Execution Version
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AMENDMENT NO. 2 TO THE SECOND AMENDED AND RESTATED
PROPERTY MANAGEMENT AND SERVICING AGREEMENT
This Amendment No. 2 to the Second Amended and Restated Property Management and
Servicing Agreement (this “Amendment”), is entered into as of this 14th day of December, 2017,
by and among Spirit Master Funding, LLC, Spirit Master Funding II, LLC, Spirit Master Funding
III, LLC, Spirit Master Funding VI, LLC and Spirit Master Funding VIII, LLC, each as an issuer
(each, an “Issuer” and, collectively, the “Issuers”), Spirit Realty, L.P. (“Spirit Realty”), as
property manager and special servicer (together with its successors in such capacities, the
“Property Manager” and “Special
Servicer,” respectively), Midland Loan Services, a division
of PNC Bank, National Association, as Back-Up Manager (together with its successors in such
capacity, the “Back-Up Manager”).
WITNESSETH:
WHEREAS, the Issuers, the Property Manager, the Special Servicer and the Back-Up
Manager entered into that certain Second Amended and Restated Property Management and
Servicing Agreement, dated as of May 20, 2014 (as amended by Amendment No. 1 thereto, dated
as of November 26, 2014, the “Property Management Agreement”);
WHEREAS, Article VIII of the Second Amended and Restated Master Indenture, dated as
of May 20, 2014, as amended by Amendment No. 1 thereto, dated as
of November 26, 2014, and
Amendment No. 2 thereto, dated as of the date hereof (as so amended, the “Master Indenture”),
among the Issuers and the Indenture Trustee, and Section 9.01 of the Property Management
Agreement permit amendments to the Property Management Agreement subject to certain
conditions set forth therein;
WHEREAS, the Issuers have entered into that certain Series 2017-1 Supplement to the
Master Indenture related to the issuance by the Issuers of $542,400,000 Net-Lease Mortgage
Notes, Series 2017-1, Class A and $132,000,000 Net-Lease Mortgage Notes, Series 2017-1,
Class B (collectively, the “Series 2017-1 Notes”) on the date hereof (the “Series 2017-1 Notes
Issuance”), which constitutes a New Issuance (as defined in the Master Indenture);
WHEREAS, Section 8.04 of the Master Indenture
authorizes the Issuers and the other
parties thereto to amend, modify or supplement any of the Transaction Documents, including the
Property Management Agreement, without the consent of the Noteholders, in connection with any
New Issuance, including the Series 2017-1 Notes Issuance; provided that consent of holders of
100% of the Aggregate Series Principal Balance affected by such amendment, modification or
supplement is required if the related amendments, modifications or supplements to such
Transaction Document is set forth in Section 8.04(a)(1)-(7) of the Master Indenture;
WHEREAS, the parties hereto desire, in accordance with Article VIII of the Master
Indenture and Section 9.01 of the Property Management Agreement, to amend the Property
Management Agreement as provided herein, which amendments, modifications and supplements
are not enumerated in Section 8.04(a)(1)-(7)
of the Master Indenture; and
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NOW, THEREFORE, based upon the mutual promises and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned, intending to be legally bound, hereby agree as follows:
AGREEMENTS
1. Defined Terms. All capitalized terms not otherwise defined herein shall have the
meanings assigned thereto in the Property Management Agreement and if not defined therein, shall
have the meaning assigned thereto in the Master Indenture.
2. Amendments to the Property Management Agreement.
(i) As of the date hereof, the Property Management Agreement is hereby amended to
delete the stricken text (indicated textually in the same manner as the following example: stricken
text) and to add the bold and double-underlined text (indicated
textually in the same manner as the
following example: bold and double-underlined text) as set forth on the pages of the Property
Management Agreement attached as Exhibit A hereto (the “Amended Property Management
Agreement”).
(ii) as of the date hereof, Exhibit E to the Property Management Agreement is hereby
amended by amending and restating Exhibit E in its entirety in the form of amended Exhibit E
attached hereto as Exhibit B hereto (the “Amended Exhibit E”); and
(iii) as of the date hereof, the Property Management Agreement is hereby amended by
adding a new Exhibit I in the form attached hereto as Exhibit C in its proper alphabetical order
(the “New Exhibit I”); and
(iv) except as expressly set forth in this Amendment, the Exhibits and Schedules to the
Property Management Agreement shall be the Exhibits and Schedules to the Property Management
Agreement, as amended hereby, and on and after the date hereof, unless otherwise specified, any
reference to “Property Management Agreement” in the Exhibits and/or Schedules and/or
Transaction Documents included in the Property Management Agreement shall be a reference to
the Property Management Agreement, as amended, amended and restated, supplemented or
otherwise modified from time to time.
3. Reference to and Effect on the Property Management Agreement; Ratification.
(a) Except as specifically amended above, the Property Management Agreement is and
shall continue to be in full force and effect and is hereby ratified and confirmed in all respects.
(b) Except as expressly set forth above, the execution, delivery and effectiveness of
this Amendment shall not operate as a waiver of any right, power or remedy of any party hereto
under the Master Indenture
or the Property Management Agreement, or constitute a waiver of
any provision of any other agreement.
(c) Upon the effectiveness hereof, each reference in the Property Management to “this
Agreement”, “Property Management Agreement”, “Second Amended and Restated Property
Management and Servicing Agreement”, “hereto”, “hereunder”, “hereof” or words of like
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import referring to the Property Management Agreement, and each reference in any other
Transaction Document to “Property Management Agreement”, “Second Amended and Restated
Property Management Agreement”, “thereto”, “thereof”, “thereunder” or words of like import
referring to the Property Management Agreement shall mean and be a reference to the Property
Management Agreement as amended hereby.
4. Effectiveness. This Amendment shall be effective upon delivery of executed
signature pages by all parties hereto. The parties hereto agree and acknowledge that the
amendments, modifications set forth herein are being made in connection with a New Issuance
and that the related amendments, modifications and supplements are not of the type described in
Section
8.04(a)(1)-(7) of the Master Indenture.
5. Counterparts; Facsimile Signature. This Amendment may be executed
simultaneously in any number of counterparts, each of which shall be deemed to be an original,
and all such counterparts shall constitute but one and the same instrument. Delivery of an executed
counterpart of a signature page of this Amendment in Portable Document Format (PDF) or by
facsimile transmission shall be as effective as delivery of a manually executed original counterpart
of this Amendment.
6. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE
(WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES), AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
7.
Headings. The descriptive headings of the various sections of this Amendment are
inserted for convenience of reference only and shall not be deemed to affect the meaning or
construction of any of the provisions thereof.
8. Severability. The failure or unenforceability of any provision hereof shall not affect
the other provisions of this Amendment. Whenever possible each provision of this Amendment
shall be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Amendment shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Amendment.
9. Interpretation. Whenever the context and construction so require, all words used
in the singular number herein
shall be deemed to have been used in the plural, and vice versa, and
the masculine gender shall include the feminine and neuter and the neuter shall include the
masculine and feminine.
[Remainder of Page Intentionally Blank; Signature Pages Follow]
[Amendment No. 2 to the Second Amended and Restated Property Management and Servicing Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers or representatives all as of the day and year first above
written.
SPIRIT MASTER FUNDING, LLC, as Issuer
By: Spirit SPE Manager, LLC, a Delaware limited
liability company
Its: Manager
By: /s/ Phillip D. Joseph, Jr.
Name: Phillip D. Joseph, Jr.
Title: Executive
Vice President, Chief
Financial Officer and Treasurer
SPIRIT MASTER FUNDING II, LLC, as Issuer
By: Spirit SPE Manager, LLC, a Delaware limited
liability company
Its: Manager
By: /s/ Phillip D. Joseph, Jr.
Name: Phillip D. Joseph, Jr.
Title: Executive Vice President, Chief
Financial Officer and Treasurer
SPIRIT MASTER FUNDING III, LLC, as Issuer
By: Spirit
SPE Manager, LLC, a Delaware limited
liability company
Its: Manager
By: /s/ Phillip D. Joseph, Jr.
Name: Phillip D. Joseph, Jr.
Title: Executive Vice President, Chief
Financial Officer and Treasurer
[Amendment No. 2 to the Second Amended and Restated Property Management and Servicing Agreement]
SPIRIT MASTER FUNDING VI, LLC, as Issuer
By: Spirit SPE Manager, LLC, a Delaware limited
liability company
Its: Manager
By: /s/ Phillip D. Joseph, Jr.
Name: Phillip D. Joseph, Jr.
Title: Executive Vice President, Chief
Financial Officer and Treasurer
SPIRIT MASTER FUNDING VIII, LLC, as Issuer
By: Spirit
SPE Manager, LLC, a Delaware limited
liability company
Its: Manager
By: /s/ Phillip D. Joseph, Jr.
Name: Phillip D. Joseph, Jr.
Title: Executive Vice President, Chief
Financial Officer and Treasurer
[Amendment No. 2 to the Second Amended and Restated Property Management and Servicing Agreement]
MIDLAND LOAN SERVICES, A
DIVISION OF PNC BANK, NATIONAL
ASSOCIATION, as Back-Up Manager
By: /s/ David A. Eckels
Name: David A. Eckels
Title: Senior Vice President
EXHIBIT A
Amended Property Management Agreement
[See attached.]
Conformed Copy of Property Management Agreement
(reflects updates pursuant to Amendment No. 12 dated as of November 26, 2014December 14,
2017)
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SPIRIT MASTER FUNDING, LLC, SPIRIT MASTER FUNDING II, LLC AND SPIRIT
MASTER FUNDING III, LLC
each, as Issuer,
and
EACH JOINING PARTY
each, as Issuer,
SPIRIT REALTY, L.P.
as Property Manager and Special Servicer and
MIDLAND LOAN SERVICES, A DIVISION OF PNC BANK, NATIONAL
ASSOCIATION
as Back-Up Manager
SECOND AMENDED AND RESTATED PROPERTY MANAGEMENT AND
SERVICING AGREEMENT
Dated as
of May 20, 2014
Net-Lease Mortgage Notes
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TABLE OF CONTENTS
Page
Article I DEFINITIONS ..................................................................................................................1
Section 1.01 Defined Terms .............................................................................................1
Section 1.02 Other Definitional Provisions ................................................................2932
Section 1.03 Certain Calculations in Respect of the Leases and the Mortgage
Loans ......................................................................................................3033
Section 1.04 Fee Calculations; Interest Calculations
..................................................3134
Article II REPRESENTATIONS AND WARRANTIES; RECORDINGS AND
FILINGS; BOOKS AND RECORDS; DEFECT, BREACH, CURE,
REPURCHASE AND SUBSTITUTION; FINANCIAL COVENANTS .....................3135
Section 2.01 Representations and Warranties of Spirit Realtythe Property
Manager and the Back-Up Manager .....................................................3135
Section 2.02 Representations and Warranties of the Issuers ......................................3438
Section 2.03 Recordings and Filings; Books and Records .........................................3639
Section 2.04 Repurchase or Transfer for Collateral Defects and Breaches of
Representations and Warranties .............................................................3741
Section 2.05 Non-Petition ...........................................................................................4043
Article III ADMINISTRATION AND SERVICING OF MORTGAGED PROPERTIES
AND LEASES ...............................................................................................................4044
Section 3.01 Administration of the Mortgaged Properties, Leases and Mortgage
Loans ......................................................................................................4044
Section 3.02 Collection of Lease Payments and Loan Payments; Lockbox
Accounts; Lockbox Transfer Accounts .................................................4245
Section 3.03 Collection of Real Estate Taxes and Insurance Premiums;
Servicing Accounts; Property Protection Advances; P&I
Advances; Emergency Property Expenses .............................................4346
Section 3.04 Collection Account; Release Account 48; Exchange Reserve
Account .....................................................................................................52
Section 3.05 Withdrawals From the Collection Account and the Release
Account ..................................................................................................5154
Section 3.06 Investment of Funds in the Collection Account and the Release
Account ..................................................................................................5255
Section 3.07 Maintenance of Insurance Policies; Errors and Omissions and
Fidelity Coverage ...................................................................................5357
Section
3.08 Enforcement of Alienation Clauses; Consent to Assignment ................5660
Section 3.09 Realization Upon Specially Serviced Assets. ........................................5660
Section 3.10 Issuers, Custodian and Indenture Trustee to Cooperate; Release of
Lease Files and Loan Files .....................................................................5963
Section 3.11 Servicing Compensation; Interest on Property Protection Advances ....6165
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EXHIBITS
EXHIBIT A-1 MORTGAGED PROPERTY SCHEDULE
EXHIBIT A-2 MORTGAGE LOAN SCHEDULE
EXHIBIT B FORM OF REQUEST FOR RELEASE — PROPERTY MANAGER
EXHIBIT C FORM OF REQUEST FOR RELEASE — SPECIAL SERVICER
EXHIBIT D FORM OF LIMITED POWERS OF ATTORNEY FROM ISSUER OR
INDENTURE TRUSTEE
EXHIBIT E CALCULATION OF FIXED CHARGE COVERAGE RATIOS
EXHIBIT F FORM OF DETERMINATION DATE REPORT
EXHIBIT G FORM OF JOINDER AGREEMENT
EXHIBIT H INDENTURE
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This SECOND AMENDED AND RESTATED PROPERTY MANAGEMENT AND
SERVICING AGREEMENT, dated as of May 20, 2014 (as amended, modified or otherwise
modified, the “Agreement”), is made among Spirit Master Funding, LLC, Spirit Master Funding
II, LLC, Spirit Master Funding III, LLC, and each Joining Party, each as an issuer (each, an
“Issuer” and, collectively, the “Issuers”), Spirit Realty, L.P. (“Spirit Realty”), as property
manager and special servicer (together with its successors in such capacities, the “Property
Manager” and “Special Servicer,” respectively), and Midland Loan Services, a division of PNC
Bank, National Association, as Back-Up
Manager (together with its successors in such capacity,
the “Back-Up Manager”).
PRELIMINARY STATEMENT
As of the Applicable Series Closing Date, the Issuers own the Mortgaged Properties and
related Leases as indicated on Exhibit A-1 and the Mortgage Loans as indicated on Exhibit A-2
and each Issuer has pledged such Mortgaged Properties, Leases and Mortgage Loans owned by it
to the Indenture Trustee as security for the indebtedness evidenced by the Indenture and each
Series of Notes issued under the Indenture. Spirit Realty has agreed to provide property
management services with respect to the Mortgaged Properties and to service the Leases and the
Mortgage Loans as set forth herein.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this
Agreement, including in the Preliminary Statement, the words and
phrases set forth below, unless the context otherwise requires, shall have the meanings specified
in this Section 1.01. Capitalized terms used in this Agreement, including the Preliminary
Statement, and not defined herein, unless the context otherwise requires, shall have the
respective meanings specified in Section 1.01 of the Indenture (as defined below).
“30/360 Basis”: The accrual of interest calculated on the basis of a 360-day year
consisting of twelve 30-day months.
“Account Control Agreement”: An agreement with respect to a deposit account or a
securities account, in form and substance satisfactory to the Indenture Trustee, pursuant to which
the institution at which such account is maintained agrees to follow the instructions or
entitlement orders, as the case may be, of the Indenture
Trustee with respect thereto.
“Additional Rent”: With respect to any Lease, in addition to fixed rent or base rent
thereunder, rent, if any, calculated as a percentage of the total sales generated by the related
Tenant at the related Mortgaged Property in excess of the Monthly Lease Payments for the
prior calendar year.
“Additional Servicing Compensation”: Property Manager Additional Servicing
Compensation and/or Special Servicer Additional Servicing Compensation, as the context may
require.
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“Advance”: Any Property Protection Advance and/or P&I Advance, as the context may
require.
“Advance Interest”: Interest accrued on any unreimbursed Advance at the
Reimbursement Rate and payable to the Property Manager, Indenture Trustee or the Back-Up
Manager, as the case may be, in accordance with the terms hereof.
“Aggregate Collateral Value”: As defined in the Indenture.
“Aggregate Collateral Value of Post-Closing Properties”: Unless otherwise specified
in the applicable Series Supplement, $94,000,000282,440,000.
“Aggregate Note Principal Balance”: As defined in the Indenture.
“Aggregate Series Principal Balance”: As defined in the Indenture.
“Allocated Loan Amount”: For any Mortgage Loan
or Mortgaged Property (that does
not otherwise secure a Mortgage Loan) as of any date of determination, the product of (i) the
Aggregate Series Principal Balance and (ii) a fraction, (a) the numerator of which is the
Collateral Value of such Mortgage Loan or Mortgaged Property, as applicable, and (b) the
denominator of which is the sum of (1) the Aggregate Collateral Value and (2) the Aggregate
Collateral Value of Post-Closing Properties multiplied by a fraction, (A) the numerator of
which is the outstanding balance of the Post-Closing Acquisition Reserve Account and (B)
the denominator of which is the initial balance of the Post-Closing Reserve Account, in
each case as of such date of determination; provided that on the Post-Closing Acquisition
Date, all acquisitions of Post-Closing Properties and releases from the Post-Closing
Acquisition Reserve Account to occur on
such Post-Closing Acquisition Date will be given
effect for purposes of determining the Allocated Loan Amount..
“Applicable Series Closing Date”: May 20, 2014.
“Appraised Value”: (X) For any Mortgaged Property included (or to be included) in the
Collateral Pool or securing a Mortgage Loan included (or to be included) in the Collateral Pool
other than an Equipment Loan, an appraised value determined pursuant to an independent MAI
appraisal in accordance with the Uniform Standards of Professional Appraisal Practice (as
recognized by the Financial Institutions Reform, Recovery and Enforcement Act of 1989) and
which takes into account the leased fee value of the related buildings and land of such Mortgaged
Property, consistent with industry standards, and excludes the value of equipment and other
tangible personal
property and business enterprise value, and (1) with respect to any Mortgage
Loan (other than an Equipment Loan) included in the Collateral Pool as of a Series Closing Date
(including the Applicable Series Closing Date), is the most recent full narrative (complete
summary) or limited scope (limited restricted) MAI appraisal obtained by the Property Manager
with respect to the related Mortgaged Property, (2) with respect to any Mortgaged Property
included in the Collateral Pool as of a Series Closing Date (including the Applicable Series
Closing Date), is the most recent full narrative (complete summary) or limited scope (limited
restricted) MAI appraisal obtained by the Property Manager with respect to such Mortgaged
Property or (3) with respect to any Qualified Substitute Mortgage Loan or Qualified Substitute
Mortgaged Property added (or to be added) to the Collateral Pool since
the most recent Series
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Closing Date (including the Applicable Series Closing Date), is either (a) a full narrative
(complete summary) MAI appraisal or (b) with respect to a related Mortgaged Property operated
within the Restaurant/Casual Dining Business Sector (as defined in the Indenture), a limited
scope (limited restricted) MAI appraisal obtained within 12 months prior to the date such
Qualified Substitute Mortgage Loan or Qualified Substitute Mortgaged Property is pledged as
part of the Collateral Pool; provided, that, in the event that, at any time subsequent to a Series
Closing Date, in accordance with the Servicing Standard, the Property Manager or Special
Servicer determines that obtaining a new Appraised Value is necessary, a full narrative
(complete summary) or, with respect to a related Mortgaged Property operated within the
Restaurant/Quick Service Business Sector, limited scope (limited restricted) MAI appraisal
obtained by the Property Manager or the Special Servicer with respect to such Mortgaged
Property or (Y) for any Equipment Loan included or to be included in the Collateral Pool, as
specified in the most recent Series Supplement.
“Asset File”: A Loan File or a Lease File, as the context requires.
“Assignment of Leases”: With respect to any Mortgage Loan, any assignment of leases,
rents and profits or similar document or instrument executed by the Borrower in connection with
the origination or subsequent modification or amendment of the related Mortgage Loan.
“Authorized Officer”: With respect to an Issuer, any person who is authorized to act for
such Issuer and who is identified on the list delivered by such Issuer to the Indenture Trustee on
each Series
Closing Date (as such list may be modified or supplemented from time to time
thereafter by the Issuer).
“Available Amount”: The Available Amount onfor any Payment Date will consist of the
aggregate of all amounts received in respect of the Collateral Pool during the immediately
preceding Collection Period and on deposit in the Collection Account on the immediately
preceding Determination Date, including amounts earned, if any, on the investment of such funds
on deposit in the Collection Account and the Release Account during the immediately preceding
Collection Period, Unscheduled Proceeds, amounts received on account of payments under any
Guaranties, and any amounts received on account of payments under the Performance
UndertakingUndertakings and the Environmental Indemnity AgreementAgreements, any
amounts released from the Liquidity Reserve Account to be treated
as Available Amounts
in accordance with the Indenture on such Payment Date, and any amounts released from the
Cashflow Coverage Reserve Account to be treated as Available Amounts in accordance with the
Indenture on such Payment Date and any other amounts deposited in the Payment Account in
order to be applied as Available AmountAmounts on such Payment Date, but excluding (i)
amounts on deposit in the Release Account and not transferred to the Collection Account for
such Payment Date, (ii) the amount of any collections allocated to Companion Loans, if any, as
provided in the applicable Pari Passu Co-Lender Agreements, (iii) the amount of any Additional
Servicing Compensation, (iv) amounts received on account of Excess Cashflow (so long as no
Early Amortization Event or Sweep Period has occurred and is continuing), (v) amounts
withdrawn from the Collection Account to reimburse
the Property Manager, the Back-Up
Manager or the Indenture Trustee, as applicable, for any unreimbursed Advances (plus interest
thereon) and to pay the Property Management Fee, the Back-Up Fee, any Special Servicing Fee,
Workout Fees or Liquidation Fees and any Emergency Property Expenses, (vi) amounts required
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to be paid by theany Issuer as the lessor under the related Leases in respect of sales taxes, (vii)
Third Party Option Expenses, (viii) any amount received from a Tenant or Borrower as
reimbursement for any cost paid by or on behalf of any Issuer as lessor or lender under a related
Lease or Mortgage Loan, as applicable, and (viiiix) any amounts collected by or on behalf of any
Issuer as lender or lessor and held in escrow or impound to pay future obligations due under a
Mortgage Loan or Lease, as applicable, and (ix) any amounts constituting Third Party
Option Expenses.
“Average Cashflow Coverage Ratio”: With respect to any Determination Date, the
average of the Cashflow Coverage Ratios for such Determination Date and each of the two
immediately preceding Determination Dates; provided, however,
that the Average Cashflow
Ratio shall not be calculated until the third Determination Date following the Applicable Series
Closing Date.
“Back-Up Fee”: With respect to each Mortgage Loan and each Mortgaged Property (that
does not otherwise secure a Mortgage Loan), the fee payable to the Back-Up Manager
pursuant to Section 3.11(h).
“Back-Up Fee Rate”: With respect to each Mortgage Loan and each Mortgaged
Property, a fixed percentage rate equal to 0.00750.0100% per annum.
“Back-Up Manager”: Midland Loan Services, a division of PNC Bank, National
Association, a Delaware corporation, or its successor in interest.
“Balloon Loan”: Mortgage Loans which have substantial payments of principal (relative
to the initial principal balance of such Mortgage Loan) due at their stated maturities.
“Bankruptcy
Code”: The federal Bankruptcy Code of 1978, Title 11 of the United States
Code, as amended from time to time.
“Borrower”: For any Mortgage Loan, the obligor or obligors on the related Mortgage
Note, including any Person that has acquired the related collateral and assumed the obligations of
the original obligor or obligors under such Mortgage Note.
“Business Day”: Any day other than a Saturday, a Sunday or a day on which banking
institutions are authorized or obligated by law or executive order to remain closed in New York,
New York, Scottsdale, Arizona, or any other city in which is located the principal office of an
Issuer, the Primary Servicing Office of the Property Manager or the Special Servicer or the
Indenture Trustee’s office.
“Cashflow Coverage Ratio”: With respect to any Determination Date and the Collateral
Pool, the ratio,
expressed as a fraction, the numerator of which is the Cashflow Coverage Ratio
Numerator for such Determination Date, and the denominator of which is the Total Debt Service
for such Determination Date.
“Cashflow Coverage Ratio Numerator”: With respect to any Determination Date, the
sum of (i) the Monthly Loan Payments and the Monthly Lease Payments received during the
Collection Period ending on such Determination Date, (ii) any income earned from the
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investment of funds on deposit in the Collection Account and the Release Account during the
Collection Period ending on such Determination Date and, (iii) any Liquidity Reserve
Amounts and (iv) any net payments received by any Issuer under the applicable hedge
agreements for any Series of Notes for the Payment Date relating to such Determination Date.
“Cashflow Coverage Reserve Account”: As defined in the Indenture.
“CERCLA”: The Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended.
“Closing Date Period” means the period from (and including) the most recent Series
Closing Date until (and excluding) the next occurring Series Closing Date; provided, that the
initial Closing Date Period shall commence on the Applicable Series Closing Date.
“Code”:
The Internal Revenue Code of 1986, as amended.
“Collateral”: As defined in the Indenture.
“Collateral Agent”: As defined in the Indenture.
“Collateral Defect”: As defined in Section 2.04(a).
“Collateral Pool”: As defined in the Indenture.
“Collateral Value”: As of any determination date (i) with respect to each Mortgaged
Property (that does not otherwise secure a Mortgage Loan), the Appraised Value of such
Mortgaged Property as of the First Collateral Date with respect thereto, (ii) with respect to each
Mortgage Loan, the lesser of (a) the Appraised Value of the related Mortgaged Property or
Mortgaged Properties securing such Mortgage Loan and (b) the outstanding principal balance
of such Mortgage Loan, or (iii) with respect to each potential
Post-Closing Property
identified on Exhibit I, until the earlier of the Post-Closing Acquisition Date and the Post-
Closing Deadline, the “Collateral Value” specified for such property on Exhibit I; provided,
that, with respect to clause (i) and (ii), in the event that the Property Manager has caused a
Global Appraisal Event to occur, the “CollateralAppraised Value” of such Mortgaged Property
will be the Re-Appraised Value determined with respect to such Mortgaged Property in
connection with such Global Appraisal Event or (ii) with respect to each Mortgage Loan, the
lesser of (a) the Appraised Value of the Mortgaged Property or Mortgaged Properties securing
such Mortgage Loan and (b) the outstanding principal balance of such Mortgage Loan.
“Collection Account”: The segregated account or accounts created and maintained
by
the Property Manager in the name of the Indenture Trustee, held on behalf of the Noteholders,
for the collection of payments on the Mortgage Loans and Leases.
“Collection Account Agreement”: As defined in Section 3.04(a).
“Collection Account Bank”: As defined in Section 3.04(a).
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“Collection Period”: With respect to any Payment Date, the period commencing
immediately after the Determination Date in the month preceding the month in which such
Payment Date occurs and ending on (and including) the Determination Date related to such
Payment Date.
“Companion Loans”: A mortgage loan or leasehold interest which is secured, on a pari
passu basis by the same Mortgaged Property that secures a Mortgage Loan included in the
Collateral Pool.
“Condemnation Proceeds”: All proceeds received in connection with the condemnation
or remediation of, or granting an easement on, any Mortgaged Property other than proceeds
applied to the restoration of such Mortgaged Property or released
to the related Tenant or
Borrower in accordance with the Servicing Standard.
“Control Person”: With respect to any Person, anyone that constitutes a “controlling
person” of such Person within the meaning of the Securities Act of 1933, as amended.
“Controlling Party”: As defined in the Indenture.
“Corporate Asset Management Agreement”: A management agreement entered into
by Spirit Realty and Spirit MTA in connection with the Spin-Off pursuant to which Spirit
Realty or one of its Affiliates (which may include a Taxable REIT Subsidiary) performs
services for Spirit MTA which may include, without limitation, investment management
and real estate management and servicing.
“Corrected Lease”: Any Specially Serviced Lease with respect to which, as of any date
of determination, one or more of the following as are applicable shall have occurred
with respect
to each Specially Serviced Lease Trigger Event that previously occurred with respect to such
Specially Serviced Lease:
(i) with respect to the circumstances described in clause (a) of the definition of the
term “Specially Serviced Lease”, the related Tenant has made three consecutive
full and timely Monthly Lease Payments under the terms of such Lease (as such
terms may be changed or modified in connection with a bankruptcy or similar
proceeding involving the related Tenant or by reason of a modification, waiver or
amendment granted or agreed to by the Special Servicer) or such Lease has been
terminated and the related Mortgaged Property has been re-leased;
(ii) with respect to the circumstances described in clause (b) of the definition of the
term “Specially Serviced
Lease”, such circumstances cease to exist in the good
faith and reasonable judgment of the Special Servicer;
(iii) with respect to the circumstances described in clause (c) of the definition of the
term “Specially Serviced Lease”, the Special Servicer determines that the
applicable Tenant likely will be able to make future Monthly Lease Payments;
(iv) with respect to the circumstances described in clause (d) of the definition of the
term “Specially Serviced Lease”, such default is cured; and
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(v) with respect to the circumstances described in clause (e) of the definition of the
term “Specially Serviced Lease”, such proceedings are terminated.
“Corrected Loan”: Any Specially Serviced Loan with respect to which, as of any date of
determination, one or more of the following as are applicable shall have occurred with respect to
each Specially Serviced Loan Trigger Event that previously occurred with respect to such
Specially Serviced Loan:
(i) with respect to the circumstances described in clause (a) of the definition of the
term “Specially Serviced Loan”, the related Borrower has made three consecutive
full and timely Monthly Loan Payments under the terms of such Mortgage Loan
(as such terms may be
changed or modified in connection with a bankruptcy or
similar proceeding involving the related Borrower or by reason of a modification,
waiver or amendment granted or agreed to by the Special Servicer);
(ii) with respect to the circumstances described in clause (b) of the definition of the
term “Specially Serviced Loan”, such circumstances cease to exist in the good
faith and reasonable judgment of the Special Servicer;
(iii) with respect to the circumstances described in clause (c) of the definition of the
term “Specially Serviced Loan”, the Special Servicer determines that the
applicable Borrower likely will be able to make future Monthly Loan Payments;
(iv) with respect to the circumstances described in clause (d) of the definition of the
term “Specially
Serviced Loan”, such default is cured; and
(v) with respect to the circumstances described in clause (e) of the definition of the
term “Specially Serviced Loan”, such proceedings are terminated.
“Cure Party”: (i) With respect to any Mortgaged Property, Mortgage Loan, Qualified
Substitute Mortgage Loan or Qualified Substitute Mortgaged Property acquired by the applicable
Issuer from an Originator, such Originator; (ii) with respect to any Mortgage Loan, Mortgaged
Property, Qualified Substitute Mortgaged Property or Qualified Substitute Mortgage Loan
acquired by the applicable Issuer from a third party unaffiliated with Spirit Realty, such Issuer;
and (iii) in the case of either of (i) or (ii), Spirit Realty in its capacity asthe Support Provider
under the Performance Undertaking.
“Custodian”:
As defined in the Indenture.
“Custodian Inventory List”: As defined in the Custody Agreement.
“Custody Agreement”: The Second Amended and Restated Custody Agreement, dated
as of the Applicable Closing Date, among the Issuers, the Indenture Trustee and the Custodian,
as the same may be amended or supplemented from time to time.
“Default Interest”: With respect to any (i) Lease, any amounts collected thereon (other
than late payments, late payment charges or amounts representing the Third Party Option Price
(without giving effect to clause (ii) in the definition thereof) paid by the related the Tenant) that
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represent penalty interest accrued at the rate specified in the related lease agreement and (ii)
Mortgage Loan, any amounts collected thereon (other than late payments, late payment charges
or Yield Maintenance PremiumsPrepayment Consideration Payments) that represent penalty
interest in excess of interest on theprincipalthe principal balance of such Mortgage Loan
accrued at the related Interest Rate.
“Defaulted Asset”: Any Mortgage Loan or Mortgaged Property included in the
Collateral Pool, with respect to which a default occurs under the applicable Mortgage Loan or
Lease, respectively, that materially and adversely affects the interestinterests of the applicable
Issuer and that continues unremedied for the applicable grace period under the terms
of such
Mortgage Loan or Lease (or, if no grace period is specified, for 30 days).
“Defaulting Party”: As defined in Section 6.01(b).
“Delinquent Asset”: Any Mortgage Loan or Mortgaged Property included in the
Collateral Pool (other than a Defaulted Asset), with respect to which any Monthly Loan Payment
or Monthly Lease Payment, as applicable, becomes delinquent for 60 or more consecutive days.
“Determination Date”: With respect to any Payment Date, the 7th day of the month in
which such Payment Date occurs or, if such 7th day is not a Business Day, the Business Day
immediately succeeding such 7th day.
“Determination Date Report”: As defined in Section 4.01(a).
“Due Date”: With respect to any Mortgage Loan or Lease, the day of each calendar
month on which the Monthly Loan Payment
or Monthly Lease Payment, as applicable, with
respect thereto is due.
“Early Amortization Event”: As defined in the Indenture.
“Early Refinancing Prepayment”: As defined in the Series 2017-1 Supplement.
“Eligible Account”: As defined in the Indenture.
“Eligible Successor”: An entity which, at the time it is appointed as Successor Property
Manager or Successor Special Servicer, (i) is legally qualified and has the capacity to carry out
the duties and obligations hereunder of the Property Manager or Special Servicer, as applicable,
and (ii) has demonstrated the ability to administer professionally and competently a portfolio of
leases, mortgaged properties and mortgage loans that are similar to the Leases, Mortgaged
Properties and Mortgage Loans with high standards of skill and care.
“Emergency
Property Expenses”: As defined in Section 3.03(e).
“Environmental Condition Mortgaged Property”: Any Mortgaged Property (i) on
which a gasoline station or other gasoline pumping facility is operated, (ii) on which, to the
Property Manager’s knowledge, oil or other hazardous materials are stored in underground
storage tanks, (iii) in the Manufacturing Business Sector or (iv) any other Mortgaged Property
that the Property Manager believes, in its reasonable discretion exercised in accordance with the
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Servicing Standard (including based on the review of any Environmental Report), has a material
risk of declining in value due to environmental conditions existing on or in respect of such
Mortgaged Property; provided that no Mortgaged Property described in clauses (i) through (iv)
shall be an Environmental Condition Mortgaged Property if the Rating Condition is satisfied
with respect to the acquisition of such Mortgaged Property by an Issuer.
“Environmental Indemnity Agreement”: As defined in the Indenture.
“Environmental Insurer”: Any Qualified Insurer that issues Environmental Policies
relating to any of the Mortgage Loans or Mortgaged Properties.
“Environmental Policy”: Any insurance policy issued by an Environmental Insurer,
together with any endorsements thereto, providing
insurance coverage for losses, with respect to
certain Mortgage Loans or Mortgaged Properties, caused by the presence of hazardous
substances on, or the migration of hazardous substances from, the related Mortgaged Properties.
“Equipment Loan”: Any commercial equipment loan secured by equipment used in the
operation of a commercial real estate property and listed on the Mortgage Loan Schedule.
“Escrow Payment”: Any payment received by the Property Manager or the Special
Servicer for the account of any Obligor or otherwise deposited in the Servicing Account for
application toward the payment of real estate taxes, assessments, insurance premiums, ground
rents (if applicable) and similar items in respect of the related Mortgaged Property.
“Event of Default”: As defined in the Indenture.
“Excess Cashflow”: As defined in the Indenture.
“Exchange
Act”: The Securities Exchange Act of 1934, as amended.
“Exchange Account”: An account established in the name of the Qualified
Intermediary in order to receive all proceeds from the sale or disposition of Relinquished
Properties.
“Exchange Agreement”: An agreement entered into a Qualified Intermediary
setting forth the terms of a like-kind exchange program.
“Exchange Cash Collateral”: With respect to any Mortgaged Property which has
been released pursuant to Section 7.01(a), an amount provided by the Issuers that is free
and clear of all Liens in an amount equal to the Net Release Price thereof that is deposited
into the Exchange Reserve Account.
“Exchange Reserve Account”: As defined in Section 3.04(c).
“Extraordinary Expense”: As defined in the Indenture.
“Fair Market Value”: With
respect to any Mortgaged Property or Mortgage Loan
secured by a Mortgaged Property, at any time, a price determined by the Property Manager (or
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by the Special Servicer with respect to a Specially Serviced Asset) in accordance with the
Servicing Standard and Section 7.01(b).
“FDIC”: Federal Deposit Insurance Corporation or any successor.
“Financing Statement”: A financing statement either filed or recorded or in a form
suitable for filing and recording under the applicable Uniform Commercial Code.
“First Collateral Date”: With respect to any Mortgaged Property or Mortgage Loan, (i)
in the event that such Mortgaged Property or Mortgage Loan was owned by an Issuer on the(or
is) added to the Collateral Pool on a Series Closing Date on which such Issuer became an
“Issuer” hereunder, such Series Closing Date or (ii) otherwise, the Transfer Date with respect
thereto.
“Fixed Charge Coverage
Ratio” or “FCCR”: The fixed charge coverage ratio
determined in accordance with the provisions of Exhibit E attached hereto.
“FNMA”: Federal National Mortgage Association or any successor.
“GAAP”: Generally accepted accounting principles as in effect in the United States,
consistently applied, as of the date of such application.
“Global Appraisal Event”: An event that shall occur when the Property Manager, within
a one-year period, both (i) causes new Appraised Values to be determined with respect to all of
the Mortgaged Properties and (ii) designates (in its sole discretion) that a “Global Appraisal
Event” has occurred in connection therewith.
“Granting Clause”: The Granting Clause set forth in the Indenture.
“Ground Lease”: With respect to any Mortgaged Property the fee interest in which is
owned by an Issuer or
the related Borrower, the lease agreement, if any, pursuant to which such
Issuer leases the land relating to such Mortgaged Property to the related tenant and such tenant
owns the buildings and other improvements on such Mortgaged Property.
“Guaranty”: With respect to any Lease or Mortgage Loan, the guaranty, if any, related
to such Lease or Mortgage Loan executed by an individual or an Affiliate or parent of the Tenant
or Borrower, as applicable, in favor of the lessor or the lender, as applicable.
“Hazardous Materials”: As defined in the Indenture.
“Indenture”: The Second Amended and Restated Master Indenture, dated as of the
Applicable Series Closing Date, among the Issuers and the Indenture Trustee, relating to the
issuance of the Notes, including all amendments, supplements and other modifications thereto
and any additional indenture between the Indenture Trustee and any Issuer.
“Indenture Trustee”: Citibank, N.A., a national banking association, in its capacity as
indenture trustee under the Indenture, or its successor in interest or any successor indenture
trustee appointed as provided in the Indenture.
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“Indenture Trustee Fee”: As defined in the Indenture.
“Independent”: When used with respect to any specified Person, any such Person who
(i) is not an Issuer, an Issuer Member, the Indenture Trustee, the Property Manager, the Special
Servicer or an Affiliate thereof, (ii) does not have any direct financial interest in or any material
indirect financial interest in any of the Issuers, the Issuer Members, the Indenture Trustee, the
Property Manager, the Special Servicer or any of their respective Affiliates, and (iii) is not
connected with the Issuers, the Issuer Members, the Indenture Trustee, the Property Manager, the
Special Servicer or any of their respective Affiliates as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions; provided,
however,
that a Person shall not fail to be Independent of the Issuers, the Issuer Members, the Indenture
Trustee, the Property Manager, the Special Servicer or an Affiliate thereof merely because such
Person is the beneficial owner of 1% or less of any class of securities issued by any Issuer, any
Issuer Member, the Indenture Trustee, the Property Manager, the Special Servicer or an Affiliate
thereof, as the case may be.
“Initial Purchaser”: As defined in the Indenture.
“Interest Accrual Period”: With respect to each Due Date related to any Mortgage
Loan, the applicable period specified in the related Loan Documents.
“Interest Rate”: With respect to any Mortgage Loan, the annualized rate at which
interest is scheduled (in the absence of a default) to accrue on such Mortgage Loan from time to
time during any Interest Accrual Period in accordance
with the related Mortgage Note and
applicable law, as such rate may be modified in accordance with Section 3.19 or in connection
with a bankruptcy, insolvency or similar proceeding involving the related Borrower.
“Interested Person”: The Issuers, the Issuer Members, the Property Manager, the
Special Servicer, any holder of Notes or an Affiliate of any such Person.
“Issuer”: Each of Spirit Master Funding, LLC, Spirit Master Funding II, LLC, Spirit
Master Funding III, LLC, Spirit Master Funding VI, LLC, Spirit Master Funding VIII, LLC
and any Joining Party or, in any such case, its successor in interest, as the context may require.
References to a “related” or “applicable” Issuer shall refer to the Issuer that owns the Collateral
or has issued the Notes being addressed.
“Issuer Member”:
With respect to any Issuer, the holder of the LLC Interests with
respect to such Issuer, and with respect to any Joining Party, as indicated in the applicable
Joinder Agreement.
“Joinder Agreement”: With respect to any Series of Notes (other than any Series of
Notes that was issued on the Applicable Series Closing Date), the Joinder Agreement, dated as of
the applicable Series Closing Date, among the applicable Joining Party, the Property Manager,
the Special Servicer and the Back-Up Manager, substantially in the form of Exhibit G attached
hereto.
“Joining Party”: Any Spirit SPE or Support Provider SPE, as indicated in the
applicable Joinder Agreement.
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“Lease”: Each lease listed on the Mortgaged Property Schedule and from time to time
included in the Collateral Pool. As used herein, the term “Lease” includes the related lease
agreement and other documents contained in the related Lease File as the context may require.
“Lease Documents”: Any related lease agreement, non-disturbance agreement, guaranty
or other agreement or instrument, to the extent made for the benefit of the related Originator.
“Lease File”: As defined in the Custody Agreement.
“Lease Security Deposit”: As defined in Section 3.03(a).
“Lease Transfer Mortgaged Property”: As defined in Section 7.03.
“Like-Kind Exchange Program”: A like-kind exchange program whereby
Relinquished
Property may be exchanged with Replacement Property pursuant to an
Exchange Agreement with a Qualified Intermediary.
“Liquidated Lease”: A Defaulted Asset that is a Lease with respect to which the related
Mortgaged Property has been either re-leased or sold, or any Lease related to a Mortgaged
Property sold, exchanged or otherwise disposed of by such Issuer, whether or not a Defaulted
Asset.
“Liquidation Fee”: The fee payable to the Special Servicer pursuant to Section 3.11(g).
“Liquidation Fee Rate”: A percentage equal to 0.50%.
“Liquidation Proceeds”: All cash proceeds and all other amounts (other than Property
Insurance Proceeds and REO Revenues) received by the applicable Issuer, the Property Manager,
or the Special Servicer and retained in connection with the liquidation of any Mortgage Loan,
Lease or Mortgaged Property which
is (or relates to) a Defaulted Asset; all cash proceeds and all
other amounts (other than Property Insurance Proceeds and REO Revenues) from the release or
substitution of any Mortgage Loan or Mortgaged Property other than to the extent deposited into
the Release Account; all proceeds from the investment of funds on deposit in the Release
Account; and all cash proceeds from the release or substitution of any Mortgage Loan or
Mortgaged Property transferred from the Release Account to the Collection Account pursuant to
Section 3.04(b).
“LLC Agreement”: With respect to (i) any Issuer that constitutes an Issuer as of the date
hereof, such Issuer’s limited liability company agreement and (ii) any other Issuer, as indicated
in the applicable Joinder Agreement, in each case as the same may be amended from time to time
in accordance with the terms thereto and the Indenture.
“LLC Interests”: The limited liability company interests issued pursuant to an LLC
Agreement evidencing beneficial ownership interests in the related Issuer.
“Loan Agreement”: The agreement pursuant to which a Mortgage Loan was made.
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“Loan Documents”: With respect to each of the Mortgage Loans, the related Loan
Agreement, if any, and Mortgage Note, and any related Mortgage, Ground Lease, as
applicable, Guaranty or other agreement or instrument, to the extent made for the benefit of the
related lender or holder of the Mortgage Note.
“Loan File”: As defined in the Custody Agreement.
“Loan-to-Value Ratio”: With respect to any Mortgage Loan and any commercial real
estate loan proposed to be included in the Collateral Pool as a Qualified Substitute Mortgage
Loan, a ratio, expressed as a percentage, the numerator of which is the unpaid principal balance
of such Mortgage Loan (or proposed Qualified Substitute Mortgage Loan) and the denominator
of which is the Appraised Value of the Mortgaged Property securing such Mortgage
Loan (or the
Mortgaged Property securing the proposed Qualified Substitute Mortgage Loan).
“Lockbox Account”: The account or accounts created and maintained pursuant to
Section 3.02(b).
“Lockbox Account Bank”: As defined in Section 3.02(b).
“Lockbox Transfer Account”: The account or accounts created and maintained pursuant
to Section 3.02(c).
“Lockbox Transfer Account Bank”: As defined in Section 3.02(c).
“MAI”: A designation signifying that the designee is a member of the Appraisal Institute,
a real estate appraisers and valuation professionals trade group.
“Modified Collateral Detail and Realized Loss Report”: As defined in Section 4.01(c).
“Monthly Lease Payment”: With respect to any Lease (except as otherwise described in
the Mortgaged Property Schedule),
the fixed or “base” rent monthly lease payment that is
actually payable by the related Tenant from time to time under the terms of such Lease, after
giving effect to any provision of such Lease providing for periodic increases in such fixed or
“base” rent by fixed percentages or dollar amounts or by percentages based on increases in a
consumer price index.
“Monthly Loan Payment”: With respect to any Mortgage Loan, the scheduled monthly
payment of interest and, if applicable, principal due on such Mortgage Loan that is or would be,
as the case may be, payable by the related Borrower on each Due Date under the terms of the
related Mortgage Note as in effect on the First Collateral Date with respect to such Mortgage
Loan, without regard to any subsequent change in or modification of such terms in connection
with a bankruptcy or similar proceeding involving
the related Borrower or a modification, waiver
or amendment of such Mortgage Loan granted or agreed to by the Special Servicer pursuant to
Section 3.19, and assuming that each prior Monthly Loan Payment has been made in a timely
manner.
“Moody’s”: Moody’s Investors Service, Inc.
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“Mortgage”: With respect to any Mortgaged Property, a mortgage (or deed of trust or
deed to secure debt), assignment of leases and rents, security agreement and fixture filing or
similar document executed by the applicable Issuer or the related Borrower, as applicable,
pursuant to which such Issuer or Borrower grants a lien on its interest in such Mortgaged
Property in favor of the Collateral Agent or the initial lender of the related Mortgage Loan, as
applicable.
“Mortgage Loan”: Each fixed-rate or adjustable-rate, monthly pay, first lien,
commercial mortgage loan secured by fee title to, or leasehold interest in, commercial real
estate properties (including each similarly secured, fixed-rate or adjustable-rate, monthly pay,
first lien Equipment Loanmortgage loan acquired after the applicable Series Closing Date),
as listed on the Mortgage Loan Schedule and from time to time included in the Collateral Pool.
“Mortgage Loan Schedule”: The list of Mortgage Loans transferred to each Issuer as
part of the Collateral Pool and attached hereto as Exhibit A-2 (as such list may be amended upon
each Series Closing Date and each Transfer Date, and otherwise be amended from time to time
in accordance with the Transaction Documents, including to reflect the conveyance by an Issuer
of any Mortgage Loan pursuant to the terms hereof). Such list shall set forth the following
information with respect to each Mortgaged Loan:
(i) the street address (including city, state and zip code) of the related Mortgaged
Property (if any);
(ii) the related Issuer loan number and name of Borrower;
(iii)
the initial Appraised Value of any related Mortgaged Property; and
(iv) the Mortgage Loan’s maturity date, if applicable.
“Mortgage Note”: The original executed note evidencing the indebtedness of a Borrower
under a Mortgage Loan, together with any rider, addendum or amendment thereto, or any
renewal, substitution or replacement of such note.
“Mortgaged Property”: Each parcel of real property listed on the Mortgaged Property
Schedule, the fee or leasehold interest in which is from time to time included in the Collateral
Pool, and each parcel of real property or leasehold interest in a commercial real estate property
securing a Mortgage Loan, including (to the extent not property of the related Tenant) the
buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs,
replacements
or improvements now or hereinafter erected or located on such parcel and
appurtenant easements and other property rights relating thereto.
“Mortgaged Property Schedule”: The list of Mortgaged Properties and Leases
transferred to each Issuer as part of the Collateral Pool and attached hereto as Exhibit A-1 (as
such list may be amended upon each Series Closing Date and each Transfer Date, and otherwise
be amended from time to time in accordance with the Transaction Documents, including to
reflect the conveyance by an Issuer of any Mortgaged Property pursuant to the terms hereof).
Such list shall set forth the following information with respect to each Mortgaged Property:
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(i) the street address (including city, state and zip code) of the Mortgaged Property;
(ii) the related Issuer lease number and name of Tenant;
(iii) the Appraised Value; and
(iv) the Lease’s final payment date.
“Net Assets” As defined in Section 6.04(b).
“Net Default Interest”: With respect to any (i) Lease, any Default Interest collected
thereon, net of any unreimbursed Advance Interest accrued on Property Protection Advances
made in respect of such Lease and reimbursable from such Default Interest in accordance with
the terms hereof and (ii) Mortgage Loan, any Default Interest collected thereon, net of any
unreimbursed Advance Interest accrued on Property Protection Advances made in respect of
such Mortgage Loan and reimbursable from such Default Interest in accordance with
the terms
hereof.
“Net Investment Earnings”: The amount by which the aggregate of all interest and other
income realized during a Collection Period on funds held in the Collection Account, the
Exchange Reserve Account and/or the Release Account (as the context may require), if any,
exceeds the aggregate of all losses, if any, incurred during such Collection Period in connection
with the investment of such funds.
“Net Release Price”: As defined in Section 3.05(b).
“Nonrecoverable Advance”: Any Nonrecoverable P&I Advance and/or Nonrecoverable
Property Protection Advance, as the context may require.
“Nonrecoverable P&I Advance”: Any P&I Advance previously made or proposed to be
made in respect of any Payment Date, that, as determined by the Property
Manager (or, if
applicable, the Back-Up Manager or Indenture Trustee), in its commercially reasonable, good
faith business judgment and (other than with respect to any such determination made by the
Indenture Trustee) in accordance with the Servicing Standard, will not be ultimately recoverable
by it from the proceeds on the Collateral Pool allocated in accordance with the priority set forth
in Section 2.11 of the Indenture with respect to the payment of Collateral Pool Expenses.
“Nonrecoverable Property Protection Advance”: Any Property Protection Advance
previously made or proposed to be made in respect of a Mortgaged Property (including any
Lease related thereto) or Mortgage Loan that, as determined by the Property Manager (or, if
applicable, the Back-Up Manager or Indenture Trustee), in its commercially reasonable good
faith business judgment and (other than
with respect any such determination made by the
Indenture Trustee) in accordance with the Servicing Standard, will not be ultimately recoverable
from late payments, Property Insurance Proceeds, Liquidation Proceeds or any other recovery on
or in respect of the related Mortgage Loan or Mortgaged Property or related Lease with respect
to which such Property Protection Advance was (or is proposed to be) made (including any
Monthly Lease Payments in respect of any Lease added to the Collateral upon any re-leasing of
the related Mortgaged Property).
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“Note Registrar”: As defined in the Indenture.
“Notes”: As defined in the Indenture.
“Noteholders”: As defined in the Indenture.
“Obligor”: A Tenant or a Borrower, as the context requires.
“Officer’s Certificate”: A certificate signed by a Servicing Officer of the Property
Manager or the Special Servicer or a Responsible Officer of the Indenture Trustee or the
applicable Issuer Member on behalf of an Issuer, as the case may be, and with respect to any
other Person, a certificate signed by the Chairman of the Board, the President, a Vice President
or Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant Treasurers or
Assistant Secretaries of such Person.
“Opinion of Counsel”:
A written opinion of counsel (which shall be rendered by counsel
that is Independent of the Issuers, the Issuer Members, the Indenture Trustee, the Property
Manager and the Special Servicer) in form and substance reasonably acceptable to and delivered
to the addressees thereof.
“Originators”: Collectively, each of Spirit Realty and its Affiliates which has conveyed
one or more Mortgage Loans or Mortgaged Properties to an Issuer pursuant to a Property
Transfer Agreement or otherwise.
“OTS”: The Office of Thrift Supervision or any successor thereto.
“P&I Advance”: As defined in Section 3.03(g) hereof.
“P&I Shortfall”: With respect to any Series of Notes and any Payment Date, in the event
that the Series Available Amount allocated (or to be allocated) to such Series of Notes in respect
of such Payment Date will be insufficient
to pay in full (x) the P&I Shortfall Scheduled Principal
Payment (if any), in respect of the Notes of such Series due on such Payment Date and (y)
accrued and unpaid Note Interest in respect of the Notes of such Series due on such Payment
Date, in each case in accordance with the terms of the Series Supplement with respect to such
Series of Notes, the amount of such insufficiency for such Payment Date. For the avoidance of
doubt and notwithstanding the foregoing, in no event shall P&I Shortfall include any Make
Whole Amount, Class B Deferred Interest, Post-ARD Additional Interest or Deferred Post-
ARD Additional Interest
“P&I Shortfall Scheduled Principal Balance”: With respect to any Series of Notes and
any Payment Date, the Scheduled Principal Payment (if any) with respect to each Class of Notes
in such Series other than any such Class of Notes whose
Anticipated Repayment Date (x) occurs
on such Payment Date or (y) has occurred prior to such Payment Date.
“Pari Passu Co-Lender Agreements”: Any co-lender agreement relating to any Issuer
acquiring Pari Passu Loans secured by Mortgaged Properties (or leasehold interests in real
property) that also secure Companion Loans held by parties other than such Issuer.
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“Pari Passu Loans”: Mortgage Loans secured by Mortgaged Properties (or leasehold
interests in real property) that also secure on a pari passu basis any Companion Loans.
“Payment Account”: As defined in the Indenture.
“Payment Date”: As defined in the Indenture.
“Payoff Amount”: An amount equal to the Collateral Value as of the First Collateral
Date of any Mortgage Loan or Mortgaged Property, as applicable, as of the First Collateral
Date with respect to such Mortgage Loan or Mortgaged Property, plus any due and unpaid
Monthly Loan Payment(s) or Monthly Lease Payment(s), as applicable, and any unreimbursed
Property Protection Advances (plus Advance Interest thereon), Emergency Property Expenses,
Liquidation Fees, Workout Fees,
Special Servicing Fees and Extraordinary Expenses, in each
case with respect to such Mortgage Loan or Mortgaged Property or the related Lease.
“Percentage Rent”: With respect to any Lease that does not provide for the payment of
fixed rent, the rent thereunder, if any, calculated solely as a percentage of the total sales
generated by the related Tenant at the related Mortgaged Property.
“Performance Undertaking”: As defined in the Indenture.
“Permitted Investments”: Any one or more of the following obligations or securities:
(i) direct obligations of, or obligations fully guaranteed as to timely payment of
principal and interest by, the United States of America or any agency or
instrumentality thereof; provided, that such obligations are backed by the full faith
and credit of the United States of America and have a predetermined, fixed
amount
of principal due at maturity (that cannot vary or change) and that each
such obligation has a fixed interest rate or has its interest rate tied to a single
interest rate index plus a single fixed spread;
(ii) obligations of the following agencies or instrumentalities of the United States of
America: the Export-Import Bank, the Farm Credit System Financial Assistance
Corporation, the Rural Economic Community Development Administration, the
General Services Administration, the U.S. Maritime Administration, the Small
Business Administration, the Government National Mortgage Association, the
U.S. Department of Housing & Urban Development, the Federal Housing
Administration and the Federal Financing Bank; provided, that such obligations
are backed by the full faith and credit of the United States of America, have a
predetermined, fixed amount of principal due
at maturity (that cannot vary or
change) and do not have an “r” highlight attached to any rating and that each such
obligation has a fixed interest rate or has its interest rate tied to a single interest
rate index plus a single fixed spread;
(iii) direct obligations of the following agencies or instrumentalities of the United
States of America that are not backed by the full faith and credit of the United
States: the Resolution Funding Corporation, the Federal Home Loan Bank System
(senior debt obligations only), the Federal National Mortgage Association (senior
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US-DOCS\96557504.296557504.7
debt obligations rated “Aaa” by Moody’s and “AAA” by S&P only) or the
Federal Home Loan Mortgage Corporation (senior debt obligations rated “Aaa”
by Moody’s and “AAA” by S&P only); provided, that such obligations have a
predetermined amount of principal due at maturity (that cannot vary or change)
and do not have an “r” highlight attached to any rating and that each such
obligation has a fixed interest rate or has its interest rate tied to a single interest
rate index plus a single fixed spread;
(iv) uncertificated certificates of deposit, time deposits and bankers’ acceptances
having maturities of not more than 360 days, of any bank or trust company
organized under the laws of the United States of America or any state thereof;
provided, that such
items are rated in the highest short-term debt rating category
of each Rating Agency or such lower rating as will not result in a qualification,
downgrading or withdrawal of the rating then assigned to the Notes by any Rating
Agency without giving effect to any Insurance Policy (as evidenced in writing by
each Rating Agency), do not have an “r” highlight affixed to its rating and have a
predetermined fixed amount of principal due at maturity (that cannot vary or
change);
(v) commercial paper (having original maturities of not more than 270 days) of any
corporation incorporated under the laws of the United States of America or any
state thereof (or of any corporation not so incorporated; provided, that the
commercial paper is denominated in United States dollars and amounts payable
thereunder are not subject to any withholding imposed by any non-United
States
jurisdiction) that is rated in the highest short-term debt rating category of each
Rating Agency or such lower rating as will not result in a qualification,
downgrading or withdrawal of the rating then assigned to the Notes by any Rating
Agency without giving effect to any Insurance Policy (as evidenced in writing by
each Rating Agency), does not have an “r” highlight affixed to its rating, has a
predetermined fixed amount of principal due at maturity (that cannot vary or
change) and has a fixed interest rate or has its interest rate tied to a single interest
rate index plus a single fixed spread, or any demand notes that constitute vehicles
for commercial paper rated in the highest unsecured commercial or finance
company paper rating category of each Rating Agency;
(vi) investments in money market funds rated “AA-mg” (or the equivalent rating)
or
higher by each Rating Agency; and
(vii) any other obligation or security the inclusion of which, as an Eligible Investment,
satisfies the Rating Agency Notification Condition.
provided, that (1) no investment described hereunder shall evidence either the right to receive
(x) only interest with respect to such investment or (y) a yield to maturity greater than 120% of
the yield to maturity at par of the underlying obligations, (2) no investment described hereunder
may be purchased at a price greater than par if such investment may be prepaid or called at a
price less than its purchase price prior to stated maturity (that cannot vary or change) and (3)
such Permitted Investments are either (x) at all times available or (y) mature prior to the Payment
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Date on which funds used to acquire such investment would otherwise be distributed pursuant to
Section 2.11 of the Indenture.
“Permitted Replacement Event”: As defined in Section 6.04(a) hereof.
“Permitted Termination Event”: As defined in Section 6.04(b) hereof.
“Person”: Any individual, corporation, partnership, joint venture, association, joint-stock
company, limited liability company, trust, estate, unincorporated organization or government or
any agency, instrumentality or political subdivision of any government, or any definition of
such term as may be provided in Sections 13(d) and 14(d) of the Exchange Act.
“Post-Closing Acquisition Reserve Account”: As defined in the Indenture.
“Post-Closing Property”: As defined in the Indenture.
“Prepayment
Consideration Payment”: With respect to any Mortgage Loan, any
yield maintenance or prepayment premium payment made by a Borrower in connection with
a Principal Prepayment on or other early collection of principal of a Mortgage Loan.
“Primary Servicing Office”: The office of the Property Manager or the Special Servicer,
as the context may require, that is primarily responsible for such party’s servicing obligations
hereunder.
“Principal Prepayment”: Any payment of principal voluntarily made by the Borrower on
a Mortgage Loan that is received in advance of its scheduled Due Date and that is not
accompanied by an amount of interest (without regard to any Yield Maintenance Premium that
may have been collected) representing scheduled interest due on any date or dates in any month
or
months subsequent to the month of prepayment.
“Prime Rate”: The “prime rate” published in the “Money Rates” section of The Wall
Street Journal, as such “prime rate” may change from time to time. If The Wall Street Journal
ceases to publish the “prime rate,” then the Indenture Trustee shall select an equivalent
publication that publishes such “prime rate”; and if such “prime rate” is no longer generally
published or is limited, regulated or administered by a governmental or quasi-governmental
body, then the Indenture Trustee shall select a comparable interest rate index. In either case, such
selection shall be made by the Indenture Trustee in its sole discretion and the Indenture Trustee
shall notify the Property Manager and the Special Servicer in writing of its selection.
“Principal Prepayment”: Any payment of principal voluntarily
made by the Borrower
on a Mortgage Loan that is received in advance of its scheduled Due Date and that is not
accompanied by an amount of interest (without regard to any Prepayment Consideration
Payment that may have been collected) representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment.
“Property Insurance Policy”: With respect to any Mortgage Loan and/or Mortgaged
Property, any hazard insurance policy, flood insurance policy, title policy, Environmental Policy,
residual value insurance policy or other insurance policy that is maintained from time to time in
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US-DOCS\96557504.296557504.7
respect of such Mortgage Loan and/or Mortgaged Property (including, without limitation, any
blanket insurance policy maintained by or on behalf of the applicable Issuer).
“Property Insurance Proceeds”: All proceeds received under any Property Insurance
Policy that provides coverage with respect to any Mortgaged Property or the related Mortgage
Loan, if applicable.
“Property Management Fee”: With respect to each Mortgage Loan and each
Mortgaged Property owned by the Issuer, the fee payable to the Property Manager pursuant to
Section 3.11(a).
“Property Management Fee Rate”: With respect to each Mortgage Loan and each
Lease, a fixed percentage rate equal to 0.25% per annum.
“Property Manager”: Spirit Realty, in its
capacity as property manager under this
Agreement, or any successor property manager appointed as herein provided.
“Property Manager Additional Servicing Compensation”: As defined in Section
3.11(b).
“Property Protection Advances”: With respect to the Leases, the Mortgage Loans and
the Mortgaged Properties:
(i) All customary, reasonable and necessary out-of-pocket costs and expenses
incurred by the Property Manager or the Back-Up Manager, in connection with
servicing the Leases, the Mortgaged Properties and the Mortgage Loans, in
accordance with the Servicing Standard and this Agreement, for the purpose of
paying (a) real estate taxes, (b) in the case of Leasehold Mortgaged Properties,
payments required to be made under the related ground leases, (c) premiums on
Property Insurance Policies (not already paid pursuant to Section 2.11 of
the
Indenture, as confirmed by the applicable Issuers) and (d) other amounts
necessary to preserve or maintain the security interest and lien of the Indenture
Trustee in, and value of, each related Mortgaged Property (including any costs
and expenses necessary to re-lease such Mortgaged Property), Lease or Mortgage
Loan (including costs and expenses related to collection efforts).
(ii) All customary, reasonable and necessary out-of-pocket costs and expenses
incurred by the Property Manager or the Back-Up Manager (or, if applicable, the
Special Servicer) in connection with the servicing of a Mortgage Loan after a
default, delinquency or other unanticipated event, or in connection with the
administration of any REO Property, including, but not limited to, the cost of (a)
compliance with the obligations of the Property Manager or the Special Servicer
set
forth in Sections 2.04(c), 3.03(c) and 3.17(b), (b) the preservation, insurance,
restoration, protection and management of any Collateral, including the cost of
any “force placed” insurance policy purchased by the Property Manager to the
extent such cost is allocable to a particular item of Collateral that the Property
Manager is required to cause to be insured pursuant to Section 3.07(a), (c)
obtaining any Liquidation Proceeds (insofar as such Liquidation Proceeds are of
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the nature described in the definition thereof) or Property Insurance Proceeds in
respect of any Collateral or REO Property, (d) any enforcement of judicial
proceedings with respect to any Collateral, including foreclosures, and (e) the
operation, management, maintenance and liquidation of any REO Property.
Notwithstanding anything to the contrary, “Property Protection Advances” shall not
include allocable overhead of the Property Manager or the Special Servicer, such as costs for
office space, office equipment, supplies and related expenses, employee salaries and related
expenses and similar internal costs and expenses.
“Property Transfer Agreements”: As defined in the Indenture.
“Protective Mortgage Loan”: Means any Mortgage Loan (a) with respect to which
Spirit Realty
or an affiliate thereof is the Borrower and (b) that was acquired by any Issuer in lieu
of such Issuer acquiring the Mortgaged Property or Mortgaged Properties securing such
Mortgage Loan in order to reduce or eliminate any actual or potential liability that such Issuer
would have had in the event that such Mortgaged Property or Mortgaged Properties were
acquired by such Issuer.
“Purchase Option Deficiency”: An amount equal to the deficiency, if any, between
125115% of the Allocated Loan Amount of a Mortgaged Property released in connection with a
Third Party Purchase Option and the related Third Party Option Price for such Mortgaged
Property.
“Purchase Premium”: As defined in Section 7.01(c).
“Qualified Deleveraging Event”: Either (i) a firm commitment underwritten public
offering of the equity interests of Spirit MTA or any direct or indirect
parent entity of
Spirit MTA pursuant to a registration statement under the Securities Act, which results in
aggregate cash proceeds to Spirit MTA or any direct or indirect parent entity of Spirit
MTA of at least $75 million (net of underwriting discounts and commissions), (ii) an
acquisition (whether by merger, consolidation or otherwise) of greater than fifty percent
(50%) of the voting equity interests of Spirit MTA, or any direct or indirect parent of
Spirit MTA by any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) or (iii) Spirit MTA or any direct or indirect parent or subsidiary of Spirit
MTA sells or transfers (whether by merger, consolidation or otherwise) all of its interests
in the Issuers or the Issuers convey or transfer (whether by merger, consolidation or
otherwise) all or substantially all the Collateral Pool in accordance
with the applicable
restrictions in the Indenture (in each case, other than a sale, transfer or other conveyance
to a direct or indirect parent or wholly owned subsidiary of Spirit MTA).
“Qualified Eligible Successor”: As defined in Section 6.04(b).
“Qualified Insurer”: An insurance company or security or bonding company qualified to
write the related Property Insurance Policy in the relevant jurisdiction.
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“Qualified Intermediary”: Any third-party acting as an “qualified intermediary”
within the meaning of Section 1031 of the Code and Section 1.1031(k)-1(g)(4) of the
Treasury Regulations.
“Qualified Release Amount”: An amount equal to the product of (i) the amount of
the Early Refinancing Prepayment and (ii) (a) the aggregate Collateral Value of all
Mortgaged Properties (not otherwise securing a Mortgage Loan) and Mortgage Loans
divided by (b) the aggregate Allocated Loan Amount of the Collateral Pool.
“Qualified Substitute Mortgage Loan”: (X) Any Qualified Substitute Protective
Mortgage Loan or (Y) any other commercial real estate loan acquired by the applicablean
Issuer, which, in the case of clause (Y), is: (a) in substitution for a Released Mortgage
Loan, (b)
with the proceeds (or a portion thereof) from the sale of a Released Mortgage Loan or (c) with
the proceeds (or a portion thereof) of a Balloon Payment or Principal Prepayment on a Mortgage
Loan and which, in theeach such case of any such commercial real estate loan, as of the date
of the acquisition thereof, (i) is secured by one or more Mortgaged Properties that would
constitute a Qualified Substitute Mortgaged Property (other than any requirements set forth in
clauses (iii) and (vii) of the definition thereof) in the event that it (or they) were exchanged by
such Issuer for the Mortgaged Property (or Mortgaged Properties) securing such Released
Mortgage Loan or the Mortgage Loan with respect to which such Balloon Payment or Principal
Prepayment was received, as applicable (it being understood that, for the purposes of this clause
(i), the Collateral Value
of each such Mortgaged Property shall be determined in accordance with
clause (i) of the definition of “Collateral Value” as if it did not secure a Mortgage Loan), (ii) has
an unpaid principal balance that, when combined with any cash proceeds received (or to be
received) in connection with such substitution or such sale, if applicable, and the principal
balance of each other commercial real estate loan acquired (or to be acquired) by the applicable
Issuer in substitution for such Released Mortgage Loan or with the proceeds of such sale or such
Balloon Payment or Principal Prepayment, as applicable, is not less than the unpaid principal
balance of such Released Mortgage Loan or the amount of such Balloon Payment or Principal
Prepayment, as applicable (other than the amount of such Balloon Payment or Principal
Prepayment that will remain in the Release Account after giving
effect to such acquisition), (iii)
has an Interest Rate not more than one percentage point less than such Released Mortgage Loan
or the Mortgage Loan with respect to which such Balloon Payment or Principal Prepayment was
made, as applicable, (iv) subject to any exceptions with respect to which the Rating Condition is
satisfied or the Requisite Global Majority has consented, the applicable Issuer has obtained from
an Originator or itself has made, with respect to such commercial real estate loan, either (x) all
of the representations and warranties originally made with respect to such Released Mortgage
Loan or Mortgage Loan with respect to which such Balloon Loan or Principal Prepayment was
made (or (y) all of the representations and warranties required to be made for Mortgage
Loans pursuant to Section 2.19 of the Indenture (in each case, with each date therein
referring
to, unless otherwise expressly stated, the date of such acquisition), (v) pays interest and,
if applicable, principal on a monthly basis, (vi) has been approved in writing by the Support
Provider, (vii) has a maturity date that is not more than one year earlier than such Released
Mortgage Loan or Mortgage Loan with respect to which the Balloon Payment or Principal
Prepayment was made, (viii) if such commercial real estate loan would constitute a Balloon Loan
and either such Released Mortgage Loan was a Balloon Loan or such commercial real estate loan
is being acquired with the proceeds of a Balloon Payment, such commercial real estate loan has a
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balloon payment that is not more than 10.0% larger than the Balloon Payment relating to such
Released Mortgage Loan or such Balloon Payment, as applicable and (ix) that has a Loan-to-
Value Ratio no greater than the higher of (a) 80.0% and (b) the Loan-to-Value Ratio of the
Released Mortgage Loan (or the Mortgage Loan with respect to which the Balloon Payment or
Principal Prepayment was made). If one or more of the foregoing criteria are not met (x) other
than with respect to a commercial real estate loan being acquired with the proceeds of a Balloon
Payment or Principal Prepayment, such commercial real estate loan will be a Qualified Substitute
Mortgage Loan if the Qualified Substitute Mortgage Loan Waiver Criteria are satisfied with
respect to such commercial real estate loan or (y) with respect to a commercial
real estate loan
being acquired with the proceeds of a Balloon Payment or Principal Prepayment, such
commercial real estate loan will be a Qualified Substitute Mortgage Loan if the Special Servicer
considers such acquisition to be in the interest of the Noteholders and the Rating Agency
Notification Condition is satisfied in connection with such acquisition.
“Qualified Substitute Mortgage Loan Waiver Criteria”: Means criteria that will be
satisfied with respect to any commercial real estate loan in the event that: (1) the Special Servicer
considers the acquisition by the applicable Issuer of such commercial real estate loan to be in the
interest of the Noteholders and (2) either (x) the Rating Condition is satisfied in connection with
such acquisition or (y) both (A) the Rating Agency Notification Condition is satisfied in
connection with such acquisition and (B)
after giving effect to such acquisition, the aggregate
Collateral Values (determined as of the date of acquisition by the applicable Issuer) of all
commercial real estate loans acquired pursuant to this clause (2)(y) and all commercial real estate
properties acquired pursuant to clause (2)(y) of the Qualified Substitute Mortgaged Property
Waiver Criteria, in each case during the Closing Date Period in which such acquisition occurs,
will not exceed 5.0% of the Aggregate Collateral Value (determined as of the Starting Closing
Date with respect to such Closing Date Period).
“Qualified Substitute Mortgaged Property”: Any commercial real estate property
acquired by the applicable Issuer (a) in substitution for a Released Mortgaged Property or a
Released Mortgage Loan, (b) with the proceeds (or a portion thereof) from the sale of a Released
Mortgaged Property or Released
Mortgage Loan or (c) with the proceeds (or a portion thereof) of
a Balloon Payment or Principal Prepayment on a Mortgage Loan and which, in any case, as of
the date of the acquisition thereof, (i) solely to the extent acquired with amounts on deposit in
the Release Account, has a Collateral Value that, when combined with any cash proceeds
received (or to be received) in connection with such substitution or such sale, if applicable,
and the Collateral Value of each other commercial real estate property acquired (or to be
acquired) by the applicable Issuer or Co-Issuer in substitution for such Released
Mortgaged Property or Released Mortgage Loan or with the proceeds of such sale or such
Balloon Payment or Principal Prepayment, as applicable, is equal to or greater than (x) in
the case of a Released Mortgaged Property, the Fair Market Value of such Released
Mortgaged Property,
(y) in the case of a Released Mortgage Loan, the principal balance of
such Released Mortgage Loan or (z) in the case of a Balloon Payment or Principal
Prepayment, the amount of such Balloon Payment or Principal Prepayment, as applicable
(other than the amount of such Balloon Payment or Principal Prepayment that will remain
in the Release Account after giving effect to such acquisition), (ii) solely to the extent
acquired through an exchange (and not with proceeds on deposit in the Release Account),
has a Fair Market Value that, when combined with any cash proceeds received (or to be
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received) in connection with such substitution or such sale, if applicable, and the Fair Market
Value of each other commercial real estate property acquired (or to be acquired) by the
applicable Issuer in substitution for such Released Mortgaged Property or Released Mortgage
Loan or with the proceeds of such sale or such Balloon Payment or Principal Prepayment, as
applicable, is equal to or greater than (x) in the case of a Released Mortgaged Property, the Fair
Market Value of such Released Mortgaged Property, (y) in the case of a Released Mortgage
Loan, the principal balance of such Released Mortgage Loan or (z) in the case of a Balloon
Payment or Principal Prepayment, the amount of such Balloon Payment or Principal Prepayment,
as applicable (other than the amount of such Balloon Payment or Principal Prepayment
that will
remain in the Release Account after giving effect to such acquisition), (ii)iii) solely to the extent
acquired through an exchange (and not with proceeds on deposit in the Release Account),
has a Collateral Value that, when combined with any cash proceeds received (or to be received)
in connection with such substitution or such sale, if applicable, and the Collateral Value of each
other commercial real estate property acquired (or to be acquired) by the Issuer in substitution
for such Released Mortgaged Property or Released Mortgage Loan or with the proceeds of such
sale or such Balloon Payment or Principal Prepayment, as applicable, is equal to or greater than
(x) in the case of a Released Mortgaged Property, the Collateral Value of such Released
Mortgaged Property, (y) in the case of a Released Mortgage Loan, the principal balance of such
Released Mortgage
Loan or (z) in the case of a Balloon Payment or Principal Prepayment, the
amount of such Balloon Payment or Principal Prepayment, as applicable (other than the amount
of such Balloon Payment or Principal Prepayment that will remain in the Release Account after
giving effect to such acquisition), (iiiiv) subject to any exceptions with respect to which the
Rating Condition is satisfied or the Requisite Global Majority has consented, such Issuer has
obtained from an Originator or itself has made, (A) with respect to any such commercial real
estate property, acquired in substitution for a Released Mortgaged Property, either (x) all of
the representations and warranties originally made with respect to such Released Mortgaged
Property, or, in the event that (y) all of the representations and warranties required to be
made with respect to commercial real estate loans contemplated by Section
2.19 of the
Indenture for Mortgaged Properties or (B) with respect to any such commercial real estate
property is being acquired in substitution for, or with the proceeds of, any Released Mortgage
Loan, or the proceeds of any Balloon Payment or Principal Prepayment of a Mortgage Loan, all
of the representations and warranties required to be made with respect to commercial real
estate loans contemplated by Section 2.19 of the Indenture for Mortgaged Properties (in each
case, with each date therein referring to, unless otherwise expressly stated, the date of such
acquisition), (ivv) in the event that such commercial real estate property were included as a
Mortgaged Property in the Collateral Pool as of the end of the Collection Period preceding the
Collection Period in which such acquisition occurs, it would not have lowered the weighted
average of the FCCR for all Mortgaged
Properties in the Collateral Pool and all Mortgaged
Properties securing Mortgage Loans in the Collateral Pool, based upon the most recent
determination of each such FCCR by the Property Manager (weighted based on the Allocated
Loan Amount of each such Mortgaged Property), (v; provided, however, with respect to no
more than 10% of the Aggregate Collateral Value in any Closing Date Period (determined
as of the applicable Starting Closing Date), such Qualified Substitute Mortgaged Properties
will not be subject to the weighted average FCCR criteria set forth in this clause (v), but
instead will be required to have a minimum FCCR of 2.5 (measured as of the date of each
respective substitution); provided, further, that with respect to no more than 5% of the
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US-DOCS\96557504.296557504.7
Aggregate Collateral Value in any Closing Date Period, such Qualified Substitute
Mortgaged Properties will not be subject to the weighted average FCCR or minimum
FCCR criteria set forth in this clause (v) so long as the Tenant under the related Lease (or
any related Guarantor) has an investment grade rating from S&P, Moody’s or Fitch
Ratings, Inc.,, (vi) in the event that any lease relating to such commercial real estate property
were included as a “Lease” in the Collateral Pool as of the end of the Collection Period
preceding the Collection Period in which such acquisition occurs, it would not have lowered the
weighted average of the Monthly Lease Payments for all Leases in the Collateral Pool and all
leases relating to Mortgaged Properties securing Mortgage Loans in the Collateral Pool
(weighted
based on the Allocated Loan Amount of each such Mortgaged Property), (vi) in the
event that any lease relating to such commercial real estate property were included as a “Lease”
in the Collateral Pool as of the end of the Collection Period preceding the Collection Period in
which such acquisition occurs, it would not have lowered the weighted average of the remaining
lease termMonthly Lease Payments for all Leases in the Collateral Pool and all leases relating
to Mortgaged Properties securing Mortgage Loans in the Collateral Pool (weighted based on the
Allocated Loan Amount of each such Mortgaged Property), (vii) in the event that any lease
relating to such commercial real estate property were included as a “Lease” in the
Collateral Pool as of the end of the Collection Period preceding the Collection Period in
which such acquisition occurs, it would not have lowered
the weighted average of the
remaining lease term for all Leases in the Collateral Pool and all Leases relating to
Mortgaged Properties securing Mortgage Loans in the Collateral Pool (weighted based on
the Allocated Loan Amount of each such Mortgaged Property), (viii) if the tenant thereof or
any third party has an option to purchase such commercial real estate property, the contractual
amount of such option price is no less than what the Allocated Loan Amount of such commercial
real estate property would be after giving effect to such acquisition, (viiiix) has been approved in
writing by the Support Provider, (ixx) is leased pursuant to a “triple net” lease and (xxi) has an
appraisal that meets the applicable requirements set forth in the definition of “Appraised Value.”
If one or more of the foregoing criteria are not met, such commercial real estate property will
be
a Qualified Substitute Mortgaged Property if the Qualified Substitute Mortgaged Property
Waiver Criteria are satisfied with respect to such commercial real estate property.
“Qualified Substitute Mortgaged Property Waiver Criteria”: Means criteria that will
be satisfied with respect to any commercial real estate property in the event that: (1) the Special
Servicer considers the acquisition by the applicable Issuer of such commercial real estate
property to be in the interest of the Noteholders and (2) either (x) the Rating Condition is
satisfied in connection with such acquisition or (y) both (A) the Rating Agency Notification
Condition is satisfied in connection with such acquisition and (B) after giving effect to such
acquisition, the aggregate Collateral Values (determined as of the date of acquisition by the
applicable Issuer) of all commercial real estate
properties acquired pursuant to this clause (2)(y)
and all commercial real estate loans acquired pursuant to clause (2)(y) of the Qualified Substitute
Mortgage Loan Waiver Criteria, in each case during the Closing Date Period in which such
acquisition occurs, will not exceed 5.0% of the Aggregate Collateral Value (determined as of the
Starting Closing Date with respect to such Closing Date Period).
“Qualified Substitute Protective Mortgage Loan”: Means any Protective Mortgage
Loan that (i) is secured by one or more Mortgaged Properties that would constitute a Qualified
Substitute Mortgaged Property (other than any requirements set forth in clauses (iii) and (vii) of
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US-DOCS\96557504.296557504.7
the definition thereof) in the event that it (or they) were exchanged by an Issuer for the Released
Mortgaged Property (it being understood that, for the purposes of this clause (i), the Collateral
Value of each such Mortgaged Property shall be determined in accordance with clause (i) of the
definition of “Collateral Value” as if it did not secure a Mortgage Loan), (ii) has an unpaid
principal balance that, when combined with any cash proceeds received (or to be received) in
connection with the substitution or sale of the applicable Released Mortgaged Property, if
applicable, and the principal balance of each other commercial real estate loan or commercial
real estate property acquired (or to be acquired) by the applicable Issuer in substitution for such
Released Mortgaged Property or with the proceeds
of such sale or substitution, is not less than
the Collateral Value of such Released Mortgaged Property, (iii) with respect to which, subject to
any exceptions with respect to which the Rating Condition is satisfied or the Requisite Global
Majority has consented, the applicable Issuer has obtained from an Originator or itself has made,
with respect to such Protective Mortgage Loan,all of the representations and warranties set
forth herein with respect torequired to be made for Mortgage Loans pursuant to Section
2.19 of the Indenture (with each date therein referring to, unless otherwise expressly stated, the
date of such acquisition) and (iv) has been approved in writing by the Support Provider.
“Rating Agency”: As defined in the Indenture.
“Rating Agency Notification Condition”: As defined in the Indenture.
“Rating Condition”: As defined in the Indenture.
“Re-Appraised Value: With respect to each Mortgaged Property that is the subject of a
Global Appraisal Event, the Appraised Value that is determined with respect to such Mortgaged
Property in connection with such Global Appraisal Event. In the event that multiple Global
Appraisal Events occur with respect to the same Mortgaged Property, the Appraised Value
determined with respect to the most recent Global Appraisal Event shall constitute the Re-
Appraised Value of such Mortgaged Property.
“Reimbursement Rate”: The rate per annum applicable to the accrual of Advance
Interest, which rate per annum is equal to the Prime Rate plus 2.0%.
“Release”: As defined in Section 7.01(a).
“Release Account”: The segregated account established and maintained by the
Indenture Trustee on behalf of the Noteholders
and the IssuersAs defined in Section
3.04(b).
“Release Parcel”: With respect to the Post-Closing Properties identified as
Buehler’s Food Market (1055 Sugarbush Drive) and Buehler’s Food Market (3540
Burbank Road), an undeveloped portion of each such property that (i) was not considered
in determining the purchase price thereof paid by the Originator with respect thereto and
(ii) is subject to an option on the part of the related Tenant permitting such Tenant to
subdivide and reacquire such undeveloped portion for a nominal amount.
“Release Price”: As defined in Section 7.01(b).
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US-DOCS\96557504.296557504.7
“Remaining Parcel”: As defined in Section 7.01(a).
“Relinquished Property”: Any Mortgaged Property qualifying as “relinquished
property” within the meaning of Section 1.1031(k)-(1(a) of the Treasury Regulations (or
any successor section).
“Relinquished Property Agreement”: Any agreement relating to the sale or
disposition of Relinquished Property.
“Relinquished Property Proceeds”: means the proceeds of the sale or disposition of
Relinquished Property.
“Remittance Date”: The Business Day preceding each Payment Date.
“Removed Mortgaged Property”: Each Third Party Option Mortgaged Property and
each Lease Transfer Mortgaged Property, released at any time from the lien of the Indenture.
“REO Acquisition”: The acquisition of any REO Property pursuant to Section 3.09.
“REO Disposition”: The sale or other disposition of any REO Property pursuant to
Section 3.18.
“REO Property”: A Mortgaged Property acquired by or on behalf of the Indenture
Trustee through foreclosure, acceptance of a deed-in-lieu of foreclosure or otherwise in
accordance with applicable law in connection with the default or imminent default of a Mortgage
Loan.
“REO Revenues”: All income, rents, profits and proceeds derived from the ownership,
operation or leasing of any REO Property.
“Replacement Property”: Mortgaged Properties that are (i) of a “like-kind” (within
the meaning of Section 1.1031(a)-1(b) of the Treasury Regulations (or any successor
section)) to any Relinquished
Property and otherwise satisfying the definition of and
requirements for “replacement property” under the Treasury Regulations and (ii) satisfy
the definition of Qualified Substitute Mortgaged Property.
“Replacement Property Agreement”: Any agreement relating to the acquisition of
Replacement Property.
“Request for Release”: A request signed by a Servicing Officer, as applicable, of the
Property Manager substantially in the form of Exhibit B attached hereto or of the Special
Servicer substantially in the form of Exhibit C attached hereto.
“Requisite Global Majority”: As defined in the Indenture.
“Responsible Officer”: As defined in the Indenture.
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“Restaurant Concept”: With respect to any properties operated within the Restaurants
Business Sector, any chain of properties that share substantially the same characteristics.
“S&P”: Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies,
Inc.
“Series”: As defined in the Indenture.
“Series 2014-1 Supplement”: The Series 2014-1 Supplement to the Indenture, dated as
of the date hereof, among the Issuers and the Indenture Trustee, as amended, supplemented or
modified from time to time.
“Series 2017-1 Supplement”: The Series 2017-1 Supplement to the Indenture, dated
as of the Series 2017-1 Closing Date, among the Issuers and the Indenture Trustee, as
amended, supplemented or modified from time to time.
“Series Account: As
defined in the Indenture.
“Servicer Replacement Event”: The meaning specified in Section 6.01(a).
“Servicing Account”: The segregated account or accounts created and maintained
pursuant to Section 3.03(a).
“Servicing Fees”: With respect to each Mortgage Loan, Mortgaged Property and Lease,
the Property Management Fee, the Back-Up Fee, the Special Servicing Fee, if any, and the
Additional Servicing Compensation, if any.
“Servicing File”: Any documents (other than documents required to be part of the related
Loan File or Lease File) in the possession of the Property Manager or the Special Servicer and
relating to the origination and servicing of any Mortgage Loan or Lease or the administration of
any Mortgaged Property (including copies of all applicable Property Insurance Policies with
respect
thereto).
“Servicing Officer”: Any officer or employee of the Property Manager or the Special
Servicer, as applicable, involved in, or responsible for, the administration, management and
servicing of the Mortgage Loans, Mortgaged Properties and Leases, whose name and specimen
signature appear on the list of servicing officers furnished, from time to time, by such party to
the applicable Issuers and the Indenture Trustee.
“Servicing Standard”: To provide property management services for the Mortgaged
Properties and to service and special service the Mortgage Loans and Leases on behalf of the
applicable Issuers in accordance with applicable law, the terms of this Agreement, the terms of
the respective Mortgage Loans and Leases and, to the extent consistent with the foregoing, (x) in
the same manner in which,
and with the same care, skill, prudence and diligence with which, the
Property Manager or the Special Servicer, as the case may be, (a) services and administers
similar mortgage loans, leases and mortgaged properties for other third party portfolios or (b)
administers similar mortgage loans, leases and mortgaged properties for its own account or (y) in
a manner normally associated with the servicing and administration of similar properties,
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whichever standard is highest, in all cases taking into account the best interests of the
Noteholders and taking into consideration the maximization of revenue, but without regard to: (i)
any known relationship that the Property Manager or Special Servicer, or an Affiliate of the
Property Manager or Special Servicer, may have with any Issuer, any Originator, the Support
Provider, any Tenant, any Borrower, any of their respective Affiliates or any other party to the
Transaction Documents; (ii) the ownership of any Note or LLC Interest by the Property Manager
or Special Servicer or any Affiliate of the Property Manager or Special Servicer, as applicable;
(iii) the Property Manager’s obligation to make Advances, to incur servicing expenses or to
withdraw (or, in the event the Property Manager is Spirit Realty, to
direct the Indenture Trustee
to withdraw) funds from the Collection Account to pay Emergency Property Expenses with
respect to the Mortgage Loans, the Leases or the Mortgaged Properties; (iv) the Property
Manager’s or Special Servicer’s right to receive compensation for its services or reimbursements
of the costs under this Agreement; (v) the ownership, servicing or management for others, by the
Property Manager, the Special Servicer or any Originator or other Affiliate of any other
leases or property; (vi) the repurchase and indemnification obligations of the Originators or
Support Provider; or (vii) the existence of any loans made to a Tenant by the Property Manager,
the Special Servicer or Spirit Realty or any Affiliate of the Property Manager, the Special
Servicer or Spirit Realty.
“Servicing Transfer Agreement”: As defined in Section 5.04.
“Servicing
Transfer Date”: As defined in Section 5.04.
“Servicing Transfer Event”: With respect to any Mortgaged Property, the occurrence of
any of the events described in clauses (a) through (e) of the definition of “Specially Serviced
Lease.” With respect to any Mortgage Loan, the occurrence of any of the events described in
clauses (a) through (e) of the definition of “Specially Serviced Loan.”
“Special Servicer”: Spirit Realty, in its capacity as special servicer under this
Agreement, or any successor special servicer appointed as herein provided.
“Special Servicer Additional Servicing Compensation”: As defined in Section 3.11(d).
“Special Servicer Report”: As defined in Section 4.01(b).
“Special Servicing Fee”: With respect to each Specially
Serviced Asset, the fee
designated as such and payable to the Special Servicer pursuant to the first paragraph of Section
3.11(c).
“Special Servicing Fee Rate”: With respect to each Specially Serviced Asset, a fixed
percentage rate equal to 0.75% per annum.
“Specially Serviced Asset”: A Specially Serviced Lease or a Specially Serviced Loan.
“Specially Serviced Lease”: Any Lease as to which any of the following events occurs
or exists:
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(i) any Monthly Lease Payment becomes delinquent for 60 or more consecutive
days;
(ii) the Property Manager determines in its good faith and reasonable judgment that a
default in making a Monthly Lease Payment is likely to occur within 30 days and
is not likely to be remedied for 60 days;
(iii) the Property Manager receives written notice from the Tenant indicating that such
Tenant cannot make future Monthly Lease Payments or requesting a reduction in
the amount of its Monthly Lease Payments;
(iv) a default (other than as described in clause (a) above) occurs that materially and
adversely affects the interests of the Issuers and that continues unremedied for the
applicable grace period under the terms of the Lease (or, if no grace period is
specified, for 30 days); or
(v)
the related Tenant becomes insolvent, readjusts its debt, is subject to marshaling
of assets and liabilities, or similar proceedings in respect of the related Tenant
occur, or as to which the related Tenant (in the good faith and reasonable
judgment of the Property Manager) takes actions indicating its insolvency or its
inability to pay its obligations or the Property Manager or the Special Servicer
receives notice of commencement of foreclosure or similar proceedings with
respect to the related Mortgaged Property.
“Specially Serviced Lease Trigger Event”: Each of the circumstances identified in
clauses (a) through (e) of the definition of the term “Specially Serviced Lease”.
“Specially Serviced Loan”: Any Mortgage Loan as to which any of the following events
has occurred:
(i) any Monthly Loan Payment becomes delinquent for 60 or more consecutive days;
(ii) the Property Manager determines in its good faith and reasonable judgment that a
default in making a Monthly Loan Payment is likely to occur within 30 days and
is not likely to be remedied for 60 days;
(iii) the Property Manager receives written notice from the Borrower indicating that
such Borrower cannot make future Monthly Loan Payments or requesting a
reduction in the amount of its payment;
(iv) a default (other than as described in clause (a) above) occurs that materially and
adversely affects the interests of the Issuers and that continues unremedied for the
applicable grace period under the terms of the Mortgage Loan (or, if no grace
period is specified, for 30 days); or
(v) the related Borrower becomes insolvent, readjusts its debt,
is subject to
marshaling of assets and liabilities, or similar proceedings in respect of the related
Borrower occur, or as to which the related Borrower (in the good faith and
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reasonable judgment of the Property Manager) takes actions indicating its
insolvency or its inability to pay its obligations or the Property Manager or the
Special Servicer receives notice of commencement of foreclosure or similar
proceedings with respect to the related Mortgaged Property.
“Specially Serviced Loan Trigger Event”: Each of the circumstances identified in
clauses (a) through (e) of the definition of the term “Specially Serviced Loan”.
“Specified Permitted Subdivision”: With respect to each Post-Closing Property
containing a Release Parcel, the subdivision of such Mortgaged Property to permit the
transfer of the Release Parcel to the related Tenant.
“Specified Permitted Subdivision Conditions”: As defined in Section
7.01(a).
“Spin-Off”: A transaction whereby Spirit Realty (or its parent) will “spin-off”
certain of its real estate assets, including the Issuers and the Collateral Pool.
“Spirit MTA”: Spirit MTA REIT, a Maryland real estate investment trust, and its
successors and assigns.
“Spirit Realty”: Spirit Realty, L.P., a Delaware limited partnership, and its successors
and assigns.
“Spirit SPE”: Any special purpose, bankruptcy remote subsidiary (direct or indirect) of
Spirit Realty (other than any Originator).
“Starting Closing Date”: With respect to any Closing Date Period, the Series Closing
Date upon which such Closing Date Period commences.
“Sub-Manager”: Any Person with which the Property Manager or the Special Servicer
has entered into a Sub-Management Agreement.
“Sub-Management Agreement”:
The written contract between the Property Manager or
the Special Servicer, on the one hand, and any Sub-Manager, on the other hand, relating to
servicing and administration of Mortgage Loans, Leases and Mortgaged Properties, as provided
in Section 3.21, as may be amended, supplemented or otherwise modified.
“Successor Property Manager”: As defined in Section 6.01(b).
“Successor Replacement Date”: As defined in Section 6.01(b).
“Successor Special Servicer”: As defined in Section 6.01(b).
“Support Provider”: Spirit Realty or any successor support provider.
“Support Provider SPE”: Any special purpose, bankruptcy remote subsidiary
(direct or indirect) of the Support Provider.
“Sweep Period”: As defined in the Indenture.
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“Tax Required Condition”: As defined in Section 7.01(a).
“Taxable REIT Subsidiary” With respect to Spirit Realty, an Affiliate thereof that
is a “taxable REIT subsidiary” under the Code.
“Tenant”: With respect to each Lease, the tenant under such Lease and any successor or
assign thereof.
“Terminated Lease Property”: A Mortgaged Property, with respect to which (a) the
related Lease has expired, has been terminated or has been rejected in a bankruptcy,
insolvency or similar proceeding of the Tenant, (b) the related Tenant has notified the
Property Manager or the applicable Issuer of its intent to not renew such Lease within 24
months of the termination date of the related Lease or (c) the related Tenant has otherwise
failed to comply with the procedures for
renewal under the terms of the related Lease
(including, but not limited to, any notice provisions relating to renewal of the Lease);
provided solely in the case of an expiration, termination or rejection as described in clause
(a), the Property Manager has used commercially reasonable efforts to renew such Lease
or obtain a new Lease of such Mortgaged Property.
“Third Party Option Expenses”: Any reasonable out-of-pocket costs and expenses (but
not internal costs and expenses) incurred by the Issuers (or Property Manager or Special
Servicer, as applicable, on behalf of the Issuers) in connection with the exercise of a Third Party
Purchase Option with respect to the applicable Mortgaged Property; provided, that such costs
and expenses shall not exceed $50,000 with respect to any single Mortgaged Property.
“Third Party Option Mortgaged Property”: As defined
in Section 7.02(a).
“Third Party Option Price”: A cash price equal to (i) the amount specified in a related
Lease or other, Lease Document or relatedother agreement, as payable by a Tenant or any
other Person in connection with the exercise of a Third Party Purchase Option minus (ii) the
Third Party Option Expenses in connection with such exercise.
“Third Party Purchase Option”: An option of a Tenant or any other Person under or in
connection with a Lease, Lease Documents or other related agreements to purchase the related
Mortgaged Property before or at the expiration of the Lease term.
“Title Company”: As defined in Section 2.03(a).
“Title Insurance Policies”: As defined in Section 2.03(a).
“Total Debt Service”: As defined in the Indenture.
“Transfer Date”: The date on which a Mortgage Loan or Mortgaged Property is
acquired by the applicable Issuer.
“Treasury Regulations” Any treasury regulations relating to like-kind exchanges
and Section 1031 of the Code (or any successor section thereof).
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“Unscheduled Principal Payment”: On any Payment Date, the sum of (a) the
Unscheduled Proceeds deposited into the Collection Account during the Collection Period
relating to such Payment Date plus (b) any Purchase Option Deficiency arising during such
Collection Period, together with any Purchase Option Deficiency from any prior Payment Date
or related Collection Period with respect to which Available Amounts were not allocated to any
Series pursuant to Section 2.11(b) the Indenture.
“Unscheduled Proceeds”: Collectively, Liquidation Proceeds, Condemnation Proceeds,
Property Insurance Proceeds, Principal Prepayments, Release Prices, Balloon Payments and,
Purchase Premiums and Exchange Cash Collateral; provided, however, that any amounts
which are on deposit in the Release Account or the Exchange
Reserve Account shall not be
deemed Unscheduled Proceeds until such amounts have been transferred to the Collection
Account.
“Uniform Commercial Code”: The Uniform Commercial Code as in effect in any
applicable jurisdiction.
“Workout Fee”: With respect to each Corrected Loan and each Corrected Lease, the fee
payable to the Special Servicer pursuant to Section 3.11(f).
“Workout Fee Rate”: With respect to each Corrected Loan and each Corrected Lease, a
fixed percentage rate equal to 0.50%.
“Yield Maintenance Premium”: With respect to any Mortgage Loan, any premium,
penalty or fee paid or payable, as the context requires, by a Borrower in connection with a
Principal Prepayment on or other early collection of principal of a Mortgage Loan.
Section
1.02 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings when used
in any certificate or other document made or delivered pursuant hereto unless otherwise defined
therein.
(b) As used in this Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any
such certificate or other document, and accounting terms partly defined in this Agreement or in
any such certificate or other document, to the extent not defined, shall have the respective
meanings given to them under GAAP. To the extent that the definitions of accounting terms in
this Agreement or in any such certificate or other document are inconsistent with the meanings
of such terms under GAAP, the definitions contained in this Agreement or in any such certificate
or
other document shall control.
(c) 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; Section and Exhibit references contained in this Agreement are
references to Sections and Exhibits in or to this Agreement unless otherwise specified; a
reference to a subsection or other subdivision without further reference to a Section is a reference
to such subsection or other subdivision as contained in the Section in which the reference
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appears; and the words “include” and “including” shall mean without limitation by reason of
enumeration.
(d) The definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as the feminine and neuter genders
of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement, instrument or
statute as from time to time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and instruments incorporated
therein; references to a Person are also to its permitted assignees.
Section 1.03 Certain Calculations in Respect of the
Leases and the Mortgage Loans.
(a) All amounts collected in respect of any Lease in the form of payments from the
related Tenants, Guaranties, Property Insurance Proceeds or otherwise shall be applied to
amounts due and owing under the Lease in accordance with the express provisions of such
Lease, and all amounts collected in respect of any Mortgage Loan in the form of payments from
the related Borrower, Guaranties, Liquidation Proceeds or Property Insurance Proceeds shall be
applied to amounts due and owing under the related Mortgage Note and Mortgage (including for
principal and accrued and unpaid interest) in accordance with the express provisions of the
related Mortgage Note and Mortgage; in the absence of such express provisions, all amounts
collected shall be applied for purposes of this Agreement: (i) with respect to amounts collected in
respect to any Lease, first,
as a recovery of any related and unreimbursed Property Protection
Advances, and second, in accordance with the Servicing Standard, but subject to Section 1.03(c),
as a recovery of any other amounts then due and owing under such Lease, including, without
limitation, Additional Rent and Default Interest; and (ii) with respect to amounts collected in
respect of any Mortgage Loan, first, as a recovery of any related and unreimbursed Property
Protection Advances, second, as a recovery of accrued and unpaid interest at the related Interest
Rate on such Mortgage Loan to but not including, as appropriate, the date of receipt or the Due
Date in the Collection Period of receipt, third, as a recovery of principal of such Mortgage Loan
then due and owing, including by reason of acceleration of the Mortgage Loan following a
default thereunder (or, if a liquidation event has occurred in respect
of such Mortgage Loan, a
recovery of principal to the extent of its entire remaining unpaid principal balance), fourth, as a
recovery of any Yield Maintenance PremiumPrepayment Consideration Payment then due
and owing under such Mortgage Loan, fifth, in accordance with the Servicing Standard, but
subject to Section 1.03(c), as a recovery of any other amounts then due and owing under such
Mortgage Loan, including Default Interest, and sixth, as a recovery of any remaining principal of
such Mortgage Loan to the extent of its entire remaining unpaid principal balance. Any proceeds
derived from an unleased Mortgaged Property (exclusive of related operating costs, including
reimbursement of Property Protection Advances made by the Property Manager or the Back-Up
Manager in connection with the operation and disposition of such Mortgaged Property) shall be
applied by the Property
Manager in the same manner as if they were Monthly Lease Payments
due on the previously existing Lease for such Mortgaged Property until such Lease becomes a
Liquidated Lease pursuant to the terms of such Lease and the related Lease Documents.
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(b) Collections in respect of each REO Property (exclusive of amounts to be applied
to the payment of the costs of operating, managing, maintaining and disposing of such REO
Property) shall be treated: first, as a recovery of any related and unreimbursed Property
Protection Advances; second, as a recovery of accrued and unpaid interest on the related
Mortgage Loan at the related Interest Rate to but not including the Due Date in the Collection
Period of receipt; third, as a recovery of principal of the related Mortgage Loan to the extent of
its entire unpaid principal balance; and fourth, in accordance with the Servicing Standard, but
subject to Section 1.03(c), as a recovery of any other amounts deemed to be due and owing in
respect of the related Mortgage Loan.
(c) Insofar as amounts received in respect
of any Lease, Mortgage Loan or REO
Property which are allocable to fees and charges owing in respect of such Lease, Mortgage Loan
or REO Property which constitute Additional Servicing Compensation payable to the Property
Manager or Special Servicer are insufficient to cover the full amount of such fees and charges,
such amounts shall be allocated between such of those fees and charges as are payable to the
Property Manager, on the one hand, and as are payable to the Special Servicer, on the other, pro
rata in accordance with their respective entitlements with respect to such Lease, Mortgage Loan
or REO Property.
(d) The foregoing applications of amounts received in respect of any Lease, Mortgage
Loan or REO Property shall be determined by the Property Manager and reflected in the
appropriate monthly Determination Date Report and any Modified Collateral Detail and Realized
Loss Report.
(e) Notwithstanding the early termination of any Lease resulting from a default by the
related Tenant, such Lease will be treated for purposes of determining Servicing Fees and
Indenture Trustee Fees as remaining in effect until such Lease becomes a Liquidated Lease.
Section 1.04 Fee Calculations; Interest Calculations.
(a) The calculation of the Servicing Fees shall be made in accordance with Section
3.11. All dollar amounts calculated hereunder shall be rounded to the nearest penny with one-
half of one penny being rounded up.
(b) The amount of interest accrued on each Mortgage Loan during any Interest
Accrual Period will be calculated in arrears based on the terms specified in the related Mortgage
Documents.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; RECORDINGS AND FILINGS; BOOKS AND
RECORDS;
DEFECT, BREACH, CURE, REPURCHASE AND SUBSTITUTION;
FINANCIAL COVENANTS
Section 2.01 Representations and Warranties of Spirit Realtythe Property Manager
and the Back-Up Manager.
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(a) Spirit RealtyThe Property Manager represents and warrants to the other parties
hereto, and for the benefit of the Issuers, the Indenture Trustee on behalf of the Noteholders, as
of each Series Closing Date:
(i) Spirit RealtyThe Property Manager is a limited partnership duly
organized, validly existing, and in good standing under the laws of the State of Delaware
and is in compliance with the laws of each state (within the United States of America) in
which any Mortgaged Property is located to the extent necessary to its performance under
this Agreement;
(ii) The execution and delivery of this Agreement by Spirit Realtythe
Property Manager, and the performance and compliance with the terms of this
Agreement by Spirit Realtythe Property Manager, do not violate its organizational
documents
or constitute an event that, with notice or lapse of time, or both, would
constitute a default under, or result in the breach of, any material agreement or other
instrument to which it is a party or by which it is bound;
(iii) Spirit RealtyThe Property Manager has the power and authority to enter
into and consummate all transactions to be performed by it contemplated by this
Agreement, has duly authorized the execution, delivery and performance by it of this
Agreement, and has duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization, execution and delivery by
each of the other parties hereto, constitutes a valid, legal and binding obligation of Spirit
Realtythe Property Manager, enforceable against Spirit Realtythe Property Manager
in accordance with the terms hereof (except as such enforceability may be limited by
bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors’ rights generally or by general equitable principles,
whether considered in a proceeding at law or in equity and by an implied covenant of
good faith and fair dealing);
(v) Spirit RealtyThe Property Manager is not in violation of, and its
execution and delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any order or decree of
any court or arbiter, or any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation is likely to affect materially and
adversely either the ability of Spirit Realtythe Property Manager to perform its
obligations under this Agreement or the financial condition of Spirit Realtythe Property
Manager;
(vi) No litigation is pending or, to Spirit Realty’sthe Property Manager’s
knowledge, threatened against Spirit Realtythe Property Manager that is reasonably
likely to be determined adversely to Spirit Realtythe Property Manager and, if
determined adversely to Spirit Realtythe Property Manager, would prohibit Spirit
Realtythe Property Manager from entering into this Agreement or that, in Spirit
Realty’sthe Property Manager’s good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of Spirit Realtythe Property Manager
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to perform its obligations under this Agreement or the financial condition of Spirit
Realtythe Property Manager;
(vii) No consent, approval, authorization or order under any court or
governmental agency or body is required for the execution, delivery and performance by
Spirit Realtythe Property Manager of, or the compliance by Spirit Realtythe
Property Manager with, this Agreement or the consummation of the transactions of
Spirit Realtythe Property Manager contemplated by this Agreement, except for any
consent, approval, authorization or order that has been obtained or that if not obtained
would not have a material and adverse effect on the ability of Spirit Realtythe Property
Manager to perform its obligations hereunder; and
(viii) Each officer and employee of Spirit Realtythe Property Manager
that
has responsibilities concerning the management, servicing and administration of
Mortgaged Properties, Leases and Mortgage Loans is covered by errors and omissions
insurance and the fidelity bond as and to the extent required by Section 3.07(c).
(b) The representations and warranties of Spirit Realtythe Property Manager set
forth in Section 2.01(a) shall survive the execution and delivery of this Agreement and shall
inure to the benefit of the Persons to whom and for whose benefit they were made until all
amounts owed to the Noteholders under or in connection with this Agreement, the Indenture and
the Notes have been indefeasibly paid in full. Upon discovery by any party hereto of any breach
of any of the foregoing representations and warranties, the party discovering such breach shall
give prompt written notice to the other parties.
(c) Any successor Property
Manager or Special Servicer shall be deemed to have
made, as of the date of its succession, each of the representations and warranties set forth in
Section 2.01(a), subject to such appropriate modifications to the representation and warranty set
forth in Section 2.01(a)(i) to accurately reflect such successor’s jurisdiction of organization and
whether it is a corporation, partnership, bank, association or other type of organization.
(d) The Back-Up Manager represents and warrants to the other parties hereto, and for
the benefit of the Issuers and the Indenture Trustee on behalf of the Noteholders, as of each
Series Closing Date:
(i) The Back-Up Manager is a national banking association duly organized,
validly existing, and in good standing under the laws of the United States of America and
is in compliance with the laws of each state (within the United States of America)
in
which any Mortgaged Property is located to the extent necessary to its performance under
this Agreement;
(ii) The execution and delivery of this Agreement by the Back-Up Manager,
and the performance and compliance with the terms of this Agreement by the Back-Up
Manager, do not violate its organizational documents or constitute an event that, with
notice or lapse of time, or both, would constitute a default under, or result in the breach
of, any material agreement or other instrument to which it is a party or by which it is
bound;
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(iii) The Back-Up Manager has the corporate power and authority to enter into
and consummate all transactions to be performed by it contemplated by this Agreement,
has duly authorized the execution, delivery and performance by it of this Agreement, and
has duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization, execution and delivery by
each of the other parties hereto, constitutes a valid, legal and binding obligation of the
Back-Up Manager, enforceable against the Back-Up Manager in accordance with the
terms hereof (except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws affecting
creditors’ rights generally or by general equitable principles, whether considered in a
proceeding
at law or in equity and by an implied covenant of good faith and fair dealing);
(v) The Back-Up Manager is not in violation of, and its execution and
delivery of, this Agreement and its performance and compliance with the terms of this
Agreement will not constitute a violation of, any law, any order or decree of any court or
arbiter, or any order, regulation or demand of any federal, state or local governmental or
regulatory authority, which violation is likely to affect materially and adversely either the
ability of the Back-Up Manager to perform its obligations under this Agreement or the
financial condition of the Back-Up Manager;
(vi) No litigation is pending or, to the Back-Up Manager’s knowledge,
threatened against the Back-Up Manager that is reasonably likely to be determined
adversely to the Back-Up Manager and, if determined adversely to the Back-Up
Manager,
would prohibit the Back-Up Manager from entering into this Agreement or
that, in the Back-Up Manager’s good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the Back-Up Manager to perform its
obligations under this Agreement or the financial condition of the Back-Up Manager;
(vii) No consent, approval, authorization or order under any court or
governmental agency or body is required for the execution, delivery and performance by
the Back-Up Manager of, or the compliance by the Back-Up Manager with, this
Agreement or the consummation of the transactions contemplated by the Back-Up
Manager by this Agreement, except for any consent, approval, authorization or order that
has been obtained or that if not obtained would not have a material and adverse effect on
the ability of the Back-Up Manager to perform its obligations hereunder;
and
(viii) Each officer and employee of the Back-Up Manager that has
responsibilities concerning the management, servicing and administration of the
Mortgaged Properties, Leases and Mortgage Loans is covered by errors and omissions
insurance and the fidelity bond as and to the extent required by Section 3.07(c).
Section 2.02 Representations and Warranties of the Issuers.
(a) Each Issuer hereby represents and warrants to each of the other parties hereto and
for the benefit of the Indenture Trustee, on behalf of the Noteholders as of each Series Closing
Date on or after the date on which such Issuer becomes a party to this Agreement:
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(i) Such Issuer is a limited liability company duly organized, validly existing,
and in good standing under the laws of the State of Delaware and is in compliance with
the laws of each state (within the United States of America) in which any applicable
Mortgaged Property is located to the extent necessary for the Issuer to perform its
obligations under this Agreement;
(ii) The execution and delivery by such Issuer of this Agreement and the
consummation by such Issuer of the transactions provided for in this Agreement have
been duly authorized by all necessary action on the part of the Issuer;
(iii) The execution and delivery of this Agreement by such Issuer, and the
performance and compliance with the terms of this Agreement by such Issuer, do not
violate its organizational documents or constitute
an event that, with notice or lapse of
time, or both, would constitute a default under, or result in the breach of, any material
agreement or other instrument to which it is a party or by which it is bound;
(iv) Such Issuer has the limited liability company power and authority to enter
into and consummate all transactions to be performed by it contemplated by this
Agreement, has duly authorized the execution, delivery and performance by it of this
Agreement and any applicable Joinder Agreement, and has duly executed and delivered
this Agreement and any applicable Joinder Agreement;
(v) This Agreement, assuming due authorization, execution and delivery by
each of the other parties hereto, constitutes a valid, legal and binding obligation of such
Issuer, enforceable against such Issuer in accordance with the terms hereof (except as
such enforceability may be limited
by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors’ rights generally or
by general equitable principles, whether considered in a proceeding at law or in equity
and by an implied covenant of good faith and fair dealing);
(vi) Such Issuer is not in violation of, and its execution and delivery of, this
Agreement or any applicable Joinder Agreement and its performance and compliance
with the terms of this Agreement will not constitute a violation of, any law, any order or
decree of any court or arbiter, or any order, regulation or demand of any federal, state or
local governmental or regulatory authority, which violation is likely to affect materially
and adversely either the ability of such Issuer to perform its obligations under this
Agreement or the financial condition of such Issuer;
(vii) No
litigation is pending or, to such Issuer’s knowledge, threatened against
such Issuer that is reasonably likely to be determined adversely to such Issuer and, if
determined adversely to such Issuer, would prohibit such Issuer from entering into this
Agreement or that, in such Issuer’s good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of such Issuer to perform its obligations
under this Agreement or the financial condition of such Issuer;
(viii) No consent, approval, authorization or order under any court or
governmental agency or body is required for the execution, delivery and performance by
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such Issuer of, or the compliance by such Issuer with, this Agreement or the
consummation of the transactions of such Issuer contemplated by this Agreement, except
for any consent, approval, authorization or order that has been obtained or that if not
obtained would not have a material and adverse effect on the ability of such Issuer to
perform its obligations hereunder;
(ix) Each officer and employee of such Issuer that has responsibilities
concerning the management, servicing and administration of the applicable Mortgaged
Properties, Leases and Mortgage Loans is covered by errors and omissions insurance and
the fidelity bond as and to the extent required by Section 3.07(c); and
(x) To such Issuer’s knowledge, each of the Mortgaged Properties owned by
such Issuer or securing a Mortgage Loan
owned by such Issuer is a commercial property.
(b) The representations and warranties of each Issuer set forth in Section 2.02(a) shall
survive the execution and delivery of this Agreement and shall inure to the benefit of the Persons
to whom and for whose benefit they were made for so long as such Issuer remains in existence.
Upon discovery by any party hereto of any breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice to the other
parties.
Section 2.03 Recordings and Filings; Books and Records.
(a) In connection with the Grant made by the Issuers to the Indenture Trustee
pursuant to the Granting Clause of the Indenture, each Issuer shall cause the delivery of the
applicable Lease Files for the Leases and the applicable Loan Files for the applicable Mortgage
Loans
to the Custodian in accordance with the Custody Agreement for the benefit of the
Indenture Trustee in furtherance of such Grant and such Issuer shall cause: (i) with respect to the
Mortgaged Properties owned by such Issuer (A) each Mortgage, Financing Statement and
continuation statement referred to in the definition of “Lease File” in the Custody Agreement to
be submitted to the appropriate Title Company (as defined below) on or before the First
Collateral Date with respect thereto for recording or filing, as the case may be, in the appropriate
public office for real property records or for Financing Statements, at the expense of such Issuer
and (B) each title insurance binder or commitment referred to in the definition of “Lease File” in
the Custody Agreement to be issued as a final title insurance policy by the title companies (the
“Title Companies”) issuing
the same (the “Title Insurance Policies”); and (ii) with respect to
the Mortgage Loans owned by such Issuer, promptly (and in any event within 60 days following
the applicable First Collateral Date) cause each assignment of Mortgage in favor of the Collateral
Agent referred to in clauses (v) and (vi) of the definition of “Loan File” in the Custody
Agreement and each Financing Statement on the applicable UCC form in favor of the Collateral
Agent referred to in clause (iii) of such definition to be submitted for recording or filing, as the
case may be, in the appropriate public office for real property records or for Financing
Statements. Each such assignment and each Mortgage shall reflect that, following recording, it
should be returned by the public recording office to the Custodian, on behalf of the Indenture
Trustee (or to the Property Manager (or its designee),
who shall then deliver such recorded
document to the Custodian), and each such Financing Statement shall reflect that the file copy
thereof should be returned to the Custodian, for the benefit of the Indenture Trustee (or to the
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Property Manager (or its designee), who shall then deliver such filed document to the Custodian)
following filing; provided, that in those instances where the public recording office retains the
original Mortgage, assignment of Mortgage and assignment of Assignment of Leases, the
Property Manager, on behalf of the Indenture Trustee, shall obtain therefrom a certified copy of
the recorded original. Each of the Title Companies issuing the Title Insurance Policies shall be
instructed by the applicable Issuer to deliver such policies to the Custodian, for the benefit of the
Indenture Trustee. The Property Manager, on behalf of the Indenture Trustee, shall use
reasonable efforts to diligently pursue with the Title Companies the return of each of the
Mortgages,
assignments of Mortgage and Financing Statements from the appropriate recording
or filing offices and the delivery of the Title Insurance Policies by the related Title Companies. If
any such document or instrument is lost or returned unrecorded or unfiled, as the case may be,
because of a defect therein, the applicable Issuer shall promptly prepare and cause to be executed
a substitute therefor or cure such defect, as the case may be, and thereafter, such Issuer shall
cause the same to be duly recorded or filed, as appropriate. The Property Manager shall file any
continuation statements necessary to continue the effectiveness of the Financing Statements.
(b) Each Issuer shall deliver to and deposit with, or cause to be delivered to and
deposited with, the Property Manager all documents and records in the possession of such Issuer
or any related Originators that relate to the applicable
Mortgaged Properties, Leases and
Mortgage Loans and that are not required to be a part of a Lease File or a Loan File in
accordance with the definition thereof, and the Property Manager shall hold all such documents
and records in trust on behalf of the Indenture Trustee (in hard copy or electronic format). The
Property Manager’s possession of such documents and records shall be at the will of the related
Issuer and the Indenture Trustee for the sole purpose of facilitating the servicing and
administration of the applicable Leases, Mortgage Loans and Mortgaged Properties pursuant to
this Agreement and such possession by the Property Manager shall be in a custodial capacity
only on behalf of the Indenture Trustee. The ownership of such documents and records shall be
vested in each Issuer, as applicable, subject to the lien of the Indenture, and the ownership of all
documents
and records with respect to the applicable Leases, Mortgage Loans and Mortgaged
Properties that are prepared by or which come into possession of the Property Manager or the
Special Servicer shall immediately vest in such Issuer, subject to the lien of the Indenture, and
shall be delivered to and deposited with the Property Manager, in the case of documents or
records in the hands of the Special Servicer, and retained and maintained in trust by the Property
Manager in such custodial capacity only on behalf of the Indenture Trustee, except as otherwise
provided herein. All such documents and records shall be appropriately maintained in a manner
to clearly reflect the ownership of such documents and records by the applicable Issuers, subject
to the lien of the Indenture, and that such documents and records are being held on behalf of the
Indenture Trustee, and the Property Manager
shall release such documents and records from its
custody only in accordance with this Agreement.
(c) With respect to any Mortgaged Property or Mortgage Loan the First Collateral
Date of which occurred prior to the Applicable Series Closing Date, no additional documents
shall be delivered by any Issuer or Property Manager to, or reviewed by, the Custodian in
connection with the Applicable Series Closing Date, it being understood that the related Loan
Files and related Lease Files were previously delivered by each Issuer and reviewed by the
Custodian.
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(d) The Property Manager shall monitor the delivery of the Lease Files and the Loan
Files to the Custodian, for the benefit of the Indenture Trustee.
Section 2.04 Repurchase or Transfer for Collateral Defects and Breaches of
Representations and Warranties.
(a) If any party hereto discovers that any document required to be included in any
Loan File or Lease File is missing (after the date it is required to be delivered) or otherwise
deficient (any such absence or deficiency, an “Applicable Absence or Deficiency”) or that there
exists a breach of any of the representations and warranties made by any Originator set forth in
the applicable Property Transfer Agreement, any Issuer as required under Section 2.19 of the
Indenture or Section 3.04 of the Series 2014-1 Supplement
or the Support Provider under Section
2 of the applicable Performance Undertaking with respect to any applicable Mortgage Loan or
Mortgaged Property or related Lease (such representations and warranties, the “Applicable
Representations”), and if such absence or deficiency or breach materially and adversely affects
the value of such Mortgage Loan or such Mortgaged Property and related Lease or the interests
of the applicableany Issuer or the Noteholders therein, such party shall give prompt written
notice thereof to the other parties to this Agreement. If such absence, deficiency or breach
materially and adversely affects the value of the applicable Mortgage Loan or Mortgaged
Property or the related Lease or the interests of the applicable Issuer or the Noteholders in the
related Mortgage Loan or Mortgaged Property or related Lease (a “Collateral Defect”), within
60
days following notice thereof (which may be extended for an additional 60 days if such
Collateral Defect is capable of being cured but not within such initial 60 day period and the
applicable Cure Party is diligently proceeding with the cure), an applicable Cure Party shall
(a) deliver the missing document or cure the deficiency or breach, as the case may be, in all
material respects or (b) repurchase such Mortgage Loan or Mortgaged Property from the
applicable Issuer at an amount equal to the Payoff Amount for such Mortgage Loan or
Mortgaged Property (or if the applicable Issuer acquired such Mortgage Loan or Mortgaged
Property by contribution from the applicable Cure Party, transfer the applicable Payoff
Amount to the applicable Issuer upon which transfer the applicable Issuer may at its
option reconvey such Mortgage Loan or Mortgaged Property to such Cure Party), or
exchange
one or more Qualified Substitute Mortgage Loans or Qualified Substitute Mortgaged
Properties for such Mortgage Loan or Mortgaged Property (or if the applicable Issuer assigned
such Mortgage Loan or Mortgaged Property by contribution from the applicable Cure
Party, substitute a Qualified Substitute Mortgage Loan or Qualified Substitute Mortgaged
Property by contribution to the applicable Issuer, upon which contribution the applicable
Issuer may at its option reconvey the Mortgage Loan or Mortgaged Property being
substituted for by the applicable Cure Party), as the case may be (subject to Section 7.04);
provided, that if (i) such Collateral Defect is capable of being cured (including by delivery of a
missing document) but not within such 60-day period, (ii) an applicable Cure Party has
commenced and is diligently proceeding with the cure (which may include the delivery of a
missing
document) of such Collateral Defect within such 60-day period, and (iii) prior to the end
of such 60-day period, an applicable Cure Party shall have delivered to the applicable Issuer, the
Property Manager and the Indenture Trustee a certification executed on its behalf by an officer
thereof setting forth the reason such Collateral Defect is not capable of being cured within an
initial 60-day period and what actions such Cure Party is pursuing in connection with the cure
thereof and stating that it anticipates that such Collateral Defect will be cured within an
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additional period of 60 days, then such Cure Party shall have an additional 60 days commencing
on the 61st day from receipt of such certification by the Indenture Trustee to (x) complete such
cure or (y) effectuate a repurchase of, or exchange for, the applicable Mortgage Loan or
Mortgaged Property as described in clause (b) above. If the affected Mortgaged Property or
Mortgage Loan is to be repurchased, funds in the amount of the Payoff Amount shall be wired to
the Release Account, and the Property Manager shall promptly notify the applicable Issuer, the
Back-Up Manager, and the Indenture Trustee when such deposit is made. In addition, failure to
deliver the documents specified in clauses (i), (ii), (iv) or (ix) of the definition of “Loan File”
with respect to any Mortgage Loan or clauses (i), (iv) or
(v) in the definition of “Lease File” with
respect to any Mortgaged Property, in each case to the Collateral Agent, shall be deemed to
constitute a Collateral Defect with respect to such Mortgaged Property or Mortgage Loan, as
applicable.
In the event that an applicable Cure Party elects to substitute one or more Qualified
Substitute Mortgaged Properties or Qualified Substitute Mortgage Loans for the affected
Mortgaged Property or Mortgage Loan pursuant to this Section 2.04(a), such Cure Party shall
give notice of same to the Back-Up Manager and each Issuer and deliver, or cause to be
delivered, to the Custodian all documents as specified in the definition of “Lease File” or “Loan
File” in the Custody Agreement with respect to each such Qualified Substitute Mortgaged
Property or Qualified
Substitute Mortgage Loan no later than the date such Qualified Substitute
Mortgaged Property or Qualified Substitute Mortgage Loan is acquired by the applicable Issuer.
Notwithstanding anything to the contrary herein, Monthly Lease Payments due with respect to
Qualified Substitute Mortgaged Properties and Monthly Loan Payments due with respect to
Qualified Substitute Mortgage Loans in the month in which the applicable substitution occurs
shall not be part of the Collateral and will be retained by the Property Manager and remitted by
the Property Manager to the applicable Cure Party. Notwithstanding anything to the contrary
herein, in the event that any Mortgaged Property or Mortgage Loan is to be substituted for (and
released) pursuant to this Section 2.04(a), the applicable Issuer shall be entitled to receive the
Monthly Lease Payment due on the Lease for any such Mortgaged Property
in the month in
which such substitution occurs and the Monthly Loan Payment due on any such Mortgage Loan
in the month in which such substitution occurs and thereafter the applicable Person acquiring
such Mortgaged Property or Mortgage Loan shall be entitled to retain all amounts received in
respect of such Lease or Mortgage Loan. On or prior to the effective date of any substitution or
repurchase pursuant to this Section 2.04(a), the Property Manager shall deliver to the Indenture
Trustee and the Issuers an amended Mortgaged Property Schedule and Mortgage Loan Schedule
reflecting the addition (if any) to the Collateral of each new Qualified Substitute Mortgaged
Property and Lease and each new Qualified Substitute Mortgage Loan and the removal from the
Collateral of each Mortgaged Property and Lease and each Mortgage Loan that, in either case,
was repurchased or substituted
for. For the avoidance of doubt, in the event that any Cure Party
takes any action described in this Section 2.4(a), the failure to take such action shall not
constitute a default or breach with respect to any other Cure Party. Notwithstanding anything to
the contrary herein, it is understood and agreed that the obligations of the Cure Parties expressly
set forth in this Section 2.04(a) constitute (i) the sole remedies available to the Noteholders and
to the Indenture Trustee on their behalf in respect of a breach of the Applicable Representations
and (ii) the sole remedies available to the Noteholders and to the Indenture Trustee on their
behalf in respect of an Applicable Absence or Deficiency.
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(b) Upon receipt of an Officer’s Certificate from the Property Manager to the effect
that all requirements for any repurchase or substitution pursuant to Section 2.4(a) have been
satisfied, which Officer’s Certificate shall be furnished by the Property Manager promptly after
such requirements have been satisfied, the Indenture Trustee or the Custodian, as applicable,
shall release or cause to be released to the Person acquiring such Mortgaged Property or
Mortgage Loan, or its designee, the related Lease File or Loan File, as applicable, and each of
the applicable Issuer, the Indenture Trustee and the Collateral Agent shall execute and deliver
such instruments of release, transfer and assignment, in each case without recourse, as shall be
provided to it and are reasonably necessary to vest in such Person the ownership
of such
Mortgaged Property and the related Lease or Mortgage Loan, free and clear of the lien of the
Indenture and the related Mortgage. The Property Manager shall, and is hereby authorized and
empowered by each applicable Issuer and the Indenture Trustee to, prepare, execute and deliver
in its own name, on behalf of such Issuer, the Indenture Trustee and the Collateral Agent or any
of them, the endorsements, assignments and other documents contemplated by this Section
2.04(b), and such Issuer, the Indenture Trustee and the Collateral Agent shall execute and deliver
any limited powers of attorney substantially in the form of Exhibit D necessary to permit the
Property Manager to do so; provided, however, that none of the Issuers, the Issuer Members, the
Indenture Trustee or the Collateral Agent shall be held liable for any misuse of any such power
of attorney by the Property
Manager and the Property Manager hereby agrees to indemnify the
Issuers, the Issuer Members, the Indenture Trustee and the Collateral Agent against, and hold the
Issuers, the Issuer Members, the Indenture Trustee and the Collateral Agent harmless from, any
loss or liability arising from any misuse of such power of attorney. In connection with any such
repurchase or substitution by any Cure Party, the Property Manager or the Special Servicer, as
appropriate, shall deliver the related Lease File or Loan File, as applicable, to such Cure Party.
(c) If any Cure Party defaults on its obligations to repurchase or substitute for any
Mortgaged Property as contemplated by Section 2.04(a) or the applicable Performance
Undertaking, as the case may be, the Property Manager shall promptly notify the Issuers, the
Back-Up Manager and the Indenture Trustee and shall take such actions with respect
to the
enforcement of such obligations, including the institution and prosecution of appropriate
proceedings, as the Property Manager shall determine, in its good faith and reasonable judgment,
are in the best interests of the applicable Issuer and the Noteholders. In the event the Property
Manager fails to take such actions, the Back-Up Manager shall do so if it has notice of such
default by the Property Manager. Any and all expenses incurred by the Property Manager or the
Back-Up Manager with respect to the foregoing shall constitute Property Protection Advances in
respect of the affected Mortgaged Property and neither the Property Manager nor the Back-Up
Manager shall have any obligation to any such expenses if it determines that such amounts
would constitute Nonrecoverable Advances.
Section 2.05 Non-Petition.
The Issuers will cause
each party to any property transfer agreement, purchase and sale
agreement or loan purchase agreement between any such Issuer and seller of Mortgage Loans or
Mortgaged Properties pursuant thereto (other than such agreement in which the applicable Issuer
does not incur any material liability or obligation or in which the applicable Issuer satisfies each
of its material liabilities or obligations thereunder as of the date of such agreement) to covenant
and agree that such party shall not institute against, or join any other Person in instituting against,
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any Issuer, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or any other proceeding under any federal or state bankruptcy or similar law.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGED PROPERTIES AND LEASES
Section 3.01 Administration of the Mortgaged Properties, Leases and Mortgage Loans.
(a) Each of the Property Manager and the Special Servicer shall service and
administer the Mortgaged Properties, Leases and Mortgage Loans in the Collateral Pool that it is
obligated to service and administer pursuant to this Agreement on behalf of the applicable
Issuers, and in the best interests and for the benefit of the holders of the Notes and the LLC
Interests (as a collective whole) in accordance with any and all applicable laws and the terms of
this
Agreement, the Property Insurance Policies and the respective Leases and Mortgage Loans
and, to the extent consistent with the foregoing, in accordance with the Servicing Standard.
Without limiting the foregoing, and subject to Section 3.20, (i) the Property Manager shall
service and administer each Lease (and each related Mortgaged Property) and each Mortgage
Loan as to which no Servicing Transfer Event has occurred and each Corrected Lease and
Corrected Loan, and (ii) the Special Servicer shall service and administer each Lease (and each
related Mortgaged Property) and each Mortgage Loan as to which a Servicing Transfer Event has
occurred and that is not a Corrected Lease or Corrected Loan, as applicable; provided, however,
that the Property Manager shall continue to collect information and prepare and deliver all
reports to the Indenture Trustee and the Issuers required hereunder
with respect to any Specially
Serviced Leases (and the related Mortgaged Properties) and Specially Serviced Loans, and
further to render such incidental services with respect to any Specially Serviced Assets as are
specifically provided for herein. No direction, consent or approval or lack of direction, consent
or approval of any Controlling Party or the Requisite Global Majority may (and the Special
Servicer or the Property Manager will ignore and act without regard to any such advice or
approval or lack of approval that the Special Servicer or the Property Manager has determined, in
its reasonable, good faith judgment, would) (A) require or cause the Special Servicer or the
Property Manager to violate applicable law, the Servicing Standard or the terms of any Mortgage
Loan or any Lease or (B) expand the scope of the Property Manager’s or Special Servicer’s
responsibilities
under this Agreement. In addition, neither the Property Manager nor the Special
Servicer, acting in its individual capacity (and, for the avoidance of doubt, not in the capacity of
Special Servicer or Property Manager), shall take any action or omit to take any action as lessor
of any Collateral if such action or omission would materially and adversely affect the interests of
the holders of the Notes or the LLC Interests or the Issuers. None of the Property Manager, the
Special Servicer or the Back-Up Manager shall be liable to the Indenture Trustee, any
Noteholder or any other Person for following any direction of a Controlling Party hereunder, and
any action taken in accordance with such direction shall be deemed to be in accordance with the
Servicing Standard and deemed not to breach such party’s obligations hereunder.
(b) Subject to Section 3.01(a), the Property Manager and
the Special Servicer each
shall have full power and authority, acting alone, to do or cause to be done any and all things in
connection with such servicing and administration of the Mortgage Loans and Mortgaged
Properties and related Leases that it may deem necessary or desirable. Without limiting the
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generality of the foregoing, each of the Property Manager and the Special Servicer, in its own
name, with respect to each of the Mortgaged Properties, Leases and Mortgage Loans it is
obligated to service or administer hereunder, is hereby authorized and empowered by the
applicable Issuers and the Indenture Trustee to execute and deliver, on behalf of each such Issuer
and the Indenture Trustee: (i) any and all financing statements, continuation statements and other
documents or instruments necessary to maintain the lien created by any Mortgage or other
security document in the related Asset File on the related Collateral; (ii) in accordance with the
Servicing Standard and subject to Sections 3.08 and 3.19, any and all modifications, waivers,
amendments or consents to or with respect to any documents contained in
the related Asset File;
and (iii) any and all instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments. Subject to Section 3.10, each applicable Issuer
and the Indenture Trustee shall, at the written request of a Servicing Officer of the Property
Manager or the Special Servicer, furnish, or cause to be so furnished, to the Property Manager or
the Special Servicer, as the case may be, any limited powers of attorney (substantially in the
form of Exhibit D attached hereto) and other documents necessary or appropriate to enable it to
carry out its servicing and administrative duties hereunder; provided, however, that none of the
Issuers, the Issuer Members or the Indenture Trustee shall be held liable for any misuse of any
such power of attorney by the Property Manager or the Special Servicer and each of the Property
Manager and the Special Servicer hereby agree to indemnify the Issuers, the Issuer Members, the
Back-Up Manager and the Indenture Trustee against, and hold the Issuers, the Issuer Members,
the Back-Up Manager and the Indenture Trustee harmless from, any cost, loss or liability arising
from any misuse by it of such power of attorney. Notwithstanding anything contained herein to
the contrary, the Property Manager shall not, without the Indenture Trustee’s written consent: (i)
initiate any action, suit or proceeding solely under the Indenture Trustee’s name without
indicating the Indenture Trustee’s representative capacity or (ii) take any action with the intent to
cause, and which actually does cause, the Indenture Trustee to be registered to do business in any
state.
(c) Promptly after any request therefor, the Property Manager shall provide to the
Indenture
Trustee: (i) the most recent inspection report prepared or obtained by the Property
Manager or the Special Servicer in respect of each Mortgaged Property pursuant to Section
3.12(a); (ii) the most recent available operating statement and financial statements of the related
Obligor collected by the Property Manager or the Special Servicer pursuant to Section 3.12(b),
together with the accompanying written reports to be prepared by the Property Manager or the
Special Servicer, as the case may be, pursuant to Section 3.12(c); and (iii) any and all notices and
reports with respect to any Mortgaged Property as to which environmental testing is
contemplated by Section 10.08 of the Indenture.
(d) The relationship of each of the Property Manager and the Special Servicer to the
Issuers and the Indenture Trustee under this Agreement is intended by the parties to be and shall
be
that of an independent contractor and not that of a joint venturer, partner or agent.
(e) The Property Manager will cause the form of each Mortgage with respect to
Mortgaged Properties added to the Collateral Pool after the Applicable Series Closing Date to be
prepared with review and comment by counsel licensed to practice in the state where such
Mortgage is filed.
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Section 3.02 Collection of Lease Payments and Loan Payments; Lockbox Accounts;
Lockbox Transfer Accounts.
(a) Each of the Property Manager and the Special Servicer shall undertake reasonable
efforts to collect all payments called for under the terms and provisions of the Leases and the
Mortgage Loans it is obligated to service hereunder and shall, to the extent such procedures shall
be consistent with this Agreement (including Section 3.01(a)), follow such collection procedures
as it would follow were it the owner of such Leases and Mortgage Loans. Consistent with the
foregoing (and without regard to Section 3.19), the Special Servicer or the Property Manager, as
the case may be, may waive any Net Default Interest or late payment charge it is entitled to in
connection with any
delinquent payment on a Lease or Mortgage Loan it is obligated to service
hereunder.
(b) The Property Manager shall establish and maintain one or more segregated
accounts (each, a “Lockbox Account”) with one or more banks (each, a “Lockbox Account
Bank”). Each Lockbox Account shall be an Eligible Account and may be an account to which
payments relating to other assets serviced or managed by the Property Manager are paid;
provided, that such account shall be in the nature of a clearing account and the Property Manager
shall not have access to such account; provided, further, that the Property Manager shall at all
times be able to readily identify any amounts that constitute Collateral. Each of the Property
Manager and the Special Servicer shall, as to those Leases and Mortgage Loans it is obligated
to
service hereunder, instruct the related Obligor to make all Monthly Lease Payments and Monthly
Loan Payments to a Lockbox Account. The Property Manager shall cause all amounts deposited
into the Lockbox Account with respect to the Collateral to be transferred to the Collection
Account or a Lockbox Transfer Account within one Business Day after such funds have been
identified, cleared and become available in accordance with the polices of the Lockbox Account
Bank; provided, that the Property Manager shall cause all such amounts to be transferred to the
Collection Account or the Lockbox Transfer Account no later than seven Business Days after
such amounts have been deposited into a Lockbox Account (the requirements set forth in this
sentence, the “Lockbox Transfer Requirements”).
(c) The Property Manager may establish and maintain one or more segregated
accounts
in the name of the Property Manager on behalf of the Indenture Trustee, held for the
benefit of the Noteholders (each, a “Lockbox Transfer Account”) with one or more banks
(each, a “Lockbox Transfer Account Bank”). Each Lockbox Transfer Account shall be an
Eligible Account. Each Lockbox Transfer Account shall be subject to an Account Control
Agreement (in form and substance satisfactory to the Indenture Trustee) among the Property
Manager, the Indenture Trustee and the applicable Lockbox Transfer Account Bank. Except as
expressly permitted herein, neither the Property Manager nor the Issuers will have any right of
withdrawal from the Lockbox Transfer Account, and the Property Manager hereby covenants
and agrees that it shall not withdraw, or direct any Person to withdraw, any funds from the
Lockbox
Transfer Account except as expressly permitted hereunder.
Section 3.03 Collection of Real Estate Taxes and Insurance Premiums; Servicing
Accounts; Property Protection Advances; P&I Advances; Emergency Property Expenses.
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(a) Each of the Property Manager and the Special Servicer shall, as to those
Mortgaged Properties, Leases and Mortgage Loans it is obligated to service and administer
hereunder, establish and maintain one or more accounts (the “Servicing Accounts”), and shall
cause to be deposited from the Lockbox Transfer Account or otherwise into such Servicing
Accounts all Escrow Payments, security deposits received from Tenants pursuant to the Leases,
subject to the Tenants’ rights to such amounts (“Lease Security Deposits”), and amounts
required to be paid by the applicable Issuers as lessors under the Leases in respect of sales taxes
(“Sales Tax Deposits”). Notwithstanding the foregoing, no Servicing Accounts shall be
established and maintained with respect to those Mortgaged Properties, Leases or Mortgage
Loans pursuant to which the Tenant or Borrower is not required to make Escrow Payments,
Lease Security Deposit or Sales Tax Deposits. Each Servicing Account shall be an Eligible
Account. Withdrawals of amounts so collected from a Servicing Account (other than Lease
Security Deposits) may be made only to: (i) effect payment of real estate or personal property
taxes, sales taxes, assessments, insurance premiums, ground rents (if applicable) and comparable
items (including taxes or other amounts that could constitute liens prior to or on parity with the
lien of the related Mortgage); (ii) refund to Obligors any sums as may be determined to be
overages; (iii) pay interest, if required and as described below in clause (b), to Obligors on
balances in the Servicing Account; (iv) clear and terminate the Servicing
Account at the
termination of this Agreement in accordance with Section 8.01; (v) withdraw any amounts
deposited in error or (vi) for any other purpose required by the applicable Lease or Mortgage
Loan; provided, however, that Lease Security Deposits may not be withdrawn for such purposes
and shall be withdrawn only in accordance with the terms of the related Lease, to be repaid to the
related Tenant or applied in full or partial satisfaction of the obligations of the related Tenant in
accordance with the Servicing Standard (for application in the same manner as payments in
respect of such obligations). Any remaining portion of such Lease Security Deposit (after no
further allocations could be required pursuant to clauses (i) through (vi) above) shall be
withdrawn by the Property Manager from the Servicing Account and deposited into the
Collection Account and shall constitute
part of the Available Amount on the next Payment Date.
(b) The Property Manager and the Special Servicer shall each pay or cause to be paid
to the Obligors interest, if any, earned on the investment of funds in Servicing Accounts
maintained thereby, if required by law or the terms of the related Lease or Mortgage Loan. If the
Property Manager or the Special Servicer shall deposit in a Servicing Account any amount not
required to be deposited therein, it may at any time withdraw such amount from such Servicing
Account, any provision herein to the contrary notwithstanding.
(c) Each of the Property Manager and the Special Servicer shall, as to those
Mortgaged Properties and Mortgage Loans it is obligated to service hereunder, maintain accurate
records with respect to any Mortgaged Property and Mortgage Loan reflecting the status of real
estate taxes, ground rents, assessments
and other similar items that are or may become a lien
thereon, and the status of insurance premiums payable in respect thereof that, in each case, the
related Obligor is contractually or legally obligated to pay under the terms of the applicable
Lease or Mortgage Loan or applicable law, and the Property Manager shall effect payment
thereof, as a Property Protection Advance or otherwise as payment of an Emergency Property
Expense from funds on deposit in the Collection Account, as described below, if not paid by
such Obligor prior to the applicable due, penalty or termination date, promptly after the Property
Manager or Special Servicer, as the case may be, receives actual notice from any source of such
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nonpayment by such Obligor. For purposes of effecting any such payment for which it is
responsible, the Property Manager or the Special Servicer, as the case may be, shall apply
Escrow Payments as allowed under the terms of the related Lease or Mortgage Loan or, if such
Lease or Mortgage Loan does not require the related Obligor to escrow for the payment of real
estate taxes, assessments and insurance premiums, each of the Property Manager and the Special
Servicer shall, as to those Leases and Mortgage Loans it is obligated to service hereunder,
enforce the requirement of the related Lease and Mortgage Loan that such Obligor make
payments in respect of such items at the time they first become due.
(d) In accordance with the Servicing Standard, the Property Manager shall make
Property Protection Advances
with respect to each Mortgaged Property, Lease and Mortgage
Loan in the Collateral Pool; provided, that in no event shall the Property Manager be required to
make any Property Protection Advance that it determines would constitute a Nonrecoverable
Property Protection Advance in accordance with Section 3.03(f). Notwithstanding anything to
the contrary herein, (i) the Property Manager shall not have any obligation to advance funds in
respect of delinquent payments of principal or interest in respect of the Mortgage Loans and (ii)
the Property Manager shall not have any obligation to advance real estate taxes or premiums on
Insurance Policies that the related obligor or the Issuer is not contractually or legally obligated to
pay, nor shall it have any obligation to monitor the timely payment of real estate taxes and
insurance premiums the payment of which is the responsibility of a
person other than the
applicable Tenant or Borrower or Issuer; provided that if the Property Manager has actual
knowledge of the nonpayment of such real estate taxes and insurance premiums, it shall be
obligated to make such advance in accordance with the provisions set forth herein if it would
otherwise make such advance in accordance with the Servicing Standard. Each of the Property
Manager, the Indenture Trustee and the Back-Up Manager will be entitled to recover any
Property Protection Advance (i) from general collections if such Property Protection Advance is
determined to be a Nonrecoverable Property Protection Advance, (ii) from any amounts
subsequently received on the related Mortgage Loan or Lease or with respect to the related
Mortgaged Property with respect to which such Property Protection Advance was made or (iii) in
the case of the Back-Up Manager or Indenture
Trustee, to the extent not recovered under clauses
(i) and (ii) immediately above, from the Property Manager or any Successor Property Manager.
The Property Manager shall give prompt written notice to the Indenture Trustee and the Back-Up
Manager in the event that it has not made, and does not intend to make, any Property Protection
Advance it is required to make hereunder. Promptly upon obtaining knowledge that the full
amount of any Property Protection Advance required to be made by the Property Manager has
not been so made, the Indenture Trustee shall provide notice of such failure to a Servicing
Officer of the Property Manager and the Back-Up Manager. If the Indenture Trustee does not
receive confirmation that the full amount of such Property Protection Advance has been made
within four (4) Business Days following the date of such notice, then the Back-Up Manager,
upon
written notice from the Indenture Trustee, shall make the portion of such Property
Protection Advance that was required to be, but was not, made by the Property Manager in
accordance with the Servicing Standard, unless the Back-Up Manager determines in accordance
with the Servicing Standard that such Property Protection Advance would be a Nonrecoverable
Property Protection Advance. Promptly upon obtaining knowledge that the full amount of any
Property Protection Advance required to be made by the Back-Up Manager has not been so
made, then the Indenture Trustee shall make the portion of such Property Protection Advance
that was required to be, but was not, made by the Back-Up Manager, unless the Indenture
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Trustee determines in its commercially reasonable judgment that such Property Protection
Advance would be a Nonrecoverable Property Protection Advance. In making any such
determination, the Indenture Trustee may conclusively rely on any determination of
nonrecoverability by the Property Manager or the Back-Up Manager, as the case may be. Any
such Property Protection Advance made by the Back-Up Manager or the Indenture Trustee shall
thereafter be reimbursable to the such Indenture Trustee or Back-Up Manager, together with
Advance Interest thereon, in accordance Section 2.11 of the Indenture or from any Successor
Property Manager.
(e) If, prior to making any Property Protection Advance, the Property Manager shall
have determined (which shall be evidenced by an Officer’s Certificate
delivered to the Indenture
Trustee), in accordance with the Servicing Standard, (i) that such Property Protection Advance, if
made, would constitute a Nonrecoverable Property Protection Advance, and (ii) that the payment
of such cost, expense or other amount for which a Property Protection Advance might be made is
nonetheless in the best interest of the Noteholders, the Property Manager shall, in accordance
with the Servicing Standard, withdraw (or, in the event the Property Manager is Spirit Realty,
direct the Indenture Trustee to withdraw) funds from the Collection Account and use such funds
in order to pay such costs, expenses and other amounts (collectively, “Emergency Property
Expenses”) to the extent necessary to preserve the security interest in, and value of, any
Mortgaged Property or Mortgage Loan, as applicable. Any such funds withdrawn from the
Collection Account
to pay Emergency Property Expenses shall not constitute part of the
Available Amount on any Payment Date.
(f) In determining whether it has made a Nonrecoverable Property Protection
Advance or whether any proposed Property Protection Advance, if made, would constitute a
Nonrecoverable Property Protection Advance, the Property Manager (or, if applicable, the Back-
Up Manager or Indenture Trustee) shall be entitled to (a) consider (among other things) the
obligations of the Obligor under the terms of the related Lease Documents or Loan Documents
as they may have been modified, (b) consider the related Mortgaged Properties or REO
Properties in their “as is” or then current conditions and occupancies, as modified by such party’s
assumptions (consistent with the Servicing Standard in the case of the Property Manager or the
Back-Up Manager) regarding the possibility and
effects of future adverse changes with respect to
such Mortgaged Properties or REO Properties, (c) estimate and consider (consistent with the
Servicing Standard in the case of the Property Manager or the Back-Up Manager) (among other
things) future expenses, and (d) estimate and consider (consistent with the Servicing Standard in
the case of the Property Manager or the Back-Up Manager) (among other things) the timing of
recoveries. If applicable to a Series of Notes, none of the Property Manager, the Back-Up
Manager or the Indenture Trustee, as applicable, shall take into account amounts on deposit in
the Post-Closing Acquisition Reserve Account in determining whether it has made a
Nonrecoverable Property Protection Advance or whether any proposed Property Protection
Advance, if made, would constitute a Nonrecoverable Property Protection Advance. In addition,
any such
Person may update or change its recoverability determinations at any time (but not
reverse any other Person’s determination that a Property Protection Advance is a Nonrecoverable
Property Protection Advance) and, consistent with the Servicing Standard, in the case of the
Property Manager, the Back-Up Manager or the Indenture Trustee, may obtain promptly upon
request, from the Special Servicer, any reasonably required analysis, appraisals or market value
estimates or other information in the Special Servicer’s possession for making a recoverability
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determination. The determination by the Property Manager, the Back-Up Manager or the
Indenture Trustee, as the case may be, that it has made a Nonrecoverable Property Protection
Advance or that any proposed Property Protection Advance, if made, would constitute a
Nonrecoverable Property Protection Advance, or any updated or changed recoverability
determination, shall be evidenced by an Officer’s Certificate delivered by such Back-Up
Manager, Property Manager or Indenture Trustee to each other such Person and to the Issuers.
Any such determination shall be conclusive and binding on the applicable Issuer, the Property
Manager, the Noteholders the Back-Up Manager and the Indenture Trustee. The Officer’s
Certificate shall set forth such determination of nonrecoverability and the considerations of the
Property
Manager, the Back-Up Manager or the Indenture Trustee, as applicable, forming the
basis of such determination (which shall be accompanied by, to the extent available, information
such as related income and expense statements, rent rolls, occupancy status and property
inspections, and shall include an appraisal of the related Lease, Mortgage Loan or Mortgaged
Property or REO Property). The Special Servicer shall promptly furnish any party required to
make Property Protection Advances hereunder with any information in its possession regarding
the Specially Serviced Assets which are Leases, Mortgaged Properties, Mortgage Loans and
REO Properties as such party required to make Property Protection Advances may reasonably
request for purposes of making recoverability determinations. In the case of a cross collateralized
Mortgage Loan, such recoverability determination shall take into
account the cross
collateralization of the related cross-collateralized Mortgage Loan.
(g) In the event that a P&I Shortfall exists with respect to any Series for any Payment
Date, the Property Manager shall deposit an amount equal to such P&I Shortfall with respect to
such Series into a Series Account for such Series no later than 11:00 a.m. New York time on the
related Remittance Date, and such amount shall be added to (and applied as) Series Available
Amount for such Series for such Payment Date (any such amount, a “P&I Advance”).
(h) Notwithstanding anything to the contrary herein, none of the Property Manager,
the Back-Up Manager or the Indenture Trustee shall be required to make any P&I Advance that
it determines would constitute a Nonrecoverable P&I Advance. In making a determination that
any P&I Advance is (or is not) a Nonrecoverable
Advance, the Property Manager, the Back-Up
Manager or the Indenture Trustee, as applicable, may consider only the obligations of the Issuers
under the terms of the transaction documents as they may have been modified, the Collateral in
“as is” or then current condition and the timing and availability of anticipated cash flows as
modified by such party’s assumptions regarding the possibility and effect of future adverse
changes, together with such other factors, including but not limited to an estimate of future
expenses, timing of recovery, the inherent risk of a protracted period to complete liquidation or
the potential inability to liquidate Collateral as a result of intervening creditor claims or of a
bankruptcy proceeding affecting the Issuer and the effect thereof on the existence, validity and
priority of any security interest encumbering the Collateral, available cash
on deposit in the
Collection Account, the future allocations and disbursements of cash on deposit in the Collection
Account, and the net proceeds derived from any of the foregoing. If applicable to a Series of
Notes, none of the Property Manager, the Back-Up Manager or the Indenture Trustee, as
applicable, shall take into account amounts on deposit in the Post-Closing Acquisition Reserve
Account in such determination of whether a P&I Advance is (or is not) a Nonrecoverable
Advance. Any such determination shall be conclusive and binding on the applicable Issuer, the
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Property Manager, the Special Servicer, the Noteholders the Back-Up Manager and the Indenture
Trustee.
(i) If the Indenture Trustee does not receive confirmation that the full amount of such
P&I Advance has been made by 5:00 p.m. New York time on such Remittance Date for any
Series, then the Back-Up Manager, after receipt of written notice from the Indenture Trustee,
shall deposit, into a Series Account for such Series, the portion of such P&I Advance that was
required to be, but was not, made by the Property Manager in respect of such Series by 10:00
a.m. New York time on the Payment Date, unless the Back-Up Manager determines (in
accordance with clause (h) above) that such P&I Advance would be a Nonrecoverable P&I
Advance.
If the Indenture Trustee does not receive confirmation that the full amount of such P&I
Advance for such Series that was required to be made in respect of such Series by such Back-Up
Manager has been made by 11:00 a.m. New York time on such Remittance Date, then the
Indenture Trustee, shall deposit, into a Series Account for such Series, the portion of such P&I
Advance that was required to be, but was not, made by the Property Manager in respect of such
Series on or prior to the time the Series Available Amount is distributed to such Series in
accordance with the terms of the Indenture, unless the Indenture Trustee determines (in
accordance with clause (h) above) that such P&I Advance would be a Nonrecoverable P&I
Advance. In making any such determination, the Indenture Trustee may conclusively rely
on any
determination of nonrecoverability by the Property Manager or the Back-Up Manager, as the
case may be.
(j) Additionally, in the event that a Series of Notes is proposed to be issued after the
Applicable Series Closing Date, the Property Manager will give notice to the Back-Up Manager
and the Indenture Trustee of such proposed issuance. Within ten business days of receipt of such
notice, the Back-Up Manager will be obligated to notify the Property Manager and the Indenture
Trustee in writing as to whether the Back-Up Manager is willing to make Advances after such
Series of Notes is issued. Notwithstanding anything to the contrary herein, in the event that the
Back-Up Manager delivers to the Property Manager and the Indenture Trustee a notice stating
that it is unwilling to make such Advances after such issuance (with respect to any such Series of
Notes,
a “Decline to Advance Notice”), the Property Manager in its sole discretion (and without
the consent of the Indenture Trustee, any Issuer or any Noteholder) will be permitted to remove
the Back-Up Manager (a “Discretionary Back-Up Manager Removal”) and appoint a
successor Back-Up Manager (so long as the Rating Condition is satisfied in connection with such
appointment); provided, that, no such removal will be effective until such a successor Back-Up
Manager is appointed. In the event of any such removal, the Issuer, the Indenture Trustee and the
Back-Up Manager shall be required to (i) cooperate reasonably to effectuate the transfer of the
back-up servicing rights, duties and obligations to such successor and (ii) take any actions
reasonably requested by the Property Manager in order to effectuate such appointment. In the
event that a Series of Notes is issued with
respect to which the Back-Up Manager has delivered
to the Property Manager and the Indenture Trustee a Decline to Advance Notice but a successor
Back-Up Manager has not been appointed, the Back-Up Manager will have no further obligation
to make any Advance from and after the date (the “Non-Advance Date”) of issuance of such
Series of Notes (but, for the avoidance of doubt, will have the right to be reimbursed for any
Advances previously made). If the Back-Up Manager has delivered a Decline to Advance Notice
to the Property Manager and the Indenture Trustee and a successor Back-Up Manager has not
been appointed, the obligations of the Indenture Trustee to make Advances shall automatically
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cease as of the Non-Advance Date (but, for the avoidance of doubt, the Indenture Trustee will
have the right to be reimbursed for any Advances previously made). So long as the Back-Up
Manager has not been removed, after any Non-Advance Date, the Back-Up Manager may deliver
an Officer’s Certificate to each of the Property Manager and the Indenture Trustee stating that it
wishes to reinstate its obligation to make Advances. Upon such delivery, (x) the Back-Up
Manager and the Indenture Trustee will again be obligated to make Advances to the extent
required in accordance with this Agreement and in the manner described in this Agreement (as if
the applicable Decline to Advance Notice had not been delivered) and (y) the Property Manager
will no longer be permitted to effectuate a Discretionary Back-Up Manager Removal,
in each
case until a subsequent Decline to Advance Notice is delivered by the Back-Up Manager (which
may only be delivered in connection with an additional proposed issuance of a Series of Notes).
Section 3.04 Collection Account; Release Account; Exchange Reserve Account.
(a) The Property Manager shall establish and maintain one or more separate accounts
in the name of the Indenture Trustee for the benefit of the Noteholders, for the collection of
payments on and other amounts received in respect of the Leases, the Mortgaged Properties and
the Mortgage Loans (collectively, the “Collection Account”), which shall be established in such
manner and with the type of depository institution (the “Collection Account Bank”) specified in
this Agreement that permits the Collection Account to be an Eligible Account. The Collection
Account shall be an Eligible Account. If the Property Manager is Spirit Realty, the Property
Manager shall establish and maintain the Collection Account at a Collection Account Bank at the
Indenture Trustee and the Indenture Trustee shall have the sole right of withdrawal from such
account; provided, that the Property Manager shall be permitted to make withdrawals from such
Collection Account to the extent expressly permitted under the terms hereof. If the Property
Manager is not Spirit Realty or another Affiliate of the Issuers, the Collection Account shall be
subject to an Account Control Agreement among the applicable Issuers, the Property Manager,
the Indenture Trustee and the Collection Account Bank.
Unless otherwise expressly required hereunder, the Property Manager shall deposit or
cause to be deposited in the Collection Account, (i) other than payments and collections
deposited into a Lockbox Account, within two (2) Business Days after receipt, the following
payments and collections received or made by or on behalf of the Property Manager on or after
the later of the applicable Transfer Date (other than payments due before the applicable Transfer
Date) and (ii) in the case of collections and payments deposited into a Lockbox Account, in
accordance with the Lockbox Transfer Requirements, the Property Manager shall instruct each
Lockbox Account Bank to transfer the following payments and collections deposited in the
Lockbox Account (A) to the Lockbox Transfer Account and, within one Business Day thereafter
from the Lockbox Transfer Account into the Collection Account or (B) directly into the
Collection Account:
(i) all payments on account of Monthly Lease Payments,
Monthly Loan
Payments and, so long as an Early Amortization Event or Sweep Period has occurred and
is continuing, Excess Cashflow;
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(ii) all payments of other amounts payable by the Obligors on the Leases and
the Mortgage Loans, including without limitation Yield Maintenance
PremiumsPrepayment Consideration Payments;
(iii) all Property Insurance Proceeds, Condemnation Proceeds (other than
proceeds paid to the related Borrower or Tenant as required by Loan Documents or Lease
Documents, as applicable, proceeds applied to the restoration or remediation of property
or otherwise released in accordance with the Servicing Standard) and all Liquidation
Proceeds;
(iv) all cash proceeds and other amounts (other than Property Insurance
Proceeds and REO Revenues) from the release or substitution of any Mortgage Loan or
Mortgaged Property to the extent not deposited into the Release Account or any
Exchange Account; and all
cash proceeds from the release or substitution of any
Mortgage Loan or Mortgaged Property transferred from the Release Account or the
Exchange Reserve Account to the Collection Account pursuant to Section 3.05(b) and
all proceeds representing earnings on investments in the Release Account (including
interest on any Permitted Investments) made with such proceeds;
(v) any amounts required to be deposited into the Collection Account pursuant
to Section 3.07(b) in connection with losses resulting from a deductible clause in a
blanket hazard insurance policy;
(vi) any amounts received on account of payments under the Guaranties, the
Property Transfer Agreements, the Performance Undertakings or the Environmental
Indemnity Agreements;
(vii) all REO Revenues; and
(viii) any other amounts required to be so deposited under this Agreement.
Except as
expressly permitted hereunder, the Property Manager shall not make any
withdrawals from the Collection Account except in accordance with this Section 3.04 and
Section 3.05(a) hereof. The Collection Account shall be maintained as a segregated account,
separate and apart from trust funds created for certificates, bonds or notes of other series of notes
(other than any Series) serviced by and the other accounts of the Property Manager.
Upon direct receipt by the Special Servicer of any of the amounts described above with
respect to any Specially Serviced Asset or the Mortgaged Property or REO Property relating
thereto, the Special Servicer shall promptly but in no event later than the second Business Day
after receipt (or, if later, the date on which such amounts are available to the Special Servicer),
remit such amounts to the Property Manager for deposit into the Collection Account
in
accordance with this Section 3.04(a), unless the Special Servicer determines, consistent with the
Servicing Standard, that a particular item should not be deposited therein because of a restrictive
endorsement or other reasonably appropriate reason. The Property Manager shall not deposit (or
cause to be deposited) into the Collection Account or the Lockbox Transfer Account any
collections allocated to Companion Loans, any Additional Servicing Compensation, amounts
received on account of Excess Cashflow (so long as no Early Amortization Event or Sweep
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Period has occurred and is continuing), Sales Tax Deposits, Escrow Payments, Lease Security
Deposits, amounts received as reimbursement for any cost paid by the Issuers as lessors or
lenders under the Leases or Mortgage Loans, as applicable, amounts collected by or on behalf of
the Issuers and held in escrow or impound as lenders or lessors to pay future obligations or other
amounts that the Property Manager is not required to deposit into the Collection Account as
expressly set forth herein.
With respect to any such amounts paid by check to the order of the Special Servicer, the
Special Servicer shall endorse such check to the order of the Property Manager and shall deliver
promptly, but in no event later than one (1) Business Day after receipt, any such check to the
Property Manager by overnight courier,
unless the Special Servicer determines, consistent with
the Servicing Standard, that a particular item cannot be so endorsed and delivered because of a
restrictive endorsement or other reasonably appropriate reason. The funds held in the Collection
Account may be held as cash or invested in Permitted Investments in accordance with the
provisions of Section 3.06(a). Any interest or other income earned on funds in the Collection
Account will be added to the Available Amount.
(b) The Property Manager shall establish and maintain at a bank designated by the
Indenture Trustee a segregated account in the name of the Indenture Trustee for the deposit of
cash proceeds from the sale of any Mortgage Loan or Mortgaged Property or receipt of any
Balloon Payments or Principal Prepayments (the “Release Account”). The Release Account
shall
be an Eligible Account. The funds held in the Release Account may be held as cash or
invested in Permitted Investments in accordance with the provisions of Section 3.06(b). The
Release Account and the amounts on deposit therein will be pledged to the Indenture Trustee
under the Indenture. The Property Manager will deposit or cause to be deposited in the Release
Account any cash proceeds from the sale of any Mortgage Loan or Mortgaged Property and any
Balloon Payments or Principal Prepayments received in connection with any Mortgage Loan
within one Business Day after such funds have been identified, cleared and become available.
(c) The Property Manager shall establish and maintain at a bank designated by
the Indenture Trustee a segregated account in the name of the Indenture Trustee for the
deposit of cash proceeds from the sale of any Mortgaged Property released pursuant to
Section
7.01(a) (the “Exchange Reserve Account”). The Exchange Reserve Account shall be
an Eligible Account. The funds held in the Exchange Reserve Account may be held as cash
or invested in Permitted Investments in accordance with the provisions of Section 3.06(b).
The Exchange Reserve Account and the amounts on deposit therein will be pledged to the
Indenture Trustee under the Indenture. The Property Manager will deposit or cause to be
deposited, on behalf of the Issuers, any Exchange Cash Collateral.
Section 3.05 Withdrawals From the Collection Account and the Release Account.
(a) If the Property Manager is Spirit Realty, Spirit MTA or any of their respective
affiliates, then the Indenture Trustee shall make withdrawals upon the written direction of the
Property Manager from the Collection Account (i) on each Remittance Date, for delivery by wire
transfer of immediately
available funds for deposit into the Payment Account, of the Available
Amount for the related Payment Date for application by the Indenture Trustee to make payments
in accordance with the priorities set forth pursuant to Section 2.11(b) of the Indenture, (ii) on any
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date, to pay any Emergency Property Expenses (pursuant to Section 3.03(e)) and (iii) on any
date, to remove amounts deposited in the Collection Account in error. If the Property Manager is
an entity other than Spirit Realty, Spirit MTA or any of their respective affiliates, then the
Property Manager shall make withdrawals from the Collection Account (i) on each Remittance
Date, for delivery by wire transfer of immediately available funds for deposit into the Payment
Account, of the Available Amount for the related Payment Date for application by the Indenture
Trustee to make payments in accordance with the priorities set forth pursuant to Section 2.11(b)
of the Indenture, (ii) at any time on or prior to each Remittance Date, to pay the Property
Management Fee, the Back-Up Fee, any Special Servicing Fees, any Liquidation
Fees and any
Workout Fees (each, pursuant to Section 3.11), (iii) on any date, to pay any Emergency Property
Expenses (pursuant to Section 3.03(e)) or (iv) on any date, to remove amounts deposited in the
Collection Account in error. Except as provided in Section 3.04(a), no other amounts may be
withdrawn from the Collection Account by the Property Manager.
(b) Amounts deposited in the Release Account with respect to any Mortgage Loan,
Lease or Mortgaged Property (including Net Investment Earnings on funds on deposit therein)
shall be applied by the Property Manager (or the Indenture Trustee based on the instructions of
the Property Manager if the Property Manager is Spirit Realty), to reimburse the Property
Manager, the Special Servicer and the Back-Up Manager any amounts owed with respect to
unreimbursed Extraordinary Expenses, Property Protection Advances and Advance
Interest
thereon and Emergency Property Expenses related to such Mortgage Loan, Lease or Mortgaged
Property and to pay the expenses related to the release of such Mortgage Loan, Lease or
Mortgaged Property. After any such reimbursements have been made, any remaining amounts
deposited in the Release Account with respect to any Mortgage Loan, Lease or Mortgaged
Property shall be(such amount with respect to any Mortgage Loan, Lease or Mortgaged
Property, the “Net Release Price” thereof) shall be applied by the Property Manager (or the
Indenture Trustee based on the instructions of the Property Manager if the Property Manager is
Spirit Realty) to either (i) permit an Issuer to acquire (or to acquire on behalf of an Issuer)
Qualified Substitute Mortgage Loans or Qualified Substitute Mortgaged Properties
within twelve
months following the release of the applicable Mortgage Loan or Mortgaged Property (in the
event that such amounts were received in connection with such a release) or following the receipt
of such amounts (in the event that such amounts were received in connection with a Balloon
Payment or Principal Prepayment, as applicable) or (ii) after such twelve-month period
concludes with respect to the applicable amounts (or, if the Property Manager elects, prior to the
conclusion of such twelve-month period) be deposited as Unscheduled Proceeds into the
Collection Account and included in the Available Amount on the Payment Date relating to the
Collection Period in which such deposit occurs. Upon the occurrence and during the continuance
of an Early Amortization Event, all amounts in the Release Account (and all amounts that
otherwise would have been deposited into
the Release Account excluding amounts on deposit
in the Exchange Account, but including equivalent amounts on deposit in the Exchange
Reserve Account) shall be deposited as Unscheduled Proceeds into the Collection Account and
will be included in the Available Amount on the Payment Date relating to the Collection Period
in which such deposit occurs. If the Like-Kind Exchange Program is established, in
connection with the sale or disposition of a Mortgaged Property, the Property Manager
may elect to deposit or cause to be deposited the related Net Release Price into an Exchange
Account (in lieu of the Release Account) for the purpose of consummating an Exchange
pursuant to Section 7.01(d).
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Section 3.06 Investment of Funds in the Collection Account and the Release Account.
(a) The Property Manager may direct any institution maintaining the Collection
Account to invest the funds held therein in one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand, not later than the Business Day
immediately preceding the Remittance Date relating to the Payment Date for which such funds
will constitute Available Amounts, which may be in the form of a standing direction.
(b) The Property Manager may direct any institution maintaining the Release
Account or Exchange Reserve Account to invest the funds held therein in one or more specific
Permitted Investments bearing interest or sold at a discount, and maturing, unless payable on
demand, not later
than the Business Day immediately preceding the day such amounts are
required to be distributed pursuant to Section 3.05(b), which may be in the form of a standing
direction.
(c) The Property Manager may direct any institution maintaining the Servicing
Accounts with respect to Lease Security Deposits to invest the funds held therein in one or more
Permitted Investments bearing interest or sold at a discount, and maturing, unless payable on
demand, not later than the Business Day immediately preceding the day such amounts are
required to be distributed pursuant to the related Lease and this Agreement, which may be in the
form of a standing direction.
(d) [Reserved]
(e) All Permitted Investments in the Collection Account, the Release Account, the
Expense Reserve Account and the Servicing Accounts shall be held to maturity, unless payable
on demand. Any
investment of funds in the Collection Account, the Release Account, the
Expense Reserve Account and the Servicing Accounts shall be made in the name of the
Indenture Trustee (in its capacity as such). The Property Manager shall promptly deliver to the
Indenture Trustee, and the Indenture Trustee shall maintain continuous possession of, any
Permitted Investment that is either (i) a “certificated security,” as such term is defined in the
Uniform Commercial Code, or (ii) other property in which the lack of possession of such
property could reasonably be expected to materially adversely affect the Noteholders’ interest in
such property. If amounts on deposit in the Collection Account, the Release Account, the
Expense Reserve Account or the Servicing Accounts are at any time invested in a Permitted
Investment payable on demand, the Property Manager shall:
(i) consistent
with any notice required to be given thereunder, demand that
payment thereon be made on the last day such Permitted Investment may otherwise
mature thereunder in an amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such date; and
(ii) demand payment of all amounts due thereunder promptly upon
determination by the Property Manager that such Permitted Investment would not
constitute a Permitted Investment in respect of funds thereafter on deposit in the
Collection Account, the Release Account, the Expense Reserve Account or the
Servicing Accounts, as applicable.
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(f) Interest and investment income realized on funds deposited in the Collection
Account and, if applicable, the Release Account, that constitute part of the Available Amount for
any Collection Period, to the extent of the Net Investment Earnings, if any, shall be added to the
Available Amount for such Collection Period and distributed in accordance with Section 2.11 of
the Indenture on the applicable Payment Date. Notwithstanding the investment of funds held in
the Collection Account, for purposes of the calculations hereunder, including the calculation of
the Available Amount, the amounts so invested shall be deemed to remain on deposit in the
Collection Account. Except as provided in Section 5.03(a), the Property Manager shall have no
liability
for any investment of funds in the Collection Account, the Release Account, the
Expense Reserve Account or Servicing Account.
(g) Except as otherwise expressly provided in this Agreement, if any default occurs in
the making of a payment due under any Permitted Investment, or if a default occurs in any other
performance required under any Permitted Investment, the Property Manager may take such
action as may be appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
Section 3.07 Maintenance of Insurance Policies; Errors and Omissions and Fidelity
Coverage.
(a) The Property Manager (other than with respect to Specially Serviced Assets) and
the Special Servicer (with respect to Specially Serviced Assets) shall use reasonable efforts in
accordance with the Servicing Standard to cause the related Obligor
to maintain for each
Mortgaged Property all insurance coverage as is required under the terms of the related Lease or
Mortgage Loan, as applicable (including for the avoidance of doubt, any Environmental Policy);
provided, that if and to the extent that any such Lease or Mortgage Loan permits the lessor
thereunder any discretion (by way of consent, approval or otherwise) as to the insurance
coverage that the related Obligor is required to maintain, the Property Manager or the Special
Servicer, as the case may be, shall exercise such discretion in a manner consistent with the
Servicing Standard; and provided, further, that, if and to the extent that a Lease or Mortgage
Loan so permits, the related Obligor shall be required to obtain the required insurance coverage
from Qualified Insurers that have a claims-paying ability rated at least “A:VIII” by A.M. Best’s
Key
Rating Guide and at least “A” by S&P, which are licensed to do business in the state
wherein the related Obligor or the Mortgaged Property subject to the policy, as applicable, is
located. If such Obligor does not maintain the required insurance or, with respect to any
Environmental Policy in place as of the applicable First Collateral Date, the Property Manager
will itself cause such insurance to be maintained with Qualified Insurers meeting such criteria;
provided, that the Property Manager shall not be required to maintain such insurance if the
Indenture Trustee (as mortgagee of record on behalf of the Noteholders) does not have an
insurable interest or the Property Manager has determined (in its reasonable judgment in
accordance with the Servicing Standard) that either (i) such insurance is not available at a
commercially reasonable rate and the subject hazards are
at the time not commonly insured
against by prudent owners of properties similar to the Mortgaged Property located in or around
the region in which such Mortgaged Property is located or (ii) such insurance is not available at
any rate. Subject to Section 3.17(b), the Special Servicer shall also use reasonable efforts to
cause to be maintained for each REO Property no less insurance coverage than was previously
required of the Obligor under the related Mortgage or Lease and at a minimum, (i) hazard
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insurance with a replacement cost rider and (ii) comprehensive general liability insurance, in
each case, in an amount customary for the type and geographic location of such REO Property
and consistent with the Servicing Standard; provided, that all such insurance shall be obtained
from Qualified Insurers that, if they are providing casualty insurance, shall have a claims-paying
ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and “A” by S&P. The cost of
any such insurance coverage obtained by either the Property Manager or the Special Servicer
shall be a Property Protection Advance to be paid by the Property Manager. All such insurance
policies shall contain (if they insure against loss to property) a “standard” mortgagee clause, with
loss payable to the Property Manager,
as agent of and for the account of the applicable Issuer and
the Indenture Trustee, and shall be issued by an insurer authorized under applicable law to issue
such insurance. Any amounts collected by the Property Manager or the Special Servicer under
any such policies (other than amounts to be applied to the restoration or repair of the related
Mortgaged Property or amounts to be released to the related Tenant, in each case in accordance
with the Servicing Standard) shall be deposited in the Collection Account, subject to withdrawal
pursuant to Section 2.11 of the Indenture.
(b) The Property Manager or Special Servicer may satisfy its obligations under
Section 3.07(a) by obtaining, maintaining or causing to be maintained a blanket or forced place
insurance policy. If applicable, the Property Manager or the Special Servicer shall obtain and
maintain, or cause to be obtained
and maintained on behalf of each applicable Issuer, a master
forced place insurance policy or a blanket policy (or an endorsement to an existing policy)
insuring against hazard losses (not otherwise insured by a Tenant or Borrower due to a default by
such Tenant or Borrower under the insurance covenants of its Lease or Mortgage Loan or
because a Tenant or Borrower permitted to self-insure fails to pay for casualty losses) on the
applicable Mortgaged Properties that it is required to service and administer, which policy shall
(i) be obtained from a Qualified Insurer having a claims-paying ability rated at least “A:VIII” by
A.M. Best’s Key Rating Guide and at least “A” by S&P, and (ii) provide protection equivalent to
the individual policies otherwise required under Section 3.07(a). The Property Manager and the
Special Servicer shall bear the cost of any premium
payable in respect of any such blanket policy
(other than blanket policies specifically obtained for Mortgaged Properties or REO Properties)
without right of reimbursement; provided, that if the Property Manager or the Special Servicer,
as the case may be, causes any Mortgaged Property or REO Property to be covered by such
blanket policy in order to satisfy such obligations, the incremental costs of such insurance
applicable to such Mortgaged Property or REO Property shall constitute, and be reimbursable as,
a Property Protection Advance (it being understood that such incremental costs incurred by the
Special Servicer shall be paid by the Property Manager to the Special Servicer and that such
payment shall constitute, and be reimbursable as, a Property Protection Advance). If the Property
Manager or Special Servicer, as applicable, causes any Mortgaged Property or REO Property to
be covered by a force-placed insurance policy, the incremental costs of such insurance applicable
to such Mortgaged Property or REO Property (which shall not include any minimum or standby
premium payable for such policy whether or not any Mortgaged Property or REO Property is
covered thereby) shall be paid as a Property Protection Advance (it being understood that such
incremental costs incurred by the Special Servicer shall be paid by the Property Manager to the
Special Servicer and that such payment shall constitute, and be reimbursable as, a Property
Protection Advance). Any such policy may contain a deductible clause (not in excess of a
customary amount) in which case the Property Manager or the Special Servicer, as appropriate,
shall, if there shall not have been maintained on the related Mortgaged Property or REO Property
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a hazard insurance policy complying with the requirements of Section 3.07(a) and there shall
have been one or more losses that would have been covered by such policy, promptly deposit
into the Collection Account from its own funds the amount not otherwise payable under the
blanket policy in connection with such loss or losses because of such deductible clause. The
Property Manager or the Special Servicer, as appropriate, shall prepare and present, on behalf of
itself, the Indenture Trustee and the applicable Issuer, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy. Any payments on such policy shall
be made to the Property Manager as agent of and for the account of the applicable Issuer, the
Noteholders and the Indenture Trustee.
(c) Each of the Property
Manager, the Special Servicer and the Back-Up Manager
shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all
times during the term of this Agreement in which Specially Serviced Assets exist as part of the
Collateral) keep in force with a Qualified Insurer having a claims paying ability rated at least
“A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a fidelity bond in such
form and amount as does not adversely affect any rating assigned by any Rating Agency to the
Notes; provided, that, unless any Rating Agency then rating any Notes at the request of an Issuer
states that the form or amount of any such fidelity bond would be the sole cause of or be a
material reason for a downgrade, qualification or withdrawal of any rating then assigned by such
Rating Agency to such Notes, the form and amount of such
fidelity bond shall be deemed to not
adversely affect any rating assigned by any Rating Agency to the Notes. Each of the Property
Manager and the Special Servicer shall be deemed to have complied with the foregoing provision
if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the
coverage afforded thereunder extends to the Property Manager or the Special Servicer, as the
case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’
prior written notice to the Issuers.
Each of the Property Manager, the Special Servicer and the Back-Up Manager shall at all
times during the term of this Agreement (or, in the case of the Special Servicer, at all times
during the term of this Agreement in which Specially Serviced Assets exist as part of the
Collateral) also keep in force with a Qualified Insurer
having a claims-paying ability rated at
least “A: VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a policy or policies
of insurance covering loss occasioned by the errors and omissions of its officers, employees and
agents in connection with its servicing obligations hereunder, which policy or policies shall name
the Indenture Trustee as an additional insured and shall be in such form and amount as does not
adversely affect any rating assigned by any Rating Agency to the Notes; provided, that, unless
any Rating Agency then rating any Notes at the request of an Issuer states that the form or
amount of any such insurance would be the sole cause of or be a material reason for a
downgrade, qualification or withdrawal of any rating then assigned by such Rating Agency to
such Notes, the form and amount of such insurance shall be deemed to not adversely
affect any
rating assigned by any Rating Agency to the Notes. Each of the Property Manager and the
Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate
thereof has such insurance and, by the terms of such policy or policies, the coverage afforded
thereunder extends to the Property Manager or the Special Servicer, as the case may be. Any
such errors and omissions policy shall provide that it may not be canceled without ten (10) days’
prior written notice to the Issuers.
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Each of the Property Manager and the Special Servicer shall at all times during the term
of this Agreement (or, in the case of the Special Servicer, at all times during the term of this
Agreement in which Specially Serviced Assets exist as part of the Collateral) also, on behalf of
the Issuers, keep in force with a Qualified Insurer having a claims-paying ability rated at least
“A:VIIF" by A.M. Best’s Key Rating Guide and at least “A” by S&P, a lessor’s general liability
insurance policy or policies, which policy or policies shall be in such form and amount as does
not adversely affect any rating assigned by any Rating Agency to the Notes; provided, that,
unless any Rating Agency then rating any Notes at the request of an Issuer states that the form or
amount of any such insurance would be the
sole cause of or be a material reason for a
downgrade, qualification or withdrawal of any rating then assigned by such Rating Agency to
such Notes, the form and amount of such insurance shall be deemed to not adversely affect any
rating assigned by any Rating Agency to the Notes. Any such general liability insurance policy
shall provide that it may not be canceled without ten (10) days’ prior written notice to the Issuers
and the Indenture Trustee. Any payments on such policy shall be made to the Property Manager
as agent of and for the account of any applicable Issuer and the Indenture Trustee.
The insurance described in this clause (c) shall be required to include coverage in respect
of losses that may be sustained as a result of an officer’s or employee’s of the Property Manager
or the Special Servicer misappropriation of funds and errors and omissions.
If the Property
Manager (or its corporate parent), the Special Servicer (or its corporate
parent) or the Back-Up Manager (or its corporate parent), as applicable, are rated not lower than
“A2” by Moody’s, “A” by S&P and “A” by Fitch Ratings, Inc., the Property Manager, the
Special Servicer or the Back-Up Manager, as applicable, may self-insure with respect to any
insurance coverage or fidelity bond coverage required hereunder, in which case it shall not be
required to maintain an insurance policy with respect to such coverage; provided, that Spirit
Realty may not self-insure with respect to any such insurance coverage or fidelity bond.
Section 3.08 Enforcement of Alienation Clauses; Consent to Assignment.
With respect to those Leases and Mortgage Loans it is obligated to service hereunder,
each of the Property Manager and the Special Servicer, on
behalf of the Issuers and the Indenture
Trustee for the benefit of the holders of the Notes, shall enforce the restrictions contained in the
related Lease and Mortgage Loans or in any other document in the related Lease File or Loan
File on transfers or further encumbrances of the related Mortgaged Property and Mortgage Loan
and on transfers of interests in the related Borrower or Tenant, unless it has determined,
consistent with the Servicing Standard, that waiver of such restrictions would be in accordance
with the Servicing Standard. After having made any such determination, the Property Manager
or the Special Servicer, as the case may be, shall deliver to the Indenture Trustee (and the
Property Manager in the case of the Special Servicer) an Officer’s Certificate setting forth the
basis for such determination. In connection with any assignment or sublet by a Tenant of its
interest
under a Lease, the applicable Issuer shall not take any action to release such Tenant from
its obligations under such Lease unless a new Tenant approved by such Issuer assumes the
obligations under such Lease and any applicable requirements set forth in the applicable Lease
have been satisfied.
Section 3.09 Realization Upon Specially Serviced Assets.
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(a) If the Special Servicer has determined, in its good faith and reasonable judgment,
that any material default related to a Specially Serviced Asset will not be cured by the related
Obligor, the Special Servicer will be required to evaluate the possible alternatives available in
accordance with the Servicing Standard and this Agreement with respect to such Specially
Serviced Asset. Such alternatives may include, among other things, modification or restructuring
of the related Mortgage Loan or Lease, sale or exchange of the related Mortgage Loan or
Mortgaged Property in accordance with Section 3.18 or the enforcement of remedies available
under the related Mortgage Loan or Lease in accordance with Section 3.19, including foreclosure
of the Mortgage Loan or eviction of the Tenant, as applicable, and the re-leasing
of the related
Mortgaged Property. Subject to all other provisions and limitations set forth herein, the Special
Servicer shall take such actions with respect to each Specially Serviced Asset as it determines in
accordance with the Servicing Standard, acting in the best interests of the applicable Issuer and
the Noteholders. If the Property Manager re-leases any Mortgaged Property, the Property
Manager shall deliver to the Indenture Trustee and the Issuers an amended Exhibit A-1 reflecting
the addition of such Lease to the Collateral Pool.
(b) Upon the request of the Special Servicer, the Property Manager shall pay or cause
to be paid, as Property Protection Advances or Emergency Property Expenses, as applicable, in
accordance with Section 3.17(c), all costs and expenses (other than
costs or expenses that would,
if incurred, constitute a Nonrecoverable Property Protection Advance) incurred in connection
with each Specially Serviced Asset, and shall be entitled to reimbursement therefor as provided
herein and in Section 2.11 of the Indenture. If and when the Property Manager or the Special
Servicer deems it necessary and prudent for purposes of establishing the Fair Market Value of
any Mortgaged Property related to a Specially Serviced Asset, the Special Servicer or the
Property Manager; as the case may be, is authorized to have an appraisal done by an Independent
MAI-designated appraiser or other expert (the cost of which appraisal shall be paid by the
Property Manager and shall constitute a Property Protection Advance).
(c) Notwithstanding anything to the contrary contained herein, neither the Property
Manager nor the Special Servicer shall, on behalf
of the applicable Issuer, obtain title to a
Mortgaged Property that secures a Mortgage Loan by deed in lieu of foreclosure or otherwise, or
take any other action with respect to any Mortgaged Property that secures a Mortgage Loan, if,
as a result of any such action, the applicable Issuer or the Indenture Trustee could, in the
reasonable judgment of the Property Manager or the Special Servicer, as the case may be, made
in accordance with the Servicing Standard and which shall be based on Opinions of Counsel (of
which the Indenture Trustee shall be an addressee) and evidenced by an officer’s certificate
delivered to the Indenture Trustee, be considered to hold title to, to be a “mortgagee-in-
possession” of, or to be an “owner” or “operator” of such Mortgaged Property within the
meaning of CERCLA or any comparable law, unless:
(i) the Property Manager or the
Special Servicer, as the case may be, has
previously determined in accordance with the Servicing Standard (and as evidenced by
an officer’s certificate delivered to the Indenture Trustee), based on (x) a Phase I
Environmental Assessment or comparable environmental assessment (and any additional
environmental testing, investigation or analysis that the Property Manager or the Special
Servicer, as applicable, deems necessary and prudent) of such Mortgaged Property
conducted by an Independent Person who regularly conducts such environmental testing,
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investigation or analysis, or (y) any environmental testing, investigation and/or analysis
conducted in connection with any related Environmental Policy, and performed during
the twelve-month period preceding any such acquisition of title or other action and in
each case after consultation with an environmental expert, that:
(A) the Mortgaged Property is in compliance with applicable
environmental laws and regulations or, if not, that it would
maximize the recovery to the applicable Issuer on a present value
basis (the relevant discounting of anticipated collections to be
performed at the relevant interest rate for the applicable Mortgage
Loan or the capitalization rate used in respect of the Lease for any
Mortgaged Property) to acquire title to or possession of the
Mortgaged Property
and to effect such compliance, which
determination shall take into account any coverage afforded under
any related Environmental Policy with respect to such Mortgaged
Property; and
(B) there are no circumstances or conditions present at the Mortgaged
Property relating to the use, management or disposal of Hazardous
Materials for which investigation, testing, monitoring,
containment, clean-up or remediation could be required under any
currently applicable environmental laws and regulations or, if such
circumstances or conditions are present for which any such action
could reasonably be expected to be required, that it would
maximize the recovery to the applicable Issuer on a present value
basis (the relevant discounting of anticipated collections to be
performed at the relevant interest rate for the applicable Mortgage
Loan or the
capitalization rate used in respect of the Lease for any
Mortgaged Property) to acquire title to or possession of the
Mortgaged Property and to take such actions, which determination
shall take into account any coverage afforded under any related
Environmental Policy with respect to such Mortgaged Property; or
(ii) (ii) in the event that the conditions set forth in clauses (i)(A) or (i)(B) are
not satisfied, it shall have notified the Indenture Trustee in writing that it has determined
that the applicable Issuer or the Indenture Trustee could not reasonably be considered to
be a potentially responsible party (which determination may be based on an Opinion of
Counsel the cost of which shall be a Property Protection Advance).
(d) Any such determination in clauses (c)(i) or (c)(ii) above by the Property Manager
or the Special Servicer shall be evidenced by an Officer’s
Certificate to such effect delivered to
the Indenture Trustee (which the Indenture Trustee shall provide to the Noteholders), the Issuers
and, in the case of the Special Servicer, the Property Manager, specifying all of the bases for
such determination, such Officer’s Certificate to be accompanied by all related environmental
reports. The Property Manager or the Special Servicer, as appropriate, shall undertake reasonable
efforts to make the determination referred to in clause (ii) immediately above, and may
conclusively rely on any related environmental assessments referred to above in making such
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determination. The cost of any opinions, testing, analysis and investigation and any remedial,
corrective or other action contemplated by clause (c) above, shall be reimbursed, to the extent
not paid by an Environmental Insurer or other party with liability for such amounts, to the
Property Manager from the Collection Account as a Property Protection Advance, subject to
Section 5.03.
(e) If the Property Manager or Special Servicer, as applicable, determines (in
accordance with Section 3.09(c)) that any of the conditions set forth in Section 3.09(c)(i) or (ii)
above have not been satisfied with respect to any such Mortgaged Property, the Property
Manager or Special Servicer, as applicable, shall take such action as is in accordance with the
Servicing Standard and, at such time as it deems appropriate,
may, on behalf of the applicable
Issuer and the Indenture Trustee, release all or a portion of such Mortgaged Property from the
lien of the related Mortgage; provided, that prior to the release of all or a portion of the related
Mortgaged Property from the lien of the related Mortgage, (ix) the Property Manager or the
Special Servicer, as applicable, shall have notified the Indenture Trustee in writing of its
intention to so release all or a portion of such Mortgaged Property and (iiy) the Indenture Trustee
shall have notified the Controlling Parties in writing of the Property Manager’s intention to so
release all or a portion of such Mortgaged Property. The Indenture Trustee shall execute and
deliver such instruments of transfer or assignment, in each case without recourse, as shall be
provided to it by the Property Manager and are reasonably necessary to release any lien on or
security interest in such Mortgaged Property.
(f) The Property Manager or the Special Servicer, as applicable, shall report to the
Indenture Trustee and the Property Manager (if applicable) monthly in writing as to any actions
taken by such party with respect to any Mortgaged Property as to which the environmental
testing contemplated in Section 3.09(c) has revealed that any of the conditions set forth in either
Section 3.09(c)(i)(A) or (i)(B) have not been satisfied, in each case until such matter has been
resolved.
(g) The Special Servicer shall have the right to determine, in accordance with the
Servicing Standard, the advisability of seeking to obtain a deficiency judgment if the state in
which the Collateral securing a Specially Serviced Loan is located and the terms of the Mortgage
Loan permit such an action and shall, in accordance with the Servicing Standard,
seek such
deficiency judgment if it deems advisable.
(h) The Special Servicer shall prepare and file the reports of foreclosures and
abandonments of any Mortgaged Property and the information returns relating to cancellation of
indebtedness income with respect to any Mortgaged Property required by Sections 6050J and
6050P of the Code and promptly deliver to the Indenture Trustee an Officer’s Certificate stating
that such reports have been filed. Such reports shall be in form and substance sufficient to meet
the reporting requirements imposed by Sections 6050J and 6050P of the Code.
(i) All sales of Mortgaged Properties pursuant to this Section 3.09 shall be conducted
in accordance with the provisions of Section 3.18 and Article VII, as applicable.
Section 3.10 Issuers, Custodian and Indenture Trustee to Cooperate; Release of Lease
Files and Loan Files.
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(a) If from time to time, and as appropriate for servicing of any Mortgage Loan,
Lease, assumption of a Lease, modification of a Lease or the re-lease or sale of any Mortgaged
Property, the Property Manager or the Special Servicer shall otherwise require the use of any
Lease File or Loan File, as applicable (or any portion thereof), the Custodian, upon request of the
Property Manager and receipt from the Property Manager of a Request for Release substantially
in the form of Exhibit B attached hereto signed by a Servicing Officer thereof, or upon request of
the Special Servicer and receipt from the Special Servicer of a Request for Release substantially
in the form of Exhibit C attached hereto, shall release such Lease File or Loan File, as applicable
(or portion thereof), to the Property Manager or the Special
Servicer, as the case may be. Upon
return of such Lease File or Loan File, as applicable (or portion thereof), to the Custodian, or
upon the Special Servicer’s delivery to the Indenture Trustee of an Officer’s Certificate stating
that (i) such Lease or Mortgage Loan has been liquidated and all amounts received or to be
received in connection with such Lease or Mortgage Loan are required to be deposited into the
Collection Account pursuant to Section 3.04(a) have been or will be so deposited or (ii) such
Mortgaged Property has been sold, a copy of the Request for Release shall be released by the
Indenture Trustee to the Property Manager or the Special Servicer, as applicable.
(b) Within seven (7) Business Days of the Special Servicer’s request therefor (or, if
the Special Servicer notifies the Issuers and the Indenture Trustee of an exigency, within such
shorter period
as is reasonable under the circumstances), each of the applicable Issuer and the
Indenture Trustee shall execute and deliver to the Special Servicer, in the form supplied to the
applicable Issuer and the Indenture Trustee by the Special Servicer, any court pleadings, leases,
sale documents or other documents reasonably necessary to the re-lease, foreclosure or sale in
respect of any Mortgage Loan or Mortgaged Property or to any legal action brought to obtain
judgment against any Obligor on the related Lease or Mortgage Loan or to obtain a judgment
against an Obligor, or to enforce any other remedies or rights provided by the Lease or Mortgage
Loan or otherwise available at law or in equity or to defend any legal action or counterclaim filed
against the applicable Issuer, the Property Manager or the Special Servicer; provided, that each
of the applicable Issuer and the Indenture
Trustee may alternatively execute and deliver to the
Special Servicer, in the form supplied to the applicable Issuer and the Indenture Trustee by the
Special Servicer, a limited power of attorney substantially in the form of Exhibit D issued in
favor of the Special Servicer and empowering the Special Servicer to execute and deliver any or
all of such pleadings, leases, sale documents or other documents on behalf of the applicable
Issuer or the Indenture Trustee, as the case may be; provided, however, that neither the
applicable Issuer nor the Indenture Trustee shall be held liable for any misuse of such power of
attorney by the Special Servicer. Together with such pleadings, leases, sale documents or
documents (or such power of attorney empowering the Special Servicer to execute the same on
behalf of the applicable Issuer and the Indenture Trustee), the Special Servicer shall deliver
to
each of the applicable Issuer and the Indenture Trustee an Officer’s Certificate requesting that
such pleadings, leases, sale documents or other documents (or such power of attorney
empowering the Special Servicer to execute the same on behalf of the applicable Issuer or the
Indenture Trustee, as the case may be) be executed by the applicable Issuer or the Indenture
Trustee and certifying as to the reason such pleadings or documents are required.
(c) Upon the payment in full of any Mortgage Loan, or the receipt by the Property
Manager of a notification that payment in full shall be escrowed in a manner customary for such
purposes, the Property Manager shall promptly notify the Custodian and the Indenture Trustee by
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a certification (which certification shall be in the form of a Request for Release substantially in
the form of Exhibit B attached hereto, shall be accompanied by the form of any necessary release
or discharge and shall include a statement to the effect that all amounts received or to be received
in connection with such payment which are required to be deposited in the Collection Account
pursuant to Section 3.04(a) have been or will be so deposited) of a Servicing Officer (a copy of
which certification shall be delivered to the Special Servicer) and shall request delivery to it and
release of the related Loan File. Upon receipt of such certification and request, the Custodian
shall promptly cause the release of the related Loan File to the Property Manager and the
Indenture Trustee shall deliver to the Property
Manager such release or discharge, duly executed.
Except customary fees and expenses, no expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection Account or other
amounts that constitute Collateral.
Section 3.11 Servicing Compensation; Interest on Property Protection Advances.
(a) As compensation for its activities hereunder, the Property Manager shall be
entitled to receive the Property Management Fee with respect to each Mortgaged Property and
Mortgage Loan included in the Collateral Pool. As to each such Mortgaged Property and
Mortgage Loan included in the Collateral Pool, the Property Management Fee shall accrue daily
at the related Property Management Fee Rate on the basis of the Collateral Value of each such
Mortgaged Property and Mortgage Loan and shall be calculated
with respect to each Mortgage
Loan on the same basis as interest accrues on such Mortgage Loan and with respect to each
Mortgaged Property on a 30/360 Basis. The right to receive the Property Management Fee may
not be transferred in whole or in part except in connection with the transfer of all of the Property
Manager’s responsibilities and obligations under this Agreement. Earned but unpaid Property
Management Fees shall be payable monthly out of general collections on deposit in the
Collection Account pursuant to Section 3.05 and Section 2.11 of the Indenture.
(b) On each Remittance Date, the Property Manager shall be entitled to receive: (i) all
returned check fees, assumption, modification and similar fees and late payment charges from
Obligors with respect to Mortgaged Properties, Leases and Mortgage Loans that are not
Specially Serviced Assets as of such Remittance
Date; and (ii) any default interest collected on a
Mortgaged Property, Lease or Mortgage Loan, but only to the extent that (x) such default interest
is allocable to the period (not to exceed 60 days) when such Mortgaged Property, Lease or
Mortgage Loan did not constitute a Specially Serviced Asset and (y) such default interest is not
allocable to reimburse the Property Manager, the Back-Up Manager or the Indenture Trustee
with respect to any Property Protection Advances or interest thereon made in respect of such
Mortgage Loan, Lease or Mortgaged Property (collectively, the “Property Manager Additional
Servicing Compensation”).
(c) As compensation for its activities hereunder, the Special Servicer shall be entitled
to receive the Special Servicing Fee with respect to each Specially Serviced Asset. As to each
Specially Serviced Asset, the Special Servicing Fee shall accrue
daily from time to time at the
Special Servicing Fee Rate on the basis of the Collateral Value of such Specially Serviced Asset
and shall be calculated with respect to each Specially Serviced Loan on the same basis as interest
accrues on such Specially Serviced Loan and with respect to each Mortgaged Property related to
a Specially Serviced Lease on a 30/360 Basis. The Special Servicing Fee with respect to any
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Specially Serviced Asset shall (subject to Section 3.20 hereof) cease to accrue if (i) the related
Mortgaged Property is sold or exchanged for a Qualified Substitute Mortgaged Property or the
Specially Serviced Loan is sold or exchanged for a Qualified Substitute Mortgage Loan, as
applicable, or (ii) such Specially Serviced Asset becomes a Corrected Lease or a Corrected Loan,
as applicable, or (iii) such Specially Serviced Asset becomes a Liquidated Lease or liquidated
Mortgage Loan, as applicable. Earned but unpaid Special Servicing Fees shall be payable
monthly out of collections on deposit in the Collection Account pursuant to Section 3.05 hereof
and Section 2.11 of the Indenture.
The Special Servicer’s right to receive the Special Servicing Fee may not be transferred
in whole or in part except in
connection with the transfer of all of the Special Servicer’s
responsibilities and obligations under this Agreement.
(d) Subject to the last sentence of this Section 3.11(d), on each Remittance Date, the
Special Servicer shall be entitled to receive: (i) all returned check fees, assumption, modification
and similar fees and late payment charges received on or with respect to the Specially Serviced
Assets (determined as of the Remittance Date relating to such Payment Date); and (ii) any
default interest collected on a Specially Serviced Asset (to the extent that such default interest is
not allocable to reimburse the Property Manager, Indenture Trustee or Back-Up Manager with
respect to any Property Protection Advances made in respect of the related Mortgage Loan,
Lease or Mortgaged Property or interest thereon and such default interest is not allocable to the
Property
Manager under Section 3.11(b)) as additional servicing compensation (collectively, the
“Special Servicer Additional Servicing Compensation”). Notwithstanding the foregoing, if the
Special Servicer is terminated at a time when no Servicer Replacement Event existed with
respect to the Special Servicer and such Special Servicer was servicing or administering any
Specially Serviced Asset as of the date of such termination, and such servicing or administration
had been continuing for at least two (2) months, then the terminated Special Servicer will be
entitled to 50% of all modification fees earned by its successor with respect to such Specially
Serviced Asset during the 12-month period following the date of such termination.
(e) As and to the extent permitted by Section 2.11 of the Indenture, the Property
Manager, Indenture Trustee and the Back-Up Manager, as applicable, shall
each be entitled to
receive Advance Interest on the amount of each Advance made thereby for so long as such
Advance is outstanding. The Property Manager and the Back-Up Manager shall be reimbursed
for Property Protection Advances in accordance with Sections 3.03(d) and 3.05(a) and (b), and
Section 2.11 of the Indenture.
Except as otherwise expressly set forth herein, the Property Manager and the Special
Servicer shall each be required to pay all ordinary expenses incurred by it in connection with its
servicing activities under this Agreement, including fees of any subservicers retained by it. In
addition, the Property Manager and the Special Servicer shall not be reimbursed for its own
internal costs and expenses and overhead expenses, such as office space expenses, office
equipment costs, supply costs or employee salaries or related costs and expenses.
(f) A
Workout Fee shall be payable to the Special Servicer with respect to each
Corrected Loan or Corrected Lease. As to each such Corrected Loan or Corrected Lease, the
Workout Fee will be payable out of, and shall be calculated by application of the Workout Fee
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Rate to, each collection of rents, interest (other than Default Interest) and principal (including
scheduled payments, prepayments, Balloon Payments and payments at maturity) received on
such Corrected Loan or Corrected Lease, as applicable, so long as it remains a Corrected Lease
or Corrected Loan; provided, that no Workout Fee shall be payable from, or based upon the
receipt of, Liquidation Proceeds collected in connection with (i) the purchase of any Specially
Serviced Loan, Mortgaged Property related to any Specially Serviced Lease or REO Property by
the Property Manager or the Special Servicer or (ii) the repurchase of any Specially Serviced
Loan or Mortgaged Property related to any Specially Serviced Lease by the Originator or
Support Provider due to a Collateral Defect within the period provided to the
Originator and
Support Provider to cure such Collateral Defect. In addition, no Workout Fee shall be payable
with respect to any Corrected Loan or Corrected Lease if and to the extent (i) such Mortgage
Loan again becomes a Specially Serviced Loan under clause (b) of the definition of “Specially
Serviced Loan” or the Lease again becomes a Specially Serviced Lease under clause (b) of the
definition of “Specially Serviced Lease” and (ii) no default under the Mortgage Loan or Lease,
as applicable, actually occurs, or if such default has occurred, it is remedied within the 60 days
provided in such clauses. Except as provided in the preceding sentence, for the avoidance of
doubt, a new Workout Fee will become payable if and when a Mortgage Loan or Lease that
ceased to be a Corrected Lease or Corrected Loan again becomes a Corrected
Lease or Corrected
Loan. If the Special Servicer is terminated (with or without cause) or resigns with respect to any
or all of its servicing duties, it shall retain the right to receive any and all Workout Fees payable
with respect to the Mortgage Loans or Leases that became Corrected Loans or Corrected Leases
during the period that it had responsibility for servicing Specially Serviced Assets (and the
successor Special Servicer shall not be entitled to any portion of such Workout Fees), in each
case until the Workout Fee for any such Corrected Loan or Corrected Lease ceases to be payable
in accordance with the second preceding sentence. If the Special Servicer is terminated for any
reason or resigns as Special Servicer hereunder, and prior to such resignation or termination, any
Specially Serviced Asset would have been a Corrected Loan or Corrected Lease but for the
related
Borrower or Tenant, as applicable, not yet having made three full and consecutive
Monthly Payments as provided in the Lease Documents or Loan Documents, then such
terminated or resigning Special Servicer shall be entitled to all, and the Successor Special
Servicer shall be entitled to none, of the Workout Fee payable in connection with such Specially
Serviced Asset after it actually becomes a Corrected Loan or Corrected Lease, as applicable.
(g) A “Liquidation Fee” shall be payable to the Special Servicer with respect to (i)
each Mortgage Loan or Mortgaged Property repurchased by the related Originator or the Support
Provider due to a Collateral Defect if purchased after the applicable cure period, and shall equal
the product of (x) the repurchase price with respect to any such repurchase and (y) the
Liquidation Fee Rate, (ii) any Specially Serviced Asset as to which the
Special Servicer obtains a
full, partial or discounted payoff from the related Borrower of a Mortgage Loan or for some or
all of the Collateral Value from the Mortgaged Property related to a Lease from the Tenant, and
shall equal the product of (x) the amount of any such payoff and (y) the Liquidation Fee Rate, or
(iii) any Specially Serviced Asset or REO Property as to which the Special Servicer recovers any
Liquidation Proceeds, and shall equal the product of (x) the amount of such Liquidation Proceeds
and (y) the Liquidation Fee Rate; provided, that no Liquidation Fee shall be payable from, or
based upon the receipt of, Liquidation Proceeds collected in connection with the purchase of any
Specially Serviced Loan, Mortgaged Property related to any Specially Serviced Lease or REO
Property by the Property Manager or the Special Servicer.
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(h) As compensation for its activities hereunder, the Back-Up Manager shall be
entitled to receive the Back-Up Fee with respect to each Mortgaged Property and Mortgage Loan
included in the Collateral Pool. As to each such Mortgaged Property and Mortgage Loan
included in the Collateral Pool, the Back-Up Fee shall accrue each day at the related Back-Up
Fee Rate on the basis of the Collateral Value of each such Mortgaged Property and Mortgage
Loan. The right to receive the Back-Up Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Back-Up Manager’s responsibilities and obligations
under this Agreement. Earned but unpaid Back-Up Fees shall be payable monthly pursuant to
Section 3.05(a) and Section
2.11 of the Indenture.
Section 3.12 Property Inspections; Collection of Financial Statements; Delivery of
Certain Reports.
(a) If a Lease or Mortgage Loan becomes a Specially Serviced Asset, the Special
Servicer shall perform a physical inspection of the related Mortgaged Property as soon as
practicable thereafter and, if such Lease or Mortgage Loan remains a Specially Serviced Asset
for more than two years, at least annually thereafter so long as such Lease or Mortgage Loan
remains a Specially Serviced Asset. The Special Servicer shall prepare a written report of each
such inspection performed by it that sets forth in detail the condition of the related Mortgaged
Property and that specifies the existence of (i) any sale, abandonment or transfer of such
Mortgaged Property, or (ii) any change in the condition or value of such Mortgaged Property that
it, in its
good faith and reasonable judgment, considers material. The Special Servicer shall
deliver to the Issuers, the Indenture Trustee, the Property Manager and the Rating Agencies a
copy of each such written report prepared by it within 15 days of the completion of each such
inspection. The Special Servicer (i) shall receive reimbursement for reasonable out-of-pocket
expenses related to any such inspection and (ii) shall be entitled to a reasonable inspection fee for
any such inspection, in each case from the applicable Issuers pursuant to Section 2.11(b) of the
Indenture.
(b) The Special Servicer, in the case of any Specially Serviced Asset, and the
Property Manager, in the case of all other Leases and Mortgage Loans, shall make reasonable
efforts to collect promptly from each related Obligor and review annual
operating statements of
the related Mortgaged Properties and financial statements of such Obligor required to be
provided under the applicable Mortgage Loan or Lease.
(c) Not later than December 15 of each year, commencing December 15, 2014, the
Property Manager shall deliver to the Issuers, the Indenture Trustee and the Special Servicer (i)
from information, if any, that the Property Manager has most recently received pursuant to
Section 3.12(b), a report setting forth the aggregate Fixed Charge Coverage Ratios of all
Mortgaged Properties with respect to which it has received sufficient financial information from
the applicable Obligor(s) to permit it to calculate such Fixed Charge Coverage Ratio (either at
the “unit” level, master lease level or corporate level, as applicable) and, in each case,
identifying the
period covered by the related financial statements in its possession, and (ii) a
schedule, in the form of the Mortgaged Property Schedule or Mortgage Loan Schedule, as
applicable, prepared as of the later of (1) the most recent Series Closing Date and (2) the most
recent Transfer Date, and further identifying on such schedule each Lease or Mortgage Loan (x)
that has become a Liquidated Lease or liquidated Mortgage Loan since the most recent delivery
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of such schedule pursuant to this Section 3.12(c)(ii) (or, in the case of the first such delivery,
since the Series Closing Date), and specifying the date on which the sale or re-lease of the related
Mortgaged Property or Mortgage Loan occurred or (y) that has otherwise terminated in
accordance with its terms and, in each case, specifying the date of such sale, re-lease or
termination, the amount collected in connection therewith and the amount of any unreimbursed
Property Protection Advances, Emergency Property Expenses, Extraordinary Expenses and other
amounts due and unpaid under the related Mortgage Loan or Lease incurred in connection
therewith.
Section 3.13 Annual Statement as to Compliance.
Each of the Property Manager and the Special Servicer shall deliver to the Issuers,
to the
Indenture Trustee and, in the case of the Special Servicer, to the Property Manager, as soon as
available, and in any event by the 15th day after each March 31 of each year (or the next
succeeding Business Day if any such day is not a Business Day) beginning in March 2015, an
Officer’s Certificate stating, as to each officer signatory thereof, that (i) a review of the activities
of the Property Manager or the Special Servicer, as the case may be, during the prior calendar
year, and of its performance under this Agreement, has been made under the supervision of the
signatories signing such Officer’s Certificate, and (ii) to the best of such signatory’s knowledge,
based on such review, the Property Manager or the Special Servicer, as the case may be,
complied in all material respects throughout such period with the minimum servicing standards
in this Agreement and
fulfilled in all material respects throughout such period its obligations
under this Agreement or, if there was noncompliance with such standards or a default in the
fulfillment of any such obligation in any material respect, such Officer’s Certificate shall include
a description of such noncompliance or specify each such default, as the case may be, known to
such signatory and the nature and status thereof.
Section 3.14 Reports by Independent Public Accountants.
On or before March 31 of each year, beginning in March 2015, each of the Property
Manager and the Special Servicer, at its expense, shall cause an independent, registered public
accounting firm (which may also render other services to the Property Manager or the Special
Servicer, as the case may be) to furnish to the Issuers and the Indenture Trustee
and, in the case
of the Special Servicer, to the Property Manager a report containing such firm’s opinion that, on
the basis of an examination conducted by such firm substantially in accordance with standards
established by the American Institute of Certified Public Accountants, the officer’s assertion
made pursuant to Section 3.13 by the Property Manager or the Special Servicer, as the case may
be, is fairly stated in all material respects, subject to such exceptions and other qualifications
that, in the opinion of such firm, such institute’s standards require it to report and that such
examination included tests in accordance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers, to the extent the procedures in such program are
applicable to the servicing obligations set forth in this Agreement. In rendering such statement,
such firm may
rely, as to matters relating to direct servicing of leases and mortgage loans by
Sub-Managers, upon comparable reports for examinations conducted substantially in accordance
with such institute’s standards (rendered within one year of such report) of independent public
accountants with respect to the related Sub-Manager.
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Section 3.15 Access to Certain Information; Delivery of Certain Information.
(a) Each of the Property Manager and the Special Servicer shall afford to the other, to
the Issuers, the Indenture Trustee, the Back-Up Manager and the Rating Agencies and to the
OTS, the FDIC and any other banking or insurance regulatory authority that may exercise
authority over any holder of Notes or LLC Interests, reasonable access to any documentation
regarding the Leases, Mortgage Loans and Mortgaged Properties and its servicing thereof within
its control, except to the extent it is prohibited from doing so by applicable law, rule or
regulation or contract or to the extent such information is subject to a privilege under applicable
law. Such access shall be afforded without charge but only upon reasonable
prior written request
and during normal business hours at the offices of the Property Manager or the Special Servicer,
as the case may be, designated by it.
(b) The Property Manager or the Special Servicer shall notify the Rating Agencies,
the Back-Up Manager and the Indenture Trustee of any Mortgaged Property whose Tenant has
ceased to exercise its business activity on such Mortgaged Property within 30 days of becoming
aware of such a circumstance.
Section 3.16 Title to REO Property.
(a) If title to any REO Property is acquired by the Special Servicer on behalf of the
Issuer, the deed or certificate of sale shall be issued to the applicable Issuer. Upon acquisition of
such REO Property, the Special Servicer shall, if any amounts remain due and owing under the
related Mortgage Note, cause the applicable Issuer to execute and deliver to
the Indenture
Trustee or the Collateral Agent a new Mortgage (along with appropriate Financing Statements),
as applicable, in favor of the Indenture Trustee or the Collateral Agent to secure the lien of the
Indenture.
(b) The Special Servicer shall remit to the Property Manager for deposit in the
Collection Account or Release Account, as applicable, upon receipt, all REO Revenues, Property
Insurance Proceeds and Liquidation Proceeds received in respect of an REO Property or
Specially Serviced Asset.
Section 3.17 Management of REO Properties and Mortgaged Properties relating to
Defaulted Assets.
(a) [Reserved].
(b) At any time that a Mortgaged Property is not subject to a Mortgage Loan or a
Lease or is subject to a Mortgage Loan
or a Lease that is (or relates to) a Defaulted Asset or with
respect to an REO Property or a Terminated Lease Property, the Special Servicer’s decision as
to how such Mortgaged Property or REO Property shall be managed and operated shall be based
on the good faith and reasonable judgment of the Special Servicer as to the best interest of the
applicable Issuer and the Noteholders by maximizing (to the extent commercially feasible) the
net after-tax revenues received by the applicable Issuer with respect to such property and, to the
extent consistent with the foregoing, in the same manner as would commercial loan and lease
servicers and asset managers operating property comparable to the respective Mortgaged
Property or, REO Property or Terminated Lease Property under the Servicing Standard. The
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applicable Issuer, the Indenture Trustee and the Special Servicer may consult with counsel at the
expense of the applicable Issuer in connection with determinations required under this Section
3.17(b). Neither the Indenture Trustee nor the Special Servicer shall be liable to the Issuers, the
holders of the Notes, the other parties hereto or each other, nor shall the applicable Issuer be
liable to the other Issuers, any such holders or to the other parties hereto, for errors in judgment
made in good faith in the exercise of their discretion while performing their respective duties,
obligations and responsibilities under this Section 3.17(b). Nothing in this Section 3.17(b) is
intended to prevent the sale or re-lease of a Mortgaged Property or, REO Property or
Terminated Lease Property pursuant to the terms and
subject to the conditions of Section 3.18
and Article VII, as applicable.
(c) The Special Servicer shall have full power and authority to do any and all things
in connection with the servicing and administration of any Defaulted Asset and Mortgaged
Property subject to a Defaulted Asset and any REO Property or Terminated Lease Property as
are consistent with the Servicing Standard and, consistent therewith, shall request that the
Property Manager make, and the Property Manager shall make, Property Protection Advances, or
pay (or cause to be paid) Emergency Property Expenses from funds on deposit in the Collection
Account, necessary for the proper operation, management, maintenance and disposition of such
Mortgaged Property or, REO Property or Terminated Lease Property, including:
(i) all insurance premiums due and payable in respect of such Mortgaged
Property
or, REO Property or Terminated Lease Property;
(ii) all real estate and personal property taxes and assessments in respect of
such Mortgaged Property or, REO Property or Terminated Lease Property that may
result in the imposition of a lien thereon (including taxes or other amounts that could
constitute liens prior to or on parity with the lien of the related Mortgage);
(iii) [Reserved]; and
(iv) all costs and expenses necessary to maintain, lease, sell, protect, manage,
operate and restore such Mortgaged Property or, REO Property or Terminated Lease
Property.
Notwithstanding the foregoing, the Property Manager shall have no obligation to make any such
Property Protection Advance if (as evidenced by an Officer’s Certificate delivered to the
applicable Issuer and the Indenture Trustee) the Property Manager determines, in accordance
with the Servicing
Standard, that such payment would be a Nonrecoverable Property Protection
Advance. The Special Servicer shall submit requests to make Property Protection Advances to
the Property Manager not more than once per month unless the Special Servicer determines on
an emergency basis in accordance with the Servicing Standard that earlier payment is required to
protect the interests of the Issuers and the Noteholders.
Section 3.18 Sale and Exchange of Mortgage Loans, Leases and Mortgaged Properties.
(a) The Property Manager, the Special Servicer and the applicable Issuer may sell or
purchase, or permit the sale or purchase of, a Mortgage Loan or Mortgaged Property only on the
terms and subject to the conditions set forth in this Section 3.18 or as otherwise expressly
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provided in or contemplated hereunder. Except with respect to repurchases or substitutions by a
related Originator or the Support Provider due to a Collateral Defect, an Issuer may only sell or
exchange a Mortgaged Property or Mortgage Loan to or with any of its Affiliates subject to the
applicable conditions (if any) set forth in the Indenture (including any applicable Series
Supplement) and herein.
(b) The Special Servicer shall act on behalf of the applicable Issuer and the Indenture
Trustee in negotiating and taking any other action necessary or appropriate in connection with
the sale of any Defaulted Asset, Lease related to a Defaulted Asset, Terminated Lease Property
or REO Property and the collection of all amounts payable in connection therewith. The Special
Servicer shall take such actions as
it determines in accordance with the Servicing Standard will
be in the best interests of the applicable Issuer and the Noteholders, including, in the case of a
Terminated Lease Property, the Special Servicer shall use reasonable efforts, consistent
with the Servicing Standard, to (i) attempt to induce another Tenant to assume the
obligations under the existing Lease, with or without modification, (ii) lease the Terminated
Lease Property under a new Lease on economically desirable terms or (iii) dispose of the
related Mortgaged Property. The decision to enter into a lease assumption or re-lease the
Terminated Lease Property shall be made by the Special Servicer in accordance with the
Servicing Standard. If the Special Servicer is successful in re-leasing the related Mortgaged
Property, a new Appraised Value
will be determined in the Special Servicer’s discretion.
Any sale of a Mortgage Loan, Mortgaged Property, Lease, Defaulted Asset, Terminated Lease
Property or REO Property shall be free and clear of the lien of the Indenture and shall be final
and without recourse to the applicable Issuer or the Indenture Trustee. If such sale is
consummated in accordance with the terms of this Agreement, none of the Property Manager, the
Special Servicer or the Indenture Trustee shall have any liability to the Issuers or any holder of
Notes with respect to the purchase price therefor accepted by the Property Manager, the Special
Servicer or the Indenture Trustee, as the case may be.
Section 3.19 Modifications, Waivers, Amendments and Consents.
(a) The Property Manager and the Special Servicer each may, consistent with the
Servicing Standard, agree to any modification, waiver or amendment of any term of, forgive any
Lease or Mortgage Loan payment on, permit the release of the Obligor on or guarantor of, or
approve of the assignment of a Tenant’s interest in its Lease with respect to, or the sublease of all
or a portion of, any Mortgaged Property, Lease or Mortgage Loan it is required to service and
administer hereunder, without the consent of the Issuers, the Indenture Trustee, any holder of
Notes or any Controlling Party or Requisite Global Majority; provided; that (i) in the reasonable
judgment of the party agreeing to any such amendment, such amendment will not cause the
Current Cashflow Coverage Ratio to be reduced to or below 1.30 or, if the Current Cashflow
Coverage Ratio is already equal to or lower than 1.30, will not cause the Current Cashflow
Coverage Ratio to be further reduced
and (ii) in the reasonable judgment of the party agreeing to
any such amendment, such amendment is in the best interest of the Noteholders and will not
have an adverse effect on the Collateral Value of the related Mortgaged Property (in the case of
any such amendment with respect to a Lease) or Mortgage Loan (in the case of any such
amendment with respect to a Mortgage Loan); provided; that any such amendment (x) in
connection with a Delinquent Asset or Defaulted Asset, (y) that is required by the terms of the
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applicable Lease or Mortgage Loan or (z) with respect to which the Rating Condition is satisfied,
shall not be subject to the foregoing restrictions set forth in (i) or (ii) above;
(b) From time to time, subject to the Servicing Standard and upon satisfaction of the
Rating Agency Notification Condition, the Property Manager or Special Servicer, as applicable,
shall be entitled (on behalf of the Issuer and the Indenture Trustee) to release an immaterial
portion of any Mortgaged Property that it is then administering from the lien of the Indenture and
the Mortgage (and simultaneously release the Issuer’s interest in such portion of such Mortgaged
Property) or consent to, or make, an immaterial modification with respect to any Mortgaged
Property that it is then administering; provided, that, such Property Manager
or Special Servicer
shall have certified that it reasonably believes that such release or modification (both
individually and collectively with any other similar releases or modifications with respect to such
Mortgaged Property) will not materially adversely affect (i) the Appraised Value of such
Mortgaged Property or (ii) the Noteholders’ or the holders’ of the Related Series Notes interests
in such Mortgaged Property;
(c) The Property Manager and the Special Servicer each may, as a condition to its
granting any request by an Obligor for consent, modification, waiver or indulgence or any other
matter or thing, the granting of which is within the Property Manager’s or Special Servicer’s, as
the case may be, discretion pursuant to the terms of the instruments evidencing or securing the
related Lease or Mortgage Loan and is permitted by the terms of such Lease or Mortgage
Loan,
require that such Obligor pay to it, as Additional Servicing Compensation, a reasonable or
customary fee for the additional services performed in connection with such request, together
with any related costs and expenses incurred by it; and
(d) All modifications, waivers, amendments and other actions entered into or taken in
respect of a Lease or Mortgage Loan pursuant to this Section 3.19 shall be in writing. Each of the
Property Manager and the Special Servicer shall notify the other such party and the Issuers and
the Indenture Trustee, in writing, of any modification, waiver, amendment or other action
entered into or taken in respect of any Lease or Mortgage Loan pursuant to this Section 3.19 and
the date thereof, and shall deliver to the Custodian for deposit in the related Lease File or Loan
File an original counterpart of the agreements relating to such modification,
waiver, amendment
or other action, promptly (and in any event within ten (10) Business Days) following the
execution thereof.
Section 3.20 Transfer of Servicing Between Property Manager and Special Servicer;
Record Keeping.
(a) Upon determining that a Servicing Transfer Event has occurred with respect to
any Lease or Mortgage Loan and if the Property Manager is not also the Special Servicer, the
Property Manager shall immediately give notice thereof, and shall deliver the related Servicing
File, to the Special Servicer, and shall use its best efforts to provide the Special Servicer with all
information, documents (or copies thereof) and records (including records stored electronically
on computer tapes, magnetic discs and the like) relating to such Lease or Mortgage Loan
reasonably requested by the Special Servicer to enable it to assume its functions hereunder
with
respect thereto without acting through a Sub-Manager. The Property Manager shall use its best
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efforts to comply with the preceding sentence within five (5) Business Days of the occurrence of
each related Servicing Transfer Event.
Upon determining that a Specially Serviced Asset has become a Corrected Lease or
Corrected Loan and if the Property Manager is not also the Special Servicer, the Special Servicer
shall immediately give notice thereof, and shall return the related Servicing File, to the Property
Manager and, upon giving such notice and returning such Servicing File, to the Property
Manager, (i) the Special Servicer’s obligation to service such Corrected Lease or Corrected Loan
shall terminate, (ii) the Special Servicer’s right to receive the Special Servicing Fee with respect
to such Corrected Lease or Corrected Loan shall terminate, and (iii) the obligations of the
Property Manager to
service and administer such Lease or Mortgage Loan shall resume, in each
case, effective as of the first day of the calendar month following the calendar month in which
such notice was delivered and return effected.
(b) In servicing any Specially Serviced Assets, the Special Servicer shall provide to
the Custodian, for the benefit of the Indenture Trustee, originals of documents included within
the definition of “Lease File” for inclusion in the related Lease File and “Loan File” for inclusion
in the related Loan File (with a copy of each such original to the Property Manager), and copies
of any additional related Lease and Mortgage Loan information, including correspondence with
the related Obligor.
(c) Notwithstanding anything in this Agreement to the contrary, in the event that the
Property Manager and the Special Servicer are the same Person, all notices,
certificates,
information and consents required to be given by the Property Manager to the Special Servicer or
vice versa shall be deemed to be given without the necessity of any action on such Person’s part.
Section 3.21 Sub-Management Agreements.
(a) The Property Manager and the Special Servicer may enter into Sub-Management
Agreements to provide for the performance by third parties of any or all of their respective
obligations hereunder; provided, that, in each case, the Sub-Management Agreement: (i) is
consistent with this Agreement in all material respects and requires the Sub-Manager to comply
with all of the applicable conditions of this Agreement; (ii) provides that if the Property Manager
or the Special Servicer, as the case may be, shall for any reason no longer act in such capacity
hereunder (including by reason of a Servicer Replacement
Event), any Back-Up Manager,
Successor Property Manager or Successor Special Servicer, may thereupon assume all of the
rights and, except to the extent they arose prior to the date of assumption, obligations of the
Property Manager or the Special Servicer, as the case may be, under such agreement or,
alternatively, may (or the Indenture Trustee may) terminate such Sub-Management Agreement
without cause and without payment of any penalty or termination fee; (iii) provides that the
Issuers, the Back-Up Manager, the Indenture Trustee, the other parties hereto and, as and to the
extent provided herein, the third party beneficiaries hereof shall be third party beneficiaries under
such agreement, but that (except to the extent the Back-Up Manager or Successor Property
Manager or Successor Special Servicer assumes the obligations of the Property Manager or the
Special Servicer,
as the case may be, under the applicable Sub-Management Agreement as
contemplated by the immediately preceding clause (ii) and, in such case, only from the date of
such assumption) none of the Issuers, the Indenture Trustee, the Back-Up Manager, any other
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party hereto, any successor Property Manager or Special Servicer, as the case may be, any holder
of Notes or LLC Interests or any other third party beneficiary hereof shall have any duties under
such agreement or any liabilities arising therefrom; (iv) permits any purchaser of a Mortgaged
Property and any related Lease or Mortgage Loan pursuant to this Agreement to terminate such
Sub-Management Agreement with respect to such purchased Mortgaged Property and related
Lease or Mortgage Loan at its option and without penalty; (v) does not permit the Sub-Manager
to enter into or consent to any modification, waiver or amendment or otherwise take any action
on behalf of the Property Manager or Special Servicer, as the case may be, contemplated by
Section 3.19 without the written consent of the Property Manager or Special
Servicer, as the case
may be; and (vi) does not permit the Sub-Manager any rights of indemnification that may be
satisfied out of the Collateral (it being understood that any Sub-Manager shall be entitled to
recover amounts in respect of Property Protection Advances as described in the following
paragraph). In addition, each Sub-Management Agreement entered into by the Property Manager
shall provide that such agreement shall terminate with respect to any Lease and the related
Mortgaged Property, and any Mortgage Loan serviced thereunder at the time such Lease or
Mortgage Loan becomes a Specially Serviced Asset, and each Sub-Management Agreement
entered into by the Special Servicer shall relate only to Specially Serviced Assets and shall
terminate with respect to any such Lease or Mortgage Loan that ceases to be a Specially Serviced
Asset, in each case pursuant to the terms
hereof.
The Property Manager and the Special Servicer shall each deliver to the Issuers and the
Indenture Trustee copies of all Sub-Management Agreements, and any amendments thereto and
modifications thereof, entered into by it, promptly upon its execution and delivery of such
documents. References in this Agreement to actions taken or to be taken by the Property
Manager or the Special Servicer include actions taken or to be taken by a Sub-Manager on behalf
of the Property Manager or the Special Servicer, as the case may be, and in connection therewith,
all amounts advanced by any Sub-Manager to satisfy the obligations of the Property Manager
hereunder to make Advances shall be deemed to have been advanced by the Property Manager
out of its own funds and, accordingly, such amounts constituting Advances shall be recoverable
by such Sub-Manager in the same manner and out
of the same funds as if such Sub-Manager
were the Property Manager. For so long as they are outstanding, Advances shall accrue Advance
Interest in accordance with the terms hereof, such interest to be allocable between the Property
Manager and such Sub-Manager as they may agree. For purposes of this Agreement, the
Property Manager and the Special Servicer each shall be deemed to have received any payment,
and shall be obligated to handle such payment in accordance with the terms of this Agreement,
when a Sub-Manager retained by it receives such payment. The Property Manager and the
Special Servicer each shall notify the other, the Issuers and the Indenture Trustee in writing
promptly of the appointment by it of any Sub-Manager.
(b) The Property Manager shall have determined to its commercially reasonable
satisfaction that each Sub-Manager shall be authorized to transact
business, and shall have
obtained all necessary licenses and approvals, in each jurisdiction in which the failure to be so
authorized or qualified or to have obtained such licenses would adversely affect its ability to
carry out its obligations under the Sub-Management Agreement to which it is a party.
(c) The Property Manager and the Special Servicer, for the benefit of the Issuers,
shall (at no expense to the Issuers or the Indenture Trustee) monitor the performance and enforce
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the obligations of their respective Sub-Managers under the related Sub-Management
Agreements. Such enforcement, including the legal prosecution of claims, termination of Sub-
Management Agreements in accordance with their respective terms and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent and at such time as
the Property Manager or the Special Servicer, as applicable, in its good faith and reasonable
judgment, would require were it the owner of the Mortgaged Properties and the Mortgage Loans.
Subject to the terms of the related SubManagementSub-Management Agreement, the Property
Manager and the Special Servicer shall each have the right to (in its sole discretion and without
the consent of any other person) remove a Sub-Manager retained
by it at any time it considers
such removal to be in the best interests of the Issuers.
(d) In the event that the Back-Up Manager has succeeded to the rights and assumed
the obligations hereunder, of the Property Manager or the Special Servicer, then the Back-Up
Manager shall succeed to the rights and assume the obligations of the Property Manager or the
Special Servicer, as applicable, under any Sub-Management Agreement, unless the Indenture
Trustee elects to terminate any such Sub-Management Agreement in accordance with its terms.
In any event, if a Sub-Management Agreement is to be assumed by the Back-Up Manager, then
the predecessor Property Manager or the Special Servicer, as applicable, at its expense, shall,
upon request of the Back-Up Manager, deliver to the Back-Up Manager all documents and
records relating to such Sub-Management Agreement and the Mortgaged Properties
and the
Mortgage Loans then being serviced thereunder and an accounting of amounts collected and held
on behalf of it thereunder, and otherwise use its best efforts to effect the orderly and efficient
transfer of the Sub-Management Agreement to the assuming party.
(e) Notwithstanding any Sub-Management Agreement, the Property Manager and the
Special Servicer shall remain obligated and liable to the Issuers, the Noteholders, the Indenture
Trustee and each other for the performance of their respective obligations and duties under this
Agreement in accordance with the provisions hereof to the same extent and under the same terms
and conditions as if each alone were servicing and administering the Mortgage Loans, the
Mortgaged Properties and Leases for which it is responsible.
(f) Except as otherwise expressly provided for herein, the Property Manager or
Special
Servicer, as applicable, will be solely liable for all fees owed by it to any Sub-Manager,
irrespective of whether its compensation pursuant to this Agreement is sufficient to pay such
fees.
(g) Each of the Property Manager and the Special Servicer shall have all the
limitations upon liability and all the indemnities for the actions and omissions of any such Sub-
Manager retained by it that it has for its own actions hereunder.
(h) For the avoidance of doubt, this Section 3.21 shall not apply to any delegation
of obligations pursuant to Section 6.04(a) following a Permitted Replacement Event or
Section 6.04(b) following a Permitted Termination Event.
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ARTICLE IV
REPORTS
Section 4.01 Reports to the Issuers, the Indenture Trustee and the Insurers.
(a) Not later than 2:00 p.m. (New York City time), three (3) Business Days prior to
each Payment Date, the Property Manager shall deliver to each of the Issuers and the Indenture
Trustee a report containing the information specified on Exhibit F hereto, and such other
information with respect to the Mortgage Loans, the Leases and Mortgaged Properties as the
Indenture Trustee may reasonably request (such report, the “Determination Date Report”),
reflecting information as of the close of business on the last day of the related Collection Period,
in a mutually agreeable electronic format. The Determination Date Report
and any written
information supplemental thereto shall include such information with respect to the Mortgage
Loans, the Leases and Mortgaged Properties as is required by the Indenture Trustee for purposes
of making the payments required by Section 2.11(b) of the Indenture and the calculations and
reports referred to in Section 6.01 of the Indenture and otherwise therein, in each case as set forth
in the written specifications or guidelines issued by any of the Issuers of the Indenture Trustee,
as the case may be, from time to time. The Property Manager shall also provide to the Indenture
Trustee the wire instructions for the relevant parties to which payments under Section 2.11(b) of
the Indenture will be made. The Determination Date Report shall also contain a certification by
the Property Manager that the Issuers have not incurred any indebtedness except indebtedness
permitted
by the Transaction Documents. Such information shall be delivered by the Property
Manager to each of the Issuers and the Indenture Trustee in agreed-upon format and such
electronic or other form as may be reasonably acceptable to the Issuers and the Indenture
Trustee. The Special Servicer shall from time to time (and, in any event, as may be reasonably
required by the Property Manager) provide the Property Manager with such information
regarding the Specially Serviced Assets as may be necessary for the Property Manager to prepare
each Determination Date Report and any supplemental information to be provided by the
Property Manager to the Issuers or the Indenture Trustee.
(b) Not later than 2:00 p.m. (New York City time), three (3) Business Days prior to
each Payment Date, the Special Servicer shall deliver to the Property Manager and the Indenture
Trustee a report containing
such information relating to the Specially Serviced Assets and in
such form as the Indenture Trustee may reasonably request (such report, the “Special Servicer
Report”), reflecting information as of the close of business on the last day of the related
Collection Period. For the avoidance of doubt, the Special Servicer Report may be included in
the Determination Date Report.
(c) Not later than the 30th day following the end of each calendar quarter,
commencing with the quarter ended September 30, 2014, the Special Servicer shall deliver to the
Indenture Trustee and the Property Manager a report containing such information and in such
form as the Indenture Trustee may reasonably request (such report a “Modified Collateral
Detail and Realized Loss Report”) with respect to all operating
statements and other financial
information collected or otherwise obtained by the Special Servicer pursuant to Section 3.12(b)
during such calendar quarter.
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Section 4.02 Use of Agents.
The Property Manager may at its own expense utilize agents or attorneys-in-fact,
including Sub-Managers, in performing any of its obligations under this Article IV, but no such
utilization shall relieve the Property Manager from any of such obligations, and the Property
Manager shall remain responsible for all acts and omissions of any such agent or attorney-in-
fact. The Property Manager shall have all the limitations upon liability and all the indemnities for
the actions and omissions of any such agent or attorney-in-fact that it has for its own actions
hereunder pursuant to Article V, and (except as set forth in Section 3.21(a)) any such agent or
attorney-in-fact shall have the benefit of all the limitations upon liability, if any, and all the
indemnities
provided to the Property Manager under Section 5.03(a). Such indemnities shall be
expenses, costs and liabilities of the Issuers, and any such agent or attorney-in-fact shall be
entitled to be reimbursed (to the same extent the Property Manager would be entitled to be
reimbursed) as provided in Section 2.11 of the Indenture.
ARTICLE V
THE PROPERTY MANAGER AND THE SPECIAL SERVICER
Section 5.01 Liability of the Property Manager and the Special Servicer.
The Property Manager and the Special Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken by the Property
Manager and the Special Servicer, respectively, herein.
Section 5.02 Merger, Consolidation or Conversion of the Property Manager and the
Special
Servicer.
Subject to the following paragraph, the Property Manager and the Special Servicer shall
each keep in full effect its existence, rights and franchises as a partnership, corporation, bank or
association under the laws of the jurisdiction of its formation, and each will obtain and preserve
its qualification to do business as a foreign partnership, corporation, bank or association in each
jurisdiction in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Leases and the Mortgage Loans and to perform its
respective duties under this Agreement.
Each of the Property Manager and the Special Servicer may be merged or consolidated
with or into any Person, or may transfer all or substantially all of its assets to any Person, in
which case any Person resulting from any merger or consolidation
to which the Property
Manager or the Special Servicer is a party, or any Person succeeding to the business of the
Property Manager or the Special Servicer, will be the successor Property Manager or the
successor Special Servicer, as the case may be, hereunder, and each of the Property Manager and
the Special Servicer may transfer any or all of its rights and obligations under this Agreement to
any Person; provided, however, that no such successor, surviving Person or transferee shall
succeed to the rights of the Property Manager or the Special Servicer unless (a) the Rating
Condition is satisfied or (b) such successor is an affiliate of the Property Manager or the Special
Servicer and the obligations of such successor hereunder are guaranteed by the Support Provider.
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Section 5.03 Limitation on Liability of the Property Manager, the Special Servicer and
the Back-Up Manager; Environmental Liabilities.
(a) None of the Property Manager, the Special Servicer or the Back-Up Manager or
any director, partner, member, manager, officer, employee or agent of any such party or Control
Person over any of them shall be under any liability to the Issuers, the Indenture Trustee, the
Collateral Agent, the Custodian or the holders of the Notes or the LLC Interests or any other
Person for any action taken, or not taken, in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that none of the Property Manager, the Special Servicer or the
Back-Up Manager shall be protected against any liability that would otherwise be imposed by
reason of misfeasance,
bad faith or negligence in the performance of obligations or duties
hereunder. The Property Manager and the Special Servicer and the Back-Up Manager (each, an
“Applicable Party”) and any director, officer, partner, member, manager, employee or agent of
any such person or Control Person of any of them shall be entitled to indemnification by the
Issuers, payable, subject to Section 5.04 of the Indenture and pursuant to Section 2.11 of the
Indenture, against any loss, liability or expense incurred in connection with the performance of
duties or obligations hereunder or under any other Transaction Document or in connection with
any legal action that relates to this Agreement or any other Transaction Document; provided,
however, that such indemnification shall not extend to any loss, liability or expense incurred
by
reason of misfeasance, bad faith or negligence in the performance of obligations or duties under
this Agreement. Each Applicable Party shall indemnify the Issuers, the Indenture Trustee and the
Collateral Agent and any director, officer, employee, agent or Control Person of any of them
against any loss, liability or expense resulting from the misfeasance, bad faith or negligence in
the performance of such Applicable Party’s duties or obligations under this Agreement. No
Applicable Party shall be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its respective responsibilities under this Agreement and that in its opinion
may involve it in any expense or liability; provided, however, that each Applicable Party shall be
permitted, at its sole discretion, to undertake any such action that it may deem necessary or
desirable
with respect to the enforcement or protection of the rights and duties of the parties
hereto or the interests of any Issuer hereunder. In such event, the legal expenses and costs of
such action, and any liability resulting therefrom, shall be reimbursed by the Issuers in
accordance with Section 2.11(b) of the Indenture.
(b) The Property Manager shall enforce or pursue in accordance with the Servicing
Standard any claim for payment, indemnity or reimbursement available to any of the Issuers or
the Indenture Trustee in respect of any environmental liabilities, losses, claims, costs or
expenses, including, without limitation, any right to payment under an Environmental Indemnity
Agreement or a Performance Undertaking. The Property Manager shall seek payment from the
Support Provider for any indemnities due under an Environmental Indemnity Agreement to the
extent any such
amounts are not paid by the applicable Issuer on a current basis from the
Available Amount on any Payment Date in accordance with Section 2.11(b) of the Indenture.
Any amounts advanced by Spirit Realty, in its capacity as Property Manager, in respect of
environmental matters that are payable by the applicable Issuer under an Environmental
Indemnity Agreement and are not reimbursed on a current basis as described above, shall be
deemed to be payment by Spirit Realty, in its capacity as Support Provider, and Spirit Realty
shall not be entitled to reimbursement of any such amounts as a Property Protection Advance.
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Section 5.04 Term of Service; Property Manager and Special Servicer Not to Resign.
Subject to (and without limiting) Section 5.02, Section 6.04(a) and Section 6.04(b),
hereof, neither the Property Manager nor the Special Servicer shall resign from the obligations
and duties hereby imposed on it, except upon determination that the performance of its duties
hereunder is no longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it, such other activities causing such a
conflict being of a type and nature carried on by the Property Manager or the Special Servicer, as
the case may be, at the date of this Agreement. Any such determination permitting the
resignation of the Property Manager or the Special Servicer, as applicable, shall be
evidenced by
an Opinion of Counsel to such effect that shall be delivered to the Issuers and the Indenture
Trustee. No such resignation shall become effective until a successor shall have assumed the
responsibilities and obligations of the resigning party hereunder. If within one hundred twenty
(120) days of the date of such determination, no successor shall have assumed the applicable
responsibilities and obligations of the resigning party, such Property Manager or Special Servicer
shall be permitted to petition a court of competent jurisdiction to appoint a successor.
Notwithstanding anything to the contrary herein, each of the Property Manager and the
Special Servicer may cause all or part of the obligations and duties imposed on it by this
Agreement to be assumed by, and may assign part or all of its rights, benefits or privileges
hereunder to, another Person; provided,
that (i) the assuming party is an Eligible Successor and
(ii) unless the assuming party or assignee is an Affiliate of the Property Manager or Special
Servicer whose obligations and duties hereunder are guaranteed by the Support Provider, the
Rating Condition shall have been satisfied with respect to any such assumption or assignment.
Upon any such assignment or assumption, the Property Manager and/or the Special Servicer, as
applicable, shall be relieved from all liability hereunder for acts or omissions the assuming
Person or assignee, as applicable, occurring after the date of such assignment or assumption.
If the Property Manager, Special Servicer or Back-Up Manager shall resign pursuant to
this Section 5.04 or be removed pursuant to Section 6.01, then such resigning Property Manager,
Special Servicer or Back-Up Manager, as applicable, must pay all reasonable costs and expenses
associated with the transfer of its duties and cooperate reasonably with its successor in order to
effect such transfer.
Except as provided herein, neither the Property Manager nor the Special Servicer shall
assign or transfer any of its rights, benefits or privileges hereunder to any other Person or
delegate to or subcontract with, or authorize or appoint, any other Person to perform any of the
duties, covenants or obligations to be performed by it hereunder, or cause any other Person to
assume such duties, covenants or obligations. If, pursuant to any provision hereof, all of the
duties and obligations of the Property Manager or the Special Servicer are transferred by an
assignment and assumption to a successor thereto, the entire amount of compensation payable to
the Property Manager or the Special Servicer, as the case may be, that accrues pursuant hereto
from
and after the date of such transfer shall be payable to such successor.
Section 5.05 Rights of Certain Persons in Respect of the Property Manager and the
Special Servicer.
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Each of the Property Manager and the Special Servicer shall afford to the other and, also
to the Issuers and the Indenture Trustee, upon reasonable notice, during normal business hours,
(a) access to all records maintained by it relating to the Mortgage Loans, Mortgaged Properties
and Leases included in the Collateral Pool and in respect of its rights and obligations hereunder
and (b) access to such of its officers as are responsible for such obligations; provided, that, in no
event shall the Property Manager or Special Servicer be required to take any action that violates
applicable law, contract or regulation. The Issuers may, but are not obligated to, enforce the
obligations of the Property Manager and the Special Servicer hereunder and may, but are not
obligated to, perform, or cause a designee to perform,
any defaulted obligation of the Property
Manager or the Special Servicer hereunder, or, in connection with any such defaulted obligation,
exercise the related rights of the Property Manager or the Special Servicer hereunder; provided,
however, that neither the Property Manager nor the Special Servicer shall be relieved of any of
its obligations hereunder by virtue of such performance by any such Issuer or its designee. The
Issuer shall not have any responsibility or liability for any action or failure to act by or with
respect to the Property Manager or the Special Servicer.
Section 5.06 [Reserved].
Section 5.07 Property Manager or Special Servicer as Owner of Notes.
The Property Manager or an Affiliate of the Property Manager, or the Special Servicer or
an Affiliate of the Special Servicer, may become the holder of any
Notes or any LLC Interests
with the same rights (unless otherwise expressly provided in a Transaction Document) as it
would have if it were not the Property Manager, the Special Servicer or any such Affiliate. If, at
any time during which the Property Manager, the Special Servicer or any of their respective
Affiliates is the holder of any Note or LLC Interest, the Property Manager or the Special Servicer
proposes to take or omit to take action (i) which action or omission is not expressly prohibited by
the terms hereof and would not, in the Property Manager or the Special Servicer’s good faith
judgment, violate the Servicing Standard, and (ii) which action, if taken, or omission, if made,
might nonetheless, in the Property Manager’s or the Special Servicer’s good faith judgment, be
considered by other Persons to violate the Servicing Standard, the Property Manager or the
Special
Servicer may, but need not, seek the approval of the holders of the Notes and the LLC
Interests to such action or omission by delivering to the Issuers and the Indenture Trustee a
written notice that (a) states that it is delivered pursuant to this Section 5.07, (b) identifies the
portion of Notes and LLC Interests beneficially owned by the Property Manager or the Special
Servicer or any Affiliate of the Property Manager or the Special Servicer, and (c) describes in
reasonable detail the action that the Property Manager or the Special Servicer, as the case may
be, proposes to take or omit. Upon receipt of such notice, the Issuers shall forward such notice to
the applicable holders of the LLC Interests. If, at any time, the Requisite Global Majority
separately consent in writing to the proposal described in the such notice, and if the Property
Manager or the Special Servicer, as
the case may be, takes action and/or omits to take action as
proposed in such notice, such action and/or omission will be deemed to comply with the
Servicing Standard. It is not the intent of the foregoing provision that the Property Manager or
the Special Servicer be permitted to invoke the procedure set forth herein with respect to routine
servicing matters arising hereunder, but rather in the case of unusual circumstances.
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ARTICLE VI
SERVICER REPLACEMENT EVENTS
Section 6.01 Servicer Replacement Events.
(a) “Servicer Replacement Event,” wherever used herein with respect to the
Property Manager or Special Servicer, means any one of the following events:
(i) any failure by the Property Manager or the Special Servicer to remit or
deposit moneys, as required under the Indenture or this Agreement, to the Collection
Account, the Release Account or the Payment Account, which failure remains
unremedied for onetwo (12) Business Day after the earlier of (x) the date on which notice
of such failure, requiring the same to be remedied, is given to the Property Manager or
Special Servicer,
as applicable, by the Indenture Trustee, or to such Property Manager or
Special Servicer, as applicable, and the Indenture Trustee by the Noteholders holding at
least 25% of the Aggregate Series Principal Balance and (y) actual knowledge of such
failure by such Property Manager or Special Servicer, as applicable; or
(ii) the Property Manager fails to make any P&I Advance as required by this
Agreement;
(iii) the Property Manager fails to make any Property Protection Advance or
fails to pay (or, in the event the Property Manager is Spirit Realty, fails to direct the
Indenture Trustee to pay) any Emergency Property Expenses from funds on deposit in the
Collection Account, in each case as required by the Indenture or this Agreement, which
failure remains unremedied for threefour (34) Business Days after the earlier of (x) the
date on which notice of such failure,
requiring the same to be remedied, shall have been
given to such Property Manager by the Indenture Trustee, or to such Property Manager
and the Indenture Trustee by the Noteholders holding at least 25% of the Aggregate
Series Principal Balance and (y) actual knowledge of such failure by such Property
Manager; or
(iv) either the Property Manager or the Special Servicer fails to comply in any
material respect with any other of the covenants or agreements on the part of the Property
Manager or the Special Servicer, as the case may be, contained in this Agreement, which
failure continues unremedied for a period of 30 days after the date on which written
notice of such failure shall have been received by the Property Manager or the Special
Servicer, as applicable (15 days in the case of a failure to pay the premium for any
insurance policy required to be maintained
pursuant to this Agreement or such
fewer days as may be required to avoid the commencement of foreclosure
proceedings for unpaid real estate taxes or the lapse of insurance, as applicable);
provided, however, that if the failure is capable of being cured and such Property
Manager or Special Servicer is diligently pursuing that cure, the 30 day period will be
extended for another 30 days; or
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(v) any breach on the part of the Property Manager or the Special Servicer of
any representation or warranty contained in this Agreement that materially and adversely
affects the interests of the Issuers or the Noteholders, and that continues unremedied for a
period of 30 days after the date on which notice of such breach is given to the Property
Manager or the Special Servicer, as applicable; provided, however, that if the breach is
capable of being cured and such Property Manager or Special Servicer is diligently
pursuing that cure, the 30 day period will be extended for another 30 days; or
(vi) (a) the Property Manager or the Special Servicer consents to the
appointment of a receiver, liquidator, trustee or similar official relating to it or relating to
all or substantially all of its assets or admits
in writing its inability to pay its debts or
takes other actions indicating its insolvency or inability to pay its obligations; or (b) a
decree or order of a court having jurisdiction in any involuntary case for the appointment
of a receiver, liquidator, trustee or similar official in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar proceedings is
entered against the Property Manager or the Special Servicer and the decree or order
remains in force for a period of 60 days; provided, that if any decree or order cannot be
discharged, dismissed or stayed within the 60-day period, such Property Manager or
Special Servicer will have an addition 30 days to effect the discharge, so long as it
commenced proceedings to have the decree or order dismissed within the initial 60-day
period and it is continuing to pursue the discharge;
or
(vii) either the Property Manager or Special Servicer assigns any of its
obligations to any third party other than as permitted under this Agreement or any other
Transaction Document and does not remedy such breach within five business
daysBusiness Days of such assignment; or
(viii) either the Property Manager or the Special Servicer fails to observe any
material reporting requirements under this Agreement, which failure remains unremedied
30 days after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Property Manager or the Special Servicer, as
applicable, by any other party to this Agreement or the Indenture Trustee; or
(ix) any Issuer or the Indenture Trustee has received notice in writing from any
Rating Agency then rating any Notes at the request of an Issuer citing servicing concerns
and
stating that the continuation of the Property Manager or the Special Servicer in such
capacity would be the sole cause of or be a material reason for, in and of itself, result
in a downgrade, qualification or withdrawal of any of the ratings then assigned by such
Rating Agency or other nationally recognized statistical ratings organization to such
Notes; or
(x) the declaration of an Indenture Event of Default; or
(xi) an Early Amortization Event occurs and is continuing that is reasonably
determined by the BackupBack-Up Manager (unless the Back-Up Manager is then
serving as Property Manager or Special Servicer) or the Requisite Global Majority to be
primarily attributable to acts or omissions of the Property Manager or the Special
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Servicer rather than general market factors (provided that the occurrence of an Early
Amortization Event determined to be attributable to the acts or omissions of a Property
Manager or Special Servicer that has been replaced shall not cause a Servicer
Replacement Event with respect to any Successor Property Manager or Successor Special
Servicer (including the Back-Up Manager)); or
(xii) the Property Manager or the Special Servicer has engaged in fraud, gross
negligence or willful misconduct in connection with its performance under this
Agreement and such event could reasonably be expected to have a material adverse effect
on the use, value or operation of the Collateral Pool (taken as a whole), and remains
unremedied for 30 days after the Property Manager or the Special Servicer receives
written
notice thereof.
When a single entity acts as Property Manager and Special Servicer, a Servicer Replacement
Event in one such capacity shall constitute a Servicer Replacement Event in each such capacity.
In the event that the same entity is serving as both Property Manager and Special Servicer and
such entity is terminated hereunder in one such capacity (in accordance with Section 6.01(b)), it
shall automatically be terminated in both such capacities. Each of the Property Manager and the
Special Servicer will notify the Indenture Trustee in writing of the occurrence of a Servicer
Replacement Event or an event that, with the giving of notice or the expiration of any cure
period, or both, would constitute a Servicer Replacement Event promptly upon obtaining actual
knowledge thereof.
(b) (i) If any Servicer Replacement Event (other than any Servicer Replacement
Event
under Sections 6.01(a)(vi)) occurs with respect to the Property Manager or the Special
Servicer (in either case, for purposes of this Section 6.01(b), the “Defaulting Party”) of which a
responsible officer of the Indenture Trustee shall have actual knowledge shall occur, then the
Indenture Trustee shall provide written notice thereof to the Noteholders requesting that the
Noteholders (excluding Spirit Realty and its affiliates) direct the removal of the Property
Manager and/or Special Servicer or waive such Servicer Replacement Event. In the event that,
while such Servicer Replacement Event is continuing, the Requisite Global Majority directs the
removal of such Property Manager and/or Special Servicer, as applicable, the Indenture Trustee
will terminate such Property Manager or Special Servicer by notice in writing to the Defaulting
Party (with a copy of such notice to each
other party hereto). For the avoidance of doubt, no such
direction may occur in the event that a Servicer Replacement Event is not continuing. Upon the
occurrence of any Servicer Replacement Event under Sections 6.01(a)(vi) with respect to any
Defaulting Party, such Defaulting Party shall be immediately terminated without any further
action on the part of any other person. Following any such termination of a Defaulting Party as
described in this Section 6.01(b), the Back-Up Manager shall replace the Defaulting Party as
Property Manager and/or Special Servicer, as applicable, subject to and in accordance with
Section 6.02(b) and shall have all the rights, duties and obligations of the Property Manager
and/or Special Servicer, as applicable, hereunder until a Successor Property Manager or
Successor Special Servicer, as applicable, shall have been appointed. Promptly after any such
termination, the Indenture Trustee (acting at the written direction of the Requisite Global
Majority) shall appoint a successor property manager (any property manager appointed in
such manner, the “Successor Property Manager”) and/or a successor special servicer (the
“any special servicer appointed in such manner, the “Successor Special Servicer”) in
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accordance with Section 6.01(b)(iii), each of which shall serve as and have all the rights, duties
and obligations of the Property Manager and/or of the Special Servicer, as applicable,
hereunder; provided, that any Successor Property Manager or Successor Special Servicer must
be an Eligible Successor at the time of such appointment. Upon its appointment, the Successor
Property Manager or Successor Special Servicer shall be the successor in all respects to the
Property Manager or Special Servicer, as applicable, and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed upon the Property Manager or
Special Servicer by the terms and provisions hereof; provided, that, no such Successor Special
Servicer or Successor Property Manager shall have any liability with respect to any
duties or
obligations of the terminated Property Manager or Special Servicer, as applicable, accruing prior
to the date of such appointment. Notwithstanding the foregoing, if a Servicer Replacement
Event under Section 6.01(b)(ii) or (iii) occurs as a result of a failure by the Property Manager to
make any Advance and the Back-Up Manager makes such Advance, for so long as the Property
Manager has not reimbursed the amount of such Advance to the Back-Up Manager, the Back-Up
Manager will have the right to immediately terminate the Property Manager (and the Special
Servicer, if the Property Manager and the Special Servicer are the same entity) and become the
Successor Property Manager (and the Successor Special Servicer, if the Property Manager being
replaced and the Special Servicer are the same entity). In any such event, the Back-Up Manager
shall be deemed to have been
appointed the Successor Property Manager and, if applicable, the
Successor Special Servicer hereunder (regardless of whether any of the other conditions of this
Section 6.01(b) are satisfied).
(ii) (i) Unless otherwise expressly set forth herein, any such appointment of a
Successor Property Manager or Successor Special Servicer, other than the Back-Up
Manager, will be subject to (i) the satisfaction of the Rating Condition and (ii) the
written agreement of the Successor Property Manager or Successor Special Servicer to be
bound by the terms and conditions of this Agreement, together with an Opinion of
Counsel regarding the enforceability of such agreement. Subject to the foregoing
conditions set forth in Section 6.01(b), any person, including any holder of Notes or LLC
Interests or any Affiliate thereof, may be appointed as Successor Property Manager or
Successor
Special Servicer.
(iii) (ii) In the event that a Successor Property Manager or Successor Special
Servicer (other than the Back-Up Manager), as applicable, has failed to assume all of the
duties and obligations of the Defaulting Party as provided in this Agreement within 30
days of written notice of termination to such Defaulting Party (the “Successor
Replacement Date”), the Back-Up Manager shall automatically (and without further
action and regardless of whether any of the other conditions of this Section 6.01(b) are
satisfied) be (and shall have been deemed to have been appointed) the Successor Property
Manager or the Successor Special Servicer, as applicable, under this Agreement;
provided, however, that the Indenture Trustee shall (at the direction of the Requisite
Global Majority) replace the Back-Up Manager acting as Successor Property Manager or
Successor
Special Servicer without cause upon 30 days written notice and appoint a new
Successor Property Manager or Successor Special Servicer specified in such Requisite
Global Majority’s direction; provided, that (i) such appointment shall be subject to the
terms and conditions of the appointment of a Successor Property Manager or Successor
Special Servicer, as applicable, set forth in this Section 6.01(b)(i) and (if) the Back-Up
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Manager shall continue serving as Property Manager or Special Servicer, as applicable,
until such appointment is effected.
(iv) (iii) In the event that a Successor Property Manager or Successor Special
Servicer, as applicable, other than the Back-Up Servicer has not been appointed within
thirty (30) days of the applicable Successor Replacement Date, the Back-Up Manager
may (but shall not be obligated to) direct the Indenture Trustee to appoint (for the
avoidance of doubt, subject to the terms and conditions of the appointment of a Successor
Property Manager or Successor Special Servicer, as applicable, set forth in this
SectionSections 6.01(b)(i) and (ii)) a Successor Property Manager or Successor Special
Servicer designated by the Back-Up Manager (which successor will be subject to the
criteria
described above, including satisfaction of the Rating Condition); provided,
that the Back-Up Manager will continue serving as Property Manager or Special
Servicer, as applicable, until a Successor Property Manager or Successor Special
Servicer, as applicable, has been so appointed. If the Back-Up Manager does not direct
the Indenture Trustee to appoint a Successor Property Manager or Successor Special
Servicer within 6030 days of the applicable Successor Replacement Date, then such
Back-Up Manager will continue to serve as Property Manager or Special Servicer, as
applicable, and will no longer be permitted to so direct the Indenture Trustee.
(v) (iv) Each of the Property Manager and the Special Servicer agrees that, if
it is terminated pursuant to this Section 6.01(b), it shall (i) promptly (and in any event not
later than ten (10) Business Days prior to the effective
date of such termination) provide
the Back-Up Manager or any Successor Property Manager or Successor Special Servicer,
as applicable, with all documents and records in accordance with Section 6.02(b), (ii)
cooperate with such successor in effecting the termination of the duties, obligations,
responsibilities and rights of the Property Manager or Special Servicer hereunder and
transferring such duties, obligations and responsibilities to such successor, (including
carrying out the actions set forth in Section 6.02) and (iii) in the event that it receives any
amounts that constitute Collateral, transfer such amounts to the Property Manager (it
being understood that if the Property Manager has been terminated, such amounts shall
be transferred to the Successor Property Manager that succeeds such Property Manager)
within two (2) Business Days after receipt thereof; provided,
however, that the Property
Manager and the Special Servicer each shall, if terminated pursuant to this Section
6.01(b), continue to be obligated for or entitled to pay or receive all amounts accrued or
owing by or to it under this Agreement on or prior to the date of such termination,
whether in respect of Property Protection Advances or otherwise, and it and its directors,
officers, employees and agents shall continue to be entitled to the benefits of Section
5.03(a) notwithstanding any such termination. Any Successor Property Manager or a
Successor Special Servicer shall use reasonable efforts to diligently complete the physical
transfer of servicing from the terminated Property Manager or Special Servicer, as
applicable, with the cooperation of such Property Manager or Special Servicer.
Section 6.02 Successor Property Manager.
(a)
In the event that a Successor Property Manager (including the Back-Up Manager)
is appointed, the terminated Property Manager shall arrange for the delivery to the Successor
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Property Manager of all of the Servicing Files (other than with respect to any Specially Serviced
Asset), which Servicing Files shall contain sufficient data to permit the Successor Property
Manager to assume the duties of the Property Manager hereunder without delay on account of
the absence of relevant servicing information. In the event that a Successor Special Servicer
(including the Back-Up Manager) is appointed, the terminated Special Servicer shall arrange for
the delivery to the Successor Special Servicer of all of the Servicing Files for any Specially
Serviced Asset, which Servicing Files shall contain sufficient data to permit the Successor
Special Servicer to assume the duties of the Special Servicer hereunder without delay on account
of the absence of relevant servicing information. If the Back-Up
Manager has made any
Advances that the Property Manager was required to make but did not make which have
not been reimbursed, any Successor Property Manager (other than the Back-Up Manager)
will be required to reimburse the Back-Up Manager for such Advances as a condition to its
appointment as successor (and any amount so reimbursed will be deemed to constitute
Advances made by the Successor Property Manager).
(b) The Issuers, if they determine in their reasonable discretion that enforcement
rights and/or remedies are available to the holders of the Notes against the terminated Property
Manager or Special Servicer and it is prudent under the circumstances to enforce such rights,
agree to enforce their rights under this Agreement against the terminated Property Manager or
Special Servicer, including any rights they have to enforce each Defaulting Party’s obligation to
fully
cooperate in the orderly transfer and transition of servicing and otherwise comply with the
terms of this Agreement. In the event that the Successor Special Servicer or Successor Property
Manager discovers or becomes aware of any errors in any records or data of the terminated
Special Servicer or Property Manager which impairs its ability to perform its duties hereunder,
such Successor Property Manager or Successor Special Servicer shall notify the Issuers and the
Indenture Trustee in writing of such errors and shall, at such terminated Special Servicer’s or
Property Manager’s expense and upon the Issuers’ direction, undertake to correct or reconstruct
such records or data.
(c) From and after the date of this Agreement until the Back-Up Manager becomes
the Successor Property Manager, the Property Manager shall (i) provide or cause to be provided
to the Back-Up Manager
on the 20th day of each month, in electronic form, a complete data tape
of the Mortgage Loan Schedule, the Mortgaged Property Schedule and such other information as
any Issuer may reasonably deem necessary, including all information necessary to determine the
Release Price with respect to any Mortgage Loan or Mortgaged Property and the original
purchase price paid by any Issuer in respect of any Mortgage Loan or Mortgaged Property and
(ii) make available to the Back-Up Manager a copy of each Determination Date Report,
Modified Collateral Detail and Realized Loss Report and any Special Servicer Report. The Back-
Up Manager will perform an initial comprehensive data integrity review and a monthly review of
this information to determine whether it provides adequate information to enable the Back-Up
Manager to perform its obligations hereunder as the Back-Up Manager. To the extent that
the
Back-Up Manager determines within ten (10) calendar days of its receipt of such information
that such information is adequate for the Back-Up Manager to perform its obligations as the
Back-Up Manager, the Back-Up Manager will provide the Issuers and the Indenture Trustee with
written notice to that effect. To the extent that the Back-Up Manager determines within ten (10)
calendar days of its receipt of such information that such information is inadequate for the Back-
Up Manager to perform its obligations as the Back-Up Manager, the Back-Up Manager will
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provide prompt written notice to the Issuers and the Property Manager identifying any
deficiencies in such information that do not enable the Back-Up Manager to perform its
obligations as the Back-Up Manager. The Property Manager shall use its best efforts to provide
any such deficient information to the Back-Up Manager within ten (10) calendar days of receipt
of such notice from the BackUpBack-Up Manager.
(d) Within ten (10) Business Days of the date of receipt from the Property Manager,
the Back-Up Manager shall, in order to understand the purpose of each data field (and the
interrelationships among such data fields), review the form of Determination Date Report,
Modified Collateral Detail and Realized Loss Report and the Special Servicer Report, each in the
form agreed to by the Property Manager and
the Back-Up Manager. Provided the data in the
Determination Date Report, the Special Servicer Report and the Modified Collateral Detail and
Realized Loss Report are in a format readable by the Back-Up Manager, the Back-Up Manager
shall create a set of conversion routines and database mapping programs, as necessary, that will
enable the Back-Up Manager to (i) receive such data from the Property Manager on a monthly
basis and to ensure that the data is readable, and (ii) independently generate such Determination
Date Reports and Special Servicer Reports, as applicable, in the event that it is appointed
Successor Property Manager or Successor Special Servicer.
(e) On a monthly basis, the Back-Up Manager shall (x) verify receipt of the
Determination Date Report and the Special Servicer Report required to be delivered by the
Property Manager, together with any other records
and data supplied to the Issuers, Indenture
Trustee or otherwise hereunder, by Property Manager with respect to the Mortgage Loans and
Leases, and (y) verify that such records and data are in a readable format.
(f) The Back-Up Manager may resign from its obligations under this Agreement (i)
with the consent of the Requisite Global Majority, (ii) upon a determination that the performance
of its hereunder duties and obligations are no longer permitted under applicable law or (iii) if the
Back-Up Manager identifies a successor back-up manager whose appointment as successor
Back-Up Manager satisfies the Rating Condition, and in each case a written assumption
agreement is executed whereby such successor assumes all rights, duties and obligations of the
Back-Up Manager. No such resignation shall become effective a successor shall have assumed
the responsibilities
and obligations of the Back-Up Manager party hereunder.
Section 6.03 Additional Remedies of the Issuers and the Indenture Trustee upon a
Servicer Replacement Event.
During the continuance of any Servicer Replacement Event, so long as such Servicer
Replacement Event shall not have been remedied, in addition to the rights specified in Section
6.01, the Issuers shall have the right, and the Indenture Trustee shall have the right, in its own
name and as trustee of an express trust, to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the interests, and enforce the
rights and remedies, of the Noteholders (including the institution and prosecution of all judicial,
administrative and other proceedings and the filings of proofs of claim and debt in connection
therewith). Except
as otherwise expressly provided in this Agreement, no remedy provided for
by this Agreement shall be exclusive of any other remedy, and each and every remedy shall be
cumulative and in addition to any other remedy, and no delay or omission to exercise any right or
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remedy shall impair any such right or remedy or shall be deemed to be a waiver of any Servicer
Replacement Event.
Section 6.04 Replacement of the Servicer.
(a) Following the occurrence of the Spin-Off, Sprit Realty may elect by written
notice to the Issuers and the Indenture Trustee to be replaced as Property Manager and
Special Servicer by a direct or indirect wholly owned subsidiary that is a Taxable REIT
Subsidiary (any such replacement, a “Permitted Replacement Event”); provided that (i)
Spirit Realty has entered into a performance guarantee (a copy of which shall be provided
to the Issuers and the Indenture Trustee) whereby Spirit Realty fully, unconditionally and
irrevocably guarantees the all obligations, including
financial obligations, of such
subsidiary pursuant to this Agreement in such subsidiary’s capacity as successor Property
Manager and Special Servicer and (ii) immediately after giving effect to such replacement,
such subsidiary delegates all of its obligations under this Agreement to Spirit Realty and
Spirit Realty accepts such delegation (which may involve an employee sharing agreement
between Spirit Realty and the Taxable REIT Subsidiary) (as confirmed by an Officer’s
Certificate of Spirit Realty and the applicable Taxable REIT Subsidiary). Any such
appointment of a successor Property Manager or successor Special Servicer will be subject
to the written agreement of the successor Property Manager or successor Special Servicer
to be bound by the terms and conditions of this Agreement, together with an Opinion of
Counsel delivered to the Issuers and the Indenture Trustee
regarding the enforceability of
such agreement.
(b) If a Qualified Deleveraging Event occurs or if the Corporate Asset
Management Agreement is terminated for any reason, Spirit Realty (or any Taxable REIT
Subsidiary that has been appointed Property Manager and/or Special Servicer) may resign
or be replaced as Property Manager and Special Servicer (a “Permitted Termination
Event”), in each case, upon 30 days prior written notice from Spirit Realty to the Issuers,
or from the Issuers to Spirit Realty, as applicable, so long as (i) a Qualified Eligible
Successor has been appointed Property Manager and Special Servicer, (ii) the Rating
Condition has been satisfied and (iii) the successor Property Manager and/or successor
Special Servicer has agreed in writing to be bound by the terms and conditions of this
Agreement and the Indenture Trustee has received an Opinion
of Counsel regarding the
enforceability of such agreement. A “Qualified Eligible Successor” means any Eligible
Successor that, immediately prior to giving effect to its appointment as Property Manager
and/or Special Servicer, (i) owns and/or manages at least ten million (10,000,000) square
feet of commercial property and (ii) has Net Assets of not less than $50,000,000 and
covenants with the Indenture Trustee (on behalf of the Noteholders) to maintain Net Assets
in at least such amount at all times. “Net Assets” for purposes of such definition means
with respect to any entity the difference between (i) the fair value of such entity’s assets,
but excluding accumulated depreciation, and (ii) such entity’s liabilities determined in
accordance with GAAP. Each of the Property Manager and the Special Servicer agrees
that in the event that it receives any amounts
that constitute Collateral after giving effect to
its resignation, it will transfer such amounts to the successor Property Manager within two
business days after receipt thereof.
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ARTICLE VII
TRANSFERS AND EXCHANGES OF MORTGAGED PROPERTIES AND MORTGAGE
LOANS BY THE APPLICABLE ISSUERS; RELEASE OF MORTGAGED PROPERTIES
AND MORTGAGE LOANS BY THE APPLICABLE ISSUERS.
Section 7.01 Released Mortgage Loans and Released Mortgaged Properties.
(a) The applicable Issuers may obtain the release (the “Release”) of Mortgage Loans
or Mortgaged Properties (any such Mortgage Loan or Mortgaged Property, a “Released
Mortgage Loan” or “Released Mortgaged Property” as applicable) from the lien of the
Indenture in connection with (i) the exercise of a Third Party Purchase Option, (ii) the purchase
or substitution of a Delinquent Asset or Defaulted Asset by the Special Servicer or the Property
Manager or any assignee thereof, (iii) the repurchase
or substitution of a Mortgage Loan or
Mortgaged Property by an applicable Cure Party due to a Collateral Defect, (iv) the sale of a
Mortgage Loan or Mortgaged Property to the Support Provider, a or to a Support Provider
SPE, Spirit Realty or to a third party unaffiliated with Spirit Realty or to a Spirit SPE orthe
Support Provider , (v) the exchange of a Mortgage Loan or Mortgaged Property with the
Support Provider, a third party unaffiliated with the Support Provider, a Support Provider
SPE, Spirit Realty, Spirit SPE or a third-party unaffiliated with Spirit Realty or the Support
Provider or a Spirit SPE(vi) an Early Refinancing Prepayment. In connection with the
Release of (ix) any Released Mortgaged Property, the related Lease and the related Lease File
shall be simultaneously released from the lien of the Indenture or (iiy) any Released Mortgage
Loan, the related
Loan File shall be simultaneously released from the lien of the Indenture. The
applicable Issuers shall obtain any Release that it is required to obtain in accordance with the
terms hereof.
(b) Except in connection with the release of a Mortgage Loan or a Mortgaged Property in
exchange for one or more Qualified Substitute Mortgage Loans or one or more Qualified
Substitute Mortgaged Properties or a release in connection with an Early Refinancing
Prepayment, the applicable Issuer will be required to obtain the applicable Release Price in
order to obtain the Release of a Mortgage Loan or Mortgaged Property. The “Release Price” for
any Mortgage Loan or Mortgaged Property will be an amount equal to (i) the Third Party Option
Price if the release occurs in connection with any Third Party Purchase Option, (ii) with respect
to any Delinquent Asset or Defaulted Asset purchased
by the Special Servicer or the Property
Manager or any assignee thereof the greater of (A) the Fair Market Value thereof and (B) the
Allocated Loan Amount thereof as of the First Collateral Date with respect thereto, (iii) the
Payoff Amount with respect to any Mortgage Loan or Mortgaged Property repurchased by the
related Originator or the Support Provider due to a Collateral Defect, (iv (or an equivalent
amount recorded as a contribution in such calculations), (iv) with respect to any
Terminated Lease Property, the Fair Market Value thereof, (v) the greater of (A) the Fair
Market Value and (B) the sum of 125115% of the Allocated Loan Amount thereof as of the
First Collateral Date with respect thereto plus unreimbursed Property Protection Advances
(plus Advance Interest thereon), Emergency Property Expenses,
Extraordinary Expenses, Special Servicing Fees, Liquidation
Fees and Workout Fees for
any Mortgage Loan or Mortgaged Property sold to the Support Provider, a Support Provider
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SPE, Spirit Realty, a Spirit SPE or to a third party unaffiliated with Spirit Realty or to a Spirit
SPEthe Support Provider or (vvi) the Fair Market Value of any Mortgage Loan or Mortgaged
Property, as applicablein each case, in each case if (X) the Property Manager or the Special
Servicer deems the release and sale of such Mortgage Loan or Mortgaged Property pursuant to
this clause (vi) to be in the best interest of the Noteholders and (Y) the Rating Agency Notification
Condition is satisfied with respect to such release and sale; provided, that after giving effect to
such sale, the aggregate Collateral Value of all Mortgaged Properties (determined as of the First
Collateral Date with respect to such Mortgaged Properties) and Mortgage Loans (determined
as of the release date with respect to each such Released
Mortgage Loan) owned by the Issuer that
have been sold to affiliates of the Issuersany Issuer or Spirit Realty pursuant to this clause (vvi)
would not exceed, (a) in any twelve month period, 15.0% of the Aggregate Collateral Value
as of the most recent Series Closing Date (which may be as of the date hereof) or (b) 35.0%
of the Aggregate Collateral Value (determined as of the applicable Starting Closing Date) during
the Series Closing Period in which such sale occurs; provided, further, that the Issuers shall only
be permitted to sell such Mortgaged Properties and Mortgage Loans pursuant to this clause (vvi)
to its affiliates (or affiliates of Spirit Realty) in the event that the Property Manager or the Special
Servicer determines that such sale is reasonably necessary in order to manage the Cashflow
Coverage Ratios or compliance with the Maximum Asset Concentrations. In addition,
the Issuers
shall not acquire any Mortgaged Property or Mortgage Loan pursuant to this Section 7.01 in the
event that, after giving effect to such acquisition, any Property Concentration would exceed the
Maximum Asset Concentrations set forth in the Indenture or any Series Supplement and in effect
at the time of such acquisition. Notwithstanding anything in the Transaction Documents to the
contrary, no Release Price will be payable with respect to any Release Parcel transferred to
a Tenant pursuant to an obligation under the related Lease in connection with a Specified
Permitted Subdivision and, in such case, the Indenture Trustee will release such property
from the Collateral Pool, subject only to receipt of an Officer’s Certificate from the Property
Manager certifying that: (i) the Specified Permitted Subdivision will not result in a reduction
of the Collateral Value
of the original property that was subdivided in connection with such
Specified Permitted Subdivision, (ii) the Specified Permitted Subdivision is in compliance in
all material respects with all requirements of law, (iii) the Specified Permitted Subdivision
will not impair or otherwise adversely affect the liens, security interests and other rights of
the Issuers in the portion of the property not being released (the “Remaining Parcel”), (iv)
the Remaining Parcel will comply with all requirements of law (including, without limitation,
all zoning (including any parking requirements) and building codes) as well as the applicable
requirements of the Lease, (v) the Remaining Parcel will constitute a separate and legal lot
for subdivision, assessment and zoning purposes, (vi) the Remaining Parcel will either
constitute a separate and legal lot for tax purposes or an application
for a separate tax lot
identification will have been submitted and an escrow account will have been established
with sufficient funds on deposit to pay taxes on both the Release Parcel and the Remaining
Parcel, (vii) the release of the Release Parcel will not materially adversely affect ingress or
egress to or from the Remaining Parcel or access to utilities for the Remaining Parcel, (viii)
the Release Parcel does not include any improvements that are subject to the related Lease,
(ix) the documents with respect to the Specified Permitted Subdivision will not impose any
new obligations upon, or otherwise further burden, the Remaining Parcel in any way other
than customary reciprocal easements; and (x) the Property Manager or the Tenant has
obtained or caused to be obtained all necessary approvals, consents or permits with respect
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to such Specified Permitted Subdivision (whether from applicable governmental or
municipal authorities, parties to instruments of record affecting the property or otherwise).
The certifications described in the preceding sentence are collectively referred to herein as
the “Specified Permitted Subdivision Conditions.” Any costs or expenses incurred in
connection with any Specified Permitted Subdivision will be paid by the Property Manager
from its own funds.
In determining the Fair Market Value with respect to any Mortgaged Property or
Mortgage Loan, the Property Manager or the Special Servicer, as applicable, shall establish a
price determined to be the most probable price which such Mortgage Loan or Mortgaged
Property should bring in a competitive and open market under all conditions requisite
to a fair
sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not
affected by undue stimulus. In making any such determination, the Property Manager or Special
Servicer, as applicable, (X) may obtain an MAI appraisal of the related Mortgaged Property;
provided that in the case of a sale of a Mortgaged Property or Mortgage Loan to an affiliate of
theany Issuer or Spirit Realty pursuant to clause (vvi) of the definition of “Release Price”, the
Property Manager or Special Servicer shall obtain such an appraisal unless (x) an appraisal
with respect to the related Mortgaged Property or property securing such Mortgage Loan
has been delivered within twelve months prior to the sale of such Mortgaged Property or
Mortgage Loan and (y) neither the Property Manager nor the Special Servicer reasonably
believes that the value of such
Mortgaged Property or property securing such Mortgage
Loan has materially increased in value since the date of such appraisal and (Y) shall assume
the consummation of a sale as of a specified date and the passing of title from seller to buyer
under conditions whereby: (i) buyer and seller are typically motivated; (ii) both parties are well
informed or well advised, and acting in what they consider their best interests; (iii) a reasonable
time is allowed for exposure in the open market; (iv) payment is made in terms of cash in United
States dollars or in terms of financial arrangements comparable thereto; and (v) the price
represents the normal consideration for such Mortgage Loan or Mortgaged Property unaffected
by special or creative financing or sales concessions granted by anyone associated with the sale.
In making any such determination, the Property Manager or Special Servicer
shall take into
account, among other factors, the period and amount of the delinquency on such Mortgage Loan
or Lease, the occupancy level and physical condition of the related Mortgaged Property, the state
of the local economy in the area where the Mortgaged Property is located, and the time and
expense associated with a purchaser’s foreclosing on the related Mortgaged Property. In
addition, the Property Manager or the Special Servicer, as applicable, shall refer to all other
relevant information obtained by it or otherwise contained in the related servicing file, taking
into account any change in circumstances regarding the related Mortgaged Property known to the
Property Manager or the Special Servicer, as applicable, that would materially affect the value of
the related Mortgaged Property reflected in the most recent related appraisal. Furthermore, the
Property Manager
or the Special Servicer, as applicable, may consider available objective third
party information obtained from generally available sources, as well as information obtained
from vendors providing real estate services to the Property Manager or the Special Servicer, as
applicable, concerning the market for distressed real estate loans and the real estate market for
the subject property type in the area where the related Mortgaged Property is located. The
Property Manager or the Special Servicer, as applicable, may also conclusively rely on any
opinions or reports of qualified independent experts in real estate or commercial mortgage loan
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matters. All reasonable costs and expenses incurred by the Property Manager or the Special
Servicer, as applicable, pursuant to making a determination of Fair Market Value shall constitute,
and be reimbursable as, Property Protection Advances.
(c) Any (i) Release Price (plus sales proceeds in excess thereof (any such excess
amount, a “Purchase Premium”)) received by the applicable Issuer in connection with the
release of a Mortgage Loan or Mortgaged Property (other than during a Disposition Period) and
(ii) any Balloon PaymentsPayment or Principal PrepaymentsPrepayment received in
connection with a Mortgage Loan, in each case shall be deposited into the Release Account (or,
during the continuance of an Early Amortization Event, the Collection Account or an Exchange
Account pursuant to Section
7.01(d) below).
(d) For the avoidance of doubt, an Issuer may obtain the release of a Mortgage Loan
or a Mortgaged Property in exchange for one or more Qualified Substitute Mortgage Loans or
one or more Qualified Substitute Mortgaged Properties, as applicable, subject to the terms
hereof.
(e) (i) After giving effect to any sale or exchange of a Mortgage Loan or Mortgaged
Property, the aggregate Collateral Value of all Released Mortgaged Properties (determined as of
the First Collateral Date with respect to each such Released Mortgaged Property) and
Released Mortgage Loans (determined as of the release date with respect to each such Released
Mortgage Loan) sold or exchanged by any Issuer during the Closing Date Period in which such
sale or exchange occurs shall not exceed 35.0% of the Aggregate Collateral
Value (determined
as of the applicable Starting Closing Date) unless the Rating Condition is satisfied; provided that
releases and exchanges or substitutions in connection with Collateral Defects, sales pursuant to
the exercise of Third Party Purchase Options, sales during the Disposition Period and, transfers
or exchanges of Terminated Lease Properties, Risk-Based Substitutions and releases in
connection with an Early Refinancing Prepayment shall not be subject to the foregoing
limitation or taken into consideration in determining such aggregate Collateral Values of such
Released Mortgaged Properties and Released Mortgage Loans..
(ii) If any of the following criteria are satisfied, the release of a Mortgaged
Property in exchange for one or more Qualified Substitute Mortgaged Properties or,
solely in the case of clause (d) below, the release of a Mortgage Loan in exchange
for one
or more Qualified Substitute Mortgage Loans or Qualified Substitute Mortgaged
Properties will constitute a “Risk- BasedRisk-Based Substitution”: (a) the remaining
term to maturity of the related Lease is less than three years from the date of the proposed
substitution and the Property Manager, in accordance with the Servicing Standard,
determines that there is a reasonable risk of non-renewal of such Lease;
based on written communications from the Tenant under such Lease, the
Property Manager, in accordance with the Servicing Standard, determines that there is a
reasonable risk of nonrenewal of such Lease; (c) the Issuer has received from the Tenant
under the related Lease written notice of the non-renewal of such Lease; or (d) the
Property Manager, in accordance with the Servicing Standard, determines that there is a
reasonable risk of monetary
default by the Tenant under such Lease or the Borrower
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under such Mortgage Loan, as applicable, or such a default has occurred or such Lease or
Mortgage Loan is or relates to a Defaulted Asset.
(iii) (f) (iii) If the Class Principal Balance of any Class of Notes is greater than
zero on the Payment Date that is three years prior to the earliest Legal Final Payment
Date of any outstanding Class of Notes, then a disposition period (the “Disposition
Period”) will commence on such Payment Date and will continue until the earlier of (i)
the date on which the Class Principal Balance of the Class of Notes having the earliest
Legal Final Payment Date is reduced to zero and (ii) such Legal Final Payment Date.
During the Disposition Period, the Property Manager will be required to utilize efforts
consistent with the Servicing Standard to either (i) sell (on behalf
of the Issuers) each
Mortgage Loan and Mortgaged Property for a price equal to the greater of (x) the
applicable Release Price and (y) the applicable Allocated Loan Amount (and in each case
in accordance with the other provisions set forth in this Agreement) or (ii) sell (on behalf
of the Issuers) all the Mortgage Loans and Mortgaged Properties for no less than an
amount sufficient to generate proceeds which would, when combined with all other
amounts available for such purposes on deposit in the Collection Account and applied as
described in Section 2.11 of the Indenture, cause the Class Principal Balance of each
Class of Notes to be reduced to zero and all outstanding expenses of the Issuers to be
paid. In the event of any such disposition, the sales proceeds therefor will be deposited as
Unscheduled Proceeds into the Collection Account and applied as part of the Available
Amount on the Payment Date relating to the Collection Period in which such deposit
occurs.
(g) Except with respect to repurchases or substitutions by the Originator or Support
Provider due to a Collateral Defect, an Issuer may only sell or exchange its Mortgaged
Properties and Mortgage Loans to or with any of its affiliates subject to the following
conditions: (a) such Issuer may sell or exchange such Mortgaged Properties and Mortgage
Loans only to or with a Spirit SPE that is not the Originator who conveyed such
Mortgaged Property or Mortgage Loan to the Issuer or, in the case of such Mortgaged
Properties or Mortgage Loans that are (or relate to) Delinquent Assets or Defaulted Assets,
to or with the Property Manager, the Special Servicer or a Spirit SPE that is not the
Originator who conveyed such Delinquent Asset or Defaulted Asset to the Issuer and (b)
unless
such Issuer receives (or has previously received) an Opinion of Counsel relating to
“true sale”, “true contribution” or similar matters (or a bring-down to any such Opinion of
Counsel previously given), the Aggregate Collateral Value of all Mortgaged Properties and
Mortgage Loans owned by such Issuer that are sold to or exchanged with affiliates of such
Issuer during any Closing Date Period or twelve-month period may not exceed
(h) 15.0% of the Collateral Value of the Mortgage Loans and Mortgaged Properties
owned by such Issuer as of the beginning of such twelve-month period or the Starting
Closing Date of such Closing Date Period, as applicable or (b) 10.0% of the Collateral
Value of the Mortgage Loans and Mortgaged Properties owned by such Issuer as of the
first date on which such Issuer issued (or co-issued) any Notes.
(f) If the Rating Condition is satisfied,
the Property Manager and the Issuers
may enter into an Exchange Agreement with a Qualified Intermediary to establish a Like-
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Kind Exchange Program. If a Like-Kind Exchange Program is established, the Property
Manager and the Issuers (or the Property Manager on behalf of the Issuers) shall be
permitted to:
(i) Assign their respective rights to each Relinquished Property
Agreement and Replacement Property Agreement to the Qualified Intermediary in
accordance with Section 1.1031(k)-1(g)(4)(iv) of the Treasury Regulations (or any
successor section thereto); and
(ii) Deposit all Relinquished Property Proceeds in the Exchange Account
(in lieu of depositing such amount in the Release Account), which such amounts may
be disbursed from such Exchange Account to the applicable seller of any
Replacement Property;
Provided, that, no such assignment pursuant to clause (d)(i) above or deposit in the
Exchange
Account pursuant to clause (ii) above shall be permitted unless, (A) the Issuers
have established the Exchange Reserve Account and (B) the Exchange Cash Collateral
relating to the applicable Relinquished Property has been deposited in the Exchange
Reserve Account.
If an Early Amortization Event has occurred and is continuing, all Exchange Cash
Collateral on deposit in the Exchange Reserve Account shall be transferred to the
Collection Account as Unscheduled Proceeds and applied as Unscheduled Principal
Payments on the Payment Date following the commencement of such Early Amortization
Event. Upon such transfer of Exchange Cash Collateral, the Indenture Trustee will release
any interest in any right to receive any related amounts of Relinquished Property Proceeds
on deposit in the Exchange Account. Upon the purchase of any Qualified Substitute
Mortgaged Property
using any Relinquished Property Proceeds, if directed by the Property
Manager, the Indenture Trustee will release Exchange Cash Collateral in an amount equal
to the amount of such Relinquished Property Proceeds that were used for such purchase
directly to the Issuers without depositing such amount in the Collection Account. In
addition, if any Relinquished Property Proceeds on deposit in the Exchange Account are
transferred to the Release Account as a result of a failed exchanged or otherwise, if
directed by the Property Manager, the Indenture Trustee to release Exchange Cash
Collateral in an amount equal to the amount of such Relinquished Property Proceeds
transferred to the Release Account directly to the Issuers without depositing such amount
in the Collection Account.
Exchange Cash Collateral will be invested in Permitted Investments as directed by
the Issuers,
or if no such direction is received, will be held uninvested. Any such Permitted
Investment must (i) have a maturity date prior to the Payment Date following the date of
such direction and (ii) have a short-term rating of not less than “A- 2” by S&P. Any
interest or other income earned on funds in the Exchange Reserve Account (including
interest on any Permitted Investments) will be treated as Unscheduled Proceeds for the
applicable Payment Date.
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Section 7.02 Third Party Purchase Options; Release of Mortgaged Properties to
Affiliates under Defaulted or Delinquent Assets; Early Refinancing Prepayment; Other Sales
or Exchanges.
(a) In the event any third party authorized to do so exercises a Third Party Purchase
Option in accordance with the terms of the applicable Lease, the Third Party Option Price
(without giving effect to clause (ii) in the definition thereof) paid by such third party shall be
deposited into the Release Account (or, during the continuance of an Early Amortization
Amount, the Collection Account), at the direction of the Property Manager, and upon receipt of
an Officer’s Certificate from the Property Manager to the effect that such deposit has been or
will be made (which the Property Manager shall deliver to the Indenture Trustee
and the Issuers
promptly after such deposit is made or immediately prior to the time at which such deposit will
be made), the Indenture Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be provided to it by the Property Manager and
are reasonably necessary to release the related Mortgage or any other lien on or security interest
in such Mortgaged Property (each, a “Third Party Option Mortgaged Property”), whereupon
such Mortgaged Property may be sold, transferred or otherwise disposed of by such Issuer, free
and clear of the lien of the Indenture and any Mortgage. Each of the applicable Issuers and the
Property Manager hereby covenant and agree that they shall not solicit any Person to exercise
any Third Party Purchase Option.
(b) A Mortgaged Property leased under or constituting any Delinquent
Asset or any
Defaulted Asset, or a Mortgage Property securing or constituting any Delinquent Asset or any
Defaulted Asset, may at the option of the Property Manager or Special Servicer be (a) purchased
by the Special Servicer or the Property Manager or any assignee thereof for cash in an amount
equal to the applicable Release Price, or (b) substituted for one or more Qualified Substitute
Mortgaged Properties or Qualified Substitute Mortgage Loans owned by the Special Servicer,
the Property Manager or any assignee thereof; provided, that (1) no Early Amortization Event
has occurred and is continuing or would occur as a result of such purchase or substitution or (2)
the Rating Condition is satisfied with respect to such purchase or substitution. The Indenture
Trustee shall execute and deliver such instruments of release, transfer or assignment, in each case
without recourse,
as shall be provided to it by the applicable Issuer and are reasonably necessary
to release any lien or security interest in the Released Mortgage Loan or Released Mortgage
Property relating to such purchase or substitution, whereupon such Mortgaged Property may be
sold, transferred or otherwise disposed of by such Issuer, free and clear of the lien of the
Indenture and any Mortgage.
(c) The applicable Issuer may (i) sell any of its Mortgage Loans or Mortgaged
Properties and related Leases for cash equal to any amount not less than the applicable Release
Price and/or (ii) exchange such Mortgage Loan or Mortgaged Property for one or more Qualified
Substitute Mortgage Loans or Qualified Substitute Mortgaged Properties, as applicable, in each
case in a transaction with (1) a third party unaffiliated with Spirit Realty or, (2) a Spirit SPE or
(3) a Support Provider SPE; provided,
however, that no Early Amortization Event has occurred
and is continuing or would occur as a result of such sale or exchange (unless the Rating
Condition is satisfied with respect to such sale or exchange) and that any Spirit SPE
purchasing such Mortgage Loan or Mortgaged Property must agree in writing not to
transfer or convey such Mortgage Loan or Mortgaged Property to the Support Provider or
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any Affiliate thereof that was a prior owner of such Mortgage Loan or Mortgaged Property
without the receipt of an Opinion of Counsel relating to true sale matters with respect to
such sale or exchange. The Indenture Trustee shall execute and deliver such instruments of
release, transfer or assignment, in each case without recourse, as shall be provided to it by the
applicable Issuer and are reasonably necessary to release any lien or security interest in the
Released Mortgage Loan or Released Mortgage Property relating to such sale or exchange,
whereupon such Mortgaged Property may be sold, transferred or otherwise disposed of by such
Issuer, free and clear of the lien of the Indenture and any Mortgage.
(d) In the event that the applicable Tenant or any other Person pays any cash price in
connection
with the exercise of a Third Party Purchase Option, the Issuers (or the Property
Manager or Special Servicer, as applicable, on behalf of the Issuers) may use a portion of such
cash price (not to exceed the Third Party Option Expenses with respect to such exercise) to pay
the applicable costs and expenses incurred by the Issuers (or such Property Manager or Special
Servicer on behalf of such Issuers) in connection with such exercise (and such portion shall not
constitute part of the Available Amount for any Payment Date).
Section 7.03 Transfer of Lease to New Mortgaged Property.
In the event a Tenant under a Lease requests that such Lease be modified to apply to a
property (owned by such Tenant or an Affiliate thereof) in lieu of the related Mortgaged
Property, the substitute property shall be acquired by
the applicable Issuer (with the consent of
the Issuer and the Property Manager or Special Servicer, as applicable) from such Tenant or
Affiliate thereof in exchange for the original Mortgaged Property (each such original Mortgaged
Property, a “Lease Transfer Mortgaged Property”) and such substitute property will be
mortgaged to the Indenture Trustee; provided, however, that none of the applicable Issuer, the
Property Manager or the Special Servicer shall consent to the substitution of a Lease Transfer
Mortgaged Property unless (i) the substituted property is a Qualified Substitute Mortgaged
Property and satisfies any criteria set forth in such Lease and (ii) the Property Manager and
Back-Up Manager have been reimbursed for all Property Protection Advances and Emergency
Property Expenses related to the Lease Transfer Mortgaged Property. Upon the Indenture
Trustee’s
receipt of an Officer’s Certificate from the Property Manager to the effect that such
modification and substitution has been or will be completed in accordance with the terms hereof
(which shall include a certification that the applicable Issuer has executed and delivered (or
immediately will execute and deliver) a Mortgage with respect to the applicable Lease Transfer
Mortgaged Property to the Indenture Trustee), the Indenture Trustee shall execute and deliver
such instruments of release, transfer or assignment, in each case without recourse, as shall be
provided to it by such Issuer and are reasonably necessary to release any lien or security interest
in the Lease Transfer Mortgaged Property, whereupon such Lease Transfer Mortgaged Property
may be sold, transferred or otherwise disposed of by such Issuer, free and clear of the lien of the
Indenture and any Mortgage. Any proceeds
of such sale, transfer or other disposition shall not
constitute part of the Collateral and shall not be deposited in the Collection Account or the
Release Account.
In connection with an Early Refinancing Prepayment, if directed by an Issuer (or
the Property Manager on behalf of an Issuer) the Indenture Trustee will release Mortgaged
Properties and Mortgage Loans with an aggregate Allocated Loan Amount not to exceed
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the Qualified Release Amount; provided, however, that the Rating Condition is satisfied in
connection with such release and such release does not cause (i) an Event of Default or
Early Amortization Event to occur or (ii) a Maximum Asset Concentration to be exceeded
after giving effect to such release (or if, prior to such release, an existing Maximum Asset
Concentration is already exceeded, the release of such Mortgaged Properties or Mortgage
Loans will reduce the Maximum Asset Concentration or such Maximum Asset
Concentration will remain unchanged after giving effect to such release).
Section 7.04 Criteria Applicable to all Mortgage Properties and Mortgage Loans
included in the Collateral Pool.
(a) No Issuer shall acquire, either
in connection with a New Issuance or as a
Qualified Substitute Mortgage Loan or Qualified Substitute Mortgaged Property, any real
property or mortgage loan that will not meet the definition of “Mortgaged Property” or
“Mortgage Loan”, as applicable, set forth herein or that is operated in a business sector other
than a “Business Sector” as defined in the most recent Series Supplement which includes a
definition of “Business Sector.”
(b) For each Mortgaged Property included in the Collateral Pool, on or prior to the
later of (i) the First Collateral Date with respect to such Mortgaged Property and (ii) the
Applicable Series Closing Date, the Property Manager shall assign such Mortgaged Property to a
particular Business Sector (and such Mortgaged Property shall be categorized as solely being in
such
Business Sector). From and after such assignment with respect to such Mortgaged Property,
the Property Manager shall not assign such Mortgaged Property to a different Business Sector.
(c) For each Mortgaged Property securing a Mortgage Loan included in the Collateral
Pool, on or prior to the later of (i) the First Collateral Date with respect to such Mortgage Loan
and (ii) the Applicable Series Closing Date, the Property Manager shall assign such Mortgaged
Property to a particular Business Sector (and such Mortgaged Property shall be categorized as
solely being in such Business Sector). From and after such assignment with respect to such
Mortgaged Property, the Property Manager shall not assign such Mortgaged Property to a
different Business Sector.
(d) (d) If the definition of “Business Sector” in the Indenture is amended
pursuant to an amendment, the Property
Manager may reasonably re-designate any Mortgaged
Property included in the Collateral Pool in order to give effect to such amendment.
(e) The Loan Documents for any adjustable rate Mortgage Loan added to the
Collateral Pool after the Series 2017-1 Closing Date that accrues interest based on LIBOR
will contain provisions that provide for interest to accrue in an alternate manner in the
event LIBOR becomes unavailable.
(f) The Loan Documents for any Mortgage Loan added to the Collateral Pool
after the Series 2017-1 Closing Date will contain provisions that require Monthly Loan
Payments of interest and scheduled principal to be payable by the related Borrower on the
first day of each calendar month.
Section 7.05 Restrictions on Environmental Condition Mortgaged Properties.
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An Environmental Condition Mortgaged Property shall not be considered a Qualified
Substitute Mortgaged Property; provided that a Protective Mortgage Loan may be secured by an
Environmental Condition Mortgaged Property (and, for the avoidance of doubt, any
Environmental Condition Mortgaged Property may be considered a Qualified Substitute
Mortgaged Property for purposes of determining whether a Protective Mortgage Loan constitutes
a Qualified Substitute Protective Mortgage Loan).
Section 7.06 Terminated Lease Property.
An Issuer may remove a Terminated Lease Property from the Collateral Pool in
exchange for the addition of one or more Qualified Substitute Mortgaged Properties to the
Collateral Pool pursuant to the provisions
of Section 7.01.
ARTICLE VIII
TERMINATION
Section 8.01 Termination Upon Repurchase or Liquidation of All Mortgaged Properties
or Discharge of Indenture.
The respective obligations and responsibilities under this Agreement of the Property
Manager, the Special Servicer, the Back-Up Manager and the Issuers shall terminate upon the
earlier of (i) liquidation or final payment under the last remaining Mortgage Loan or Lease with
respect to a Mortgaged Property included in the Collateral Pool and (ii) satisfaction of the
indebtedness evidenced by the Notes.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01 Amendment.
Subject to the provisions of Article VIII of the Indenture governing amendments,
supplements and other modifications to this
Agreement, this Agreement may be amended,
supplemented or modified by the parties hereto from time to time but only by the mutual written
agreement signed by the parties hereto with 20 days’ prior written notice to the Rating Agencies.
The Property Manager shall furnish to each party hereto and to the Issuers a fully executed
counterpart of each amendment to this Agreement.
The parties hereto agree that no modifications or amendments will be made to the
Indenture, any Series Supplement or other Transaction Documents without the consent of the
Property Manager, the Special Servicer or the Back-Up Manager, as applicable, if such person
would be materially adversely affected by such modification or amendment, regardless of
whether such person is a party to such agreement.
Section 9.02 Counterparts.
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This Agreement may be executed simultaneously in any number of counterparts, each of
which shall be deemed to be an original, and all such counterparts shall constitute but one and
the same instrument. This Agreement may be executed in several counterparts, each of which
counterparts shall be deemed an original instrument and all of which together shall constitute a
single Agreement. Delivery of an executed counterpart of a signature page of this Agreement in
Portable Document Format (PDF) or by facsimile transmission shall be as effective as delivery
of a manually executed original counterpart of this Agreement.
Section 9.03 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE
AND TO BE PERFORMED IN SUCH STATE (WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES), AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 9.04 Notices.
All notices, requests and other communications hereunder shall be in writing and, unless
otherwise provided herein, shall be deemed to have been duly given if delivered by courier or
mailed by first class mail, postage prepaid, or if transmitted by facsimile or e-mail and confirmed
in a writing delivered or mailed as aforesaid, to:
(a) the Property Manager or Special Servicer, Spirit Realty, L.P., 16767 N. Perimeter
Drive, Suite 210, Scottsdale, Arizona
85260; fax: 480-606-0826; e-mail:
rberry@spiritrealty.com;
(b) in the case of the Back-Up Manager, Midland Loan Services, a division of PNC
Bank, National Association, 10851 Mastin Street, Suite 700, Overland Park, Kansas, 66210,
Attention: President, facsimile number: 913-253-9009, e-mail: noticeadmin@midlandls.com and
noticeadmin@pnc.com, with a copy
to, Andrascik & Tita LLC, 1425 Locust Street, Suite 268,
Philadelphia, PA 19102, Attention: Stephanie Tita, e-mail: stephanie@kanlegal.com;
(c) in the case of the Issuers: to Spirit Master Funding, LLC, Spirit Master Funding
II, LLC, Spirit Master Funding III, LLC or the name of any other Issuer, as applicable, at 16767
N. Perimeter Drive, Suite 210, Scottsdale, Arizona
85260, facsimile number: 480- 606-0820;
Attention: Ryan Berry, General Counsel; e-mail: rberry@spiritrealty.com;
(d) in the case of the Indenture Trustee, Citibank, N.A., 388 Greenwich Street, 14th
Floor, New York, New York 10013, Attention: Structured Finance Agency and Trust- Spirit
Master Funding, LLC, facsimile number: 212-816-5527;
(e) in the case of any Originator, at its
address for notices specified in the related
Property Transfer Agreement; provided, however, that any notice required to be given hereunder
to any Originator which has ceased to exist as a legal entity for any reason may be given directly
to the Support Provider;
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(f) in the case of the Support Provider, at its address for notices specified in the
Performance Undertakings;
(g) in the case of any Rating Agency, as provided in each outstanding Series
Supplement;
or, as to each such Person, to such other address and facsimile number as shall be designated by
such Person in a written notice to parties hereto. Any notice required or permitted to be delivered
to a holder of LLC Interests or Notes shall be deemed to have been duly given if mailed by first
class mail, postage prepaid, at the address of such holder as shown in the register maintained for
such purposes under the applicable LLC Agreement and the Indenture, respectively. Any notice
so mailed within the time prescribed in this Agreement shall conclusively be presumed to have
been duly given, whether
or not such holder receives such notice.
Section 9.05 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements, provisions or terms
of this Agreement and shall in no way affect the validity or enforceability of the other provisions
of this Agreement.
Section 9.06 Effect of Headings and Table of Contents.
The article and section headings and the table of contents herein are for convenience of
reference only and shall not limit or otherwise affect the construction hereof.
Section 9.07
Notices to Rating Agencies.
(a) The Indenture Trustee shall promptly provide notice to the Rating Agencies with
respect to each of the following of which a Responsible Officer of the Indenture Trustee has
actual knowledge:
(i) Any requests for the satisfaction of the Rating Condition;
(ii) The occurrence of any Servicer Replacement Event that has not been
cured; and
(iii) the resignation or termination of the Property Manager or the Special
Servicer and the appointment of a successor.
(b) The Property Manager shall promptly provide notice to the Rating Agencies with
respect to each of the following of which it has actual knowledge:
(i) the resignation or removal of the Indenture Trustee and the appointment of
a successor;
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(ii) any change in the location of the Collection Account or the Release
Account;
(iii) any change in the identity of an Obligor; and
(iv) any requests for the satisfaction of the Rating Condition;
(v) any addition or removal of a Mortgage Loan or Mortgaged Property from
the Collateral.
(c) Each of the Property Manager and the Special Servicer, as the case may be, shall
furnish each Rating Agency such information with respect to the Mortgage Loans, Leases and
Mortgaged Properties as such Rating Agency shall reasonably request and that the Property
Manager or the Special Servicer, as the case may be, can reasonably provide.
(d) Prior to providing any information to, or communicating with, any Rating Agency
in accordance with its obligations hereunder or under
the Indenture, the Property Manager,
Special Servicer or Indenture Trustee, as applicable, shall cause such information or
communication to be uploaded to the 17g-5 Website subject to and in accordance with the terms
of the Indenture relating thereto (including with respect to such uploading).
(e) Any Officer’s Certificate, Opinion of Counsel, report, notice, request or other
material communication prepared by the Property Manager, the Special Servicer, the Issuer
Members on behalf of each Issuer or the Indenture Trustee, or caused to be so prepared, for
dissemination to any of the parties to this Agreement or any holder of Notes or LLC Interests
shall also be concurrently forwarded by such Person to Spirit Realty and the Issuers to the extent
not otherwise required to be so forwarded.
Section 9.08 Successors and Assigns: Beneficiaries.
The
provisions of this Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties hereto. The Indenture Trustee shall be an express
third party beneficiary hereof. No other person, including any Obligor, shall be entitled to any
benefit or equitable right, remedy or claim under this Agreement. Except as otherwise expressly
permitted herein, the Back-Up Manager may not assign any of its rights, duties or obligations
under this Agreement, in whole or in part, without the prior written consent of each other party
hereto.
Section 9.09 Complete Agreement.
This Agreement embodies the complete agreement among the parties with respect to the
subject matter hereof and may not be varied or (other than pursuant to Section 8.01) terminated
except
by a written agreement conforming to the provisions of Section 9.01. All prior
negotiations or representations of the parties are merged into this Agreement and shall have no
force or effect unless expressly stated herein.
Section 9.10 [Reserved].
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Section 9.11 Consent to Jurisdiction.
Any action or proceeding against any of the parties hereto relating in any way to this
Agreement may be brought and enforced in the courts of the State of New York sitting in the
borough of Manhattan or of the United States District Court for the Southern District of New
York and each of the parties hereto irrevocably submits to the jurisdiction of each such court in
respect of any such action or proceeding. Each of the parties hereto hereby waives, to the fullest
extent permitted by law, any right to remove any such action or proceeding by reason of
improper venue or inconvenient forum.
Section 9.12 No Proceedings.
The Property Manager, the Special Servicer, each Issuer (with respect to any other Issuer)
and
the Back-Up Manager hereby covenant and agree that, prior to the date which is two years
and thirty-one days after the payment in full of the latest maturing Note, it will not institute
against, or join with, encourage or cooperate with any other Person in instituting, against an
Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings, under any federal or state bankruptcy or similar law; provided, however, that
nothing in this Section 9.12 shall constitute a waiver of any right to indemnification,
reimbursement or other payment from the Issuer pursuant to the Indenture. In the event that any
such Person takes action in violation of this Section 9.12, the applicable Issuer, shall file or cause
to be filed an answer with the bankruptcy court or otherwise properly contesting the filing of
such a petition by any such Person against
such Issuer or the commencement of such action and
raising the defense that such Person has agreed in writing not to take such action and should be
estopped and precluded therefrom and such other defenses, if any, as its counsel advises that it
may assert. The provisions of this Section 9.12 shall survive the termination of this Agreement,
and the resignation or removal of any party hereto. Nothing contained herein shall preclude
participation by any Person in the assertion or defense of its claims in any such proceeding
involving an Issuer.
The obligations of each Issuer under Agreement are solely the obligations of such Issuer.
No recourse shall be had for the payment of any amount owing in respect of any fee hereunder or
any other obligation or claim arising out of or based upon this Agreement against any member,
employee, officer or director of such Issuer. Fees, expenses,
costs or other obligations payable by
an Issuer hereunder shall be payable by such Issuer solely to the extent that funds are then
available or thereafter become available for such purpose pursuant to Section 2.11 of the
Indenture. In the event that sufficient funds are not available for their payment pursuant to
Section 2.11 of the Indenture, the excess unpaid amount of such fees, expenses, costs or other
obligations shall in no event constitute a claim (as defined in Section 101 of the Bankruptcy
Code) against, or corporate obligation of, such Issuer.
Signature Page to
Property Management and Servicing Agreement
US-DOCS\96557504.296557504.7
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed by their respective officers or representatives all as of the day and year first above
written.
SPIRIT MASTER FUNDING, LLC, as Issuer
By: Spirit SPE Manager, LLC, a Delaware limited
liability company
Its: Manager
By:
Name: Peter M. Mavoides
Its: President and Chief Operating Officer
SPIRIT MASTER FUNDING II, LLC, as Issuer
By: Spirit
SPE Manager, LLC, a Delaware limited
liability company
Its: Manager
By:
Name: Peter M. Mavoides
Its: President and Chief Operating Officer
SPIRIT MASTER FUNDING III, LLC, as Issuer
By: Spirit SPE Manager, LLC, a Delaware limited
liability company
Its: Manager
By:
Name: Peter M. Mavoides
Its: President and Chief Operating Officer
Signature Page to
Property Management and Servicing Agreement
US-DOCS\96557504.296557504.7
SPIRIT REALTY, L.P.,
By: Spirit General OP Holdings, LLC, a Delaware
limited liability company
Its: Manager
By:
Name: Peter M. Mavoides
Its: President and Chief Operating Officer
MIDLAND LOAN SERVICES, A DIVISION
OF PNC BANK, NATIONAL ASSOCIATION,
as Back-Up Manager
By:
Name: Lawrence D. Ashley
Title: Senior Vice President
US-DOCS\97310286.3
EXHIBIT B
Amended Exhibit E
EXHIBIT E
CALCULATION OF FIXED CHARGE COVERAGE RATIOS
1. Adjusted EBITDAR: As to any unit, an amount equal to the sum of such
unit’s (i) pre-tax income, (ii) interest expense, (iii) all non-cash amounts in
respect of depreciation and amortization, (iv) all non-recurring expenses,
(v) specifically documented discretionary management fees and (vi) all
operating lease or rent expense (including with respect to any Equipment
Loans) less (vii) all non-recurring income and standardized overhead
expense based on the industry standards;
2. Fixed Charges: As to any unit, an amount equal to the sum of (i) total
operating lease or rent expenses, (ii) interest expense and (iii) scheduled
principal payments on indebtedness,
in each case for the period of time as
to which such figure is presented; and
3. FCCR: Adjusted EBITDAR/Fixed Charges.
Or in summarized Form
(EBITDA + Management Fees + Rent) / ( Rent + Principal + Interest)
In the event that the Property Manager does not receive sufficient financial information with
respect to any Mortgaged Property from the applicable Obligor(s) to make the calculations set
forth above on a “unit” level, FCCR may be calculated based on corporate financial statements
received from the applicable Obligor(s) or the Parent(s). In the case of master leases, references
to “units” refer to the group of units subject to the same master lease, in the aggregate.
US-DOCS\97310286.3
EXHIBIT C
New Exhibit I
EXHIBIT I
POST-CLOSING ACQUISITION PROPERTIES
Property
ID
Asset/Property
Name
Address City State Zip
Code
Collateral
Value
P04603 Mills Fleet Farm 2630 Division
Street
Waite Park MN 56387 $31,850,000
P01274 Casual Male 555 Turnpike
Street
Canton MA
02021 $80,320,000
P02748 Station Casinos 1505 S.
Pavilion
Center Dr.
Las Vegas NV 89135 $52,610,000
P04507 Buehler’s Food
Market
1055
Sugarbush
Drive
Ashland OH 48805 $12,107,263
P04508 Buehler’s Food
Market
3000 N.
Wooster
Road
Dover OH 44622
$12,107,263
P04509 Buehler’s Food
Market
3626 Medina
Road
Medina OH 44256 $17,991,127
P04510 Buehler’s Food
Market
3540 Burbank
Road
Wooster OH 44691 $13,351,887
P04511 Buehler’s Food
Market
175 Great
Oaks Trail
Wadsworth
OH 44281 $13,012,459
P02850 CarMax 2800 Laurens
Road
Greenville SC 29607 $28,070,000
P00876 CarMax 11335
Atlantic Blvd
Jacksonville FL 32225 $21,020,000
