duties under and
to the Note or the Defeased Note, as
applicable, together with the pledged U.S.
Obligations to such Successor Borrower.
Such Successor Borrower shall assume the
obligations under the Note or the Defeased
Note, as applicable, and the Security
Agreement and Borrower shall be relieved of
its obligations under such documents
and the other Loan Documents, except with
respect to those obligations which are
expressly stated to survive. Borrower shall
pay $1,000 to any such Successor
Borrower as consideration for assuming the
obligations under the Note or the
Defeased Note, as applicable, and the
Security Agreement. Notwithstanding
anything in this Agreement to the contrary,
no other assumption fee shall be
payable upon a transfer of the Note or the
Defeased Note, as applicable, in
accordance with this Section 2.4.2, but
Borrower shall pay all costs and
expenses incurred by Lender, including
Lender's attorneys' fees and expenses,
incurred in connection therewith.
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SECTION .5
RELEASE OF PROPERTY. Except as set forth in Section 2.4 hereof
and this Section 2.5, no repayment,
prepayment or defeasance of all or any
portion of the Note shall cause, give rise
to a right to require, or otherwise
result in, the release of any Lien of any
Security Instrument on any Individual
Property.
.5.1 RELEASE OF ALL
PROPERTIES.
(a) After the
Permitted Release Date, if Borrower has elected to defease
the entire Loan and the applicable
requirements of Section 2.4 hereof and this
Section 2.5 have been satisfied, all of the
Properties shall be released from
the Liens of their respective Security
Instruments and the U.S. Obligations,
pledged pursuant to the Security Agreement,
shall be the sole source of
collateral securing the Note.
(b) In
connection with the release of the Security Instruments,
Borrower
shall submit to Lender, not less than
thirty (30) days prior to the Defeasance
Date, a release of Lien (and related Loan
Documents) for each Individual
Property for execution by Lender. Such
release shall be in a form appropriate in
each jurisdiction in which an Individual
Property is located and that would be
satisfactory to a prudent institutional
lender. In addition, Borrower shall
provide all other documentation Lender
reasonably requires to be delivered by
Borrower in connection with such release,
together with an Officer's Certificate
certifying that such documentation (i) is
in compliance with all applicable
Legal Requirements, and (ii) will,
following execution by Lender and recordation
thereof, effect such releases in accordance
with the terms of this Agreement.
.5.2 RELEASE OF
INDIVIDUAL PROPERTY. After the Permitted Release Date, if
Borrower has elected to defease a portion
of the Loan and the applicable
requirements of Section 2.4 hereof and this
Section 2.5 have been satisfied,
Borrower may obtain the release of an
Individual Property from the Lien of the
Security Instrument thereon (and related
Loan Documents) and the release of
Borrower's obligations under the Loan
Documents with respect to such Individual
Property (other than those expressly stated
to survive), upon the satisfaction
of each of the following conditions:
(a) The
principal balance of the Defeased Note shall equal or exceed
the
Release Amount for the applicable
Individual Property; provided, however, if the
undefeased portion of the Loan at the time
a release is requested is less than
the Release Amount, the Defeased Note shall
equal the remaining undefeased
portion of the Loan at the time of
release;
(b) Borrower
shall provide Lender with at least thirty (30) days but no
more than ninety (90) days prior written
notice of its request to obtain a
release of the Individual Property;
(c) Borrower
shall defease the portion of the Note equal to the Release
Amount of the Individual Property being
released (together with all accrued and
unpaid interest on the principal amount
being defeased) in accordance with the
terms and conditions of Sections 2.4.1 and
2.4.2 hereof;
(d) Borrower
shall submit to Lender, not less than thirty (30) days prior
to the date of such release, a release of
Lien (and related Loan Documents) for
such Individual Property for execution by
Lender. Such release shall be in a
form appropriate in each jurisdiction in
which
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the Individual Property is located and that
would be satisfactory to a prudent
institutional lender. In addition, Borrower
shall provide all other
documentation Lender reasonably requires to
be delivered by Borrower in
connection with such release, together with
an Officer's Certificate certifying
that such documentation (i) is in
compliance with all applicable Legal
Requirements, (ii) will, following
execution by Lender and recordation thereof,
effect such release in accordance with the
terms of this Agreement, and (iii)
will not impair or otherwise adversely
affect the Liens, security interests and
other rights of Lender under the Loan
Documents not being released (or as to the
parties to the Loan Documents and
Properties subject to the Loan Documents not
being released);
(e) After giving
effect to such release, the Debt Service Coverage Ratio
for the Properties then remaining subject
to the Lien of the Security Instrument
shall be at least equal to the Debt Service
Coverage Ratio for all of the
Properties (including the Individual
Property to be released) for the twelve
(12) full calendar months immediately
preceding the release of such Individual
Property.
(f)
Intentionally Deleted;
(g) Lender shall
have received evidence that the Individual Property to be
released shall be conveyed to a Person
other than Borrower or SPC Party;
(h) Lender shall
have received payment of all Lender's costs and expenses,
including due diligence review costs and
reasonable counsel fees and
disbursements incurred in connection with
the release of the Individual Property
from the lien of the related Security
Instrument and the review and approval of
the documents and information required to
be delivered in connection therewith;
and
(i) Immediately
following such release, the Allocated Loan Amount of the
Individual Property released (the "RELEASED
INDIVIDUAL PROPERTY") shall be
reduced to zero and the Allocated Loan
Amounts of the Individual Properties
remaining subject to the Lien of a Security
Instrument immediately following
such release shall be reduced pro rata by
the difference between the Release
Amount of the Released Individual Property
and the original Allocated Loan
Amount of the Released Individual
Property.
.5.3 RELEASE ON
PAYMENT IN FULL. Lender shall, upon the written request and
at the expense of Borrower, upon payment in
full of all principal and interest
on the Loan and all other amounts due and
payable under the Loan Documents in
accordance with the terms and provisions of
the Note and this Agreement, release
the Lien of the Security Instrument on each
Individual Property not theretofore
released.
SECTION .6
MANNER OF MAKING PAYMENTS; CASH MANAGEMENT.
.6.1 DEPOSITS
INTO LOCKBOX ACCOUNT. Borrower shall cause all Rents from the
Properties to be deposited into the Lockbox
Account in accordance with the Cash
Management Agreement. Without limitation of
the foregoing, Borrower shall, and
shall cause Manager to, (a) cause or direct
all tenants under Leases to deliver
all Rents payable thereunder either
directly to the Lockbox Account or to
Manager for deposit into the Lockbox
Account, and (b) deposit all amounts
received by Borrower or Manager
constituting Rents or other revenue of any kind
from
27
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the Properties into the Lockbox Account
within one (1) Business Day of receipt
thereof. Disbursements from the Lockbox
Account will be made in accordance with
the terms and conditions of this Agreement
and the Cash Management Agreement.
Lender shall have sole dominion and control
over the Lockbox Account and, except
as set forth in the Cash Management
Agreement, Borrower shall have no rights to
make withdrawals therefrom.
.6.2 PAYMENTS
RECEIVED IN THE LOCKBOX ACCOUNT. Notwithstanding anything to
the contrary contained in this Agreement or
the other Loan Documents and
provided no Event of Default then exists,
Borrower's obligations with respect to
the Interest Only Payment Amount, the
Monthly Debt Service Payment Amount and
amounts due for the Reserve Funds shall be
deemed satisfied to the extent
sufficient amounts are deposited in the
Lockbox Account to satisfy such
obligations on the dates each such payment
is required, regardless of whether
any of such amounts are so applied by
Lender.
.6.3 NO
DEDUCTIONS, ETC. All payments made by Borrower hereunder or
under
the Note or the other Loan Documents shall
be made irrespective of, and without
any deduction for, any setoff, defense or
counterclaims.
SECTION .7
SUBSTITUTE PROPERTY.
(a) Generally.
Subject to the conditions in this Section 2.7, at any time
and from time to time, Borrower may
substitute (each such act is hereafter
referred to as a "SUBSTITUTION") a property
(a "SUBSTITUTE PROPERTY") for an
Individual Property (a "REPLACED
PROPERTY"). From and after the substitution of
a Substitute Property in accordance
herewith, such Substitute Property shall
thereafter be deemed an Individual Property
under this Agreement and the
Security Instrument, and the Allocated Loan
Amount of such Substitute Property
shall be the same as the Allocated Loan
Amount of the Replaced Property, except
that in the event that two (2) or more
Substitute Properties replace a single
Replaced Property, then in that event, the
Allocated Loan Amount of the Replaced
Property shall be apportioned between or
amongst the Substitute Properties as
Lender in its sole discretion decides. In
the event of a substitution, the Note
shall remain in full force and effect and a
new Security Instrument encumbering
the Substitute Property (the "SUBSTITUTE
SECURITY INSTRUMENT") shall be executed
and delivered by Borrower to Lender to
encumber the Substitute Property.
Concurrently with the completion of all
steps necessary to substitute a
Substitute Property as provided herein,
Lender shall execute or cause to be
executed all such documents as are
necessary or appropriate (i) to release all
Liens granted to Lender and affecting the
Replaced Property, and (ii) to cause
the Substitute Security Instrument to be
cross-collateralized and
cross-defaulted with the Security
Instrument. Notwithstanding anything to the
contrary hereinbefore contained, Borrower's
right to substitute a Property as
herein provided shall be subject to the
additional limitation that at any time
the Allocated Loan Amount of such
Substitute Property, individually or when
aggregated with the Allocated Loan Amounts
of all other Properties which are or
were a Substitute Property shall not
constitute more than 33 1/3 % of the
original outstanding principal amount of
the Loan.
(b) Substitute
Property Requirements. To qualify as a Substitute Property,
the property nominated to be a Substitute
Property must, at the time of
substitution:
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(i) be a property as to which Borrower will hold indefeasible
fee
title free and
clear of any lien or other encumbrance except for Permitted
Encumbrances;
(ii) be free and clear of Hazardous Substance except for
nominal
amounts of any
such substances commonly incorporated in or used in the
operation of
properties similar to the Properties (in either case in
compliance with
all Environmental Laws), all as set forth in an
environmental
report delivered to Lender;
(iii) be in substantially the same repair and condition, which
shall
be certified by
an Officer's Certificate of Borrower, as the Replaced
Property was on
the Closing Date or, in the event that the Replaced
Property was
itself a Substitute Property, on the date that such Property
became a
Property hereunder all as set forth in a Physical Conditions
Report delivered
to Lender;
(iv) be in compliance, in all material respects, with Legal
Requirements
which shall be certified in an Officer's Certificate;
(v) as evidenced by an Approved Appraisal performed at
Borrower's
expense and
delivered to Lender, have a fair market value no less than the
greater of (y)
the fair market value of the Replaced Property on the
Closing Date or
(z) the fair market value of the Replaced Property
immediately
prior to the Substitution;
(vi) be used primarily for self-service storage and related uses;
and
(vii) after giving effect to the Substitution, the Debt Service
Coverage Ratio
for all of the Properties (including the Substitute
Property, but
excluding the Replaced Property) shall be at least equal to
the Debt Service
Coverage Ratio for all of the Properties (including the
Replaced
Property) for the twelve (12) full calendar months immediately
preceding the
release and substitution of such Individual Property.
(c) Conditions
to Substitution. In addition to the requirements in Section
2.7(b) above, substitution of any Property
pursuant to this Section 2.7 shall be
subject to the satisfaction of the
following, all of which shall be prepared or
obtained at Borrower's expense:
(i) simultaneously with the Substitution, Borrower shall convey
fee
simple title to
the Replaced Property to a Person other than Borrower;
(ii) Intentionally Deleted;
(iii) Intentionally Deleted;
(iv) receipt by Lender and the Rating Agencies of written
notice
thereof from
Borrower at least thirty (30) days before the date of the
proposed
Substitution (the "SUBSTITUTION DATE"), together with (1)
written
evidence that
the property proposed to be a Substitute Property complies
with Section
2.7(b) above and (2) such other information, including
financial
information, as Lender or the Rating Agencies may request;
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<PAGE>
(v) Lender's receipt of written affirmation from the Rating
Agencies
that the ratings
of the Securities immediately prior to such Substitution
will not be
qualified, downgraded or withdrawn as a result of such
Substitution,
which affirmation may be granted or withheld in the Rating
Agencies' sole
and absolute discretion;
(vi) delivery to Lender of an opinion of counsel opining as to
the
enforceability
of the Substitute Security Instrument with respect to the
Substitute
Property in substantially the same form and substance as the
opinion of
counsel concerning enforceability originally delivered at the
Closing Date in
connection with the Replaced Property, with reasonable
allowance for
variations in applicable State law, and a Nondisqualification
Opinion and a
Tax Opinion;
(vii) no Event of Default shall have occurred and be
continuing;
(viii) the representations and warranties set forth in this
Agreement,
in the Security
Instrument and the Loan Documents applicable to the
Replaced
Property shall be true and correct (except as to title
exceptions)
as to the
Substitute Property on the Substitution Date in all material
respects;
(ix) delivery to Lender of a copy of the organizational documents
of
Borrower and all
amendments thereto, certified as true, complete and
correct as of
the date of delivery by an Officer's Certificate; a
certificate from
the secretary of the State or other applicable State
official or
officer in Borrower's State of formation certifying that it is
duly formed and
in good standing (with tax clearance, if applicable), if
available, and
certificates from the Secretary of State of the State in
which the
Substitute Property is located (if such certificates are
issued),
certifying as to
Borrower's good standing as a limited liability company in
such State (with
tax clearance, if applicable); delivery of an Officer's
Certificate,
dated the Substitution Date and signed on behalf of its
Secretary or
Assistant Secretary, certifying the names of the officers of
the general
partner of the sole member of Borrower authorized to execute
and deliver, in
the name and on behalf of Borrower, the Security
Instrument,
Assignment of Leases, UCC Financing Statements, and the other
Loan Documents
pertaining to such Substitute Property to which Borrower is
a party,
together with the original (not photocopied) signatures of such
officers;
(x) delivery to Lender of an Officer's Certificate certifying to
the
veracity of the
statements in Subsections 2.7(b)(ii), 2.7(b)(iii),
2.7(b)(iv),
2.7(b)(vii), 2.7(c)(viii), and 2.7(c)(ix) hereof;
(xi) delivery to Lender of originals of the following:
(1) Borrower shall
have executed, acknowledged and delivered to
Lender a Security Instrument, an Assignment of Leases and
two UCC Financing Statements (to the extent execution and
acknowledgment are required) with respect to the Substitute
Property, together with a letter from Borrower countersigned
by a title insurance company acknowledging receipt of such
Security Instrument,
30
<PAGE>
Assignment of Leases and UCC-1 Financing Statements and
agreeing to record or file, as applicable, such Security
Instrument, Assignment of Leases and Rents and, with regard
to the UCC-1 Financing Statements, if recordation or a
system of filing is accepted or established in the
applicable jurisdiction, one of the UCC-1 Financing
Statements in the real estate records for the county in
which the Substitute Property is located and, subject to
local law, rule or custom, to file one of the UCC-1
Financing Statements in the office of the Secretary of State
of the State in which Borrower has been formed, so as to
effectively create upon such recording and filing valid and
enforceable Liens upon the Substitute Property, of the
requisite priority, in favor of Lender (or such other
trustee as may be desired under local law), subject only to
the Permitted Encumbrances and such other Liens as are
permitted pursuant to the Loan Documents. The Security
Instrument, Assignment of Leases and UCC-1 Financing
Statements shall be the same in form and substance as the
counterparts of such documents executed and delivered with
respect to the related Replaced Property subject to
modifications reflecting the Substitute Property as the
Property that is the subject of such documents and such
modifications reflecting the laws of the State in which the
Substitute Property is located as shall be recommended by
the counsel admitted to practice in such State and
delivering the opinion of counsel as to the enforceability
of such documents required pursuant to this Section. The
Security Instrument encumbering the Substitute Property
shall secure all amounts evidenced by the Note, provided
that in the event that the jurisdiction in which the
Substitute Property is located imposes a mortgage recording,
intangibles or similar tax and does not permit the
allocation of indebtedness for the purpose of determining
the amount of such tax payable, the principal amount secured
by such Security Instrument shall be equal to one hundred
fifty percent (150%) of the amount of the Loan allocated to
the Substitute Property;
(2) Lender shall have
received (A) any "tie-in" or similar
endorsement to each Title Insurance Policy insuring the Lien
of the Security Instrument as of the date of the
substitution available with respect to the Title Insurance
Policy insuring the Lien of the Security Instrument with
respect to the Substitute Property and (B) a Title Insurance
Policy (or a marked, signed and redated commitment to issue
such Title Insurance Policy) insuring the Lien of the
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Security Instrument encumbering the Substitute Property,
issued by the title company that issued the Title Insurance
Policies insuring the Lien of the Security Instrument and
dated as of the date of the substitution, with reinsurance
and direct access agreements that replace such agreements
issued in connection with the Title Insurance Policy
insuring the Lien of the Security Instrument encumbering the
Replaced
Property. The Title Insurance Policy issued with
respect to the Substitute Property shall (1) provide
coverage in the amount of the Release Amount applicable to
the Substitute Property if the "tie-in" or similar
endorsement described above is available or, if such
endorsement is not available, in an amount equal to one
hundred fifty percent (150%) of the Release Amount
applicable for the Substitute Property, (2) insure Lender
that the relevant Security Instrument creates a valid first
lien on the Substitute Property encumbered thereby, free and
clear of all exceptions from coverage other than Permitted
Encumbrances and standard exceptions and exclusions from
coverage (as modified by the terms of any endorsements), (3)
contain such legally available endorsements and affirmative
coverages as are contained in the Title Insurance Policies
insuring the Liens of the existing Security Instrument, and
(4) name Lender as the insured. Lender also shall have
received copies of paid receipts showing that all costs of
or premiums for such endorsements and Title Insurance
Policies have been paid;
(3) a current as-built
land title Survey and a certificate from
a professional licensed land surveyor with respect to such
Substitute Property, certified to the Title Company and
Lender, and prepared in accordance with the 1999 Minimum
Standard Detail Requirements for ALTA/ACSM Land Title
Surveys meeting the classification of an "Urban Survey" and
the following additional items from the list of "Optional
Survey Responsibilities and Specifications" (Table A) shall
be added to each survey 2, 3, 4, 6, 8, 9, 10, 11(a) (as to
utilities, surface matters only) and 13, and showing the
location, dimensions and area of each parcel of the
Substitute Property, including all existing buildings and
improvements, utilities, parking areas and spaces, internal
streets, if any, external streets, rights-of-way, as well as
any easements, setback violations or encroachments on such
Substitute Property and identifying each item with its
corresponding exception, if any, in the title policy
relating thereto. Each survey shall contain the original
signature and seal of the surveyor and any additional matter
required
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<PAGE>
by the Title Company. In addition, Borrower shall provide
with respect to each Substitute Property a certificate of a
professional land surveyor to the effect that the
Improvements located upon such Substitute Property are not
located in a flood plain area, or, if such Substitute
Property is in a flood plain area, Borrower shall deliver on
the Closing Date evidence of flood insurance;
(4) a certified copy
of a deed conveying to Borrower all right,
title and interest in and to the Replaced Property and a
letter from a title insurance company acknowledging receipt
of such deed and agreeing to record such deed in the real
estate records for the county in which the Replaced Property
is located;
(5) insurance
certificates issued by insurance companies
evidencing the insurance coverage required under Section 6.1
hereof;
(6) a Phase I
environmental report issued by a qualified
environmental consultant at Borrower's expense, and, if
recommended by the Phase I environmental report, a Phase II
environmental report, which conclude that the Substitute
Property does not contain any Hazardous Substance except for
nominal amounts of such substances commonly incorporated in
or used in the operation of properties similar to the
Substitute Property (in either case in compliance with all
Environmental Laws). If any such report discloses the
presence of any Hazardous Substance, such report shall
include an estimate of the cost of any related remediation
and Borrower shall deposit with Lender an amount equal to
one hundred fifty percent (150%) of such estimated cost,
which deposit shall constitute additional security for the
Loan and shall be released to Borrower upon the delivery to
Lender of (A) an update to such report indicating that there
is no longer any Hazardous Substance on the Substitute
Property except for nominal amounts of such substances
commonly incorporated in or used in the operation of
properties similar to the Substitute Property (in either
case in compliance with all Environmental Laws) and (B) paid
receipts indicating that the costs of all such remediation
work have been paid;
(7) payments of or
reimbursement for all costs and expenses
incurred by Lender (including, without limitation,
reasonable attorneys' fees and disbursements) in connection
with the substitution, and Borrower shall have paid all
recording charges, filing fees, taxes or other expenses
(including, without limitation, mortgage and
33
<PAGE>
intangibles taxes and documentary stamp taxes) payable in
connection with the substitution. Borrower shall have paid
all costs and expenses of the Rating Agencies incurred in
connection with the substitution;
(8) an endorsement to
the Title Insurance Policy insuring the
Lien of the Security Instrument encumbering the Substitute
Property insuring that the Substitute Property constitutes a
separate tax lot or, if such an endorsement is not available
in the State in which the Substitute Property is located, a
letter from the title insurance company issuing such Title
Insurance Policy or of an opinion of competent counsel in
the State where such Substitute Property is located, stating
that the Substitute Property constitutes a separate tax lot
or a letter from the appropriate authority stating that the
Substitute Property constitutes a separate tax lot;
(9) a Physical
Conditions Report with respect to the Substitute
Property stating that the Substitute Property and its use
comply in all material respects with all applicable Legal
Requirements (including, without limitation, zoning,
subdivision and building laws) and that the Substitute
Property is in good condition and repair and free of damage
or waste. If compliance with any Legal Requirements are not
addressed by the Physical Conditions Report, such compliance
shall be confirmed by delivery to Lender of a certificate of
an architect licensed in the State in which the Substitute
Property is located, a letter from the municipality in which
such Property is located, a certificate of a surveyor that
is licensed in the State in which the Substitute Property is
located (with respect to zoning and subdivision laws), an
ALTA 3.1 zoning endorsement to the Title Insurance Policy
delivered pursuant to clause (2) above (with respect to
zoning laws) or a subdivision endorsement to the Title
Insurance Policy delivered pursuant to clause (2) above
(with respect to subdivision laws). If the Physical
Conditions Report recommends that any repairs be made with
respect to the Substitute Property, such Physical Conditions
Report shall include an estimate of the cost of such
recommended repairs and Borrower shall deposit with Lender
an amount equal to one hundred twenty-five percent (125%) of
such estimated cost, which deposit shall constitute
additional security for the Loan and shall be released to
Borrower upon the delivery to Lender of (A) an update to
such Physical Conditions Report or a letter from engineer
that prepared such Physical Conditions Report indicating
that the recommended repairs were completed in
34
<PAGE>
good
manner and (B) paid receipts indicating that the costs
of all such repairs have been paid;
(10) annual operating statements and occupancy statements for
the
Substitute Property for the most current completed fiscal
year and a current operating statement for the Replaced
Property, each certified to Lender as being true and
correct, and a certificate from Borrower certifying that
there has been no adverse change in the financial condition
of the Substitute Property since the date of such operating
statements;
(12) a release of Lien (and related Loan Documents) for the
Replaced Property for execution by Lender. Such release
shall be in a form appropriate for the jurisdiction in which
the Replaced Property is located; and
(13) Lender shall have received such other and further
approvals,
opinions, documents and information in connection with the
substitution as the Rating Agencies may have requested.
CONDITIONS PRECEDENT
SECTION.1
CONDITIONS PRECEDENT TO CLOSING.
The obligation of Lender to make the Loan hereunder is subject to
the
fulfillment by Borrower or waiver by Lender
of the following conditions
precedent no later than the Closing
Date:
.1.1
REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH CONDITIONS. The
representations and warranties of Borrower
contained in this Agreement and the
other Loan Documents shall be true and
correct in all material respects on and
as of the Closing Date with the same effect
as if made on and as of such date,
and no Default or an Event of Default shall
have occurred and be continuing; and
Borrower shall be in compliance in all
material respects with all terms and
conditions set forth in this Agreement and
in each other Loan Document on its
part to be observed or performed.
.1.2 LOAN
AGREEMENT AND NOTE. Lender shall have received a copy of this
Agreement and the Note, in each case, duly
executed and delivered on behalf of
Borrower.
.1.3 DELIVERY OF
LOAN DOCUMENTS; TITLE INSURANCE; REPORTS; LEASES.
(a) SECURITY
INSTRUMENT, ASSIGNMENT OF LEASES AND OTHER LOAN DOCUMENTS.
Lender shall have received from Borrower
fully executed and acknowledged
counterparts of the Security Instrument and
the Assignment of Leases and
evidence that counterparts of the Security
Instrument and Assignment of Leases
have been delivered to the title company
for recording, in the reasonable
judgment of Lender, so as to effectively
create upon such recording valid and
enforceable liens upon each Individual
Property, of the requisite priority, in
favor of Lender (or
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such other trustee as may be required or
desired under local law), subject only
to the Permitted Encumbrances and such
other Liens as are permitted pursuant to
the Loan Documents. Lender shall have also
received from (i) Borrower fully
executed counterparts of the Environmental
Indemnity, Cash Management Agreement
and Assignment of Management Agreement and
(ii) Guarantor, a fully executed
counterpart of the Guaranty.
(b) TITLE
INSURANCE. Lender shall have received Title Insurance Policies
issued by a title company acceptable to
Lender and dated as of the Closing Date,
with reinsurance and direct access
agreements acceptable to Lender. Such Title
Insurance Policies shall (i) provide
coverage in amounts satisfactory to Lender,
(ii) insure Lender that the applicable
Security Instrument creates a valid lien
on the Individual Property encumbered
thereby of the requisite priority, free
and clear of all exceptions from coverage
other than Permitted Encumbrances and
standard exceptions and exclusions from
coverage (as modified by the terms of
any endorsements), (iii) contain such
endorsements and affirmative coverages as
Lender may reasonably request, and (iv)
name Lender as the insured. The Title
Insurance Policies shall be assignable.
Lender also shall have received evidence
that all premiums in respect of such Title
Insurance Policies have been paid.
(c) SURVEY.
Lender shall have received a current title Survey for each
Individual Property, certified to the title
company and Lender and their
successors and assigns, in form and content
satisfactory to Lender and prepared
by a professional and properly licensed
land surveyor satisfactory to Lender in
accordance with the 1999 Minimum Standard
Detail Requirements for ALTA/ACSM Land
Title Surveys. The Surveys shall show the
following additional items from the
list of "Optional Survey Responsibilities
and Specifications" (Table A) should
be added to each survey: 2, 3, 4, 6, 7(a),
7(b)(1), 8, 9, 10, 11(a) (as to
utilities, surface matters only) and 13.
Each such Survey shall reflect the same
legal description contained in the Title
Insurance Policy relating to such
Individual Property referred to in clause
(ii) above and shall include, among
other things, a metes and bounds
description of the real property comprising
part of such Individual Property reasonably
satisfactory to Lender. The
surveyor's seal shall be affixed to each
Survey and the surveyor shall provide a
certification for each Survey in accordance
with the 1999 Minimum Standard
Detail Requirements for ALTA/ACSM Land
Title Surveys in form and substance
acceptable to Lender.
(d) INSURANCE.
Lender shall have received valid certificates of insurance
for the policies of insurance required
hereunder, satisfactory to Lender in its
sole discretion, and evidence of the
payment of all premiums payable for the
existing policy period.
(e)
ENVIRONMENTAL REPORTS. Lender shall have received an
environmental
report in respect of each Individual
Property, in each case satisfactory to
Lender.
(f) ZONING. With
respect to each Individual Property, Lender shall have
received, at Lender's option, (i) letters
or other evidence with respect to each
Individual Property from the appropriate
municipal authorities (or other
Persons) concerning applicable zoning and
building laws, (ii) an ALTA 3.1 zoning
endorsement for the applicable Title
Insurance Policy or (iii) a zoning opinion
letter, in each case in substance
reasonably satisfactory to Lender.
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(g)
ENCUMBRANCES. Borrower shall have taken or caused to be taken
such
actions in such a manner so that Lender has
a valid and perfected first lien as
of the Closing Date with respect to each
Security Instrument on the applicable
Individual Property, subject only to
applicable Permitted Encumbrances and such
other Liens as are permitted pursuant to
the Loan Documents, and Lender shall
have received satisfactory evidence
thereof.
.1.4 RELATED
DOCUMENTS. Each additional document not specifically
referenced herein, but relating to the
transactions contemplated herein, shall
have been duly authorized, executed and
delivered by all parties thereto and
Lender shall have received and approved
certified copies thereof.
.1.5 DELIVERY OF
ORGANIZATIONAL DOCUMENTS. On or before the Closing Date,
Borrower shall deliver or cause to be
delivered to Lender copies certified by
Borrower of all organizational
documentation related to Borrower and/or the
formation, structure, existence, good
standing and/or qualification to do
business, as Lender may request in its sole
discretion, including, without
limitation, good standing certificates,
qualifications to do business in the
appropriate jurisdictions, resolutions
authorizing the entering into of the Loan
and incumbency certificates as may be
requested by Lender.
.1.6 OPINIONS OF
BORROWER'S COUNSEL. Lender shall have received opinions of
Borrower's counsel (a) with respect to
non-consolidation issues, and (b) with
respect to due execution, authority,
enforceability of the Loan Documents and
such other matters as Lender may require,
all such opinions in form, scope and
substance satisfactory to Lender and
Lender's counsel in their sole discretion.
.1.7 BUDGETS.
Borrower shall have delivered to Lender the Annual Budget for
the current Fiscal Year.
.1.8 BASIC
CARRYING COSTS. Borrower shall have paid all Basic Carrying
Costs relating to the Properties which are
in arrears, including without
limitation, (a) accrued but unpaid
insurance premiums relating to the
Properties, (b) currently due Taxes
(including any in arrears) relating to the
Properties, and (c) currently due Other
Charges relating to the Properties,
which amounts shall be funded with proceeds
of the Loan.
.1.9 COMPLETION
OF PROCEEDINGS. All corporate and other organizational
proceedings taken or to be taken in
connection with the transactions
contemplated by this Agreement and other
Loan Documents and all documents
incidental thereto shall be satisfactory in
form and substance to Lender, and
Lender shall have received all such
counterpart originals or certified copies of
such documents as Lender may reasonably
request.
.1.10 PAYMENTS.
All payments, deposits or escrows required to be made or
established by Borrower under this
Agreement, the Note and the other Loan
Documents on or before the Closing Date
shall have been paid.
.1.11 TENANT
ESTOPPELS. Lender shall have received an executed tenant
estoppel letter, which shall be in form and
substance satisfactory to Lender,
from each tenant under a Major Lease.
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<PAGE>
.1.12
TRANSACTION COSTS. Borrower shall have paid or reimbursed Lender
for
all title insurance premiums, recording and
filing fees, costs of environmental
reports, Physical Conditions Reports,
appraisals and other reports, the fees and
costs of Lender's counsel and all other
third party out-of-pocket expenses
incurred in connection with the origination
of the Loan.
.1.13 MATERIAL
ADVERSE EFFECT. There shall have been no Material Adverse
Effect on the financial condition or
business condition of Borrower or the
Properties since the date of the most
recent financial statements delivered to
Lender. The income and expenses of the
Properties, the occupancy and Leases
thereof, and all other features of the
transaction shall be as represented to
Lender without material adverse change.
Neither Borrower nor any of its
constituent Persons shall be the subject of
any bankruptcy, reorganization, or
insolvency proceeding.
.1.14 LEASES AND
RENT ROLL. Lender shall have received copies of all tenant
leases, certified copies of any tenant
leases as requested by Lender and
certified copies of all ground leases
affecting the Properties. Lender shall
have received a current certified rent roll
of the Properties, reasonably
satisfactory in form and substance to
Lender.
.1.15 TAX LOT.
Lender shall have received evidence that each Individual
Property constitutes one (1) or more
separate tax lots, which evidence shall be
reasonably satisfactory in form and
substance to Lender.
.1.16 PHYSICAL
CONDITIONS REPORTS. Lender shall have received Physical
Conditions Reports with respect to each
Individual Property, which reports shall
be reasonably satisfactory in form and
substance to Lender.
.1.17 MANAGEMENT
AGREEMENT. Lender shall have received a certified copy of
the Management Agreement with respect to
the Properties which shall be
satisfactory in form and substance to
Lender.
.1.18 APPRAISAL.
Lender shall have received an appraisal of each Individual
Property, which shall be satisfactory in
form and substance to Lender.
.1.19 FINANCIAL
STATEMENTS. Lender shall have received a balance sheet with
respect to each Individual Property for the
two most recent Fiscal Years and
statements of income and statements of cash
flows with respect to each
Individual Property for the three most
recent Fiscal Years, each in form and
substance satisfactory to Lender.
.1.20 FURTHER
DOCUMENTS. Lender or its counsel shall have received such
other and further approvals, opinions,
documents and information as Lender or
its counsel may have reasonably requested
including the Loan Documents in form
and substance satisfactory to Lender and
its counsel.
REPRESENTATIONS AND WARRANTIES
SECTION.1
BORROWER REPRESENTATIONS.
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<PAGE>
Borrower represents and warrants as of the date hereof and as of
the
Closing Date that:
.1.1
ORGANIZATION. Borrower has been duly organized and is validly
existing
and in good standing with requisite power
and authority to own its properties
and to transact the businesses in which it
is now engaged. Borrower is duly
qualified to do business and is in good
standing in each jurisdiction where it
is required to be so qualified in
connection with its properties, businesses and
operations. Borrower possesses all rights,
licenses, permits and authorizations,
governmental or otherwise, necessary to
entitle it to own its properties and to
transact the businesses in which it is now
engaged, and the sole business of
Borrower is the ownership, management and
operation of the Properties. Schedule
4.1.1 attached hereto accurately depicts
the organizational structure of
Borrower.
.1.2
PROCEEDINGS. Borrower has taken all necessary action to authorize
the
execution, delivery and performance of this
Agreement and the other Loan
Documents. This Agreement and such other
Loan Documents have been duly executed
and delivered by or on behalf of Borrower
and constitute legal, valid and
binding obligations of Borrower enforceable
against Borrower in accordance with
their respective terms, subject only to
applicable bankruptcy, insolvency and
similar laws affecting rights of creditors
generally, and subject, as to
enforceability, to general principles of
equity (regardless of whether
enforcement is sought in a proceeding in
equity or at law).
.1.3 NO
CONFLICTS. The execution, delivery and performance of this
Agreement and the other Loan Documents by
Borrower will not conflict with or
result in a breach of any of the terms or
provisions of, or constitute a default
under, or result in the creation or
imposition of any lien, charge or
encumbrance (other than pursuant to the
Loan Documents) upon any of the property
or assets of Borrower pursuant to the terms
of any indenture, mortgage, deed of
trust, loan agreement, partnership
agreement or other agreement or instrument to
which Borrower is a party or by which any
of Borrower's property or assets is
subject, nor will such action result in any
violation of the provisions of any
statute or any order, rule or regulation of
any court or governmental agency or
body having jurisdiction over Borrower or
any of Borrower's properties or
assets, and any consent, approval,
authorization, order, registration or
qualification of or with any court or any
such regulatory authority or other
governmental agency or body required for
the execution, delivery and performance
by Borrower of this Agreement or any other
Loan Documents has been obtained and
is in full force and effect.
.1.4 LITIGATION.
Except as set forth on Schedule 4.1.4 attached hereto and
made a part hereof there are no actions,
suits or proceedings at law or in
equity by or before any Governmental
Authority or other agency now pending or
threatened against or affecting Borrower or
any Individual Property, which
actions, suits or proceedings, if
determined against Borrower or any Individual
Property, might materially adversely affect
the condition (financial or
otherwise) or business of Borrower or the
condition or ownership of any
Individual Property.
.1.5 AGREEMENTS.
Borrower is not a party to any agreement or instrument or
subject to any restriction which might
materially and adversely affect Borrower
or any Individual Property, or Borrower's
business, properties or assets,
operations or condition, financial or
otherwise. Borrower is not in default in
any material respect in the performance,
observance or
39
<PAGE>
fulfillment of any of the obligations,
covenants or conditions contained in any
agreement or instrument to which it is a
party or by which Borrower or any of
the Properties are bound. Borrower has no
material financial obligation under
any indenture, mortgage, deed of trust,
loan agreement or other agreement or
instrument to which Borrower is a party or
by which Borrower or the Properties
is otherwise bound, other than (a)
obligations incurred in the ordinary course
of the operation of the Properties and
specifically permitted under this
Agreement and (b) obligations under the
Loan Documents. Set forth on Schedule
4.1.5 attached hereto are the material
agreements to which Borrower is a party
or by which Borrower or any of the
Properties are bound. Each such material
agreement is cancellable without penalty or
premium on no more than thirty (30)
days notice unless otherwise specifically
set forth on such Schedule 4.1.5.
.1.6 TITLE.
Borrower has good, marketable and insurable fee simple title to
the real property comprising part of each
Individual Property and good title to
the balance of such Individual Property,
free and clear of all Liens whatsoever
except the Permitted Encumbrances, such
other Liens as are permitted pursuant to
the Loan Documents and the Liens created by
the Loan Documents. Each Security
Instrument, when properly recorded in the
appropriate records, together with any
Uniform Commercial Code financing
statements required to be filed in connection
therewith, will create (a) a valid,
perfected lien on the applicable Individual
Property, subject only to Permitted
Encumbrances and the Liens created by the
Loan Documents and (b) perfected security
interests in and to, and perfected
collateral assignments of, all personalty
(including the Leases), all in
accordance with the terms thereof, in each
case subject only to any applicable
Permitted Encumbrances, such other Liens as
are permitted pursuant to the Loan
Documents and the Liens created by the Loan
Documents. There are no claims for
payment for work, labor or materials
affecting the Properties which are or may
become a lien prior to, or of equal
priority with, the Liens created by the Loan
Documents.
.1.7 SOLVENCY /
NO BANKRUPTCY FILING. Borrower (a) has not entered into the
transaction or executed the Note, this
Agreement or any other Loan Documents
with the actual intent to hinder, delay or
defraud any creditor and (b) has
received reasonably equivalent value in
exchange for its obligations under the
Loan Documents. Giving effect to the Loan,
the fair saleable value of Borrower's
assets exceeds and will, immediately
following the making of the Loan, exceed
Borrower's total liabilities, including,
without limitation, subordinated,
unliquidated, disputed and contingent
liabilities. The fair saleable value of
Borrower's assets is and will, immediately
following the making of the Loan, be
greater than Borrower's probable
liabilities, including the maximum amount of
its contingent liabilities on its debts as
such debts become absolute and
matured. Borrower's assets do not and,
immediately following the making of the
Loan will not, constitute unreasonably
small capital to carry out its business
as conducted or as proposed to be
conducted. Borrower does not intend to incur
debt and liabilities (including contingent
liabilities and other commitments)
beyond its ability to pay such debt and
liabilities as they mature (taking into
account the timing and amounts of cash to
be received by Borrower and the
amounts to be payable on or in respect of
obligations of Borrower). No petition
under the Bankruptcy Code or similar State
bankruptcy or insolvency law has been
filed against Borrower or any constituent
Person in the last seven (7) years,
and neither Borrower nor any constituent
Person in the last seven (7) years has
ever made an assignment for the benefit of
creditors or taken advantage of any
insolvency act for the benefit of debtors.
Neither Borrower nor any of its
constituent Persons are contemplating
either the filing of a petition by it
under the Bankruptcy Code or similar State
bankruptcy or insolvency law or the
liquidation of all or a major portion
of
40
<PAGE>
Borrower's assets or property, and Borrower
has no knowledge of any Person
contemplating the filing of any such
petition against it or such constituent
Persons.
.1.8 FULL AND
ACCURATE DISCLOSURE. No statement of fact made by Borrower in
this Agreement or in any of the other Loan
Documents contains any untrue
statement of a material fact or omits to
state any material fact necessary to
make statements contained herein or therein
not misleading. There is no material
fact presently known to Borrower which has
not been disclosed to Lender which
adversely affects, nor as far as Borrower
can foresee, might adversely affect,
any Individual Property or the business,
operations or condition (financial or
otherwise) of Borrower.
.1.9 NO PLAN
ASSETS. Borrower is not a Plan and none of the assets of
Borrower constitute or will constitute
"Plan Assets" of one or more Plans. In
addition, (a) Borrower is not a
"governmental plan" within the meaning of
Section 3(32) of ERISA and (b) transactions
by or with Borrower are not subject
to State statutes regulating investment of,
and fiduciary obligations with
respect to, governmental plans similar to
the provisions of Section 406 of ERISA
or Section 4975 of the Code currently in
effect, which prohibit or otherwise
restrict the transactions contemplated by
this Agreement.
.1.10
COMPLIANCE. Borrower and the Properties and the use thereof comply
in
all material respects with all applicable
Legal Requirements, including, without
limitation, Environmental Laws, building
and zoning ordinances and codes.
Borrower is not in default or violation of
any order, writ, injunction, decree
or demand of any Governmental Authority.
There has not been committed by
Borrower or, to Borrower's actual
knowledge, any other Person in occupancy of or
involved with the operation or use of the
Properties any act or omission
affording the Federal government or any
other Governmental Authority the right
of forfeiture as against any Individual
Property or any part thereof or any
monies paid in performance of Borrower's
obligations under any of the Loan
Documents. Borrower hereby covenants and
agrees not to commit, permit or suffer
to exist any act or omission affording such
right of forfeiture.
.1.11 FINANCIAL
INFORMATION. All financial data, including, without
limitation, the statements of cash flow and
income and operating expense, that
have been delivered to Lender in respect of
Borrower and the Properties (i) are
true, complete and correct in all material
respects, (ii) accurately represent
the financial condition of Borrower and the
Properties, as applicable, as of the
date of such reports, and (iii) to the
extent prepared or audited by an
Acceptable Accountant, have been prepared
in accordance with GAAP throughout the
periods covered, except as disclosed
therein. Borrower does not have any
contingent liabilities, liabilities for
taxes, unusual forward or long-term
commitments or unrealized or anticipated
losses from any unfavorable commitments
that are known to Borrower and reasonably
likely to have a Material Adverse
Effect on any Individual Property or the
operation thereof in the manner
currently operated, except as referred to
or reflected in said financial
statements. Since the date of such
financial statements, there has been no
Material Adverse Effect on the financial
condition, operations or business of
Borrower from that set forth in said
financial statements.
.1.12
CONDEMNATION. No Condemnation or other similar proceeding has
been
commenced or, to the best of Borrower's
knowledge, is contemplated with respect
to all or any
41
<PAGE>
portion of any Individual Property or for
the relocation of roadways providing
access to any Individual Property.
.1.13 FEDERAL
RESERVE REGULATIONS. No part of the proceeds of the Loan will
be used for the purpose of purchasing or
acquiring any "margin stock" within the
meaning of Regulation U of the Board of
Governors of the Federal Reserve System
or for any other purpose which would be
inconsistent with such Regulation U or
any other Regulations of such Board of
Governors, or for any purposes prohibited
by Legal Requirements or by the terms and
conditions of this Agreement or the
other Loan Documents.
.1.14 UTILITIES
AND PUBLIC ACCESS. Each Individual Property has rights of
access to public ways and is served by
public water, sewer, sanitary sewer and
storm drain facilities adequate to service
such Individual Property for its
respective intended uses. All public
utilities necessary or convenient to the
full use and enjoyment of each Individual
Property are located either in the
public right-of-way abutting such
Individual Property (which are connected so as
to serve such Individual Property without
passing over other property) or in
recorded easements serving such Individual
Property and such easements are set
forth in and insured by the Title Insurance
Policies. All roads necessary for
the use of each Individual Property for
their current respective purposes have
been completed, are physically open and are
dedicated to public use and have
been accepted by all Governmental
Authorities.
.1.15 NOT A
FOREIGN PERSON. Borrower is not a "foreign person" within the
meaning of Section 1445(f)(3) of the
Code.
.1.16 SEPARATE
LOTS. Each Individual Property is comprised of one (1) or
more parcels which constitute a separate
tax lot or lots and does not constitute
a portion of any other tax lot not a part
of such Individual Property.
.1.17
ASSESSMENTS. There are no pending or proposed special or other
assessments for public improvements or
otherwise affecting any Individual
Property, nor, has Borrower received any
notice of any contemplated improvements
to any Individual Property that may result
in such special or other assessments.
.1.18
ENFORCEABILITY. The Loan Documents are not subject to any right
of
rescission, set-off, counterclaim or
defense by Borrower, including the defense
of usury, nor would the operation of any of
the terms of the Loan Documents, or
the exercise of any right thereunder,
render the Loan Documents unenforceable,
and Borrower has not asserted any right of
rescission, set-off, counterclaim or
defense with respect thereto.
.1.19 NO PRIOR
ASSIGNMENT. There are no prior assignments of the Leases or
any portion of the Rents due and payable or
to become due and payable which are
presently outstanding.
.1.20 INSURANCE.
Borrower has obtained and has delivered to Lender
certified copies of all insurance policies
reflecting the insurance coverages,
amounts and other requirements set forth in
this Agreement. No claims have been
made under any such policy, and no Person,
including Borrower, has done, by act
or omission, anything which would impair
the coverage of any such policy.
42
<PAGE>
.1.21 USE OF
PROPERTY. Each Individual Property is used exclusively for
self-service storage facility purposes and
other appurtenant and related uses.
.1.22
CERTIFICATE OF OCCUPANCY; LICENSES. All certifications,
permits,
licenses and approvals, including without
limitation, certificates of completion
and occupancy permits required for the
legal use, occupancy and operation of
each Individual Property as currently
operated (collectively, the "LICENSES"),
have been obtained and are in full force
and effect. Borrower shall keep and
maintain all licenses necessary for the
operation of each Individual Property as
currently operated. The use being made of
each Individual Property is in
conformity with the certificate of
occupancy issued for such Individual
Property.
.1.23 FLOOD
ZONE. Except as shown on the Surveys, none of the Improvements
on any Individual Property are located in
an area as identified by the Federal
Emergency Management Agency as an area
having special flood hazards and, if so
located, the flood insurance required
hereunder is in full force and effect with
respect to each such Individual
Property.
.1.24 PHYSICAL
CONDITION. Each Individual Property, including, without
limitation, all buildings, improvements,
parking facilities, sidewalks, storm
drainage systems, roofs, plumbing systems,
HVAC systems, fire protection
systems, electrical systems, equipment,
elevators, exterior sidings and doors,
landscaping, irrigation systems and all
structural components, are in good
condition, order and repair in all material
respects; there exists no structural
or other material defects or damages in any
Individual Property, whether latent
or otherwise, and Borrower has not received
notice from any insurance company or
bonding company of any defects or
inadequacies in any Individual Property, or
any part thereof, which would adversely
affect the insurability of the same or
cause the imposition of extraordinary
premiums or charges thereon or of any
termination or threatened termination of
any policy of insurance or bond. Each
Individual Property is free from damage
covered by fire or other casualty. All
liquid and solid waste disposal, septic and
sewer systems located on each
Individual Property are in a good and safe
condition and repair and in
compliance with all Legal Requirements.
.1.25
BOUNDARIES. Except as otherwise as shown on the Survey, all of
the
Improvements which were included in
determining the appraised value of each
Individual Property lie wholly within t
