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Exhibit 10.3
 

 
LOAN AGREEMENT

Dated as of April 19, 2006

Between

MAGUIRE PROPERTIES-PACIFIC CENTER, LLC
as Borrower

And

GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as Lender
 

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TABLE OF CONTENTS

Page
   
ARTICLE 1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION
5
Section 1.1
Specific Definitions
5
Section 1.2
Index of Other Definitions
20
Section 1.3
Principles of Construction
23
ARTICLE 2 GENERAL LOAN TERMS
23
Section 2.1
The Loan
23
Section 2.2
Interest; Monthly Payments
23
Section 2.3
Loan Repayment
25
Section 2.4
Release of Property
28
Section 2.5
Payments and Computations
28
ARTICLE 3 CASH MANAGEMENT AND RESERVES
29
Section 3.1
Cash Management Arrangements
29
Section 3.2
Intentionally Omitted
30
Section 3.3
Taxes and Insurance
30
Section 3.4
Capital Expense Reserves
31
Section 3.5
Rollover Reserve
32
Section 3.6
Casualty/Condemnation Subaccount
34
Section 3.7
Security Deposits
34
Section 3.8
Cash Collateral Subaccount
34
Section 3.9
Grant of Security Interest; Application of Funds
35
Section 3.10
Property Cash Flow Allocation
36
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
36
Section 4.1
Organization; Special Purpose
36
Section 4.2
Authorization; Valid Execution and Delivery;
 

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Enforceability
37
Section 4.3
No Conflict/Violation of Law
37
Section 4.4
No Litigation
37
Section 4.5
No Defenses
37
Section 4.6
Title
38
Section 4.7
No Insolvency or Judgment; No Bankruptcy Filing
38
Section 4.8
Misstatements of Fact
38
Section 4.9
Tax Filings
38
Section 4.10
ERISA
39
Section 4.11
Compliance with Applicable Laws and Regulations
39
Section 4.12
Contracts
40
Section 4.13
Federal Reserve Regulations; Investment Company Act
40
Section 4.14
Access/Utilities
40
Section 4.15
Condition of Improvements
40
Section 4.16
Leases
41
Section 4.17
Fraudulent Transfer
41
Section 4.18
Ownership of Borrower
42
Section 4.19
No Purchase Options
42
Section 4.20
Management Agreement
42
Section 4.21
Hazardous Substances
42
Section 4.22
Name; Principal Place of Business
43
Section 4.23
No Other Obligations
43
Section 4.24
Defense of Usury
43
Section 4.25
Intentionally Omitted
44
Section 4.26
Single Tax Lot
44
Section 4.27
Special Assessments
44
Section 4.28
No Condemnation
44
Section 4.29
No Labor or Materialmen Claims
44
Section 4.30
Boundary Lines
44
Section 4.31
Survey
45
Section 4.32
Forfeiture
45
Section 4.33
Borrower Entity Representations
45
ARTICLE 5 COVENANTS
47
Section 5.1
Existence
47
Section 5.2
Taxes and Other Charges
47
Section 5.3
Access to Property
48
Section 5.4
Repairs; Maintenance and Compliance; Alterations
48
Section 5.5
Performance of Other Agreements
49
Section 5.6
Cooperate in Legal Proceedings
50
Section 5.7
Further Assurances
50
Section 5.8
Environmental Matters
50
Section 5.9
Title to the Property
53

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Section 5.10
Leases
53
Section 5.11
Estoppel Statement
55
Section 5.12
Property Management
55
Section 5.13
Special Purpose Bankruptcy Remote Entity
56
Section 5.14
Assumption in Non-Consolidation Opinion
56
Section 5.15
Change in Business or Operation of Property
56
Section 5.16
Debt Cancellation
57
Section 5.17
Affiliate Transactions
57
Section 5.18
Zoning
57
Section 5.19
No Joint Assessment
57
Section 5.20
Principal Place of Business
57
Section 5.21
Change of Name, Identity or Structure
57
Section 5.22
Indebtedness
58
Section 5.23
Licenses
58
Section 5.24
Compliance with Restrictive Covenants, etc.
58
Section 5.25
ERISA
58
Section 5.26
Transfers
59
Section 5.27
Liens
68
Section 5.28
Dissolution
68
Section 5.29
Expenses
69
Section 5.30
Indemnity
69
Section 5.31
Patriot Act Compliance
70
ARTICLE 6 NOTICES AND REPORTING
71
Section 6.1
Notices
71
Section 6.2
Borrower Notices and Deliveries
73
Section 6.3
Financial Reporting
73
ARTICLE 7 INSURANCE; CASUALTY; AND CONDEMNATION
75
Section 7.1
Insurance
75
Section 7.2
Casualty
79
Section 7.3
Condemnation
80
Section 7.4
Application of Proceeds or Award
81
ARTICLE 8 DEFAULTS
85
Section 8.1
Events of Default
85
Section 8.2
Remedies
87
ARTICLE 9 SPECIAL PROVISIONS
89
Section 9.1
Sale of Note and Securitization
89
ARTICLE 10 MISCELLANEOUS
94
Section 10.1
Exculpation
94

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Section 10.2
Brokers and Financial Advisors
96
Section 10.3
Retention of Servicer
96
Section 10.4
Survival
96
Section 10.5
Lender’s Discretion
97
Section 10.6
Governing Law
97
Section 10.7
Modification, Waiver in Writing
98
Section 10.8
Trial by Jury
98
Section 10.9
Headings/Exhibits
99
Section 10.10
Severability
99
Section 10.11
Preferences
99
Section 10.12
Waiver of Notice
99
Section 10.13
Remedies of Borrower
99
Section 10.14
Prior Agreements
100
Section 10.15
Offsets, Counterclaims and Defenses
100
Section 10.16
Publicity
100
Section 10.17
No Usury
100
Section 10.18
Conflict; Construction of Documents
101
Section 10.19
No Third Party Beneficiaries
101
Section 10.20
Yield Maintenance Premium
101
Section 10.21
Assignment
102
Section 10.22
Certain Additional Rights of Lender
102
Section 10.23
Set-Off
103
Section 10.24
Counterparts
104

Schedule 1 - Intentionally Omitted
Schedule 2 - Exceptions to Representations and Warranties
Schedule 3 - Rent Roll
Schedule 4 - Organization of Borrower
Schedule 5 - Definition of Special Purpose Bankruptcy Remote Entity
 

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LOAN AGREEMENT
 
LOAN AGREEMENT dated as of April 19, 2006 (as the same may be modified,
supplemented, amended or otherwise changed, this “Agreement”) between MAGUIRE
PROPERTIES-PACIFIC CENTER, LLC, a Delaware limited liability company (together
with its permitted successors and assigns, “Borrower”), and GREENWICH CAPITAL
FINANCIAL PRODUCTS, INC., a Delaware corporation (together with its successors
and assigns, “Lender”).
 
ARTICLE 1
 

 
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
 
Section 1.1 Specific Definitions
 
. The following terms have the meanings set forth below:
 
Affiliate: as to any Person, any other Person that, directly or indirectly, is
in Control of, is Controlled by or is under common Control with such Person or
is a director or officer of such Person or of an Affiliate of such Person.
 
Affiliated Manager: any managing agent of the Property (other than Maguire
Property Services, Inc.) in which Borrower or any Guarantor has, directly or
indirectly, any legal, beneficial or economic interest.
 
Approved Capital Expenses: Capital Expenses incurred by Borrower, provided that
during a Cash Management Period, such Capital Expenses shall either be
(i) included in the Approved Annual Budget for the current calendar month or
(ii) approved by Lender.
 
Approved Leasing Expenses: actual out-of-pocket expenses incurred by Borrower
and payable to third parties that are not Affiliates of Borrower or Guarantor in
leasing space at the Property pursuant to Existing Leases or Leases entered into
in accordance with the Loan Documents, including brokerage commissions and
tenant improvements, which expenses (i) are required pursuant to the terms of
Existing Leases, (ii) with respect to Leases entered into after the date hereof
(A) incurred in the ordinary course of business and on market terms and
conditions in connection with Leases which do not require Lender’s approval
under the Loan Documents, or (B) otherwise approved by Lender, which approval
shall not be unreasonably withheld or delayed, and (iii) are substantiated by
executed Lease documents and brokerage agreements.
 
Approved Operating Expenses: During a Cash Management Period, operating expenses
incurred by Borrower which (i) are included in the Approved Annual Budget for
the current calendar month, (ii) are for real estate taxes, insurance premiums,
electric, gas, oil, water, sewer or other utility service to the Property or
(iii) have been approved by Lender.
 
Available Cash: as of each Payment Date during the continuance of a Cash
Management Period, the amount of Rents, if any, remaining in the Deposit Account
after the application of all of the payments required under clauses (i) through
(vii) of Section 3.10(a).
 
 

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Business Day: any day other than a Saturday, Sunday or any day on which
commercial banks in New York, New York are authorized or required to close.
 
Calculation Date: the last day of each calendar quarter during the Term.
 
Capital Expenses: expenses that are capital in nature or required under GAAP to
be capitalized.
 
Cash Management Period: shall commence upon Lender giving notice to the Clearing
Bank of the occurrence of any of the following: (i) the Stated Maturity Date,
(ii) a Default or an Event of Default, or (iii) if, as of any Calculation Date,
the Debt Service Coverage Ratio is less than the Minimum DSCR Threshold (a “DSCR
Cash Management Period”); and shall end upon Lender giving notice to the
Clearing Bank that the sweeping of funds into the Deposit Account may cease,
which notice Lender shall only be required to give if (1) the Loan and all other
obligations under the Loan Documents have been repaid in full or (2) the Stated
Maturity Date has not occurred and (A) with respect for the matters described in
clause (ii) above, such Default or Event of Default has been cured and no other
Default or Event of Default has occurred and is continuing, or (B) with respect
to the matter described in clause (iii) above, either (x) Lender has reasonably
determined that the Property has achieved a Debt Service Coverage Ratio of at
least the Minimum DSCR Threshold for two (2) consecutive Calculation Dates, or
(y) Borrower delivers to Lender either (a) a Letter of Credit (any such Letter
of Credit, the “DSCR Cash Management Letter of Credit Collateral”), in an amount
equal to the Minimum DSCR Maintenance Amount or (b) replacement DSCR Cash
Management Letter of Credit Collateral which increases the outstanding face
amount of DSCR Cash Management Letter of Credit Collateral previously delivered
to Lender and being held by Lender in accordance with Section 3.8.2 hereof by an
amount equal to the Minimum DSCR Maintenance Amount (All DSCR Cash
Management Letter of Credit Collateral shall be held in accordance with Section
3.8.2 hereof.).
 
Code: the Internal Revenue Code of 1986, as amended and as it may be further
amended from time to time, any successor statutes thereto, and applicable U.S.
Department of Treasury regulations issued pursuant thereto in temporary or final
form.
 
Control or Controlled: with respect to any Person, (i) ownership, directly or
indirectly, in the aggregate of 49% or more of the beneficial ownership interest
of such Person or (ii) the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ability to exercise voting power, by contract or otherwise
(subject only to customary reservations of rights in favor of other partners or
members to approve the sale and/or refinancing of all or substantially all of
the entity's assets and other major decisions).
 
Debt: the unpaid Principal, all interest accrued and unpaid thereon, any Yield
Maintenance Premium and all other sums due to Lender in respect of the Loan or
under any Loan Document.
 
Debt Service: with respect to any particular period, the scheduled Principal and
interest payments due under the Note in such period.
 
 

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Debt Service Coverage Ratio: as of any date, the ratio calculated by Lender of
(i) the Net Operating Income for the twelve (12)-month period during the Term of
the Loan ending with the most recently completed calendar month to (ii) the Debt
Service with respect to such period. In calculating the Debt Service Coverage
Ratio solely for purposes of determining whether or nor a DSCR Cash Management
Period then exists, the Debt Service component of such calculation shall be
computed as if the outstanding Principal amount of the Loan on such Calculation
Date was reduced by an amount equal the aggregate outstanding face amount of all
DSCR Cash Management Letter of Credit Collateral being held by Lender pursuant
to Section 3.8.2 hereof on the Calculation Date in question.
 
Default: the occurrence of any event under any Loan Document which, with the
giving of notice or passage of time, or both, would be an Event of Default.
 
Default Rate: a rate per annum equal to the lesser of (i) the maximum rate
permitted by applicable law, or (ii) 5% above the Interest Rate.
 
Defeasance Collateral: U.S. Obligations, which provide payments (i) on or prior
to, but as close as possible to, all Payment Dates and other scheduled payment
dates, if any, under the Note after the Defeasance Date and up to and including
the Stated Maturity Date, and (ii) in amounts equal to or greater than the
Scheduled Defeasance Payments.
 
Deposit Bank: Wachovia Bank, National Association, a national banking
association, or such other bank or depository selected by Lender in its
discretion.
 
Eligible Account: a separate and identifiable account from all other accounts
held by the holding institution that is either (i) an account or accounts (A)
maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution or (B) as to
which Lender has received a Rating Comfort Letter from each of the applicable
Rating Agencies with respect to holding funds in such account, or (ii) a
segregated trust account or accounts maintained with the corporate trust
department of a federal depository institution or state chartered depository
institution subject to regulations regarding fiduciary funds on deposit similar
to Title 12 of the Code of Federal Regulations §9.10(b), having in either case
corporate trust powers, acting in its fiduciary capacity, and a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authorities. An Eligible Account will not be evidenced by a
certificate of deposit, passbook or other instrument.
 
Eligible Institution: a depository institution insured by the Federal Deposit
Insurance Corporation the short term unsecured debt obligations or commercial
paper of which are rated at least A-1 by S&P, P-1 by Moody’s and F-1+ by Fitch
in the case of accounts in which funds are held for thirty (30) days or less or,
in the case of Letters of Credit or accounts in which funds are held for more
than thirty (30) days, the long term unsecured debt obligations of which are
rated at least “AA” by Fitch and S&P and “Aa2” by Moody’s. Notwithstanding the
foregoing, Lender acknowledges that Bank of the West (Borrower’s current
Clearing Bank) is deemed an Eligible Institution.
 
 

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Eligibility Requirements: with respect to any Person, that such Person (i) has
total assets (in name or under management) in excess of $750,000,000 (excluding
the Property) and (except with respect to a pension advisory firm or similar
fiduciary) capital/statutory surplus or shareholder’s equity of $300,000,000
(excluding the Property) and (ii) is regularly engaged in the business of owning
and operating commercial real estate properties of the type, size and quality
comparable to the Property.
 
ERISA: the Employment Retirement Income Security Act of 1974, as amended from
time to time, and the rules and regulations promulgated thereunder.
 
ERISA Affiliate: all members of a controlled group of corporations and all
trades and business (whether or not incorporated) under common control and all
other entities which, together with Borrower, are treated as a single employer
under any or all of Section 414(b), (c), (m) or (o) of the Code.
 
Existing Leases: Leases of the Property or the Improvements existing on the date
hereof.
 
GAAP: generally accepted accounting principles in the United States of America
as of the date of the applicable financial report or the method used in
connection with the financial statements of Borrower delivered to Lender in
connection with the closing of the Loan.
 
Governmental Authority: any court, board, agency, commission, office or
authority of any nature whatsoever for any governmental unit (federal, state,
county, district, municipal, city or otherwise) now or hereafter in existence.
 
Guarantor: the OP or any other guarantor of the Debt.
 
Interest Period: (i) the period from the date hereof through the first day
thereafter that is the 5th day of a calendar month and (ii) each period
thereafter from the 6th day of each calendar month through the 5th day of the
following calendar month; except that the Interest Period, if any, that would
otherwise commence before and end after the Maturity Date shall end on the
Maturity Date. Notwithstanding the foregoing, if Lender exercises its right to
change the Payment Date to a New Payment Date in accordance with Section 2.2.4
hereof, then from and after such election, each Interest Period shall be the
period from the New Payment Date (as defined under Section 2.2.4) in each
calendar month through the day in the next succeeding calendar month immediately
preceding the New Payment Date in such calendar month.
 
Interest Rate: a rate of interest equal to 5.7594% per annum (or, when
applicable pursuant to the Note or any other Loan Document, the Default Rate).
 
Key Principal(s): the OP, the REIT and Robert F. Maguire III.
 
Leases: all leases and other agreements or arrangements heretofore or hereafter
entered into for the use, enjoyment or occupancy of, or the conduct of any
activity upon or in, the Property or the Improvements, including any guarantees,
extensions, renewals, modifications or amendments thereof and all additional
remainders, reversions and other rights and estates appurtenant thereunder.
 
 

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Lease Termination Payments: (i) all fees, penalties, commissions or other
payments made to Borrower in connection with or relating to the rejection,
buy-out, termination, surrender or cancellation of any Lease (including in
connection with any bankruptcy proceeding), (ii) any security deposits or
proceeds of letters of credit held by Borrower in lieu of cash security
deposits, which Borrower is permitted to retain pursuant to the applicable
provisions of any Lease and (iii) any payments made to Borrower relating to
unamortized tenant improvements and leasing commissions under any Lease.
 
Letter of Credit: an irrevocable, unconditional, transferable, clean sight draft
letter of credit acceptable to Lender and the Rating Agencies (either an
evergreen letter of credit or one which does not expire until at least thirty
(30) days after the Maturity Date) for which Borrower shall have no
reimbursement obligation and which reimbursement obligation is not secured by
the Property or any other property pledged to secure the Note in favor of Lender
and entitling Lender to draw thereon in New York, New York, issued by a domestic
Eligible Institution or the U.S. agency or branch of a foreign Eligible
Institution.
 
Legal Requirements: statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting
Borrower, any Loan Document or all or part of the Property or the construction,
ownership, use, alteration or operation thereof, whether now or hereafter
enacted and in force, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instrument, either of record or known to Borrower,
at any time in force affecting all or part of the Property.
 
Lien: any mortgage, deed of trust, lien (statutory or otherwise), pledge,
hypothecation, easement, restrictive covenant, preference, assignment, security
interest or any other encumbrance, charge or transfer of, or any agreement to
enter into or create any of the foregoing, on or affecting all or any part of
the Property or any interest therein, or any direct or indirect interest in
Borrower, including any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic’s, materialmen’s
and other similar liens and encumbrances.
 
Loan Documents: this Agreement and all other documents, agreements and
instruments now or hereafter evidencing, securing or delivered to Lender in
connection with the Loan, including the following, each of which is dated as of
the date hereof: (i) the Promissory Note or Promissory Notes made by Borrowers
to Lender in the aggregate principal amount equal to the Loan (the “Note”),
(ii) the Deed of Trust, Assignment of Leases and Rents and Security Agreement
made by Borrower to a trustee for the benefit of Lender which covers the
Property (the “Mortgage”), (iii) Assignment of Leases and Rents from Borrower to
Lender, (iv) the Clearing Bank Instruction Letter (the “Clearing Account
Agreement”) among Borrower, Lender, Manager and Clearing Bank, (v) the Cash
Management Agreement (the “Cash Management Agreement”) among Borrower, Lender,
Manager and the Deposit Bank, (vi) the Environmental and Hazardous Substance
Indemnification Agreement, and (vii) the Non-Recourse Guaranty made by Guarantor
(the “Non-Recourse Guaranty”; as each of the foregoing may be (and each of the
foregoing defined terms shall refer to such documents as they may be) amended,
restated, replaced, supplemented or otherwise modified from time to time.
 
 

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Lockout Release Date: the earlier to occur of (i) the thirty sixth (36th)
Payment Date of the Term and (ii) the date that is two (2) years from the
“startup day” (within the meaning of Section 860G(a)(9) of the Code) of the
REMIC Trust established in connection with the last Securitization involving any
portion of the Loan.
 
Management Agreement: the management agreement between Borrower and Manager,
pursuant to which Manager is to manage the Property, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time in
accordance with Section 5.12.
 
Manager: the OP or any successor, assignee or replacement manager appointed by
Borrower in accordance with Section 5.12.
 
Material Lease: all Leases which individually or in the aggregate with respect
to the same tenant and its Affiliates (i) cover more than the greater of 25,000
square feet of the Improvements at an Office Building or a full floor of the
Improvements at an Office Building or (ii) have a gross annual rent of more than
10% of the total annual Rents of the Office Buildings or (iii) demise the
entirety of the Parking Garage.
 
Maturity Date: the date on which the final payment of principal of the Note
becomes due and payable as therein provided, whether at the Stated Maturity
Date, by declaration of acceleration, or otherwise.
 
Minor Lease: any Lease that is not a Material Lease.
 
Minimum DSCR Maintenance Amount: as of any date, an amount equal to the portion
of the then-outstanding Principal such that the Minimum DSCR Threshold would be
maintained on the Loan after repayment of such amount, taking into account
further reduction of Principal in an amount equal to the aggregate outstanding
face amount of all DSCR Cash Management Letter of Credit Collateral being held
by Lender.
 
Minimum DSCR Threshold: with respect to any Calculation Date, a Debt Service
Coverage Ratio of 1.05:1 or greater.
 
Net Operating Income: for any period during the Term of the Loan, the actual net
operating income of the Property determined on a cash basis of accounting, after
deducting therefrom deposits to (but not withdrawals from) any reserves required
under this Agreement, and without giving credit for non-recurring extraordinary
items of income.
 
Officer’s Certificate: a certificate delivered to Lender by Borrower which is
signed by a senior executive officer of the REIT.
 
OP: Maguire Properties, L.P., a Maryland limited partnership.
 
Operating Agreements: any covenants, restrictions or agreements of record
relating to the construction, operation or use of the Property, excluding any
Lease.
 
 

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Other Charges: all ground rents, maintenance charges, impositions other than
Taxes, and any other charges, including vault charges and license fees for the
use of vaults, chutes and similar areas adjoining the Property (other than
Taxes), now or hereafter levied or assessed or imposed against the Property or
any part thereof.
 
Payment Date: the 6th day of each calendar month or, upon Lender’s exercise of
its right to change the Payment Date in accordance with Section 2.2.4, the New
Payment Date (in either case, if such day is not a Business Day, the Payment
Date shall be the first Business Day thereafter). The first Payment Date
hereunder shall be June 6, 2006.
 
Permitted Encumbrances: (i) the Liens created by the Loan Documents, (ii) all
Liens and other matters disclosed in the Title Insurance Policy, (iii) Liens, if
any, for Taxes or Other Charges not yet due and payable and not delinquent,
(iv) any workers’, mechanics’ or other similar Liens on the Property provided
that any such Lien is bonded or discharged within 30 days after Borrower first
receives notice of such Lien, (v) such other title and survey exceptions as
Lender approves in writing in Lender’s discretion and (vi) Liens incurred in
connection with Permitted Equipment Financing as set forth in Section 5.22, and
(vii) Liens which constitute a Permitted Transfer.
 
Permitted Fund Manager: any nationally-recognized manager of investment funds
which (i) invests in debt or equity interests relating to commercial real
estate, (ii) invests through a fund with committed capital of at least
$250,000,000 and (iii) is not the subject of a bankruptcy proceeding.
 
Permitted Investment: (a) subject to the provisions of subparagraph (b) of this
definition, any one or more of the following obligations or securities acquired
at a purchase price of not greater than par, including those issued by Servicer,
the trustee under any Securitization or any of their respective affiliates,
payable on demand or having a maturity date not later than the Business Day
immediately prior to the first Payment Date following the date of acquiring such
investment (and in no event having maturities of more than 365 days) and meeting
one of the appropriate standards set forth below: (i) obligations of, or
obligations fully guaranteed as to payment of principal and interest by, the
United States or any agency or instrumentality thereof provided such obligations
are backed by the full faith and credit of the United States of America
including, without limitation, obligations of: the U.S. Treasury (all direct or
fully guaranteed obligations), the Farmers Home Administration (certificates of
beneficial ownership), the General Services Administration (participation
certificates), the U.S. Maritime Administration (guaranteed Title XI financing),
the Small Business Administration (guaranteed participation certificates and
guaranteed pool certificates), the U.S. Department of Housing and Urban
Development (local authority bonds) and the Washington Metropolitan Area Transit
Authority (guaranteed transit bonds); provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not have
an “r” highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity; (ii) Federal Housing Administration debentures;
(iii) obligations of the following United States government sponsored agencies:
Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System
 

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(consolidated system wide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association (debt
obligations), the Financing Corp. (debt obligations), and the Resolution Funding
Corp. (debt obligations); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity; (iv) federal funds, unsecured certificates of deposit, time
deposits, bankers’ acceptances and repurchase agreements with maturities of not
more than 365 days of any bank, the short term obligations of which at all times
are rated in the highest short term rating category by each Rating Agency
(defined herein) (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency in the highest short term rating category and otherwise acceptable
to each other Rating Agency, as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities issued
in connection with a Securitization or any class thereof); provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity; (v) fully Federal Deposit Insurance
Corporation insured demand and time deposits in, or certificates of deposit of,
or bankers’ acceptances issued by, any bank or trust company, savings and loan
association or savings bank, the short term obligations of which at all times
are rated in the highest short term rating category by each Rating Agency (or,
if not rated by all Rating Agencies, rated by at least one Rating Agency in the
highest short term rating category and otherwise acceptable to each other Rating
Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities or any class
thereof); provided, however, that the investments described in this clause must
(A) have a predetermined fixed dollar of principal due at maturity that cannot
vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to
their rating, (C) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity; (vi) debt
obligations with maturities of not more than three hundred sixty-five (365) days
and at all times rated by each Rating Agency (or, if not rated by all Rating
Agencies, rated by at least one Rating Agency and otherwise acceptable to each
other Rating Agency, as confirmed in writing that such investment would not, in
and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities or any
class thereof) in its highest long term unsecured rating category; provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar amount of principal due at maturity that cannot vary
or change, (B) if rated by S&P, must not have an “r” highlighter affixed to
their rating, (C) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity; (vii) commercial
paper (including both
 

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non interest bearing discount obligations and interest bearing obligations
payable on demand or on a specified date not more than one year after the date
of issuance thereof) with maturities of not more than three hundred sixty-five
(365) days and that at all times is rated by each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the
Securities or any class thereof) in its highest short term unsecured debt
rating; provided, however, that the investments described in this clause must
(A) have a predetermined fixed dollar of principal due at maturity that cannot
vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to
their rating, (C) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity; and (viii) other
security, obligation or investment which has been approved as a Permitted
Investment in writing by (a) Lender and (b) each Rating Agency, as evidenced by
a written a Rating Comfort Letter with respect to that the designation of such
security, obligation or investment as a Permitted Investment; provided, however,
that no obligation or security shall be a Permitted Investment if (A) such
obligation or security evidences a right to receive only interest payments or
(B) the right to receive principal and interest payments on such obligation or
security are derived from an underlying investment that provides a yield to
maturity in excess of one hundred twenty percent (120%) of the yield to maturity
at par of such underlying investment. Notwithstanding anything to the contrary
contained herein, the Permitted Investments (i) through (ix) above must have a
Moody’s rating of (a) ”A2 or P-1” if such investment has a maximum maturity of
one (1) month, (b) ”A1 and P-1” if such investment has a maximum maturity of
three (3) months, (c) ”Aa3 and P-1” if such investment has a maximum maturity of
six (6) months and (d) ”AAA and P-1” if such investment has a maximum maturity
of more than six (6) months.
 
At any time when Borrower is not permitted under the Loan Documents to select
Permitted Investments, “Permitted Investments” shall mean any one or more of the
following obligations or securities acquired at a purchase price of not greater
than par, including those issued by Servicer (defined herein), the trustee under
any Securitization or any of their respective Affiliates, payable on demand or
having a maturity date not later than the Business Day immediately prior to the
first Payment Date following the date of acquiring such investment (and in no
event having maturities of more than 365 days) and meeting one of the
appropriate standards set forth below: (i) obligations of, or obligations fully
guaranteed as to payment of principal and interest by, the United States or any
Person controlled or supervised by and acting as an instrumentality of the
United States pursuant to authority granted by the Congress of the United States
provided such obligations are backed by the full faith and credit of the United
States of America and are one of the following: obligations of: the U.S.
Treasury (all direct or fully guaranteed obligations), the General Services
Administration (participation certificates), the Small Business Administration
(guaranteed participation certificates and guaranteed pool certificates) or the
U.S. Department of Housing and Urban Development (local authority bonds);
provided, however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to
 

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liquidation prior to their maturity; (ii) Federal Housing Administration
debentures; and (iii) obligations of the following United States government
sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations), the
Farm Credit System (consolidated system wide bonds and notes), the Federal Home
Loan Banks (consolidated debt obligations) and the Federal National Mortgage
Association (debt obligations); provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not have
an “r” highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity; provided, however, that no obligation or security shall be a
Permitted Investment if (A) such obligation or security evidences a right to
receive only interest payments or (B) the right to receive principal and
interest payments on such obligation or security are derived from an underlying
investment that provides a yield to maturity in excess of one hundred twenty
percent (120%) of the yield to maturity at par of such underlying investment.
Notwithstanding anything to the contrary contained herein, the Permitted
Investments (i) through (ix) above must have a Moody’s rating of (a) “A2 or P-1”
if such investment has a maximum maturity of one (1) month, (b) “A1 and P-1” if
such investment has a maximum maturity of three (3) months, (c) “Aa3 and P-1” if
such investment has a maximum maturity of six (6) months and (d) “AAA and P-1”
if such investment has a maximum maturity of more than six (6) months.
 
Permitted REIT Transferee: an entity that the REIT Controls (within the sense of
clause (ii) of the defined term “Control”) and directly or indirectly owns at
least a 51% interest in, and that (i) qualifies as a Special Purpose Bankruptcy
Remote Entity in compliance with Section 5.13 hereof, and (ii) whose counsel has
delivered to Lender a non-consolidation opinion acceptable to Lender in its
reasonable discretion and acceptable to the Rating Agencies.
 
Permitted Transferee: for purposes of one Transfer and Assumption only, a
Qualified Transferee (i) that qualifies as a Special Purpose Bankruptcy Remote
Entity in compliance with Section 5.13 hereof, (ii) whose counsel has delivered
to Lender a non-consolidation opinion acceptable to Lender and the Rating
Agencies in their sole discretion, (iii) is an experienced operator and/or owner
of office properties of similar size, type and income as the Property, as
evidenced by financial statements and other information reasonably requested by
Lender, and is, or has retained, a Qualified Manager, (iv) is not Controlled by
any Person that has been a debtor in any Bankruptcy Action (hereinafter defined)
in the past ten (10) years or has ever been convicted of fraud or any crimes
with respect to securities or banking laws, and (v) that has not been involved
in any prior disputes with Lender, and is not Controlled by any Person that has
not been involved in any prior disputes with Lender. As used herein, “Bankruptcy
Action” means with respect to any Person (a) such Person filing a voluntary
petition under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law; (b) the filing of an involuntary petition against such Person
under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency
law, or soliciting or causing to be solicited petitioning creditors for any
involuntary petition against such Person, which is not dismissed within 90 days;
(c) such Person filing an answer consenting to or otherwise acquiescing in or
joining in any involuntary petition filed against it, by any other Person under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law,
or soliciting or causing to be solicited petitioning creditors for any
involuntary petition from any Person; (d) such Person consenting to or
acquiescing in or joining
 

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in an application for the appointment of a custodian, receiver, trustee, or
examiner for such Person or any portion of the Property; or (e) such Person
making an assignment for the benefit of creditors, or admitting, in writing or
in any legal proceeding, its insolvency or inability to pay its debts as they
become due.
 
Person: any individual, corporation, partnership, limited liability company,
joint venture, estate, trust, unincorporated association, any other person or
entity, and any federal, state, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on behalf
of any of the foregoing.
 
Plan: (i) an employee benefit or other plan established or maintained by
Borrower or any ERISA Affiliate or to which Borrower or any ERISA Affiliate
makes or is obligated to make contributions and (ii) which is covered by Title
IV of ERISA or Section 302 of ERISA or Section 412 of the Code.
 
Prescribed Laws: collectively, (i) the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (Public Law 107-56) (The USA PATRIOT Act), (ii) Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001, and relating to Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism, (iii) the International Emergency Economic Power
Act, 50 U.S.C. §1701 et seq. and (iv) all other legal requirements relating to
money laundering or terrorism.
 
Property: the parcels of real property and Improvements thereon owned by
Borrower and encumbered by the Mortgage; together with all rights pertaining to
such real property and Improvements, and all other collateral for the Loan as
more particularly described in the Granting Clauses of the Mortgage and referred
to therein as the Property. The Property is known as Pacific Center and is
located at 1455 Frazee Road and 1615 Murray Canyon Road (collectively, the
“Office Buildings”), and 1585 Murray Canyon Road (the “Parking Garage”), San
Diego, California.
 
Qualified Manager: any of (a) the OP, (b) an Affiliated Manager, (c) any
property manager Controlled (within the sense of clause (ii) of the defined term
“Control”) by the REIT or (d) in the reasonable judgment of Lender, a reputable
and experienced management company which (i) is a reputable national (or
regional) major management company having at least five (5) years’ experience in
the management of commercial properties of comparable quality to the Property,
with similar uses as the Property and in the jurisdiction in which the Property
is located, (ii) at the time of its engagement has managed, for at least five
(5) years prior to its engagement as property manager, at least (5) commercial
office buildings of comparable quality to the Property, (iii) at the time of its
engagement as property manager is managing leaseable square footage of office
buildings of comparable quality to the Property equal to five times the
leaseable square feet of the Property or such lesser amount as is approved by
the applicable Rating Agencies and (iv) is not the subject of a Bankruptcy
Action; provided that Borrower shall have obtained prior written confirmation
from the applicable Rating Agencies that management of the Property by such
Person will not cause a downgrade, withdrawal or qualification of the then
current ratings of the Securities or any class thereof (provided that no such
written confirmation from the Rating Agencies in connection with such Qualified
Manager
 

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will be required in connection with Permitted Transfers under Section 5.26.5 and
the Transfer and Assumption under Section 5.26.6 not requiring such prior
written confirmation from the Rating Agencies).
 
Qualified Transferee:
 
(i) a real estate investment trust, bank, saving and loan association,
investment bank, insurance company, trust company, commercial credit
corporation, pension plan, pension fund or pension advisory firm, mutual fund,
government entity or plan, provided that any such Person referred to in this
clause (i) satisfies the Eligibility Requirements;
 
(ii) an investment company, money management firm or “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act of 1933, as
amended, or an institutional “accredited investor” within the meaning of
Regulation D under the Securities Act of 1933, as amended, provided that any
such Person referred to in this clause (ii) satisfies the Eligibility
Requirements;
 
(iii) an institution substantially similar to any of the foregoing entities
described in clauses (i) or (ii) that satisfies the Eligibility Requirements;
 
(iv) any entity Controlled (which for purposes of this definition means the
ownership, directly or indirectly, in the aggregate of more than fifty percent
(50%) of the beneficial ownership interests of an entity and the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of an entity, whether through the ability to exercise
voting power, by contract or otherwise) by any of the entities described in
clauses (i) (ii) or (iii) above or (v) below;
 
(v) an investment fund, limited liability company, limited partnership or
general partnership where a Permitted Fund Manager or an entity that is
otherwise a Qualified Transferee under clauses (i) (ii), (iii) or (iv) of this
definition investing through a fund with committed capital of at least
$250,000,000 acts as the general partner, managing member or fund manager and at
least 50% of the equity interests in such investment vehicle are owned, directly
or indirectly, by one or more entities that are otherwise Qualified Transferees
under clauses (i) (ii), (iii) or (iv) of this definition;
 
(vi) a Person (i) with a long-term unsecured debt rating from each of the Rating
Agencies rating the Securities of at least "investment grade" that (ii) owns,
controls or operates, with its Affiliates, office buildings totaling at least
4,000,000 square feet of gross leaseable area (exclusive of the Property), has
with its Affiliates a net worth, as of a date no more than three (3) months
prior to the date of such Transfer; of at least $300 million (exclusive of the
Property), and immediately prior to such Transfer, controls with its Affiliates
real estate equity assets of at least $750 million (exclusive of the Property);
or
 
(vii) Robert F. Maguire III or a Person Controlled (within the meaning of
clauses (i) and (ii) of the definition of Control) by Robert F. Maguire III,
provided that at the time of such Transfer, Robert F. Maguire III has a net
worth of at least $200 million.
 
 

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Rating Agency: each of Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. (“S&P”), Moody’s Investors Service, Inc.
(“Moody’s”), and Fitch, Inc. (“Fitch”) or any other nationally recognized
statistical rating organization to the extent any of the foregoing have been
engaged by Lender or its designee in connection with or in anticipation of any
Securitization.
 
Rating Comfort Letter: a letter issued by each of the applicable Rating Agencies
which confirms that the taking of the action referenced to therein will not
result in any qualification, withdrawal or downgrading of any existing ratings
of Securities created in a Securitization or, if a Securitization has not
occurred, any ratings to be assigned in connection with a Securitization.
 
REIT: Maguire Properties, Inc., a Maryland corporation.
 
REMIC Trust: a “real estate mortgage investment conduit” within the meaning of
Section 860D of the Code that holds the Note.
 
Rents: all rents, rent equivalents, moneys payable as damages (including
payments by reason of the rejection of a Lease in a Bankruptcy Proceeding) or in
lieu of rent or rent equivalents, royalties (including all oil and gas or other
mineral royalties and bonuses), income, fees, receivables, receipts, revenues,
deposits (including security, utility and other deposits), accounts, cash,
issues, profits, charges for services rendered, and other payment and
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower, Manager or any of their agents or employees
from any and all sources arising from or attributable to the Property,
including, without limitation, income related to parking, and the Improvements,
including all receivables, customer obligations, installment payment obligations
and other obligations now existing or hereafter arising or created out of the
sale, lease, sublease, license, concession or other grant of the right of the
use and occupancy of the Property or rendering of services by Borrower, Manager
or any of their agents or employees and proceeds, if any, from business
interruption or other loss of income insurance.
 
Restricted Party: (i) Borrower, the OP, the Guarantor, or any Affiliated
Manager, and (ii) any shareholder, general partner, member, non-member manager,
direct or indirect legal or beneficial owner of, Borrower, the OP, Guarantor,
any Affiliated Manager or any non-member manager; provided, however, that the
term "Restricted Party" shall not include any limited partner of the OP,
Guarantor, or any Affiliated Manager, or any shareholders of the REIT, or any
person owning direct or indirect interests in or through such limited partners
or shareholders.
 
Sale or Pledge: a voluntary or involuntary sale, conveyance, assignment,
transfer, encumbrance or pledge of a legal or beneficial interest.
 
Scheduled Defeasance Payments: the Monthly Debt Service Payment Amount required
under the Note for all Payment Dates occurring after the Defeasance Date
(including the outstanding Principal balance on the Note as of the Stated
Maturity Date).
 
Security Agreement: a security agreement in form and substance that would be
satisfactory to Lender (in Lender’s sole but good faith discretion) pursuant to
which Borrower
 

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grants Lender a perfected, first priority security interest in the Defeasance
Collateral Account and the Defeasance Collateral.
 
Servicer: a servicer selected by Lender to service the Loan, including any
“master servicer” or “special servicer” appointed under the terms of any pooling
and servicing agreement or similar agreement entered into as a result of a
Securitization.
 
State: the state in which the Premises (as defined in the Mortgage) is located.
 
Stated Maturity Date: May 6, 2016, as such date may be changed in accordance
with Section 2.2.4.
 
Taxable REIT Subsidiary: a taxable REIT subsidiary within the meaning of Section
856(1) of the Code and of which the OP owns, directly or indirectly, no less
than a 51% interest.
 
Taxes: all real estate and personal property taxes, assessments, water rates or
sewer rents, maintenance charges, impositions, vault charges and license fees,
now or hereafter levied or assessed or imposed against all or part of the
Property.
 
Term: the entire term of this Agreement, which shall expire upon repayment in
full of the Debt and full performance of each and every obligation to be
performed by Borrower pursuant to the Loan Documents.
 
Title Insurance Policy: the ALTA mortgagee title insurance policy in the form
acceptable to Lender issued with respect to the Property and insuring the Lien
of the Mortgage.
 
UCC: the Uniform Commercial Code as in effect in the state of Delaware or the
state in which any of the Cash Management Accounts are located, as the case may
be.
 
U.S. Obligations: (i) direct full faith and credit obligations of (or guaranteed
as to timely payment by) the United States of America (or any agency or
instrumentality of the United States of America, to the extent acceptable by the
applicable Rating Agencies), or the obligations of which are backed by the full
faith and credit of the United States of America, in each case that are not
subject to prepayment, call or early redemption, (ii) obligations that are
“government securities” within the meaning of Section 2(a)(16) of the Investment
Company Act of 1940, as amended, and, (iii) to the extent acceptable to the
applicable Rating Agencies, other non-callable government securities satisfying
the REMIC Provisions (hereinafter defined), in each case to the extent such
obligations are not subject to prepayment, call or early redemption. As used
herein, “REMIC Provisions” mean provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of Subtitle A of the Code, and
related provisions, and temporary and final regulations and, to the extent not
inconsistent with such temporary and final regulations, proposed regulations,
and published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time.
 
Yield Maintenance Premium: an amount equal to the greater of (i) one percent of
the outstanding principal balance of the Loan at the time of prepayment or
(ii) an amount
 

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which, when added to the outstanding Principal, would be sufficient to purchase
U.S. Obligations which provide payments (a) on or prior to, but as close as
possible to, all successive scheduled Payment Dates under this Agreement through
the Stated Maturity Date and (b) in amounts equal to the Monthly Debt Service
Payment Amount required under this Agreement through the Stated Maturity Date
together with the outstanding principal balance of the Note as of the Stated
Maturity Date assuming all such Monthly Debt Service Payments are made
(including any servicing costs associated therewith). In no event shall the
Yield Maintenance Premium be less than zero.
 
Section 1.2 Index of Other Definitions
 
. The following terms are defined in the sections or Loan Documents indicated
below:
 
“Approved Annual Budget” - 6.3.4
“Annual Budget” - 6.3.4
“Applicable Taxes” - 2.2.3
“Asbestos” - 5.8.2
“Assignment of Leases and Rents” - 4.16
“Award” - 7.3.2
“Bankruptcy Proceeding” - 4.8
“Blanket Insurance Premium Financing Arrangements” - 7.1.4
“Borrower Parties” - 10.1
“Capital Reserve Subaccount” - 3.4
“Cash Collateral Subaccount” - 3.8.1
“Cash Management Accounts” - 3.9
“Cash Management Agreement” - 1.1 (Definition of Loan Documents)
“Casualty” - 7.2.1
“Casualty/Condemnation Prepayment” - 2.3.2
“Casualty/Condemnation Subaccount” - 3.6
“Casualty Consultant” - 7.4.1(e)
“Casualty Restoration” - 7.2.1
“Casualty Retainage” - 7.4.1(b)
“Clearing Account” -- 3.1
“Clearing Account Agreement” - 1.1 (Definition of Loan Documents)
“Clearing Bank” - 3.1
“Condemnation” - 7.3.1
“Condemnation Proceeds” - 7.4.1
“Condemnation Restoration” - 7.3.1
“Defeasance Collateral Account” - 2.3.3
“Defeasance Event” - 2.3.3
“Defeasance Date” - 2.3.3
“Delinquency Date” - 5.2
“Deposit Account” - 3.1
“Disclosure Document” - 9.1.2
“DSCR Cash Management Letter of Credit Collateral” - 1.1 (Definition of Cash
Management Period)
“Eligible Account” - Cash Management Agreement

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“Endorsement” - 5.26.b(c)(iv)
“Environmental Laws” - 4.21
“Equipment” - Mortgage
“Event of Default” - 8.1
“Exchange Act” - 9.1.2
“Excluded Costs” - 5.4.2
“Financing Installment” - 7.1.4
“Fitch” - 1.1 (Definition of Rating Agency)
“Full Replacement Cost” - 7.1.1(j)
“Full Coverage” - 7.1.1(a)
“Government Lists” - 5.30
“Hazardous Substances” - 4.21
“Improvements” - Mortgage
“Indemnified Liabilities” - 5.30
“Indemnified Party” - 5.30
“Indemnified Group” - 9.1.3
“Independent Director” - Schedule 5
“Initial Rollover Deposit” - 3.5.1
“Insurance Premiums” - 7.1.3
“Insurance Proceeds” - 7.4.1
“Insured Casualty” - 7.2.2
“Investor” - 9.1.1
“Late Payment Charge” - 2.5.3
“Lender’s Consultant” - 5.8.1
“Liabilities” - 9.1.3
“Licenses” - 4.11
“Loan” - 2.1
“Monthly Debt Service Payment Amount” - 2.2.1
“Moody’s” - 1.1 (Definition of Rating Agency)
“Mortgage” - 1.1 (Definition of Loan Documents)
“Net Proceeds” - 7.4(b)
“New Payment Date” - 2.2.4
“Non-Recourse Guaranty” - 1.1 (Definition of Loan Documents)
“Note” - 1.1 (Definition of Loan Documents)
“Notice” - 6.1
“OFAC” - 5.30
“Office Buildings” 1.1 (Definition of Property)
“Parent” - 9.1.1(a)
“Parking Garage” 1.1 (Definition of Property)
“Patriot Act” - 5.30
“Patriot Act Offense” - 5.30
“Permitted Indebtedness” - 5.22
“Permitted Prepayment Date” - 2.3.4
“Phase I Reports” - 4.21
“Policies” or “Policy” - 7.1.2
“Principal” - 2.1

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“Proceeds” - 7.2.2
“Provided Information” - 9.1.1
“Public Releases: - 10.16
“Registration Statement” - 9.1.3
“Related Party” or “Related Parties - 4.33(d)
“Remedial Work” - 5.8.3
“Rent Roll” - 4.16
“Restoration” - 7.3.1
“Rollover Reserve Subaccount” - 3.5.1
“S&P” - 1.1 (Definition of Rating Agency)
 “Securities” - 9.1.1
“Securities Act” - 9.1.2
“Securitization” - 9.1.1
“Securitization Information - 9.1.3(b)
“Security Deposit Account” - 3.7
“Security Deposit Subaccount” - 3.7
“Significant Casualty” - 7.2.2
“Special Purpose Bankruptcy Remote Entity” - 5.13
“Subaccounts” - 3.1
“Subordination of Management Agreement” - 5.12.1
“Successor Borrower” - 2.3.3
“Survey” - 4.31
 “Tax and Insurance Impound Fund” - 3.3
“Tax and Insurance Subaccount” - 3.3
“Tenant Estoppels” - 4.16
“Terrorism Acts” - 7.1.1(j)
“Threshold Amount” - 5.4.2
“Toxic Mold” - 4.21
“Transfer” - 5.26.3
“Transfer and Assumption” - 5.26.6(a)
“Transferee Borrower” - 5.26.6(a)
 
Section 1.3 Principles of Construction
 
. Unless otherwise specified, (i) all references to sections and schedules are
to those in this Agreement, (ii) the words “hereof,” “herein” and “hereunder”
and words of similar import refer to this Agreement as a whole and not to any
particular provision, (iii) all definitions are equally applicable to the
singular and plural forms of the terms defined, (iv) the word “including” means
“including but not limited to,” and (v) accounting terms not specifically
defined herein shall be construed in accordance with GAAP. To the extent that
the definition of Net Operating Income deviates from GAAP, the definitions of
such terms contained herein shall govern.
 
ARTICLE 2
 

 
GENERAL LOAN TERMS
 
Section 2.1 The Loan
 
 

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. Lender is making a loan (the “Loan”) to Borrower on the date hereof, in the
original principal amount (the “Principal”) of $121,200,000.00 which shall
mature on the Stated Maturity Date. Borrower acknowledges receipt of the Loan,
the proceeds of which are being and shall be used to (i) return capital to
direct and indirect owners of Borrower used to acquire the Property, (ii) fund
certain of the Subaccounts, and (iii) pay transaction costs. Any excess proceeds
may be used for any lawful purpose. No amount repaid in respect of the Loan may
be reborrowed.
 
Section 2.2 Interest; Monthly Payments
 
.
 
2.2.1 Generally. From and after the date hereof, interest on the unpaid
Principal shall accrue at the Interest Rate and be payable as hereinafter
provided. On the date hereof, Borrower shall pay interest on the unpaid
Principal from the date hereof through and including May 5, 2006. On June 6,
2006 and each Payment Date thereafter through and including the Maturity Date,
the interest on the Principal at the Interest Rate shall be payable in monthly
installments (each such installment, the “Monthly Debt Service Payment Amount”).
The Monthly Debt Service Payment Amount due on any Payment Date shall be applied
to the payment of interest accrued during the preceding Interest Period. All
accrued and unpaid interest shall be due and payable on the Maturity Date. If
the Loan is repaid on any date other than on a Payment Date (whether prior to or
after the Stated Maturity Date), Borrower shall also pay interest that would
have accrued on such repaid Principal to but not including the next Payment
Date.
 
2.2.2 Default Rate. After the occurrence and during the continuance of an Event
of Default, the entire unpaid Debt shall bear interest at the Default Rate, and
shall be payable, to the extent permitted by applicable law, within ten (10)
days after the date Lender makes written demand therefor.
 
2.2.3 Taxes. Any and all payments by Borrower hereunder and under the other Loan
Documents shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on Lender’s
income, and franchise and other similar taxes imposed on Lender by the law or
regulation of any Governmental Authority (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to in this Section 2.2.3 as “Applicable Taxes”). If Borrower shall be
required by law to deduct any Applicable Taxes from or in respect of any sum
payable hereunder to Lender, the following shall apply: (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.2.3), Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) Borrower shall make such
deductions and (iii) Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
Payments pursuant to this Section 2.2.3 shall be made within ten (10) days after
the date Lender makes written demand therefor. Notwithstanding the foregoing, if
the Loan is transferred to a transferee which is organized under the laws of any
jurisdiction other than the United States of America or any state thereof, the
transferor shall cause such transferee, concurrently with the effectiveness of
such transfer, to
 

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furnish to the transferor and Borrower either a United States Internal Revenue
Service Form W-8BEN, United States Internal Revenue Service Form W-8ECI or
United States Internal Revenue Service Form W-8IMY (wherein such transferee
claims entitlement to complete exemption from United States federal withholding
tax on all interest payments hereunder); provided, however, that in the event
that the transferor fails to cause the transferee to furnish either such Form,
Borrower shall deduct any Applicable Taxes to the extent required by law and
payments shall be made net of any Applicable Taxes without regard to the
provisions of clause (i) of the second sentence of this Section 2.2.3.
 
2.2.4 New Payment Date. Lender shall have the right, to be exercised not more
than once during the term of the Loan, to change the Payment Date to a date
later than the sixth day of each month (a “New Payment Date”), on 30 days’
written notice to Borrower; provided, however, that any such change in the
Payment Date: (i) shall not modify the amount of regularly scheduled monthly
principal (if any) and interest payments, except that the first payment of
principal (if any) and interest payable on the New Payment Date shall be
accompanied by interest at the interest rate herein provided for the period from
the Payment Date in the month in which the New Payment Date first occurs to the
New Payment Date, and (ii) shall extend the Stated Maturity Date to the New
Payment Date occurring in the month set forth in the definition of Stated
Maturity Date.
 
Section 2.3 Loan Repayment
 
.
 
2.3.1 Repayment. Borrower shall repay the entire outstanding principal balance
of the Note in full on the Maturity Date, together with interest thereon to (but
excluding) the date of repayment and any other amounts due and owing under the
Loan Documents. Borrower shall have no right to prepay or defease all or any
portion of the Principal except in accordance with Section 2.3.2, Section 2.3.3
and Section 2.4 below. Except during the continuance of an Event of Default, all
proceeds of any repayment, including any prepayments of the Loan, shall be
applied by Lender as follows in the following order of priority: First, accrued
and unpaid interest at the Interest Rate; second, to Principal; and third, to
and any other amounts then due and owing under the Loan Documents. If prior to
the Stated Maturity Date the Debt is accelerated by reason of an Event of
Default, then Lender shall be entitled to receive, in addition to the unpaid
Principal and accrued interest and other sums due under the Loan Documents, an
amount equal to the Yield Maintenance Premium applicable to such Principal so
accelerated. During the continuance of an Event of Default, all proceeds of
repayment, including any payment or recovery on the Property (whether through
foreclosure, deed-in-lieu of foreclosure, or otherwise) shall, unless otherwise
provided in the Loan Documents, be applied in such order and in such manner as
Lender shall elect in Lender’s discretion.
 
2.3.2 Mandatory Prepayments. The Loan is subject to mandatory prepayment in
certain instances of Insured Casualty or Condemnation (each, a
“Casualty/Condemnation Prepayment”), in the manner and to the extent set forth
in Section 7.4.2. Each Casualty/Condemnation Prepayment, after deducting
Lender’s costs and expenses (including reasonable attorneys’ fees and expenses)
in connection with the settlement or collection of the Proceeds or Award, shall
be applied in the same manner as repayments under Section 2.3.1, and
 

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if such Casualty/Condemnation Payment is made on any date other than a Payment
Date, then such Casualty/Condemnation Payment shall include interest that would
have accrued on the Principal prepaid to but not including the next Payment
Date. Provided that no Event of Default is continuing, any such mandatory
prepayment under this Section 2.3.2 shall be without the payment of the Yield
Maintenance Premium. Notwithstanding anything to the contrary contained herein,
each Casualty/Condemnation Prepayment shall be applied in inverse order of
maturity and shall not extend or postpone the due dates of the monthly
installments due under the Note or this Agreement.
 
2.3.3 Defeasance
 
(a) Conditions to Defeasance. Provided no Event of Default shall be continuing,
Borrower shall have the right on any Payment Date after the Lockout Release Date
and prior to the Permitted Prepayment Date to voluntarily defease the entire
amount of the Principal and obtain a release of the Lien of the Mortgage and a
release of Borrower’s and Guarantor’s obligations under the other Loan Documents
(other than (i) those obligations which are expressly stated to survive the
payment in full of the Loan and (ii) the Security Agreement) by providing Lender
with the Defeasance Collateral (a “Defeasance Event”), subject to the
satisfaction of the following conditions precedent:
 
(1) Borrower shall give Lender not less than thirty (30) days prior written
notice specifying a Payment Date (the “Defeasance Date”) on which the Defeasance
Event is expected to occur.
 
(2) Borrower shall pay to Lender (A) all payments of interest due on the Loan to
and including the Defeasance Date and (B) all other sums then due under the
Note, this Agreement and the other Loan Documents;
 
(3) Borrower shall deposit the Defeasance Collateral into the Defeasance
Collateral Account and otherwise comply with the provisions of subsections (b)
and (c) of this Section 2.3.3;
 
(4) Borrower shall execute and deliver to Lender a Security Agreement in respect
of the Defeasance Collateral Account and the Defeasance Collateral;
 
(5) Borrower shall deliver to Lender an opinion of counsel for Borrower that is
standard in commercial lending transactions and subject only to customary
qualifications, assumptions and exceptions opining to the effect that, among
other things, that (i) Lender has a legal and valid perfected security interest
in the Defeasance Collateral Account and the Defeasance Collateral, (ii) if a
securitization has occurred, the REMIC Trust formed pursuant to such
securitization will not fail to maintain its status as a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code solely as a
result of a Defeasance Event pursuant to this Section 2.3.3, (iii) the
Defeasance Event will not result in a significant modification and will not be
an exchange of the Note for purposes of Section 1001 of the Code and the
Treasury Regulations thereunder, (iv) delivery of the Defeasance Collateral and
the grant of a security interest therein to Lender shall not constitute an
avoidable preference under
 

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Section 547 of the Bankruptcy Code or applicable state law and (v) a
non-consolidation opinion with respect to the Successor Borrower (if any);
 
(6) Borrower shall deliver to Lender and the Rating Agencies a Rating Comfort
Letter as to the Defeasance Event;
 
(7) Borrower shall deliver an Officer’s Certificate certifying that the
requirements set forth in this Section 2.3.3 have been satisfied;
 
(8) Borrower shall deliver an agreed upon procedures letter from a “big four” or
other nationally recognized public accounting firm that would be acceptable to a
prudent lender (or any other accounting firm that is reputable and experienced
in preparing such procedure letters and reports and would be reasonably
acceptable to a prudent lender) verifying that the Defeasance Collateral will
generate monthly amounts equal to or greater than the Scheduled Defeasance
Payments, (ii) the revenue from the Defeasance Collateral will be applied within
four months of receipt towards payments of Debt Service, (iii) the securities
that comprise the Defeasance Collateral are not subject to prepayment, call or
early redemption and (iv) the interest income to Borrower (or the Successor
Borrower, if applicable) from the Defeasance Collateral will not in any tax year
materially exceed the interest expense associated with the defeased Loan;
 
(9) Borrower shall deliver such other certificates, opinions, documents and
instruments as a prudent lender may reasonably request; and
 
(10) Borrower shall pay all costs and expenses of Lender incurred in connection
with the Defeasance Event, including Lender’s reasonable attorneys’ fees and
expenses and Rating Agency fees and expenses.
 
(b) Defeasance Collateral Account. On or before the date on which Borrower
delivers the Defeasance Collateral, Borrower shall open at any Eligible
Institution the defeasance collateral account (the “Defeasance Collateral
Account”) which shall at all times be an Eligible Account. The Defeasance
Collateral Account shall contain only (i) Defeasance Collateral, and (ii) cash
from interest and principal paid on the Defeasance Collateral. All cash from
interest and principal payments paid on the Defeasance Collateral shall be paid
over to Lender on each Payment Date and applied first to accrued and unpaid
interest and then to Principal. Any cash from interest and principal paid on the
Defeasance Collateral not needed to pay accrued and unpaid interest or Principal
shall be retained in the Defeasance Collateral Account as additional collateral
for the Loan. Borrower shall cause the Eligible Institution at which the
Defeasance Collateral is deposited to enter an agreement with Borrower and
Lender, satisfactory to Lender in its sole discretion, pursuant to which such
Eligible Institution shall agree to hold and distribute the Defeasance
Collateral in accordance with this Agreement. The Borrower or the Successor
Borrower shall be the owner of the Defeasance Collateral Account and shall
report all income accrued on Defeasance Collateral for federal, state and local
income tax purposes in its income tax return to the extent required by law.
Borrower shall pay all costs and expenses associated with opening and
maintaining the Defeasance Collateral Account. Neither Borrower (provided that a
Successor Borrower has assumed the Loan) nor Lender shall in any way be liable
by reason of any insufficiency in the Defeasance Collateral Account.
 
 

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(c) Successor Borrower. In connection with a Defeasance Event under this
Section 2.3.3, Borrower shall, if required by the Rating Agencies or if Borrower
elects to do so, establish or designate a successor entity (the “Successor
Borrower”) which shall be a Single Purpose Bankruptcy Remote Entity and which
shall be approved by the Rating Agencies. Any such Successor Borrower may, at
Borrower’s option, be an Affiliate of Borrower unless the Rating Agencies shall
require otherwise. Borrower shall transfer and assign all obligations, rights
and duties under and to the Note, together with the Defeasance Collateral to
such Successor Borrower. Such Successor Borrower shall assume the obligations
under the Note and the Security Agreement and Borrower shall be relieved of its
obligations under the Debt and the Loan Documents (other than those obligations
which are expressly stated to survive the payment in full of the Loan). Borrower
shall pay a minimum of $1,000 to any such Successor Borrower as consideration
for assuming the obligations under the Note and the Security Agreement (unless
such requirement shall be waived by the applicable Rating Agencies). Borrower
shall pay all costs and expenses incurred by Lender, including Lender’s
attorney’s fees and expenses, incurred in connection therewith.
 
2.3.4 Optional Prepayments. From and after the third Payment Date prior to the
Stated Maturity Date (the “Permitted Prepayment Date”), Borrower shall have the
right to prepay the Principal in whole but not in part, provided that Borrower
gives Lender at least 15 days’ prior written notice thereof. If any such
prepayment is not made on a Payment Date, Borrower shall also pay interest that
would have accrued on such prepaid Principal to, but not including, the next
Payment Date. Any such prepayment shall be made without payment of the Yield
Maintenance Premium.
 
2.3.5 Prepayments After Default. If after the occurrence and during the
continuance of an Event of Default, payment of all or any part of the principal
of the Loan is tendered by Borrower, a purchaser at foreclosure or any other
Person, such tender shall be deemed an attempt to circumvent the prohibition
against prepayment set forth in Section 2.3.1 and Borrower, such purchaser at
foreclosure or other Person shall pay the Yield Maintenance Premium, in addition
to the outstanding principal balance, all accrued and unpaid interest and other
amounts payable under the Loan Documents.
 
Section 2.4 Release of Property
 
.
 
2.4.1 Release on Defeasance. If Borrower has elected to defease the Note and the
requirements of Section 2.3.3 and this Section 2.4 have been satisfied, the
Property shall be released from the Lien of the Mortgage and the other Loan
Documents, and the Defeasance Collateral pledged pursuant to the Security
Agreement shall be the sole source of collateral securing the Note. In
connection with the release of the Lien, Borrower shall submit to Lender, not
less than fifteen (15) days prior to the Defeasance Date (or such shorter time
as is acceptable to Lender in its sole discretion), release of Lien (and related
Loan Documents) for execution by Lender. Such release shall be in a form
appropriate in the jurisdiction in which the Property is located. In addition,
Borrower shall provide all other documentation as a prudent lender would
reasonably require to be delivered by Borrower in connection with such release,
together with an Officer’s Certificate certifying that such documentation (i) is
in compliance with all Legal
 

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Requirements, and (ii) will effect such release in accordance with the terms of
this Agreement. Borrower shall pay all costs, taxes and expenses associated with
the release of the Lien of the Mortgage and the other Loan Documents, including
Lender’s reasonable attorneys’ fees.
 
2.4.2 Release on Payment in Full. Lender shall, upon the written request and at
the expense of Borrower, upon payment in full of the Debt in accordance
herewith, release or, if requested by Borrower, assign to Borrower’s designee
(without any representation or warranty by and without any recourse against
Lender whatsoever), the Lien of the Loan Documents if not theretofore released.
 
Section 2.5 Payments and Computations
 
.
 
2.5.1 Making of Payments. Each payment by Borrower shall be made in funds
settled through the New York Clearing House Interbank Payments System or other
funds immediately available to Lender by 4:00 p.m., New York City time, on the
date such payment is due, to Lender by deposit to such account as Lender may
designate by written notice to Borrower. Whenever any such payment shall be
stated to be due on a day that is not a Business Day, such payment shall be made
on the first Business Day thereafter. All such payments shall be made
irrespective of, and without any deduction, set-off or counterclaim whatsoever
and are payable without relief from valuation and appraisement laws and with all
costs and charges incurred in the collection or enforcement thereof, including
attorneys’ fees and court costs.
 
2.5.2 Computations. Interest payable under the Loan Documents shall be computed
on the basis of the actual number of days elapsed over a 360-day year.
 
2.5.3 Late Payment Charge. If any Principal, interest or other sum due under any
Loan Document is not paid by Borrower on the date on which it is due, Borrower
shall pay to Lender (within ten (10) days after the date Lender makes written
demand therefor) an amount equal to the lesser of 5% of such unpaid sum or the
maximum amount permitted by applicable law (the “Late Payment Charge”), in order
to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Such amount shall be secured by the Loan Documents. 
 
ARTICLE 3
 

 
CASH MANAGEMENT AND RESERVES
 
Section 3.1 Cash Management Arrangements
 
. Borrower shall cause all Rents to be transmitted directly by non-residential
tenants of the Property into an Eligible Account (the “Clearing Account”)
maintained by Borrower at a local bank selected by Borrower, which shall at all
times be an Eligible Institution (the “Clearing Bank”) as more fully described
in the Clearing Account Agreement. Without in any way limiting the foregoing,
all Rents received by Borrower or Manager shall be deposited into the Clearing
Account within one Business Day of receipt. Funds deposited into the Clearing
Account shall be swept by the Clearing Bank on a daily basis into the Borrower’s
operating
 

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account at the Clearing Bank, unless a Cash Management Period is continuing, in
which event such funds shall be swept on a daily basis into an Eligible Account
at the Deposit Bank controlled by Lender (the “Deposit Account”) and applied and
disbursed in accordance with this Agreement. Funds in the Deposit Account shall
be invested at Lender’s discretion only in Permitted Investments. Lender will
also establish subaccounts of the Deposit Account which shall at all times be
Eligible Accounts (and may be ledger or book entry accounts and not actual
accounts) (such subaccounts are referred to herein as “Subaccounts”). The
Deposit Account and any Subaccount will be under the sole control and dominion
of Lender, and Borrower shall have no right of withdrawal therefrom. Borrower
shall pay for all expenses of opening and maintaining all of the above accounts.
 
Section 3.2 Intentionally Omitted
 
.
 
Section 3.3 Taxes and Insurance
 
. Borrower shall pay to Lender (i) on each Payment Date, one-twelfth of the
Taxes that Lender estimates will be payable during the next ensuing twelve (12)
months in order to accumulate with Lender sufficient funds to pay all such Taxes
at least thirty (30) days prior to their Delinquency Date, and (ii) (1) for so
long as the applicable Blanket Insurance Premium Financing Arrangement remains
in full force and effect, on each Payment Date, the Financing Installment for
the next occurring payment under the applicable Blanket Insurance Premium
Financing Arrangement and/or (2) with respect to any Insurance Premiums not
covered by a Blanket Insurance Premium Financing Arrangement, on each Payment
Date, one-twelfth of the Insurance Premiums that Lender estimates will be
payable for the renewal of the coverage afforded by the Policies upon the
expiration thereof in order to accumulate with Lender sufficient funds to pay
all such Insurance Premiums at least thirty (30) days prior to the expiration of
the Policies (said amounts in (i) and (ii) above hereinafter called the “Tax and
Insurance Impound Fund”). Such amounts will be transferred by Lender to a
Subaccount (the “Tax and Insurance Subaccount”). Lender will apply the Tax and
Insurance Impound Fund to payments of Taxes and Insurance Premiums required to
be made by Borrower pursuant to Sections 5.2 and 7.1 hereof and/or to payments
due to the applicable finance company under the applicable Blanket Insurance
Premium Financing Arrangement, as applicable. In making any payment relating to
the Tax and Insurance Impound Fund, Lender may do so according to any bill,
statement or estimate procured from the appropriate public office (with respect
to Taxes) or insurer or agent (with respect to Insurance Premiums), without
inquiry into the accuracy of such bill, statement or estimate or into the
validity of any tax, assessment, sale, forfeiture, tax lien or title or claim
thereof. If the amount of the Tax and Insurance Impound Fund shall exceed the
amounts due for Taxes and Insurance Premiums pursuant to Sections 5.2 and 7.1
hereof, Lender shall, in its sole discretion, return any excess to Borrower or
credit such excess against future payments to be made to the Tax and Insurance
Impound Fund. In allocating such excess, Lender may deal with the person shown
on the records of Lender to be the owner of the Property. If at any time Lender
determines that the Tax and Insurance Impound Fund is not or will not be
sufficient to pay the items set forth in (i) and (ii) above, Lender shall notify
Borrower of such determination and Borrower shall increase its monthly payments
to Lender by the amount that Lender estimates is sufficient to make up the
deficiency at least thirty (30) days prior to delinquency of the Taxes
 

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and/or expiration of the Policies, as the case may be. All earnings of interest
on the Tax and Insurance Impound Fund shall become part of the Tax and Insurance
Impound Fund and shall be disbursed in accordance with this Section 3.3. If
Lender so elects at any time, Borrower shall provide, at Borrower’s expense, a
tax service contract for the Term issued by a tax reporting agency acceptable to
Lender. If Lender does not so elect, Borrower shall reimburse Lender for the
cost of making annual tax searches throughout the Term.
 
Section 3.4 Capital Expense Reserves
 
. On the date hereof, Borrower shall deposit with Lender $5,000,000. Lender will
transfer such amount into a Subaccount (the “Capital Reserve Subaccount”). In
addition to the foregoing, Borrower shall pay to Lender on each Payment Date an
amount initially equal to $9,145 (one-twelfth (1/12th) of the product obtained
by multiplying $0.25 by the aggregate number of rentable square feet of space in
the Property) for deposit into the Capital Reserve Subaccount; provided,
however, Borrower shall only be obligated to make such monthly payment on any
Payment Date on which the aggregate amount then on deposit in the Capital
Reserve Subaccount is below $500,000. Additionally, upon thirty (30) days’ prior
notice to Borrower, Lender may reassess the amount of the monthly payment
required under this Section 3.4 from time to time in its reasonable discretion
(based upon its then current underwriting standards). Provided that no Event of
Default is continuing, Lender shall disburse funds held in the Capital Reserve
Subaccount to Borrower, within fifteen (15) days after the delivery by Borrower
to Lender of a request therefor (but not more often than once per month), in
increments of at least $5,000 provided that (i) such disbursement is for an
Approved Capital Expense; (ii) with respect to disbursements in excess of
$100,000, Lender shall have (if it desires) verified (by an inspection conducted
at Borrower’s expense) performance of the work associated with such Approved
Capital Expense; and (iii) the request for disbursement is accompanied by (A) an
Officer’s Certificate certifying (1) that such funds will be used to pay or
reimburse Borrower for Approved Capital Expenses and a description thereof,
(2) that all outstanding trade payables (other than those to be paid from the
requested disbursement or those constituting Permitted Indebtedness) have been
paid in full, (3) that the same has not been the subject of a previous
disbursement, and (4) that all previous disbursements have been used to pay the
previously identified Approved Capital Expenses, and (B) lien waivers or other
evidence of payment satisfactory to Lender, (C) at Lender’s option, a title
search for the Property indicating that the Property is free from all Liens,
claims and other encumbrances not previously approved by Lender and (D) such
other evidence as Lender shall reasonably request that the Approved Capital
Expenses at the Property to be funded by the requested disbursement have been
completed and are paid for or will be paid upon such disbursement to Borrower.
Any such disbursement of more than $100,000 to pay (rather than reimburse)
Approved Capital Expenses may, at Lender’s option, be made by joint check
payable to Borrower and the payee on such Approved Capital Expenses. 
 
Section 3.5 Rollover Reserve
 
. Borrower shall pay to Lender $4,400,000 on the date hereof (the “Initial
Rollover Deposit”), and Lender shall transfer such funds into a Subaccount (the
“Rollover Reserve Subaccount”). Additionally, on each Payment Date commencing on
the earlier to occur of (x) May 6, 2009 or (y) the first Payment Date following
the date that the funds constituting the Initial Rollover
 

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Deposit have been reduced to $1,000,000, Borrower shall pay to Lender (for
deposit into the Rollover Reserve Subaccount) $45,725 (one-twelfth (1/12th) of
the product obtained by multiplying $1.25 by the aggregate number of rentable
square feet of space in the Property); provided, however, Borrower shall only be
obligated to make such monthly payment on any Payment Date on which the
aggregate amount then on deposit in the Rollover Reserve Subaccount (excluding
any Lease Termination Payments) is below $2,500,000. Borrower shall also pay to
Lender (for deposit into the Rollover Reserve Subaccount) all Lease Termination
Payments received by Borrower with respect to Material Leases; provided,
however, once Borrower has provided to Lender evidence reasonably acceptable to
Lender that the space under the Lease that was the subject of such Lease
Termination Payment has been re-tenanted and all Approved Leasing Expenses in
connection with such space have been paid, Lender shall (provided no Event of
Default is then continuing) disburse to Borrower any remaining portion of the
subject Lease Termination Payment. Provided that no Event of Default has
occurred and is continuing, Lender shall disburse funds held in the Rollover
Reserve Subaccount to Borrower, within fifteen (15) days after the delivery by
Borrower to Lender of a request therefor (but not more often than once per
month), in increments of at least $5,000, provided (i) such disbursement is for
an Approved Leasing Expense; (ii) with respect to disbursements in excess of
$100,000, Lender shall have (if it desires) verified (by an inspection conducted
at Borrower’s expense) performance of any construction work associated with such
an Approved Leasing Expense; and (iii) the request for disbursement is
accompanied by (A) an Officer’s Certificate certifying (1) that such funds will
be used only to pay (or reimburse Borrower for) an Approved Leasing Expense, and
a description thereof, (2) that all outstanding trade payables (other than those
to be paid from the requested disbursement or those constituting Permitted
Indebtedness) have been paid in full, (3) that the same has not been the subject
of a previous disbursement, and (4) that all previous disbursements have been
used only to pay (or reimburse Borrower for) the previously identified Approved
Leasing Expenses, and (B) reasonably detailed supporting documentation as to the
amount, necessity and purpose therefor. Any such disbursement of more than
$100,000 to pay (rather than reimburse) Approved Leasing Expenses may, at
Lender’s option, be made by joint check payable to Borrower and the payee of
such Approved Leasing Expenses. 
 
Section 3.6 Casualty/Condemnation Subaccount
 
. Borrower shall pay, or cause to be paid, to Lender all Proceeds or Awards due
to any Casualty or Condemnation to be transferred to a Subaccount (the
“Casualty/Condemnation Subaccount”) in accordance with the provisions of Article
7. All amounts in the Casualty/Condemnation Subaccount shall be disbursed in
accordance with the provisions of Article 7.
 
Section 3.7 Security Deposits
 
. Borrower shall keep all security deposits actually paid to Borrower under
Leases at a separately designated account under Borrower’s control at the
Clearing Bank (and in the case of a letter of credit received after the date
hereof, assigned with full power of attorney and executed sight drafts to
Lender) so that the security deposits shall not be commingled with any other
funds of Borrower (such account, the “Security Deposit Account”). After the
occurrence of an Event of Default which is continuing, Borrower shall, upon
Lender’s request, if permitted by applicable
 

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Legal Requirements, turn over to Lender the security deposits (and any interest
theretofore earned thereon) under Leases, to be held by Lender in a Subaccount
(the “Security Deposit Subaccount”) subject to the terms of the Leases. Security
deposits held in the Security Deposit Subaccount will be released by Lender upon
notice from Borrower together with such evidence as Lender may reasonably
request that such security deposit is required to be returned to a tenant
pursuant to the terms of a Lease or may be applied as Rent pursuant to the
rights of Borrower under the applicable Lease. Any letter of credit or other
instrument that Borrower receives in lieu of a cash security deposit under any
Lease entered into after the date hereof shall (i) be maintained in full force
and effect in the full amount required by the applicable Lease unless replaced
by a cash deposit as hereinabove described and (ii) if permitted pursuant to any
Legal Requirements, name Lender as payee or mortgagee thereunder (or at Lender’s
option, be fully assignable to Lender).
 
Section 3.8 Cash Collateral/DSCR Cash Management Letter of Credit Collateral
 
.
 
3.8.1 Cash Collateral Subaccount
 
. If a Cash Management Period shall have commenced, then on the immediately
succeeding Payment Date and on each Payment Date thereafter during the
continuance of such Cash Management Period, all Available Cash shall be paid to
Lender, which amounts shall be transferred by Lender into a Subaccount (the
“Cash Collateral Subaccount”) as cash collateral for the Debt. Any funds in the
Cash Collateral Account and not previously disbursed or applied shall be
disbursed to Borrower upon the termination of such Cash Management Period.
Lender shall have the right, but not the obligation, at any time during the
continuance of an Event of Default, in its sole and absolute discretion to apply
all sums then on deposit in the Cash Collateral Subaccount to the Debt, in such
order and in such manner as Lender shall elect in its sole and absolute
discretion, including to make a prepayment of Principal (together which the
applicable Yield Maintenance Premium applicable thereto). Additionally, Lender
shall have the right, but not the obligation, at any time subsequent to the
second Calculation Date following the commencement of a DSCR Cash Management
Period (whether or not an Event of Default is then continuing), in its sole and
absolute discretion to apply all sums then on deposit in the Cash Collateral
Subaccount towards a partial Defeasance of the Loan (together with any
Defeasance costs associated therewith), and Borrower shall execute such
documents and take such other actions necessary to satisfy the Defeasance
requirements set forth in Section 2.3.3 hereof (to the extent applicable to a
partial involuntary Defeasance).
 
3.8.2 DSCR Cash Management Letter of Credit Collateral
 
.
 
(a) All DSCR Cash Management Letter of Credit Collateral received by Lender from
Borrower in accordance with the definition of “Cash Management Period” shall be
held as collateral and additional security for the payment of the Debt. Upon the
occurrence and during the continuance of an Event of Default, Lender shall have
the right, at its option, to draw on all
 

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or any portion of the DSCR Cash Management Letter of Credit Collateral and to
apply such amount drawn to payment of the Debt in such order, proportion or
priority as Lender may determine. Any such application to the Debt shall be
subject to the Yield Maintenance Premium, if applicable. Borrower shall not be
entitled to draw upon any such DSCR Cash Management Letter of Credit Collateral.
However, if, as of any Calculation Date, the aggregate outstanding face amount
of the DSCR Cash Management Letter of Credit Collateral received by Lender from
Borrower in accordance with the definition of “Cash Management Period” is in an
amount which is at least $350,000.00 greater than the amount necessary to (i)
prevent the triggering of a DSCR Cash Management Period or (ii) end any
then-continuing DSCR Cash Management Period, then, provided no Default or Event
of Default then exists, Borrower may, at its option, reduce (or replace) the
DSCR Cash Management Letter of Credit Collateral with DSCR Cash Management
Letter of Credit Collateral which, when utilized in the calculation of the Debt
Service component of the Debt Service Coverage Ratio, is in an amount equal to a
portion of the then-outstanding Principal such that the Minimum DSCR Threshold
would be maintained on the Loan after reduction of Principal in an amount equal
to the aggregate outstanding face amount of the reduced (or replaced) DSCR Cash
Management Letter of Credit Collateral.
 
(b) In addition to any other right Lender may have to draw upon DSCR Cash
Management Letter of Credit Collateral pursuant to the terms and conditions of
Section 3.8.2(a) above, Lender shall have the additional rights to draw in full
any Letter of Credit constituting DSCR Cash Management Letter of Credit
Collateral: (i) with respect to any evergreen Letter of Credit, if Lender has
received a notice from the issuing bank that the applicable Letter of Credit
will not be renewed and a substitute Letter of Credit is not provided at least
thirty (30) days prior to the date on which the outstanding Letter of Credit is
scheduled to expire; (ii) with respect to any Letter of Credit with a stated
expiration date, if Lender has not received a notice from the issuing bank that
it has renewed the Letter of Credit at least thirty (30) days prior to the date
on which such Letter of Credit is scheduled to expire and a substitute Letter of
Credit is not provided at least twenty (20) days prior to the date on which the
outstanding Letter of Credit is scheduled to expire; (iii) upon receipt of
notice from the issuing bank that the Letter of Credit will be terminated
(except if the termination of such Letter of Credit is permitted pursuant to the
terms and conditions of this Agreement or a substitute Letter of Credit is
provided) or (iv) if Lender has received notice that the bank issuing the Letter
of Credit shall cease to be an Approved Bank and Borrower shall not have
replaced such Letter of Credit with a Letter of Credit issued by an Approved
Bank within twenty (20) days after notice thereof. Notwithstanding anything to
the contrary contained in the above, Lender is not obligated to draw any DSCR
Cash Management Letter of Credit Collateral upon the happening of an event
specified in (i), (ii), (iii) or (iv) above and shall not be liable for any
losses sustained by Borrower due to the insolvency of the bank issuing the
Letter of Credit if Lender has not drawn the applicable Letter of Credit.
 
Section 3.9 Grant of Security Interest; Application of Funds
 
. As security for payment of the Debt and the performance by Borrower of all
other terms, conditions and provisions of the Loan Documents, Borrower hereby
pledges and assigns to Lender, and grants to Lender a security interest in, all
Borrower’s right, title and interest in and to the Clearing Account, the Deposit
Account and all Subaccounts, all Rents and in and to all payments to or monies
held in the Clearing Account, the Deposit Account, and all Subaccounts
 

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created pursuant to this Agreement (collectively, the “Cash Management
Accounts”). Borrower hereby grants to Lender a continuing security interest in,
and agrees to hold in trust for the benefit of Lender, all Rents in its
possession prior to the (i) payment of such Rents to Lender or (ii) deposit of
such Rents into the Deposit Account until such Rents are released to Borrower
from the Clearing Account pursuant to this Agreement and the Cash Management
Agreement. Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in any Cash
Management Account, or permit any Lien to attach thereto, or any levy to be made
thereon, or any UCC Financing Statements, except those naming Lender as the
secured party, to be filed with respect thereto. This Agreement is, among other
things, intended by the parties to be a security agreement for purposes of the
UCC. Upon the occurrence and during the continuance of an Event of Default,
Lender may apply any sums in any Cash Management Account in any order and in any
manner as Lender shall elect in Lender’s discretion without seeking the
appointment of a receiver and without adversely affecting the rights of Lender
to foreclose the Lien of the Mortgage or exercise its other rights under the
Loan Documents. Cash Management Accounts shall not constitute trust funds and
may be commingled with other monies held by Lender. Provided no Event of Default
has occurred and is continuing, at the direction of Borrower, Lender shall
deposit the amounts held in the Cash Management Accounts in Permitted
Investments selected by Borrower. All investment earnings which accrues on the
funds in any Cash Management Account shall accrue for the benefit of Borrower
and shall be taxable to Borrower and shall be added to and disbursed in the same
manner and under the same conditions as the principal sum on which said interest
accrued. Lender shall not be responsible for any losses resulting from the
investment of the Funds or for obtaining any specific level or percentage of
earnings on such investment. Upon repayment in full of the Debt or defeasance of
the Loan, all remaining funds in the Cash Management Accounts, if any, shall be
promptly disbursed to Borrower.
 
Section 3.10 Property Cash Flow Allocation
 
.
 
(a) During any Cash Management Period, all Rents deposited into the Deposit
Account during the immediately preceding Interest Period shall be applied on
each Payment Date as follows in the following order of priority: (i) First, to
make payments into the Tax and Insurance Subaccount as required under Section
3.3; (ii) Second, to pay the monthly portion of the fees charged by the Deposit
Bank in accordance with the Cash Management Agreement; (iii) Third, to Lender to
pay the Monthly Debt Service Payment Amount due on such Payment Date (plus, if
applicable, interest at the Default Rate and all other amounts, other than those
described under other clauses of this Section 3.10(a), then due to Lender under
the Loan Documents); (iv) Fourth, to make payments into the Capital Reserve
Subaccount as required under Section 3.4; (v) Fifth, to make payments into the
Rollover Reserve Subaccount if and as required under Section 3.5.1; (vi) Sixth,
to Borrower the monthly amount set forth in the Approved Budget for the
following month as being necessary for payment of Approved Operating Expenses at
the Property for such month, plus the amount for Budgeted Variances (as defined
in the Cash Management Agreement); (vii) Seventh, after the consummation of a
Securitization, to pay the pro rata portion of the expenses described in Section
9.1.4; and (viii) Lastly, to make payments in an amount equal to all remaining
Available Cash on such Payment Date into the Cash Collateral Subaccount in
accordance with Section 3.8.
 
 

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(b) The failure of Borrower to make all of the payments required under clauses
(i) through (viii) of Section 3.10(a) in full on each Payment Date shall
constitute an Event of Default under this Agreement; provided, however, if
adequate funds are available in the Deposit Account for such payments, the
failure by the Deposit Bank to allocate such funds into the appropriate
Subaccounts shall not constitute an Event of Default.
 
(c) Notwithstanding anything to the contrary contained in this Section 3.10,
after the occurrence and continuance of a Default or an Event of Default, Lender
may apply all Rents deposited into the Deposit Account and other proceeds of
repayment in such order and in such manner as Lender shall elect.
 
ARTICLE 4
 

 
REPRESENTATIONS AND WARRANTIES
 
Borrower represents and warrants to Lender as of the date hereof that, except to
the extent (if any) disclosed on Schedule 2 with reference to a specific Section
of this Article 4:
 
Section 4.1 Organization; Special Purpose
 
. Borrower has been duly organized and is validly existing and in good standing
under the laws of the state of its formation, with requisite power and
authority, and all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to own its properties and to transact the business in which
it is now engaged. Borrower is duly qualified to do business and is in good
standing in each jurisdiction where it is required to be so qualified in
connection with its properties, business and operations. Borrower is a Special
Purpose Bankruptcy Remote Entity.
 
Section 4.2 Authorization; Valid Execution and Delivery; Enforceability
 
. Borrower has taken all necessary actions for the authorization of the
borrowing on account of the Loan and for the execution and delivery of the Loan
Documents, including, without limitation, that those members of Borrower whose
approval is required by the terms of Borrower’s organizational documents have
duly approved the transactions contemplated by the Loan Documents and have
authorized execution and delivery thereof by the respective signatories. To the
best of Borrower’s knowledge, no other consent by any local, state or federal
agency is required in connection with the execution and delivery of the Loan
Documents. All of the Loan Documents requiring execution by Borrower have been
duly and validly executed and delivered by Borrower. All of the Loan Documents
constitute valid, legal and binding obligations of Borrower and are fully
enforceable against Borrower in accordance with their terms by Lender and its
successors, transferees and assigns, subject only to bankruptcy laws, and
general principles of equity, insolvency, reorganization, arrangement,
moratorium, receivership or other similar laws relating to or affecting the
rights of creditors. All consents, approvals, authorizations, orders or filings
with any court or governmental agency or body, if any, required for the
execution, delivery and performance of the Loan Documents by Borrower have been
obtained or made.
 
Section 4.3 No Conflict/Violation of Law
 
 

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. The execution, delivery and performance of the Loan Documents by Borrower will
not cause or constitute a default under or conflict with the organizational
documents of Borrower, any Guarantor or any general partner or managing member
of Borrower or any Guarantor. The execution, delivery and performance of the
obligations imposed on Borrower under the Loan Documents will not cause Borrower
to be in default, including after due notice or lapse of time or both, under the
provisions of any agreement, judgment or order to which Borrower is a party or
by which Borrower is bound.
 
Section 4.4 No Litigation
 
. Except as otherwise disclosed on Schedule 2, to the best of Borrower’s
knowledge there are no pending actions, suits or proceedings, arbitrations or
governmental investigations against the Property, an adverse outcome of which
would materially affect Borrower’s performance under the Note, this Agreement or
the other Loan Documents.
 
Section 4.5 No Defenses
 
. The Note, this Agreement, the Mortgage and the other Loan Documents are not
subject to any right of rescission, set-off, counterclaim or defense, nor would
the operation of any of the terms of the Note, this Agreement, the Mortgage or
any of the other Loan Documents, or the exercise of any right thereunder, render
this Agreement or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including the defense
of usury.
 
Section 4.6 Title
 
. Borrower has good and marketable fee simple title to the Property constituting
real property (other than the beneficial interests), and good title to the
Equipment, subject to no liens, charges or encumbrances other than the Permitted
Encumbrances and liens, charges or encumbrances otherwise expressly permitted by
the Loan Documents. The possession of the Property has been peaceful and
undisturbed and title thereto has not been disputed or questioned to the best of
Borrower’s knowledge. The Permitted Encumbrances do not and will not materially
and adversely affect (1) the ability of Borrower to pay in full the principal
and interest on the Note in a timely manner or (2) the use of the Property for
the use currently being made thereof, the operation of the Property as currently
being operated or the value of the Property. Upon the execution by Borrower and
the recording of the Mortgage, and upon the filing of UCC-1 financing statements
or amendments thereto, the Lender will have a valid first lien on the Property
and a valid security interest in the Equipment subject to no liens, charges or
encumbrances other than the Permitted Encumbrances and liens, charges or
encumbrances otherwise expressly permitted by the Loan Documents.
 
Section 4.7 No Insolvency or Judgment; No Bankruptcy Filing
 
. Neither Borrower, nor any general partner or member of Borrower, nor any
Guarantor of the Loan is currently (a) the subject of or a party to any
completed or pending bankruptcy, reorganization or insolvency proceeding; or (b)
the subject of any judgment unsatisfied of record or docketed in any court of
the state in which the Property is located or in any other court located in the
United States. The Loan will not render Borrower nor any general partner or
member of
 

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Borrower insolvent. As used herein, the term “insolvent” means that the sum
total of all of an entity’s liabilities (whether secured or unsecured,
contingent or fixed, or liquidated or unliquidated) is in excess of the value of
all such entity’s non-exempt assets, i.e., all of the assets of the entity that
are available to satisfy claims of creditors. Borrower is not contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency law or the liquidation of all or a major portion of its property (a
“Bankruptcy Proceeding”), and Borrower has no knowledge of any Person
contemplating the filing of any such petition against it. In addition, except as
described on Schedule 2 attached hereto, neither Borrower nor any principal nor
Affiliate of Borrower has been a party to, or the subject of a Bankruptcy
Proceeding for the past ten years.
 
Section 4.8 Misstatements of Fact
 
. No statement of fact made in the Loan Documents contains any untrue statement
of a material fact or omits to state any material fact known to Borrower or its
Affiliates necessary to make statements contained herein or therein not
misleading. There is no fact presently known to Borrower which has not been
disclosed which materially adversely affects, nor as far as Borrower can
reasonably foresee, might materially adversely affect the business, operations
or condition (financial or otherwise) of Borrower.
 
Section 4.9 Tax Filings
 
. To the extent required, Borrower has filed (or has obtained effective
extensions for filing) all federal, state and local tax returns required to be
filed and, except as otherwise disclosed to Lender in writing, has paid or made
adequate provision for the payment of all federal, state and local taxes,
charges and assessments payable by Borrower pursuant to such returns or any
notice of assessment received by Borrower. Borrower believes that its tax
returns (if any) properly reflect the income and taxes of Borrower for the
periods covered thereby, subject only to reasonable adjustments required by the
Internal Revenue Service or other applicable tax authority upon audit. Borrower
does not have any knowledge of any basis for additional assessment with respect
to such taxes other than a possible reassessment of the Property for real estate
tax purposes resulting from transactions occurring in connection with the
acquisition of the Property on or prior to the date hereof.
 
Section 4.10 ERISA
 
. As of the date hereof and throughout the Term (i) Borrower is not and will not
be an “employee benefit plan,” as defined in Section 3(3) of ERISA, which is
subject to Title I of ERISA, (ii) none of the assets of Borrower constitutes or
will constitute “plan assets” of one or more such plans within the meaning of 29
C.F.R. Section 2510.3-101, (iii) Borrower is not and will not be a “governmental
plan” within the meaning of Section 3(32) of ERISA, and (iv) transactions by or
with Borrower are not and will not be subject to state statutes regulating
investment of, and fiduciary obligations with respect to, governmental plans. As
of the date hereof, neither Borrower, nor any member of the “controlled group of
corporations” (within the meaning of Section 414 of the Code) that includes
Borrower maintains, sponsors or contributes to a “defined benefit plan” (within
the meaning of Section 3(35) of ERISA) or a “multiemployer pension plan” (within
the meaning of Section 3(37)(A) of ERISA).
 
 

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Section 4.11 Compliance with Applicable Laws and Regulations
 
. To the Borrower’s knowledge, except as set forth in the engineering reports
obtained and submitted to Lender in connection with the Loan, all of the
Improvements and the use of the Property comply in all material respects with,
and shall remain in compliance in all material respects with, all applicable
statutes, rules, regulations and private covenants now or hereafter relating to
the ownership, construction, use or operation of the Property, including all
applicable Prescribed Laws and all applicable statutes, rules and regulations
pertaining to requirements for equal opportunity, anti-discrimination, fair
housing, environmental protection, zoning and land use and the Improvements
comply in all material respects with, and shall remain in compliance in all
material respects with, applicable health, fire and building codes. Borrower is
not aware of any illegal activities relating to controlled substances on the
Property. To Borrower’s knowledge, all certifications, permits, licenses and
approvals, including, without limitation, certificates of completion and
occupancy permits required for the legal use, occupancy and operation of the
Property as an office building (collectively, the “Licenses”), have been
obtained and are in full force and effect. To the Borrower’s knowledge, all of
the Improvements comply with all material requirements of any applicable zoning
and subdivision laws and ordinances. To Borrower’s knowledge, in the event that
all or any part of the Improvements are destroyed or damaged, said Improvements
can be legally reconstructed to their condition prior to such damage or
destruction, and thereafter exist for the same use without violating any zoning
or other ordinances applicable thereto and without the necessity of obtaining
any variances or special permits. No legal proceedings are pending or, to the
knowledge of Borrower, threatened with respect to the zoning of the Property. To
the Borrower’s knowledge, neither the zoning nor any other right to construct,
use or operate the Property is in any way dependent upon or related to any
property other than the Property. The use being made of the Property is in
conformity with the certificate of occupancy issued for the Property and, to the
Borrower’s knowledge, all other restrictions, covenants and conditions affecting
the Property.
 
Section 4.12 Contracts
 
. Except as set forth on Schedule 2, to the Borrower’s knowledge there are no
service, maintenance or repair contracts affecting the Property that are not
terminable on one month’s notice or less without cause and without penalty or
premium. All service, maintenance or repair contracts affecting the Property
entered into by the Borrower have been entered into at arms-length in the
ordinary course of Borrower’s business and provide for the payment of fees in
amounts and upon terms comparable to existing market rates.
 
Section 4.13 Federal Reserve Regulations; Investment Company Act
 
. No part of the proceeds of the Loan will be used for the purpose of purchasing
or acquiring any “margin stock” within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System or for any other purpose that would
be inconsistent with such Regulation U or any other regulation of such Board of
Governors, or for any purpose prohibited by Legal Requirements or any Loan
Document. Borrower is not (i) an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended; (ii) a “holding company” or a “subsidiary company” of a
“holding company” or an “affiliate” of either a “holding company” or a
“subsidiary company”
 

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within the meaning of the Public Utility Holding Company Act of 1935, as
amended; or (iii) subject to any other federal or state law or regulation which
purports to restrict or regulate its ability to borrow money.
 
Section 4.14 Access/Utilities
 
. To Borrower’s best knowledge, the Property has adequate rights of access to
public ways and is served by adequate water, sewer, sanitary sewer and storm
drain facilities. Other than as disclosed on the Survey (as hereinafter
defined), all public utilities necessary to the continued use and enjoyment of
the Property as presently used and enjoyed are located in the public
right-of-way abutting the Property, and all such utilities are connected so as
to serve the Property without passing over other property. All roads necessary
for the full utilization of the Property for its current purpose have been
completed and dedicated to public use and accepted by all Governmental
Authorities or are the subject of access easements for the benefit of the
Property.
 
Section 4.15 Condition of Improvements
 
. To the Borrower’s knowledge, except as may be expressly disclosed in the
engineering reports obtained and submitted to Lender, the Property, including
all Improvements, parking facilities, systems, Equipment and landscaping, are in
good condition, order and repair in all material respects; and there exists no
structural or other material defect or damages to the Property, whether latent
or otherwise. Borrower has not received notice from any insurance company or
bonding company of any defect or inadequacy in the Property, or any part
thereof, which would adversely affect its insurability or cause the imposition
of extraordinary premiums or charges thereon or any termination of any policy of
insurance or bond. No portion of the Property is located in an area as
identified by the Federal Emergency Management Agency as an area having special
flood hazards. The Property has not been damaged by fire, water, wind or other
cause of loss which has not been fully restored in all material respects.
 
Section 4.16 Leases
 
. To Borrower’s best knowledge the rent roll attached hereto as Schedule 3
together with the schedules and the exhibits attached to such rent roll
(collectively, the “Rent Roll”) is true, complete and correct and the Property
is not subject to any Leases other than the Leases described in the Rent Roll
and any existing subleases thereunder. To Borrower’s best knowledge no Person
has any possessory interest in the Property or right to occupy the same except
under and pursuant to the provisions of the Leases (and any existing subleases
thereunder). As of the date hereof (i) Borrower is the owner and holder of the
landlord’s interest under each Lease; (ii) there are no prior assignments of the
landlord’s interest by Borrower (and to Borrower’s knowledge any prior landlord)
in any Lease or any portion of Rents which are presently outstanding and have
priority over the Assignment of Leases and Rents (the “Assignment of Leases and
Rents”), dated the date hereof, given by Borrower to Lender and intended to be
duly recorded; (iii) true and correct copies of the Leases have been delivered
by Borrower to Lender or made available to Lender and, to Borrower’s knowledge,
the Leases have not been further modified or amended, except as disclosed to
Lender in writing on or prior to the date hereof; (iv) to Borrower’s best
knowledge, each Lease is in full force and effect; (v) to Borrower’s best
knowledge, except as disclosed on the Rent Roll or in any tenant estoppels
delivered to Lender in
 

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connection with the Loan (collectively, the “Tenant Estoppels”), neither
Borrower nor, to Borrower’s knowledge, any tenant under any Lease is in default
under any of the material terms, covenants or provisions of the Lease, and,
except as disclosed to Lender in writing or in any Tenant Estoppels, Borrower
knows of no event which, but for the passage of time or the giving of notice or
both, would constitute an event of default under any Lease; (vi) to Borrower’s
best knowledge, except as expressly set forth in the Leases, the Tenant
Estoppels or on the Rent Roll, there are no offsets or defenses to the payment
of any portion of the Rents; and (vii) to Borrower’s best knowledge, except as
disclosed on the Rent Roll or in any Tenant Estoppel, all Rents due and payable
under each Lease have been paid in full and, except for estimated payments of
operating expenses and taxes made by tenants in accordance with their Leases, no
Rents have been paid more than one (1) month in advance of the due dates
thereof. For purposes of the preceding sentence, the term “Lease” shall exclude
subleases.
 
Section 4.17 Fraudulent Transfer
 
. Borrower (1) has not entered into the Loan or any Loan Document with the
actual intent to hinder, delay, or defraud any creditor and (2) received
reasonably equivalent value in exchange for its obligations under the Loan
Documents. Giving effect to the Loan contemplated by the Loan Documents, the
fair saleable value of Borrower’s assets exceed and will, immediately following
the execution and delivery of the Loan Documents, exceed Borrower’s total
liabilities, including, without limitation, subordinated, unliquidated, disputed
or contingent liabilities. The fair market value of Borrower’s assets is and
will, immediately following the execution and delivery of the Loan Documents, be
greater than Borrower’s probable liabilities, including the maximum amount of
its contingent liabilities or its debts as such debts become absolute and
matured. Borrower’s assets do not and, immediately following the execution and
delivery of the Loan Documents will not, constitute unreasonably small capital
to carry out its business as conducted or as proposed to be conducted. Borrower
does not intend to, and does not believe that it will, incur debts and
liabilities (including, without limitation, contingent liabilities and other
commitments) beyond its ability to pay such debts as they mature (taking into
account the timing and amounts to be payable on or in respect of obligations of
Borrower).
 
Section 4.18 Ownership of Borrower
 
. The sole member of Borrower is the OP, whose sole general partner is the REIT.
The membership interests in Borrower are owned free and clear of all Liens,
warrants, options and rights to purchase. Borrower does not have any obligation
to any Person to purchase, repurchase or issue any ownership interest in it. The
organizational chart attached hereto as Schedule 4 is complete and accurate and
illustrates all Persons who have a direct ownership interest in Borrower and the
OP.
 
Section 4.19 No Purchase Options
 
. To Borrower’s best knowledge, no tenant, person, party, firm, corporation or
other entity has an option to purchase the Property, any portion thereof or any
interest therein other than options, rights of first refusal and similar rights
to lease space in the Improvements granted to a tenant pursuant to its
respective Lease or in another writing otherwise delivered to Lender and other
 

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than rights of first refusal contained in operating agreements of members of
Borrower in favor of members of the members of Borrower in the event of a sale
of the Property by Borrower.
 
Section 4.20 Management Agreement
 
. The Management Agreement is in full force and effect and there is no default
or violation by any party thereunder. The fee due under the Management
Agreement, and the terms and provisions of the Management Agreement, are
subordinate to the Mortgage and Manager agrees to attorn to Lender pursuant to
and in accordance with that certain Assignment and Subordination of Management
Agreement dated of even date herewith by and among Borrower, Manager and Lender.
 
Section 4.21 Hazardous Substances
 
. To Borrower’s knowledge, except as disclosed in the reports, dated March 28,
2006, prepared by URS Corporation (the “Phase I Reports”) and delivered to
Lender in connection with the Loan: (a) the Property is not in violation of any
local, state, federal or other governmental authority, statute, ordinance, code,
order, decree, law, rule or regulation pertaining to or imposing liability or
standards of conduct concerning environmental regulation, contamination or
clean-up including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, the Resource Conservation
and Recovery Act, as amended, the Emergency Planning and Community Right-to-Know
Act of 1986, as amended, the Hazardous Substances Transportation Act, as
amended, the Solid Waste Disposal Act, as amended, the Clean Water Act, as
amended, the Clean Air Act, as amended, the Toxic Substance Control Act, as
amended, the Safe Drinking Water Act, as amended, the Occupational Safety and
Health Act, as amended, any state super-lien and environmental clean-up statutes
(including with respect to Toxic Mold) and all rules and regulations adopted in
respect to the foregoing laws (collectively, “Environmental Laws”); (b) the
Property is not subject to any private or governmental lien or judicial or
administrative notice or action or inquiry, investigation or claim relating to
hazardous and/or toxic, dangerous and/or regulated, substances, wastes,
materials, raw materials which include hazardous constituents, pollutants or
contaminants including without limitation, petroleum, tremolite, anthlophylie,
actinolite or polychlorinated biphenyls, toxic mold or fungus of a type that may
pose a risk to human health or the environment or would materially and
negatively impact the value of the Property (“Toxic Mold”) and any other
substances or materials which are included under or regulated by Environmental
Laws or which are considered by scientific opinion to be otherwise dangerous in
terms of the health, safety and welfare of humans (collectively, “Hazardous
Substances”); (c) no Hazardous Substances are or have been (including the period
prior to Borrower’s acquisition of the Property) discharged, generated, treated,
disposed of or stored on, incorporated in, or removed or transported from the
Property other than in compliance with all Environmental Laws; (d) no Hazardous
Substances are present in, on or under any nearby real property which could
migrate to or otherwise affect the Property and which would reasonably be likely
to result in a requirement under applicable Environmental Laws to remediate the
Property; and (e) no underground storage tanks exist on any of the Property.
Notwithstanding anything to the contrary in this Section 4.21, Borrower and
tenants may use and store ordinary amounts of Hazardous Substances at the
Property in compliance with all applicable Environmental Laws if such use and
storage is in connection with business
 

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supplies used by Borrower, a tenant in accordance with the terms of its Lease or
in connection with the ordinary cleaning and maintenance of the Property.
 
Section 4.22 Name; Principal Place of Business
 
. Borrower does not use and will not use any trade name and has not done and
will not do business under any name other than its actual name set forth herein.
The principal place of business of Borrower is its primary address for notices
as set forth in Section 6.1, and Borrower does not have any other place of
business.
 
Section 4.23 No Other Obligations
 
. Borrower does not have any material financial obligation or contingent
liabilities under any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which Borrower is a party or by which Borrower
or the Property is otherwise bound, other than obligations incurred in the
ordinary course of the operation of the Property and other than obligations
under the Leases, this Agreement and the other Loan Documents that would
materially affect Borrower’s performance under the Note, this Agreement or the
other Loan Documents.
 
Section 4.24 Defense of Usury
 
. Borrower knows of no facts that would support a claim of usury to defeat or
avoid its obligation to repay the principal of, interest on, and other sums or
amounts due and payable under, the Loan Documents.
 
Section 4.25 Intentionally Omitted
 
.
 
Section 4.26 Single Tax Lot
 
. The Property consists of a single lot or multiple tax lots; no portion of said
tax lot(s) covers property other than the Property or a portion of the Property
and no portion of the Property lies in any other tax lot.
 
Section 4.27 Special Assessments
 
. Except as disclosed in the Title Insurance Policy, there are no pending or, to
the knowledge of Borrower, proposed special or other assessments for public
improvements or otherwise affecting the Property, nor, to the knowledge of
Borrower, are there any contemplated improvements to the Property that may
result in such special or other assessments.
 
Section 4.28 No Condemnation
 
. No part of any property subject to the Mortgage has been taken in condemnation
or other like proceeding to an extent which would impair the value of the
Property, the Mortgage or the Loan or the usefulness of such property for the
purposes for which it is currently being operated, nor to
 

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Borrower’s knowledge, is any proceeding pending, threatened or known to be
contemplated for the partial or total condemnation or taking of the Property.
 
Section 4.29 No Labor or Materialmen Claims
 
. Except for those improvements and other work performed in the ordinary course
of business with respect to which any applicable payments are not more than
sixty (60) days past due, to Borrower’s knowledge, all parties furnishing labor
and materials for which payment is due and payable as of the date hereof have
been paid in full and, except for such liens or claims insured against by the
policy of title insurance to be issued in connection with the Loan, there are no
mechanics’, laborers’ or materialmens’ liens or claims outstanding for work,
labor or materials affecting the Property, whether prior to, equal with or
subordinate to the lien of the Mortgage.
 
Section 4.30 Boundary Lines
 
. Except as disclosed in the survey of the Property and Improvements delivered
to Lender in connection with the funding of the Loan (the “Survey”), to
Borrower’s knowledge, (i) all of the Improvements which were included in
determining the appraised value of the Property lie wholly within the boundaries
and building restriction lines of the Property, (ii) no improvements on
adjoining properties encroach upon the Property, and (iii) no easements or other
encumbrances upon the Property encroach upon any of the Improvements, so as to
materially and adversely affect the value or marketability of the Property
except those which are insured against by title insurance.
 
Section 4.31 Survey
 
. To Borrower’s knowledge, the Survey does not fail to reflect any material
matter affecting the Property or the Improvements or the title thereto.
 
Section 4.32 Forfeiture
 
. There has not been and shall never be committed by Borrower or, to Borrower’s
knowledge, any other person in occupancy of or involved with the operation or
use of the Property any act or omission affording the federal government or any
state or local government the right of forfeiture as against the Property or any
part thereof or any monies paid in performance of Borrower’s obligations under
any of the Loan Documents.
 
Section 4.33 Borrower Entity Representations
 
. Borrower hereby represents, warrants, covenants, with respect to Borrower,
from the date of formation of Borrower to the date of this Agreement as follows:
 
(a) Borrower’s business has been limited solely to (i) acquiring, improving,
developing, owning, holding, leasing, financing, operating and managing the
Property, (ii) entering into financings and refinancings of the Property and
(iii) transacting any and all lawful business that was incident, necessary and
appropriate to accomplish the foregoing.
 
(b) Borrower has not engaged in any business other than as set forth in (a)
above.
 
 

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(c) Borrower has not owned any asset or property other than (i) the Property,
and (ii) incidental personal property reasonably necessary for and used or to be
used in connection with the ownership or operation of the Property.
 
(d) Borrower has not entered into any contract or agreement with any Affiliate
of Borrower, any constituent party of Borrower, any owner of Borrower, any
guarantors of the obligations of Borrower or any Affiliate of any such
constituent party, owner or guarantor (individually, a “Related Party” and
collectively, the “Related Parties”), except upon terms and conditions that are
commercially reasonable.
 
(e) Borrower has not made any loans or advances to any Person and has not
acquired obligations or securities of any Related Party.
 
(f) Borrower has paid its debts and liabilities from its assets as the same have
become due.
 
(g) Borrower has done or caused to be done all things necessary to observe
organizational formalities and preserve its existence.
 
(h) Borrower has maintained all of its books, records, financial statements and
bank accounts separate from those of any other Person and Borrower’s assets have
not been listed as the assets of any other Person on the financial statement of
any other Person, and without limiting the foregoing, to the extent Borrower’s
financial information were required under GAAP or tax-reporting rules to be
included within a consolidated set of financial statements, such statements has
included a footnote to the effect that Borrower is a separate legal entity and
its assets are not available to creditors of other members of the consolidated
group. Borrower has maintained its books, records, resolutions and agreements as
official records.
 
(i) Borrower has been, and at all times has held itself out to the public as, a
legal entity separate and distinct from any other Person (including any
Affiliate or other Related Party), has corrected any known misunderstanding
regarding its status as a separate entity, has conducted its business in its own
name, has not identified itself or any of its Affiliates as a division or part
of the other and has maintained and utilized separate stationery, invoices and
checks.
 
(j) Borrower has not commingled its assets with those of any other Person and
has held all of its assets in its own name.
 
(k) Borrower has not guaranteed or become obligated for the debts of any other
Person and has not held itself out as being responsible for the debts or
obligations of any other Person.
 
(l) Borrower has allocated fairly and reasonably any overhead expenses that have
been shared with an Affiliate (other than the other Borrower), including paying
for office space and services performed by any employee of an Affiliate or
Related Party.
 
 

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(m) Borrower has not pledged its assets for the benefit of any other Person
other than with respect to loans secured by the Property and no such pledge
remains outstanding except in connection with the Loan.
 
(n) Borrower has maintained a sufficient number of employees in light of its
contemplated business operations and has paid the salaries of its own employees
from its own funds.
 
(o) Borrower has not made loans to any other Person or has bought or held
evidence of indebtedness issued by any other Person.
 
(p) Except as otherwise disclosed on Schedule 2, Borrower does not have any
actions, suits or proceedings at law or in equity by or before any Governmental
Authority or other agency now pending or, threatened against or affecting
Borrower, which actions, suits or proceedings, if determined against Borrower,
would materially adversely affect the financial condition or business of
Borrower.
 
(q) Borrower has not incurred any indebtedness that is still outstanding other
than indebtedness that is permitted under the Loan Documents.
 
(r) Borrower is not now party to any lawsuit, arbitration, summons, or legal
proceeding, except as otherwise disclosed in Schedule 2, and any prior
litigation related solely to the Property or the ownership in Borrower.
 
(s) Borrower has no judgments or liens of any nature against it except for tax
liens not delinquent and liens disclosed in the title report and other Permitted
Encumbrances.
 
(t) To Borrower’s knowledge, Borrower is in compliance with all laws,
regulations, and orders applicable to it and has received all permits necessary
for it to operate.
 
(u) Borrower is not involved in any dispute with any taxing authority.
 
(v) Borrower does not have any material contingent or actual obligations not
related to the Property.
 
(w) Borrower is and has since its formation been duly formed, validly existing,
and in good standing in the state of its formation and in all other
jurisdictions where it is qualified to do business.
 
(x) Borrower has paid all taxes which Borrower owes pursuant to Legal
Requirements. 
 
All of the representations and warranties in this Article 4 and elsewhere in the
Loan Documents (i) shall survive for so long as any portion of the Debt remains
owing to Lender and (ii) shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf; provided, however, that, with regard to events or conditions that
occur or arise on the Property before Lender or any other Person
 

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acquires the Property by foreclosure or deed in lieu of foreclosure, the
representations, warranties and covenants set forth in Section 4.21 shall
survive in perpetuity.
 
ARTICLE 5
 

 
COVENANTS
 
Until the end of the Term, Borrower hereby covenants and agrees with Lender
that:
 
Section 5.1 Existence
 
. Borrower shall (i) do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its existence, rights, and franchises,
(ii) continue to engage in the business presently conducted by it, (iii) obtain
and maintain all Licenses, and (iv) qualify to do business and remain in good
standing under the laws of each jurisdiction, in each case as and to the extent
required for the ownership, maintenance, management and operation of the
Property.
 
Section 5.2 Taxes and Other Charges
 
. Borrower shall pay all Taxes on or before the last date prior to which any
interest, late fees or penalties would begin to accrue thereon (the “Delinquency
Date”) and Other Charges as the same become due and payable, and deliver to
Lender receipts for payment or other evidence satisfactory to Lender that the
Taxes and Other Charges have been so paid no later than the Delinquency Date
(provided, however, that Borrower need not pay such Taxes nor furnish such
receipts for payment of Taxes paid by Lender pursuant to Section 3.3). Borrower
shall not suffer and shall promptly cause to be paid and discharged any Lien
against the Property other than Permitted Encumbrances, and shall promptly pay
for all utility services provided to the Property required to be paid by
Borrower. After prior notice to Lender, Borrower, at its own expense, may
contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application of any
Taxes or Other Charges, provided that (i) no Default or Event of Default has
occurred and is continuing, (ii) such proceeding shall suspend the collection of
the Taxes or such Other Charges, (iii) such proceeding shall be permitted under
and be conducted in accordance with the provisions of any other instrument to
which Borrower is subject and shall not constitute a default thereunder, (iv) no
part of or interest in the Property will be in danger of being sold, forfeited,
terminated, canceled or lost, (v) Borrower shall have furnished such security as
may be required in the proceeding, or as may be requested by Lender, to insure
the payment of any such Taxes or Other Charges, together with all interest and
penalties thereon, which shall not be less than 125% of the Taxes and Other
Charges being contested, and (vi) Borrower shall promptly upon final
determination thereof pay the amount of such Taxes or Other Charges, together
with all costs, interest and penalties. Lender may pay over any such security or
part thereof held by Lender to the claimant entitled thereto at any time when,
in the judgment of Lender, the entitlement of such claimant is established.
 
Section 5.3 Access to Property
 
 

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. Borrower shall permit agents, representatives, consultants and employees of
Lender to inspect the Property or any part thereof at reasonable hours upon
reasonable advance notice, subject however to the rights of tenants under their
respective Leases.
 
Section 5.4 Repairs; Maintenance and Compliance; Alterations
 
.
 
5.4.1 Repairs; Maintenance and Compliance. Borrower shall at all times maintain,
preserve and protect all franchises and trade names, and Borrower shall cause
the Property to be maintained in a good and safe condition and repair and shall
not remove, demolish or alter the Improvements or Equipment (except for
alterations performed in accordance with Section 5.4.2 and normal replacement of
Equipment with Equipment of equivalent value and functionality). Borrower shall
promptly comply with all Legal Requirements, including, without limitation,
Prescribed Laws, and immediately cure properly any violation of a Legal
Requirement, including, without limitation, Prescribed Laws; provided, however,
that after prior written notice to Lender, Borrower, at its own expense, may
contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, such Legal Requirement, provided that (i) no
Event of Default has occurred and is continuing; (ii) such proceeding shall not
be prohibited by the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder and such proceeding shall
be conducted in accordance with all applicable statutes, laws and ordinances;
(iii) neither the Property nor any part thereof or interest therein will be in
danger of being sold, forfeited, terminated, cancelled or lost; (iv) Borrower
shall promptly upon final determination thereof comply with such Legal
Requirement and pay all costs, interest and penalties which may be payable in
connection therewith; and (v) such proceeding shall suspend the requirement of
Borrower to comply with such Legal Requirement. Borrower shall notify Lender in
writing within one Business Day after Borrower first receives notice of any such
non-compliance. Borrower shall promptly repair, replace or rebuild any part of
the Property that becomes damaged, worn or dilapidated and shall complete and
pay for any Improvements at any time in the process of construction or repair. 
 
5.4.2 Alterations. Borrower shall obtain Lender’s prior written consent, which
consent shall not be unreasonably withheld or delayed, to any alterations to the
Improvements, the cost of which is reasonably anticipated to exceed $3,500,000
(the “Threshold Amount”) or that will have a material adverse effect on
Borrower’s financial condition, the use, operation or value of the Property or
the Net Operating Income with respect to the Property, other than (a) tenant
improvement work performed pursuant to the terms of any Existing Lease,
(b) tenant improvement work performed pursuant to the terms and provisions of a
Lease executed after the date hereof and not adversely affecting any structural
component of any Improvements, any utility or HVAC system contained in any
Improvements or the exterior of any building constituting a part of any
Improvements (it being understood that the foregoing provision shall not require
Lender’s consent to tenants’ exterior signage pursuant to any Lease approved by
Lender in accordance with the terms and provisions of this Agreement) or
(c) alterations performed in connection with the restoration of the Property
after the occurrence of a Casualty or Condemnation in accordance with the terms
and provisions of this Agreement (“Excluded Costs”). If Lender fails to respond
to a request for consent under this Section 5.4.2 within ten (10) Business Days
of receipt thereof, such consent shall be deemed granted, provided that such
 

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request shall have been accompanied by all information reasonably requested by
Lender or reasonably necessary for Lender to evaluate such request and shall
have clearly stated, in 14 point type or greater, that if Lender fails to
respond to such request within ten (10) Business Days, Lender’s consent shall be
deemed to have been granted. If Lender refuses to grant such consent, Lender
shall specify in writing the reasons for such refusal. Any approval by Lender of
the plans, specifications or working drawings for alterations of the Property
shall not create responsibility or liability on behalf of Lender for their
completeness, design, sufficiency or their compliance with applicable laws.
Lender may condition any such approval upon receipt of a certificate of
compliance with applicable laws from an independent architect, engineer, or
other Person reasonably acceptable to Lender. If the total unpaid amounts due
and payable with respect to alterations to the Improvements (other than such
amounts to be paid or reimbursed by tenants under the Leases or paid from
accounts established hereunder or Excluded Costs) shall at any time exceed the
Threshold Amount, Borrower shall promptly deliver to Lender as security for the
payment of such amounts and as additional security for Borrower’s obligations
under the Loan Documents any of the following: (1) cash, (2) U.S. Treasury
securities, (3) other securities having a rating acceptable to Lender and with
respect to which the applicable Rating Agencies have delivered a Rating Comfort
Letter, or (4) a Letter of Credit. Such security shall be in an amount equal to
the excess of the total unpaid amounts with respect to alterations to the
Improvements (other than such amounts to be paid or reimbursed by tenants under
the Leases or from accounts established hereunder or Excluded Costs) over the
Threshold Amount. Upon completion of the alterations to the satisfaction of
Lender in its reasonable discretion Lender shall promptly return to Borrower
such additional security.
 
Section 5.5 Performance of Other Agreements
 
. Borrower shall observe and perform each and every term to be observed or
performed by it pursuant to the terms of any agreement or instrument affecting
or pertaining to the Property, including the Loan Documents.
 
Section 5.6 Cooperate in Legal Proceedings
 
. Borrower shall cooperate fully with Lender with respect to, and permit Lender,
at its option, to participate in, any proceedings before any Governmental
Authority which may in any way affect the rights of Lender under any Loan
Document.
 
Section 5.7 Further Assurances
 
. Borrower shall, at Borrower’s sole cost and expense, (i) execute and deliver
to Lender such documents, instruments, certificates, assignments and other
writings, and do such other acts necessary or desirable, to evidence, preserve
and/or protect the collateral at any time securing or intended to secure the
Debt and/or for the better and more effective carrying out of the intents and
purposes of the Loan Documents, as Lender may reasonably require from time to
time; and (ii) upon Lender’s request therefor given from time to time after the
occurrence and continuation of any Default or Event of Default pay for
(a) reports of UCC, federal tax lien, state tax lien, judgment and pending
litigation searches with respect to Borrower and the OP and (b) searches of
title to the Property, each such search to be conducted by search firms
reasonably designated by Lender in each of the locations reasonably designated
by Lender.
 
 

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Section 5.8 Environmental Matters
 
.
 
5.8.1 Environmental Covenants. So long as Borrower owns or is in possession of
the Property, Borrower (i) shall keep or cause the Property to be kept free from
Hazardous Substances except those in compliance with all Environmental Laws or
any permits issued with respect thereto, (ii) shall promptly notify Lender if
Borrower shall become aware of any release of Hazardous Substances on the
Property and/or if Borrower shall become aware that the Property is in violation
of any Environmental Laws and/or if Borrower shall become aware of any condition
on the Property which shall pose a threat to the health, safety or welfare of
humans, and (iii) shall remove or remediate such Hazardous Substances and/or
cure such violations and/or remove or remediate such threats, as applicable, as
required by law (or as shall be reasonably required by Lender in the case of
removal or remediation which is not required by law, but in response to the
opinion of a licensed hydrogeologist, licensed environmental engineer or other
qualified consultant engaged by Lender (“Lender’s Consultant”) provided that
such removal, remediation or cure is reasonably necessary to eliminate imminent
danger to the health, safety or welfare of humans and would customarily be
performed by prudent owners of properties similar to the Property in similar
circumstances), promptly after Borrower becomes aware of same, at Borrower’s
sole expense, without prejudice to any rights Borrower may have against any
responsible parties. Notwithstanding anything to the contrary in this Section,
Borrower, Manager and/or tenants on the Property may use and store ordinary
amounts of Hazardous Substances at the Property if such use or storage is in
connection with business supplies used by Borrower, a tenant in accordance with
the terms of its Lease or by Manager pursuant to the Management Agreement or is
in connection with the ordinary cleaning and maintenance of the Property so long
as such use and storage (A) does not violate any applicable Environmental Laws
and (B) is not the subject of any specific recommendations in the Phase I
Reports that would prohibit such use or storage. Nothing herein shall prevent
Borrower from recovering such expenses from any other party that may be liable
for such removal or cure. The obligations and liabilities of Borrower under this
Section 5.8.1 shall survive any termination, satisfaction, or assignment of the
Mortgage and the exercise by Lender of any of its rights or remedies hereunder,
including, without limitation, the acquisition of the Property by foreclosure or
a conveyance in lieu of foreclosure; provided that such obligations and
liabilities of Borrower shall not survive after the date Lender or its
Affiliates take title to the Property pursuant to foreclosure or a conveyance in
lieu of foreclosure.
 
5.8.2 Asbestos. Borrower represents and warrants that, to Borrower’s knowledge,
no asbestos or any substance or material containing asbestos (collectively,
“Asbestos”) is located on the Property except as may have been disclosed in the
Phase I Reports delivered to Lender in connection with the Loan. Borrower shall
not install in the Property, nor permit to be installed in the Property,
Asbestos and shall remove any Asbestos to the extent required by applicable
Legal Requirements, at Borrower’s sole expense. Borrower shall in all instances
comply with, and ensure compliance by all occupants of the Property with, all
applicable federal, state and local laws, ordinances, rules and regulations with
respect to Asbestos and shall keep the Property free and clear of any liens
imposed pursuant to such laws, ordinances, rules or regulations. In the event
that Borrower receives any notice or advice from
 

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any governmental agency or any source whatsoever with respect to Asbestos on,
affecting or installed on the Property, Borrower shall promptly notify Lender. 
 
5.8.3 Environmental Monitoring. Except to the extent already disclosed in the
Phase I Reports, Borrower shall give prompt written notices to Lender of:
(a) any proceeding or inquiry by any party with respect to the presence of any
Hazardous Substance or Asbestos on, under, from or about the Property, (b) all
claims made or threatened by any third party against Borrower or the Property
relating to any loss or injury resulting from any Hazardous Substance or
Asbestos, and (c) Borrower’s discovery of any occurrence or condition on any
real property adjoining or in the vicinity of the Property that could reasonably
be expected to cause the Property to be subject to any investigation or cleanup
pursuant to any Environmental Law. Upon becoming aware of the presence of mold
or fungus at the Property, Borrower shall (a) undertake an investigation to
identify the source(s) of such mold or fungus and shall develop and implement an
appropriate remediation plan to eliminate the presence of any Toxic Mold, (b)
perform or cause to be performed all acts reasonably necessary for the
remediation of any Toxic Mold (including taking any action necessary to clean
and disinfect any portions of the Property affected by Toxic Mold, including
providing any necessary moisture control systems at the Property), and (c)
provide evidence reasonably satisfactory to Lender of the foregoing. Borrower
shall permit Lender to join and participate in, as a party if it so elects, any
legal proceedings or actions initiated with respect to the Property in
connection with any actual or alleged violation of Environmental Law or the
presence of Hazardous Substance at the Property, and Borrower shall pay all
reasonable attorneys’ fees and disbursements incurred by Lender in connection
therewith. Upon Lender’s request, at any time and from time to time while the
Loan is outstanding but not more frequently than once per calendar year, unless
Lender has determined (in the exercise of its good faith judgment) that
reasonable cause exists for the performance of an environmental inspection or
audit of the Property, Borrower shall provide at Borrower’s sole expense, (i) an
inspection or audit of the Property prepared by a licensed hydrogeologist or
licensed environmental engineer approved by Lender indicating the presence or
absence of Hazardous Substances on, in or near the Property, and (ii) an
inspection or audit of the Property prepared by a duly qualified engineering or
consulting firm approved by Lender, indicating the presence or absence of
Asbestos on the Property; provided, however, any such inspection or audit
requested by Lender, during the Term, in excess of one (1) inspection during
each three (3) year period commencing upon the date hereof, shall be performed
at Lender’s expense unless an Event of Default exists or Lender has determined
(in the exercise of its good faith judgment) that reasonable cause exists for
the performance of an environmental inspection or audit. If Borrower fails to
provide such inspection or audit within sixty (60) days after such request
Lender may order same, and Borrower hereby grants to Lender and its employees
and agents access to the Property and a license to undertake such inspection or
audit upon reasonable prior notice to Borrower and in a manner that does not
unreasonably interfere with tenants or occupants thereof. The cost of such
inspection or audit obtained by Lender upon Borrower’s failure to do so shall
bear interest from the date such costs are incurred by Lender until paid at the
Default Rate and shall be due and payable by Borrower to Lender within ten (10)
days after the date Lender makes written demand therefor, and if not so paid,
may be added to the Debt. In the event that any environmental site assessment
report prepared in connection with such inspection or audit recommends that an
operations and maintenance plan be implemented for Asbestos or any Hazardous
Substance, Borrower shall cause such operations and maintenance plan to be
prepared and implemented at Borrower’s expense upon request of Lender, and with
respect to any Toxic
 

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Mold, Borrower shall take all action necessary to clean and disinfect any
portions of the Improvements affected by Toxic Mold in or about the
Improvements, including providing any necessary moisture control systems at the
Property. In the event that any investigation, site monitoring, containment
cleanup, removal, restoration, or other work of any kind is reasonably necessary
under an applicable Environmental Law (the “Remedial Work”), Borrower shall
promptly commence and thereafter diligently prosecute to completion all such
Remedial Work, provided that in any event Borrower shall complete such Remedial
Work within the time required by applicable Environmental Law, and provided,
further, that Borrower’s obligation to perform Remedial Work shall be without
prejudice to any rights Borrower may have against responsible parties. All
Remedial Work shall be performed by contractors approved in advance by Lender,
and under the supervision of a consulting engineer approved by Lender. All costs
and expenses of such Remedial Work shall be paid by Borrower including, without
limitation, Lender’s reasonable attorneys’ fees and disbursements incurred in
connection with monitoring or review of such Remedial Work. Nothing herein shall
prevent Borrower from recovering such expenses from any other party that may be
liable for such Remedial Work. In the event Borrower shall fail to timely
commence, or cause to be commenced, or fail to diligently prosecute to
completion, such Remedial Work, Lender may, but shall not be required to, cause
such Remedial Work to be performed, and all costs and expenses thereof, or
incurred in connection therewith, shall bear interest from the date such costs
are incurred by Lender until paid at the Default Rate and shall be due and
payable by Borrower to Lender within ten (10) days after the date Lender makes
written demand therefor, and if not so paid, may be added to the Debt.
 
5.8.4 Underground Storage Tanks. Borrower shall not install or permit to be
installed on the Property any underground storage tank.
 
Section 5.9 Title to the Property
 
. Borrower will warrant and defend the title to the Property, and the validity
and priority of all Liens granted or otherwise given to Lender under the Loan
Documents, subject only to Permitted Encumbrances, against the claims of all
Persons.
 
Section 5.10 Leases
 
.
 
5.10.1 All new Leases shall be subordinate to the Mortgage and the tenant
thereunder shall agree to attorn to Lender either pursuant to the Lease or a
subordination, nondisturbance and attornment agreement executed by such tenant
and Lender. None of the Leases shall contain any option to purchase, any right
of first refusal to purchase or any right by a tenant to terminate the lease
term (except for termination rights (i) set forth in Leases executed prior to,
or on, the date hereof or (ii) arising from a taking or the destruction of all
or substantially all of the Property or all or substantially all of a tenant’s
demised premises). Leases executed after the date hereof shall not contain any
provisions which adversely affect the Property or which might adversely affect
the rights of any holder of the Loan without the prior written consent of
Lender. Each tenant shall conduct business only in that portion of the
 

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Property covered by its Lease. Upon request, Borrower shall furnish Lender with
executed copies of all Leases.
 
5.10.2 Borrower shall not, without the prior consent of Lender, which consent
shall not be unreasonably withheld or conditioned (i) enter into any Material
Lease of all or any part of the Property, (ii) cancel, terminate (other than as
a result of a tenant default thereunder), abridge or otherwise modify in any
material respect the terms of any Material Lease unless such action is required
by the terms thereof, or accept a surrender thereof, (iii) consent to any
assignment of or subletting under any Material Lease not in accordance with its
terms, (iv) cancel, terminate, abridge or otherwise modify any guaranty of any
Material Lease or the terms thereof, (v) accept prepayments of installments of
Rents for a period of more than one (1) month in advance (other than estimated
payments of taxes and reimbursable expenses paid by tenants pursuant to their
Leases) or (vi) further assign the whole or any part of the Leases or the Rents
other than in connection with a Transfer and Assumption. If Lender fails to
respond to a request for consent under this Section 5.10.2 within ten (10)
Business Days of receipt thereof, such consent shall be deemed granted, provided
that such request shall have been accompanied by all information requested by
Lender or reasonably necessary for Lender to evaluate such request and shall
have clearly stated, in 14 point type or greater, that if Lender fails to
respond to such request within ten (10) Business Days, Lender’s consent shall be
deemed to have been granted. In the event that Lender refuses to grant any such
consent, Lender shall specify in writing the reasons for such refusal. In
addition, Borrower shall not (A) lease all or any part of the Property,
(B) cancel, terminate (other than as a result of a tenant default thereunder),
abridge or otherwise modify the terms of any Lease in any material respect, or
accept a surrender thereof, (C) consent to any assignment of or subletting under
any Lease not in accordance with its terms or (D) cancel, terminate, abridge or
otherwise modify in any material respect any guaranty of any Lease or the terms
thereof, unless such actions are exercised for a commercially reasonable purpose
in arms-length transactions for market rate terms. The foregoing shall not apply
to any Lease or license entered into with a Taxable REIT Subsidiary.
 
5.10.3 Notwithstanding the provisions of Section 5.10.2 above, provided that no
Event of Default is continuing, renewals, amendments and modifications of
existing Leases and proposed leases, shall not be subject to the prior approval
of Lender provided (i) the proposed lease would be a Minor Lease or the existing
Lease as amended or modified or the renewal Lease is a Minor Lease, (ii) the
proposed lease shall be written substantially in accordance with the standard
form of Lease which shall have been approved by Lender, (iii) the Lease as
amended or modified or the renewal Lease or series of leases or proposed lease
or series of leases: (a) shall provide for net effective rental rates comparable
to existing local market rates, (b) shall have a term of not less than three (3)
years or greater than ten (10) years, (c) shall provide for automatic
self-operative subordination to the Mortgage and, at Lender’s option, (x)
attornment to Lender and (y) the unilateral right by Lender, at the option of
Lender, to subordinate the Lien of the Mortgage to the Lease, and (d) shall not
contain any option to purchase, any right of first refusal to purchase, any
right to terminate (except in the event of the destruction or condemnation of
substantially all of the Property), any requirement for a non-disturbance or
recognition agreement, or any other provision which might adversely affect the
rights of Lender under the Loan Documents in any material respect. Borrower
shall deliver to Lender copies of all Leases which are entered into pursuant to
the preceding sentence together with Borrower’s certification that it has
satisfied all of the conditions of the preceding sentence within ten (10) days
after the
 

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execution of the Lease. With respect to any Lease or proposed renewal, extension
or modification of an existing Lease that requires Lender’s consent under this
Section 5.10.3, provided that no Event of Default is continuing, if Borrower
provides Lender with a written request for approval (which written request shall
specifically refer to this Section 5.10.3 and shall explicitly state that
failure by Lender to approve or disapprove within ten (10) Business Days will
constitute a deemed approval) and Lender fails to reject the request in writing
delivered to Borrower within ten (10) Business Days after receipt by Lender of
the request, the proposed Lease or proposed renewal, extension or modification
of an existing Lease shall be deemed approved by Lender, and Borrower shall be
entitled to enter into such proposed Lease or proposed renewal, extension or
modification of an existing Lease.
 
5.10.4 Borrower (i) shall observe and perform all the material obligations
imposed upon the lessor, grantor or licensor, as applicable, under the Leases
and shall not do or permit to be done anything to impair the value of the Leases
as security for the Debt; (ii) shall promptly send copies to Lender of all
notices of default which Borrower shall send or receive thereunder; (iii) shall
enforce all the material terms, covenants and conditions contained in the Leases
upon the part of the lessee, grantee or licensee, as applicable, thereunder to
be observed or performed, short of termination thereof (unless by reason of
default thereunder); (iv) shall not collect any of the Rents (other than
estimated payments of taxes and reimbursable expenses paid by tenants pursuant
to their Leases) more than one (1) month in advance; (v) shall not execute any
other assignment of the lessor’s interest in the Leases or the Rents except in
connection with a Transfer and Assumption; (vi) shall, upon request of Lender,
request and use commercially reasonable efforts to obtain and deliver to Lender
tenant estoppel certificates from each commercial tenant at the Property in form
and substance reasonably satisfactory to Lender, provided that Borrower shall
not be required to deliver such certificates more frequently than two (2) times
in any calendar year; and (vii) shall execute and deliver at the request of
Lender all such further assurances, confirmations and assignments in connection
with the Property as Lender shall from time to time reasonably require.
 
5.10.5 All security deposits of tenants, whether held in cash or any other form,
if cash, shall be deposited by Borrower at such commercial or savings bank or
banks and shall be held in compliance with applicable Legal Requirements, as may
be reasonably satisfactory to Lender. Any bond or other instrument which
Borrower is permitted to hold in lieu of cash security deposits under any
applicable legal requirements shall be maintained in full force and effect in
the full amount of such deposits unless replaced by cash deposits as hereinabove
described, shall (if issued after the date hereof) be fully assignable to Lender
and shall, in all respects, comply with any applicable legal requirements and
otherwise be reasonably satisfactory to Lender. Borrower shall, upon request,
provide Lender with evidence reasonably satisfactory to Lender of Borrower’s
compliance with the foregoing. Following the occurrence and during the
continuance of any Event of Default, Borrower shall, upon Lender’s request, if
permitted by any applicable legal requirements, turn over to Lender the security
deposits (and any interest theretofore earned thereon) with respect to all or
any portion of the Property, to be held by Lender subject to the terms of the
Leases.
 
Section 5.11 Estoppel Statement
 
 

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. After request by Lender, Borrower shall within ten days furnish Lender with a
statement addressed to Lender, its successors and assigns, duly acknowledged and
certified, setting forth (i) the unpaid Principal, (ii) the Interest Rate,
(iii) the date installments of interest and/or Principal were last paid,
(iv) any offsets or defenses to the payment of the Debt, and (v) that the Loan
Documents are valid, legal and binding obligations and have not been modified or
if modified, giving particulars of such modification.
 
Section 5.12 Property Management
 
.
 
5.12.1 Management Agreement. Borrower shall maintain, or cause to be maintained,
the Management Agreement in full force and effect and timely perform all of
Borrower’s obligations thereunder and enforce performance in all material
respects of all obligations of the Manager thereunder, and except as otherwise
permitted by the Loan Documents, not permit the termination or amendment of the
Management Agreement unless the prior written consent of Lender is first
obtained, which consent shall not be unreasonably withheld, conditioned or
delayed. Borrower shall cause the Manager to enter into an assignment and
subordination of the management agreement in form satisfactory to Lender (the
“Subordination of Management Agreement”). The Subordination of Management
Agreement shall assign and subordinate the Manager’s interests in the Property
and all fees and other rights of the Manager pursuant to the Management
Agreement to the rights of Lender. Upon an Event of Default, Borrower shall, at
Lender’s request made at any time while such Event of Default continues,
terminate, or cause the termination of, the Management Agreement. After the date
hereof, Borrower shall not enter into any agreement relating to the management
of the Property with any party without the express written consent of Lender
(which consent shall not be unreasonably withheld to the extent that such
manager is an affiliate of Borrower); provided, however, with respect to a new
manager of the Property (but not a leasing agent or subcontractor appointed in
accordance with the Management Agreement) such consent may also be conditioned
upon Borrower delivering (i) a Rating Comfort Letter with respect to such new
manager and management agreement (other than a Qualified Manager that is
Controlled (in the sense of clause (ii) of the defined term “Control”) by the
REIT), and (ii) evidence satisfactory to Lender (which shall include, at the
request of Lender, a legal non-consolidation opinion acceptable to Lender) that
the single purpose nature and bankruptcy remoteness of Borrower, its
shareholders, partners or members, as the case may be, after the engagement of
the new manager are in accordance with the requirements of the Rating Agencies.
If at any time Lender consents to the appointment of a new manager, such new
manager and Borrower shall, as a condition of Lender’s consent, execute an
assignment and subordination of such management agreement in the form then used
by Lender.
 
5.12.2 Termination of Manager. Borrower, upon the request of Lender, shall
terminate the Manager, without penalty or fee, if at any time during the Term
(a) the Manager shall become insolvent or a debtor in any bankruptcy or
insolvency proceeding, (b) there exists an Event of Default for which Lender has
not accepted a cure thereof, (c) the Maturity Date has occurred and the Loan has
not been repaid or (d) the Manager’s gross negligence, malfeasance or willful
misconduct or the occurrence of a default by Manager under the Management
Agreement and its continuance beyond any applicable notice or cure period. At
such time as the Manager
 

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may be removed pursuant to and in accordance with the terms and provisions of
the Loan Documents, a replacement manager and management agreement acceptable to
Lender and the applicable Rating Agencies in their sole discretion shall assume
management of the Property and shall receive a property management fee not to
exceed the then current market rates.
 
Section 5.13 Special Purpose Bankruptcy Remote Entity
 
. Borrower shall at all times be a Special Purpose Bankruptcy Remote Entity.
Borrower shall not, directly or indirectly, make any change, amendment or
modification to its organizational documents, or otherwise take any action which
could result in Borrower not being a Special Purpose Bankruptcy Remote Entity. A
“Special Purpose Bankruptcy Remote Entity” shall have the meaning set forth on
Schedule 5 hereto.
 
Section 5.14 Assumption in Non-Consolidation Opinion
 
. Borrower and the OP shall each conduct its business so that the assumptions
(with respect to each Person) made in that certain substantive non-consolidation
opinion letter dated the date hereof delivered by Borrower’s counsel in
connection with the Loan, shall be true and correct in all respects.
 
Section 5.15 Change in Business or Operation of Property
 
. Borrower shall not purchase or own any real property other than the Property
and shall not enter into any line of business other than the ownership and
operation of the Property, or make any material change in the scope or nature of
its business objectives, purposes or operations, or undertake or participate in
activities other than the continuance of its present business or otherwise cease
to operate the Property as an office property or terminate such business for any
reason whatsoever (other than temporary cessation in connection with renovations
to the Property).
 
Section 5.16 Debt Cancellation
 
. Borrower shall not cancel or otherwise forgive or release any claim or debt
(other than termination of Leases in accordance herewith) owed to Borrower by
any Person, except for adequate consideration and in the ordinary course of
Borrower’s business.
 
Section 5.17 Affiliate Transactions
 
. Borrower shall not enter into, or be a party to, any transaction with an
Affiliate of Borrower or any of the members of Borrower except in the ordinary
course of business and on terms which are fully disclosed to Lender in advance
and are no less favorable to Borrower than would be obtained in a comparable
arm’s length transaction with an unrelated third party.
 
Section 5.18 Zoning
 
. Borrower shall not initiate or consent to any zoning reclassification of any
portion of the Property or seek any variance under any existing zoning ordinance
or use or permit the use of any portion of the Property in any manner that could
result in such use becoming a non
 

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conforming use under any zoning ordinance or any other applicable land use law,
rule or regulation, without the prior consent of Lender.
 
Section 5.19 No Joint Assessment
 
. Borrower shall not suffer, permit or initiate the joint assessment of the
Property (i) with any other real property constituting a tax lot separate from
the Property, and (ii) with any portion of the Property which may be deemed to
constitute personal property, or any other procedure whereby the lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to the Property.
 
Section 5.20 Principal Place of Business
 
. Borrower shall not change its principal place of business or chief executive
office without first giving Lender 30 days’ prior notice.
 
Section 5.21 Change of Name, Identity or Structure
 
. Borrower shall not change its name, identity (including its trade name or
names) or Borrower’s corporate, partnership or other structure without notifying
Lender of such change in writing at least thirty (30) days prior to the
effective date of such change and, in the case of a change in Borrower’s
structure, without first obtaining the prior written consent of Lender. Borrower
shall execute and deliver to Lender, prior to or contemporaneously with the
effective date of any such change, any financing statement or financing
statement change required by Lender to establish or maintain the validity,
perfection and priority of the security interest granted herein. At the request
of Lender, Borrower shall execute a certificate in form satisfactory to Lender
listing the trade names under which Borrower intends to operate the Property,
and representing and warranting that Borrower does business under no other trade
name with respect to the Property.
 
Section 5.22 Indebtedness
 
. Borrower shall not directly or indirectly create, incur or assume any
indebtedness other than (i) the Debt and (ii) unsecured trade payables incurred
in the ordinary course of business relating to the ownership and operation of
the Property and (iii) Permitted Equipment Financing (hereinafter defined), (A),
which in the case of such unsecured trade payables, are not evidenced by a note,
(B) such trade payables and Permitted Equipment Financing do not exceed, at any
time, a maximum aggregate amount of two percent (2%) of the original amount of
the Principal and (C) all such unsecured trade payables are paid within sixty
(60) days of the date incurred (collectively, “Permitted Indebtedness”). As used
herein, “Permitted Equipment Financing” means equipment financing that is (i)
entered into in the ordinary course of Borrower’s business, (ii) for equipment
related to the ownership and operation of the Property whose removal would not
materially damage or impair the value of the Property, and (iii) which is
secured only by the financed equipment and proceeds thereof.
 
Section 5.23 Licenses
 
. Borrower shall not Transfer any License required for the operation of the
Property.
 
 

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Section 5.24 Compliance with Restrictive Covenants, etc.
 
Borrower will not amend, modify, supplement, waive in any material respect,
cancel, terminate or release any Operating Agreement, easements, restrictive
covenants or other Permitted Encumbrances, or suffer, consent to or permit any
of the foregoing, without Lender’s prior written consent, which consent may be
granted or denied in Lender’s sole discretion.
 
Section 5.25 ERISA
 
.
 
(1) Borrower shall not engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by Lender
of any of its rights under the Note, this Agreement or the other Loan Documents)
to be a non-exempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA.
 
(2) Borrower shall not maintain, sponsor, contribute to or become obligated to
contribute to, or suffer or permit any ERISA Affiliate of Borrower to, maintain,
sponsor, contribute to or become obligated to contribute to, any Plan or permit
the assets of Borrower to become “plan assets,” whether by operation of law or
under regulations promulgated under ERISA.
 
(3) Borrower shall deliver to Lender such certifications or other evidence from
time to time throughout the Term, as requested by Lender in its sole discretion,
that (A) Borrower is not an “employee benefit plan” as defined in Section 3(3)
of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within
the meaning of Section 3(32) of ERISA; (B) Borrower is not subject to state
statutes regulating investments and fiduciary obligations with respect to
governmental plans; and (C) one or more of the following circumstances is true:
 
(i) Equity interests in Borrower are publicly offered securities, within the
meaning of 29 C.F.R. § 2510.3-101(b)(2);
 
(ii) Less than twenty-five percent (25%) of each outstanding class of equity
interests in Borrower are held by “benefit plan investors” within the meaning of
29 C.F.R. § 2510.3-101(f)(2); or
 
(iii) Borrower qualifies as an “operating company” or a “real estate operating
company” within the meaning of 29 C.F.R. § 2510.3-101(c) or (e).
 
Section 5.26 Transfers
 
.
 
5.26.1 Transfers Prohibited. Borrower shall not directly or indirectly make,
suffer or permit the occurrence of any Transfer except as expressly permitted
pursuant to Section 5.26.5 and Section 5.26.6.
 
 

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5.26.2 Lender’s Reliance. Borrower acknowledges that Lender has examined and
relied on the creditworthiness and experience of Borrower in owning and
operating properties such as the Property in agreeing to make the Loan, and that
Lender will continue to rely on Borrower’s ownership of the Property as a means
of maintaining the value of the Property as security for repayment of the Debt.
Borrower acknowledges that Lender has a valid interest in maintaining the value
of the Property so as to ensure that, should Borrower default in the repayment
of the Debt, Lender can recover the Debt by a sale of the Property.
 
5.26.3 Transfer Defined. “Transfer” shall mean a sale, conveyance, mortgage,
grant, bargain, encumbrance, pledge, assignment, lease, grant of options with
respect to, or other transfer or disposition of (directly or indirectly,
voluntarily or involuntarily, by operation of law or otherwise, and whether or
not for consideration or of record) the Property or any part thereof or any
legal or beneficial interest therein, or a Sale or Pledge of an interest in any
Restricted Party, other than pursuant to Leases of space in the Improvements to
tenants in accordance with the provisions of Section 5.10, licenses of rights to
a Taxable REIT Subsidiary to operate any fitness center, provide concierge
services or in connection with parking agreements and Permitted Encumbrances. A
Transfer shall include, but not be limited to, (i) an installment sales
agreement wherein Borrower agrees to sell the Property or any part thereof for a
price to be paid in installments; (ii) an agreement by Borrower leasing all or a
substantial part of the Property for other than actual occupancy by a space
tenant thereunder or a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower’s right, title and interest in and to any Leases
or any Rents; (iii) if a Restricted Party is a corporation, any merger,
consolidation or Sale or Pledge of such corporation’s stock or the creation or
issuance of new stock such that more than ten percent (10%) of such
corporation’s stock shall be vested in a party or parties who are not
stockholders as of the date hereof; (iv) if a Restricted Party is a limited or
general partnership or joint venture, any merger or consolidation of such
Restricted Party or the change, removal, resignation or addition of a general
partner thereof or the Sale or Pledge of the partnership interest of any general
partner of such Restricted Party or any profits or proceeds relating to such
partnership interest, or the Sale or Pledge of limited partnership interests of
such Restricted Party or any profits or proceeds relating to such limited
partnership interests or the creation or issuance of new limited partnership
interests of such Restricted Party; (v) if a Restricted Party is a limited
liability company, any merger or consolidation of such Restricted Party or the
change, removal, resignation or addition of a managing member or non member
manager (or if no managing member, any member) of such Restricted Party or the
Sale or Pledge of the membership interest of a managing member (or if no
managing member, any member) of such Restricted Party or any profits or proceeds
relating to such membership interest, or the Sale or Pledge of non managing
membership interests of such Restricted Party or the creation or issuance of new
non managing membership interests of such Restricted Party such that more than
ten percent (10%) of such limited liability company’s non-managing membership
interest shall be vested in a party or parties who are not members as of the
date hereof; (vi) if a Restricted Party is a trust or nominee trust, any merger,
consolidation or the Sale or Pledge of the legal or beneficial interest in a
Restricted Party or the creation or issuance of new legal or beneficial
interests; or (vii) the removal or the resignation of the managing agent
(including, without limitation, an Affiliated Manager) without Lender’s consent
other than in accordance with Section 5.12.
 
5.26.4 No Impairment Required. Lender shall not be required to demonstrate any
actual impairment of its security or any increased risk of default hereunder in
order to declare the
 

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Debt immediately due and payable upon any Transfer in violation of this Section
5.26 without Lender’s consent. This provision shall apply to every Transfer
regardless of whether voluntary or not, or whether or not Lender has consented
to any previous Transfer. Lender’s consent to one Transfer shall not be deemed
to be a waiver of Lender’s right to require such consent to any future Transfer.
Any Transfer made in contravention of this Section 5.26 shall be null and void
and of no force and effect. Borrower agree to bear and shall pay or reimburse
Lender on demand for all reasonable expenses (including, without limitation,
reasonable attorneys’ fees and disbursements, title search costs and title
insurance endorsement premiums) incurred by Lender in connection with the
review, approval and documentation of any such Transfer, except as provided
herein.
 
5.26.5 Permitted Transfers. Notwithstanding anything to the contrary contained
in this Section 5.26, the following Transfers (“Permitted Transfers”) shall not
require the prior written consent of Lender:
 
(a) Transfers of direct or indirect interests in any Restricted Party provided
that the following conditions are satisfied:
 
(i) after taking into account any prior Transfers pursuant to this subsection,
whether to the proposed transferee or otherwise, no such Transfer (or series of
Transfers) shall result in (1) the proposed transferee, together with all
members of his/her immediate family or any Affiliates thereof, owning in the
aggregate (directly, indirectly or beneficially) more than forty-nine percent
(49%) of the interests in Borrower (or any entity directly or indirectly holding
an interest in Borrower that is a Restricted Party), or (2) a Transfer in the
aggregate of more than forty-nine percent (49%) of the interests in Borrower as
of the date hereof, except in either case for Transfers to a direct or indirect
interest holder of Borrower as of the date hereof, or any Affiliate thereof,
including any Taxable REIT Subsidiary, provided that if reasonably requested by
Lender or if requested by any Rating Agency, Borrower shall deliver a
non-consolidation opinion acceptable to Lender and the Rating Agencies with
respect to such transferee which may be relied upon by Lender, the Rating
Agencies and their successors and assigns;
 
(ii) after giving effect to such Transfer, the REIT shall continue to own not
less than a fifty-one percent (51%) direct general and/or limited partnership
interest in the OP and the REIT shall continue to Control (in the sense of
clause (ii) of the defined term “Control”) Borrower and, subject to the rights
of Manager under the Management Agreement (or any replacement manager under a
replacement management agreement with respect to the Property, each as approved
by Lender in accordance with Section 5.12 of this Agreement), the day-to-day
operations of the Property;
 
(iii) Borrower shall give Lender notice of such Transfer together with copies of
all instruments effecting such transfer not less than ten (10) days prior to the
date of such Transfer;
 
(iv) no Event of Default or event which with the giving of notice or the passage
of time would constitute an Event of Default shall have occurred and remain
uncured or unwaived;
 
 

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(v) the single purpose nature and bankruptcy remoteness of Borrower and its
shareholders, partners or members after such transfer, shall satisfy Lender’s
then current applicable underwriting criteria and requirements; and
 
(vi) Lender shall have received payment of, or reimbursement for, all costs and
expenses incurred by Lender in connection with such Transfer (including, but not
limited to, reasonable attorneys’ fees and costs and expenses of the Rating
Agencies).
 
Notwithstanding the foregoing, in the event that such Transfer is (A) by a
limited partner of the OP of such limited partner’s limited partnership interest
in the OP, then Borrower shall not be required to satisfy subsections (a)(iii),
(a)(iv) or (a)(vi) above so long as Borrower has satisfied subsections (a)(i),
(a)(ii) and (a)(v) above or (B) is to a Taxable REIT Subsidiary, then Borrower
shall not be required to satisfy subsections (a)(iii) or (a)(v) (provided, that
in any such case, Borrower shall continue to be a Special Purpose Bankruptcy
Remote Entity after giving effect to such Transfer) so long as Borrower has
satisfied subsections (a)(i), (a)(ii), (a)(iv) and (a)(vi) above.
 
(b) Intentionally omitted.
 
(c)  the Sale or Pledge of stock in the REIT (the “Traded Equity”), provided
such stock is listed on the New York Stock Exchange or such other nationally
recognized stock exchange, or any Sale or Pledge.
 
(d) (A) the issuance of any securities, options, warrants or other interests in
the REIT or any entity owning an interest in the REIT, (B) the merger or
consolidation of the REIT or (C) the merger or consolidation of the OP or (D)
the merger of consolidation of any other Restricted Party, provided that in the
case of each of (B) and (C) above, the surviving entity shall be the REIT and/or
the OP, as applicable, and, in the case of each of (B), (C) and (D) above, after
giving effect to such merger or consolidation, the REIT shall continue to own
not less than a fifty-one percent (51%) direct general and/or limited
partnership interest in the OP and the REIT shall continue to Control (in the
sense of clause (ii) of the defined term “Control”) Borrower and, subject to the
rights of Manager under the Management Agreement (or any replacement manager
under a replacement management agreement with respect to the Property, each as
approved by Lender in accordance with Section 5.12.1 of this Agreement), the day
to day operations of the Property.
 
(e) without in any way limiting any other Permitted Transfers under this Section
5.26.5, transfers by the REIT, the OP and/or their respective Affiliates of up
to one-hundred percent (100%) of the direct or indirect ownership interests in
Borrower and/or other indirect ownership interests in the Property to a
Qualified Transferee provided that the following conditions are met:
 
(i) no Event of Default or event which with the giving of notice or the passage
of time would constitute an Event of Default shall have occurred and remain
uncured;
 
(ii) Lender shall have received a Rating Comfort Letter with respect to such
Transfer;
 
 

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(iii) Borrower shall deliver to Lender a non-consolidation opinion acceptable to
Lender and the Rating Agencies which may be relied upon by Lender, the Rating
Agencies and their successor and assigns;
 
(iv) the single purpose nature and bankruptcy remoteness of Borrower and its
shareholders, partners or members after such Transfer, shall satisfy Lender’s
then current applicable underwriting criteria and requirements;
 
(v) the property manager that shall manage the day to day operations of the
Property shall be a Qualified Manager;
 
(vi) Lender shall have received payment of, or reimbursement for, all costs and
expenses incurred by Lender in connection with such transfer (including, but not
limited to, reasonable attorneys’ fees and costs and expenses of the Rating
Agencies);
 
(vii) concurrently with the consummation of such Transfer, Borrower shall pay to
Lender a transfer fee in the amount of 0.25% of the then unpaid Principal; and
 
(viii) If the Qualified Transferee assumes in writing the obligation of the OP
under the Non-Recourse Guaranty (pursuant to documentation reasonably
satisfactory to Lender), and Lender accepts the Qualified Transferee as an
acceptable replacement guarantor (which consent will not be unreasonably
withheld), then the OP and any other Guarantor shall be released from all
liability under the Non-Recourse Guaranty, and Lender shall execute and deliver
to the OP such documents as reasonably requested by the OP to evidence such
release. Notwithstanding anything to the contrary contained herein, Robert F.
Maguire III shall be deemed an acceptable replacement guarantor for the purposes
of this Section 5.26.5(e)(viii), provided that he has a net worth of at least
$200 million at the time of any such Transfer.
 
(f) without in any way limiting any other Permitted Transfers under this Section
5.26.5, the restructuring of the ownership interests in the Property held by the
REIT, the OP or any entity holding any direct or indirect interests in the REIT
or the OP (including the adjustment of partnership units held by partners in the
OP to reflect redemptions pertaining to the limited partner interests in the OP)
or the Borrower, provided that the following conditions are met:
 
(i) no Event of Default or event which with the giving of notice or the passage
of time would constitute an Event of Default shall have occurred and remain
uncured or unwaived;
 
(ii) such restructuring does not reduce the REIT’s or the OP’s aggregate
ownership interests in the Property;
 
(iii) in the event that such restructuring shall result in any Person, together
with any Affiliates thereof, that prior to such restructuring, owned in the
aggregate (directly, indirectly or beneficially) less than forty-nine percent
(49%) of the interests in Borrower (or any entity directly or indirectly holding
an interest in Borrower), owning in the aggregate (directly, indirectly or
beneficially) more than forty-nine percent (49%) of the interests in Borrower
(or any entity directly or indirectly holding an interest in Borrower),
 

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then Borrower shall deliver a non-consolidation opinion acceptable to Lender and
the Rating Agencies with respect to such entity which may be relied upon by
Lender, the Rating Agencies and their successors and assigns;
 
(iv) In the event that such restructuring requires a new non-consolidation
opinion pursuant to subsection (iii) above, Borrower shall give Lender notice of
such restructuring together with copies of all instruments effecting such
restructuring not less than ten (10) days prior to the date of such
restructuring;
 
(v) In the event that such restructuring requires a new non-consolidation
opinion pursuant to subsection (iii) above, Lender shall have received payment
of, or reimbursement for, all costs and expenses incurred by Lender in
connection with such restructuring (including, but not limited to, reasonable
attorneys’ fees and costs and expenses of the Rating Agencies).
 
(g) notwithstanding anything to the contrary contained herein (including the
provisions of Section 5.27 below), pledges (but not the foreclosure thereon) by
the REIT, the OP or any entity holding any direct or indirect interests in the
REIT, the OP or the Borrower of their direct or indirect ownership interest in
Borrower or any entity holding any direct or indirect interests in the Borrower
to any institutional lender (including investors in syndicated loan facilities
or the agent for such investors) providing a corporate line of credit or other
financing to the REIT, the OP or any entity holding any direct or indirect
interests in the REIT or the OP or the Borrower, provided that the value of the
Property which is indirectly pledged as collateral under such corporate line of
credit or other financing constitutes no more than thirty-three percent (33%) of
the total value of all assets directly or indirectly securing such line of
credit or other financing, and provided that the following conditions are met:
 
(i) no Event of Default or event which with the giving of notice or the passage
of time would constitute an Event of Default shall have occurred and remain
uncured or unwaived; and
 
(ii) Lender shall have received payment of, or reimbursement for, all costs and
expenses incurred by Lender in connection with such pledges (including, but not
limited to, reasonable attorneys’ fees and costs and expenses of the Rating
Agencies).
 
Lender shall respond to any requests made by Borrower pursuant to this Section
5.26.5 in a prompt manner. In the event that Lender claims that Borrower has not
satisfied any of the requirements of this Section 5.26.5, Lender shall specify
in writing the reason why any conditions are deemed not satisfied.
 
Any provisions of this Section 5.26.5 which require more conditions to be
satisfied in connection with any particular Permitted Transfer than other
provisions under this Section 5.26.5 (relating to other Permitted Transfers)
which require fewer conditions to be satisfied shall not be deemed to be a
limitation or modification on the Transfer rights provided hereunder containing
such fewer conditions.
 
 

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Notwithstanding anything to the contrary contained herein, and without limiting
any of the Transfers or rights contained in this Section 5.26.5, Lender agrees
that, provided no Event of Default has occurred and is continuing, a Transfer of
an interest in Borrower shall not require the consent of Lender and no transfer
fee shall be payable in connection therewith, provided that (i) such Transfer is
of an interest in the OP or any direct or indirect owner of the OP that occurs
by gift, devise or bequest or by operation of law upon the death or incapacity
of a natural person that was the holder of such interest to a member of the
immediate family of such interest holder or a trust established for the benefit
of such immediate family member, provided that (A) no such Transfer shall result
in a change of the day to day operations of the Property, (B) Borrower shall
give Lender notice of such Transfer together with copies of all instruments
effecting such Transfer not more than ten (10) days after the date of such
Transfer, (C) such Transfer shall not cause a default by Borrower of the single
purpose bankruptcy remote provisions set forth in Section 5.13 hereof, (D) if
any such Transfer would result in a change of Control of Borrower or the OP
Borrower, at Borrower’s sole cost and expense, shall, within thirty (30) days
after any such Transfer, (a) deliver (or cause to be delivered) a substantive
non-consolidation opinion to Lender and the Rating Agencies with respect to
Borrower and the OP and such transferee in form and substance satisfactory to
Lender and the Rating Agencies, and (b) reimburse Lender for all reasonable
expenses incurred by Lender in connection with such Transfer, (E) if any such
Transfer would result in a change of Control of Borrower or the OP and occurs
prior to the occurrence of a Secondary Market Transaction, such Transfer is
approved by Lender in writing within thirty (30) days after any such Transfer,
which approval shall not be unreasonably withheld, (F) if any such Transfer
would result in a change of Control of Borrower or the OP and occurs after the
occurrence of a Secondary Market Transaction, Borrower, at Borrower’s sole cost
and expense, shall, within thirty (30) days after any such Transfer, (a) deliver
(or cause to be delivered) a Rating Comfort Letter to Lender, and (b) obtain the
prior written consent of Lender which shall not be unreasonably withheld or
delayed, or (ii) such Transfer is of a direct or indirect interest in the OP
related to or in connection with the estate and/or gift planning of such
transferor to (A) the immediate family members of such transferor or Key
Principal(s), including without limitation, the spouse, children or
grandchildren of such transferor (B) a trust established for the benefit of the
transferor, a Key Principal(s) and/or any of the parties described in the
preceding clause (A) provided that (a) after giving effect to such Transfer, Key
Principal(s) and/or family trusts or other entities Controlled by Key
Principal(s) shall continue to Control (in the sense of clause (ii) of the
defined term “Control”) Borrower, (b) Borrower shall give Lender notice of such
Transfer together with copies of all instruments effecting such Transfer not
more than ten (10) days after the date of such Transfer and (c) such Transfer
shall not cause a default by Borrower of the single purpose bankruptcy remote
provisions set forth in Section 5.13 hereof.
 
Notwithstanding the foregoing, none of the foregoing Transfers shall be deemed a
“Permitted Transfer” hereunder if, as a result of any of the foregoing
Transfers, the Guarantor no longer owns any direct or indirect interests in
Borrower, unless, upon Lender’s request, one or more creditworthy Persons or
entities reasonably satisfactory to Lender, that then Controls Borrower or owns
a material direct or indirect interest in Borrower, shall execute and deliver a
guaranty of recourse obligations (in the same form as the guaranty of recourse
obligations delivered to Lender by Guarantor on the date hereof, or in such
other form as may be acceptable to Lender, in Lender’s sole and absolute
discretion) and otherwise reasonably satisfactory to Lender, pursuant to which
the replacement guarantor(s) agrees to be liable under such guaranty of recourse
obligations from and after the date executed (whereupon (i) the previous
guarantor shall be
 

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released solely with respect to obligations arising and accruing from and after
the date of such Transfer and (ii) such replacement guarantor(s) shall become
liable for all obligations arising or accruing from and after the date of such
Transfer and (iii) from and after the date of such Transfer, such replacement
guarantor(s) shall be the “Guarantor” for all purposes set forth in this
Agreement and the other Loan Documents (it being agreed and understood that the
previous guarantor shall remain the “Guarantor” with respect to any and all
obligations accruing prior to the date of such Transfer)).
 
Notwithstanding anything to the contrary contained herein, the terms and
provisions of this Section 5.26.5 are mutually exclusive from the term of the
provisions contained in Section 5.26.6.
 
5.26.6 Transfer and Assumption. (a)  Notwithstanding the foregoing, Borrower
shall have the right to Transfer the Property to another party (the “Transferee
Borrower”) and have the Transferee Borrower assume all of Borrower’s obligations
under the Loan Documents, and have replacement guarantors and indemnitors assume
all of the obligations of the indemnitors and guarantors of the Loan Documents
(collectively, a “Transfer and Assumption”). Borrower may make a written
application to Lender for Lender’s consent to the Transfer and Assumption,
subject to the conditions set forth in paragraphs (b) and (c) of this Section
5.26.6. Together with such written application, Borrower will pay to Lender the
reasonable review fee then required by Lender. Borrower also shall pay on demand
all of the reasonable costs and expenses incurred by Lender, including
reasonable attorneys’ fees and expenses, and including the fees and expenses of
Rating Agencies and other outside entities, in connection with considering any
proposed Transfer and Assumption, whether or not the same is permitted or
occurs.
 
(b) Lender’s consent to a Transfer and Assumption, shall be subject to the
following conditions (and if all such conditions have been satisfied, Lender
shall not withhold its consent to the subject Transfer and Assumption):
 
(i) No Default or Event of Default has occurred and is continuing;
 
(ii) Borrower has submitted to Lender true, correct and complete copies of any
and all information and documents reasonably requested by Lender concerning the
Property, Transferee Borrower, replacement guarantors and indemnitors and
Borrower;
 
(iii) Evidence satisfactory to Lender has been provided showing that the
Transferee Borrower and such of its Affiliates as shall be designated by Lender
comply and will comply with Section 5.13 hereof, as those provisions may be
modified by Lender taking into account the ownership structure of Transferee
Borrower and its Affiliates;
 
(iv) If the Loan, by itself or together with other loans, has been the subject
of a Securitization, then Lender shall have received a Rating Comfort Letter
from the applicable Rating Agencies; provided that the requirements contained in
this clause (iv) shall not apply in connection with a Transfer and Assumption to
a Transferee Borrower that is a Permitted REIT Transferee;
 
 

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(v) If the Loan has not been the subject of a Securitization, then Lender shall
have determined in its reasonable discretion (taking into consideration such
factors as Lender may determine, including the attributes of the loan pool in
which the Loan might reasonably be expected to be securitized) that no rating
for any securities that would be issued in connection with such securitization
will be diminished, qualified, or withheld by reason of the Transfer and
Assumption; provided that the requirements contained in this clause (v) shall
not apply in connection with a Transfer and Assumption to a Transferee Borrower
that is a Permitted REIT Transferee;
 
(vi) Borrower shall have paid all of Lender’s reasonable costs and expenses in
connection with considering the Transfer and Assumption, and shall have paid the
amount requested by Lender as a deposit against Lender’s costs and expenses in
connection with effecting the Transfer and Assumption;
 
(vii) Borrower, the Transferee Borrower, and the replacement guarantors and
indemnitors shall have indicated in writing in form and substance reasonably
satisfactory to Lender their readiness and ability to satisfy the conditions set
forth in subsection (c) below (other than clause (i) with respect to a Permitted
REIT Transferee); and
 
(viii) The identity, experience, and financial condition of the Transferee
Borrower and the replacement guarantors and indemnitors shall be reasonably
satisfactory to Lender; provided that the requirements contained in this clause
(viii) shall not apply in connection with a Transfer and Assumption to a
Transferee Borrower that is a Permitted REIT Transferee.
 
(c) If Lender consents to the Transfer and Assumption, the Transferee Borrower
and/or Borrower as the case may be, shall immediately deliver the following to
Lender concurrently with the consummation of such Transfer and Assumption:
 
(i) Borrower shall deliver to Lender an assumption fee in the amount of (x) with
respect to the first Transfer and Assumption, 0.25% of the then unpaid Principal
and (ii) with respect to any subsequent Transfer and Assumption, 0.50% of the
then unpaid Principal, less any review fees, costs and expenses previously paid
by Borrower pursuant to the provision of Section 5.26.6(a) and (b)(vi); provided
that, no assumption fee shall apply in connection with a Transfer and Assumption
to a Transferee Borrower that is a Permitted REIT Transferee;
 
(ii) Borrower, Transferee Borrower and the original and replacement guarantors
and indemnitors shall execute and deliver to Lender any and all documents
reasonably required by Lender, in form and substance reasonably required by
Lender;
 
(iii) Counsel to the Transferee Borrower and replacement guarantors and
indemnitors shall deliver to Lender opinions in form and substance reasonably
satisfactory to Lender as to such matters as Lender shall reasonably require,
which may include opinions as to substantially the same matters and were
required in connection with the origination of the Loan;
 
 

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(iv) Borrower or the Transferee Borrower shall cause to be delivered to Lender,
an endorsement (relating to the change in the identity of the vestee and
execution and delivery of the Transfer and Assumption documents) to the Title
Insurance Policy in form and substance acceptable to Lender, in Lender’s
reasonable discretion (the “Endorsement”); and
 
(v) Borrower or the Transferee Borrower shall deliver to Lender a payment in the
amount of all remaining unpaid costs incurred by Lender in connection with the
Transfer and Assumption, including but not limited to, Lender’s reasonable
attorneys fees and expenses, all recording fees, and all fees payable to the
title company for the delivery to Lender of the Endorsement.
 
(d) Notwithstanding anything to the contrary contained in this Section 5.26.6,
with respect to a one-time only Transfer and Assumption, Lender’s prior consent
shall not be required in connection with a Transfer and Assumption where either
(i) the Transferee Borrower is a Permitted Transferee; provided that the
conditions set forth in subsection (b) above (other than clause (viii) therein)
and subsection (c) above have been satisfied or (ii) the Transferee Borrower is
a Permitted REIT Transferee; provided that the conditions set forth in
subsection (b) above (other than clauses (iv), (v) and (viii) therein) and
subsection (c) above (other than clause (i) therein) have been satisfied.
 
(e) Upon the closing of a Transfer and Assumption, Lender shall release
Borrower, the OP and Guarantor from all obligations under the Loan Documents
arising prior to and after the date of the Transfer and Assumption (but only to
the extent that such obligations of Borrower, the OP and Guarantor are expressly
assumed by the Transferee Borrower or replacement guarantor, as the case may be,
in connection with the Transfer and Assumption).
 
Section 5.27 Liens
 
. Without Lender’s prior written consent, Borrower shall not create, incur,
assume, permit or suffer to exist any Lien on all or any portion of the Property
or any direct or indirect legal or beneficial ownership interest in Borrower,
except Liens in favor of Lender, Permitted Encumbrances and Liens encumbering
Traded Equity, unless such Lien is bonded or discharged within 30 days after
Borrower first receives notice of such Lien.
 
Section 5.28 Dissolution
 
. Borrower shall not (i) engage in any dissolution (to the fullest extent such
prohibition is permitted by law), liquidation or consolidation or merger with or
into any other business entity, (ii) engage in any business activity not related
to the ownership and operation of the Property or (iii) transfer, lease or sell,
in one transaction or any combination of transactions, all or substantially all
of the property or assets of Borrower except to the extent expressly permitted
by the Loan Documents.
 
Section 5.29 Expenses
 
. Borrower shall reimburse Lender, within ten (10) days after demand therefor,
for all reasonable out-of-pocket costs and expenses (including reasonable
attorneys’ fees and disbursements)
 

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incurred by Lender in connection with the Loan, including (i) the preparation,
negotiation, execution and delivery of the Loan Documents and the consummation
of the transactions contemplated thereby and all the costs of furnishing all
opinions by counsel for Borrower; (ii) Borrower’s and Lender’s ongoing
performance under and compliance with the Loan Documents, including confirming
compliance with environmental and insurance requirements; (iii) the negotiation,
preparation, execution, delivery and administration of any consents, amendments,
waivers or other modifications of or under any Loan Document and any other
documents or matters requested by Lender; (iv) filing and recording of any Loan
Documents; (v) title insurance, surveys, inspections and appraisals; (vi) the
creation, perfection or protection of Lender’s Liens in the Property and the
Cash Management Accounts (including fees and expenses for title and lien
searches, intangibles taxes, personal property taxes, Mortgage, recording taxes,
due diligence expenses, travel expenses, accounting firm fees, costs of
appraisals, environmental reports and Lender’s Consultant, surveys and
engineering reports); (vii) enforcing or preserving any rights in response to
third party claims or the prosecuting or defending of any action or proceeding
or other litigation, in each case against, under or affecting Borrower, the Loan
Documents, the Property, or any other security given for the Loan; (viii) fees
charged by Rating Agencies in connection with the Loan or any modification
thereof; and (ix) enforcing any obligations of or collecting any payments due
from Borrower under any Loan Document or with respect to the Property or in
connection with any refinancing or restructuring of the Loan in the nature of a
“work-out,” or any insolvency or bankruptcy proceedings. Any costs and expenses
due and payable to Lender hereunder which are not paid by Borrower within ten
(10) days after demand therefor may be paid from any amounts in the Deposit
Account, with notice thereof to Borrower. The obligations and liabilities of
Borrower under this Section 5.29 shall survive the Term and the exercise by
Lender of any of its rights or remedies under the Loan Documents, including the
acquisition of the Property by foreclosure or a conveyance in lieu of
foreclosure.
 
Section 5.30 Indemnity
 
(a) . Borrower shall defend, indemnify and hold harmless Lender and each of its
Affiliates and their respective successors and assigns, including the directors,
officers, partners, members, shareholders, participants, employees,
professionals and agents of any of the foregoing (including any Servicer) and
each other Person, if any, who Controls Lender, its Affiliates or any of the
foregoing (each, an “Indemnified Party”), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for an Indemnified
Party in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not Lender shall be designated a
party thereto, court costs and costs of appeal at all appellate levels,
investigation and laboratory fees, consultant fees and litigation expenses),
that may be imposed on, incurred by, or asserted against any Indemnified Party
(collectively, the “Indemnified Liabilities”) in any manner, relating to or
arising out of or by reason of the Loan, including: (i) any breach by Borrower
of its obligations under, or any misrepresentation by Borrower contained in, any
Loan Document; (ii) the use or intended use of the proceeds of the Loan;
(iii) any information provided by or on behalf of Borrower, or contained in any
documentation approved by Borrower; (iv) ownership of the Mortgage, the Property
or any interest therein, or receipt of any Rents; (v) any accident, injury to or
death of persons or loss of or damage to property occurring
 

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in, on or about the Property or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (vi) any use, nonuse or
condition in, on or about the Property or on adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (vii) performance
of any labor or services or the furnishing of any materials or other property in
respect of the Property; (viii) the presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release, or threatened release of any
Hazardous Substance on, from or affecting the Property; (ix) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to such Hazardous Substance; (x) any lawsuit brought or threatened,
settlement reached, or government order relating to such Hazardous Substance;
(xi) any violation of the Environmental Laws which is based upon or in any way
related to such Hazardous Substance, including the costs and expenses of any
Remedial Work; (xii) any failure of the Property to comply with any Legal
Requirement; (xiii) any claim by brokers, finders or similar persons claiming to
be entitled to a commission in connection with any Lease or other transaction
involving the Property or any part thereof, or any liability asserted against
Lender with respect thereto; and (xiv) the claims of any lessee of any portion
of the Property or any Person acting through or under any lessee or otherwise
arising under or as a consequence of any Lease; provided, however, that Borrower
shall not have any obligation to any Indemnified Party hereunder (A) to the
extent that it is finally judicially determined that such Indemnified
Liabilities arise from the gross negligence, illegal acts, fraud or willful
misconduct of such Indemnified Party or (B) for any event or condition that
first arises on or after the date on which Lender or any Affiliate of Lender
acquires title to the Property (whether at foreclosure sale, a transfer in lieu
of foreclosure or any other transfer); provided that Borrower’s obligation to
indemnify the Indemnified Parties with respect to an event or condition
specified in clauses (viii) through (xi) above (relating to Hazardous
Substances) shall continue in perpetuity after Lender or its Affiliates acquires
title or control of the Property unless such specified event or condition occurs
during or after Lender’s (or its Affiliate’s) period of ownership and provided
that Borrower shall bear the burden of proving that such specified event or
condition occurred during Lender’s (or such Affiliate’s) period of ownership..
Any amounts payable to any Indemnified Party by reason of the application of
this Section 5.30 shall be payable on demand and shall bear interest at the
Default Rate from the date loss or damage is sustained by any Indemnified Party
until paid. The obligations and liabilities of Borrower under this Section 5.30
shall survive the Term and the exercise by Lender of any of its rights or
remedies under the Loan Documents, including the acquisition of the Property by
foreclosure or a conveyance in lieu of foreclosure.
 
Section 5.31 Patriot Act Compliance
 
. (a) Borrower will use its good faith and commercially reasonable efforts to
comply with the Patriot Act (as defined below) and all applicable requirements
of governmental authorities having jurisdiction over Borrower and the Property,
including those relating to money laundering and terrorism. Lender shall have
the right to audit Borrower’s compliance with the Patriot Act and all applicable
requirements of governmental authorities having jurisdiction over Borrower and
the Property, including those relating to money laundering and terrorism. In the
event that Borrower fails to comply with the Patriot Act or any such
requirements of governmental authorities, then Lender may, at its option, cause
Borrower to comply therewith and any and all reasonable costs and expenses
incurred by Lender in connection therewith shall be secured by the Mortgage and
the other Loan Documents and shall be immediately due and payable. For purposes
hereof, the term “Patriot Act” means the Uniting and Strengthening America by
 

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Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT ACT) Act of 2001, as the same may be amended from time to time, and
corresponding provisions of future laws.
 
(b) Neither Borrower, OP nor REIT nor to Borrower’s knowledge, any Affiliate
that owns more than a 20% interest in either the OP or REIT (a) is listed on any
Government Lists (as defined below), (b) is a person who has been determined by
competent authority to be subject to the prohibitions contained in Presidential
Executive Order No. 13224 (Sept. 23, 2001) or any other similar prohibitions
contained in the rules and regulations of OFAC (as defined below) or in any
enabling legislation or other Presidential Executive Orders in respect thereof,
(c) has been previously indicted for or convicted of any felony involving a
crime or crimes of moral turpitude or for any Patriot Act Offense (as defined
below), or (d) is currently under investigation by any governmental authority
for alleged criminal activity. For purposes hereof, the term “Patriot Act
Offense” means any violation of the criminal laws of the United States of
America or of any of the several states, or that would be a criminal violation
if committed within the jurisdiction of the United States of America or any of
the several states, relating to terrorism or the laundering of monetary
instruments, including any offense under (a) the criminal laws against
terrorism; (b) the criminal laws against money laundering, (c) the Bank Secrecy
Act, as amended, (d) the Money Laundering Control Act of 1986, as amended, or
the (e) Patriot Act. “Patriot Act Offense” also includes the crimes of
conspiracy to commit, or aiding and abetting another to commit, a Patriot Act
Offense. For purposes hereof, the term “Government Lists” means (i) the
Specially Designated Nationals and Blocked Persons Lists maintained by Office of
Foreign Assets Control (“OFAC”), (ii) any other list of terrorists, terrorist
organizations or narcotics traffickers maintained pursuant to any of the Rules
and Regulations of OFAC that Lender notified Borrower in writing is now included
in “Governmental Lists”, or (iii) any similar lists maintained by the United
States Department of State, the United States Department of Commerce or any
other government authority or pursuant to any Executive Order of the President
of the United States of America that Lender notified Borrower in writing is now
included in “Governmental Lists”.
 
ARTICLE 6
 

 
NOTICES AND REPORTING
 
Section 6.1 Notices
 
. All notices, consents, approvals and requests required or permitted hereunder
or under any other Loan Document (a “Notice”) shall be given in writing and
shall be effective for all purposes if either hand delivered with receipt
acknowledged, or by a nationally recognized overnight delivery service (such as
Federal Express), or by certified or registered United States mail, return
receipt requested, postage prepaid, or by facsimile and confirmed by facsimile
answer back, in each case addressed as follows (or to such other address or
Person as a party shall designate from time to time by notice to the other
party):
 
 

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If to Lender:

 
Greenwich Capital Financial Products, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Attention: Mortgage Loan Department
Telecopier (203) 618-2052
 
With a copy to:
 
Kaye Scholer LLP
425 Park Avenue
New York, New York 10022
Attention: Stephen Gliatta, Esq.
Telecopier: (212) 836-8689
 
If to Borrower:

 
Maguire Properties-Pacific Center, LLC
333 South Grand Avenue, Suite 400
Los Angeles, California 90071
Attention: Mr. Robert F. Maguire III and Mark T. Lammas, Esq.
Telecopier: (213) 533-5100
 
With a copy to:

 
Munger, Tolles & Olson LLP
355 South Grand Avenue, Suite 3500
Los Angeles, California 90071
Attention: Jeffrey A. Heintz, Esq.
Telecopier: (213) 638-5185
 
A notice shall be deemed to have been given: (i) in the case of hand delivery,
at the time of delivery; (ii) in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; (iii) in the case
of overnight delivery, upon the first attempted delivery on a Business Day; or
(iv) in the case of facsimile, upon the confirmation of such facsimile
transmission. Any party may change the address to which any such Notice is
delivered, by furnishing ten (10) days’ written notice of such change to the
other parties in accordance with the provisions of this Section 6.1. Notice for
either party may be given by its respective counsel.
 
Section 6.2 Borrower Notices and Deliveries
 
. Borrower shall (a) give prompt written notice to Lender of: (i) any
litigation, governmental proceedings or claims or investigations pending or
threatened against Borrower or the OP or the REIT which might materially
adversely affect Borrower’s or the OP’s or the REIT’s condition (financial or
otherwise) or business or the Property; (ii) any material adverse change in
 

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Borrower’s or the OP’s or the REIT’s condition, financial or otherwise, or of
the occurrence of any Default or Event of Default of which Borrower has
knowledge; and (b) furnish and provide to Lender: (i) if requested by Lender,
any Securities and Exchange Commission or other public filings, if any, of
Borrower, the OP, the REIT, Manager, or any Affiliate of any of the foregoing
within two (2) Business Days of such filing and (ii) all instruments, documents,
boundary surveys, footing or foundation surveys, certificates, plans and
specifications, appraisals, title and other insurance reports and agreements,
reasonably requested, from time to time, by Lender. In addition, after request
by Lender (but no more frequently than twice in any year), Borrower shall(x)
furnish to Lender within ten days, a certificate addressed to Lender, its
successors and assigns reaffirming all representations and warranties of
Borrower set forth in the Loan Documents as of the date requested by Lender or,
to the extent of any changes to any such representations and warranties, so
stating such changes, and (y) within 30 days, use commercially reasonable
efforts to obtain tenant estoppel certificates addressed to Lender, its
successors and assigns from each commercial tenant at the Property in form and
substance reasonably satisfactory to Lender.
 
Section 6.3 Financial Reporting
 
.
 
6.3.1 Financial Statements. The financial statements heretofore furnished to
Lender with respect to Borrower, the OP and the REIT are, as of the dates
specified therein, complete and correct in all material respects and fairly
present in all material respects the financial condition of Borrower, the OP and
the REIT and are prepared in accordance with GAAP. Since the date of such
financial statements, there has been no materially adverse change in the
financial condition, operation or business of Borrower, the OP and the REIT from
that set forth in said financial statements.
 
6.3.2 Quarterly Reports. Borrower will maintain full and accurate books of
accounts and other records reflecting the results of the operations of the
Property and will furnish to Lender on or before forty-five (45) days after the
end of each calendar quarter the following items, each certified by Borrower as
being true and correct in all material respects: (i) a written statement (rent
roll) dated as of the last day of each such calendar quarter identifying each of
the Leases (excluding subleases) by the term, space occupied, rental required to
be paid, security deposit paid, any rental concessions, and a report identifying
any defaults or payment delinquencies thereunder; (ii) monthly and year to date
operating statements prepared for each calendar month during each such calendar
quarter, noting Net Operating Income, and operating expenses, and including an
itemization of actual (not pro forma) capital expenditures and other information
necessary and sufficient under generally accepted accounting practices to fairly
represent the financial position and results of operation of the Property during
such calendar month, all in form satisfactory to Lender; (iii) a property
balance sheet for each such calendar quarter; (iv) a comparison of the budgeted
income and expenses and the actual income and expenses for year to date together
with a detailed explanation of any variances of five percent (5%) or more
between budgeted and actual amounts for such year to date period; and (v) a
calculation reflecting the Debt Service Coverage Ratio as of the last day of
each such calendar quarter. Until a Securitization has occurred, Borrower shall
furnish monthly each of the items listed in the immediately preceding sentence
within thirty (30) days after the end of such month.
 
 

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6.3.3 Annual Reports. Within one hundred twenty (120) days following the end of
each calendar year (provided, however, if requested by Lender, Borrower shall
use commercially reasonable efforts to provide Lender with any unaudited annual
statements prior to such date), Borrower shall furnish statements of its
financial affairs and condition including a balance sheet and a statement of
profit and loss for Borrower in such detail as Lender may reasonably request,
and setting forth the financial condition and the income and expenses for the
Property for the immediately preceding calendar year, which statements shall be
prepared by Borrower. Borrower’s annual financial statements shall include (x) a
list of the tenants, if any, occupying more than twenty (20%) percent of the
total floor area of the Improvements, and (y) a breakdown showing the year in
which each Lease then in effect expires and the percentage of total floor area
of the Improvements and the percentage of base rent with respect to which Leases
shall expire in each such year, each such percentage to be expressed on both a
per year and a cumulative basis. Borrower’s annual financial statements shall be
accompanied by a certificate executed by a financial officer of Borrower or the
REIT stating that each such annual financial statement presents fairly the
financial condition of the Property being reported upon and shall be audited by
a “Big Four” accounting firm or other independent certified public accountant
reasonably acceptable to Lender, which audited financial statements may be in
the form of schedules to the audited consolidated financial statements of the
REIT. Each such annual financial statement shall be prepared in accordance with
GAAP. At any time and from time to time Borrower shall deliver to Lender or its
agents such other financial data as Lender or its agents shall reasonably
request with respect to the ownership, maintenance, use and operation of the
Property.
 
6.3.4 Annual Budget. Within 30 days after the commencement of a Cash Management
Period, and not later than each December 15 during the Term of the Loan until
such Cash Management Period has ended, Borrower shall submit to Lender a
detailed budget (an “Annual Budget”) for the Property covering the calendar year
commencing on the following January 1, each of which budgets shall be subject to
Lender’s approval, not to be unreasonably withheld, (provided that Borrower
shall have the option to submit to Lender a revised budget not later than June
30 of each year during the Term of the Loan to adjust such budget on the basis
of the actual results of Borrower to such point in such calendar year) (each
such budget, when so approved, is referred to as an “Approved Annual Budget”).
Until such time that Lender approves a proposed Annual Budget, Borrower may
operate under the most recently Approved Annual Budget (adjusted to reflect
actual increases in real estate taxes, insurance premiums, utilities expenses,
labor costs, interest and other fixed costs with respect to the ownership,
operation and financing of the Property).
 
ARTICLE 7
 

 
INSURANCE; CASUALTY; AND CONDEMNATION
 
Section 7.1 Insurance
 
.
 
 

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7.1.1 Coverage. Borrower shall maintain insurance for Borrower and the Property
providing at least the following coverages:
 
(a) comprehensive all risk insurance on the Improvements and the Equipment, in
each case (A) in an amount equal to one hundred percent (100%) of the “Full
Replacement Cost,” which for purposes of this Agreement shall mean actual
replacement value (exclusive of costs of excavations, foundations, underground
utilities and footings) with a waiver of depreciation; (B) containing an agreed
amount endorsement with respect to the Improvements and Equipment waiving all co
insurance provisions; (C) providing for no “all risk” deductible in excess of
$100,000; and (D) containing an “Ordinance or Law Coverage” or “Enforcement”
endorsement if any of the Improvements or the use of the Property shall at any
time constitute legal non conforming structures or uses. In addition, Borrower
shall obtain: (x) Flood Insurance in an amount of not less than $25,000,000 each
occurrence; (y) earthquake insurance in an amount at least equal to one
multiplied by a “Probable Maximum Loss” of total replacement value less a
deductible of 5% of the Total Insured Value (which includes annual rental value)
at the Property, and otherwise in form and substance reasonably satisfactory to
Lender; and (z) coastal windstorm insurance in amounts and in form and substance
satisfactory to Lender, provided that the insurance pursuant to clauses (x), (y)
and (z) hereof shall be on terms consistent with the comprehensive all risk
insurance policy required under this subsection (a) and rental interruption
insurance under subsection (c). Notwithstanding anything to the contrary
contained herein, provided that Borrower maintains a minimum blanket Policy
limit of $1,250,000,000 per occurrence and the entire blanket Policy limit is
available for any one loss, Lender shall accept Borrower’s stated value of
insurance for the Property, which is $76,149,250 as of the date hereof. If at
any time during the Term, Borrower either (x) losses its blanket Policy
coverage, (y) reduces its overall blanket Policy limit or (z) elects to insure
the Property separately, Borrower shall increase the stated value for the
Property to the then 100% replacement cost of the improvements, as reasonably
determined by Lender;
 
(b) commercial general liability insurance against claims for personal injury,
bodily injury, death or property damage occurring upon, in or about the
Property, such insurance (A) to be on the so-called “occurrence” form with a
combined limit of not less than Two Million and No/100 Dollars ($2,000,000) in
the aggregate and One Million and No/100 Dollars ($1,000,000) per occurrence;
(B) to continue at not less than the aforesaid limit until required to be
changed by Lender in writing by reason of changed economic conditions making
such protection inadequate; and (C) to cover at least the following hazards:
(1) premises and operations; (2) products and completed operations on an “if
any” basis; (3) independent contractors; (4) blanket contractual liability for
all legal contracts; and (5) liability that may arise from acts of terrorism, if
commercially available. The self-insured retention or deductible for general
liability coverage is not to exceed $100,000 per occurrence subject to a
$750,000 maximum. This deductible is to be initially funded with a letter of
credit in the amount of $200,000, held and administrated by the carrier. Once
the first $200,000 is exhausted additional Letters of Credit must be continually
posted until the $750,000 maximum deductible is exhausted.
 
(c) rental interruption insurance (A) with loss payable to Lender (allowing
reimbursement to Borrower for reasonable operating costs during the
interruption); (B) covering all risks required to be covered by the insurance
provided for in subsection (a) above;
 

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(C) containing an unlimited period of restoration and extended period of
indemnity endorsement which provides that after the physical loss to the
Improvements and Equipment has been repaired, the continued loss of rental
income will be insured until such rental income either returns to the same level
it was at prior to the loss, or the expiration of twelve (12) months from the
date that the Property is repaired or replaced and operations are resumed,
whichever first occurs, and notwithstanding that the policy may expire prior to
the end of such period, provided that the unlimited period of restoration
endorsement may be limited to the length of time required with the exercise of
due diligence and dispatch to rebuild, repair or replace the damaged or
destroyed property; and (D) in an amount equal to one hundred percent (100%) of
the projected gross income from the Property for a period of eighteen (18)
months from the date that the Property is repaired or replaced and operations
are resumed. The amount of such rental interruption insurance shall be
determined prior to the date hereof and at least once each year thereafter based
on Borrower’s reasonable estimate of the gross income from the Property for the
succeeding eighteen (18) month period. Subject to the rights of Lender and
subject to the provisions of Section 7.4.1(j) below, all proceeds payable to
Lender pursuant to this subsection shall be held by Lender and shall be applied
to the obligations secured by the Loan Documents from time to time due and
payable hereunder and under the Note; provided, however, that nothing herein
contained shall be deemed to relieve Borrower of its obligations to pay the
obligations secured by the Loan Documents on the respective dates of payment
provided for in the Note and the other Loan Documents except to the extent such
amounts are actually paid out of the proceeds of such rental interruption
insurance. Notwithstanding anything to the contrary contained herein, provided
that Borrower maintains a minimum blanket Policy limit of $1,250,000,000 per
occurrence and the entire blanket Policy limit is available for any one loss,
Lender shall accept Borrower’s loss of rents calculation in lieu of the amount
set forth in sub-clause (D) hereof, which such calculation currently deducts for
“variable expenses.” If at any time during the Term, Borrower either (x) losses
its blanket Policy coverage, (y) reduces its overall blanket Policy limit or (z)
elects to insure the Property separately, Borrower shall provide rental
interruption insurance in the amount set forth in sub-clause (D) hereof without
any deductions;
 
(d) at all times during which structural construction, repairs or alterations
are being made with respect to the Improvements, and only if the property
coverage form does not otherwise apply, (A) owner’s contingent or protective
liability insurance covering claims not covered by or under the terms or
provisions of the above mentioned commercial general liability insurance policy;
and (B) the insurance provided for in subsection (a) above written in a so
called builder’s risk completed value form (1) on a non reporting basis,
(2) against all risks insured against pursuant to subsections (a) and (c) above,
(3) including permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co insurance provisions;
 
(e) Workers’ Compensation insurance, as required by any governmental authority
or any Legal Requirements and Employer’s Liability Insurance of not less than
One Million and No/100 Dollars ($1,000,000) for each occurrence;
 
(f) comprehensive boiler and machinery insurance in an amount of not less than
Fifty Million and No/100 Dollars ($50,000,000) each occurrence on terms
consistent with the commercial property insurance policy required under
subsections (a) and (c) above;
 
 

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(g) umbrella liability insurance in an amount not less than Twenty-Five Million
and No/100 Dollars ($25,000,000) per occurrence, on terms consistent with the
commercial general liability insurance policy and motor liability insurance
policy required under subsection (b) above and (h) below, on a portfolio basis
naming the Property and all other properties owned by the OP and/or its
Affiliates; provided, that such insurance may be provided under a blanket
insurance Policy so long as the coverage required pursuant to this clause is not
reduced below the per occurrence limit set forth in this clause;
 
(h) motor vehicle liability coverage for all owned and non owned vehicles,
including rented and leased vehicles containing minimum limits per occurrence,
including umbrella coverage, of Twenty Six Million and No/100 Dollars
($26,000,000);
 
(i) if the Property is or becomes a legal "non conforming" use, ordinance and
law coverage is required based on the following minimum limits: Coverage A
(value of the undamaged portion) to be included with the insured building limit;
Coverage B (demolition/debris removal) at 10% of insured building value; and
Coverage C (increased cost of construction) at 10% of insured building value;
 
(j) if “certified acts of terrorism”, as declared by the United States
Government, are now or hereafter excluded from Borrower’s comprehensive all risk
insurance policy, business income coverage, commercial general liability
insurance or umbrella liability insurance coverage, Borrower shall obtain an
endorsement to such policies, or separate policies, insuring against all such
“certified acts of terrorism” (such acts or events so excluded, “Terrorism
Acts”), at Borrower’s option, either (A) in an amount not less than Three
Hundred Sixty Million and No/100 Dollars ($360,000,000) on an aggregate basis
covering the Property and all other properties owned by the OP and/or its
Affiliates and providing for a deductible not exceeding $1,000,000.00 or (B) in
a total amount not less than Four Hundred Ten Million and No/100 Dollars
($410,000,000) on an aggregate basis covering the Property and all other
properties owned by the OP and/or its Affiliates as of the date hereof and
providing for a deductible of not in excess of 5% of the full replacement value
of the Property; in either case, the endorsement or policy shall be (x) in form
and substance reasonably satisfactory to Lender; and (y) non-cancelable (to the
extent such non-cancelable insurance is available in the marketplace) (insurance
meeting such requirements being referred to herein as “Full Coverage”); provided
Borrower shall not be required to spend in excess of an amount equal to 200% of
the aggregate amount of the “all risk” insurance premiums payable with respect
to the Property and all other properties owned by the OP and/or its Affiliates
per annum for the last policy year in which coverage for terrorism was included
as part of the “all risk” property policy, adjusted annually by a percentage
equal to the increase in the Consumer Price Index (hereinafter defined) (the
“Terrorism Premium Cap”) for such coverage and, in the event that Full Coverage
is not available at a per annum cost of the Terrorism Premium Cap, then Borrower
shall purchase insurance covering Terrorism Acts in an amount equal to the
principal balance of the Loan, but shall not be required to maintain the full
amount of such coverage if such coverage is not available at a per annum cost of
the Terrorism Premium Cap or less, provided that in the event that the Terrorism
Premium Cap is not sufficient to purchase such coverage in an amount equal to
the principal balance of the Loan, then Borrower shall obtain the greatest
amount of coverage obtainable at a per annum cost of the Terrorism Premium Cap.
As used herein, “Consumer Price Index” means the Consumer Price Index for All
Urban Consumers published by the
 

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Bureau of Labor Statistics of the United States Department of Labor, New York
Metropolitan Statistical Area, All Items (1982-84 = 100), or any successor index
thereto, approximately adjusted, and in the event that the Consumer Price Index
is converted to a different standard reference base or otherwise revised, the
determination of adjustments provided for herein shall be made with the use of
such conversion factor, formula or table for converting the Consumer Price Index
as may be published by the Bureau of Labor Statistics or, if said Bureau shall
not publish the same, then with the use of such conversion factor, formula or
table as may be published by Prentice-Hall, Inc., or any other nationally
recognized publisher of similar statistical information; and if the Consumer
Price Index ceases to be published, and there is no successor thereto (i) such
other index as Lender and Borrower shall agree upon in writing or (ii) if Lender
and Borrower cannot agree on a substitute index, such other index, as reasonably
selected by Lender.
 
In the event that the limits of insurance in place covering Terrorism Acts on a
portfolio basis are exhausted by damage to a property other than the Property,
then Borrower shall restore the coverage provided for in clause (x) above (or
any lesser amount of coverage that is available if such coverage is not
available), to the extent such insurance is commercially available; and
 
(k) upon sixty (60) days’ written notice, such other reasonable insurance and in
such reasonable amounts as Lender from time to time may reasonably request
against such other insurable hazards which at the time are commonly insured
against for property similar to the Property located in or around the region in
which the Property is located.
 
7.1.2 Policies. All insurance provided for in Section 7.1.1 shall be obtained
under valid and enforceable policies (collectively, the “Policies” or in the
singular, the “Policy” and shall be subject to the reasonable approval of Lender
as to insurance companies, amounts, deductibles, loss payees and insureds. The
Policies (or a “cut-through” endorsement, approved by Lender, with respect to
any such Policy) shall be issued by financially sound and responsible insurance
companies authorized to do business in the State and, except in the case of
flood hazard insurance and earthquake insurance, having a claims paying ability
rating of “A-” or better by S&P and an equivalent rating by Moody’s (provided,
however for multi-layered policies, (A) if four (4) or less insurance companies
issue the Policies, then at least 75% of the insurance coverage represented by
the Policies must be provided by insurance companies with a claims paying
ability rating of “A-” or better by S&P (and the equivalent by any other Rating
Agency), with no carrier below “BBB” (and the equivalent by any other Rating
Agency) or (B) if five (5) or more insurance companies issue the Policies, then
at least sixty percent (60%) of the insurance coverage represented by the
Policies must be provided by insurance companies with a claims paying ability
rating of “A-” or better by S&P (and the equivalent by any other Rating Agency),
with no carrier below “BBB” (and the equivalent by any other Rating Agency). The
Policies described in Section 7.1.1 (other than those strictly limited to
liability protection) shall designate Lender as loss payee and Lender shall be
an additional named insured, as its interests may appear. Not less than ten (10)
days prior to the expiration dates of the Policies theretofore furnished to
Lender, certificates of insurance evidencing the Policies accompanied by
evidence satisfactory to Lender of payment of the premiums due thereunder shall
be delivered by Borrower to Lender.
 
 

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7.1.3 Insurance Premiums. Subject to the provisions of Section 3.3 hereof,
Borrower shall pay the premiums for such Policies (the “Insurance Premiums”) as
the same become due and payable and shall furnish to Lender evidence of the
renewal of each of the Policies with receipts for the payment of the Insurance
Premiums or other evidence of such payment reasonably satisfactory to Lender
(provided, however, that Borrower is not required to furnish such evidence of
payment to Lender in the event that such Insurance Premiums have been paid by
Lender pursuant to Section 3.3 hereof). If Borrower is required to furnish such
evidence and receipts pursuant to the preceding sentence and Borrower does not
furnish such evidence and receipts at least ten (10) days prior to the
expiration of any expiring Policy, then Lender may procure, but shall not be
obligated to procure, such insurance and pay the Insurance Premiums therefor,
and Borrower agrees to reimburse Lender for the cost of such Insurance Premiums
promptly on demand. Within thirty (30) Business Days after request by Lender,
Borrower shall obtain such increases in the amounts of coverage required
hereunder as may be reasonably requested by Lender, taking into consideration
changes in the value of money over time, changes in liability laws, changes in
prudent customs and practices of owners of property similar to the Property
located in or around the region in which the Property is located and as may be
available at commercially reasonable rates. Lender acknowledges that the
Policies, delivered with respect to the Property as of the date hereof satisfy
the requirements of this Section 7. Such approval shall continue in effect until
the expiration or termination of such Policies, provided that there is not a
downgrade by S&P or Moody’s of any insurer providing such Policies and, as a
result thereof, Borrower fails to satisfy the rating criteria set forth in
Section 7.1.2. Any renewal or replacement of such Policies, however, shall
require Lender’s approval as provided above in this Section 7.1.2 unless (i) the
companies providing such renewal or replacement Policies are licensed to do
business in the state where the Property is located and have a claims paying
ability rating by S&P and Moody’s that satisfy the requirements set forth in
Section 7.1.2 above or that, subject to the provisions of Section 7.1.5 below,
such rating is no less than the rating as of the date hereof of the company
providing the insurance approved by Lender as of the date hereof, (ii) the
coverage provided by such renewal or replacement Policies is no less than the
coverage approved by Lender as of the date hereof, (iii) such renewal or
replacement Policies contain in all material respects the same terms and
conditions as the Policies approved by Lender as of the date hereof and
(iv) Lender has not notified Borrower in accordance with this Section 7.1 that
the requirements for the Policies have changed since the date hereof.
 
7.1.4 Blanket Policies. The insurance coverage required under this Section 7.1
may be effected under one or more blanket Policies covering the Property and
other property and assets not constituting a part of the Property; provided that
any blanket Policy shall specify, except in the case of general liability
insurance, the portion of the total coverage of such blanket Policy that is
allocated exclusively to the Property and shall comply in all respects with the
requirements of this Section 7. Lender hereby confirms that it approves (i) the
terms of the existing Property Insurance Sharing Agreement among Borrower and
certain of its Affiliates, and (ii) that the Insurance Premiums are financed
through one or more finance companies (individually and/or collectively, the
“Blanket Insurance Premium Financing Arrangement”) to whom Borrower pays
Borrower’s allocable share of the annual initial deposit and the monthly
payments due for each blanket Policy to the applicable finance company (with
respect to each blanket Policy, such monthly payment, together with one-twelfth
(1/12th) of the allocable share
 

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of the annual initial deposit necessary to accumulate such allocable share for
such Policy at least thirty (30) days prior to its due date, each, a “Financing
Installment”).
 
Section 7.2 Casualty
 
.
 
7.2.1 Notice; Restoration. If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty (a “Casualty”), Borrower shall give
prompt notice thereof to Lender. Following the occurrence of a Casualty,
Borrower, regardless of whether insurance proceeds are available (unless Lender
has breached its obligation (if any) to make such insurance proceeds available
pursuant to Section 7.4.1), shall promptly proceed to restore, repair, replace
or rebuild the same to be of at least equal value and of substantially the same
character as prior to such damage or destruction (a “Casualty Restoration”), all
to be effected in accordance with applicable law
 
7.2.2 Settlement of Proceeds. If a Casualty covered by any of the Policies (an
“Insured Casualty”) occurs where the loss does not exceed $1,500,000, provided
no Default or Event of Default has occurred and is continuing, Borrower may
settle and adjust any claim without the prior consent of Lender; provided such
adjustment is carried out in a competent and timely manner, and Borrower is
hereby authorized to collect and receipt for the Insurance Proceeds (as
hereinafter defined). In the event of an Insured Casualty where the loss exceeds
$1,500,000 (a “Significant Casualty”), Lender may, in its sole discretion,
settle and adjust any claim without the consent of Borrower and agree with the
insurer(s) in a commercially reasonable manner on the amount to be paid on the
loss, and the Proceeds shall be due and payable solely to Lender and held by
Lender in the Casualty/Condemnation Subaccount and disbursed in accordance
herewith. If Borrower or any party other than Lender is a payee on any check
representing Proceeds with respect to a Significant Casualty, Borrower shall
immediately endorse, and cause all such third parties to endorse, such check
payable to the order of Lender. Borrower hereby irrevocably appoints Lender as
its attorney-in-fact, coupled with an interest, to endorse such check payable to
the order of Lender. The expenses incurred by Lender in the settlement,
adjustment and collection of the Proceeds shall become part of the Debt and
shall be reimbursed by Borrower to Lender within ten (10) days following demand.
Notwithstanding anything to the contrary contained herein, if in connection with
a Casualty any insurance carrier makes a payment under a property insurance
Policy that Borrower proposes be treated as business or rental interruption
insurance, then, notwithstanding any designation (or lack of designation) by the
insurance carrier as to the purpose of such payment, as between Lender and
Borrower, such payment shall not be treated as business or rental interruption
insurance proceeds unless Borrower has demonstrated to Lender’s reasonable
satisfaction that the remaining net Proceeds that will be received from the
property insurance carriers are sufficient to pay 100% of the cost of fully
restoring the Improvements or, if such net Proceeds are to be applied to repay
the Debt in accordance with the terms hereof, that such remaining net Proceeds,
together with any portion of the amount treated as business or rental
interruption insurance that will be paid to Lender, will be sufficient to pay
the Debt in full.
 
 

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Section 7.3 Condemnation
 
.
 
7.3.1 Notice; Restoration. Borrower shall promptly give Lender written notice of
the actual or threatened commencement of any condemnation or eminent domain
proceeding (a “Condemnation”) and shall deliver to Lender copies of any and all
papers served in connection with such Condemnation. Following the occurrence of
a Condemnation, Borrower, regardless of whether an Award (hereinafter defined)
is available (unless Lender has breached its obligation (if any) to make such
Award available pursuant to Section 7.4.1), shall promptly proceed to restore,
repair, replace or rebuild the same to the extent practicable to be of at least
equal value and of substantially the same character as prior to such
Condemnation (a “Condemnation Restoration”, together with a Casualty
Restoration, collectively a “Restoration”), all to be effected in accordance
with applicable law.
 
7.3.2 Collection of Award. Lender is hereby irrevocably appointed as Borrower’s
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain any award or payment (“Award”) for any taking accomplished
through a Condemnation (a “Taking”) and to make any commercially reasonable
compromise or settlement in connection with any such Condemnation, subject to
the provisions of this Agreement. Notwithstanding the foregoing, Borrower shall
have the right, provided no Default or Event of Default has occurred and is
continuing, to compromise and collect or receive any award that does not exceed
$1,500,000. Notwithstanding any Taking by any public or quasi-public authority
(including, without limitation, any transfer made in lieu of or in anticipation
of such a Taking), Borrower shall continue to pay the Debt at the time and in
the manner provided for in the Note, in this Agreement and the other Loan
Documents and the Debt shall not be reduced unless and until any Award shall
have been actually received and applied by Lender to expenses of collecting the
Award and to discharge of the Debt. Lender shall not be limited to the interest
paid on the Award by the condemning authority but shall be entitled to receive
out of the Award interest at the rate or rates provided in the Note. Borrower
shall cause any Award that is payable to Borrower to be paid directly to Lender.
The expenses incurred by Lender in the adjustment and collection of the Award
shall become part of the Debt and be secured hereby and shall be reimbursed by
Borrower to Lender within ten (10) days after the date Lender makes written
demand therefor.
 
Section 7.4 Application of Proceeds or Award
 
.
 
7.4.1 Application to Restoration. The following provisions shall apply in
connection with the Restoration of the Property and Improvements:
 
(a) If the Net Proceeds shall be less than $1,500,000 and the costs of
completing the Restoration shall be less than $1,500,000, the Net Proceeds will
be disbursed by Lender to Borrower upon receipt, provided that all of the
conditions set forth in Section 7.4.1(c)(i) are met and Borrower delivers to
Lender a written undertaking to expeditiously commence and to
 

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satisfactorily complete with due diligence the Restoration in accordance with
the terms of this Agreement.
 
(b) If the Net Proceeds are equal to or greater than $1,500,000 or the costs of
completing the Restoration is equal to or greater than $1,500,000 Lender shall
make the Net Proceeds available for the Restoration in accordance with the
provisions of this Section 7.4. The term “Net Proceeds” shall mean: (A) the net
amount of all insurance proceeds received by Lender pursuant to Section
7.1.1(a), (d), (f), (i) and (j) (and any similar or comparable types of
insurance obtained pursuant to Section 7.1.1(i) as a result of such damage or
destruction, after deduction of its reasonable costs and expenses (including,
but not limited to, reasonable counsel fees), if any, in collecting same
(“Insurance Proceeds”), or (B) the net amount of the Award, after deduction of
its reasonable costs and expenses (including, but not limited to, reasonable
counsel fees), if any, actually incurred in collecting same (“Condemnation
Proceeds”), whichever the case may be.
 
(c) The Net Proceeds shall be made available to Borrower for Restoration
provided that each of the following conditions are met:
 
(i) no Event of Default shall have occurred and be continuing;
 
(ii) (1) in the event the Net Proceeds are Insurance Proceeds, less than thirty
percent (30%) of the total floor area of the Improvements has been damaged,
destroyed or rendered unusable as a result of such fire or other casualty or
(2) in the event the Net Proceeds are Condemnation Proceeds, less than fifteen
percent (15%) of the land constituting the Property is taken, and such land is
located along the perimeter or periphery of the Property, and no portion of the
Improvements is located in such land;
 
(iii) Leases demising in the aggregate at least sixty-five percent (65%) of the
total rentable space in the Property and in effect as of the date of the
occurrence of such Insured Casualty or Condemnation remain in full force and
effect during and after the completion of the Restoration;
 
(iv) Borrower shall commence the Restoration as soon as reasonably practicable
(but in no event later than ninety (90) days after such damage or destruction or
taking, whichever the case may be, occurs) and shall diligently pursue the same
to satisfactory completion;
 
(v) Lender shall be reasonably satisfied that any operating deficits, including
all scheduled payments of principal and interest under the Note, which will be
incurred with respect to the Property as a result of the occurrence of any such
fire or other casualty or taking, whichever the case may be, will be covered out
of (1) the Net Proceeds, (2) the insurance coverage referred to in Section
7.1.1(c), if applicable, or (3) by other funds of Borrower;
 
(vi) Lender shall be satisfied that the Restoration will be completed on or
before the earliest to occur of (1) six (6) months prior to the Maturity Date,
(2) the earliest date required for such completion under the terms of any
Required Lease, (3) such time as may be required under applicable zoning law,
ordinance, rule or
 

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regulation in order to repair and restore the Property to the condition it was
in immediately prior to such fire or other casualty or to as nearly as possible
the condition it was in immediately prior to such taking, as applicable or
(4) the expiration of the insurance coverage referred to in Section 7.1.1(c);
 
(vii) the Property and the use thereof after the Restoration will be in
compliance with and permitted under all applicable zoning laws, ordinances,
rules and regulations and all necessary operating or reciprocal easement
agreements for the operation and maintenance of the Property are, or remain, in
effect;
 
(viii) the Restoration shall be done and completed by Borrower in an expeditious
and diligent fashion and in compliance with all applicable governmental laws,
rules and regulations (including, without limitation, all applicable
environmental laws); and
 
(ix) such fire or other casualty or taking, as applicable, does not result in a
material loss of access to the Property.
 
(d) Unless such amounts are payable to Borrower pursuant to Section 7.2 or 7.3,
the Net Proceeds shall be held by Lender in an interest-bearing account for the
benefit of Borrower (which interest shall be added to and become a part of the
Net Proceeds) and, until disbursed in accordance with the provisions of this
Section 7.4, shall constitute additional security for the Debt and other
obligations under the Loan Documents. The Net Proceeds shall be disbursed by
Lender to, or as directed by, Borrower from time to time during the course of
the Restoration, upon receipt of evidence reasonably satisfactory to Lender that
(A) all materials installed and work and labor performed (except to the extent
that they are to be paid for out of the requested disbursement) in connection
with the Restoration have been paid for in full, and (B) there exist no notices
of pendency, stop orders, mechanic’s or materialman’s liens or notices of
intention to file same, or any other liens or encumbrances of any nature
whatsoever on the Property arising out of the Restoration which have not either
been fully bonded to the satisfaction of Lender and discharged of record or in
the alternative fully insured to the reasonable satisfaction of Lender by the
title company issuing the title insurance policy.
 
(e) All plans and specifications required in connection with any Restoration
following a Casualty or Condemnation resulting in Net Proceeds of $3,000,000 or
more shall be subject to prior review and reasonable acceptance in all respects
by Lender and by an independent consulting engineer selected by Lender (the
“Casualty Consultant”) provided that if the correspondence from Borrower to
Lender requesting approval of any such plans and specifications (or contractors,
subcontractors or materialmen in connection therewith) contains a bold faced,
conspicuous legend at the top of the first page stating that “IF YOU FAIL TO
RESPOND TO THIS REQUEST FOR APPROVAL IN WRITING WITHIN 15 BUSINESS DAYS, YOUR
APPROVAL SHALL BE DEEMED GIVEN”, and if Lender fails to respond to such request
for approval in writing within fifteen (15) Business Days after receipt by
Lender of such written request, the related plans and specifications and all
information reasonably required in order to adequately review the same, then
such approval will be deemed given. Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained in
connection with the Restoration. The identity of the contractors, subcontractors
and
 

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materialmen engaged in any Restoration following a Casualty or Condemnation
resulting in Net Proceeds of $3,000,000 or more, as well as the contracts under
which they have been engaged, shall be subject to prior review and acceptance by
Lender and the Casualty Consultant, which acceptance shall not be unreasonably
withheld, conditioned or delayed. All costs and expenses incurred by Lender in
connection with making the Net Proceeds available for the Restoration including,
without limitation, reasonable counsel fees and disbursements and the Casualty
Consultant’s fees, shall be paid by Borrower.
 
(f) In no event shall Lender be obligated to make disbursements of the Net
Proceeds in excess of an amount equal to the costs actually incurred from time
to time for work in place as part of the Restoration, as certified by the
Casualty Consultant, minus the Casualty Retainage. The term “Casualty Retainage”
shall mean an amount equal to ten percent (10%) of the hard costs actually
incurred for work in place as part of the Restoration, as certified by the
Casualty Consultant, until the Restoration has been completed. The Casualty
Retainage shall in no event, and notwithstanding anything to the contrary set
forth above in this clause (f), be less than the amount actually held back by
Borrower from contractors, subcontractors and materialmen engaged in the
Restoration. The Casualty Retainage shall not be released until the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 7.4.1 and that all approvals
necessary for the re-occupancy and use of the Property have been obtained from
all appropriate governmental and quasi governmental authorities, and Lender
receives evidence satisfactory to Lender that the costs of the Restoration have
been paid in full or will be paid in full out of the Casualty Retainage;
provided, however, that Lender will release the portion of the Casualty
Retainage being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed all work and has supplied all materials in
accordance with the provisions of the contractor’s, subcontractor’s or
materialman’s contract, the contractor, subcontractor or materialman delivers
the lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested by
Lender or by the title company issuing the title insurance policy, and Lender
receives an endorsement to the title insurance policy insuring the continued
priority of the lien of the Mortgage and evidence of payment of any premium
payable for such endorsement. If required by Lender, the release of any such
portion of the Casualty Retainage shall be approved by the surety company, if
any, which has issued a payment or performance bond with respect to the
contractor, subcontractor or materialman.
 
(g) Lender shall not be obligated to make disbursements of the Net Proceeds more
frequently than once every calendar month.
 
(h) If at any time the Net Proceeds or the undisbursed balance thereof shall
not, in the reasonable opinion of Lender in consultation with the Casualty
Consultant, be sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the “Net
Proceeds Deficiency”) with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to
 

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this Section 7.4 shall constitute additional security for the Debt and other
obligations under the Loan Documents.
 
(i) The excess, if any, of the Net Proceeds and the remaining balance, if any,
of the Net Proceeds Deficiency deposited with Lender after the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 7.4.1, and the receipt by Lender
of evidence satisfactory to Lender that all costs incurred in connection with
the Restoration have been paid in full, shall be remitted by Lender to Borrower,
provided no Event of Default shall have occurred and shall be continuing under
the Note, this Agreement or any of the other Loan Documents.
 
(j) Notwithstanding the last sentence of Section 7.1.1(c) and provided no Event
of Default exists hereunder, proceeds received by Lender on account of the
rental or business interruption insurance specified in Section 7.1.1(c) above
with respect to any Casualty shall either (x) at any time other than during the
continuance of a Cash Management Period, be released to Borrower for Borrower’s
deposit with the Clearing Bank or (y) during a Cash Management Period, be
deposited by Lender directly into the Deposit Account and allocated as Rents in
accordance with Section 3.10(i) through (viii) but (a) only to the extent it
reflects a replacement for (i) lost Rents that would have been due under Leases
existing on the date of such Casualty, and/or (ii) lost Rents under Leases that
had not yet been executed and delivered at the time of such Casualty which
Borrower has proven to the insurer under the related Policy would have been due
under such Leases (and then only to the extent such proceeds disbursed by such
insurer reflect a replacement for such past due Rents) and (b) with respect to
clause (y) above, only to the extent necessary to fully make the disbursements
required by Section 3.10(i) through (viii). All other such proceeds shall be
held by Lender and disbursed in accordance with this Section 7.4.
 
7.4.2 Application to Debt. All Net Proceeds not required (i) to be made
available for the Restoration or (ii) to be returned to Borrower as excess Net
Proceeds pursuant to Section 7.4.1(i) may be retained and applied by Lender
toward the payment of the Debt whether or not then due and payable in such
order, priority and proportions as Lender in its sole discretion shall deem
proper, or, at the discretion of Lender, the same may be paid, either in whole
or in part, to Borrower for such purposes as Lender shall designate, in its
discretion. So long as no Event of Default has occurred and is continuing, any
application of Net Proceeds to the Debt shall not require any payment of the
Yield Maintenance Premium or any other premium or penalty.
 
ARTICLE 8
 

 
DEFAULTS
 
Section 8.1 Events of Default
 
. An “Event of Default” shall exist with respect to the Loan if any of the
following shall occur:
 
(a) if any portion of the Debt (including required deposits into the Subaccounts
pursuant to Sections 3.3, 3.4, 3.5, 3.6 and 3.8) that is due on a Payment Date
is not paid on or
 

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before the related Payment Date or, for any payment other than payments due on a
Payment Date, the date on which such payment is due;
 
(b) subject to Borrower’s right to contest as provided herein, if any of the
Taxes are not paid prior to the date that any interest, late fees or other
penalties would accrue thereon or any of the Other Charges are not paid when the
same are due and payable (unless sums equaling the amount of Taxes and Other
Charges then due and payable have been delivered to Lender in accordance with
Section 3.3 hereof);
 
(c) if the Policies are not kept in full force and effect, or if the Policies or
certificates evidencing such Policies are not delivered to Lender within fifteen
(15) days after request;
 
(d) except as expressly permitted by the terms of this Agreement or the other
Loan Documents, a Transfer occurs without Lender’s prior written consent;
 
(e) if any representation or warranty of Borrower, or of any Guarantor, made
herein or in any other Loan Document or in any certificate, report, financial
statement or other instrument or document furnished to Lender in connection with
the Loan shall have been false or misleading in any material respect when made,
provided that if such misrepresentation was not intentional, is susceptible to
cure and Lender will not be adversely affected by a delay in enforcing its
remedy under the Loan Documents, Borrower shall have thirty (30) days after
notice thereof to cure such default;
 
(f) if Borrower or any Guarantor shall make an assignment for the benefit of
creditors or if Borrower shall generally not be paying its debts as they become
due;
 
(g) if a receiver (other than a receiver appointed by Lender), liquidator or
trustee of Borrower or of any Guarantor shall be appointed or if Borrower or any
Guarantor shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Borrower or any Guarantor or if any proceeding for the
dissolution or liquidation of Borrower or of any Guarantor shall be instituted;
however, if such appointment, adjudication, petition or proceeding was
involuntary and not consented to by Borrower or such Guarantor, upon the same
not being discharged, stayed or dismissed within ninety (90) days;
 
(h) Borrower breaches any covenant contained in Section 5.12.1, 5.13, 5.15,
5.22, 5.25 or 5.28;
 
(i) if Borrower shall be in default under any other deed of trust or security
agreement covering any part of the Property whether it be superior or junior in
lien to the Mortgage;
 
(j) subject to Borrower’s right to contest as provided herein, if the Property
becomes subject to any mechanic’s, materialman’s or other lien that is not
otherwise permitted by the Loan Documents and such lien is not removed of record
within thirty (30) days of the
 

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filing or recording of such lien (except a lien for local real estate taxes and
assessments or special taxes not then due and payable);
 
(k) if Borrower fails to cure properly any violations of laws or ordinances
affecting or which may be interpreted to affect the Property within thirty (30)
days after Borrower first receives notice of any such violations; provided,
however, that if such violation is reasonably susceptible of cure, but not
within such thirty (30) day period and the applicable law or ordinance permits
such longer period within which to cure such violation, then Borrower shall be
permitted up to an additional sixty (60) days to cure such violation provided
that Borrower diligently and continuously pursues such cure;
 
(l) except as permitted in this Agreement, the alteration, improvement,
demolition or removal of any of the Improvements without the prior consent of
Lender;
 
(m) if Borrower shall continue to be in default under any term, covenant, or
provision of the Note or any of the other Loan Documents, beyond applicable
notice and/or cure periods contained in those documents;
 
(n) if Borrower fails to cure a default under any other term, covenant or
provision of this Agreement within thirty (30) days after Borrower first
receives notice of any such default; provided, however, if such default is
reasonably susceptible of cure, but not within such thirty (30) day period, then
Borrower may be permitted up to an additional sixty (60) days to cure such
default provided that Borrower diligently and continuously pursues such cure;
 
(o) if without Lender’s prior written consent, except as otherwise expressly
permitted by the Loan Documents, (i) the Management Agreement is terminated,
(ii) the ownership, management or control of Manager is transferred, (iii) there
is a material change in the Management Agreement, or (iv) there shall be a
material default by Borrower under the Management Agreement that is not cured
within any applicable notice or cure period provided under the Management
Agreement;
 
(p) if Borrower ceases to continuously operate the Property or any material
portion thereof as office space for any reason whatsoever (other than temporary
cessation in connection with any repair or renovation thereof undertaken with
the consent of Lender or otherwise permitted under this Agreement);
 
(q) if any of the assumptions contained in the “non-consolidation” opinion
delivered to Lender in connection with the Loan, or in any other
“non-consolidation” opinion delivered subsequent to the closing of the Loan, is
or shall become untrue in any respect; or
 
(r) if Borrower fails to comply with the covenants as to Prescribed Laws set
forth in Section 5.4.1 hereof.
 
Section 8.2 Remedies
 
.
 
 

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8.2.1 Acceleration. Upon the occurrence of an Event of Default (other than an
Event of Default described in paragraph (f) or (g) of Section 8.1) and at any
time and from time to time thereafter, in addition to any other rights or
remedies available to it pursuant to the Loan Documents or at law or in equity,
Lender may take such action, without notice or demand, that Lender deems
advisable to protect and enforce its rights against Borrower and in and to the
Property including declaring the Debt to be immediately due and payable
(including unpaid interest, Default Rate interest, Late Payment Charges, Yield
Maintenance Premium and any other amounts owing by Borrower), without notice or
demand; and upon any Event of Default described in paragraph (f) or (g) of
Section 8.1, the Debt (including unpaid interest, Default Rate interest, Late
Payment Charges, Yield Maintenance Premium and any other amounts owing by
Borrower) shall immediately and automatically become due and payable, without
notice or demand, and Borrower hereby expressly waives any such notice or
demand, anything contained in any Loan Document to the contrary notwithstanding.
 
8.2.2 Remedies Cumulative. Upon the occurrence of an Event of Default, all or
any one or more of the rights, powers, privileges and other remedies available
to Lender against Borrower under the Loan Documents or at law or in equity may
be exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared, or be automatically, due and payable, and
whether or not Lender shall have commenced any foreclosure proceeding or other
action for the enforcement of its rights and remedies under any of the Loan
Documents. Any such actions taken by Lender shall be cumulative and concurrent
and may be pursued independently, singly, successively, together or otherwise,
at such time and in such order as Lender may determine in its discretion, to the
fullest extent permitted by law, without impairing or otherwise affecting the
other rights and remedies of Lender permitted by law, equity or contract or as
set forth in the Loan Documents. Without limiting the generality of the
foregoing, Borrower agrees that if an Event of Default is continuing, (i) to the
extent permitted by applicable law, Lender is not subject to any “one action” or
“election of remedies” law or rule, and (ii) all Liens and other rights,
remedies or privileges provided to Lender shall remain in full force and effect
until Lender has exhausted all of its remedies against the Property, the
Mortgage has been foreclosed, the Property has been sold and/or otherwise
realized upon in satisfaction of the Debt or the Debt has been paid in full. To
the extent permitted by applicable law, nothing contained in any Loan Document
shall be construed as requiring Lender to resort to any portion of the Property
for the satisfaction of any of the Debt in preference or priority to any other
portion, and Lender may seek satisfaction out of the entire Property or any part
thereof, in its discretion.
 
8.2.3 Severance. Lender shall have the right from time to time to sever the Note
and the other Loan Documents into one or more separate notes, mortgages and
other security documents in such denominations and priorities of payment and
liens as Lender shall determine in its discretion for purposes of evidencing and
enforcing its rights and remedies. Borrower shall execute and deliver to Lender
from time to time, promptly after the request of Lender, a severance agreement
and such other documents as Lender shall request in order to effect the
severance described in the preceding sentence, all in form and substance
reasonably satisfactory to Lender. Borrower hereby absolutely and irrevocably
appoints Lender as its true and lawful attorney, coupled with an interest, in
its name and stead to make and execute all documents necessary or desirable to
effect such severance, Borrower ratifying all that such attorney shall do by
virtue thereof.
 
 

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8.2.4 Delay. No delay or omission to exercise any remedy, right or power
accruing upon an Event of Default, or the granting of any indulgence or
compromise by Lender shall impair any such remedy, right or power hereunder or
be construed as a waiver thereof, but any such remedy, right or power may be
exercised from time to time and as often as may be deemed expedient. A waiver of
one Default or Event of Default shall not be construed to be a waiver of any
subsequent Default or Event of Default or to impair any remedy, right or power
consequent thereon. Notwithstanding any other provision of this Agreement,
Lender reserves the right to seek a deficiency judgment or preserve a deficiency
claim in connection with the foreclosure of the Mortgage to the extent necessary
to foreclose on all or any portion of the Property, the Rents, the Cash
Management Accounts or any other collateral.
 
8.2.5 Lender’s Right to Perform. If Borrower fails to perform any covenant or
obligation contained herein (including the covenant set forth in the last
sentence of Section 5.4.1) and such failure shall continue for a period of five
Business Days after Borrower’s receipt of written notice thereof from Lender,
without in any way limiting Lender’s right to exercise any of its rights, powers
or remedies as provided hereunder, or under any of the other Loan Documents,
Lender may, but shall have no obligation to, perform, or cause performance of,
such covenant or obligation, and all costs, expenses, liabilities, penalties and
fines of Lender incurred or paid in connection therewith shall be payable by
Borrower to Lender within ten (10) days after the date Lender makes written
demand therefor and, if not paid, shall be added to the Debt (and to the extent
permitted under applicable laws, secured by the Mortgage and other Loan
Documents) and shall bear interest thereafter at the Default Rate.
Notwithstanding the foregoing, Lender shall have no obligation to send notice to
Borrower of any such failure.
 
ARTICLE 9
 

 
SPECIAL PROVISIONS
 
Section 9.1 Sale of Note and Securitization
 
.
 
9.1.1 Cooperation in Securitization. At the request of the holder of the Note
and, to the extent not already required to be provided by Borrower under the
Note, Loan Agreement or other Loan Documents, Borrower and its affiliates shall
use reasonable efforts to comply with the requests of the holder of the Note or
to take such action as may be required by a purchaser, transferee, assignee,
servicer, participant or other potential investor (collectively, the “Investor”)
or by the Rating Agencies in connection with one or more sales, transfers or
assignments of the Loan (or portions thereof or interests therein), or grants of
participation interests therein, in connection with one or more securitizations
of such Note, or portions thereof or interests therein (each such sale and/or
securitization, a “Securitization”) involving the issuance of rated or unrated
single-class or multi-class securities (the “Securities”) secured by or
evidencing direct or indirect ownership interests in, among other things, the
Note (or any portion thereof or interests therein) and the Loan Agreement. Such
efforts, with respect to each Securitization may include, without limitation,
to:
 
 

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(a) (i) provide such financial and other information with respect to the
Property, Borrower, the OP and the REIT (the OP and the REIT, being individually
or collectively referred to herein as the “Parent”) and the manager of the
Property as reasonably determined by the holder of the Note to be necessary or
appropriate in connection with the Securitization (including, without
limitation, existing audited or unaudited financial statements or at no expense
to Borrower or any Parent, audited or unaudited financial statements),
(ii) provide budgets relating to the Property (iii) at no expense to Borrower or
any Parent, perform or permit or cause to be performed or permitted such site
inspections, appraisals, market studies, environmental reviews and reports
(Phase I’s and, if appropriate, Phase II’s), engineering reports and other due
diligence investigations of the Property, as may be reasonably requested by the
holder of the Note, the Rating Agencies, and/or Investors in the Securities, or
as may be reasonably necessary or appropriate in connection with the
Securitization in a manner which does not unreasonably interfere with the
tenants or occupants thereof (such information in clauses (i), (ii) and (iii)
being collectively referred to as the “Provided Information”), together with
appropriate verification and/or consents with respect to the Provided
Information through letters of auditors or opinions of counsel of independent
attorneys acceptable to the holder of the Note and the Rating Agencies;
 
(b) prepare a presentation for the Rating Agencies describing Borrower, Parent,
the Property, management of the Property and such other matters as are customary
for securitizations such as the Securitization, in each case as may be
reasonably requested by the holder of the Note, the Rating Agencies and/or
Investors in the Securities or as may be reasonably determined by the holder of
the Note to be necessary or appropriate in connection with the Securitization;
 
(c) cause counsel to render opinions, which may be relied upon by the holder of
the Note, the Rating Agencies, Investors and/or other participants in the
Securitization, as to non consolidation or any other opinion customary in
securitization transactions with respect to the Property, Borrower, Parent and
their respective affiliates, which counsel and opinions shall be reasonably
satisfactory to the holder of the Note, the Rating Agencies and/or Investors in
the Securities;
 
(d) work with and, if requested, supervise third-party service providers engaged
by Borrower to obtain, collect and deliver information reasonably required by
the Rating Agencies in connection with the Securitization;
 
(e) if required by the Rating Agencies, use commercially reasonable efforts to
deliver such additional tenant estoppel letters, subordination agreements or
other agreements from parties to agreements that affect the Property, which
estoppel letters, subordination agreements or other agreements shall be
reasonably satisfactory to Lender and the Rating Agencies;
 
(f) make such representations and warranties as of the closing date of the
Securitization with respect to the Property, Borrower, Parent, the Note, Loan
Agreement and other Loan Documents as may be reasonably requested by the holder
of the Note, the Rating Agencies and/or Investors in the Securities and as are
consistent with the facts covered by such
 

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representations and warranties as they exist on the date thereof, including the
representations and warranties made in the Note, Loan Agreement and other Loan
Documents; and
 
(g) execute such amendments to the Note, Loan Agreement, other Loan Documents
and organizational documents as may be reasonably requested by the holder of the
Note, the Rating Agencies and/or Investors in the Securities or otherwise to
effect one or more Securitizations (including, without limitation, such
amendments as shall be necessary or advisable to sever the Note (and/or any then
existing component thereof) into one or more notes and/or one or more components
and allocate Principal amounts thereof in order to effectuate one or more sales
of the Note (and/or the resulting notes or components thereof) and/or to
correspond to the related classes of Securities in one or more Securitizations
so long as, in all such cases, the overall duration-weighted interest rate over
all of the notes and components shall equal the Interest Rate); provided,
however, that Borrower shall not be required to modify or amend the Note, Loan
Agreement or any other Loan Documents if such modification or amendment would
(i) have a material adverse economic effect on Borrower or its Affiliates,
(ii) modify or amend the loan term, amortization or any other economic term of
the Loan or (iii) otherwise materially increase the obligations or materially
decrease the rights of Borrower or the other parties pursuant to the Note, Loan
Agreement and other Loan Documents (including, but not limited to, modifying the
transfer, recourse, prepayment, event of default or remedy provisions of the
Loan Documents or the organizational documents of Borrower or its Affiliate).
 
9.1.2 Costs and Expenses. Borrower, the REIT and their Affiliates will bear
their own internal costs of cooperation required by this Agreement in connection
with any Securitization, but Lender shall be responsible for all other
out-of-pocket costs and expenses in connection with any Securitization after the
closing of the Loan.
 
9.1.3 Indemnification. 
 
(a) Borrower and its respective Affiliates understand that certain of the
Provided Information may be included in disclosure documents in connection with
each Securitization, including, without limitation, a prospectus, prospectus
supplement, private placement memorandum, collateral term sheets, structured
term sheets and computational materials (each, a “Disclosure Document”) and may
also be included in filings with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended (the “Securities Act”), or the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or provided or
made available to Investors in the Securities, the Rating Agencies and service
providers relating to such Securitization. In the event that such Disclosure
Document is required to be revised prior to the sale of all Securities,
Borrower, and its respective Affiliates will cooperate with the holder of the
Note in updating the Disclosure Document by providing all current information
necessary to keep the Disclosure Document accurate and complete in all material
respects; provided, however, that this provision shall be limited to those
portions of the Disclosure Statement that described Borrower or any of its
Affiliates, the Property, the Loan or the other Loan Documents.
 
(b) In the case of each Securitization, Borrower agrees to cooperate in
connection with (i) the preparation of a preliminary and a final private
placement memorandum and/or (ii) the preparation of a preliminary and final
prospectus or prospectus supplement, as applicable, and (iii) the execution of
an indemnification certificate (A) certifying that Borrower has carefully
 

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examined in each such memorandum or prospectus, as applicable, all sections
containing information relating to the Property, Parent, Borrower, any
Affiliates of Parent, Borrower, or the Loan, and that such information included
therein (collectively, the “Securitization Information”), does not contain any
untrue statement of a material fact or omit to state a material fact known to
Borrower that is necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading, (B) indemnifying
Lender (and for purposes of this Section 9.1.3, Lender hereunder shall include
its officers, directors and employees), the Person who acts as depositor, issuer
and/or registrant who may have filed a registration statement relating to the
Securitization, each underwriter or placement agent involved in the
Securitization, each of their respective directors and officers and each Person
who controls such Person within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (collectively, the “Indemnified Group”), for
any losses, claims, damages or liabilities (collectively, the “Liabilities”) to
which any of the Indemnified Group may become subject insofar as the Liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Securitization Information which untrue or
alleged untrue statement is not expressly disclosed to Lender by Borrower after
Borrower has been given an opportunity to review the Securitization Information,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (C) agreeing to reimburse each Person in the
Indemnified Group for any legal or other expenses incurred by each such Person
in connection with investigating or defending the Liabilities for which an
indemnity is owed hereunder; provided, however, that Borrower will be liable in
any such case under clauses (B) or (C) above only to the extent that any such
Liability arises out of or is based upon any Provided Information or upon the
omission or alleged omission to state therein a material fact known to Borrower
that is required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or any other information furnished to Lender or any other Person
in the Indemnified Group by Borrower or an affiliate in connection with the
preparation of any Disclosure Document or in connection with the underwriting of
the Debt, including, without limitation, financial statements of Borrower,
operating statements, rent rolls, environmental site assessment reports and
Property condition reports with respect to the Property. This indemnity
agreement will be in addition to any liability which Borrower may otherwise
have.
 
(c) In the case of each Securitization, in connection with filings under the
Exchange Act, Borrower agrees to indemnify (i) each Person in the Indemnified
Group for Liabilities to which each such Person may become subject insofar as
the Liabilities arise out of or are based upon an untrue statement or an alleged
untrue statement in the Provided Information or an omission or alleged omission
to state in the Provided Information a material fact known to Borrower that is
necessary in order to make the statements in the Provided Information, in light
of the circumstances under which they were made, not misleading, which untrue or
alleged untrue statement or omission or alleged omission is not expressly
disclosed to Lender by Borrower after Borrower has been given an opportunity to
review such filings under the Exchange Act and (ii) each Person in the
Indemnified Group for any reasonable legal or other expenses incurred by each
such Person in connection with defending or investigating the Liabilities for
which an indemnity is owed hereunder.
 
 

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(d) Promptly after receipt by a party seeking indemnification hereunder of
notice of the commencement of any action, suit or proceeding against such party
in respect of which a claim is to be made under this Section 9.1.3, such party
will notify Borrower in writing of the commencement thereof, but the omission to
so notify Borrower will not relieve Borrower from any liability which Borrower
may have to any indemnified party hereunder except to the extent that failure to
notify causes prejudice to Borrower. In the event that any action is brought
against any indemnified party, and it notifies Borrower of the commencement
thereof, Borrower will be entitled to participate therein and, to the extent
that Borrower may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. After notice from Borrower to such indemnified party
hereunder, Borrower shall be responsible for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, if the
defendants in any such action include both the indemnified party and Borrower
and the indemnified party shall have reasonably concluded that there are any
legal defenses available to it and/or other indemnified parties that are
different from or in addition to those available to Borrower, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Borrower shall not be liable for
the expenses of more than one separate counsel unless an indemnified party shall
have reasonably concluded that there may be legal defenses available to Borrower
that are different from or additional to those available to another indemnified
party.
 
(e) In order to provide for just and equitable contribution in circumstances in
which any indemnification provided for under this Section 9.1.3 is for any
reason held to be unenforceable, unavailable or insufficient to hold harmless an
indemnified party in respect of any Liabilities which would otherwise be
indemnifiable hereunder, Borrower shall contribute to the amount paid or payable
by the indemnified party as a result of such Liabilities; provided, however,
that if any indemnified party is guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) it shall not be entitled to
contribution from Borrower if Borrower was not guilty of such fraudulent
misrepresentation. In determining the amount of contribution to which the
respective parties are entitled, the following factors shall be considered:
(i) the relative knowledge and access to information concerning the matter with
respect to which a claim was asserted; (ii) the opportunity to correct and
prevent any statement or omission; and (iii) any other equitable considerations
appropriate in the circumstances. Lender and Borrower hereby agree that it would
not be equitable if the amount of such contribution were determined by pro rata
or per capita allocation.
 
(f) The liabilities and obligations of Borrower and its Affiliates hereunder
shall survive the termination of the Note, Loan Agreement and other Loan
Documents and the satisfaction and discharge of the Debt.
 
(g) Each Person in the Indemnified Group is an intended third party beneficiary
of the obligations of Borrower herein.
 
9.1.4 Rating Surveillance. Lender will retain the Rating Agencies to provide
rating surveillance services on Securities. The pro rata expenses of such
surveillance will be
 

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paid for by Borrower based on the applicable percentage of such expenses
determined by dividing the then outstanding Principal by the then aggregate
outstanding amount of the pool created in the Securitization which includes the
Loan.
 
9.1.5 Severance of Loan. Lender shall have the right, at any time (whether prior
to, in connection with, or after any Securitization), with respect to all or any
portion of the Loan, to modify, split and/or sever all or any portion of the
Loan as hereinafter provided. Without limiting the foregoing, Lender may
(i) cause the Note and the Mortgage to be split into a first and second mortgage
loan, (ii) create one more senior and subordinate notes (i.e., an A/B or A/B/C
structure), (iii) create multiple components of the Note or Notes (and allocate
or reallocate the Principal balance of the Loan among such components) or
(iv) otherwise sever the Loan into two or more loans secured by mortgages, in
each such case, in whatever proportion and whatever priority Lender determines;
provided, however, in each such instance the outstanding Principal balance of
all the Notes evidencing the Loan (or components of such Notes) immediately
after the effective date of such modification equals the outstanding Principal
balance of the Loan immediately prior to such modification and the weighted
average of the interest rates for all such Notes (or components of such Notes)
immediately after the effective date of such modification equals the interest
rate of the original Note immediately prior to such modification and such action
shall not result in additional costs to Borrower except as expressly provided
above. If requested by Lender, Borrower (and Borrower’s constituent members, if
applicable, and Guarantor) shall execute within five (5) Business Days after
such request, such documentation as Lender may reasonably request to evidence
and/or effectuate any such modification or severance.
 
ARTICLE 10
 

 
MISCELLANEOUS
 
Section 10.1 Exculpation
 
. Subject to the qualifications below, Lender shall not enforce the liability
and obligation of Borrower or its constituent members, partners, shareholders,
directors, employees or agents or the direct or indirect constituent members,
partners, shareholders, directors, employees or agents thereof (collectively,
the “Borrower Parties”) or any other Person, to perform and observe the
obligations contained in this Agreement, the Note or any of the other Loan
Documents by any action or proceeding wherein a money judgment shall be sought
against any of the Borrower Parties or any other Person, except that Lender may
bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon
the Property, the Rents or any other collateral given to Lender pursuant to this
Agreement and the other Loan Documents; provided, however, that, except as
specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against the Borrower Parties only to the extent of their
interest in the Property, the Rents and in any other collateral given to Lender,
and Lender, by accepting this Agreement, the Note and the other Loan Documents,
agrees that it shall not sue for, seek or demand any deficiency judgment against
any of the Borrower Parties or any other Person in any such action or proceeding
under or by reason of or in connection with this Agreement, the Note or any of
the other Loan Documents. The provisions of this paragraph shall not, however,
(i) constitute a waiver, release or impairment of
 

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any obligation evidenced or secured by this Agreement, the Note or any of the
other Loan Documents; (ii) impair the right of Lender to name any of the
Borrower Parties, as a party defendant in any action or suit for foreclosure and
sale under the Mortgage; (iii) affect the validity or enforceability of any
guaranty made in connection with the Loan or any rights and remedies of Lender
thereunder; (iv) impair the right of Lender to obtain the appointment of a
receiver; (v) impair the enforcement of the Assignment of Leases and Rents
executed in connection herewith; or (vi) constitute a waiver of the right of
Lender to enforce the liability and obligation of Borrower (but not against any
members of Borrower (other than Guarantor to the extent provided in the
Non-Recourse Guaranty) or their direct or indirect constituent members or
partners or any other Person), by money judgment or otherwise, to the extent of
any loss, damage, cost, expense, liability, claim or other obligation (but
excluding any punitive, consequential or speculative damages) incurred by Lender
(including attorneys’ fees and costs reasonably incurred) arising out of or in
connection with the following:
 
(a) fraud or intentional misrepresentation by Borrower or any Guarantor in
connection with the Loan;
 
(b) intentional physical waste of the Property (including, but not limited to,
waste due to gross negligence) by Borrower or any affiliate thereof; provided,
however, such physical waste shall exclude wear and tear to the Property that
occurs in the ordinary course of business of the Property by Borrower or any
affiliate thereof;
 
(c) the material breach of any representation, warranty, covenant or
indemnification provision in that certain Environmental and Hazardous Substance
Indemnification Agreement of even date herewith given by Borrower to Lender or
in this Agreement concerning Environmental Laws, Hazardous Substances and
Asbestos;
 
(d) the removal or disposal by Borrower or any affiliate thereof of any portion
of the Property after an Event of Default has occurred and while it is
continuing, unless such portion of the Property is replaced by an item of equal
or greater value as determined by Lender in its reasonable discretion;
 
(e) the misapplication or conversion by Borrower or any affiliate thereof of
(i) any insurance proceeds paid by reason of any loss, damage or destruction to
the Property, (ii) any awards or other amounts received in connection with the
condemnation of all or a portion of the Property, (iii) any Rents following an
Event of Default or (iv) any Rents paid more than one month in advance;
 
(f) failure to pay charges for labor or materials or taxes or other charges that
can create liens superior to the lien of the Mortgage on any portion of the
Property unless such taxes or other charges are being contested in accordance
herewith or such taxes or charges have been delivered to Lender in accordance
with Section 3.3 or Borrower has complied with Section 5.2; and
 
(g) any security deposits collected by Borrower or any affiliate thereof with
respect to the Property which are not delivered to Lender upon a foreclosure of
the Property or action in lieu thereof, except to the extent any such security
deposits were applied in accordance
 

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with the terms and conditions of any of the Leases prior to the occurrence of
the Event of Default that gave rise to such foreclosure or action in lieu
thereof.
 
Notwithstanding anything to the contrary in any of the Loan Documents (i) Lender
shall not be deemed to have waived any right which Lender 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 Debt or to require that all collateral
shall continue to secure all of the Debt owing to Lender in accordance with the
Loan Documents, and (ii) the Debt shall become fully recourse to Borrower (but
not its members (other than Guarantor solely to the extent provided in the
Non-Recourse Guaranty) or other direct or indirect constituent members or
partners or any other Person) in the event that: (A) the first full Monthly
Payment Amount (as defined in the Note) under the Note is not paid when due;
(B) other than in connection with a default under subsection (x) of the
definition of Special Purpose Bankruptcy Remote Entity set forth in Schedule 5
hereof, Borrower fails to maintain its status as a Special Purpose Bankruptcy
Remote Entity in accordance with the provisions of this Agreement and such
failure results in the substantive consolidation of Borrower with another
Person; (C) except as otherwise permitted pursuant to the Loan Documents,
Borrower fails to obtain Lender’s prior written consent to any subordinate
financing or other voluntary lien encumbering the Property; (D) except as
otherwise permitted pursuant to the Loan Documents, Borrower fails to obtain
Lender’s prior written consent to any assignment, transfer, or conveyance of the
Property or any interest therein as and to the extent required by this Agreement
or the Mortgage; or (E) (1) if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by Borrower or Guarantor, or (2) if Borrower or Guarantor
files an answer consenting to, or otherwise joining in, any involuntary petition
for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy
law, or any similar federal or state law filed against it by any other Person,
or is found pursuant to a final, unappealable order of a court of competent
jurisdiction to have solicited or caused to be solicited creditors to file any
involuntary petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law against Borrower or
Guarantor, or (3) if Borrower or Guarantor are found, pursuant to a final
unappealable order of a court of competent jurisdiction, to have been in
collusion with creditors that initiate a bankruptcy action or proceeding against
Borrower or Guarantor.
 
Section 10.2 Brokers and Financial Advisors
 
. Borrower hereby represents that, with the exception of Secured Capital Corp.,
it has dealt with no financial advisors, brokers, underwriters, placement
agents, agents or finders in connection with the Loan. Borrower shall indemnify
and hold Lender harmless from and against any and all claims, liabilities, costs
and expenses (including attorneys’ fees, whether incurred in connection with
enforcing this indemnity or defending claims of third parties) of any kind in
any way relating to or arising from a claim by any Person that such Person acted
on behalf of Borrower in connection with the transactions contemplated herein.
The provisions of this Section 10.2 shall survive the expiration and termination
of this Agreement and the repayment of the Debt.
 
Section 10.3 Retention of Servicer
 
 

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. Lender reserves the right to retain the Servicer to act as its agent hereunder
with such powers as are specifically delegated to the Servicer by Lender,
whether pursuant to the terms of this Agreement, any pooling and servicing
agreement or similar agreement entered into as a result of a Securitization, the
Cash Management Agreement or otherwise, together with such other powers as are
reasonably incidental thereto. Borrower shall pay any reasonable fees and
expenses of the Servicer in connection with a release of the Property,
assumption or modification of the Loan, enforcement of the Loan Documents or any
other action taken by Servicer hereunder on behalf of Lender.
 
Section 10.4 Survival
 
. This Agreement and all covenants, agreements, representations and warranties
made herein and in the certificates delivered pursuant hereto shall survive the
making by Lender of the Loan and the execution and delivery to Lender of the
Note, and shall continue in full force and effect so long as any of the Debt is
unpaid or such longer period if expressly set forth in this Agreement. All
Borrower’s covenants and agreements in this Agreement shall inure to the benefit
of the respective legal representatives, successors and assigns of Lender.
 
Section 10.5 Lender’s Discretion
 
. Whenever pursuant to this Agreement or any other Loan Document, Lender
exercises any right given to it to approve or disapprove, or consent or withhold
consent, or any arrangement or term is to be satisfactory to Lender or is to be
in Lender’s discretion, the decision of Lender to approve or disapprove, to
consent or withhold consent, or to decide whether arrangements or terms are
satisfactory or not satisfactory, or acceptable or unacceptable or in Lender’s
discretion shall (except as is otherwise specifically herein provided) be in the
sole discretion of Lender and shall be final and conclusive.
 
Section 10.6 Governing Law
 
.
 
(a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK AND THE PROCEEDS OF
THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK,
WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND
TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA,
EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND
ENFORCEMENT OF THE LIENS CREATED PURSUANT TO THE MORTGAGE AND THE ASSIGNMENT OF
LEASES AND RENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE
STATE IN WHICH THE PREMISES (AS DEFINED IN THE MORTGAGE) ARE LOCATED, IT BEING
UNDERSTOOD THAT, TO THE FULLEST
 

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EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK
SHALL GOVERN THE VALIDITY AND THE ENFORCEABILITY OF ALL LOAN DOCUMENTS AND THE
DEBT. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE
NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK PURSUANT TO § 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
 
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT
OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR STATE
COURT IN NEW YORK COUNTY, NEW YORK AND BORROWER WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND
APPOINT CORPORATION TRUST COMPANY AT 111 EIGHTH AVENUE, NEW YORK, NEW YORK
10011, AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE
OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT
SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID
SERVICE OF BORROWER MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED
HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
BORROWER (UNLESS LOCAL LAW REQUIRES ANOTHER METHOD OF SERVICE), IN ANY SUCH
SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (i) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (ii) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH OFFICE SHALL BE
DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND (iii) SHALL PROMPTLY
DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN
NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
 
Section 10.7 Modification, Waiver in Writing
 
. No modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement or of any other Loan Document, nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in a writing signed by the party against whom enforcement is sought,
and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. Except as otherwise expressly
provided herein, no notice to or demand on Borrower shall entitle Borrower to
any other or future notice or demand in the same, similar or other
circumstances. Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under
 

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any other Loan Document, shall operate as or constitute a waiver thereof, nor
shall a single or partial exercise thereof preclude any other future exercise,
or the exercise of any other right, power, remedy or privilege. In particular,
and not by way of limitation, by accepting payment after the due date of any
amount payable under any Loan Document, Lender shall not be deemed to have
waived any right either to require prompt payment when due of all other amounts
due under the Loan Documents, or to declare an Event of Default for failure to
effect prompt payment of any such other amount.
 
Section 10.8 Trial by Jury
 
. BORROWER AND LENDER HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN
DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. EITHER PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER.
 
Section 10.9 Headings/Exhibits
 
. The Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose. The Exhibits attached hereto, are hereby incorporated by reference as a
part of the Agreement with the same force and effect as if set forth in the body
hereof.
 
Section 10.10 Severability
 
. Wherever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement 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 Agreement.
 
Section 10.11 Preferences
 
. Upon the occurrence and continuance of an Event of Default, Lender shall have
the continuing and exclusive right to apply or reverse and reapply any and all
payments by Borrower to any portion of the Debt. To the extent Borrower makes a
payment to Lender, or Lender receives proceeds of any collateral, which is in
whole or part subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or proceeds received, the
Debt or part thereof intended to be satisfied shall be revived and continue in
full force and effect, as if such payment or proceeds had not
 

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been received by Lender. This provision shall survive the expiration or
termination of this Agreement and the repayment of the Debt.
 
Section 10.12 Waiver of Notice
 
. Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Agreement or any other Loan
Document specifically and expressly requires the giving of notice by Lender to
Borrower and except with respect to matters for which Borrower is not, pursuant
to applicable Legal Requirements, permitted to waive the giving of notice.
Borrower hereby expressly waives the right to receive any notice from Lender
with respect to any matter for which no Loan Document specifically and expressly
requires the giving of notice by Lender to Borrower.
 
Section 10.13 Remedies of Borrower
 
. If a claim or adjudication is made that Lender or any of its agents, including
Servicer, has acted unreasonably or unreasonably delayed acting in any case
where by law or under any Loan Document, Lender or any such agent, as the case
may be, has an obligation to act reasonably or promptly, Borrower agrees that
neither Lender nor its agents, including Servicer, shall be liable for any
monetary damages, and Borrower’s sole remedy shall be to commence an action
seeking injunctive relief or declaratory judgment. Any action or proceeding to
determine whether Lender has acted reasonably shall be determined by an action
seeking declaratory judgment. Borrower specifically waives any claim against
Lender and its agents, including Servicer, with respect to actions taken by
Lender or its agents on Borrower’s behalf.
 
Section 10.14 Prior Agreements
 
. This Agreement and the other Loan Documents contain the entire agreement of
the parties hereto and thereto in respect of the transactions contemplated
hereby and thereby, and all prior agreements, understandings and negotiations
among or between such parties, whether oral or written, are superseded by the
terms of this Agreement and the other Loan Documents.
 
Section 10.15 Offsets, Counterclaims and Defenses
 
. Borrower hereby waives the right to assert a counterclaim, other than a
mandatory or compulsory counterclaim, in any action or proceeding brought
against it by Lender or its agents, including Servicer, or otherwise offset any
obligations to make payments required under the Loan Documents. Any assignee of
Lender’s interest in and to the Loan Documents shall take the same free and
clear of all offsets, counterclaims or defenses which Borrower may otherwise
have against any assignor of such documents, and no such offset, counterclaim or
defense shall be interposed or asserted by Borrower in any action or proceeding
brought by any such assignee upon such documents, and any such right to
interpose or assert any such offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.
 
Section 10.16 Publicity
 
. All news releases, publicity or advertising through any media intended to
reach the general public (collectively, “Public Releases”) issued by Borrower or
its Affiliates that refer to the
 

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Loan Documents, the Loan, Lender or any member of the Indemnified Group, a Loan
purchaser, the Servicer or the trustee in a Securitization shall be subject to
the prior written approval of Lender. Lender shall have the right to issue any
Public Releases without Borrower’s approval.
 
Section 10.17 No Usury
 
. Borrower and Lender intend at all times to comply with applicable state law or
applicable United States federal law (to the extent that it permits Lender to
contract for, charge, take, reserve or receive a greater amount of interest than
under state law) and that this Section 10.17 shall control every other agreement
in the Loan Documents. If the applicable law (state or federal) is ever
judicially interpreted so as to render usurious any amount called for under the
Note or any other Loan Document, or contracted for, charged, taken, reserved or
received with respect to the Debt, or if Lender’s exercise of the option to
accelerate the maturity of the Loan or any prepayment by Borrower results in
Borrower having paid any interest in excess of that permitted by applicable law,
then it is Borrower’s and Lender’s express intent that all excess amounts
theretofore collected by Lender shall be credited against the unpaid Principal
and all other Debt (or, if the Debt has been or would thereby be paid in full,
refunded to Borrower), and the provisions of the Loan Documents immediately be
deemed reformed and the amounts thereafter collectible thereunder reduced,
without the necessity of the execution of any new document, so as to comply with
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for thereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance or detention of 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 Debt does not exceed the maximum lawful rate from
time to time in effect and applicable to the Debt for so long as the Debt is
outstanding. Notwithstanding anything to the contrary contained in any Loan
Document, it is not the intention of Lender to accelerate the maturity of any
interest that has not accrued at the time of such acceleration or to collect
unearned interest at the time of such acceleration.
 
Section 10.18 Conflict; Construction of Documents
 
. In the event of any conflict between the provisions of this Agreement and any
of the other Loan Documents, the provisions of this Agreement shall control. The
parties hereto acknowledge that each is represented by separate counsel in
connection with the negotiation and drafting of the Loan Documents and that the
Loan Documents shall not be subject to the principle of construing their meaning
against the party that drafted them.
 
Section 10.19 No Third Party Beneficiaries
 
. The Loan Documents are solely for the benefit of Lender and Borrower and
nothing contained in any Loan Document shall be deemed to confer upon anyone
other than the Lender and Borrower any right to insist upon or to enforce the
performance or observance of any of the obligations contained therein.
 
Section 10.20 Yield Maintenance Premium
 
. Borrower acknowledges that (a) Lender is making the Loan in consideration of
the receipt by Lender of all interest and other benefits intended to be
conferred by the Loan Documents and
 

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(b) if payments of Principal are made to Lender prior to the Stated Maturity
Date, for any reason whatsoever, whether voluntary, as a result of Lender’s
acceleration of the Loan after an Event of Default, by operation of law or
otherwise, Lender will not receive all such interest and other benefits and may,
in addition, incur costs. For these reasons, and to induce Lender to make the
Loan, Borrower agrees that, except as expressly provided in this Agreement, all
prepayments, if any, whether voluntary or involuntary, will be accompanied by
the Yield Maintenance Premium. Such Yield Maintenance Premium shall be required
whether payment is made by Borrower, by a Person on behalf of Borrower, or by
the purchaser at any foreclosure sale, and may be included in any bid by Lender
at such sale. Borrower further acknowledges that (A) it is a knowledgeable real
estate developer and/or investor; (B) it fully understands the effect of the
provisions of this Section 10.20, as well as the other provisions of the Loan
Documents; (C) the making of the Loan by Lender at the Interest Rate and other
terms set forth in the Loan Documents are sufficient consideration for
Borrower’s obligation to pay a Yield Maintenance Premium (if required); and
(D) Lender would not make the Loan on the terms set forth herein without the
inclusion of such provisions. Borrower also acknowledges that the provisions of
this Agreement limiting the right of prepayment and providing for the payment of
the Yield Maintenance Premium and other charges specified herein were
independently negotiated and bargained for, and constitute a specific material
part of the consideration given by Borrower to Lender for the making of the Loan
except as expressly permitted hereunder. BORROWER EXPRESSLY ACKNOWLEDGES AND
UNDERSTANDS THAT, PURSUANT TO THE TERMS OF THIS AGREEMENT, BORROWER HAS AGREED
THAT IT DOES NOT HAVE THE RIGHT TO PREPAY THE LOAN IN WHOLE OR IN PART WITHOUT
PREMIUM EXCEPT AS OTHERWISE PROVIDED HEREIN, AND THAT BORROWER SHALL BE LIABLE
FOR THE PAYMENT OF THE PREPAYMENT PREMIUM OR YIELD MAINTENANCE PREMIUM, AS
APPLICABLE AND TO THE EXTENT PROVIDED HEREIN IF BORROWER PREPAYS THE LOAN
FOLLOWING THE OCCURRENCE OF AN ACCELERATION OF THE LOAN. FURTHERMORE, BORROWER
WAIVES ANY RIGHTS THEY MAY HAVE UNDER SECTION 2954.10 OF THE CALIFORNIA CIVIL
CODE, OR ANY SUCCESSOR STATUTE, AND BORROWER AGREES THAT IF A PREPAYMENT OF ANY
OR ALL OF THIS AGREEMENT IS MADE FOLLOWING ANY ACCELERATION OF THE MATURITY DATE
BY LENDER ON ACCOUNT OF ANY TRANSFER OR DISPOSITION PROHIBITED OR RESTRICTED
HEREIN OR BY THE MORTGAGE, BORROWER SHALL BE OBLIGATED TO PAY CONCURRENTLY
THEREWITH THE PREPAYMENT PREMIUM OR YIELD MAINTENANCE PREMIUM, IF ANY. BORROWER
EXPRESSLY ACKNOWLEDGES AND UNDERSTANDS THAT LENDER HAS MADE THE LOAN EVIDENCED
HEREBY IN RELIANCE ON THE FOREGOING AGREEMENTS AND WAIVERS OF BORROWER, THAT
LENDER WOULD NOT HAVE MADE THIS LOAN WITHOUT SUCH AGREEMENTS AND WAIVERS OF
BORROWER, AND THAT THE MAKING OF THE LOAN AT THE INTEREST RATE AND FOR THE TERMS
SET FORTH HEREIN CONSTITUTES ADEQUATE CONSIDERATION, GIVEN WEIGHT BY THE
UNDERSIGNED, FOR SUCH AGREEMENTS AND WAIVER.
 

Section 10.21 Assignment
 
 

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. The Loan, the Note, the Loan Documents and/or Lender’s rights, title,
obligations and interests therein may be assigned by Lender and any of its
successors and assigns to any Person at any time in its discretion, in whole or
in part, whether by operation of law (pursuant to a merger or other successor in
interest) or otherwise. Upon such assignment, all references to Lender in this
Agreement and in any Loan Document shall be deemed to refer to such assignee or
successor in interest and such assignee or successor in interest shall
thereafter stand in the place of Lender. Borrower may not assign its rights,
title, interests or obligations under this Agreement or under any of the Loan
Documents except as specifically provided in Sections 5.26.5 and 5.26.6 of this
Agreement. In connection with any assignment, the new Lender shall provide
notice to Borrower of the identity, address and other pertinent information
pertaining to the new Lender.
 
Section 10.22 Certain Additional Rights of Lender
 
. Notwithstanding anything to the contrary which may be contained in this
Agreement, Lender shall have:
 
(1) the right to routinely consult with Borrower’s management regarding the
significant business activities and business and financial developments of
Borrower, provided, however, that such consultations shall not include
discussions of environmental compliance programs or disposal of hazardous
substances. Consultation meetings should occur on a regular basis (no less
frequently than quarterly) with Lender having the right to call special meetings
at any reasonable times;
 
(2) the right, in accordance with the terms of this Agreement, to examine the
books and records of Borrower at any time upon reasonable notice;
 
(3) the right, in accordance with the terms of this Agreement, to receive
financial reports, including balance sheets, statements of income, shareholder’s
equity and cash flow, a management report and schedules of outstanding
indebtedness;
 
(4) the right, without restricting any other rights of Lender under this
Agreement (including any similar right), to restrict financing to be obtained
with respect to the Property so long as any portion of the Debt remains
outstanding;
 
(5) the right, without restricting any other right of Lender under this
Agreement or the other Loan Documents (including any similar right), to
restrict, upon the occurrence of an Event of Default, Borrower’s payments of
management, consulting, director or similar fees to Affiliates of Borrower from
the Rents;
 
(6) the right, without restricting any other rights of Lender under this
Agreement (including any similar right), to approve any operating budget and/or
capital budget of Borrower;
 
(7) the right, without restricting any other rights of Lender under this
Agreement (including any similar right), to approve any acquisition by Borrower
of any other significant property (other than personal property required for the
day to day operation of the Property); and
 
(8) the right, without restricting any other rights of Lender under this
Agreement (including any similar right), to restrict the transfer of interests
in Borrower held by its members,
 

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and the right to restrict the transfer of interests in such member, except for
any transfer that is a Permitted Transfer.
 
The rights described above may be exercised directly or indirectly by any Person
that owns substantially all of the ownership interests in Lender. The provisions
of this Section are intended to satisfy the requirement of management rights for
purposes of the Department of Labor “plan assets” regulation 29 C.F.R., Section
2510.3-101.
 
Section 10.23 Set-Off
 
. In addition to any rights and remedies of Lender provided by this Loan
Agreement and by law, Lender shall have the right, without prior notice to
Borrower, any such notice being expressly waived by Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Lender or any Affiliate thereof to or
for the credit or the account of Borrower. Lender agrees promptly to notify
Borrower after any such set-off and application made by Lender; provided that
the failure to give such notice shall not affect the validity of such set-off
and application.
 
Section 10.24 Counterparts
 
. This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument.
 

 
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[Remainder of Page Intentionally Left Blank; Signature Page Follows]
 

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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.
 
 

BORROWER:
     
MAGUIRE PROPERTIES - PACIFIC CENTER, LLC,
a Delaware limited liability company
     
By:
/s/ Mark Lammas
 
Name: Mark Lammas
 
Its: Vice President and Secretary

 

 

 
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
 
 

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LENDER:
     
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
a Delaware corporation
   
By:
/s/ Chapin P. Hunt
 
Name: Chapin P. Hunt
 
Title: Managing Director