Exhibit 10.9
PROMISSORY NOTE
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$19,456,000
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December 21, 2005 |
FOR VALUE RECEIVED, PZ05 MAPLE HEIGHTS OH LLC, a Delaware limited liability company, WMI05
COLUMBUS OH LLC, a Delaware limited liability company, and OB CRENSHAW GCC, LP, a Delaware limited
partnership (collectively, Maker), promises to pay to the order of COUNTRYWIDE COMMERCIAL
REAL ESTATE FINANCE, INC., a California corporation (together with any subsequent holder of this
Note, and their respective successors and assigns, Holder) at such address as Holder may
from time to time designate in writing, the principal sum of NINETEEN MILLION FOUR HUNDRED FIFTY
SIX THOUSAND AND 00/100 DOLLARS ($19,456,000) together with interest thereon and all other sums due
and/or payable under any Loan Document; such principal and other sums to be calculated and payable
as provided in this Note. This Note is being executed and delivered in connection with, and is
entitled to the rights and benefits of, that certain Loan Agreement of even date herewith between
Maker and Holder (as amended, modified and supplemented and in effect from time to time, the
Loan Agreement). Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Loan Agreement.
Maker agrees to pay the principal sum of this Note together with interest thereon and all
other sums due and/or payable under any Loan Document in accordance with the following terms and
conditions:
1. Interest Rate. Interest shall accrue on the Indebtedness at five and seven
thousand one hundred seven ten-thousandths percent (5.7107%) per annum (the Interest
Rate) commencing on the date of this Note. Interest shall be computed on the actual number of
days elapsed based on a 360-day year.
2. Payments. Maker shall make the following payments to Holder:
(a) On the date hereof (unless the date hereof is the same calendar day as a Payment Date), a
payment of interest only for the first Interest Accrual Period.
(b) On February 8, 2006 (the First Payment Date) and on the same calendar day of
each calendar month (each, a Payment Date) through and including the Payment Date
occurring in January, 2008, Maker shall pay to Holder a monthly payment of interest only based on
the Interest Rate and the outstanding Principal Indebtedness. On the Payment Date occurring in
February, 2008, and on each subsequent Payment Date during the term of the Loan, Maker shall pay to
Holder a monthly payment in the amount of $113,054.67 which amount is based on the Interest Rate
and a 360-month amortization schedule.
(c) The entire outstanding Indebtedness shall be due and payable on the Payment Date occurring
in January, 2016 (the Maturity Date), or such earlier date resulting from acceleration of
the Indebtedness by Holder.
(d) Interest Accrual Period means, initially, the period commencing on the Closing
Date and continuing to and including the calendar day preceding the next Payment Date, and
thereafter each period running from and including a Payment Date to and including the calendar day
preceding the next Payment Date during the term of the Loan.
(e) For purposes of making payments hereunder, but not for purposes of calculating Interest
Accrual Periods, if the Payment Date of a given month shall not be a Business Day, then the Payment
Date for such month shall be the preceding Business Day.
3. Event of Default; Default Interest; Late Charge. Upon the occurrence of an Event
of Default, the Indebtedness shall (a) become due and payable as provided in Article 8 of the Loan
Agreement, and (b) bear interest at a per annum interest rate equal to the lesser of (i) the
Maximum Amount (as defined in Section 8), and (ii) the Interest Rate plus five percent (5%)
(the Default Rate). If Maker fails to pay any sums due under the Loan Documents on the
date when the same is due, Maker shall pay to Holder upon demand a late charge on such sum in an
amount equal to the lesser of (i) five percent (5%) of such unpaid amount, and (ii) the maximum
late charge permitted to be charged under the laws of the State of where the Property is located (a
Late Charge). Maker will also pay to Holder, after an Event of Default occurs, in
addition to the amount due and any Late Charges, all reasonable costs of collecting, securing, or
attempting to collect or secure this Note or any other Loan Document, including, without
limitation, court costs and reasonable attorneys fees (including reasonable attorneys fees on any
appeal by either Maker or Holder and in any bankruptcy proceedings).
4. Prepayment; Defeasance.
(a) Maker shall not be permitted at any time to prepay all or any part of the Loan except as
expressly provided in this Section 4. Provided no Event of Default then exists, and so
long as Maker has given Holder not less than thirty (30) days (and not more than sixty (60) days)
prior written notice, Maker may voluntarily prepay the Indebtedness in full but not in part only on
or after the date which is three (3) Payment Dates prior to the Maturity Date (and there shall be
no Yield Maintenance Premium or penalty assessed against Maker by reason of such prepayment). If
any such prepayment is not made on a Payment Date, Maker shall also pay to Holder interest
calculated at the Interest Rate that would have accrued on such prepaid Principal Indebtedness
through the end of the Interest Accrual Period in which such prepayment occurs.
(b) Provided that no Event of Default then exists, after the earlier to occur of (i) two (2)
years after start-up day (within the meaning of Section 860G(a)(9) of the Code) of any real
estate mortgage investment conduit (as defined under Section 860D of the Code) (a REMIC)
that holds the Note, and (ii) three (3) years after the Closing Date, Maker may cause the release
of a Release Property (as defined in the Loan Agreement) from the Liens of the Loan Documents upon
satisfaction of the following conditions:
(i) Maker shall (A) provide not less than thirty (30) days (and not more than sixty (60)
days) prior written notice to Holder specifying a Payment Date (the Defeasance Release
Date) on which the payments and deposits provided in clauses (B) through (E) below are to be
made and the Release Property that is proposed to be released; (B) pay all
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interest accrued and unpaid on the Indebtedness to and including the Defeasance Release Date;
(C) pay all reasonable fees and expenses associated with the defeasance of the Loan (including,
without limitation, fees of Rating Agencies and accountants, and attorneys) and all other sums then
due and payable under the Loan Documents; (D) deposit with Holder immediately-available funds in an
amount sufficient to purchase, or at Holders request deliver to Holder, government securities as
used in section 2(a)(16) of the Investment Company Act of 1940, as amended (15 U.S.C. 80a-1) and
which are not subject to prepayment, call or early redemption (U.S. Obligations) (1)
having maturity dates or being redeemable on or prior to, but as close as possible to, the Business
Day immediately preceding each successive scheduled Payment Date (after the Defeasance Release
Date) through and including the Maturity Date, (2) in amounts sufficient to pay all scheduled
principal and interest payments on this Note (or, in the case of a defeasance of less than the full
amount of the Loan, the Defeased Note (as defined below)) on each Payment Date through and
including the Maturity Date, including the payment due on the Maturity Date, and (3) payable
directly to Holder; and (E) deliver to Holder (1) a security agreement, in form and substance
satisfactory to Holder, creating a first priority perfected Lien on the deposits required pursuant
to this Section 4(b) and the U.S. Obligations purchased in accordance with this Section
4(b) (a Security Agreement), (2) for execution by Holder, a release of the Release
Property from the Lien of the Mortgage in a form appropriate for the jurisdiction in which the
Release Property is located, (3) a written certification that the requirements set forth in this
Section 4(b) have been satisfied, (4) an opinion of Makers counsel in form and substance
satisfactory to Holder stating, among other things, that (x) the U.S. Obligations have been duly
and validly assigned and delivered to Holder and Holder has a first priority perfected security
interest in and Lien on the deposits required pursuant to this Section 4(b) and a first
priority perfected security interest in and Lien on the U.S. Obligations purchased pursuant hereto
and the proceeds thereof, (y) the defeasance will not adversely affect the status of any REMIC
formed in connection with a Secondary Market Transaction, and (z) in the event of a bankruptcy
proceeding or similar occurrence with respect to Maker, none of the U.S. Obligations purchased
pursuant hereto nor any proceeds thereof will be property of Makers estate under Section 541 of
the Bankruptcy Code or any similar statute and the grant of security interest therein to Holder
shall not constitute an avoidable preference under Section 547 of the Bankruptcy Code or applicable
state law, and (5) such other certificates, documents or instruments as Holder may request
including, without limitation, (y) written confirmation from the relevant Rating Agencies that such
defeasance will not cause any Rating Agency to withdraw, qualify or downgrade the then-applicable
rating on any security issued in connection with any Secondary Market Transaction, and (z) a
certificate from a certified public accountant reasonably acceptable to Holder certifying that the
amounts of the U.S. Obligations satisfy all of the requirements of this Note. In connection with
the foregoing, Maker appoints Holder as Makers agent for the purpose of applying the amounts
delivered pursuant to this Section 4(b) to purchase U.S. Obligations.
(ii) If any notice of defeasance is given, Maker shall be required to defease the Loan on the
Defeasance Release Date (unless such notice is revoked in writing by Maker prior to the date
specified therein in which event Maker shall immediately reimburse Holder for any reasonable costs
incurred by Holder in connection with Makers giving of such notice and revocation).
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(iii) In connection with a defeasance of the Loan, Maker may (or, in the case of a defeasance
of less than the full amount of the Loan, shall) assign to such other entity or entities
established or designated by Holder in its discretion (the Successor Obligor) all of
Makers obligations under this Note (or, in the case of a defeasance of less than the full amount
of the Loan, the Defeased Note), the other Loan Documents and the Security Agreement together with
the pledged U.S. Obligations. The Successor Obligor shall assume, in a writing or writings
reasonably satisfactory to Holder, all of Makers obligations under this Note (or, in the case of a
defeasance of less than the full amount of the Loan, the Defeased Note), the other Loan Documents
and the Security Agreement and, upon such assignment Maker shall, except as set forth herein, be
relieved of its obligations hereunder. If a Successor Obligor assumes all or any part of Makers
obligations, Holder may require as a condition to such defeasance, such additional legal opinions
from Makers counsel as Holder reasonably deems necessary to confirm the valid creation and
authority of the Successor Obligor (including a non-consolidation opinion), the assignment and
assumption of the Loan, the Security Agreement and the pledged U.S. Obligations between Maker and
Successor Obligor, and the enforceability of the assignment documents and of the Loan Documents as
the obligation of Successor Obligor. Notwithstanding the foregoing or anything else in this
Section 4(b), nothing in this Section 4(b) shall release Maker from any liability
or obligation relating to any environmental matters arising under Article 9 of the Loan Agreement.
(iv) In the case of a defeasance of less than the full amount of the Loan, Maker shall execute
and deliver to Holder all documents reasonably required by Holder to amend and restate the Note and
issue two substitute notes as follows: (A) one promissory note having a principal balance equal to
the Partial Release Price (the Defeased Note) and (B) a second promissory note having a
principal balance equal to the sum of the Allocated Loan Amounts of all the Individual Properties
(including the Release Property) less the amount of the Defeased Note (the Undefeased
Note). The Defeased Note and the Undefeased Note shall have terms identical to the terms of
the Note, except for the principal balance and a pro rata allocation of the required payments of
regularly scheduled principal and interest. A Defeased Note may not be the subject of any further
defeasance. After a defeasance of less than the full amount of the Loan, all references herein and
in the other Loan Documents to Note shall be deemed to mean the Undefeased Note, unless expressly
provided otherwise.
(v) Maker shall have satisfied all of the conditions precedent to the release of the Release
Property set forth in Section 13.5 of the Loan Agreement.
(c) Except as specifically set forth in Section 4(a) and (b) above, or in
Sections 7.6(c) or 12.28 of the Loan Agreement, upon any repayment of the Principal Indebtedness,
including, without limitation, in connection with an acceleration of the Loan, Maker shall pay to
Holder on the date of such repayment, the amount that, when added to the amount otherwise being
repaid would be sufficient to purchase U.S. Obligations that satisfy the requirements of
Section 4(b) above (the Yield Maintenance Premium); provided,
however, under no circumstances shall the Yield Maintenance Premium be less than zero. All
Yield Maintenance Premium payments hereunder shall be deemed earned by Holder upon the funding of
the Loan, shall be required whether payment is made by Maker or any other Person, and may be
included in any bid by Holder at a foreclosure sale. Maker acknowledges that the provisions
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of this Section 4(c) were independently bargained for and constitute a specific
material part of the consideration given by Maker to Holder for the making of the Loan.
5. Method and Place of Payments; Application of Payments; Maker Obligations Absolute.
(a) Except as otherwise specifically provided herein, all payments under this Note and the
other Loan Documents shall be made to Holder not later than 2:00 p.m., New York City time, on the
date when due, and shall be made in lawful money of the United States of America in federal or
other immediately available funds to an address specified to Maker by Holder in writing, and any
funds received by Holder after such time, for all purposes hereof, shall be deemed to have been
paid on the next succeeding Business Day.
(b) All proceeds of payment, including any payment or recovery on the Property, shall be
applied to the Indebtedness in such order and in such manner as Holder shall elect in Holders
discretion.
(c) Except as specifically set forth in any Loan Document, all sums payable by Maker under any
Loan Document shall be paid without notice, demand, counterclaim (other than mandatory
counterclaims), setoff, deduction or defense and without abatement, suspension, deferment,
diminution or reduction.
6. Security. The obligations of Maker under this Note are secured by, among other
things, the Mortgage and Liens of the other Loan Documents granted in favor of Holder by Maker
and/or encumbering or affecting the Property.
7. Waivers. With respect to the amounts due pursuant to this Note or any other Loan
Document, Maker waives the following: (a) all rights of exemption of property from levy or sale
under execution or other process for the collection of debts under the Constitution or laws of the
United States or any State thereof; (b) demand, presentment, protest, notice of dishonor, notice of
nonpayment, notice of protest, notice of intent to accelerate, notice of acceleration, suit against
any party, diligence in collection of this Note and in the handling of securities at any time
existing in connection herewith, and all other requirements necessary to enforce this Note except
for notices required by Governmental Authorities and notices required by the Loan Agreement; and
(c) any further receipt by Holder or acknowledgment by Holder of any collateral now or hereafter
deposited as security for the Loan.
8. Usury Savings Clause. This Note and the other Loan Documents are subject to the
express condition that at no time shall Maker be obligated or required to pay interest on the
Indebtedness at a rate which could subject Holder to either civil or criminal liability as a result
of being in excess of the maximum rate of interest designated by applicable laws relating to
payment of interest and usury (the Maximum Amount). If, by the terms of this Note or the
other Loan Documents, Maker is at any time required or obligated to pay interest on the
Indebtedness at a rate in excess of the Maximum Amount, the Interest Rate shall be deemed to be
immediately reduced to the Maximum Amount and all previous payments in excess of the Maximum Amount
shall be deemed to have been payments in reduction of principal and not on account of the interest
due hereunder. All sums paid or agreed to be paid to Holder for the use,
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forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of
the Loan until payment in full so that the rate or amount of interest on account of the Loan does
not exceed the Maximum Amount from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding.
9. Modifications; Remedies Cumulative; Setoffs. Holder shall not by any act, delay,
omission or otherwise be deemed to have modified, amended, waived, extended, discharged or
terminated any of its rights or remedies, and no modification, amendment, waiver, extension,
discharge or termination of any kind shall be valid unless in writing and signed by Holder and
Maker. All rights and remedies of Holder under the terms of this Note and applicable statutes or
rules of law shall be cumulative, and may be exercised successively or concurrently. Maker agrees
that there are no defenses, equities or setoffs with respect to the obligations set forth herein as
of the date hereof, and to the extent any such defenses, equities, or setoffs may exist, the same
are hereby expressly released, forgiven, waived and forever discharged.
10. Severability. Wherever possible, each provision of this Note shall be interpreted
in such manner as to be effective and valid under applicable Legal Requirements, but if any
provision of this Note shall be prohibited by or invalid under applicable Legal Requirements, 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 Note.
11. Release. Holder may, at its option, release any Property given to secure the
Indebtedness, and no such release shall impair the obligations of Maker to Holder.
12. Governing Law. This Note and each of the other Loan Documents shall be
interpreted and enforced according to the laws of the State of Ohio (without giving effect to rules
regarding conflict of laws).
13. Venue. Maker hereby consents and submits to the exclusive jurisdiction and venue
of any state or federal court sitting in the county and state where the Property is located with
respect to any legal action or proceeding arising with respect to the Loan Documents and waives all
objections which it may have to such jurisdiction and venue. Nothing herein shall, however,
preclude or prevent Holder from bringing actions against Maker in any other jurisdiction as may be
necessary to enforce or realize upon the security for the Loan provided in any of the Loan
Documents.
14. Waiver of Jury Trial. MAKER AND HOLDER TO THE FULLEST EXTENT THAT THEY MAY
LAWFULLY DO SO, WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY
TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS NOTE OR THE OTHER LOAN DOCUMENTS.
EACH OF MAKER AND HOLDER AGREES THAT THE OTHER MAY FILE A COPY OF THIS WAIVER WITH ANY COURT AS
WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED AGREEMENT OF THE OTHER IRREVOCABLY TO
WAIVE ITS RIGHT TO TRIAL BY JURY, AND THAT, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY DO SO, ANY
DISPUTE OR
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CONTROVERSY WHATSOEVER BETWEEN MAKER AND HOLDER SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
15. Sales and Assignments. Holder may assign, sell, securitize, participate, pledge
and/or otherwise transfer all or any portion of Holders right, title and interest in, to and under
this Note and/or the other Loan Documents in one or more transactions as set forth in the Loan
Agreement.
16. Due on Sale; Due on Encumbrance. Maker understands that in making the Loan,
Holder is relying to a material extent upon the business expertise and/or net worth of Maker and,
if Maker is also an entity, its partners, members, officers or principals and upon the continuing
interest which Maker or its partners, members, officers or principals will have in the Property and
in Maker, respectively, and that a violation of Section 6.1 of the Loan Agreement may significantly
and materially alter or reduce Holders security for this Note. Accordingly, in the event that a
violation of Section 6.1 of the Loan Agreement occurs, then the same shall be deemed to increase
the risk of Holder and Holder may then, or at any time thereafter, declare the entire Indebtedness
immediately due and payable.
17. Exculpation. Subject to the qualifications below, Holder shall not enforce the
liability and obligation of Maker to perform and observe the obligations contained in the Loan
Documents by any action or proceeding wherein a money judgment shall be sought against Maker or its
Affiliates, principals or shareholders, except that Holder may bring a foreclosure action, an
action for specific performance or any other appropriate action or proceeding to enable Holder to
enforce and realize upon its interest and rights under the Loan Documents, or in the Property, the
Rents, the Insurance Proceeds, the Condemnation Proceeds or any other collateral given to Holder
pursuant to the Loan Documents; provided, however, that, except as specifically
provided herein, any judgment in any such action or proceeding shall be enforceable against Maker
only to the extent of Makers interest in the Property, the Rents, the Insurance Proceeds, the
Condemnation Proceeds and any other collateral given to Holder, and Holder agrees that it shall not
sue for, seek or demand any deficiency judgment against Maker in any such action or proceeding
under or by reason of or under or in connection with any Loan Document. The provisions of this
Section 17 shall not, however, (a) constitute a waiver, release or impairment of any
obligation evidenced or secured by any Loan Document; (b) impair the right of Holder to name Maker
as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect
the validity or enforceability of any of the Loan Documents or any guaranty made in connection with
the Loan or any of the rights and remedies of the Holder thereunder; (d) impair the right of Holder
to obtain the appointment of a receiver; (e) impair the enforcement of the Mortgage; (f) constitute
a prohibition against Holder to seek a deficiency judgment against Maker in order to fully realize
the security granted by the Mortgage or to commence any other appropriate action or proceeding in
order for Holder to exercise its remedies against all of the Property; or (g) constitute a waiver
of the right of Holder to enforce the liability and obligation of Maker by money judgment or
otherwise, to the extent of any Losses incurred by Holder arising out of or in connection with the
following (each, a Recourse Liability and collectively, the Recourse
Liabilities):
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(i) fraud, intentional misrepresentation, or willful misconduct by Maker or Guarantor in
connection with the Loan;
(ii) the breach of any representation, warranty, covenant or indemnification provision in any
Loan Document concerning Environmental Laws or Hazardous Substances, and any indemnification of
Holder with respect thereto contained in any Loan Document;
(iii) any act of waste of the Property or any portion thereof, or, during the continuance of
any Event of Default, the removal or disposal of any portion of the Property; or
(iv) the misapplication, misappropriation, or conversion by Maker, Guarantor, or any Affiliate
of either of (A) any Insurance Proceeds paid by reason of any Casualty, (B) any Condemnation
Proceeds received in connection with any Taking or (C) any Rents or security deposits.
Notwithstanding anything to the contrary in this Note or any of the Loan Documents, (A) Holder
shall not be deemed to have waived any right which Holder may have under Section 506(a), 506(b),
1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim for the full amount of
the Indebtedness or to require that all collateral shall continue to secure all of the Indebtedness
in accordance with the Loan Documents, and (B) Holders agreement not to pursue personal liability
of Maker as set forth above SHALL BECOME NULL AND VOID and shall be of no further force and effect,
and the Indebtedness shall be fully recourse to Maker in the event that one or more of the
following occurs (each, a Full Recourse Event): (1) a default occurs under Article
6 of the Loan Agreement; (2) Maker files a voluntary petition under the U.S. Bankruptcy Code or
any other federal or state bankruptcy or insolvency law, or (3) Guarantor, or any Affiliate,
officer, director, or representative of Maker or Guarantor, files or acquiesces in the filing of,
or Maker acquiesces in the filing of, an involuntary petition under the U.S. Bankruptcy Code or any
other federal or state bankruptcy or insolvency law against Maker.
18. Joint and Several Liability. Each Maker shall be jointly and severally liable for
payment of the Indebtedness and performance of all other obligations of all Makers (or any of them)
under this Note and any other Loan Document.
[Signature on the following page]
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IN WITNESS WHEREOF, Maker has caused this Promissory Note to be properly executed as of the
date first above written and has authorized this Promissory Note to be dated as of the day and year
first above written.
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MAKER: |
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PZ05 MAPLE HEIGHTS OH LLC,
a Delaware limited liability company |
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By: |
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Arthur S. Cooper, Manager |
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WMI05 COLUMBUS OH LLC,
a Delaware limited liability company |
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By: |
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Arthur S. Cooper, Manager |
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OB CRENSHAW GCC, LP,
a Delaware limited partnership |
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By:
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OB Crenshaw SPE GP LLC, |
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a Delaware limited liability company, its general partner |
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By: |
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Arthur S. Cooper, Manager |
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